Pension Schemes Bill

Debate between Lord German and Baroness Hollis of Heigham

Monday 12th January 2015 Lords Chamber

[Lord German (LD)]

My Lords, I rise to support the remarks of the noble Lord, Lord Best. In doing so, I declare my interest as an unremunerated member of the advisory committee for the Equity Release Council. I am, I hope, still in extended middle age, which is a new term that I fully endorse.

Housing wealth, along with other assets, means that the guidance is crucial given the disparity between the amount that people tend to have in a DC pot and their housing wealth, which on average is more than 10 times as much. That is a considerable amount of money or resource which people will need to take into account. The FCA standards, which were helpfully published this morning by the Treasury, state that:

“In terms of content, the standards require that the guidance session must … request information about the consumer’s financial and personal circumstances that is relevant to their retirement options”.

That requires the adviser who is going to take people through the guidance session to ask them for information about their housing wealth, but it is not explicit in the standards, and while we know that they are nearly finalised, there is time for the Treasury to make them more transparent about what is required. Because of the relationship between the two amounts of money, the instruction ought to be clarified, perhaps not in the document but in the training so that it is always an issue which people take on board. Will the Minister indicate whether the sentence in the FCA standards set out in the document produced this morning by the Treasury implies that housing wealth, savings and investments will be taken into account? Will he consider making it more explicit in the information that is provided to the consumer and to those providing the guidance?

[Baroness Hollis of Heigham]

My Lords, I would like to ask the Minister a question which is triggered by the important issues raised by the noble Baroness, Lady Greengross, and the noble Lord, Lord Best. However, I want to look at it from the other way round, which is the situation of someone who is 55, is on housing benefit, and has £20,000 locked away in a small pension pot. At the moment, if you have capital of more than £16,000 and you are pre-retirement, that is an absolute block to any further income-related benefits. Different rules apply when you come to retirement. The assumption throughout is that you can access your pension only at the point of retirement, when different rules apply. What will happen now? Can the Minister help us on this? The rules are that if you have capital that you could get at if you applied for it, you are treated as having that capital. While it was tucked away in a pension and not accessible until you reached 60 or 65, you could not have access to it and so it did not affect your entitlement. But in future you will be able to access your capital in such a way that, under the Housing Benefit Regulations 2006, Regulation 49(2), because you can access your capital, you are treated as though you have that capital, which would therefore automatically cut you off at £16,000—you have £20,000 in your pot —from any access to housing benefit. Can the Minister clarify how this will work in the future?

Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014

Debate between Lord German and Baroness Hollis of Heigham

Thursday 3rd April 2014 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

My Lords, in her powerful speech, my noble friend Lady Sherlock has explained our opposition to this statutory instrument. It brings more people into the bedroom tax which should be abolished. She has had support from all around the House today. The tax is disastrous. A previous Tory Government introduced and repealed the poll tax in the same Parliament. As the noble Lord, Lord Low, said, this Government should have the courage and decency to do the same.

You do, of course, need sanctions in social security to ensure, for example, that compliance with JSA work search is not voluntary. However, the bedroom tax—for the first time ever—falls on the innocent, disabled and vulnerable. They are punished when they have done no wrong: they simply occupy the house that the council allocated them. The Government have now said to them: move or pay. Most tenants can do neither. As my noble friend Lord Beecham said, tenants who want to move will be waiting three to four years. Arrears mount; single people or couples on the waiting list who want smaller accommodation will never get it; pensioners wanting to downsize cannot. As for overcrowding, outside London six times more families are underoccupying than overcrowding Just helping pensioners to move would sort it, with grace and consent. The bedroom tax destroys sound housing policy.

Will the Government, nonetheless, make their savings? No, because benefit cuts have been shunted on to tenants to become irrecoverable arrears. In Norwich, which has spent every penny of its DHPs, 60% of tenants affected by the bedroom tax are now in average arrears of £300 and mounting. Nationally, around two-thirds of affected tenants are in arrears. DHPs are utterly insufficient, short-term, and a postcode lottery, yet that is the policy on which the Minister, sadly, relies. Carers UK says that 75% of tenants trying to pay were cutting back on food, heating, medical supplies and mobility. The fragile economy of tenants collapses, as they turn to food banks, payday loans and loan sharks, with debts from which I doubt many will ever recover. The Government’s notional savings become tenants’ irreversible, irrevocable debts and, in the process, we destroy lives.

Fifteen per cent of affected tenants, nearly half of those in arrears, have already received eviction warning notices. What happens then? Do we evict tenants into the private sector—private landlords do not want them and it costs more—or into bed-and-breakfast accommodation which costs even more, or what? Should they be rough sleeping? What about children and disabled people? Through no fault of their own, there are people who cannot pay their rent because the Government have cut their benefit.

Instead, do we allow rent arrears to grow and in the process threaten the very viability of housing associations, as the noble Lord, Lord Taylor, said? We have offered the Minister three possible strategies to help because every defence of the bedroom tax is false. The first option is that the bedroom tax should not apply to disabled people, as the Work and Pensions Committee said only yesterday. Two-thirds of affected tenants are disabled. One may ask why. Adaptions, at a cost of £6,500 a property, become wasted. As regards space, the CAB has said that for disabled people that extra room for carers or equipment is,

“a lifeline as vital as a guide dog or a wheelchair”.

Finally, disabled people need the support of neighbours, as my noble friend Lady Lister said. We talk about social or community care and at the same time the Government seek to pluck disabled people out of the very communities that provide that social care.

The second option is that it should apply only to those who refuse an acceptable alternative offer. Following the remarks made by the noble Lord, Lord Taylor, I should like to know what the position of the Lib Dems is. Will they continue to support the bedroom tax in Parliament while campaigning on the doorstep simultaneously for its repeal? The third option is that the Government could treat social tenants like private tenants and apply the bedroom tax only to new tenancies. Any of those options would help.

