Welfare Reform Bill
Baroness Howe of Idlicote Excerpts(13 years, 1 month ago)
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The Earl of Listowel
I am reminded of an article recently published on the BBC website reporting on a survey about children reading with their parents. It reported that:
“For the majority (71%) reading with their child is one of the highlights of their day. But the poll of over 1,000 parents found 18% felt too stressed to do so. Two-fifths (41%) said that a child's tiredness stopped reading together being fun, while 30% cited their own tiredness as a problem. More than a third (36%) of the 1,011 survey participants said they were too tired to spend longer reading”.
Teachers were also surveyed:
“Nearly three-quarters of those surveyed (72%) attributed developed language skills and more advanced reading levels to those children who regularly enjoyed a shared book time with parents at home”.
The evidence is very clear that the home environment is the key experience for children in getting the best outcomes for their education, so we need to think about parents not having the energy after a long day’s work to spend that important time, particularly, perhaps, at the ages of five, six and seven, reading with their child.
I refer to an e-mail sent to me today by a primary school teacher. She wrote:
“Commuting up to ninety minutes a day would mean that I would have to leave my son in childcare and school from 7.30 am to 6.30 pm everyday … I am a primary school teacher in London and I see the affects of long term childcare on children. Some only see their parents for an hour each day or only at weekends!”.
The last time I worked with children—in a summer play scheme five years ago—what was particularly striking was that there were children who arrived early at the play scheme for breakfast and there were those who stayed until the end. These children in particular seemed a bit tired, a bit down and flat, so I can understand the concern that as the Government are implementing this, the adviser should very much keep in mind not only whether the parent is working but whether the parent will have a long commute there and back and the child will have a very long day at school, starting early and finishing late. Advisers should keep this in mind when they are considering whether a person has to take a job.
I am sorry to take so long, but to round up, I share the concerns. If there is anything that can be done to mitigate the impact on lone parents with children of this age, I would welcome it. There is a real question about the quality of childcare available. Research has shown that parents have traded quality off against affordability. They have understandably been so desperate to find childcare that the pressure to raise standards has not been as high as it might have been. In the current economic climate, with the great need for childcare, the Government have understandably been lowering the requirements for the education and training of managers of children’s centres, for instance. There is this constant pressure: we need more childcare places, so there is pressure to lower standards. One should listen very carefully to parents who say to their adviser, “I don’t have faith in the childcare in my locality”. One needs to give that weight, particularly in Northern Ireland, Scotland and Wales, where the Childcare Act 2006 does not apply and they have not necessarily got the push on greater provision that we would want. I hope that the Minister can give some reassurance on these points, and I look forward to his reply.
Baroness Howe of Idlicote
My Lords, I had not intended to speak but, listening to the debate, I think that the opposition expressed by the noble Lord, Lord McKenzie, would provide the necessary time to reconsider the effects that the Bill will have in this respect. I also agree with my noble friend that the business about child support is a problem. Quite apart from the cost, the quality has come under quite a lot of doubt recently. The major point that I want to make is about stress on parents. I invite your Lordships to think about how stressed all of you have been by the extensive amount of work we have all had to consider recently, and bear that in mind when you come to consider whether or not to support this amendment.
Lord Freud
My Lords, with regard to the point made by the noble Baroness, Lady Howe, on how we could take it slightly easier, I regret that I cannot apply it to myself because my children have gone way past that age, although they do not seem to be any less stressful.
Our policies for lone parents are based on the key principle that work is the surest and most sustainable route out of poverty. In June last year we announced our intention to align the age at which lone parents could reasonably be expected to work with the time their youngest child enters school. Current legislation, yet to come into force, provides that income support must be made available to lone parents with a child under the age of seven. This clause lowers that age to five so that lone parents with children aged five or over will no longer be entitled to income support solely on grounds of lone parenthood. We would effect this change through regulations, and implement it drawing largely on the experience of having progressively lowered the age from 16. Support for these lone parents will be available through jobseeker’s allowance or employment and support allowance if they meet the relevant conditions of entitlement, or through income support if they qualify on grounds other than lone parenthood, most notably if they are carers.
We want to encourage lone parents to enter work but not at the expense of the crucial role they play as parents. We intend to carry forward the current safeguard that allows those with children aged 12 or under to restrict their availability for work to school hours. It is worth reminding noble Lords of the powerful impact that this policy has. When the age was brought down to 12, 16 per cent of lone parents leaving income support went straight into work and 56 per cent went on to JSA, many of whom will have subsequently gone in to work. We estimate that bringing the age down to five could lead to an extra 20,000 to 25,000 lone parents in work. Children in workless lone parent households are almost three times more likely to be in relative poverty than those where the lone parent works part-time, and five times more likely to be living in relative poverty than children of lone parents working full-time.
The noble Lord, Lord McKenzie, asked about flexible work. The Government are keen to promote flexible working and have a strong commitment to greater family-friendly working practices. We have committed in the coalition agreement to consult on extending the right to request flexible working to all employees. The public consultation process ended recently and we intend to respond to the comments by the end of the year. We understand that stimulating real culture change to make flexible working practices the norm across the whole labour market requires more than just regulatory change on the right to request. There also needs to be help for employers to operate in a more flexible way and demonstration of the benefits it can bring to them and their employees. The Government have a role in leading culture change. This is why we are working with business leaders and employers to promote the business case for flexible working and ensure that employers know where to go to find support to implement practices in their organisation.
This clause also amends Section 8 of the Welfare Reform Act 2009, which relates to the possibility of requiring work-related activity from certain lone parents with children aged under seven. Section 8 as it stands would require regulations in this respect to be subject to the affirmative resolution procedure. This clause lowers that age from seven to five, in alignment with the lowering of the age for withdrawal of income support on grounds of lone parenthood alone. The key question asked by the noble Lord, Lord McKenzie, was whether it is right to make this change now rather than waiting for the introduction of universal credit. Introducing this change before introducing universal credit will help more lone parents into work, with knock-on reductions on child poverty.
A recent evaluation of lone parents’ experiences of moving into work also found that working had had a number of positive effects on their children, both direct and indirect. These range from children having the opportunity to go on school trips because of extra family income to observing the good example of a working parent and greater independence, both financially for the parent, once in work, and for the child, in terms of their role in the household. Help with childcare costs is currently available through tax credits and the flexibilities in JSA mean that childcare responsibilities are taken into account. There are a range of flexibilities available: lone parents with a child aged under 13 can restrict their job search and availability to their child's school hours, while lone parents will not be sanctioned for failing to meet requirements if they had good reason for the failure. Access to appropriate childcare will be taken into account before a decision is made.
On the state of the economy, we have to bear in mind that even in difficult times—which I accept that we are in—Jobcentre Plus holds an average of 275,000 unfilled vacancies at any one time, around a quarter of which are part-time opportunities. Clearly those figures are a snapshot which hides the number of new job opportunities that come up all the time. On average, about 10,000 new vacancies are reported to Jobcentre Plus alone every working day, while many more come up through other recruitment channels. It is not worth getting into a huge debate about the meaning of these figures but, as noble Lords understand, much of our approach to the work programme is aimed at trying to help the people who have not managed to get a job reasonably early back into the market. As the numbers of unemployed get bigger, one factor we are looking at is the average length of time that people are unemployed. As I say, there are flows all the time and many lone parents have excellent opportunities to find a job. Even in difficult times, there are still jobs going. On that basis, I commend Clause 57 to the Committee.
Welfare Reform Bill
Baroness Howe of Idlicote Excerpts(13 years, 1 month ago)
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Baroness Howe of Idlicote
My Lords, I congratulate the noble Baroness on the detailed and effective way in which she has presented the case for her amendment. I spoke firmly on the equality issue at Second Reading. I am most concerned about the extent to which the majority of second earners are women. Their very delicate position may be fine if they have a fully understanding husband, but we know that some families face situations that are far removed from this. I understand the point about mutual parenting, but if the Government put more emphasis on companies providing enough flexible working for both sexes, this situation would be much easier for families. My main concern is the vulnerability of the woman at home who, as we have heard, does not have a very good argument if she is not going to earn, as a result of her extra hours, enough to make any difference at all to the joint income. I therefore support what has been said.
Baroness Hayter of Kentish Town
My Lords, this amendment seeks to tackle the introduction, under UC, of a poor work incentive for second earners who, as the noble Baroness, Lady Howe, has said, are mostly women. As my noble friend Lady Lister said, 300,000 second earners will see increased marginal deduction rates as opposed to only one-third of those who will see reduced MDRs. The policy to make work pay does not appear to extend, therefore, to a third of these affected second earners. According to the impact assessment:
“It is possible that in some families, second earners may choose to reduce or rebalance their hours or to leave work. In these cases, the improved ability of the main earner to support his or her family will increase options available for families to strike their preferred work/life balance”.
As my noble friend Lady Lister has said, it is not clear how this will improve options for families who prefer to have a more equal working relationship, where both partners combine work and child rearing. It also seems to be in conflict with other bits of coalition policy, such as the BIS modern workplace consultation, which sets out options for families to share parental leave more evenly between men and women. Perhaps, in responding, the Minister can let us know what discussions he has had with BIS about whether the incentives within universal credit support the BIS policy.
The reduced incentives for second earners to work come on the heels of the April cuts in childcare and therefore, as has been said, further reduce the incentive for anyone with a child to take a job, not to mention other little things such as cuts to the baby element of the child tax credit, the health in pregnancy grant, the Sure Start maternity grant and the freeze in child benefit.
