Disabled People: Employment
Baroness Turner of Camden Excerpts(13 years, 5 months ago)
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Baroness Turner of Camden
To ask Her Majesty’s Government what is their response to the decision of Remploy Ltd, the largest specialist employer of disabled people in the United Kingdom, to make redundancies among the workforce.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, voluntary redundancies are a matter for Remploy management and employees. Remploy will continue to examine how best to deliver its businesses within the existing five-year modernisation plan funding and will continue to fulfil its mission of transforming lives by providing sustainable employment opportunities for disabled and disadvantaged people.
Baroness Turner of Camden
I thank the Minister for that response. However, is he aware that I have received information from the unions that Remploy has been told by the Government to make 1,500 people redundant? They are very concerned about this because they fear that it may mean the closure of certain locations. As I said in my Question, Remploy is the largest specialist employer of disabled people in the country, working at 54 different locations. Surely it is in the interests of everyone, including the Government, to ensure that this facility is maintained because, in the light of the Government’s own policy, it is very important that disabled people should be able to work if they want to do so.
Lord Freud
My Lords, I can categorically reassure the noble Baroness that there is no such plan as has been suggested by the unions; we are looking at a voluntary redundancy plan. The next stage of what happens to Remploy will depend on the review that Liz Sayce is conducting into disability employment programmes, which is due to report in the summer.
Pensions Bill [HL]
Baroness Turner of Camden Excerpts(13 years, 5 months ago)
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Baroness Turner of Camden
My Lords, my amendments are an attempt to deal with the Government’s intention to replace the retail prices index with the consumer prices index as the indexation for pensions in payment. That was raised on Second Reading, and I am sure that everyone is aware that a lot of people have already voiced opposition to that because it is felt that people will suffer very much in their expectation—mostly people who are already receiving pensions.
I understand that people in the public sector have already received notification that they will be receiving the lower amount rather than an increase in line with the retail prices index. A number of them feel very angry about it. My own sister, who is a retired teacher, has phoned up to complain to me about it, and I am not surprised. I have already read quite a lot of material from the TUC, which supports the view that it is not fair. That view has also been expressed extensively by Saga, which has been writing to a number of people on the Committee about the Bill, and I support what it has been doing.
The situation regarding public sector workers is that although there is a lot of talk about public sector pensions being gold-plated and so on, many people working in the public sector do not get paid large amounts of money. Women in the public sector are usually on salaries of between £4,000 and £5,000, and even the loss of a relatively small amount of money means quite a bit to people at that sort of pension level.
With regard to the private sector, the Government have been instructing the pension providers that they have to inform their pensioners that in future the increases will be in relation to the consumer prices index rather than the retail prices index, and their obligation is simply to notify people that that will be their situation. I believe that that has already happened in the private sector. I understand, however, although I am not sure, that if your pension is provided on contract and the contract provides for retail prices index increases, that will not be interfered with by the Government’s new ruling.
One of the reasons why people feel it is so unfair is that we are now in a situation where inflation is running at 4 per cent and everyone expects it to go up—the papers are full of information about how we can expect the cost living to rise substantially—and at the same time many of the people in this category, who were advised to save and have been saving, find that their savings are not worth what they once thought they were, because there has been nothing much by way of interest on their savings. Many of these older people feel that they are losing out twice; they are not getting what they expected with the retail prices index increases, while at the same time the savings that they have been prudentially putting aside are not going to produce the kind of increases or support that they had expected to receive. For those reasons, both Saga and the TUC have been pressing for this to be reviewed. The situation is not fair, and I hope that the Government will be prepared to look sympathetically at their request.
With regard to Amendment 48A, with which my two amendments are grouped, I understand that my noble friends Lord McKenzie and Lady Drake are anxious to soften the blow a bit by providing for the whole thing to be reviewed. I understand that and I respect what they are trying to do. Nevertheless, I want the Government to look again at the whole issue of the retail prices index, as there is a lot of concern about it. I beg to move.
Lord Boswell of Aynho
My Lords, I oppose the amendment. I should perhaps declare that I, too, have members of my family—two daughters, in fact—who are in public sector pension schemes, and of course one hears comments of the sort that have been honourably and properly recorded by the noble Baroness. There are many people in the private sector who for a variety of reasons, not necessarily where their schemes have collapsed into the Pension Protection Fund, are feeling some stress as well. That needs to be said.
I would just say that although I did not respond to the Minister on his remarkable presentation last night with regard to the social security uprating orders, I was actually convinced by it, which I am not wholly sure that I had been until he gave that presentation. It is a change that we have to make, particularly bearing in mind that there are alternative arrangements for retirement pensions which will meet the triple test and will accelerate state retirement pension levels rather faster than the CPI.
