Pensions Bill
Debate between Baroness Donaghy and Lord McKenzie of Luton(10 years, 4 months ago)
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Baroness Donaghy (Lab)
I support my noble friends Lady Turner and Lord Whitty. The pension letter that I receive reads a bit like a history book. Having completed the 40 years, I have a bit of graduated pension, some SERPS and some S2P. Obviously it all adds up penny by penny but, as I said at Second Reading, one of my concerns is that simplicity is not of itself the best objective. If the amount is set too low, the middle earners will not buy in to the new system. Any system that does not have a buy-in from the middle earners will, in the future, give rise to enormous political pressure from those people for some form of opting out, which I do not believe anyone in this room wants.
When we looked at all the charts at the briefing, we found the crossover point—which I think was in about 2040—before people start losing out. The discussion that took place on Monday about net versus gross may well place that crossover point a lot earlier, and people will see that they are going to lose out much earlier. They will then make a judgment about whether this flat rate is any good and, again, either there will be pressure to opt out or there will be pressure—dare I say it?—for SERPS, graduated pensions or S2P in about 20 to 30 years’ time. Therefore, this gives rise to very important issues.
I know that we are going to have another discussion about net versus gross when we come to later amendments, but I want to make the point that this is not a straightforward issue. I realise that there is cross-party consent about the flat rate but I am slightly sceptical about its long-term holding, although the Minister has said very confidently that it will last for more than 10 years. I hope that he is right, because the last thing I want to see is Governments tinkering with this. As I said, I do not want my grandchildren to have a history lesson in 40 years’ time in which they are reading about the different names for the pension.
Lord McKenzie of Luton
My Lords, perhaps I may raise a point about the level of the single-tier pension, and couple it with a reference to passported benefits in the impact assessment. I looked at the assessment again this morning and there was a point that I had not identified, or did not understand before. This is to do with the interaction with the guarantee credit. This passage is about passported benefits, but it says:
“Receipt of Guarantee Credit passports pensioners to the full amount of Housing Benefit and Council Tax Benefit, if the pensioner is eligible for these benefits. There is little reduction in Guarantee Credit eligibility resulting from the single tier”—
about 1%. I thought that the whole thrust of this simplicity as a base for people to be able to make judgments about saving was that, in a sense, it floated people at a level which was above the guarantee credit. Here we are saying that only 1% of people who get STP will not be affected by guarantee credit in the future. Can the Minister explain that to me, please?
Growth and Infrastructure Bill
Debate between Baroness Donaghy and Lord McKenzie of Luton
Baroness Donaghy
My Lords, in moving Amendment 46A, I make it clear that I am in full support of Amendment 46 moved so eloquently by the noble Lord, Lord True. If the first platoon of True, Tope, Lytton, Elton, Trefgarne and McKenzie came crashing against the citadel, I do not have too many illusions about how my amendment, which is much more radical and not in the least bit modest, might be faced by the Front Bench. Nevertheless, I shall persevere because the issue is of such importance. I have been in the House for only two-and-a-half years, but I have never seen such a measure of frustration in the House as I did on the previous amendment, so I think it is a topic that is worth pursuing.
I am aware that my amendment represents a significant, but perhaps long overdue, change to the planning system. It is clear that it could not be introduced without considerable consultation, and I fully acknowledge that any frameworks for proposed local permitted development could be produced only after thorough consultation at all levels.
The argument used against the proposal in Committee was that it would produce a postcode lottery and that local government already had the tools to restrict or relax nationally set permitted development by using Article 4 directions and local development orders, or LDOs.
The phrase “postcode lottery” implies something completely random, which this need not be. It is quite correct that there would be local differences—that is, after all, what local government is supposed to be about—but there is no reason why non-statutory guidance could not be issued by government giving local authorities recommended criteria when setting out and consulting on a local permitted development framework. When it comes to siting broadband infrastructure, the Government consider non-statutory guidance to be sufficient, so why not here?