As my noble friend Lady Lister said, the pay of second earners is crucial in keeping families out of poverty. If I may be forgiven for repeating her figures, which I hope I have right, child poverty is at 19 per cent where there is one full-time earner but it drops to 5 per cent with two earners and down to 2 per cent with two full-time earners. Therefore, second earnings are absolutely key to the Government’s objective of reducing joblessness, child poverty, dependence on universal credit and increasing the tax take. I look forward to the Minister’s answer to whether it was the gross cost after taking account of tax take which led to the projected cost of this.
Childcare has already been mentioned and is clearly particularly important in two sorts of families. One is obviously lone-parent families, and the other is where there is a second earner, with both parents tending to be out of the house at certain times. The disincentive to work increases where there are child costs to be met. As has already been said, childcare will cover only 70 per cent of costs, and that leaves 30 per cent to be found from earnings, which is already a high enough take from the second earner’s pay. Therefore, without an earning disregard of their own, the second earner has a very high deduction rate where there are child costs to be met, effectively making the taking of a job financially unviable. Yet, as I have said, second earnings are crucial in keeping households out of poverty. They will be even more important if, as we read today in the Financial Times, there is any truth in the rumour that when times get tough it is the poor whom this Government will seek to make pay. According to these press reports, the Chancellor is looking at cutting further billions from benefits by scrapping inflation-linked uprates, even—this beggars belief—freezing some payments. We read in the same article:
“The Liberal Democrats will oppose anything that suggests the coalition is unfairly passing the burden of deficit reduction on to struggling families”.
We look forward to hearing whether the Minister can say whether the Financial Times is accurate. Perhaps he can also ask those sitting alongside him—maybe they could pass him a note—whether they would like to place on record their opposition to any attempt to pass on any cutbacks to struggling families. They must know that the rich can pay far easier than the poor. Are they going to use their bargaining power, such as it is, in the coalition to protect the very weakest in society?
These amendments are about reducing poverty and increasing the take-up of work, and it would be useful to know on which side the Lib Dem/Tory coalition sits on this. Later today, we shall reach Amendment 75A to Clause 51 standing in the names of the noble Lords, Lord German, Lord Stoneham and Lord Kirkwood, and the noble Baroness, Lady Thomas, which effectively asks for an earnings disregard from the second earner where the first earner is now too ill to work. We very much welcome that amendment, but it would useful to know whether the same principle could be more widely adopted, as this amendment seeks to do.
The Minister may well be forgiven for wanting to reduce the number of working women on this side of the Committee but perhaps he would make it clear that that is not the intention with universal credit by ensuring that second earners really will be better off in work.
“(6A) Regulations under this section must provide that, for a claimant to be treated as not having limited capability for work, the claimant must be able to—
(a) reliably perform their work on a sustainable basis, for at least 26 weeks, without requiring excessive leave or absences; (b) work in open unsupported employment without requiring excessive support to perform their work.(6B) For the purposes of regulations made under this section—
“work” means work—
(a) that is for at least 16 hours per week on wages that are at or above the relevant minimum wage; and(b) that exists in the United Kingdom;“excessive support” means more than what is usually considered to be reasonable adjustments or normal supervision (or both).”
Baroness Howe of Idlicote
I present the sincere apologies of my noble friend Lady Mar. She had very much hoped that this amendment would come up on Tuesday, but alas, she has an engagement that she could not possibly break. So I will inadequately move it on her behalf.
Under the Bill, a person will be deemed to have limited capacity for work if the claimant’s capacity for work is limited by their physical or mental condition and if the limitation is such that it is not reasonable to require the claimant to work. The work capability assessment is designed to assess whether a claimant has limited capacity for work or limited capability for work-related activity, but there is no definition of work either on the face of the Bill or in regulations. A group of charities that includes the MS Society, Parkinson’s UK, Arthritis Care and Forward-ME have indicated that this is a significant omission, and it is one that I certainly agree with my noble friend Lady Mar should be rectified.
Individuals must not only be capable of some very limited work; they must be capable of obtaining realistic and sustainable employment. I am sure that the Minister will acknowledge that capability for work is not a clear-cut issue. Many disabled people fit neither the “completely fit for work” nor the “completely incapable of work” categories. As the Minister knows, the main interest is in those with a fluctuating condition—an area where my noble friend Lady Mar has both experience and, indeed, considerable knowledge. They can unpredictably veer between both categories and, however much they may want to work, this group finds it particularly difficult to obtain and retain sustainable employment.
My noble friend and I strongly support the principle that all those who are able to work should be supported through the work-related activity group in ESA, which is designed particularly to identify those who have a limited capacity for work. However, those who face significant barriers to returning to the workplace require extra time and support to move back into the work environment. The WRAG is a very important provision for those with fluctuating conditions, as it asks them to undertake work-related activities that are personalised and appropriate to their needs and abilities. However, the group believes that the current work capability assessment sets too high a bar for the test of limited capability for work—the test that admits people to the WRAG. The test fails to take into account the reality of the claimant’s abilities not just to take on work but to retain and manage unsupported sustainable employment.
The Australian Social Security Act 1991 and the Australian assessment of work-related impairment for disability support pension criteria supply a sensible definition of what could be meant by the ability to carry out meaningful work. Slightly amended for the UK, as is proposed in my amendment, this could provide an important aid in determining whether a claimant actually has limited capability for work. Broadly, the amendment would specify that, in order to be capable of work, the claimant should be able to: work for at least 15 or 16 hours each week in meaningful work that pays at least the national minimum wage; reliably perform their work on a sustainable basis without requiring excessive leave or absences—the Australian system takes this to be at least 26 weeks; and, lastly, work in unsupported employment without requiring excessive support to perform their work. I beg to move.
Lord Wigley
My Lords, I am very pleased to support this amendment. One is very aware of the tremendous work that the noble Countess, Lady Mar, has undertaken in this area and of her expertise. There is no doubt that the fluctuating condition of many people with disabilities can be a difficult factor from whichever end you look at it: from the point of view of the disabled person, who may want to work but is uncertain whether they can carry out the work, or from the point of view of the state and the way in which these regulations apply to such people.
The one element in this amendment that I am not entirely certain about is the question of “unsupported employment”. There are times when, if a disabled person is given adequate support, they can be in full-time meaningful work on a continuous basis. I would not want this amendment to undermine that dimension, which is very important.
Turning to new subsection (6B) proposed by the amendment, can the Minister comment on paragraph (b), which refers to work,
“which exists in the United Kingdom”?
This raises some interesting questions. Is it in the Government’s mind that there might be work outside the United Kingdom, the availability of which could, if it were not taken up, lead to people being debarred from their benefits? One thinks of people living in Dover: an hour’s journey puts them into the French catchment area. If one lives in Holyhead, if the fast boats are running one could quickly be in Dublin—presuming that there is any work in Dublin these days. The Government’s intention in this matter certainly needs to be probed. If paragraph (b) is necessary, I would be interested to know what the Government’s explanation is.
Lord Freud
My Lords, I will follow up the Croydon situation. I was not aware of it, even though I was brought up in south Croydon.
Let me try to make this absolutely clear. The whole point of the assessment is to judge whether someone is functionally able to do the job, which is exactly what the noble Baroness was asking for. The point is that it can be done coherently and consistently by people who are experts in that function, whereas GPs and specialists are trained in diagnosis and treatments which are entirely different; it is not their job to see people and make those judgments day in, day out on a consistent basis. But that is what we are looking for. Atos Healthcare professionals are trained in disability assessment, which is assessing the functional effects of a person’s condition or disability. That is exactly what the noble Baroness is asking for.
Baroness Howe of Idlicote
My Lords, this has certainly been a very wide-ranging and passionate debate on these issues, with good reason. I am certain that my noble friend Lady Mar will read it with considerable interest and will no doubt have plenty of issues to raise at a later stage of the Bill, when I hope she will be available. We obviously have to wait for Professor Harrington’s final report, which will be extremely helpful. The various questions that were raised makes one realise how complicated the way through these things will be. Above all, we will need to reassure people with these fluctuating conditions that they will be treated fairly. On my noble friend’s behalf, I thank all noble Lords who have taken part in the debate and beg leave to withdraw the amendment.
Welfare Reform Bill
Baroness Howe of Idlicote Excerpts(13 years, 1 month ago)
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Baroness Howe of Idlicote
I hope that the Minister will forgive me for interrupting. He has painted a very clear picture whereby only a handful of people are likely to be affected by this measure as they will learn the relevant lessons. However, will he make clear a route, as it were, to those administering the regulations or whatever, so that they do not push to impose higher sanctions too quickly and for a longer number of years?
Baroness Hollis of Heigham
May I add to that? I was going to wait until the Minister finished, but I wish to add two points which are germane to this discussion. First, the noble Lord is assuming—I absolutely understand why he would—that people respond rationally to sanctions. However, the group with whom he may well be dealing are those whose lives are feckless, chaotic and without much shape. In my experience, those people are semi-literate and probably do not understand what is going on when the sanction is imposed. It is just one of those things that happen to them in a passive way, which means that a high obligation is placed on staff, with the aid of easy-to-read literature and all the rest of it, to make very clear what is going on and what the nature of those sanctions are. My experience of people who have been sanctioned is that they do not know why they have been sanctioned.
Secondly—I was waiting to hear the noble Lord refer to this but he has not done so, so perhaps he will go on to do so, in which case I apologise for anticipating him—we have always had a hardship category in relation to sanctions. For example, if you have dependent children the level of sanctions is limited so that, because of your hardship, you are not sanctioned all the way. Disabled people and those with a mental health problem would in my view come into the category of vulnerable people entitled to a hardship adjustment so that their benefit is not completely wiped out. Again, this requires high levels of training and support from the very people who the noble Baroness, Lady Thomas, identified; namely, the disability employment advisers in Jobcentre Plus offices. Perhaps the noble Lord can reassure us on those two points. First, can he assume that people with such chaotic lives will understand the rationality of a sanctions system? Secondly, will the hardship regime apply to some of the people who were identified by previous contributors to this debate?