I will make one further comment on Amendment 48A and the scheme proposed by the noble Lord, Lord McKenzie of Luton. I understand the motivation, but it is asking for a report on one-hand clapping, as the Zen Buddhists would say. It would be better expressed if it called for a report on the relative impact of the use of the CPI and of the retail prices index. We would then have some measure of comparison. As all noble Lords are aware, historically the CPI has run ahead of the RPI. My noble friend last night made representations about why this was overstating the problem and arguably would overcompensate recipients.
That leads me to make a technical comment of my own, to which my noble friend may want to respond. As one takes the heat off the RPI, it will become less immediately salient, although it will still be used and reportable for a number of purposes. As that happens, given the types of interaction and substitution effects that were rehearsed last night, it may be that it will cease to be of quite the utility that it was. Somewhere at the back of my mind—I must say it while I remember it, and hope that I still can—are my scribbled lecture notes of 45 years ago that I took on the Laspeyres and Paasche indices, and on all the different impacts of these complications. I implore noble Lords not to ask me to explain to the Committee how they work, but I will make the point that as we shift the emphasis to the CPI—that will surely be an irreversible shift, and I have given reasons for supporting the concept—the RPI will move out of focus and could become distorted in the uses for which it is still employed. Perhaps the Minister will give me some assurance that it will retain its integrity even if it is not being used for these uprating purposes.
Baroness Turner of Camden
I thank the Minister for that detailed response. My aim in putting down the amendments was to give voice to a lot of the opposition that has been voiced to me in the letters and complaints that I have received after people have been notified that they are likely to have a different arrangement with regard to indexation from what they have hitherto expected. There is a lot of anger about it, so I put the amendments down. I am not exactly committed to the wording, but I wanted very much to voice that opposition and to say that the people concerned have real worries about what will happen to them and their pensions in future.
I also thank my noble friend Lord McKenzie for what he had to say in support of his amendment. In default of getting anything like my amendment on to the statute book, his amendment seems very worthwhile because it means that the situation has to be reviewed and there is an attempt to ensure that what has happened is placed under survey at intervals. If it seems to be what you might call a soft answer, at least it is an improvement on what people think that they are facing in future.
I will read carefully what the Minister has said. I found it interesting that modifications can be made, surveys are conducted and so on. That is very useful and I will look at it carefully.
Lord McKenzie of Luton
Before my colleague withdraws her amendment, and I certainly do not intend to press mine, it seems a bit hard for the Government to say that their policy is fully evidence-based when they are only just gathering the responses to the survey and will take some while to analyse the consequences. The survey of the consequences of the switch to CPI for occupational schemes is an important one, and one might have hoped that the Government would wait for that analysis and research before they committed to the switch long-term.
Lord Freud
The consultation exercise informs how we do these things in some detail in regulatory terms, but it does not affect the decision and direction of travel.
Pensions Bill [HL]
Baroness Turner of Camden Excerpts(13 years, 5 months ago)
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Baroness Turner of Camden
My Amendment 33 is in this group. I was prompted to table an amendment to this clause by the TUC. It wrote to me to point out that the trigger of £7,475 at 2011 is in excess of the national insurance threshold, which at present is £5,715. It points out that that is likely to affect a number of part-time workers, mainly women. They are the majority of those earning between the NIC limit and the personal allowance. The TUC believes that if the Government were to take forward the proposals, which they have voiced, to raise the basic personal tax allowance, the numbers excluded from auto-enrolment will grow. We have all said that we are in favour of auto-enrolment, and that we want to get as many people auto-enrolled as possible because they will then get the benefit of the employer’s contribution. As the gap between the contribution and enrolment thresholds grows, there is a danger of a sort of cliff-edge and that the newly auto-enrolled may decide to opt out as they see a noticeable chunk of their earnings going in pension contributions.
There may be various other ways of dealing with it, but the gap is not a good idea. It tends to make the whole thing less simple. People are caught up in the gap and do not receive what is intended to be of benefit to them, which is auto-enrolment. I hope that the amendment moved by my noble friend Lady Drake receives favourable consideration by the Government because there is a serious point to be made. I shall not press my amendment.
Lord Freud
Uprating and revaluation measures, especially for pensions, can be challenging to get right and hotly debated. The uprating arrangements for automatic enrolment are proving no exception. However, before going into those arrangements, I need to make clear to the noble Baroness, Lady Drake, that nothing in the Bill introduces a power to change the age criterion of 22. The flexible uprating power in Clause 8 applies only to the earnings trigger and thresholds. It does not apply to age criterion. We agree with her that 22 is the right age for automatic enrolment to kick in.