Article 4 and LDOs are no longer fit for purpose, as has already been mentioned by several speakers on the previous amendment. Local authorities must give one year’s notice before they can use Article 4 directions to avoid high levels of compensation. They are time-consuming and unnecessarily bureaucratic as well as being expensive. Although this is contested by the Department for Communities and Local Government, these devices are rarely used by local authorities. Indeed, the LGA has indicated that it is not aware of any evidence demonstrating widespread use of Article 4 and LDOs.
Amendment 46A would localise permitted development, allowing planning authorities to tailor individual frameworks for their own local areas so that they supported economic growth in the most appropriate and sustainable way. This could lead to a boost in development overall and would be a localist measure. Democratically elected representatives, accountable at the ballot box, would be given more power. This, if nothing else, would be more of a reflection of the title of this Bill than the discussion that went on earlier. I beg to move.
Lord McKenzie of Luton
My Lords, in the circumstances, I shall speak just briefly and thank my noble friend Lady Donaghy for introducing the amendment and broadening the debate about the importance of localism and why permitted development rights should be qualified or subject to local authorities’ determination.
I want to go back to Article 4, which permeated our discussions on the earlier amendment and will perhaps do so again now and at Third Reading. Article 4 directions can certainly be cumbersome and bureaucratic. There is not just one type of Article 4 direction. As I understand it, there are three types of article for direction: one affects only listed buildings, one affects dwelling houses in conservation areas and the other affects other properties. That latter category has generally been used to cover commercial property in a conservation area and is generally used outside a conservation area for restricting the use of temporary buildings.
If Article 4 is to be prayed in aid in respect of this amendment, as it was—at least in part—in respect of the earlier amendment, I think we need much more detail as to how it operates. I understand that whether it is an Article 4(1) or Article 4(2) direction, the routes and processes that have to be adopted are different. We need to understand that more effectively and we need greater clarity on the role of the Secretary of State and the guidance or principles which should govern how the Secretary of State approaches Article 4, whether using Article 4(1) or Article 4(2) directions. Given the hour, I simply support my noble friend and thank her for moving this broadened amendment.
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2012
Debate between Baroness Donaghy and Lord McKenzie of Luton
Baroness Donaghy
I speak as somebody who lost a stepfather and a sister-in-law to these diseases, but mainly I speak because I produced a report on fatalities in the construction industry for the previous Government. Although my remit was to look closely at fatalities on site, I also saw the figures for disease and the figures that the noble Lord mentioned. At that stage, I think there were something like 4,500 deaths a year from lung-related diseases. This is a silent killer of the most horrendous proportions. The noble Lord indicated the lack of future for so many.
My concern is that the profile should be higher. What work is the Health and Safety Executive doing to improve that profile? Is any more research being done? I know that technically I am probably out of order on these regulations but, as the noble Lord, Lord Avebury, said, this is extremely important. Silicosis is going to come up further down the track. Every worker you see in London carving up the corner of a pavement and not using a water spray or wearing a mask over his face may well be dead in 15 years’ time. It does not take as long—it does not take 40 years. We could do an awful lot more. I know that these regulations are about people who have already contracted these fatal diseases, but we should try to raise their profile and to do more to prevent them because some of these killers are still there. It not a question of them peaking in 2016. Some other industrial diseases are coming along, and I do not believe that sufficient work is being done on them.
I have a question, and I understand if the Minister does not have the answer immediately. Could some inquiries be made about what work is being done by the Health and Safety Executive and about what can be done to improve these diseases’ profile and their prevention?
Lord McKenzie of Luton
My Lords, I thank the noble Lord, Lord De Mauley. I know he has stepped into the breach at fairly short notice because the noble Lord, Lord Freud, is unwell. We send our best wishes to him. I thank noble Lords who have contributed, particularly my noble friend Lord Jones. He is absolutely right; we should not see these orders each year just as a technical uprating. They are a chance to reflect on their history and what they mean. My noble friend, together with the noble Lord, Lord Wigley, were, in my noble friend’s terms, participants in and witnesses to what went on in those communities. People of my generation, brought up in the relative safety of the south-east, only read about it and listened to it. It is a good opportunity to remind ourselves what we owe to those mining and quarrying communities.
