Gender Pensions Gap

Debate between Baroness Stedman-Scott and Lord Sikka

Monday 27th June 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I completely agree that the Government cannot do everything. It just is not possible. The triple lock is being restored for the rest of the Parliament and I think that, in the circumstances we are in, the Government have done a fine job on that.

[Lord Sikka (Lab)]

My Lords, under the pretence of equality, the state pension age for women has increased from 60 to 66 but women continue to receive a lower state pension than men. Can the Minister explain why women continue to be treated as second-class citizens? When will the Government give them pension equality?

[Baroness Stedman-Scott (Con)]

I think that the gap between women’s and men’s pensions is closing—

Cost of Living: Pensioners

Debate between Baroness Stedman-Scott and Lord Sikka

Thursday 26th May 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office and Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, no assessment has been made. The Government are aware of concerns about the cost of living. My right honourable friend the Chancellor is making an announcement on this issue today. Since 2010, the full yearly amount of the basic state pension has risen by more than £2,300 in cash terms. That is £720 more than if it had been uprated by prices and £570 more than if it had been uprated by earnings. State pension recipients are also supported by further measures for older people.

[Lord Sikka (Lab)]

My Lords, I thank the Minister for her reply. In 2019, 68,000 pensioners died in poverty. That number will increase, as the real value of the state pension has been cut and another £800 energy rise is coming. Can the Minister commit to an immediate increase in the state pension of 15%? If not, can she return to the House in two weeks and explain why the Treasury is failing to support our pensioners?

[Baroness Stedman-Scott (Con)]

The noble Lord understands that I cannot make that commitment. We understand that people are struggling—we really do—with rising prices of energy and other things. The Chancellor is clear that, as the situation evolves, so will our response, with the most vulnerable being his number one priority. He will set out more details today. All noble Lords and I will have to wait to hear what he says.

Social Security Benefits Up-rating Order 2022

Debate between Baroness Stedman-Scott and Lord Sikka

Wednesday 23rd March 2022 Lords Chamber

[Lord Sikka (Lab)]

I raised a point about equality, although perhaps the Minister was coming to it; I am not sure. The Government have equalised the state pension age for men and women, but women’s state pension languishes behind men’s. Why is it not equalised? Can she undertake to give a date by which that will happen?

[Baroness Stedman-Scott (Con)]

I cannot undertake to say if and when that will happen, but I will write to the noble Lord and place a copy in the Library with any updated information that I can glean.

The noble Lords, Lord Sikka and Lord Shipley, raised a point about pensioner poverty. Absolute pensioner poverty, both before and after housing costs, has fallen by 200,000 since 2009.

State Pension Age

Debate between Baroness Stedman-Scott and Lord Sikka

Tuesday 18th January 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

As I have said many times, I cannot give any guarantees, but I am absolutely sure that the points my noble friend raises about flexibility and age will be included in the review. I urge her to take part in that consultation.

[Lord Sikka (Lab)]

My Lords, poorer people tend to die at a younger age than richer people. Each increase in the state pension age effectively results in a wealth transfer from the poor to the rich, who will receive the pension for many more years. Can the Minister tell the House why the Government have pursued pension policies that penalise the poor and transfer wealth to the rich? Why this reverse socialism for the rich?

[Baroness Stedman-Scott (Con)]

I doubt I will be able to convince the noble Lord, but nobody wants pensioners to be in poverty and nobody wants to run a book on transferring wealth from one place to the other. The noble Lord raises a valid point. I know I am repeating myself, but it is one that I expect will be in the review; knowing how much knowledge the noble Lord has, especially on how to pay for these things, I look for him to have input into the review.

Sick Pay

Debate between Baroness Stedman-Scott and Lord Sikka

Monday 17th January 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

Throughout the pandemic the Government have demonstrated that they can respond proportionately to the changing path of the virus, in particular through supporting jobs and businesses, and we will continue to do that. As increasing numbers of Covid-19 cases means that more workers take time off and there is an impact on business, the Government are reintroducing the statutory sick pay rebate scheme. That will mean that small and medium-sized businesses can be reimbursed for the cost of SSP for Covid-related absences for up to two weeks per employee.