Lord Flight
My Lords, I support these amendments but express a caveat about something that could lead to the wrong decisions. It may be wrong for people who have relatively small entitlements from defined benefit schemes to take transfer values and move them into a money purchase pot such as NEST, even though small amounts of money are involved, because transfer values have been getting relatively mean under the changed rules. I have always thought that NEST itself could have a problem. Managing large amounts of money in an optimum manner is quite a difficult thing to do. Therefore, although I am sure that NEST will be run relatively safely and sensibly, it will have to be run on a blue-chip investment basis. Therefore, it is likely to underperform some other funds. However, the principle of allowing consolidation and people to take the cash out if it is peanuts has to be right.
Baroness Turner of Camden
My Lords, I support the notion behind these amendments. At Second Reading I drew attention to the possibility of people arriving at retirement with lots of little pension pots and not knowing what they would be entitled to. That sometimes happens now; people phone up and say, “Am I in your pension scheme? I just don’t know”. They reach retirement and, if they have been working for around 40 years, they do not know what they have. It seems sensible to have some mechanism whereby one’s pension entitlement is, as it were, collected as a cumulative amount of money. People would then know that they have access to this cumulative amount and the pension that is generated from it. In this sort of system we have the opportunity to do something like that. It would be a very good idea and I congratulate my noble friend Lady Hollis on what she has come up with in Amendment 35. The noble Lords, Lord Stoneham and Lord German, certainly had something similar in mind with Amendment 34. The notion is a good one, whichever amendment is acceptable to the Government.
Lord Freud
My Lords, I must start by declaring an interest. I think I have one of these infuriating little stranded pensions. It is the most annoying thing. You look at the file, look at the headline and close the file because dealing with it is unendurable. I am far too polite to complain to the noble Lord, Lord McKenzie, for not doing anything about it. If I thought about it I would resent him deeply every time I looked at the file.
I take the opportunity to let the Committee know, through these amendments, what we are doing to consider how transfers across the industry, particularly of small pension pots, can be made easier. The Making Automatic Enrolment Work review, carried out last summer, recognised that facilitating transfers was critical to the success of the workplace pension reforms. It believed, however, that the issues went beyond NEST. When automatic enrolment becomes the norm, there is a much higher risk that pension savings, particularly for lower earners and people who move jobs frequently, will become fragmented in several small pots—a point made so eloquently by the noble Baroness, Lady Hollis, just now.
The Government are already acting on the recommendation of the review to consider how transfers across the industry can be made easier. The DWP is working alongside the Treasury, HMRC, the Financial Services Authority, the Pensions Regulator, employers and pension providers to understand better the burdens employers and schemes face when administering small pots, and to identify any barriers facing members.
In addition, the DWP recently published—on 31 January—a call for evidence on the regulatory differences between occupational and workplace personal pension schemes. We are seeking to address existing rules which could impact on the success of the reforms, such as rules on early scheme leavers and disclosure. The call for evidence is likely to consider actions better to manage small pension pots. This call for evidence closes on 18 April. Our response will be released later this year after we have considered stakeholder views and evidence of burdens and costs.
Her Majesty’s Treasury recently held a call for evidence on early access. This reflects the Government’s commitment to consider ways to boost individual saving and to foster a culture of personal responsibility over financial choices, particularly in encouraging saving for retirement. The document sets out the available evidence on early access to pension savings, some potential models for early access and the potential benefits and risks, and sought further evidence from interested parties. It included a specific question on ways to improve the transfer process and on whether there is a case for introducing further flexibility in the trivial commutation rules. The call for evidence closed on 25 February. HMT is currently considering the responses and will publish its findings in due course. So, across all three of these areas, we are seeking to identify options to improve transfers so that individuals can get the most out of their savings.
I appreciate the interest that noble Lords have indicated in the overall issue of transfers, which is much wider than the restrictions that are currently placed on NEST. The restrictions on transfers into NEST are intended to focus the scheme on its target market, particularly as the reforms are staged in, enabling its administrative processes to be simple, leading to lower running costs and creating safeguards against levelling down. NEST can already accept certain transfers in—for example, where a member with less than two years’ service has the right to a cash transfer. This allows jobholders who move from an employer not using NEST to one offering NEST to transfer their cash transfer sum into NEST. The Pensions Act 2008 commits the Secretary of State to review the effect of NEST transfer restrictions in 2017. But we are doing work now, before 2017, that will bring together evidence and analysis from a broad base.
As I know noble Lords appreciate, there is no straightforward solution and the outcome of any quick fix may not provide the universal remedy for individuals and pension schemes that we might hope for. Aggregating small pots by transferring them into another pension scheme is not necessarily a good thing to do for individuals, as the noble Lord, Lord Flight, just pointed out, as it will depend on the merits—the risk, charges and growth—of the fund they are transferring into compared to those of the fund they are transferring from. It is not necessarily a good thing for pension schemes either, which, though they would no longer need to pay for the maintenance of a potentially smaller pot, would need to pay to transfer the fund out. Hence, the work we are already doing to see what measures we can sensibly take to minimise industry burdens while delivering the best possible protection of individuals’ retirement outcomes. We want to ensure that any solution will stand the test of time and meet the needs of all pension schemes and their members.