Lord Freud
I thank my noble friend for looking for clarity. There is a layer of protections here. We have a highly trained decision-maker with a specific job of making the decision. Also, the claimant can look for reconsideration within that office. Beyond that, they can look to reduce a sanction by going to an independent tribunal. There are layers of protection. The objective is that claimants who demonstrate good reason will not be sanctioned.
We will also maintain other protections. One is that we will continue to visit the homes of claimants with limited capability for work and a mental health condition or learning disability, to help us understand why they did not meet their requirement.
Baroness Howe of Idlicote
My Lords, I remain worried by the point that was raised about a basic understanding of what I call the coalface: in other words, when you are in a face-to-face situation. It is important to have some training and understanding, not least in the example that the Minister gave of a well known and common complaint. It worries me that this will be dealt with by experts at various levels of appeal rather than being sorted out much earlier in the process.
Lord Freud
My Lords, it is important that the coalface does not do the sanctioning. It is important that there are really well trained people doing this. This is a complicated area that needs to be got right. These are some of the most highly skilled people in Jobcentre Plus aiming to do that with all these supports.
In response to the concerns raised by the noble Lord, Lord McKenzie, on Amendment 51FB, I want to make it absolutely clear that there are no benchmarks and no targets for sanctions referrals. Jobcentre Plus gathers a range of management information to support its work, as you would expect us to do. On the issue of numbers, over the last year, the number of sanctions and disentitlements rose by around 270,000 from approximately 490,000 in 2009-10 to around 760,000 in 2010-11. There are a complex range of reasons for this increase, including the introduction of new requirements, a slight increase in the average claim duration and a refreshed approach to monitoring compliance with requirements designed to maximise claimants’ chances of finding work. A particular reason is due to the 2010 rule change that led to a sanction rather than disentitlement for failing to attend an employment interview. The number of sanction referrals to decision-makers is a key piece of management information. It helps local mangers assess how consistently JSA conditionality and sanctions are being administered in their area. Managers may compare rates of referrals across different areas when analysing the data, but there is no benchmark and certainly no right or wrong level of referrals. The collection of management information also allows the department to monitor and evaluate the impact of sanctions. I urge the noble Lord, Lord McKenzie, to withdraw the amendments.
Baroness Howe of Idlicote
My Lords, I am delighted to have actually made it. With regard to the previous amendment and the proposal for pilots, it may well be that pilots are relevant here, too.
This amendment would introduce a specific earnings disregard within the universal credit to ensure that carers juggling work and care are not left worse off as a result of the new system of disregards. Approximately 250,000 carers currently in receipt of the carer premium to means-tested benefits such as income support, will be moved to universal credit. Under that, the earnings taper will be more generous than the withdrawal rate of existing benefits. Many claimants who are in work, including many carers able to juggle work and care, will be able to keep more of their benefits as they earn. However, this will depend on which earnings disregard they have access to and their level of earning.
Under existing plans, it appears that certain groups of carers would see the size of their earnings disregard in universal credit reduced, compared to their existing income support disregard. Currently, individuals in receipt of income support are eligible for a £20 a week earnings disregard, that is £1,040 a year, which allows them to earn £20 a week before their benefits start to be withdrawn. The Government have announced the following disregard groups for universal credit claimants, with approximate disregard levels: for a single person without children it is £700, about £13.50 a week; for a couple it is £1,920; for a lone parent £2,260 plus £520 for the first child and £260 for the second and third children; and for single disabled people or a couple where at least one person is disabled it is £2,080.
The Government have said that, taken together with the taper, this would leave couples, singles, lone parents and disabled people significantly better off in low-paying jobs. That is good as far as it goes. However, it does not apply to single carers, who currently have access to £20 income support through receipt of the carer premium, but who would be able to access only a basic single person disregard of about £13.50 a week under universal credit. Although £13.50 would be an improvement for unemployed single people being moved onto universal credit from jobseeker’s allowance, where they currently receive only £5 a week disregard, it would see the earnings disregard for single carers on income support drop from £20 a week, that is £1,040 a year, to £13.50 a week, or £700 a year.
Those carers who would see their disregard reduced would be those unable to access the higher disregards for couples, lone parents and those with children or covered by a disability disregard. Carers losing out would be those living on their own, who do not have children and who are caring for a disabled person who does not fall within their universal credit household. This latter group includes carers looking after a disabled or elderly friend or relative living elsewhere and carers looking after an adult disabled child, a parent or other elderly relative living with them but who is not considered to be within the same household for the purpose of universal credit.
The Government have estimated that around 20 per cent of households that receive means-tested benefits and include a carer would not have access to any of the higher disregards for couples, lone parents or households that include a disabled person. With approximately 250,000 carers on means-tested benefits, this would leave approximately 50,000 carers able to access only the lowest earnings disregard if they were able to juggle work and care.
I end with a case study to put this in perspective. Sheila is on income support and cares for her mother, who is 58, has early-onset dementia and receives disability living allowance. Sheila is single and has reduced her working hours as a librarian to just two hours a week. She currently earns £20 a week and, because of the existing £20 disregard, her benefits are unaffected. Under universal credit she would be eligible only for a single person's earnings disregard of £700 a year—around £13.50 a week. Sheila's earnings above £13.50 would be subject to the universal credit taper, which would mean that she would be £15.75 better off from her £20 earnings. She would be £4.25 a week—£221 a year—worse off than under the current system even though she would be earning the same amount.
I will not go on to outline the full impact because I have given an impression of what it would be. I look forward to hearing how this unfairness can be tackled. I beg to move.
Baroness Lister of Burtersett
My Lords, I am pleased to support the amendment moved by the noble Baroness, Lady Howe of Idlicote. I am glad that she was able to get to her place in time. I welcome the fact that a single person's disregard was included in the latest round of announcements about universal credit. I also welcome the more generous disregards being made available for most recipients.
I have banged on for many years about the importance of disregards. For me, this is one of the plus signs of universal credit. However, the interaction with housing costs and the complexities that will be created have qualified my enthusiasm for the new disregard regime. It sullies the supposed simplicity of universal credit. I came across some of my noble friends one evening last week wandering around in a state of utter confusion, trying to understand various calculations that we had been given on disregards. I should add that these noble friends are extremely expert.
Just how complex the calculations are was brought home to me by Sue Royston of Citizens Advice, who kindly e-mailed me to point out the implications for carers. I will read out what she said because if I try to paraphrase it I could get in a hopeless mess and get it all wrong. She wrote:
“The proposed levels of disregards have added a whole new area of complexity ... The new disregards have given single adults a disregard floor of £13.50. I have assumed in the calculations that CTB will pay council tax in full for those on JSA or ESA levels and that any excess earnings will be clawed back at a 65% taper as I would be very surprised if any Local Authorities were more generous than this. For the first £13.50 a single claimant will not be subject to a taper of UC but will be subject to a CTB taper so will gain 35% of their earnings. However, every £10 they earn beyond that will be subject to a taper of 35 per cent from universal credit and will then be subject to a further taper in council tax benefit, leaving them with a gain of £1.22 for every £10 they earn … a single carer who at the moment can simply earn £20 and keep all £20 as well as their benefits in full will now have to earn over £55 even to get a £10 gain if they pay council tax at £18. When someone is no longer subject to the combined taper will depend on the amount of council tax they are responsible for paying”.
She goes on to observe that:
“People will have to go through complex calculations to work out given extra costs of working, what level of hours they can afford to work and how much they will gain at different levels of income”.
I hope that I have not lost noble Lords in that, but if I have, it makes the point that this is extremely complicated. If we cannot understand it, how do we expect recipients and carers who are trying to juggle work and care to do so?
Juggling work and care is no easy matter. I have not had to do it myself, but anyone who has done so or with relatives who have knows that it is difficult and stressful. According to Ipsos MORI research commissioned by Carers UK and the DWP for Carers Rights Day 2009, about one in six carers had given up work or reduced their working hours in order to care. A major barrier is the availability of suitable replacement care. In a separate survey and research by Carers UK and the University of Leeds, over 40 per cent of carers who gave up work did so due to a lack of sufficiently reliable or flexible services. A similar percentage, 41 per cent of those surveyed, said that they would rather be in paid work, but that the services available do not make a job possible. I am not saying that a disregard will magically create these services, but it would certainly help to pay for the things needed to support the combining of paid work and care. We know the arguments around childcare, but we seem to forget them when we talk about other forms of care.
There is evidence about the stress and ill-health suffered by carers who do this juggling act, and of course we are talking about more women than men here. That is because while,
“women represent 58% of all carers, they make up 73% of carers on benefits. They are substantially less likely to be in work. One third of heavy-end male carers are in full-time work, but only 13% of heavy-end female carers are working full time”.
I, too, will end with a case study which I have been given by Carers UK, and I have a couple of questions.