[Lord Sikka (Lab)]

My Lords, statutory sick pay is around 27% of the minimum wage. Can the Minister please explain why it is set at such a low amount, and can she say whether it is tested on Ministers to see whether they can survive on it? At the very least, that would generate some sympathy for the poor.

[Baroness Stedman-Scott (Con)]

The noble Lord is very eloquent in the way he holds the Government to account. I cannot say that it has been tested on Ministers, but I will go back to the department to understand how that figure has been arrived at and then write to the noble Lord and place a copy in the Library.

Gender Pay Gap

Debate between Baroness Stedman-Scott and Lord Sikka

Tuesday 23rd November 2021 Lords Chamber

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office and Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

I assure the noble Lord that we are continually looking at and assessing the gender pay gap. The national gender pay gap has fallen significantly under this Government and by approximately one-quarter in the last decade. The gap is caused by a range of factors, and reporting regulations have helped to motivate employers and focus attention on how improving equality can happen in the workplace. However, to continue making progress we need to understand in even more detail the real barriers that women face in the workplace and then take action to ensure that everyone has the opportunity to fulfil their potential.

[Lord Sikka (Lab)]

My Lords, the gender pay gap continues to blight the lives of many women, denying them access to good food, housing, education, healthcare, pensions and economic freedoms. I ask the Minister to commit to two things: first, not to award public contracts to organisations that have failed to eradicate the gap and, secondly, to give women a statutory right to know the pay of male colleagues doing equivalent work, with appropriate confidentiality.

[Baroness Stedman-Scott (Con)]

As ever, the noble Lord is very incisive and focused on the things he wants to change. I note the two points that he makes. While I cannot commit to doing them, I will go back to the ranch, tell them that the noble Lord, Lord Sikka, is on the prowl again, and see what they say.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Lord Sikka

3rd reading
Monday 8th November 2021 Lords Chamber

[Lord Sikka (Lab)]

My Lords, I echo the words of the previous speakers. I hope that the Government will act on the recommendations of this House. I am also grateful to the Minister for the impact analysis, which I received on Friday night. I should be grateful if in future we could have a better quality of data. For example, it refers to weekly mean benefits, which do not tell us much about the societal impact or distribution. It would be very helpful, for example, to know the median figure and to have some further analysis in the appropriate financial brackets. Table 4 refers to the number of people eligible, pre-2016, for the new state pension but does not tell us how many actually receive the full amount. Once again, could I please request a fuller analysis, which would not only provide greater transparency but enable us to call the Government to account? It could be in the form of a statement of the number of individuals receiving, for example, a pension of less than £100 per week, those receiving between £100 and £120, and so on in other brackets. A better quality of analysis would enrich the debate.

[Baroness Stedman-Scott (Con)]

My Lords, I am grateful for the remarks made by all noble Lords today. Our discussions have been thoughtful and powerful. Above all, they have demonstrated the commitment across your Lordships’ House to protect the income of pensioners and to bear down on pensioner poverty. The Bill now goes to the other place to consider the amendments put forward by this House. I look forward to our consideration of its reasons on the Bill’s return. As always, I note the challenge of the noble Baroness, Lady Sherlock. I will take the observations of the noble Lord, Lord Sikka, on the impact assessment back to the department, as I have done with all the other points he has raised. Finally, I thank all noble Lords who have spoken today and at earlier stages. I also thank the officials who have supported me in our discussions.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Lord Sikka

Report stage
Tuesday 2nd November 2021 Lords Chamber

[Lord Sikka (Lab)]

My Lords, I support my noble friend Lord Davies of Brixton and his detailed remedy for future problems, and the call for an 8.1% increase in the state pension. DWP has not given us the median numbers, but the pre-2016 average or mean state pension is £155.08 while the post-2016 figure is £164. 23. It seems that the older you are, the lower the pension you actually get.