I do not want to prejudge the outcome of our considerations, but I can see the merit in a number of your Lordships’ arguments, including that of the noble Lord, Lord Boswell, that we should take into account giving the individual a choice, where they have very small pension funds, to take the cash. It is, of course, the very smallest pots that cause the biggest problems, as even if transfers can be facilitated, the frictional administrative costs have a proportionally higher impact. The noble Lord talked about sums of £20 and £30—I shudder to think of the proportion of administrative costs involved in doing anything with them.
Our ambition is that NEST will complement rather than replace existing good-quality pension provision. Changing the provisions now to allow NEST to accept transfers in during the critical implementation period could undermine that aim. By 2017 the reforms will have been fully implemented. We will have more evidence on the effect of the reforms as a whole, including the impact of NEST on the market. While I appreciate the principle behind these amendments, I urge the Committee to bear with us while we get to the heart of this difficult and complex matter. On that basis, I urge noble Lords not to press their amendments.
Pensions Bill [HL]
Baroness Turner of Camden Excerpts(13 years, 5 months ago)
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Baroness Turner of Camden
My Lords, I support my noble friend Lord McKenzie with regard to this section of the Bill. I have received many letters from various organisations about the Bill—like most people, I expect—and one thing that they all have in common is that they are all very concerned about what they regard as the acceleration of the timetable for women. I have had correspondence from Saga, which tells me that it believes that 2.6 million women will be adversely affected. It points out that the women concerned had not expected such an accelerated timetable. The TUC has also said that it is concerned about the acceleration and its effect upon women. Age UK is taking a similar posture, and so is Which?.
A number of noble Lords who contributed to our Second Reading debate concentrated on what they saw as the unfairness to women in the accelerated timetable. The amendments proposed by my noble friend are an attempt to deal with that, for which I thank him. I hope that the Government will be prepared to take on board that this is a real concern about a Bill that basically many people accept. Practically everyone who has written to me says that they accept the whole idea of auto-involvement—of people being in the pension industry, so to speak, and being pension savers for very often the first time in their lives. It therefore seems a shame that we might get some difficulty and some opposition to a Bill that I basically accept. I accept that we have to have a different age of retirement and so on because of longevity and the various other arguments that have been advanced in favour of the Bill, but on the other hand there is a lot of concern about the accelerated timetable. I hope that the Government can do something to help us in that regard.
Baroness Murphy
My Lords, I very much support the amendment of the noble Lord, Lord McKenzie, but I have to say I am very attracted to the halfway position, as it were, of the noble Lord, Lord Boswell. The difficulty is, as Machiavelli said, that you should not have a second line of defence—that you should just go straight through—so I am nervous in saying that I like the compromise idea but there is a basic serious unfairness to a very small group of women. We are talking about a one-off event over a period of three to four years, I think it is, and it would be a good idea to address this. If the halfway house makes more sense in overall financial terms, though, I would support that.
“Revision of increase in pensionable age for men and women
(1) The increase in pensionable age for men and women may be revised in the case of illness or infirmity, or of particularly arduous or dangerous employment.
(2) This revision shall not involve loss of state pension rights.”
Baroness Turner of Camden
My Lords, I am attempting to follow on from what I said at Second Reading, when we discussed the Bill in its entirety. I said at that time that there were many people, mostly men, who wanted to work on and who enjoyed the jobs they were doing, and did not object at all to working on. I made the point, however, that not all jobs or all people were the same. There were instances where I thought that there should be provision for some flexibility, and that is what my wording seeks. It may not be particularly marvellous wording and I am not committed to it, but I have some concern about the issues raised by it.
There are numerous people—mostly those who have manual skills but both men and women—who perform work that, if it is not done, we would notice and we would no doubt complain about it. We complain if our hospitals and schools are not properly cleaned and if we cannot get work done on the maintenance of our homes, if we want somebody to do it. These are the sort of people who, generally speaking, do not have a great deal of educational attainment, and whose skills are manual. They often, at the end of their working lives, look forward very much to being able to retire at what was the standard retirement age, but they now find that they are expected to work for longer, and in many cases they do not want to do so. In many cases they feel that enough is enough. They have had enough working time doing the sort of arduous, not particularly interesting and perhaps even back-breaking job that they have been doing, and they want the opportunity to retire. We want to make provision for people like that to be able to retire earlier. Often they have health problems of one sort or another. That is made clear in my amendment, where I say,
“case of illness or infirmity”.