We will go further. The Labour Party is pledged to repeal the legislation. It is the most wretched piece of social security legislation that I have known in 25 years in this House. But by then, in the summer of 2015 after the election, we will have seen hundreds of thousands of social tenants—our fellow citizens, most of them disabled and many with children—punished for occupying a house that was allocated to them. They would have been doing no wrong but are unable to pay or to move. They may be deep in debt and fearing, or perhaps experiencing, the loss of their home. How can we do this to them? It is grotesque.

[Lord German (LD)]

My Lords, I am the first to recognise a political device when it comes my way. Indeed, this is a political device to secure a wider debate on the spare room subsidy on the back of regulations which have already been made and have come into effect. I do not dispute the need for political devices or regret the use of political devices but it is clear that that is what is being used. I think I should start by clearly laying on the line our policy as Liberal Democrats. What was said at our conference and what we have heard today from noble Lords is the preamble. But two things are being called for: the first is a review and the second is to do with housebuilding.

More crucially than anything else, we want to see the effect that this policy is having in this country. As I understand it—my noble friend can tell me—the review of the policy is due to publish its initial findings soon. I always hesitate when the word “soon” is used but I know that my noble friend loves the word, so perhaps he will indicate whether it will be before the end of this Session, before the Summer Recess or whatever. It would be useful to know when we can have that information.

One would expect that a Labour Party that has designed its policy to abolish the whole thing—we could have a debate about that—will want to assert that a huge amount needs to be put right. But we need facts that stand up to such an assertion and to know exactly where we are. We need to know whether things need to be changed as a result of that independent review, which was put in place by the Welfare Reform Act. That is the position of my party.

Perhaps I may dwell on the issue of correcting secondary legislation, which is what the Motion is about. The unexpected consequences of legislation of the past must have affected all Governments. I could assert that an opposition party present today will at some time have had to use corrective secondary legislation for something which has appeared after primary legislation has been put in place. Perhaps my noble friend can tell me whether I am right or wrong.

There are problems with the 1996 legislation. Perhaps my noble friend can tell us whether it was designed for social sector tenants. The impact that we are talking about is with regard to social sector tenants but my understanding is that that original legislation was put in place particularly for private sector housing and as a protection for private sector tenants. Perhaps my noble friend can advise us whether something that was designed for a different purpose is producing unexpected and unintended consequences.

My second point concerns what is happening in local authorities. Although I do not have as many years of experience in local government as the noble Lord, Lord Beecham, I did spend quite a considerable amount of time in local government. I cannot recall whether I spent more or less time than my noble friend Lord Tope. I certainly remember that we had the use of electronic equipment in the mid-1990s when I was a city councillor. How many local authorities are having to resort to paper trails in order to find out the number of people affected by the 1996 legislation? Do some local authorities have up-to-date information? When there are assertions that between 3,000 and 40,000 people are affected, somewhere there must be reasoning behind those assertions. Do we expect to find the correct solutions and answers soon? Will we be able to find out very soon how many people are affected?

Will my noble friend reassure the House that local authorities are being reimbursed for the extra work that they are having to do to trawl through the paper trails where those records have not been kept electronically or have been lost? Now that the loophole is closed, I understand that there is now an issue relating to discretionary housing payments paid to people who were subjected to the extra charge between March 2013 and March 2014. People who were awarded DHP were awarded it on the basis that they needed it at that time. Can my noble friend reassure me that there will be no question of people having to repay it and that that discretionary housing payment remains in place?

Today, the noble Lord, Lord Touhig, gave an example of a case, which has been publicised, in Torfaen, the borough in which I live. I note that the Government made additional money available for discretionary housing payments to all 386 local authorities in this land and that only about 80 applied for money. In Wales, only Cardiff, Caerphilly and Conwy—it is very easy to remember them as the three “C”s—applied for discretionary housing payments and Torfaen did not. One can only assume therefore that local authorities which say that they do not need any more discretionary housing payment have enough to make available to people who have a need. I have a number of questions to ask those who support the case, which I read about in my local newspaper. Did those involved go to the local authority? Did the local authority turn them down for extra support, given that local authorities have enough money as they did not need to apply to the Government for additional money?

The second issue my party is concerned about is that of new homes. One of the problems that might come about as a result of this policy is the distortion as local authorities and housing associations decide to build more single-bedroom units. Can my noble friend give me any indication of what is happening in the housebuilding sector, not just in England but also in Wales? We could have a direct comparison with the record on housebuilding of the Conservative and Liberal Democrat coalition and a Labour Government. On that matter, can my noble friend tell me whether the Government’s target for building 170,000 new homes in England by the end of this Parliament in 2015 is still on track? Is it being matched in Wales by the Labour Government on the number of houses that they will be building as well?

Finally, I would like to ask my noble friend a question about the overall budget for housing benefit. The Labour Party, the Liberal Democrats and the Conservatives have all said that we have to try to contain the overall budget. In fact, in the other place all three parties voted in favour of the retention of that hold on the overall budget. Will the changes that have come about as a result of amendments to the secondary legislation affect the original estimates of expenditure on housing benefit, and how much, if at all, will this put up the bill for housing benefit in this coming year?

I have asked my noble friend a variety of questions. I would be grateful if he could tell us when “soon” means in terms of the first stage of the review of this policy.

Pensions Bill

Debate between Lord German and Baroness Hollis of Heigham

Wednesday 8th January 2014 Grand Committee

[Lord German]

Perhaps I could put inverted commas around the comments of the noble Baroness, Lady Hollis, and refer them, and the precise nature of this debate, to the Minister in Canada. I do not know what was in their mind. My noble friend the Minister here cannot know either, because of course they closed the door to any discussion with the officials from the Canadian Government. However, we need a discussion about this issue. It may well be that it is not with DWP Ministers; it may need to be at some other level.