Discrimination against senior citizens is built into the system itself, which is wrong: 8.1% of that tiny amount is very small. A correspondent who contacted me from New Zealand said, “In New Zealand Super, there is a phrase that at 65, you get 65—at 65 you retire and you get 65% of average wage.” That is at least two and a half times more as a fraction of average wage than it is in the UK, where it is impossible for anyone really to live on it.

We have heard from many Members of your Lordships’ House that the state pension is the only or main source of income for many, many people. I do not know whether Ministers speak to ordinary people to hear their experiences of trying to manage poverty. I will read out just one message that I have received from a senior person: “I am struggling to pay my rent, buy food and pay for gas, electricity and water. TV is my only source of company and the government is now taking that away too. I can’t afford to buy a TV licence. It would be better for me to go to prison. At least I will be warm and I will also be fed.”

Earlier, the Minister rattled off a whole range of pension benefits that people can collect. Will she tell the House how a 75 year-old with no TV for company, with one heating bar in a room, with no access to the internet and with her local library shut, gets access to those benefits and asks for help? I should be very grateful if she can describe to the House how that person can make ends meet on this meagre state pension.

We have institutionalised poverty in this country and the voice of the poor is not being heard, so I fully support my noble friend’s call for a pensions commission. However, people cannot wait for that. We need an 8.1% increase now.

[Baroness Stedman-Scott (Con)]

My Lords—

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

My Lords, this clause requires the Secretary of State to review the rates of the basic state pension, the new state pension up to the full rate, the standard minimum guarantee in pension credit and survivors’ benefits in industrial death benefit by reference to the general level of prices in Great Britain. This is in contrast to, and in place of, the provisions of the Social Security Administration Act 1992, which require a review by reference to the general level of earnings.

Under the clause, if the relevant benefit rates have not kept pace with the increase in prices the Secretary of State is required to increase them at least in line with that increase or at least by 2.5%, whichever is the higher. If there has been no increase in the general level of prices, the increase in the benefit rates must be at least 2.5%. The requirement will apply for one tax year only, after which we will revert to the existing legislation and the link with the general level of earnings will be re-established.

As this is a two-clause Bill, if the noble Lords, Lord Sikka and Lord Davies, and the noble Baroness, Lady Bennett, successfully oppose Clause 1, the Bill will fall. As a result, these pension rates will increase by 8.3%, which is the average weekly earnings index for the year to May-July 2021. That means that, if the Bill does not achieve Royal Assent in good time, there will be an increased cost to the Exchequer of between £4 billion and £5 billion.

The noble Lord, Lord Sikka, raised the issue of the state pension and government content being so low. The Government have a proven track record of helping people to plan for their retirement. We have reformed the state pension system, introducing the new state pension to be simpler, clearer and a sustainable foundation for private saving to address the fact that millions of people were not saving enough for their retirement. Automatic enrolment into a workplace pension was created to help them with their long-term pension savings. Together, the new state pension and automatic enrolment into workplace savings provide a robust system for retirement provision for decades to come. Last month the UK pensions system ranked ninth in a report by Mercer that looked at the systems of 43 countries. It measured adequacy, sustainability and integrity, and the UK Government were grouped with countries such as Sweden, Finland and Germany.

In taking into account the points that I have raised, I ask the noble Lord to withdraw his amendment.

[Lord Sikka (Lab)]

My Lords, I thank the Minister and all noble Lords who have participated in the debate. I shall pick up some of the points.

Earlier, the Minister referred to how pensioners can get winter fuel payments. Thousands of pensioners are tuned in and watching, and while the Minister has been talking some of them have sent me information to say that the winter fuel payment was last fixed in 2011. If it had increased in line with inflation, it would be around £159. The Government have once again chosen to hurt retirees, because there has been no increase in line with price level changes.

I have also been sent information about the Christmas bonus of £10, which was introduced in 1972. It is still £10. Pensioners would be lucky to get a plate of egg and chips and a cup of tea with that. If the bonus had been kept in line with inflation, it would now be £140—another example of how pensioners have been short-changed.

The Minister said that, from 2023 onwards, we will revert to the triple lock, but no commitment is given that the amount lost will be restored to pensioners. As I said, over the next five years, £30.5 billion will disappear. The Minister has not said that even a penny of that will be restored, so pensioners will remain on low pensions—not only current but future pensioners.