“Cheryl is 45 and lives in Stoke on Trent—she has been her elderly father’s full time carer since her mother died in 2008. Spinal problems, a heart condition and arthritis mean her father needs full time care so he has come to live with Cheryl, her husband and their 5 year old son. Alongside providing childcare and supporting her father with everything including eating and personal care, Cheryl works for an hour on three evenings each week as an NHS cleaner, once her husband is home from work and can support her Dad and son. The only social care support she gets is six hours of respite care each Monday—time she uses to do food shopping and spend some time with her son who she hardly sees in the evenings. She wants to work more”—
clearly she has the same philosophy as the Government in that she believes in paid work—
“but has no one else to look after her Dad, can’t afford replacement childcare and would have to find a different or second job as her current employer is not able to give her more hours. Any work has to fit around her son’s school hours, school holidays, her husband’s working hours and his ability to provide childcare and her father frequent doctors, physio and hospital appointments during the day”.
That gives a flavour of how difficult life can be for carers. As I have said, a more generous disregard is not a magic wand, but it could ease that life and it is a way for the Government to say, “We recognise that the position of carers is different from that of other single adults”. It has been recognised in the past that there is a case for a higher disregard for carers.
Can the Minister explain why carers appear to be the only group whose earnings disregard will be reduced as they move on to universal credit? Not surprisingly, there is a feeling that that is discriminating against carers. Secondly, what assessment has been made of the impact on carers and particularly on their work incentives?
Baroness Hayter of Kentish Town
My second point is that the question that was not asked is why there is no additional amount of disregard for disabled people to take account of the council tax issues. I presume that the noble Baroness, Lady Howe, will speak, but if those extra points could be referred to it would be helpful.
Baroness Howe of Idlicote
My Lords, this has been an interesting and extremely wide-ranging—
Lord Freud
I shall try to answer the questions. To pick up the point from the noble Baroness, Lady Hayter, there is not an impact assessment on carers, but if we are talking about an entire universe of 50,000 and then we have to narrow it down to this very small group who are working two to five hours at national minimum wage, we are talking about a very small number. Do not forget that there is an element of the system that people change behaviour to fit around. You can see the encouragement here, as I was showing noble Lords, to start earning a little more than the five hours. The reality is that this is a very small impact. There are winners and losers all the way through the universal credit because we are putting in a new system.
To pick up the question from my noble friend Lady Thomas, the tax credits will no longer exist once the universal credit is introduced. As we stated in the revised policy briefing note—she has spotted this with her eagle eye—we aim to have a single assessment as the gateway to limited capability for work elements and the earnings disregard for disabled people. This assessment will be based on the work capability assessment and we are considering that this process may need to be modified in the context of the universal credit. We will have a chance at a later stage of the Bill to discuss the WCA in a little more detail.
Baroness Hollis of Heigham
I am grateful to the noble Lord because it is an issue that is dear to their Lordships’ hearts.
Baroness Howe of Idlicote
My Lords, I have been fascinated by the wide range of issues and figures that we have had to digest. It is clear that we will have to wait for the information on PIP with increased enthusiasm. However, I suspect that we will have to wait a day or two yet. I thank everybody who has contributed to the debate—a considerable number did so—particularly my noble friend Lady Lister, who supported my specific point but raised a lot of other fascinating issues.
I am afraid that I failed to say at the beginning that I owe my briefing to Carers UK, which produced an amazing range of facts and figures. The number of women carers must not be overlooked. It constitutes a huge percentage. It is well and truly worth taking into account what the state would have to pay if it were the carer in all the instances that we have talked about. The present system costs comparatively little. We will have a lot to read in Hansard tomorrow, quite apart from studying the table that we have asked for. In the mean time, I beg leave to withdraw the amendment.
Pensions Bill
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The Lord Bishop of Bath and Wells
My Lords, I, too, express my appreciation to the Minister for the work that he has done in regard to this very complex matter. At the same time, I belong to the generation that has benefited extraordinarily from the provisions that have been made by the state and I have no worries about my pension. I am very conscious that this is an issue if not of gender justice then certainly of fairness. I recognise how difficult it is when that has to be balanced against finance, but many decisions that we make in government often demonstrate that money is spent on things that do not have quite the same moral imperative as this issue.
Noble Lords will be aware of the public pressure in respect of this matter—some will have seen the advertisements in Westminster Tube station. Perhaps we should remember that the Prime Minister himself has said that he is uncomfortable with these proposals. I recognise that there can be no universal panacea but I genuinely believe that, this being an issue of fairness, we must consider whether the amendment in the name of the noble Lord, Lord McKenzie of Luton, can be supported.
Baroness Howe of Idlicote
My Lords, I, too, thank the Minister for the efforts that he has clearly been making and I am grateful for the changes that have been brought forward in the other place. As the right reverend Prelate said, the Prime Minister was made somewhat uncomfortable by all these protests and has perhaps looked rather deeper into the effects on the generation with which we are concerned.
I, too, am still very concerned about the age group which is most severely affected. The people in that group entered employment as far as they were able with their caring responsibilities. We should not forget the cost to the public purse of bringing up children—in an orphanage, say—if their parents do not look after them. We all know that it is mainly mothers who carry that responsibility, and that has definitely had an effect on the amount of time that they have been able to devote to whatever employment has been within their reach. Therefore, we still have a duty towards this group of women.
I accept that £11 billion is a lot of money, but there have been complications over equality and I would still like to see more done for this group. I would regard it as fair, just and proportionate if this group were given a full year. Although I should have liked to go along wholeheartedly with what the Government have achieved, I am sad to say that, with my background knowledge from many years of fighting for equality of opportunity and much greater equal treatment for women, I do not think that what the Government are proposing has gone far enough.
Baroness Drake
My Lords, I recognise that amendments have been made by the Government but I support the amendment tabled by my noble friend Lord McKenzie. This is not an argument against raising the state pension age. It is not even an argument against accelerating the increase in the state pension age in the face of rising life expectancy to achieve the long-term sustainability that was articulated by the noble Lord, Lord Boswell. I frequently heard the quote from the noble Lord, Lord Turner, but if one gives it in its totality, he went on to say that he would also have been more radical on state pension.
As for my own situation, in 2004 I travelled the country attending public events and platforms telling people at a time when it was most unpopular to do so that the state pension age would have to rise not once but consistently. I have no difficulty in articulating the case for the need to respond to rising longevity. However, this is an argument about the manner and timing of this particular increase, which fails to take account of the need to give people sufficient time to adjust their lives and their planning for the increase. It means that a particular group of older women will disproportionately bear the burden of achieving these savings. That will happen for five simple reasons.
First, they will have lower state pensions for legacy reasons on the treatment of carers. Secondly, they will have lower private pension savings because of their economic and social position and the past incidence of gender discrimination. Thirdly, they are more likely to be undertaking caring responsibilities and less likely to be in the workforce. Fourthly, they will have lower incomes. Fifthly, they are less able to mitigate the loss of the income in the limited time available. The debate is about this particular increase, its manner and its disproportionate impact. It is not a challenge to the intellectual analysis of what you need to do to respond to rising longevity over the long term.
Those five reasons provide the essence of why the policy on this increase upsets people. It is seen as unfair. Consistently surveys show that women believe that coalition policies are seen as particularly harmful or harsh to women. We hear organisations such as the Women’s Institute articulating these concerns. At the weekend the Daily Mail highlighted the results of a Harris Poll survey showing that government support among women is slipping away. These proposals are an example of why that is so. They are very real in their impact on ordinary women. There are others, such as the change to the tax credit system, child benefit and childcare to name but a few. Yes, tough decisions have to be made. I do not disagree with that at all. But that mantra cannot be used to justify policies that consistently and disproportionately impact on women, particularly those who are carers and on low or moderate incomes. Until that is recognised there will be many more surveys revealing views of women similar to those reported by the Daily Mail at the weekend.
To get back to the point that I made in opening, the amendment of my noble friend Lord McKenzie—I know him well and we discuss these things frequently—is not a challenge to the need to respond to increasing longevity or the fact that accelerating the increase in the state pension age is part of that. In fact, the amendment does accelerate the increase in the state pension age compared with the existing proposals, and no doubt we will come on to look at ages 67 and 68. The amendment concerns the unfairness of the manner of this increase on a particular group of women for the reasons that I have laid out.
Lord Freud
My Lords, we do not have the figures on more informal care; we do not know how many are in this age group. That is not broken down—I certainly do not have the figures to hand. I am providing the figures for the women most affected with full-time caring responsibilities.
Baroness Howe of Idlicote
Could the Minister answer the point that I was trying to make concerning the earlier period in women’s lives, when they were caring? That also will have had a huge effect on their capacity to find employment; certainly these days it is not an easy task.
Welfare Reform Bill
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The Earl of Listowel
My Lords, I am afraid my last comments were probably not very clear, for which I apologise. The question I really wanted to ask was about a young person leaving care who has a sum of capital in a child trust fund. Will that sum be exempt if he needs to draw on universal credit?
Baroness Howe of Idlicote
My Lords, having listened to the detailed arguments, which were extremely well put, if I may say so, the message to me is definitely that all this looks as though it is going to discourage people from saving. If the Minister cannot reply to what we have heard, that is a very worrying message to be sending out.
Baroness Sherlock
My Lords, I would like to add one final word. Could the Minister reflect for us briefly on one of the wider consequences of this move? When tax credits were set up, they were, as he will know, designed to replicate work in many ways and to replicate the tax system, so it is not the case that having savings is not taken into account at all. Under tax credits, genuine income from savings is taken into account, and that is the way it should be, but under this new system it is not just the very richest who are affected. Once people reach £6,000 worth of savings, they will face, as my noble friend Lady Drake described, a heavily punitive rate of effective taxation on that. I wonder what the effect of that is on the marginal deduction rates as they move into work.
I ask the noble Lord to do two things. One is to comment on how he has factored that into the effective incentives to move into work in a whole variety of situations. Secondly, could he say whether he is not worried at all that it might push people back into an approach of dependency on the state as opposed to their trying to share that responsibility between themselves and the state, which the tax credits system encourages them to do?