As the Minister said, there is no statutory obligation to uprate these compensation amounts so I would say that a CPI uprating—so far as it goes—is welcome. Had the noble Lord, Lord Freud, been in post, we might have engendered a bit of a debate about the difference between RPI and CPI and which is the more robust statistic. I will, however, forgo that on this occasion. I am sure that the Minister will be grateful for that. We aligned the payments under the 2008 Act with the 1979 Act a couple of years ago; they were not aligned when they were introduced. That was one aspiration. There was another aspiration to narrow the gap between the amounts due to claimants and the amounts due to dependants. I should be grateful if the Minister could tell us whether that is still an aspiration of the Government.
As we have heard, the concept is that the 2008 scheme was to be funded out of compensation recoveries—compensation from civil cases. Therefore, can we have an update on the levels of recovery; what percentage of 2008 scheme payments are covered by this; and what the estimate over the CSR period is? I follow the noble Lord, Lord Avebury, on the question that he posed on behalf of the noble Lord, Lord Alton—and, indeed, the noble Lord, Lord Wigley—about how this works with changes that have been made to the Legal Aid, Sentencing and Punishment of Offenders Bill. My understanding—I have not followed the intricacies of that Bill in great detail—is that there are government concerns about conditional fee arrangements being exploited, and that 25 per cent of success fees will, in future, be met out of the compensation payments. I think that is the proposition.
Therefore, my question to the Minister is: what will be the impact on the compensation recovery arrangements that help to fund the 2008 scheme if there will be that reduction in compensation recoveries? Presumably that will impact, at some stage, on the levels of compensation that will be due under the 2008 scheme. Indeed, it depends on the relationship between the overall compensation in individual cases and the level of compensation under the 2008 Act scheme, but it adds a challenge for the Government. Why should they go down that path in these circumstances as, in a sense, they risk taking the hit on these deductions themselves? I should be grateful if the Minister would give us a read across to what is happening in that legislation and what it means for compensation levels going forward.
I hope that the Minister gave us the projected numbers and what was going to happen in the upcoming years. We have discussed progress on the Employers’ Liability Tracing Office—the ELTO—before, which I think was, again, the point being pursued by the noble Lord, Lord Avebury. We know that the noble Lord, Lord Freud, has previously, expressly taken a direct interest in that. The FSA consultation proposes that the ELTO cover all employer liability policies—entered into, renewed or for which claims were made—on or after 1 November 1999. However, the FSA policy statement requires only the recording of new policies— I think from April 2012. Therefore, what is the progress on back-filling the pursuit of those policies to 1999? Clearly, people’s ability to trace those policies is particularly important. We know the challenges posed, as the Minister and others have expressed, by long latency of the conditions with which we are faced.
I also ask the Minister whether any progress has been made on ELI, which will be the insurance bureau of last resort—a parallel to the Motor Insurance Bureau—so that when policies could not be traced there would be a collective compensation pot. There was a consultation document on that in, I think, the first quarter of 2010. I sought an update on progress before and would be grateful if the Minister could let us know the current position.
My noble friend Lady Donaghy talked in particular about her work in looking at the construction sector, and the importance of and the debt we owe to the Health and Safety Executive. We are at the moment in a rather ironic situation where the Government are consulting on asbestos regulations because the Commission has challenged the status quo about whether that was an effective translation of what it required. We have a Government now, thankfully I think, supporting the previous Government’s position on this. We usually hear that the EU is all about gold-plating and the UK Government follows suit.
I also take the opportunity to ask about the HSE’s resources. In particular what is happening on the proposed charging regime for the field operations directive, which was an integral part of its funding arrangements for the current CSR period? We are, as I say, indebted to the HSE for the tremendous work it does. My noble friend Lord Jones made the point that 20 years ago people did not realise that asbestos was dangerous. They played with it. It was a source of amusement. The research, work and preventive stuff that the HSE does is a route to making sure that history does not repeat itself, although we are still living, as are those tens of thousands of people the noble Lord referred to, with the challenges of the past.