The Minister referred to the extra cost. I have suggested numerous ways by which the extra cost could be met, and they must have been evident to the Chancellor when he gave a £4 billion cut to banks. Obviously, the Government’s priority is the banks, rather than our senior citizens, who are struggling to heat their houses and eat sufficient food. The Minister talks about the new pension arrangements, but the point remains that, if you earn little and put away something, it will still bring you little. The issue of pensioner poverty is not really tackled.

My noble friend Lady Sherlock said that this clause was passed in the Commons, as many clauses are passed in the Commons before Bills arrive in this House. This House’s duty is to scrutinise legislation, give its opinion and urge the Commons and the Government to rethink, as my noble friend Lord Davies of Brixton said.

There is no invisible hand of fate which condemns our retirees to a life of poverty and misery. It is the invisible hand of political institutions that has condemned millions to a life of poverty and early death. This House should not be willing to be a part of that invisible hand, which will bring more misery to not only current but future generations.

I am not convinced by the Minister’s explanation and I should like to test the House’s opinion.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

My Lords, out of courtesy to the noble Lord, Lord Sikka, and the noble Baroness, Lady Sherlock, for the points that she has made, and to bring some clarity to the questions raised, I hope that the House will agree that I sent the letter in good faith, and will allow me to take it back to officials with the points that have been raised and come back with, I hope, the re-emphasis that is needed to clarify the position on the fund. However, I am advised that the first point raised by the noble Baroness, Lady Sherlock, in her summing up, is correct.

As the noble Lord, Lord Sikka, will be aware, there is an existing statutory requirement under the Social Security Administration Act 1992 for a GAD report on the likely effect on the national insurance fund of the draft Social Security Benefits Up-rating Order and the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations. There is no equivalent statutory requirement for this Bill, and GAD will conduct its assessment in the round based on the draft uprating order, which will include all benefits paid out of the national insurance fund, not just the ones covered by this Bill.

With respect to an assessment of the impact on the fund if this legislation is not passed, it is important that the working balance of the national insurance fund remains positive, as this ensures that there are always enough funds to pay for these benefits and allows the Government to deal with short-term fluctuations in spending or receipts. If the balance of the fund is expected to fall below one-sixth of forecast annual benefit expenditure, the Government will transfer a Treasury grant, paid from general taxation, into the fund. This ensures that benefits such as the state pension can always be paid as necessary.

I know that several noble Lords have suggested that, when in surplus, the fund can be used to increase expenditure beyond the level originally planned, but I am afraid that that is a misconception. The balance of the national insurance fund is managed as part of the Government’s overall management of public finances and reduces the need for it to borrow from elsewhere. Therefore, any additional spending from the national insurance fund would represent an increase in overall government spending and, without cuts in other areas of spend or additional taxes, an increase in government borrowing.

Not passing this Bill would not only increase state pension payments from the fund this year by an anomalously high figure of 8.3% but have a long-lasting compounded impact for decades to come as the anomalous figure would be baked into the baseline. The Government do not believe that this would be fair to younger taxpayers. Based on these arguments and the commitment that I have given to review the letter and the questions raised today, I ask the noble Lord to withdraw his amendment.

[Lord Sikka (Lab)]

My Lords, I am very grateful to the Minister for her explanation. I understand and agree that some margin of safety is needed in any account, but this is a £37 billion surplus, out of which only £5 billion is needed to maintain the triple lock—a small proportion. When somebody asserts that accounting numbers are perhaps not serious and I have investigated, I have normally given them the phone number of the Serious Fraud Office and said, “Maybe you’d like the bed-and-breakfast facilities at one of Her Majesty’s establishments”. However, I will not offer that to the Minister, as she has promised to return to the House with an explanation.

We need a fuller investigation and report, bearing in mind the point that my noble friend Lady Sherlock made: why have these surpluses built up? The surpluses have not always been around, but they have built up, and the Treasury’s forecast is for a vast increase for the period in which the Minister’s letter said that we were going to have a deficit. If it was so important, the Chancellor should have said something. It should have been in the Treasury and OBR documents. It is not there. I cannot help feeling that some ex-post rationale is being developed to say that we are not going to maintain the triple lock, and somehow offer an explanation.