I do not know the answer to the noble Baroness’s question. All I know is that the Canadian Government believe that they have a mutually beneficial offer to make. That seems to me to be worthy of further discussion; no more than that. I make it clear that I am very much in favour of managing expectations here. The amendment does not call for expenditure at the levels which we have seen before us, and I do not wish to see a reduction in social security expenditure for people currently living in this country as a result. However, when an offer of that sort is made, it is worthy of examination. If there were to be the sorts of things that would make it mutually beneficial, and the Canadian Government believe it to be mutually beneficial to adopt a procedure for Canadian UK pensioners, then it is worth at least finding out what is on the table. If it were to be a successful offer, that of course quite clearly sends the message to other Governments that they can come up with a deal that actually meets the expectations of this Government and the British people.

[Baroness Hollis of Heigham]

I am sorry to interrupt the noble Lord again; he is being very tolerant, for which I am grateful. Again, I am relying on my memory, which is probably faulty, but something in the order of 85% of overseas pensioners outside the EU are in the four major Anglo-Saxon countries. However, the countries in which most of us would recognise that there are anomalies are not so much the big four Anglo-Saxon countries, which have decent social security systems for poverty relief as a safety net and so on. This is about the mixed history of some Caribbean islands, which came in under the net, before 1979, for protection of overseas pensioners, while others did not. Once we started inflating pensions by the cost of living—I am not sure that this was accidental—bilateral relations disappeared at that point because they started to reflect the British cost of living. Those countries are so poor that they are looking for a form of aid in the form of pensions. How would the noble Lord justify coming to a mutually advantageous deal with a relatively wealthy country like Canada while, because an appropriately mutually advantageous offer could not be made with Caribbean islands, that opportunity would be refused to some of the poorer countries?

[Lord German]

We have gone a very long way from what might be the first step in this direction. We have not yet been able to answer that first question: what do any Government have ready to offer?

Incidentally, the Government’s figures are quite clear. They say that 85% of all those with frozen pensions live in Canada, New Zealand and Australia. Those are huge numbers. One of the interesting things when you look at these issues, as noble Lords will know, is that other countries produce information, which comes to you in emails. The noble Baroness, Lady Hollis, asked earlier about Australian pensions. I understand that they are means-tested, but only by 50% of total income over the threshold, so if the UK pension was increased by £20 then the Australian pension would be reduced by the equivalent of £10. As we know, it is not always as clear as we suggest.

My intention in tabling the amendment was simply to be able to examine the issue in a different way, and only then to consider it further. However, it seems to me that we need an answer. I have not yet heard the answer, although of course I could not expect to hear an answer from my noble friend since the discussion with officials was not allowed to take place. However, I encourage that discussion to take place, even if it is over a cup of tea with another group of officials at some stage. In a spirit of hope that this will happen, I beg leave to withdraw the amendment.

Pensions Bill

Debate between Lord German and Baroness Hollis of Heigham

Monday 16th December 2013 Grand Committee

[Baroness Hollis of Heigham]

My Lords, I want to comment very briefly. I declare an interest, which I know is relevant to this amendment, as a board member of the Pensions Advisory Service. TPAS has recently completed a survey of just under 1,000 women on their pensions which makes the point absolutely for my noble friend’s request for an information and communication strategy to go out to prospective pensioners and pensioners. Of that 1,000 women, 36% did not know when their state pension would be paid; 74% did not know how much they would receive; 57% did not know whether there was a shortfall in their NI record; 25% do not know that the age is likely to change again; 54% have made no changes to their retirement plans; 27% wonder whether they will have to work longer; and 76% do not expect to be financially comfortable in retirement. I have before me a lot of quotes, some of which I may choose to use later on. Those figures suggest how wilfully uninformed far too many women are about what will happen to them over the next couple of years. That evidence from a TPAS sample substantiates my noble friend’s points.

[Lord German (LD)]

My Lords, I shall have to speak very quietly because I have lost my voice, so if anybody fails to hear to me, I will shout a bit louder after a few days. I just wanted to add to the important points made by the noble Lord. I can always remember receiving my state pension statement. It was a bit of a shock, because I always thought that I was so young that I would never receive one, but it did happen.

The most important aspect of this legislation is clarification of the words as they are written out, because this is a very complex set of arrangements and they need to have clarity of language. Those statements which I have seen are quite clear. I do not hold so negative a view as to how people will see the future world of their pensions. Just today, we have heard that we have now reached 2 million people enrolling in auto-enrolment for pensions—that is, 2 million more than there were 12 months or so ago who know about a pension because they have got into it. We have 3,500 employers. I welcome the British Heart Foundation, which has recently enrolled all its staff. So we know that people are becoming more involved and engaged with their pensions.

The second thing relates to something which happened to me last Friday. I was doing Lords outreach with two schools and the pension question came up. I do not know whether it had been planted by a teacher in advance but it came up. It is quite clear that when these matters are scrutinised, young people are beginning to realise that if we do not put those matters right they, too, will be having to pay more. I always save for my grandchildren, who are enthusiastic to hear that they will be paying to sustain me into older life—but, of course, I am not a recipient of the new single-tier pension. However, when we talk about this issue I wonder whether we should also try to include in it education from a younger age, so that when people receive any financial education within their school life, they can understand that pensions are not a matter for tomorrow or for when you are retiring; they are a matter for the day on which you start to pay and earn. This is a probing amendment but it is very important that, along with other measures which are going on, pensions are seen as an issue for all from now on and not one for when you are retired.

Jobseekers (Back to Work Schemes) Bill

Debate between Lord German and Baroness Hollis of Heigham

Thursday 21st March 2013 Lords Chamber

[Lord German]

Yes, I will. It is perfectly obvious that the noble Lord’s party did the same thing when it was in power. There was retrospection in legislation. I can think of the videogames legislation, which has some very great similarities to this Bill. My plea to the Government is to answer the questions posed to them by the Constitution Committee in this debate so that we can have that explanation. I quoted the two paragraphs of the report. I am sure the noble Lord has that in front of him, so he can look at paragraphs 12 and 15. Those are the two questions I want answered.

[Baroness Hollis of Heigham]

In the opening stages of the noble Lord’s speech, which was very interesting, he referred to remarks from the Front Bench in the debate. I have the Hansard here. Could he give me the column reference for his quotation?