Finally, given that these orders are all about the risks that workers and their families take, and the terrible suffering that comes from these conditions, can I just put it in the context of what is now International Workers’ Memorial Day? It was officially recognised a couple of years ago but has been marked in one way or another for many years. Can the Minister give us an update on what the Government are proposing to do to mark and acknowledge that day? Perhaps in closing I can remind him of the slogan that goes with that:
“Remember the dead and fight for the living”.
Welfare Reform Bill
Debate between Baroness Donaghy and Lord McKenzie of Luton(12 years, 4 months ago)
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Baroness Donaghy
My Lords, the amendment was in the first grouping on the first day of Report, when we were all bright-eyed and bushy-tailed. I asked for this to be degrouped, and I therefore accept my punishment with good grace.
I asked for the amendment to be degrouped because the issue of self-employed people is extremely important and deserves a slot on its own. The purpose of the amendment is to recognise the particular needs of the self-employed. It will ensure that the power to prescribe a minimum level of income applies only to those self-employed claimants if they under-declare their earned income with a view to maximising their entitlement to universal credit.
While it is important to prevent abuse of the system, it is equally important not to discourage the genuine self-employed claimant with a potentially viable business in the early stages of development or in financial difficulty. There are some 4 million self-employed people in the UK and that number is likely to grow as employment becomes more difficult. They are an enormously varied group who face a greater degree of risk than traditional employees. Profits are affected by any number of events—the loss of a key customer, the sickness of the sole proprietor, a bad debt, the accumulation of slow payers, or even taking on a new employee.
The measurement of self-employed income for universal credit purposes should follow generally accepted accountancy principles and aim at a true and fair view of a business’s profits. The welfare system needs to support business through such periods, not discourage them by imposing unrealistic levels of deemed income such as the minimum income floor. My amendment recognises that real abuse should be directly targeted. If you impose a minimum income floor for each hour worked, that in itself will open the floodgates for abuse. That view is supported by the National Farmers’ Union, the Tenant Farmers’ Association and the Federation of Small Businesses, as well as Community Link, Citizens Advice and the Child Poverty Action Group.
There are those with a disability or medical condition which makes it difficult for them to take traditional employment. Indeed, it is often difficult for the disabled to find employment. Being self-employed allows the disabled to work at their own pace and according to a pattern which suits their circumstances.
What steps are the Government taking to minimise the compliance burden on the self-employed? The current system requires only one set of accounts to be prepared, which is accepted for both tax and tax credits. That allows the individual to get on with running their business. If a different measure of self-employed income were to apply for universal credit, the burden would be increased by having to assess profits for tax purposes according to one measure; and income for universal credit purposes according to another, quite different measure. If income is to be based on reported hours, the harder a self-employed individual works to get their business on its feet, the more they could lose from their universal credit entitlement.
It would be unfortunate if the measure were to put off genuine claimants from taking the risks inherent in self-employment, when its purpose was to deter a minority from underdeclaring their profits. One real example, which I gave in Committee, was of an arable farmer whose crop was completely destroyed. I was going to give another detailed example of livestock farmers who could not move them if they were under BTB restrictions, but in view of the hour, I will not.
There are already regulatory powers to counteract moves by claimants to underdeclare their income for tax credit. For benefit purposes, under the income deprivation rules, a person is deemed still to have income of which they have divested themselves to maximise their claim to benefit or tax credit. Where the Government perceive that abuse, surely the right course is to enforce existing powers rather than to invent new ones which will discourage genuine cases.
This brings me to a group who are in practically every sense of the word employees, but where individuals are treated as self-employed because the alternative is no job at all. They are often referred to as bogus self-employed. The Government's difficulty in drawing up criteria to deal with the genuine self-employed may be alleviated by proper enforcement of the tax laws by HMRC and employment laws by the BIS department, with all the resources that that implies. It also means a greatly increased level of interdepartmental co-operation in Whitehall.