Lord Skelmersdale
My Lords, before the debate continues, I have to say that I am afraid that the noble Lord, Lord McAvoy, has somewhat misunderstood what I said. I came down firmly in favour of fortnightly payments. What I did not say, if for no other reason, was that the move from weekly to fortnightly payments is so recent. I do not believe that it has yet bedded down.
Baroness Howe of Idlicote
My Lords, I congratulate the noble Baroness, Lady Lister, on her excellent exposition of the case and the passion with which she presented it to us. Like my noble friend Lord Northbourne, for many years I have been and still am involved with the Peckham Settlement charity. I know that there was considerable concern when the money that the women had charge of ran out for one reason or another.
I am very impressed by the range of options here, but I would really like to support the one identified by the noble Lord, Lord Kirkwood of Kirkhope, because I think that really said it all. It is a question of choice, and that should be what we give individuals in this situation. We know the number of times families have gone hungry when women have not had control of the money, for all the reasons that have been explained previously. This particular option is the one that we should all consolidate behind. More than anything else, I say this because the more people who speak in favour not just of this amendment but of what is being said in all these amendments, the more likely we are to persuade the Minister to have another look at this, and above all to take it back to his colleagues, who may have rather different views, and to try and persuade them.
Baroness Hollis of Heigham
My Lords, I support the amendment of my noble friend Lady Lister, which she moved so powerfully, and I certainly hope it will cause the Minister to reflect on the issues she has raised. I want to speak to a related issue that could be raised under Clause 29, but I raise it now because I think it will make worse the situation that my noble friend has described, and I am fearful. This issue is the payment methods for housing benefits—not to whom they are paid, which we will come on to later, but how they are paid. I hope the Minister can give us reassurances on that, and if not, that we can follow this up in the discussion afterwards.
Your Lordships will know that HB is very complicated to assess and to administer. Local authorities will often not allow a member of staff to fly solo on handling HB claims until they have had some six months—I repeat six months—training and chaperoning. This is almost as much as a police officer. The reason, of course, is that it involves checking entitlement, rents, family size, the non-dependence in the home, property size, the landlord’s veracity, any disability, backdating, separating out service charges—including fuel, water rates and energy bills—and careful checking against fraud, because it is a big-ticket item. It takes a good local authority with intimate knowledge of its locality an average of between seven and 10 days to process a housing benefit claim. Crawley Borough Council, for example, which is a very high performer, processes about 40 per cent of new claims in one day and the rest in under 10. None the less, do we think that universal credit staff can deliver a benefit as complicated as HB?
In future, this will be done online by a family in Exeter, with queries, I understand, to a call centre in Warrington. That call centre will be handling over 30,000 new HB claims a week: nearly 7,000 a day. Families competent in financial management may be able to cope; we calculate that perhaps 40 per cent of families are ready to use the online process. Those who are most dependent on HB are the same group who are most dependent upon and in need of weekly and fortnightly payments: people with, say, mental health problems or learning difficulties, or other people who for whatever reason lead chaotic lives. These are the people who find that their paperwork is lost, that landlords are unhelpful, that call backs go missing, that deadlines pass. I understand that there is a 63-page form to fill in: one mistake, and no money gets paid. I hope the call centre line is free. Is it? The lines will be jammed, callers will have to call back repeatedly, and they will have to hang on for long periods of time while their call is transferred to someone who knows something about HB—that is, if the call has not been cut off in the mean time through the handing-on process and they have to start all over again.
All that is handled now with skill, patience, good will and huge experience by local authority and housing authority offices. Local government officers find that 66 per cent of all those on housing benefit need the face-to-face service they offer. The Government are assuming that only 10 per cent will do so, and that that 10 per cent will be serviced by Jobcentre Plus offices, whose staff are not only not experienced in housing matters but in physical terms are often inconveniently located. For example, one district in Kent with 100,000 people has no Jobcentre Plus in its area. Claimants needing a face-to-face service in the north of the district have a £9 bus ride to get to and from the Jobcentre Plus offices, while those in the south have a £7 bus ride—a day’s allowance for the claimant gone on a day’s travelling costs.
At the moment, the only experience that DWP staff have of housing issues is from 200,000 home owners nationwide, less than 5 per cent of the jobseeker’s allowance caseload. Housing cost assessments will go up from 200,000 to 4.83 million. So I have some questions for the Minister, and I apologise for not giving him advance warning of them, but they are absolutely integral to the whole issue of how payments are made.
Will claimants get an itemised statement of the elements making up their universal credit so that they can see what they should get in housing benefit and thus, what is often the trickiest and most difficult to compute, be able to compare it with previous awards? Will claims get slowed down to the slowest part of the process? If there is delay over housing benefit, will the claimant know that that is where the difficulty lies, and will they none the less receive the rest of their universal credit, which may be more open to real-time assessment? At the moment, if a claimant gets their jobseeker’s allowance paid, the landlord can be pretty confident that they will get their housing benefit. Will that happen in the future?
If a claim has to be investigated further, perhaps because the family needs an extra bedroom because of disability, and it takes a fortnight or more to get the required information back from GPs, will the entire universal credit payment be held up until it is resolved? What, as my noble friend so eloquently argued, will the family live on in the meanwhile? What plan B does the Minister have in mind for the individual living on the breadline, especially since that same individual may want the housing benefit to be paid directly to the landlord? However, the Minister wants it paid directly to the tenant, who will now be far more exposed to the vagaries of administration as well as to the temptation of fraud.
Perhaps I can suggest a plan B to him: get local authority staff who are highly experienced, skilled and swift to do the housing benefit calculation for the DWP and—given that central and local government computers already communicate with each other on these issues and the whole system is online—get them to feed their data into the central universal credit processing centre. After all, the ATLAS project means that local authorities have a direct link into JSA, ESA and IS. On top of that, they can access electoral records, they can verify residency, they have knowledge of local HMOs, and they have street knowledge. No call centre 200 miles away can identify a contrived tenancy, or whether too many individuals all appear to be claiming housing benefit for a shared property, or whether rent arrears are beginning to mount up and intervention is necessary. Local housing benefit staff can and do, and they act on it. Having a local contact point would also stop the phones being jammed by worried landlords wanting to know whether their tenant is going to get housing benefit, which is essential if we assume that most tenants will in future get their housing benefit paid direct to them. Landlords want the security of a paid rent, and hence their demand that rents be paid directly to them, but they also rely on cash flow. Cumbersome administration that makes the timing of their payment from the tenant unpredictable is at least as significant.
Claimants who have steady circumstances and basic competence will cope with an online system supported by a call centre and may very well be able to cope with monthly payments. However, the claimants about whom so many of us around this Table, as well as local authorities and housing associations, are most worried, are vulnerable, chaotic and prone to error. They may have literacy difficulties, they are in constant flux and they will not cope. Many of the most vulnerable are also clients of other statutory services. No call centre can deal with them or will interface with them. The local HB office does this each and every day.
Tax credits are relatively easy because they are based on the previous year's income, with fixed periods of claim. Yet even here, as I know to my pain, the computer nearly toppled over and the backlogs were huge because no one had appreciated the rollercoaster nature of the lives of so many lone parents. Half of them had more than a dozen changes of circumstance per year, many connected to childcare. The computer was often three changes behind. HB is far more complicated than tax credit. It exposes the tenant to the much greater risk of homelessness, and no unemployed tenant facing homelessness will concern himself with looking for a job rather than trying to secure his home, which is the outcome that we want him to seek.
We will strengthen UC and protect some of the clients of UC most at risk by developing a partnership with local authorities, particularly as they will be holding and distributing the discretionary housing allowance to soften the difficulties that will follow from the tough new HB changes that we will no doubt debate in a later session. For the Government, local authorities represent a back-up resource that it would be foolish to squander. I realise that I have sprung some questions on the Minister. I hope that, if necessary, we can follow this up with a meeting. They were triggered by the concerns raised by my noble friend’s amendment, and by the additional difficulties inherent in the complexity of the nature of HB, which the system as presently constructed cannot begin to address.
Remploy
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Lord Freud
My Lords, Remploy has about 54 different factory outlets doing various things, including packaging, logistics and CCTV—a wide variety of endeavours. That is exactly the point: what a Remploy factory operation needs to be successful is to be run as a profitable entrepreneurial unit. At the moment many of them are loss-making, and indeed across the piece only 50 per cent of people are doing productive work.
Baroness Howe of Idlicote
Bearing in mind what the Minister has said, would he also please take into account the fact that Remploy is very flexible with the needs of some disabled people and those who have difficulties with learning? It can accommodate them, which makes a huge difference. I hope that that will be put into the decision that is taken.
Lord Freud
My Lords, I must emphasise that what Remploy Employment Services has done in the past few years is genuinely remarkable. In the latest financial year, it has put 20,000 disabled people into mainstream jobs and it is aiming to do that for 30,000 next year. This signifies real change for these people, and that is something on which we must congratulate Remploy.
Welfare Reform Bill
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The Earl of Listowel
My Lords, I would like to join my thanks to those made this afternoon, and to speak briefly about the importance of involving employers, about the governance of Jobcentre Plus, and briefly about housing.
I thank the Minister for the help of the civil servants. There were a number of very helpful briefing meetings which were most welcome, and I am sure this will continue.
The noble Lord, Lord Kirkwood, raised the issue of involving employers, and if I might I will give an example of how effective that can be in terms of reaching the most hard to reach people out there.