[Lord German]

Certainly. It was col. 825, about half way down towards the bottom of the page.

Welfare Reform Bill

Debate between Lord German and Baroness Hollis of Heigham

Tuesday 31st January 2012 Lords Chamber

[Lord German]

My Lords, I would like to take a little further the arguments, put by the noble Lord, Lord Newton, about where we go with the concerns that have been widely expressed around the House. It is worth reminding noble Lords that the intention expressed by the Minister is not in the Bill before us; that is the subject of future regulations that are to be brought forward. I understand that the purpose behind the amendment is to lock the Minister into a pattern which will remain for many years to come. If you put something into primary legislation, it will be locked there for many years until time is found to change it. I shall return to some of those issues later.

One thing that has not been mentioned is the other cliff edge—my noble friend Lady Thomas mentioned this in her speech—relating to those who are 16 and those who are 17. The cliff edge is enormous. We also have to consider the change in the funding, although it is not the subject of this amendment, but it is the subject of the Minister’s thinking, as expressed to us. Many people see the problem of no continuity for disabled people between the ages of 15, 16 and 17. That is the issue that the Minister is concerned about.

Another related issue is not just the level of payments, but the way in which the payments will be funded over time. Perhaps this House would be better thinking about having a further debate on this or having that discussion during proceedings on regulations. I shall come back to how that might happen in a moment. There are two possible routes out of the problem of the distinct difference in the funding for those who are post-16 and those who are less than 16. I guess that one of the ways might be to create new tiers. There are already three tiers in DLA and there are two tiers for adults. At some stage in the future, a Government—this one or a future Government—might decide that it is essential to have three tiers and they might want to redesignate. Of course, that would be stopped by this amendment.

The second and more purposeful way in which the amendment would not allow change would be as regards transitioning; I do not mean the transitional measures in the Bill, but moving to rectify the enormous cliff edge that occurs at the age of 16. For that to happen, it may well be that a Government of whatever kind would want some form of progress on changing the relationship between post-16 and under-16 provision.

All those things would not be assisted by an amendment that locked into aspic a set of placements between one set of benefits and other, and missed out the other half of this equation, which is not the subject of the amendment. Of course there are concerns about the levels of payment that go into these particular directions. If you forage around the background of these particular payments—they go back to supplementary benefits, and I guess that some noble Lords here will remember how those originated—their purpose was to pay for the additional costs that were not being funded from the disability living allowance system that we now have. Those payments related mainly to items such as energy costs—the costs of extra baths, the need for more heating in the house, extra hot water and so on. Those are very much some of the issues that face the over-16s as well as the under-16s.

We need to have this debate, but need to have it in terms of the absolute flexibility that we can create in the environment between now and when the Minister brings forward his regulations. I am sure that he has listened to what has been said today, and my advice to my noble friend would be to heed the warnings that have been given. Clearly, there are very strong views about how you treat disabled children but, at the same time, I ask noble Lords to consider in the same breath the plight of those over 16 and to think about how best we might approach this issue.

A compromise situation might well be achieved by my noble friend listening to this debate and saying that he will discuss these matters when we come forward with the regulations. I know that many noble Lords will think that you cannot do anything about regulations: they are laid before you and you can either vote for them or not. We are laying markers now and there are markers that people can lay. I am sure that all the lobby groups are lined up, ready to influence the Minister in this matter. There is time—is there not?—for us to make sure that we do not put right one problem and cause another to be set in stone against it. We need that flexibility and I hope my noble friend is listening to that, will heed what he is hearing, but give a commitment that he will consider these matters when he brings forward his regulations.

[Baroness Hollis of Heigham]

My Lords, I should like to come back on some of the points made by the noble Lords, Lord Newton and Lord German. First, I say to the noble Lord, Lord German, that this is a very narrow amendment. It is being considered at Third Reading and we were advised to focus very narrowly on the subject that we are discussing, and not to say that because we cannot do enough for older disabled young people we should therefore make younger disabled children poorer. That is what the noble Lord, Lord German, was arguing for in part of his speech, and I was sad about that. I thought it was inappropriate as well as, frankly, irrelevant—given the steer we were given from the Table about the amendment.

Secondly, the noble Lords, Lord German and Lord Newton, asked the Minister to take the opinion of the House and to come back in regulations, as though—in the words of the noble Lord, Lord Newton—we would otherwise be setting payments in concrete or, as the noble Lord, Lord German, said, in aspic. I think I prefer aspic to concrete but, none the less, the point is that we are not doing that at all. That would be fundamentally to misunderstand what the amendment seeks to do. It would be wrong to put in the Bill a precise sum of money that would require primary legislation to change. That would be wrong because it would fix a payment in concrete or aspic. We are not doing that. This amendment establishes a principle of proportionality, because—as the noble Baroness, Lady Browning, said so movingly and as so many other noble Lords, including the noble Lord, Lord Wigley, who have personal experience of this, said—the costs of disability are not just connected to the degree of disability; they are on a spectrum and may change.

Unless the amendment is passed, the Government propose that more severely disabled children will have one sum and less severely disabled children will have one-third of that sum. The amendment proposes that the right proportionality would be two-thirds of that sum. That is the principle, because we accept the arguments that have been put today by people with first-hand caring responsibilities, such as the noble Baroness, Lady Hollins, in a very moving speech, and during the whole passage of the Bill. The principle here is that disabled children fall on a spectrum of disabled needs, costs and of either an improving or a deteriorating condition. Therefore, we should not have an arbitrary line as to whether you get the full sum or one-third of it. It is not about fixing a sum of money in concrete, it is about a principle that one should be proportionate to the other. That is all we are asking the House to discuss today.

Welfare Reform Bill

Debate between Lord German and Baroness Hollis of Heigham

Wednesday 25th January 2012 Lords Chamber

[Lord German]

My Lords, I should like to follow that because it is an interesting perspective. I come to this issue as one who has been an ardent devolutionist and as someone who believes in power being passed—obviously, in my case—to Wales and to local government. So, although I come with a different historical perspective, I understand the historical perspectives of the noble Lord, Lord Fowler, and the noble Baroness, Lady Lister, because I read all about it in an article that I am afraid I have lost. It quotes her at the front about how the money would be used in Wales.