My noble friend Lady Hollis has already drawn attention to the fact that there are many instances of, and much information available about, the ways in which some poorer people at the end of their lives are subject to ill health of one sort or another, and who should therefore not be expected to continue to work in order to acquire entitlement to their state pension, and certainly not when more years are required. That applies equally to women. Again, as I have said, if you have been doing a job cleaning, you may not want to go on and on until you are 66 or whatever. Certainly, although lighter work might be available, they might not be able to do it. I remember talking to a cleaner who said, “I have not got much education. I am not very good at reading or writing. I could not do another sort of job; I can only do this sort of work”. These people are valuable to us. We notice it very much, and do not like it, if they are not there to do the work that we expect in order to keep our lives reasonably comfortable. I therefore think that arrangements should be made for some flexibility in relation to people doing arduous and sometimes dangerous work. We do not want elderly people clambering up ladders in order to do construction work. That is not a good idea, and it might not even be safe for them to do it. We ought to have a degree of flexibility. I am not wedded to this wording, but that is what I am after, and it is worth considering.
Baroness Drake
I express my sympathy with the sentiments that concern my noble friend Lady Turner in her amendment. As we can see from the previous debate, the acceleration of the equalisation timetable is disproportionate in its impact on the poorest and on those with disabilities, many of whom will have worked in manually demanding professions. I look to speak to that issue in my Amendment 7. Although I have great sympathy with her concerns, I am not sure whether the state pension age is the right mechanism for recognising the disparity in life experience that people have, and it may take some time to reduce that disparity of experience or outcomes as a result of working life experiences. Certainly, initiatives aimed at improving health generally and reducing the disparities between socioeconomic groups and geographies—because that can be quite distinctive as well—are important, because I have a great deal of sympathy with the point made by my noble friend Lady Hollis, who said that when you look closely at the figures, certainly for lower socioeconomic groups, the healthy life expectancy rate of improvement is not as great. One does not absolutely know how that will evolve over time, which is why it is important that the Government retain initiatives aimed at reducing existing health disparities.
Flexibility in working arrangements is also extremely important because, regarding scrapping the default retirement age—of which I approve—and other stated policies to improve the working position of older people, it is one thing to have a policy but it is quite another challenge to deliver the changes and cultures in working practices at the work face to deliver the flexibility in working arrangements that you need for older people. Certainly, changing employers’ practices and attitudes is important. Those may be more effective mechanisms in reducing that disparity over the long term.
Having said that, if ill health disparity persists between socioeconomic groups, and one does not know how that will evolve—in terms of ill health the early signs are that those disparities could persist—a Government may well want to look at the qualifying age for pension credit to deal with those issues, where it is not possible for someone with ill health to address the disadvantaged-income position that they will be in. The Government should certainly remain open to that, depending on how the figures evolve.
Baroness Turner of Camden
I thank everyone who has contributed to this debate. It has been very useful because, while they did not care very much for my wording or what I was trying to do, they nevertheless acknowledge that there is a problem here and that there are categories of people who need special care regarding retirement in relation to their health and the type of work that they have done all their lives. I am grateful to the people who have raised points. I thank my noble friend Lady Hollis particularly for drawing our attention once again to carers. They are part of the group who has a lot of heavy and demanding work to do, and they need our support.
I also thank the Minister for what he said. He acknowledges that there is a problem but says that there is a different way of handling it. I shall read what he has said with some interest when I get the opportunity. In the mean time, I beg leave to withdraw the amendment.
Pensions Bill [HL]
Baroness Turner of Camden Excerpts(13 years, 6 months ago)
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Baroness Turner of Camden
After that, another Pensions Bill. This time it follows legislation on pensions provision introduced by the previous Labour Government. In passing, I congratulate my noble friend Lady Drake for the way in which she introduced the debate. I support much of the new Bill, but I will draw attention to a few points.
The new Bill makes provision for auto-enrolment into the National Employment Savings Trust. The requirement for compulsory employer contributions and auto-enrolment into either NEST or an existing good-quality employer-provided pension is very important. Millions of people will for the first time save for a pension. That is a very good development.
The first part of the Bill deals with the state pension and state pension ages. It introduces equalisation for men and women. This was expected, as was the increase in the retirement age. The timetable set out in the Pensions Act 2007 was between 2024 and 2026. In the Bill, the timescale has been brought forward. For women, the SPA will reach 65 by November 2018 and 66 by April 2020. There will be equalisation for the sexes. A number of noble Lords have already drawn attention to the difficulty and unfairness that might be imposed by this arrangement on women born in 1954. I hope that their comments will be taken on board by the Minister.
Increasing the pension age will affect poorer people most, since they are much more likely to rely solely on the state pension. Those who are better off will have other resources such as an occupational pension or other means and will not be much concerned about the state pension age.