However, in view of the Minister’s offer, I beg leave to withdraw my amendment.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Lord Sikka

Committee stage
Tuesday 26th October 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

I assure the noble Baroness, Lady Sherlock, and the whole Committee, that the Government take the issues of living conditions and the standards of pensioners seriously. As I have relayed in previous contributions to this debate, we have done an enormous amount to try to help, but I have no doubt that that will not be enough for some. It is a work in progress, and we will see where that goes.

This clause requires the Secretary of State to review the rates of the basic state pension, the new state pension up to the full rate, the standard minimum guarantee in pension credit, and survivors’ benefits in industrial death benefit, by reference to the general level of prices in Great Britain. Under this clause, if the relevant benefit rates have not kept pace with the increase in prices, then the Secretary of State is required to increase them at least in line with that increase or by 2.5%—whichever is the higher.

This is a two-clause Bill. If the noble Lords, Lord Sikka and Lord Davies, and the noble Baroness, Lady Bennett, successfully oppose Clause 1, the Bill will fall and, as a result, these pension rates will be increased by 8.3%, which is the average weekly earnings index for the year May to July 2021. This means that, if the Bill does not achieve Royal Assent in good time, there will be an increased cost to the Exchequer of between £4 billion and £5 billion.

Taking into account the points raised, I ask the noble Lords to withdraw their opposition to the question that Clause 1 stand part of the Bill.

[Lord Sikka (Lab)]

My Lords, I am very grateful to all the participants in this debate, which has been very interesting. I am particularly grateful to the Minister for her comments, but the issues remain. Many of our senior citizens are condemned to poverty and, by breaking this link with earnings, we will be condemning more to poverty, not only the current generation but future generations too. Nevertheless, for the time being I would like to withdraw this amendment, but I reserve the right to bring it back.

Social Security (Up-rating of Benefits) Bill

Debate between Baroness Stedman-Scott and Lord Sikka

2nd reading
Wednesday 13th October 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

My noble friend has made this point on a number of occasions; other noble Baronesses and noble Lords have too. Before I bang a nail in, I think it is best that I write to noble Lords about that to make sure it is absolutely clear on that basis. I hope they will accept that.

My noble friends Lord Shinkwin and Lady Stroud raised the issue of a UC uplift impact assessment. The legislation enacting the temporary uplift, including its eventual removal, was approved by both Houses. No impact assessment was conducted when the uplift was introduced, as it was by law a temporary measure, as I have already said. No assessment was conducted on the reversion to the underlying rates of universal credit.

Do I have only 20 minutes for this? No? Okay, I am in charge. We will not be here for another half an hour. I want to pay respect to everybody, but I certainly do not want to abuse the House’s good will.

I hope the noble Lord, Lord Sikka, will take this in the spirit in which it is meant: I thank him for the master class in economics. I hope the Chancellor will read Hansard, and I am sure he will be in touch if he wants to take it further.

[Lord Sikka (Lab)]

I thank the Minister. I do not know what the tuition fee would be or whether it would have gone up by then. Can she please explain why the £37 billion surplus on the National Insurance Fund account is not being used to pay even £8 billion or £10 billion in extra pensions?

[Baroness Stedman-Scott (Con)]

This is a pretty challenging question, and I do not know. I will go away and find out, write to the noble Lord and place a copy in the Library.

I will stop soon, but I want to come back to my noble friend Lord Shinkwin and the disability Green Paper. This issue is not in the scope of the Bill, as he will know. I assure him that I will raise his concerns with my ministerial colleagues. We have been blessed with the appointment of Chloe Smith. I have talked to her about my noble friend and I know she will meet him—because there will be trouble if she does not.

Without being disrespectful to anybody else, I would like to hold a further briefing and answer all the unanswered questions. I hugely appreciate the time and intent of all noble Lords, and I commend the Bill to the House.