I hope that for once the Minister can tell me the mechanism by which the money will be transferred to Wales and Scotland. I understand that it will be part of the local government settlement in England and in Wales part of the Barnett formula. If that is the case, we are transferring the power to deal with those matters to Wales and Scotland. Why should I not argue for that sense of purpose? I am arguing for it and am also arguing for local government to have responsibility. After all, would you expect the swimming pool attendant to have his case heard in London for a swimming pool somewhere in the valleys of Wales? Of course not. The people closest to this—colleagues and decision-makers—will know the local circumstances. This is only a very small part of the Social Fund that is being devolved.

There is accountability because there are elections for local government. Local government is held to account, and the Scottish Parliament and the Welsh Assembly are both held to account by their electors. Clearly, there is a role for those who are receiving the money to be accountable to their electorates. I cannot believe that if there is a purpose to deliver something locally it should not be passed on to local government. We do ourselves a disservice by not accepting that there is a democratic right for local government to exercise this ability. I say to the noble Baroness, Lady Lister, that where I live in my country, her party supports no ring-fencing whatever for local government. It trusts local government to make those decisions. That is a form of devolution that is the right way.

We have to consider what functions are being transferred, whether to Wales or local government. I know that the noble Lord, Lord Brooke, in his usual manner of creating an environment, is absolutely right. If these are very small decisions about loans to people with whom the local council will already be in contact, surely it is right to trust local government to do it. I know that local government in England is ready, willing and able to do the job, and I know that there is an opportunity for their electorates to hold them to account. Sometimes it is important to let go and have the decision-making closer to the people whom it most affects.

[Baroness Hollis of Heigham]

Perhaps I may challenge the noble Lord, Lord German. What he is saying is entirely applicable to Wales, where every local authority is a unitary authority and therefore has responsibility for both housing and social services and can read across, for example, from the help that will come from the discretionary housing allowance to the Social Fund. Often the same families need support in a crisis if, for example, a house has been flooded, has caught fire, or if someone is coming out of care, and so on. They will need both housing and social services help, and a unitary authority is rightly placed to give that, provided that it spends the money as it should.

However, the noble Lord has not mentioned that most local authorities in England do not want this because they are lower-tier authorities, and the social services which handle the Social Fund are upper-tier authorities. In the county of Norfolk, which is some 60 miles long and 40 miles wide, yellow lines are put on roads that you do not even drive down, and schools that you have never even visited are closed, which happened when I was a county councillor, because it was too large to be called local government. None the less, that social services authority will be determining the Social Fund for seven district councils, including one wholly urban authority, two semi-urban authorities and three or four rural authorities. As a result, there will be a postcode lottery within Norfolk because a county council of one political complexion will be dealing with half a dozen different authorities below it, responsible for housing and trying to manage the discretionary housing allowance at the same time.

We will therefore have two sets of officials, one at district level and one at county council level, dealing with the same vulnerable family, each of them focusing discretionary money with no mutual interlocking, decision-making or accountability. It is a bloody silly system that is being proposed and I hope that my noble friend presses the amendment to a vote and that, as a result, we give the other place a chance to think again.

Welfare Reform Bill

Debate between Lord German and Baroness Hollis of Heigham

Tuesday 8th November 2011 Grand Committee

[Lord German]

I can answer that question by simply stating that the work capability assessment, if done accurately enough, should place people in the most appropriate group. Of course, one of the questions in the work capability assessment is, “What are you capable of?”; “capability” is in the title. If you are capable, with an illness, to do some work, and if you know that that will diminish over time, logic tells me that you need to think again about the way that that group of people is affected by such a proposal.

In a sense, what it means is that a clear definition between support on one side and being work ready on the other is not necessarily the only appropriate distinction you can make. It is part of the issue about having clear cut-offs and clear decisions of this sort. You need to be flexible for the people who need it most and whose circumstances will have changed.

[Baroness Hollis of Heigham]

I shall be brief because we have had some very full and powerful speeches from people who are intimately involved and who have specialist knowledge in this field. Like others, as I am sure my noble friends will go on to say, I would prefer not to see this clause in the Bill at all. I very much support the whole range of amendments that have been tabled.

However, I want to add my particular support to Amendment 75A. This is something that many of us referred to at Second Reading. It is the amendment that, leaving aside the issue of the disabled person, most protects the position of the other partner in the relationship, and it is therefore consistent with universal credit. In my view, it is the amendment that, if the Minister seeks to retain consistency with universal credit, he will do his best to support. Basically, we are again running the sort of arguments that we were having over second incomes and disregards, where the question was, “What is the return to work?”, and the Minister told us that he could not afford to run a disregard, even though the costs of childcare might eat up the earnings.

Here, we have the same problem in an even more aggravated form because here, above all, we need if we possibly can to keep the working partner attached to the labour market. We know that if somebody needs to care for more than about 20 hours a week, they probably cannot combine that with anything other than a part-time job. The ingenuity of the Lib Dem amendment is that it allows for something like 24 hours a week at minimum wage or thereabouts, which is pretty much at the tipping point where somebody leaves a full-time labour market and can manage only part-time work in order to make a generous and graceful contribution to caring responsibilities.

If the Minister cannot accept the push of this amendment—I will not say “understand” because I know that he understands it perfectly well—he will be saying to a woman in this position, who may be the working partner: “We are going to make it so unattractive for you to stay in the labour market and work that you, who may very well be tired because of your caring responsibilities, may have financial pressures and may yourself have minor complaints, will want to come out”. It would be infinitely better for her poverty, her health, her connections to the labour market, her sense of self-esteem and her social gregariousness to have a wider life that we should do our absolute damnedest to support her in the labour market—even if on only a part-time basis—and ensure that she kept that money. That is not a huge sum but it would lift her, as a parent, out of poverty and keep her in the labour market. If her partner’s condition deteriorated, we might be very glad that she had that earnings capacity behind her. If he died, we should be very glad that she had remained attached to the labour market and could, after a period of grieving, re-enter it. If he got well, and we would expect to attach conditionality to her, we would be very glad that she had remained attached to the labour market. On all possible outcomes of their partnership, it is in our public interest—the Government’s included—that we keep her attached to the labour market.

