Gender Pensions Gap

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Monday 27th June 2022 Lords Chamber

[Lord Davies of Brixton]

To ask Her Majesty’s Government what steps they are taking, if any, to address the gender pensions gap.

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

My Lords, this Government recognise the challenge of the gender pensions gap, primarily resulting from labour market participation differences. We are working with employers and partners on ways to address this, including by promoting women’s progression in workplaces and introducing shared parental leave and mandatory gender pay gap reporting. Automatic enrolment and the new state pension are enabling more women to build up pension provision in their own right, reducing historic inequalities in the pension system.

[Lord Davies of Brixton (Lab)]

My Lords, I thank the Minister for her reply and the Government’s recognition of the seriousness of the pensions gap. However, she must also know that her reply was insufficient in tackling this problem. The problem of the pensions gap is multifaceted: it is double the gap in pay—so, clearly, there are many issues involved here. Will the Minister agree that, to a significant extent, it is a carers’ pensions gap, and that any solution must involve better pensions for unpaid carers? The only solution to that will involve action by the Government directly to provide pensions for carers.

[Baroness Stedman-Scott (Con)]

I can respond to the noble Lord: where carers are working, they will be automatically enrolled, if eligible, into a workplace pension. If they earn below £6,240, they can still ask to be enrolled into the scheme, even though they are not automatically put into it. We have committed to remove the lower earnings limit; that benefits lower earners, including carers, working part-time. In addition to carer’s credit, there is a wide range of national insurance credits available to help people maximise their state pension.

Cost of Living: Pensioners

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Thursday 26th May 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I confirm that the Department for Work and Pensions requires local authorities to provide management information returns detailing their spend and the volume of awards made for food, energy and water bills. MI returns for the scheme, running from 6 October 2021 to 31 March 2022, will also detail grant spend and the volume of awards made to families with and without children. This will be published in the coming months.

[Lord Davies of Brixton (Lab)]

My Lords, does the noble Baroness understand that pensioners’ incomes, this time, this year, are 5% lower in real terms than they were last year? Part of the reason for that is the excessive delay between the index and when increases are paid. Is it not time to fully computerise the state pension so that increases can meet the challenge of inflation?

[Baroness Stedman-Scott (Con)]

As I have said, the state pension uprating relies on legacy IT systems that must be coded well in advance of the uprating. The noble Lord makes a good point about the impact of good IT systems; I am not going to argue with that. Additionally, state pension rates need to be confirmed in advance of uprating because claimants can claim their state pension four months before they reach state pension age and they need certainty about the value of their entitlement.

Senior Citizens: Means-tested Benefits

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Monday 23rd May 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

I would like to think that all those people are being contacted, but let me go and check. I shall make sure that that gets fed into the system.

[Lord Davies of Brixton (Lab)]

My Lords, the Minister mentioned that this was an urgent priority for the Government. It is an unfortunate fact that it has been an urgent priority for all Governments for at least 70 years. Will she agree that the only ultimate answer is to make sure that more people retire with an adequate pension, without the need for means-tested benefits?

[Baroness Stedman-Scott (Con)]

The noble Lord has made that point on many occasions and I admire his tenacity. We are doing what we can to make sure that the state benefit is there and that there is a benefit system to support people, but I cannot commit to the challenge that the noble Lord has given me.

Social Security Benefits Up-rating Order 2022

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Wednesday 23rd March 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

The noble Baroness is right to point out that there are those on low incomes who are unable to work, and I shall talk to my noble friend Lady Scott and write with actions that the Government are taking. I do not have that information to hand.

The noble Lord, Lord Hendy, and the noble Baroness, Lady Wilcox, raised the point that we are making savings at the expense of pensioners. We have increased most state pensions by 2.5% this year, when CPI in the relevant period was 0.5%. We made primary legislation to make sure that that happened, and we locked down the economy precisely to protect our older people. I cannot therefore recognise the points made by the noble Lord and the noble Baroness.

The noble Baroness rightly raised the issue of state pension underpayments. That should not happen, and we have apologised unreservedly, but I can confirm that the department has a dedicated team working on the correction activity. Sufficient additional staffing resources have been allocated to progress this activity, and further resources are being allocated through 2022-23. The Government are fully committed to ensuring that these historical errors made by successive Governments are addressed as quickly as possible to ensure that individuals receive the state pension that they are rightfully due in law.

The noble Baroness, Lady Wilcox, raised the issue of pensioner poverty for women. Reforms to the state pension have put measures in place to improve state pension outcomes for most women, and over 3 million women stand to receive an average of £550 per year more by 2030.