There is a programme, started by the National Grid utility about 10 years ago, led by their chairman, Sir John Parker, which employs young people from within the criminal justice system, and has reduced the reoffending rates among those young people from 70 per cent to below 7 per cent. National Grid has brought in a number of other partners, such as the engineering firm Skanska and another engineering firm Morrisons, and other businesses have been joining in such as software businesses. Because this has come from businesses they have been able to build trust among other employees, and while it would seem most unlikely that many of these companies would wish to employ people from the criminal justice system, in fact they found that because they have made the effort to recruit these young men—they have given them the training and the promise of employing them if they complete the training—those young men have become loyal employees, and have actually risen quickly up the managerial ladders of these companies. They are filling a gap, because these companies have an aging workforce and they need young people to enter their firms.
That is a very important point, and it brings me again to think about whether employers are firmly enough plugged in to the governance of Jobcentre Plus. I hope to table an amendment later in the Bill which will look at how one might perhaps involve more of the stakeholders in the running of Jobcentre Plus. I will not expand too much on this now, but if you look at the example of the Youth Justice Board, which has proved so successful since its introduction about 10 years ago you will see that, its chairman is a former chief executive of a local authority, so she can go to chief executives and directors of children’s services in local authorities and explain to them how important it is that they provide employment and find housing for young people who leave young offender institutions if they are not to reoffend, cost the taxpayer huge sums of money, and ruin their own lives. So I will bring that amendment later.
I am certainly very concerned about housing, but I am grateful for the signals from the Government, who listen very carefully to concerns, and I look forward to that debate. I will sit down at this point, but I am very grateful to the noble Lord, Lord Kirkwood, for allowing this opportunity for a broader debate at the beginning of the Bill.
Baroness Howe of Idlicote
My Lords, I shall comment briefly on a couple of the speeches that have been made. The way the noble Lord, Lord Kirkwood, introduced the whole of this absolutely explained my frustration and irritation at the short amount of time any of us have been given to do anything at all with this Bill. The noble Lord’s hard look at the use of language was very illustrative too, and that has of course been added to as far as things like social tax are concerned and other points that have already been made.
Above all, I hope that it will help us, because the atmosphere has not been particularly good regarding the whole of the way in which this has been arrived at between the usual channels. To have a little debate like this, setting the scene, will I hope influence how we all approach what we are going to be dealing with. I will leave it at that, but I have been very impressed, let me put it like that, particularly by what the noble Lord, Lord Kirkwood has said, and by the way he set the scene for the opening.
Lord Freud
I thank the noble Baroness, Lady Meacher, for that. I am at a slight loss at how to respond, in case it is an “Am I beating my wife?” question. I am getting some help from the Box. The universal credit will be built on a computer system, or rather a pair of medium-sized computer systems. We have a careful introduction process. One of the options we had, if I can explain it in layman’s terms, was that we could have picked everyone up electronically out of current systems, moved them over and dropped them into the universal credit, with effectively a Big Bang approach—go for it.
That would have been the conceptual framework in which the noble Baroness asked her question. We are not doing that. We are moving people into the system over an extended period. We will start with the flow in October 2013, and then as we get the system working we will have some managed migrations over a four-year period. It is not the Big Bang approach—where you wait for the thing to go, and then you throw everyone in—that one might envisage. It is a much more considered, steady, incremental approach. Indeed, we are developing the actual IT by using elements and units of what we have much more incrementally than it might seem from outside. That is one of the things that I will try to show noble Lords when we have the presentation; indeed, it will be a wider presentation for all parliamentarians. I see that a few in the Room may be very interested.
Baroness Howe of Idlicote
I am trying to visualise in my mind what you are doing with your groups. What worries me is the older group, who may not be quite as alert to the modern methods of IT and may find it not as easy to move around and get the right information via an IT system. It would be helpful if you could answer that point, or take it into account when setting up your demonstration.
Lord Freud
Yes. Picking up on that point from the noble Baroness, Lady Howe, one of the most complicated areas in practice is not the development of the IT system; it is the interface between the user and that system. We must develop, and are developing, a sophisticated set of gateways. There are a lot of issues to get right surrounding identity assurance, ease of use—which we are doing a lot of work on—and where you go to get access when you do not have broadband in your home or do not necessarily understand how to use programs. Getting that help right and balanced is something that we are spending a lot of time and energy on. I accept the noble Baroness’s point: that is one of the key issues to get right.
Welfare Reform Bill
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Baroness Howe of Idlicote
My Lords, I join the noble Lord, Lord Kirkwood, in his concern that the traditional practice of reasonably sized contributions from noble Lords has once again been put aside and a meagre seven minutes advisory per speaker suggested in its place. I notice that he has gone well over that time limit, which gives us plenty of opportunity to follow his example. There will clearly be a great deal to do in Committee and at other stages of the Bill in your Lordships’ House—not least as much of the Bill was apparently not discussed at all during its passage in the other place.
Perhaps the most remarkable thing about this Bill, with its principal aim of simplifying benefits and making work more attractive and much more worth while than living on benefits, is that practically all welfare rights pressure groups, think tanks and involved charities and many individuals are theoretically in favour of such an approach. Rightly so, as who would want a system which continues to encourage family dependency if jobs are genuinely available and wanted?
The snags emerge when we begin to look at the detail, particularly when families and children—even more important, when disabled adults and children and those with mental health learning difficulties—are involved. The closer one examines the huge volume of evidence, including many individual histories written in fairly despairing terms, the more obvious it becomes that the most vulnerable and least able to cope will be hardest hit. Even though there may have been some unnecessary scaremongering, the concern of many third-sector organisations and others working with such families will be to hear reassurance from Ministers as to how clearly essential and necessary support will be maintained. There is also the problem that unless the local authority finance for these essential services is to be ring-fenced, a localism approach may indeed be creating a postcode lottery.
I shall mention one or two issues. On housing for example, the plan to require those in receipt of public support to move to different accommodation if they have an unused bedroom is one concern. The noble Baroness, Lady Wilkins, overwhelmingly made the case here. Reassurance from Ministers will be needed that special arrangements will be possible or extra funding available for more expensive accommodation, if the private sector is the only alternative to a compulsory move. One worry is the understanding that the severe disability premium is to be scrapped, yet surely that kind of situation is exactly where extra help is essential. This may be one of the areas being looked at, but the Children's Society’s view is that it could mean a loss of up to £2,876 per annum for such families.
There is also a need to look at other issues that will affect the likelihood of those with caring responsibilities obtaining a job and at the effect of recent positive measures. It is good news indeed, for example, that the Government are actively involving and encouraging third-sector participation, not least by ensuring that when both sectors are competing for caring contracts, the system does not allow the public sector a tax advantage.
The change in the retirement and pension age will also have a huge impact. As we know, Ministers are eager to raise the retirement age even earlier, but closing the gap between men’s and women’s retirement age also means that women must work longer and therefore will have less time for any caring role. Finding jobs that will allow time for disabled caring responsibilities will become increasingly difficult unless more positive action is taken. Have the Government, for example, thought about a scheme that would reward businesses that make special efforts to provide flexible working opportunities for such families? I would be glad of an answer from the Minister.
Again, frankly, the likelihood of older women, whether carers or not, being able to find jobs, full or part-time, into the intermediate economic future will be minimal, and that situation needs facing. Barnardo’s and its associates, which have sent your Lordships detailed briefings, are also concerned about a number of problems. Family and friend carers, for example, who are bringing up a child who would otherwise be in local authority care, should, they think, be exempted from conditionality requirements under universal credit for a year. Also, from October 2011 carers will have to be available to work when the child is five rather than seven years old, with all that that means for extra childcare costs. Childcare costs, as the Minister knows, are seen as a major obstacle to women working. So, as the Bill progresses, it will be increasingly important for the Government to convince voluntary organisations and family and friend carers that the combination of their proposed changes will not result in even higher numbers of children in care and higher overall costs for the state.
I make one final point: there will be a great need to ensure that it is the main carer of the child, the vast majority of whom will be women, who will continue to receive whatever allowance is due to the family. This is an issue of particular concern for Platform 51 and other such organisations and is vitally important when one looks back to the past and realises that this sum has often been the only money the carer has had in order to ensure that the family is fed.
Pensions Bill [HL]
Baroness Howe of Idlicote Excerpts(13 years, 7 months ago)
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Lord Boswell of Aynho
My Lords, I congratulate the noble Baroness, Lady Hollis of Heigham, on her ingenuity in inserting this into the delicate business of amendments at Third Reading, of which I have, with modesty, rather less experience than her. I also associate myself with the spirit of her intentions in this matter at least in two respects.
First, many of us across the House felt some dissatisfaction or sadness that we were not able to resolve some of the issues of rough justice connected with the bunching of women's pensions. While I appreciate that we cannot reopen that in this House now, that area might repay further consideration. I have seen some correspondence subsequent to our debates on Report which would have suggested, for example, that a minor adjustment in the entitlement for the male pension above the age of 65 might be a way to finance a smoother progression for women without a net cost to the Treasury. I hope that Ministers have not shut their minds to this area, although I appreciate that it is difficult and that there will always be losers as well as gainers. However, it would be inappropriate to go further into that.
Perhaps I would be on more confident and more positive ground in saying, secondly, that I share the noble Baroness's enthusiasm for the single state pension, which I believe would be a considerable social advance. It would help to make pensions and saving for them, including private pensions and NEST, worth while. That must be an objective for us all. It would also be an important advance in simplifying the system. We could not discuss this previously because of the timings of government proposals and I appreciate that pensions' evolution and development is an incremental business. However, I would like to share with the House some considerations which the Minister, even if he does not consent to a formal review—I know that those things are not easy for Ministers to do—may at least wish to ponder in moving through the consultation process on the state second pension and in looking at the interaction with NEST.