Of course, many people want to continue working after the current retirement age. They will include many—mostly men—who have jobs in which they are deeply interested. That is fine, but not all jobs are the same. It is in no one's interest for older workers to continue in employment that is physically demanding: construction is one such industry. It might not even be safe to continue employing older workers in such work. Retirement would be better, unless lighter work could be found. Many women who have done heavy, uninteresting and exhausting work will not welcome the idea of having to work until 66 before they get their state pension. There is a case for flexibility.
There may also be some disadvantage for disabled people, since the Bill indicates that their entitlement will be based on pensionable age and, under the new arrangement, that will be much later. I am sure that nobody would want to disadvantage disabled people through changes in the pensionable age.
Last year, the Government announced the triple guarantee to increase the basic state pension by the highest figure of earnings, prices or 2.5 per cent. This is very welcome, although not quite as good as it appears. For many years I have urged that the state pension should be increased in line with the wages index. My late friend Lady Castle was indefatigable in her campaign for this, but we did not succeed. Had it been introduced many years ago, pensioners would be much better off now. The wages index now is relatively flat; in fact, many wages are going down rather than up. Moreover, the Government are using the consumer prices index rather than the retail prices index as their chosen measure. It does not include housing and a number of other items, and produces a much lower amount. Over the years, provided that the economy improves, the wages index may produce higher figures, so I hope that pensioners may profit in future. However, they will not profit much now, particularly since the rise in inflation is having a dire effect on many household incomes.
The second part of the Bill relates to auto-enrolment, which, as I said, I welcome. However, I do not know why there should be an optional waiting period of up to three months before an employee must be enrolled automatically into a workplace pension. Employers must make sure that employees know from day one that they have a right to enrol and to receive the employer's contribution.
I am not sure about arrangements for transfers in and out of NEST. Many people in a working life could build up an entitlement to a number of pension pots. Is it intended that it will be possible to make arrangements for transfers in and out of NEST? Employers’ contributions are rightly regarded by employees as part of a deferred salary package, and it should be wrong for employers to have the right to reclaim them.
Returning to the question of indexation, the Government have unilaterally decided that CPI should be applied rather than the retail prices index in regard not only to the basic state pension but to the state second pension, public service pensions, many occupational pensions, pension protection compensation payments and the financial assistance scheme. I understand that it cannot apply to private occupational pensions if increases in line with the retail prices index are covered by contract. However, everyone else is likely to lose out and that does seem very unfair. I understand that certain public sector employees have already been advised that that is on the cards and that their future increases will be in line with the CPI. My sister, who is a retired teacher, has told me that she has already received a notification to that effect regarding her pension. Why should employees, through no fault of their own, lose accrued pension rights? I hope that the Government will be persuaded to reconsider this.
Therefore, there are issues which could be pursued further in Committee but there is much to welcome in the new Bill—particularly the arrangements for auto-enrolment. As everyone knows, we have an ageing population, as has been referred to by everyone who has spoken in the debate. It is vital, however, that resources are available for people’s final years to be spent in dignity and without the fear of grinding poverty, which has been the fate of many working people in previous generations.
Unemployment
Baroness Turner of Camden Excerpts(13 years, 7 months ago)
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Lord Freud
My Lords, I think that it is important that we do not get cheap on the movements: this is, as always, a very complicated set of movements. During the last month, for instance, the claimant count went down a little for the youngsters. It went up by 30,000 or so, but has been broadly flat since 2009. There will be reasons for the figure being up a bit, but I do not think that is the point. The point is that we have a serious underlying structural problem. We have about 600,000 youngsters who have not managed to get sustained employment after education. Within that figure, I do not have the exact number about whom we should be seriously worried. Of the 16 to 17 year-olds, it is about 50,000. These are youngsters who may never make the transition into proper economic activity. It is vital that we have structures to help them make that transition.
Lord Freud
My Lords, I thank my noble friend for that question. Essentially, we are going to rely on the work programme and differential pricing to help the hardest to help.
Housing Benefit (Amendment) Regulations 2010
Baroness Turner of Camden Excerpts(13 years, 7 months ago)
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The Earl of Listowel
My Lords, I know that everyone is waiting for the Minister’s response to this debate, so I will be brief. I support my noble friend Lord Best’s Motion, and wish to speak on two issues. One is the availability of social housing and the other is the child protection issue, raised by the noble Lord, Lord Knight, my noble friend Lord Adebowale, and other speakers. I join the consensus of concern in this area.
The noble Lord, Lord German, raised the question of the availability of social housing. Most of us can agree that it is a tragedy that in this country we have failed to invest in good social housing for our people. I visited recently in Walthamstow a mother with a young, six week-old infant who was sharing the house, the bathroom and the kitchen with five other households. We have let such families down badly. I have visited private housing which is being used to fill the gap in Redbridge and some of it is of appalling quality. We have let these families down by not investing and not thinking strategically about securing sufficient social housing supply. The concern, in a sense, is that this will add insult to injury: we have let these families down and we may yet let them down further. I strongly support my noble friend in his call for a considered assessment of the impact of this change.