On the state pension underpayments, the noble Baroness, Lady Wilcox, asked, understandably, how we are prioritising cases. Resolving these errors is a priority for the department, as I have already said, and we are committed to doing so as quickly as possible. We have started reviewing cases when the individual is alive; in doing so, we are initially focusing available resources on older cases and those who we believe are most likely to be vulnerable.

I am conscious of the time. I have mentioned many things—but I hope that noble Lords will be reassured that the Government are fully aware of the concerns that people have over rising prices, and we have taken action, where possible, to help. I finish by again thanking the noble Lord, Lord Davies, for giving me the opportunity to set out the Government’s position.

[Lord Davies of Brixton (Lab)]

My Lords, this has been a worthwhile debate. I am conscious of the time: I could spend a lot of time rehashing all the arguments, but I am sure we will return to them. I feel this is the first of what may well become an annual event, and I look forward to future occasions. I thank my noble friends Lord Sikka, Lady Lister, Lord Hendy and Lady Wilcox, and the noble Lord, Lord Shipley, for their contributions. If the House were in a position to take a vote, the Motion would certainly be carried, but it would be meaningless in current circumstances.

I conclude by saying that I am sure the Minister had to mention the Spring Statement, but the truth is that the Spring Statement did nothing for the poorest pensioners. The whole debate has been about the poorest pensioners; there was nothing material in the Spring Statement for them. In fact, it made them worse off, by giving a further little upward shift to inflation. I thank the Minister very much for her reply, and I am sure we will continue the debate. I beg leave to withdraw the Motion.

Underpayment of Benefits: Compensation

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Tuesday 18th January 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

When things like this do happen, they are awful and nobody is proud of them, but I am very pleased to say to my noble friend that the team responsible is looking at what happened and putting in place processes that will ensure that, God forbid, this never happens again.

[Lord Davies of Brixton (Lab)]

My Lords, I take this opportunity to remind the Minister, the noble Baroness and the House of the underpayment of pension to widows and widowers. This is representative of some systematic problems within the department. Will the Minister be reporting to the House on the issue?

[Baroness Stedman-Scott (Con)]

I am not aware of the facts of the underpayment of the widows’ and widowers’ pension, but as I always try to answer in full, I will go back to the department, find out if there is any correlation and write to the noble Lord.

State Pension Age

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Tuesday 18th January 2022 Lords Chamber

[Baroness Stedman-Scott (Con)]

My noble friend has again given us some interesting facts and data. I am afraid that the impact of climate change is way outside my brief, but I am sure everybody notes the points made.

[Lord Davies of Brixton (Lab)]

My Lords, the Minister quite rightly referred to the ongoing reviews, but I simply ask, as a matter of logic, that, if the policy is that because people are living longer, retirement age should increase, is it not the necessary corollary that if people are not living as long as previously expected, retirement age should not be increased in the same way?

[Baroness Stedman-Scott (Con)]

I will not argue with logic; that would not get me anywhere. On the noble Lord’s point about the state pension age, I know that people are sceptical of government reviews, but I ask all noble Lords to approach it in a positive way, make their points—particularly the one raised by the noble Lord—and get them into the review.

Gender Pay Gap

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Tuesday 23rd November 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

The gender pay gap is something that the Government take very seriously. The point that the noble Baroness makes about flexible working and working from home, and the impact that those have on women in particular, is well noted. Flexible working is wide-ranging and includes part time and flexitime, and it can be crucial for opening up opportunities, particularly for women. I cannot give a categorical answer about what we will do other than to say that we are mindful of this in everything we do in the Government Equalities Office. It may be that I come back to the noble Baroness with a bit more detail.

[Lord Davies of Brixton (Lab)]

My Lords, my supplementary question handily spans both parts of the Minister’s multitasking portfolio—an opportunity too good to miss, and a sort of birthday present. Will the Minister acknowledge that one of the biggest consequences of the gender pay gap is the gender pensions gap? Can she therefore outline what steps the Government are taking to address that specific dimension of the problem? When will action be taken to address the acknowledged shortcomings in the benefits that accrued from automatic enrolment for the many women on low pay in broken employment?

[Baroness Stedman-Scott (Con)]

I thank the noble Lord for that wonderful birthday present. Let me just say that auto-enrolment has been a fantastic success, and we want that to continue. On the point he raises about net pay and the pensions gap, the Government are absolutely going to rectify the anomaly. We published a call for evidence. The Government will pay a top-up to low earners, making contributions to pensions schemes using a net pay arrangement, from 2024-25 onwards.