As I said earlier, self-employment entails a greater risk than traditional employment. The self-employed must often choose between taking drawings for themselves or reinvesting in the business to enable it to grow. Welfare policy must reflect those different needs if it is to succeed in promoting work through self-employment. The success of working tax credit in encouraging work and, in particular, self-employment, rests on its recognition, in alignment with the tax system, of the economic reality of how a business is doing—particularly with regard to investment in business equipment and trading losses. Will the Minister indicate what guidelines will be issued and when? I ask him to accept my amendment, which aims at the real target, rather than those struggling to survive in these deeply difficult times. I beg to move.
Lord McKenzie of Luton
My Lords, my noble friend Lady Donaghy has made a very strong case, and I look forward to the Minister's response. What she said warmed the cockles of my heart. She referred to generally accepted accounting principles—the true and fair view—and it took me back to another life, but she raises a real issue: rather than having artificial rules for assessing what people are deemed to earn, is it not better to try to capture the actual profits and to target resources on those who seek to abuse the position? That seems a very straightforward matter.
My noble friend raises once more, as she did in Committee, the matter of bogus self-employment. We all know that that is a continuing issue. I have always believed that it rests particularly with HMRC, together with BIS and other departments of government, to make progress on that. It is primarily HMRC that could begin to make a real difference. She wrote reports for the Government, as did the Minister, on the construction sector, and health and safety in particular. There is bogus self-employment in that sector, so she is an expert on that matter. We support the thrust of her amendment.
Superannuation Bill
Debate between Baroness Donaghy and Lord McKenzie of Luton(13 years, 5 months ago)
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Baroness Donaghy
My Lords, I have pleasure in moving this amendment on behalf of my noble friend Lady Turner of Camden, who, as noble Lords will know, was taken ill on Monday. She was unable to attend the House today, but I am pleased to say that she is now at home. I am a lifelong admirer of Lady Turner and I hope that I can do justice to her amendment. I have a guess that this amendment might not be received in the same way as one or two of the previous ones.
These are worrying and uncertain times for civil servants, with their job security, pensions and standard of living under attack. I am sure that many noble Lords have received letters from individual civil servants about the impact of this Bill on their lives. They entered the Civil Service with certain expectations about their job security and pensions. The impact on their morale should not be underestimated, and I am concerned that the public focus on Civil Service pay and pensions is always on the higher paid. I notice that when this was discussed on 10 November, one contribution made out that an annual salary of £40,000 to £50,000 was the norm. I know that Members of this House will realise that that is not the norm. The majority of civil servants earn very modest salaries and even more modest pensions. It is not my intention to hold up the House by quoting the figures, but I know that the Minister will be aware of them.
I acknowledge the reassurance of the noble Lord, Lord Wallace of Saltaire, that negotiations will be genuine. However, the general tenor of the Bill will not reassure civil servants. I believe that it is reasonable to reach agreement with trade unions. There is a long and honourable tradition of this in the joint Civil Service negotiating bodies and I hope that the Bill’s tenor will do nothing to undermine it. It is in that spirit that I move the amendment tabled by my noble friend Lady Turner.
Lord McKenzie of Luton
My Lords, I thank my noble friend Lady Donaghy for stepping into the breach. She did indeed do justice to our noble friend and colleague Lady Turner. Perhaps we can take this opportunity of sending our best wishes to her for a speedy recovery.
I very much agree with the thrust of the amendment, which pretty much replicates a debate that we had in Grand Committee. The difficulty, in a sense, is that the approach is predicated on Clause 1 not standing part of the Bill, so there is a potential inconsistency between these two provisions. In so far as the cap is concerned, we are very clear that it should go from the Bill in its entirety, which would negate this amendment if it were to be pressed and were successful. However, we agree that there must be consultation with every effort made to end up with a negotiated settlement. My right honourable friend in the other place, Tessa Jowell, made clear that we accept that there would be circumstances in which changes would have to be made that did not rely on agreement. We do not recognise this lightly, nor indeed does the Minister. To that extent we may differ a little on my noble friend’s amendment, but we have some other amendments constructed to achieve in large measure the same thing, which is to get rid of the caps.