With due respect to the noble Baroness, I will not confine my remarks specifically to women's issues because some wider issues are also appropriate to consider. First, it is in the nature of pensions, particularly where they are guaranteed or organised by the state, to reflect long-term commitments. Any mid-term corrective action, even if benignly intended—and this is so—may therefore inevitably subvert arrangements which have already been made. I cite as an example that when we reduced the qualifying years to 30, with a view to trying to do something about women's pensions in the past, it had the converse disadvantage of nullifying the benefits of some individuals who had made contributions above that period in order to safeguard their entitlement, on the rules as they stood and in good faith.
At the same time, if we moved to a single state pension, I would find it personally important to retain an element of the contributory principle. Again, a post-Bill development, as it were, has been the issue of whether there should be some association either of administration or even of coverage between the tax and national insurance systems. Paying for something and getting something back is both morally and prudentially wise, although there is a huge amount of further work to do on that area. There are also potential differential impacts, as the noble Baroness has already touched on, from the change not just on women but for those with interrupted or overlapping working patterns. For example, there are people who have spent time abroad or who may have saved for a private second pension at different times. All that is complicated and requires a good deal of careful thinking through.
At some stage—the Minister can help us by giving some indication of this—we need therefore to take a dispassionate and careful look at all aspects of the proposed changes as they now come out. This should be designed to minimise any retrospective unfairness and to look prospectively to minimise any moral hazard, where people may feel that they lose when they have acted in good faith; but remembering at all times as we do that—and pursue the hard cases, which we must—that there is a grand prize to follow in simplicity and in providing a good platform for additional, personal private saving. That must be our overriding objective.
Baroness Howe of Idlicote
My Lords, I congratulate the noble Baroness on her amendment, which shows us that there are very few people who know as much about pensions as the noble Baroness, Lady Hollis; we recognise her ingenuity, certainly, but above all her knowledge and her belief in getting the right and honourable thing for all pensioners. I too am extremely sad that we were not able to convince this House to amend the proposals affecting those women turning 57 in March and April this year who were going to be required to work an extra two years, a group of women who had far fewer opportunities for flexible working than women have today. I believe that an attempt in the other place will be made to return a more equitable answer to this problem, and I hope that it would be well received in this House. I too support the idea of the single state pension. It would go quite a long way towards a more equitable set-up for both men and women into the future. I would like to end by very much hoping that we will see a better outcome in many respects than we had first thought when looking at this Bill.
Lord McKenzie of Luton
My Lords, my noble friend Lady Hollis has been an initiator of thinking about, and a passionate advocate of, a single state pension for a number of years. She is truly a leader of the pack on this issue. As she explained, the nature of her amendment this afternoon is simply that it makes a request that the Secretary of State be required to lay a report before Parliament before the end of June 2016, which of course is the start of the timeframe for the acceleration of equalisation of the state pension age under the Bill. That would assess the consequences of the Bill on any proposals for the introduction of such a pension. This does not seem an unreasonable request.
From time to time during our consideration of this Bill, there have been references to proposals for a single-tier pension and the Minister acknowledged this himself at Report, when he referred to being challenged by his noble friend Lord German to say more about the single-tier pension. The Minister duly obliged by referring to a Green Paper, which was due to be published a few days later.
The Green Paper effectively consults on two propositions. One is accelerating the existing reforms so that the state pension evolves into a two-tier flat-rate structure more quickly; and the second, as my noble friend advocates, is a single-tier flat-rate pension set above the level of the pension credit standard minimum guarantee. The Green Paper, incidentally, also consults on proposals for automatically uprating the state pension age, but we are not focusing on that this afternoon. The consultation is just under way and not due to be completed until 24 June 2011. Which option, if any, the current Government wish to pursue may not emerge for a little while, but like all noble Lords who have spoken I will be interested to hear today’s thinking. Indeed, we as a party need to consider the outcome of this consultation, but see the thrust of the benefit of a single-tier flat-rate pension. A number of considerations will doubtless be brought to bear, particularly the voice of the Treasury. I think that it was the noble Lord, Lord Boswell, who made the point that we need to reflect on these in terms of long-term issues—pensions are about long-term issues—and, I suggest, of the need to drive consensus where we can. The Minister also referred to the contributory principle, and that is very much the same position that my noble friend is in, which is why she prefers the single state pension to a universal pension that would not rely on such provision.
Pensions Bill [HL]
Baroness Howe of Idlicote Excerpts(13 years, 8 months ago)
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Lord McKenzie of Luton
I shall speak also to the other amendments in the group. Their detail may appear a little intricate, but their effect should be clear and straightforward. The amendments provide for the retention of the existing timetable for the equalisation of state pension age of men and women at age 65, but to bring forward the increase in the state pension age to 66 for both, in stages, between 2020 and 2022. Noble Lords will be aware that the Pensions Act 1995 provides for the gradual rise of women's state pension age from 60 to 65 over a 10-year period from 2010 to 2020. Also, as part of what we might call the Turner settlement and to pay for re-linking the basic state pension to earnings, the Pensions Act 2007 provided for the SPA to increase to 66 between 2024 and 2026, and then to 67 and 68 in the subsequent two decades.
The Bill also brings forward the increase in the state pension age to 66, but it would be completed between November 2018 and April 2020. Because the increase for men cannot run ahead of women's state pension age, the Government have put themselves in a position where they have to accelerate the date for equalisation of the SPA to November 2018, thereby disturbing the settled timetable of the 1995 Act. The Government propose to move to a state pension age for women of 65 by November 2018, rather than March 2020. The acceleration for that begins in May 2016. Between November 2018 and March 2020, the state pension age will rise for both men and women to 66.
What the Government seek to do is a clear breach of the coalition agreement, which committed that the state pension age for women would not start to rise to 66 until 2020. Had it been honoured, we could have reached a consensus on the way forward. Our amendments accept an acceleration of the move to a state pension age of 66, bringing it forward four years from the current timetable, but because that does not need to start until 2020, when men and women will each have a state pension age of 65, there is no need to change and no justification for changing the 1995 provisions.
The Government’s proposals affect nearly 5 million people, about 2.6 million of them women. Of those 2.6 million, 1.5 million women will have to wait a year longer for their pension, of which 500,000 will have to wait more than a year, including 300,000 for more than 18 months and 33,000 for exactly two years. Those first affected will have just five years’ notice. Our amendments would affect 1.2 million fewer people; they would affect approximately equal numbers of men and women; and no one would have to wait more than an extra year for their pension. There would be a minimum of nine years’ notice for all those whose state pension age will change.
Before expanding on our reasons for that proposition, let me reiterate, as I said in Committee, that we do not dispute the updated information concerning life expectancy and the need to change the status quo. We further recognise that the current timetable for increasing the state pension age to 67 and 68 is unlikely to survive. Whether the Chancellor's wish for a more automatic process to update that will achieve a consensus will depend on what view is taken of such matters as fair notice periods and health inequalities.
It is also accepted that our amendment would achieve only two-thirds of the savings that the Government hope to secure by drawing the line where they have. Our proposition is the same as option 2 in the impact assessment. We will hear from the Government, as we did in Committee, that we cannot forgo the difference of some £11 billion in DWP savings, but let us put this in context. This is a net present value, not an annual figure. The DWP savings forgone on our proposition are spread over about five years and do not exceed £1 billion until 2018-19, with the differential between the two propositions disappearing in 2022-23. These are not small sums, but need to be seen in the context of a GDP which might then be some £2 trillion with annual spending on pensions and benefits of £100 billion a year. The timing of the savings is outside the Government’s deficit reduction plan. The savings are all outside this Parliament and significantly outside the one that follows.
One cannot ignore the medium or long term, particularly on pensions, but intergenerational judgments also involve assessing who is to bear the pain now. Savings to the Government and future taxpayers are pensions forgone by the 5 million individuals, the majority of them women, who are hit by these proposals. If intergenerational issues are to be judged on the basis of the number of years in receipt of state pension or the proportion of adult life spent in receipt of state pension, the impact assessment shows little difference between the Government’s position and our amendment.
We contend that any changes to state pension age have to be reasonable and fair and should not disadvantage any group disproportionately. The Government’s proposals fail this test. Women’s pension age is rising by up to two years; no man will see more than a one-year rise. Some women are being given six years’ notice of a two-year change; men are being given seven years’ notice of a one-year increase. Forty per cent of women in the age group affected by these proposals have no private pension wealth. Many who were part-time workers were excluded from occupational pension schemes until the 1990s. Women’s pension assets are only one-tenth of those of men. Women are more likely to take on caring responsibilities and to have reduced their hours of work or left the labour market on the expectation of a pension at a fixed date. Just on these issues, it is difficult to see that they have not been disproportionately disadvantaged by the Bill.
Of course, it is not possible to redress all the historic disadvantages women have endured in pension provision, but reasonable notice periods for changes to the state pension age is clearly one way of allowing maximum time to adjust. The 1995 Act gave 15 years’ notice. The 2007 Act gave 17 years’ notice. This Bill gives five years’ notice. What is reasonable notice can be judged in part by looking at attachment to the labour market. Analysis shows that women tend to leave the labour market earlier than men. In 2010, 65 per cent of women aged 55 to 59 were still economically active, but by age 60 to 64 this declined to 34 per cent. If individuals are to be able to respond to changes to their economic circumstances caused by a deferral of their pension, they need to know before they make irrevocable decisions about their employment. This assumes that individuals are in a position to mitigate their pension loss by continuing in or rejoining the labour market. We know this is more difficult for some than for others. The impact assessment suggests that ethnic minority groups in particular will be adversely affected. Analysis shows that notice for men should be at least five years and, ideally, 10 years, and for women it should clearly not be less. It will be noted that even our amendment offers only nine years, which is just on the cusp of what should be acceptable.