Social Security (Up-rating of Benefits) Bill

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Consideration of Commons amendments
Tuesday 16th 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)]

My Lords, I know it will be a disappointment to my noble friend Lady Altmann and others in this House that the Commons has disagreed with Lords Amendments 1 and 2. I ask that this House does not insist on its amendment for two reasons.

First, we have discussed at length the reason why the Government do not believe that they should set a precedent for uprating benefits or pensions using a methodology that is not robust and for which there is no consensus. That would be the position with an adjusted measure of earnings growth, which is why the Government decided to apply a double lock, underpinned by the established consumer prices index, which is published by the ONS. This approach was also recommended by the Social Market Foundation.

Secondly, Royal Assent is needed by 22 November 2021. This will allow the Secretary of State to conduct her statutory review using the new powers in time for the DWP to meet its hard deadline of 26 November for reprogramming its computer systems. This will ensure that the new rates of benefits and pensions are payable from April 2022. While I welcome the intentions behind the amendment, we cannot accept it. That is why I ask that the House does not insist on Amendments 1 or 2. I beg to move.

[Lord Davies of Brixton (Lab)]

My Lords, it is a matter of real regret that the Commons has not accepted the amendments to the Bill proposed by your Lordships’ House, but it is worth taking this opportunity to stress that not only have the Government broken a freely given promise to the electorate but, as has been clearly explained, they have done so totally unnecessarily. They could have lessened, if not avoided, the concern caused by breaking their promise by taking this opportunity to reaffirm clearly their commitment to the earnings element of the triple lock. It baffles me why they failed to do so.

I will not repeat all the arguments, despite the importance of the issue, but I have one more question for the Minister. The problem is that the Government are trying to have it both ways. On the one hand, they say they remain committed to all three elements of the triple lock—prices as measured by the CPI, average earnings and the 2.5% minimum. They want us to believe that this was an exceptional case that justified special rules being applied, and that they still deserve the electoral kudos that comes from standing by their promises. On the other hand, they have in practice made it clear that there are exceptional circumstances in which they can break the commitment.

We know they are prepared to break the triple lock, but we do not know under what conditions. We know what they were in this case; Ministers in this House and in the Commons have explained on several occasions the special circumstances which they believe applied. The noble Baroness the Minister said at Second Reading that

“the effects of the Covid-19 pandemic have caused distortions in the labour market, which have been reflected over two years in highly atypical trends in earnings growth.”—[Official Report, 13/10/21; col. 1847.]

We know the Government believe that highly atypical trends in earnings growth are sufficient justification for breaking the earnings link. We do not know how atypical earnings growth needs to be in future before they decide again to break the link. Can the Minister tell us more about what counts as atypical earnings growth? How atypical does it need to be to justify breaking the promise?

However, it is not just earnings growth that might be considered atypical. What counts as atypical growth in prices? This is not a hypothetical issue. Most of us here have become familiar with what many in this House might regard as consistently low rates of inflation, but who knows what is to come, with the unwinding of quantitative easing and other pressures on the economy? How do we know that the Government, when faced with a significantly higher rate of inflation than we have experienced in the last 25 years, will not decide that this too is atypical?

As I say, this is not hypothetical. Based on the OBR forecast for the Budget, it looks likely that the state pension increase in April 2023, which we will discuss next November, will be based on price increases rather than earnings or the fixed 2.5%. The latest Bank of England forecast, released earlier this month, suggests that next September—the relevant month for measuring the CPI—the increase will nudge 5%. Perhaps it will be higher, given this Government’s lack of economic competence. We do not know. In any event, an increase of this order would be significantly higher than the experience of the last few years. Earlier this year, not long ago, the September 2022 increase was expected to be only around 2%—it could be argued that this is more typical. I do not want to put ideas in the Minister’s mind, but I must ask how atypical the CPI increase next September has to be before it too will be considered atypical enough for the Government to decide that it justifies breaking the Conservative Party’s manifesto commitment to the triple lock?

The Minister needs to tell us that this year’s broken promise is truly a one-off and that the commitment to the CPI-linked increase will be adhered to, whatever next September’s increase. If we are not given such a commitment—which I suspect we will not be—then, in truth, we must conclude that we have a return to decisions about increases in the state pension being made on an ad hoc annual basis. History tells us that the inevitable outcome is that pensioners will suffer.