The noble Lord, Lord Knight, spoke about the impact on children’s services of the migration of families from one area to another. Among other local authorities, he mentioned Haringey. Your Lordships may recall from the report of my noble friend Lord Laming into the death of Victoria Climbié what he discovered about the state of the social services department in Haringey. Among other things, there was a shortage of social workers and a high number of unaccompanied asylum-seeking children entering the local authority, putting an additional and unexpected burden on the children’s services. Social worker managers said that it became like a service production line. Social workers were overloaded and Victoria Climbié’s social worker, Mrs Arthurworrey, had far above her maximum case load. This was the context of what happened to Victoria Climbié and the terrible fate that befell her. I urge your Lordships not to forget what happened in that case.
It would serve the Government’s interests well if they were to consider carefully the impact of these changes on children’s services. If something goes wrong and children’s services become overburdened and social workers cannot answer the needs, the media will understandably be very scathing about what they see as the roots of such problems. It might be unhelpful to the Government in the longer term if it seems that the policy on which they are now embarking might lead to the failure of services and the death of a child or some other outcome. I strongly support my noble friend’s Motion and I look forward to the Minister’s reply.
Baroness Turner of Camden
My Lords, it may not be part of our convention to challenge regulations in this way but we are not living in conventional times. We are faced with a determined attempt by the Government to undermine the welfare society with which we have lived since the end of the last war and to replace it with something called the big society—hence the attempt to change benefit provision without regard to what this will mean for many vulnerable people.
This is the case with housing benefit. Many people have been kept from desperate poverty and even homelessness by the existence of this benefit. Among them are many single parents, mostly women, and it is surely in our interests that such women should be able to bring up and support their children. Often they have poorly paid part-time jobs and some of the difficulties that such women and their families face have already been demonstrated to us very dramatically by one of the previous speakers in the debate.
I am a Londoner and I believe that London is a special case. The mayor may have been attacked for some of the statements he made—he was regarded as having over-reacted—but, on the other hand, he has a point. There are many areas of London, including the one in which I live, which have changed dramatically in the past 20 or 30 years. They have been developed and upgraded. I have lived there for 40 years, and it was relatively inexpensive when I moved there, but it no longer is. It is desperately overpriced. Rents are impossible, except for well-off people.
If the arrangement is that benefits in future should be related to the market rent, many people will be unable to afford the resulting rent without the appropriate benefit. Such people will have no alternative but to move. The mayor made that point strongly in his statement. It is true that people will be unable to go on living there if rent is related in some way to the market rate. That would be impossible. A number of speakers have already referred to what might happen in such circumstances and the social results of such an arrangement. People will have no alternative but to uproot and move to different places, where there may be overcrowding and other undesirable effects on their health and that of their families.
For those reasons, I hope that your Lordships will agree at least to support the amendment tabled by the noble Lord, Lord Best. I certainly do and I hope that everybody else feels the same way.
Health and Safety: Common Sense Common Safety
Baroness Turner of Camden Excerpts(13 years, 9 months ago)
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Baroness Turner of Camden
My Lords, I welcome the opportunity to contribute to this debate. The report is interesting, although I have considerable reservations about some of its conclusions.
When I was very young, I worked in the accident claims department of a major insurance company. The claimants were often working people, who believed that their injuries arose from their working conditions. They had to submit to the most rigorous examinations by the doctors working for the company. I began to feel considerable sympathy for the claimants. I did not stay in that employment as, in those days, there were negligible career opportunities for women in insurance, as in much other employment. I left and went to work for a trade union, eventually became an official and, at senior level, became responsible for the legal aid scheme that was made available to members.
I am pleased that the noble Lord, Lord Young, took submissions from the TUC and from individual unions. I have of course spoken to the chief health and safety official at the TUC about the report. However, the noble Lord, Lord Young, has very little to say in his conclusions about the major and important role played by unions on behalf of their members. Health and safety is a major part of our function. We are not only concerned to ensure that our members are provided with support to enable them to pursue claims in court but anxious to ensure that health and safety at work is improved. We use all the means at our disposal to ensure that this happens.