I feel very strongly that we have real problems with couples’ earnings. We have seen that before in amendments moved by my noble friend Lady Lister. Here, it seems even more damaging if we go down the parsimonious route of trying to peel off every pound that the woman earns against the partner’s benefit income. I hope very much not only that the Minister will take this away and think about it but, if he is unable to move, that the Lib Dems, who have come up with a decent and ingenious amendment addressing a very real problem—though it is not sufficient to deal with all the problems that disabled people face on the ESA, which need other amendments—will not retreat from the courage of their convictions and will pursue this through.

Welfare Reform Bill

Debate between Lord German and Baroness Hollis of Heigham

Tuesday 18th October 2011 Grand Committee

[Lord German]

I think if the noble Lord would wait a few moments, he will see what I am proposing. It is on this piece of card, which I can pass to him, but if he just bears with me, I will give him three things which I think are essential in order to make this section of the Bill work. That is why I am posing the questions, because it seems to me that the solutions are not given in any of the documents.

The document from the DWP about what these choices will be and the three questions that people will have to answer says:

“it is unclear how this”—

the policy—

“will affect the choices of claimants that are likely to be affected by the measure”.

In other words, the Government do not know; or do they? If they do know, we need to ensure that we have those figures in front of us. If we are to avoid unintended consequences, we are going to have to look at the levers that ensure that the housing stock is accurate, and if the housing stock can, over time, match the needs of this particular policy.

As we know, there are 670,000 claimants, presumably of working age, which means that a third of a million non-working age claimants are underoccupying—the noble Lords, Lord Stoneham and Lord Wigley, have talked about elderly people underoccupying. Maybe there is an answer to that which the Minister and the Government have already thought about. There are no figures that I have seen in any of the documentation that indicate how we are going to manage to create a housing stock to match the changes. First, we need to know how many of the 670,000 are going to move and the modelling figure behind it. Until we have the answer to that, we cannot answer the question about how many houses we are going to need.

[Baroness Hollis of Heigham]

The Government’s own impact assessment says:

“Estimates of Housing Benefit savings are based upon the current profile of tenants in the social rented sector, with little tenant mobility assumed”.

[Lord German]

I am grateful for that quotation, which of course goes against the other one that I gave from further on in the document, which says that we do not know what claimants’ choices are likely to be. The noble Baroness’s quotation has the word “little” in it. We have often reached the point where we have quoted from different sections of the same document, and that is why we need answers. We need to know which of the three choices people are going to make so that we can determine whether the homes are available for them. There are three solutions, which I put to the Minister and which we need answers about, at the very least after his answer to the fundamental question of whether we have the housing stock.

I ask the Minister, when replying, to talk not about the DCLG but about the three government departments that are responsible for these matters in this country, because three levers have to be pulled for the DWP to be able to answer that single question. What is the solution? I would like to know what the three government departments feel about how they can match housing demand. I must say that I am not particularly encouraged because, for many of us, moving house is probably the worst thing in the world that you could probably do. In fact, my noble friend Lord Kirkwood told me this morning that we ought to exchange our rubbish with our neighbour’s because our neighbour’s rubbish is much more interesting than our own. I have found moving house to be a very uncomfortable exercise, and I am sure we have to be careful of this. The Government say that they are working in England to develop a team of advisers who will work to help people to make better use of our housing stock, which is a laudable aim, but they also say that they will work with the devolved Administrations to see what can be done in Scotland and Wales. What can be done about the housing stock across the whole of the country where this policy impacts?

It seems to me that there are three potential solutions when we have the answers to the figures, one of which is that we must have housing money—discretionary housing money, or whatever—to ensure that the money reaches the particular groups that will need it in order to be able to make the adjustment. The second is about exceptions. We will come to that in the next set of amendments, but where the cost to the public purse can be demonstrated to be larger—and many of the amendments coming up now will demonstrate that—we must ensure that we have exceptions. The final point that has been made by many noble Lords here today is that we must have transition time for the social housing sector in all three parts of the country where this Bill applies to make the changes in order that this policy works. We cannot achieve the original purposes of these measures, all of which I think are right, without achieving those three things and without ensuring that we have a sector that can—

--- Later in debate ---

[Baroness Hollis of Heigham]

Does that mean, therefore, that the noble Lord supports the DWP definition of underoccupancy in which there can be, except for special groups, no spare bedroom, as opposed to the DCLG one, which I outlined, which allowed at least one bedroom more—and in the latest Parliamentary Answer from Grant Shapps is two bedrooms more? Is that what the noble Lord was saying? We need to be clear where he is coming from on this.

[Lord German]

I cannot answer that question until such time as we have the answer to what our housing stock is, how many are going to move, and for those who are going to move whether there is available housing for them. That was the answer to the question, and the one I will give if the noble Baroness asks me again.

[Baroness Hollis of Heigham]

This is an “in principle” question: what definition of overcrowding or underoccupying is the noble Lord assuming such that the transitional arrangements must seek to meet and adapt to?

[Lord German]

I will repeat the answer that I gave the noble Baroness just now.

Pensions Bill [HL]

Debate between Lord German and Baroness Hollis of Heigham

Wednesday 30th March 2011 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, I will be brief because a lot of the arguments were effectively aired on all sides on the previous amendment. I support this amendment. I spent many hours—I will not say happy hours—last weekend trying to find a compromise, what I would call a fallback amendment, that would address the issue that we have all identified today. That issue is the women who are seeing an acceleration in the time that they have to wait—if that is not a reverse phrase—for their pension.