The Government are right to address the consequences of increasing life expectancy. The much-lauded triple lock has to be paid for, but the Government have gone about it in the wrong way and will cause great unfairness, particularly to women. This group of amendments offers a fairer alternative. I beg to move.
Baroness Howe of Idlicote
My Lords, first, I apologise to the House that due to a previous commitment I was not present to support the amendment of the noble Lord, Lord McKenzie, in Committee.
As other noble Lords have said, there are a number of changes which we welcome, not least that auto-enrolment into occupational pensions will in future help more people to save for retirement. However, as we all know, both from individual letters we have received and from organisations such as Age UK, Saga, the TUC and others, considerable numbers of women are very concerned. A total of some 2.6 million women are affected by all this, and they are very concerned at the Government’s proposed acceleration of the state retirement age. To be fair, they had certainly not expected such a step.
I am sure it will not surprise the House to learn that I want to concentrate on the adverse effect that some of the Bill’s proposals will have on women, particularly on those turning 57 in March and April this year who will now have to wait until they reach 66 to receive the state pension they have contributed to during their working lives. They have had less than eight years’ notice of an additional two years without that state pension. Equally, we need, as the noble Lord has already said, to face two realities: first, that our parlous economic situation will inevitably reduce everybody’s quality of life, and secondly, the realisation that our increasing longevity means that all of us will in future have to work longer to earn a decent state retirement pension. However, we shall as well be seeing—I hope, as finance improves—far more effective equal opportunity practices available at all workplace levels for both sexes, which should mean that men as well as women can genuinely share rather more of the family responsibilities. That in particular is why I want to support the noble Lord’s amendments, for it seems to me that they have indeed faced these realities. On economic as well as longevity grounds, they do not ask for the full commitment which the coalition Government’s agreement promised to give to women to be fully honoured, but merely for a slight increase in what the Government themselves propose. For that reason, I really hope that when the Minister replies he will feel able to accept that compromise.
I have to admit that my own preference would be for the commitment to be fully honoured. In my early days as deputy chairman of the Equal Opportunities Commission in the 1970s, pensions were not even perceived as pay. I am glad to say that that situation was very soon seen to be untenable.
I return to what is proposed. A total of some 2.6 million women are affected. Of those, 33,000 women born in the 1953-54 period will see their state pension age increased by at least 18 months. It is estimated that those women will lose around £10,000. We need to remember, too, that when these women were first in the workforce, there were far fewer and far less well-paid jobs available to them than there are in today’s world, especially when they needed to work part-time or flexibly when children or other family members needed care. Two different illustrative figures bring this home very starkly. Women retiring in 2009-10 had on average a state pension of £92 compared with the average male state pension of £124. For those who were lucky enough to be involved in private pensions, an average man’s private occupational savings when aged 56 were £53,000 or nearby, which is no less than six times higher than the woman’s average total of £9,000.
When we consider the just and fair thing to do in this situation, we all need to accept who bore the responsibility for bringing up the generation of healthy, well adjusted young people who are today those responsible for paying our state pension entitlement. We also have to remember that none of the savings that the Government claim to be making will be made during this period of major financial crisis. So why victimise this already exceedingly vulnerable group of women—the poorer they are, the more they will suffer—when no actual money will be saved during this Parliament and not least when, realistically, the likelihood of women in this age group finding or keeping jobs is minimal?
If you add to all that the fact that, in our move towards a unisex retirement age—it is likely to be further increased as our longevity increases—we are asking women to increase their current earlier retirement age by a huge leap of six years compared to the one year expected of men, which was lower than that of men to compensate for the handicap of women in the workplace as a result of their family responsibilities, frankly, we should all be ashamed of doing anything less than what is proposed in these amendments.
Lord Boswell of Aynho
I am grateful to the noble Baroness, Lady Greengross, for moving her amendment, which is cognate with one that I moved in Committee. I have to say I was somewhat shaken by the Minister’s response because I do not normally go around as a fiscal incontinent. However, I accept the reproof of the noble Lord, Lord McKenzie of Luton, at my loose speech in my previous intervention on this issue when I quoted his cost at £10 billion per annum. That is of course a net present-value cost, and my cost, if I may call it that, is £7 billion per annum. Unless I have misread the amendment, the noble Baroness’s cost is very slightly more generous than mine would have been.
These are big sums but my point earlier, which I wish to talk about now, is that in making a macroadjustment—which I believe is essential and for which I established a case on which we have just triumphed—there is nevertheless a very real problem for individuals. I should say, if there is any doubt, that I have a certain background, if only because I have a household that is 80 per cent female, or was before my daughters grew up. I have no lack of sympathy with women’s issues and am well aware from the data that many women look forward to a less than generous pension and have not had an opportunity to build up the entitlement that some men have. Those are the data. We are gradually, by degrees, achieving social advance.
There is now a suggestion that, in dealing with the major problem that we have to address, we may be affecting a particular group of women very hard. We have to answer the question of how we deal with it. In terms of the overall cost of a grand architectural amendment, I can see that that would be very substantial indeed, which, as I have already indicated to your Lordships’ House, might well fall on taxpayers and the active working population of today—our children and our grandchildren. That would have adverse consequences. We have to find ways other than that of dealing with it. It is possible that one could make some slight adjustments within the system by flexing the exact provisions of the Ministers or the proposals of the Government or the proposals of the noble Baroness, Lady Greengross, thereby sharing the cost between the various women who would otherwise be affected.
My concern, and it is a paradox, is that with the best intentions, as the Minister explained to us painstakingly in Committee, the equal treatment directive—I do not dislike the equal treatment of women and I do not as a matter of fact dislike the European Community—constrains us on sharing the burden with men, unless and until we have caught up to the common age of 65. The present arrangements are a derogation from equal treatment until we reach that equality of pension age which is inhibiting this process.
One way forward, which has been touched on briefly in the earlier exchanges, may be to look at something beyond the pension age of 65, or even 66, as a compensating adjustment for burden-sharing. An alternative approach would be to go for a specific targeted scheme, but there are some difficulties even with the law on that if one were to have a differential pension credit arrangement. I have asked the Minister some Parliamentary Questions on that. The cost is much lower, but it is indeed setting up a special scheme to try to sort out the problems of individuals.
If we could have a system whereby nobody went without their pension for more than 12 months, as the noble Baroness suggested, or something like that, we could reasonably argue, given the timescale—not perfect, not ideal, we have all accepted that—that that is something with which people could accommodate themselves. A doubling of their loss, or a further acceleration of the timescale, would not be acceptable.
I urge the Minister to try to find some acceptable approach, or to signal some acceptable approach, which can, within the constraints that have been mentioned, help this group of women who are seriously and significantly affected, where there is a sense of unfairness, or of harsh treatment, without as it were destroying the intentions or the efficiency of the overall change which we need to make. I hope the Minister will consider that very seriously. It is not a matter of party politics. It is a matter of a common feeling that we should try to do something. I very much hope that, one way or another, through our combined wisdom, or at least our combined persistence, we will reach an acceptable solution.
Baroness Howe of Idlicote
My Lords, I congratulate the noble Lord, Lord McKenzie, on his amendment and I thank everyone for the very warm support that it got. Obviously, I would rather that amendment had won, but the vote was indeed very narrow. With that in mind, I would certainly want to support the proposal of my noble friend Lady Greengross, which would certainly do something along the lines that the noble Lord, Lord McKenzie, was trying to achieve with his amendment.
If the Minister can find a way to accept that, it will give some comfort at least to those who feel strongly—and have shown how strongly they feel—about this issue. I hope he will bear that in mind when he comes to reply.
Baroness Grey-Thompson
My Lords, I rise to speak to this amendment as someone who is certainly not an expert in pension provision; I admit to finding a lot of it rather confusing. The amendment tabled by the noble Baroness, Lady Greengross, is a very positive and useful way forward.
What concerns me is not the arguments that we heard earlier about the 2.6 million women having to wait longer than expected, the 330,000 who will have to wait 18 months or even the 33,000 who will have to wait two years to receive their pension, but the fact that, of the current pensioners who live in poverty, two-thirds are women. The Joseph Rowntree Foundation has made estimates about the poverty level, which it set at around £14,000 a year, and recognises that one in four women retiring today has less than £10,000 a year to live on. We know that women earn less pay on average, while taking time out to raise children means that they earn less over their lifetime. For me, though, the inequality in savings that women have access to is a stark reminder of where many women live today. The average savings in pension schemes of women between 51 and 59 are £37,000, compared to the £54,000 that men hold.
We have heard many case studies. I am very fortunate. I employ someone who is 56 and has a sister who is four years older. Maureen will have to wait 10 years beyond the age of her sister to receive her pension. This is someone who worked for a number of years, took time out to bring up a disabled child, went back into part-time work and, with nothing impelling her to contribute to a pension scheme, made decisions to try to save money but also had to recognise that there was a huge potential loss of salary in contributing to a personal pension scheme. I fear that we are going to alienate a large group of women and penalise them for making sound family choices to stay at home and bring up children and look after them.
It may be true that we need change and need to move on. It might be true that women have relied too heavily on their husbands’ careers and earnings in setting their pension limits, but I strongly believe that women deserve to have more time to adjust to this change in thinking.