Benefit Cap: Review

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Wednesday 3rd November 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

I can tell my noble friend that when people have caring responsibilities, or someone has a severe disability or health condition, they will not have their benefits capped. Universal credit households are exempt from the cap if household earnings are at least £617 a month, and housing benefit claimants entitled to working tax credits are also exempt from the benefit cap.

[Lord Davies of Brixton (Lab)]

Will the Minister understand the concern—indeed, revulsion—across many sections of this House at this punitive policy? The Minister refers to people finding work where they can. The truth is that large numbers hit by the cap cannot obtain work. Will the Minister understand that this policy recreates less eligibility and the worst aspects of the Poor Law?

[Baroness Stedman-Scott (Con)]

As I have said to the noble Baronesses, Lady Lister and Lady Smith of Newnham, and as I shall say to the noble Lord, Lord Davies of Brixton, I have agreed to go back and come back to noble Lords on this issue. The question is virtually the same, and I shall give an answer.

Social Security (Up-rating of Benefits) Bill

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Report stage
Tuesday 2nd November 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I thank the noble Lord, Lord Davies, for his amendment. I understand his passion for retaining the link between state pension uprating and earnings growth. This passion applies even in the exceptional circumstances generated by the Covid-19 pandemic, when earnings declined by 1% one year then rebounded by 8.3% the next. By contrast, the Government increased the state pension by 2.5% last year and intend to do so by 3.1% this year. This is in view of protecting the value of the state pension despite a decline in earnings last year, protecting its purchasing power next year and having due regard to the current fiscal situation and the effects on younger taxpayers. The Bill, therefore, replaces the link with earnings for one year only with a requirement to increase these rates at least in line with the increase in prices or by 2.5%, whichever is higher.

It has been agreed by many in this House and the other place that 8.3% is an anomalous figure distorted by the slump of wages at the start of the Covid-19 pandemic and by the effects of millions of people moving off furlough back into work. The noble Lord’s suggestion of 8.1% would generate a cost of more than £4.25 billion in the year April 2022-23, relative to increasing the state pension in line with the provisions in the Bill. The Government do not believe it would be fair to younger taxpayers to increase these rates by such a high percentage on top of the 2.5% increase last year, when earnings slumped by 1% and inflation stood at 0.5%. After this year, the legislation will revert to the existing requirement to uprate at least by earnings growth, as per the Government’s triple lock manifesto commitment, and it still remains in place.

The noble Lord, Lord Sikka, raised the issue of how pensioners can access their entitlements. Noble Lords will see with the letter that has gone out today that we are committed to making sure that pensioners can access their full entitlement under pension credit. The difficulty seems to be persuading them to make a claim. We offer various ways of accruing benefits, including by telephone and post. Where necessary, the department can offer home visits. We also work with partners and stakeholders such as Age UK to help people claim, and we will continue to do so. I therefore ask the noble Lord, Lord Davies, to withdraw his amendment.

[Lord Davies of Brixton (Lab)]

I do not think the Minister really responded to my request to initiate a debate about the structure of pension provision. But I am not going away. I will raise this issue at every opportunity, and I hope that at some stage we will be able to have a productive discussion about what to me is the key issue. The technical details of the uprating basis are important but the structure is crucial. With the leave of the House I will withdraw my amendment, but the issue is not withdrawn.

Arcadia Pension Fund

Debate between Lord Davies of Brixton and Baroness Stedman-Scott

Tuesday 8th December 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

There is no government liability, as the Pension Protection Fund is funded by the assets taken into it from schemes, topped up by a levy on eligible schemes. The PPF plans for the long term and, as at 31 March 2020, it had a healthy reserve of more than £6 billion.

[Lord Davies of Brixton (Lab)]

The Minister correctly highlights the role of the Pension Protection Fund, and the employees of Arcadia can take some comfort from that. The problem is that the protection afforded by the fund is incomplete. To lose your job is bad enough; to lose part of your pension as well piles injury on injury. Can the Minister tell us what consideration is being given to improving the level of protection provided by the PPF?

[Baroness Stedman-Scott (Con)]

First, the noble Lord makes a good point about people losing their jobs, and I want to give absolute comfort to the whole House that the Department for Work and Pensions, through the rapid response team, stands ready to do all it can to help people in this very difficult time. On the second part of his question, we are doing as much as we can at the moment to help companies—through the Pensions Regulator and the Pension Protection Fund—to protect their assets and ensure that trustees act honourably in their duties.