The Government are proposing to accept the existing timetable to 2016 but, instead of continuing it to 2020, to collapse it to 2018, so that what would have happened over four years is happening over two. That is what is producing the problems of bunching, the unfairness, the lottery, the roulette, one sister against another, one neighbour against another and the like.

We have heard the arguments. I tried, as I said, over many hours at the weekend to find a fallback compromise that overcame the problem of bunching without taking us up to 2020, but could not find one. What the noble Baroness, Lady Greengross, has done, for which she has our warmest congratulations, is none the less concentrated on the post-2020 period and reduces somewhat the period by which pensionable age would rise to 66. That produces the £3 billion of additional savings that the Government are so anxious to secure. It also protects the situation of women. It is smooth, as no woman waits more than one year for every additional year of her age. It is fair to all women. It is a compromise: we get to 66 somewhat earlier than I would like. None the less, it overcomes the basic unfairness of women having random times until which they must wait, according to the random month in which they were born. You cannot make state public policy on the basis of such a lottery. The amendment of the noble Baroness, Lady Greengross, addresses that issue, compromises on the later point and makes savings. I hope it will enjoy the support of the whole House.

Like others, I am thrilled by the proposal for a new state single pension of £140. I warmly congratulate the coalition in this House and the Ministers in the other place on it. Had there been eight bullet points, I would have agreed with eight out of eight instead of seven out of seven. I do not want to put this in a way that makes the noble Lord thump the Dispatch Box, but I hope he will today restore the honour of the coalition agreement by making it clear that he can accept this amendment or a version of it. The substance of what was promised in the coalition agreement by both parties forming the Government—that women’s pension age would not rise to 66 until 2020—will then be honoured, either through this amendment or the Government’s promise to come back with another. All sides of this House could then feel well content that they have protected some of the most vulnerable women, who rely solely on their state pension for their income in retirement. We will have treated them honourably, fairly and decently.

[Lord German]

My Lords, I echo the noble Lord, Lord Boswell, and the noble Baroness, Lady Hollis, in saying that we look to the Minister to address the issue behind the amendment of the noble Baroness, Lady Greengross, which is that no woman’s pension age should be accelerated by more than 12 months. That is the issue that I raised in the earlier debate. It is a concern about equity. I hope that, in the architecture that the Minister may describe to us, he might find a way of answering that question. Whether it is this or some other architecture, as the noble Baroness, Lady Hollis, just said, is not the issue at stake here; it is about the intention. It is the intention to create that level of equity that is important.

Unfortunately, I have a question for the noble Baroness, Lady Greengross, when she comes to answer this debate. It is on a very technical point. This morning we took the liberty of plotting the dates in her amendment on a graph. Unfortunately, there were two kinks in the graph, which meant that it was not a straight line. I wonder whether, in the second line of the amendment, “August 2018” should not read “July 2018”; and, in the third line, whether “October 2018” should not read “September 2018”. That would produce a straight line. However, in the context of seeking agreement—and of the Government’s intention that no woman should wait more than 12 months, which I think was the intention behind the amendment—I hope that the Minister can give some support and succour to the amendment and the intention behind it.

Pensions Bill [HL]

Debate between Lord German and Baroness Hollis of Heigham

Thursday 3rd March 2011 Grand Committee

[Lord German]

My Lords, I will not keep the Committee long, given that the Minister has, in his response to a previous debate, accepted this amendment in that he has said he will introduce a requirement for the correspondence that is sent to employees to include a statement of the rights of that employee under this provision. Therefore, the only argument that I wish to retain in this discussion is about whether the rights of the employee should appear as an item in the Bill, rather than simply relying on the important statement that the Minister has just made.

At the moment, the protection for this matter in the Bill relies entirely on proposed new Section 4(1)(b) in Clause 6(2), which says that,

“any prescribed requirements in relation to the notice are met”.

That is obviously as broad as you could get. However, the purpose of this amendment is to ensure that those jobholders whose waiting period is being enacted are informed of the rights to which they are entitled, particularly the right to opt in to the scheme as soon as they wish. I understand that this information will be provided by regulation. I am absolutely certain that that will happen, given the Minister’s commitment. However, I have always been of the view that in any Bill, where the rights of an individual are at stake, it is important to uphold those rights in the Bill itself. That means that it should be a very simple statement. It means establishing that those rights will be communicated and that there are rights to be had. It is a very important agreement, which one should have in front of an employee at the time.

I know that we have to ensure that everyone is aware of their rights, and that it is important that what is enshrined in the Bill is communicated properly. However, we must remember that this will all be very new. It will be new for employees and new for employers. The very fact that this will be enshrined from the beginning—from the date that the Bill becomes an Act—means that it is important that a signal is sent to every employer and employee that they have rights in this matter. It is important not just to have it in the Bill but to ensure that we get it right from day one. There is a great expectation that this will happen. It will be difficult for many very small employers to adjust to the changes that are coming. What I am looking for is a form of letter, with a standard set of words, which an employer can hand to their employee and that will remove any extra bureaucratic burden.

There is no additional bureaucratic burden established by this amendment, but it gives a clue as to the preparation that will be essential. If I were a small employer, having heard about this in whatever way in the coming weeks and months, I would want to know fairly quickly what I am going to have to tell my employee If an employee can say to an employer, “What about me?”, I would want to know that there was somewhere where I could download the appropriate piece of information about rights, particularly in this respect. As we wish simply to express in the Bill the rights of the individual, I beg to move this amendment.

[Baroness Hollis of Heigham]

This is an important amendment, not just for this but for all the other areas where we are looking at voluntary enrolment. I hope, therefore, that the Minister will reassure us on the employer making sure that the employee in the waiting period can voluntarily enrol into a NEST scheme before it becomes automatic. I hope that he will also reassure us that employees earning above the LEL, but below the automatic enrolment threshold will be made aware of their rights. That could involve quite a considerable number in jobs where, for example, very many women work part time; I am thinking of retail, where women might work two days a week and so on. I hope he can give us some reassurance as to how he is going to operate a nudge, where there is opt-in, as opposed to where there is auto-enrolment.