One of my early experiences in this House was in connection with a Bill that I introduced with the backing and briefing of my union. The Bill arose from the appalling Piper Alpha disaster in the North Sea. At the Cullen inquiry, at which we represented our members, it transpired that many employees had been concerned about safety but, as they were on short-term contracts, they were afraid of being victimised—that is, not re-employed—so they had not drawn attention to the hazards that they had observed. I introduced a Bill in this House, which was originally drafted by my noble friend Lord Wedderburn, with the idea of protecting employees in the industry against victimisation when acting as safety representatives or members of a safety committee. I discussed the Bill with the then Minister—at that time the noble Viscount, Lord Ullswater, who was, I am glad to say, extremely supportive—and the Bill was adopted in this House and in the other place and became law. In due course, the provisions were incorporated into much larger and even more comprehensive legislation.
I refer to this to indicate that unions are concerned not only to secure compensation for injured members but to play a part in ensuring that the working environment is as safe as possible. We welcomed the Health and Safety at Work etc. Act and we believe that its advent, and that of the Health and Safety Executive, is responsible for the substantial and very welcome decline in the number of accidents and injuries at work. Nevertheless, it is still necessary to ensure that safety representatives are elected and are able to perform their important work. Furthermore, legal services should be readily available to employees who feel that they have suffered as a result of negligence in their working environment. Certainly, we in my union always supported members in such circumstances.
I was not completely happy when no-win, no-fee arrangements were introduced. I understand that the reason for their introduction was to ensure that people who did not have funds should nevertheless have access to justice, although it seemed likely to me that the only cases that would be taken on by lawyers operating on that basis would be what might be called dead-cert cases. Yet some of the most important advances have been made when cases that looked doubtful—and in which there has been an element of risk—have been taken and been won. That is of course part of the function of the unions.
That brings me to an aspect of the report and, in particular, statements in the foreword by the Prime Minister, with which I am not at all in agreement.
“A damaging compensation culture has arisen”,
the Prime Minister says. He also says that,
“the standing of health and safety in the eyes of the public has never been lower”,
yet the report makes it clear that, although this may be a perception, the reality is very different. For example, under the heading,
“Annex D: Behind the myth: the truth behind health and safety hysteria in the media”,
some of the stories that appeared in the media are repeated and shown to be quite untrue. I hope that we do not have more legislation based not on fact but on perception created by media misrepresentation. It is in everyone’s interest that workplaces should be as safe as possible. That is also true of situations outside the workplace, which are dealt with in the report.
I do not believe that the report in any way justifies the introduction of legislation that would make it more difficult for people who felt that they had been damaged to attempt to secure compensation for their injuries. It is noticeable that many stakeholders who provided evidence did not believe that there was a growing compensation culture in the UK. That is certainly the view of the TUC. If an attempt is made on the basis of the report to introduce legislation that would make it more difficult for people who feel that they are justified in claiming for injury, I shall oppose it and so, I expect, will many of my noble friends.
Welfare Reform
Baroness Turner of Camden Excerpts(13 years, 10 months ago)
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Lord Freud
I thank my noble friend Lord Skelmersdale for his question on the work capability assessment. He will be aware that there has been an internal review of the work capability assessment and that four changes have been made to it. In practice, these changes will come into the work capability assessment next spring. On top of that, in June we employed Professor Malcolm Harrington to review how the work capability assessment worked on an annual basis. He is supported by a scrutiny group, which includes Paul Farmer, the chief executive of Mind, and three others. I mention Paul Farmer in particular because of the importance of mental health and the fluctuating conditions to do with mental health. We are determined to make sure that the work capability assessment does the job it needs to do.
Baroness Turner of Camden
My Lords, I welcome the Statement made by the Minister to the effect that we have to make work pay. I agree—but does that mean that the Government will be inclined to bring pressure to bear on low paying employers to ensure that they are prepared to pay a living wage? I do not see why the taxpayer should subsidise employers who are paying extremely low wages.
As to unemployment, I suggest that there may be particular difficulties in certain areas of the country where manufacturing industry used to exist and does not exist any more and there is a decline in suitable work for people. What steps can be taken in such areas to ensure that there is work available for people who can demonstrate a capacity to work but where there are no jobs available because of what has happened to local industry? Where the local industry does not provide jobs, because there are no jobs, people are simply resigned to spending the rest of their lives on benefit.
Lord Freud
I thank the noble Baroness for that. She makes the real point that if we do not get the universal credit right we could encourage underpaying employers. We are fully aware of that and are looking into the situation. On her other point about unemployment black spots, it is always a tragedy when an area loses its economic rationale. However, what makes the inevitable adjustment process worse—and perhaps stops it—is a benefit system which hides people away. The shocking story of Merthyr Tydfil is an example. When the steel plant there closed—I do not have the exact figures—there were approximately 4,000 people working in it; two years later there were 3,800 people on incapacity benefit. That meant that no potential entrepreneur or employer would go to that part of the world thinking there was labour there to be used because the system had locked that labour away. If we can get people back on active benefits, we will at least encourage the necessary, and sometimes painful, adjustment process to happen at the fastest speed possible.