--- Later in debate ---

[Baroness Hollis of Heigham]

I think that many of us would like the annual cap of £4,200 on contributions to NEST to be removed. However, I again understand the industry’s worries about losing funds under management from the better-off. I accept that a person would have to be a reasonably high earner to hit that cap of £4,200 each and every year. The amendment would simply allow the making-up of missing years—I am rather keen on making up missing years whether in the basic state pension or in NEST. The person concerned may have enjoyed a small legacy, perhaps on the death of a parent and the sale of the parent’s home. They may have had a small lottery or premium bond win. He or she may have traded down their home to somewhere smaller while in their fifties and have thought that it made very good sense to add some of the modest equity available to their pension fund as a form of saving. They may have divorced and received from it a modest financial settlement of a few thousand pounds or so, some of which they would like to put in their pension to make up for the years that they missed. I make it clear that there is no suggestion of there being any parallel employer contribution; the amendment would simply allow an employee, if they wished, to add to their pension pot. The money would not come from any other savings, nor would it be a transfer. It would be, so to speak, new money. Although I doubt that it would occur very often, being able to add to their pension pot in this way would still offer women in particular, whose financial and, frankly, personal and private lives are highly unpredictable, some extra flexibility in the way in which they build their NEST pension. I beg to move.

[Lord German]

My Lords, I want to say a brief word about Amendment 38, which is in the group. Clearly, the Johnson review looked at this issue and having weighed up both sides of the argument, recommended that the Government should proceed to legislate. The words of the recommendation were quite ambiguous. It said:

“We are therefore recommending that the Government legislate for the removal of the contributions cap in 2017”.

One could read that as recommending legislating in 2017 for removal of the contribution cap, or as recommending legislating now. Actually, the text of the Johnson review does use the word “now”—in other words, it should be part of this Bill—but because neither the Minister nor the Government are on record yet as saying why they have not chosen to follow that advice, it would be very helpful if this amendment could be probed in that manner.

Pensions Bill [HL]

Debate between Lord German and Baroness Hollis of Heigham

Tuesday 1st March 2011 Grand Committee

[Lord German]

There is a general sense that there is a group of people who are being treated unfairly because of the rate of acceleration, although maybe I will explain later that they shall actually be decelerating towards their pension. The general aspect here is that something needs to be done to ameliorate that unfairness. One of the key ways where that could take place, and I hope that the Government are minded to tell us about this, is to seek an upward revision and a much enhanced state pension as a right for all. That is an issue that would affect people in a much more radical way if it were the case. I have read many of the newspaper articles about the uprating of the state pension, but this seems to be almost a hand-in-glove issue. If you use the financing that comes from this measure and put it into a pot, you will be doing something to ameliorate the situation.

I am keen to examine the issue raised by my noble friend Lord Boswell about trying to make sure that we do not overly deal badly and unfairly with a particular cohort of people. The issue primarily relates to a singular group of women. This is a one-off group, because there will not normally be a similar group of people who are so badly affected by the one-year to two-year increase in such a rapid space of time. After all, there is an acceleration of something like three months in age and four months in pension age. You could not get much faster than that, unless you went to three months and 29 days, or whatever; you would be talking shades. It is a very fast rate of acceleration for a particular cohort of women, who will disappear when the system has worked its way through. That acceleration will not be apparent.

There must therefore be some measure which the Government can take to either improve the post-retirement abilities of women in this cohort or lengthen the timetable somewhat to accommodate the interests of a particularly badly-done-by group. When two people whose ages differ by as little as three, four or eight months, or whatever, stand shoulder to shoulder within a year, they will find that the differential in the rate of change in their retirement age is magnified. I hope that the Minister will reflect upon the amendments before us and try to see whether measures can be taken to ameliorate the situation of this group of women.

[Baroness Hollis of Heigham]

My Lords, like everyone else who has spoken, I support the amendment of my noble friend. We all agree—and I am sure that we will come back to this issue, following the point made by the noble Lord, Lord German—that what we also need is a decent state pension: the £140 pension espoused by his honourable friend Steve Webb in the other place, which would be transforming for both men and women in retirement. However, that does not address the issue here, which is about not just equalisation—no one disputes that—but the speeding up of that equalisation, including the very speedy additional year.

First, I suggest that that makes some easy assumptions that are false. Secondly, it has some unintended consequences that have perhaps not been considered. The first easy assumption is that because we are all living longer, we must work longer to support our old age. One understands the stats about the number of workers relative to the number of pensioners and the additional costs in the future of long-term care. However, increased longevity is not actually accompanied by increased years of full and healthy living, whereby one enjoys leisure, holidays and time with grandchildren. All the research shows that those extra years of longevity come with extra infirmity, particularly for those who are worse off. It is very much a class, as well as a gender, issue. Since the Black report, the health inequalities of those in the bottom E and D classes have widened, not narrowed, relatively—not absolutely, as obviously they have improved for us all.

Those extra years come with extra infirmity—fortunately not bed-bound infirmity necessarily requiring residential care but second-order infirmity, including the need for help with, for example, cleaning, transport, aids, appliances and care to allow you to stay in your own home. The implication is that the healthy years of retirement will be squeezed and reduced as retirement age increases, because you will not enjoy extra years of healthy living at the other end as a result of increased longevity. The first thing to address is the fact that we are squeezing the number of years people, particularly poorer people, can hope to expect to enjoy in retirement. The second assumption or myth is that women, as a result, will stay in the labour market longer and until they retire. That retirement age will increase first to 65 and then to 66. I do not know why we think that this will happen because it has not just been connected to the state retirement pension or even to the fact that employers have traditionally got rid of people at the age of 65. It has never been true for men. The majority of men leave the labour market at around 62 or 63 years old. It is even lower in Europe. In other words, half of all men have been on benefit for at least a year, sometimes two years or more, before they draw their state pension. Men compared to women have more secure and better paid employment. Therefore, they have more incentive to stay on until the age of 65. But they cannot and they do not.