Housing: Pensions and Deposits

Lord Lea of Crondall Excerpts

Wednesday 5th June 2019 Lords Chamber

[Lord Lea of Crondall (Lab)]

On the question of the role of land in house prices going up, is not one of the requirements of a sensible policy that the land value increase does not all stay in the pockets of the people who are sitting on this land, which could be given planning permission? That would help the Exchequer in other aspects of public finance.

[Baroness Buscombe]

My Lords, as I said, I am not the Housing Minister, but I will say this. Clearly, we must be very careful about how we develop our policies in this area. The reality is that our schemes are working. We are building a record number of homes. The latest evaluation has found that there is no evidence of a significant impact on house prices overall. The Help to Buy scheme is a hugely important part of that. There is no question of us supporting any scheme that would mean excess profits in the wrong hands.

Employment

Lord Lea of Crondall Excerpts

Wednesday 21st January 2015 Lords Chamber

[Lord Freud]

I am very pleased to answer my noble friend’s question. I was aware of those figures, and they underline the point: it is how you run the economy effectively that drives the employment figures, not how you manipulate those figures later with odd schemes.

[Lord Lea of Crondall (Lab)]

My Lords, will the Government announce an independent inquiry into the evidence reported in today’s Guardian that Ministers in the Minister’s department have been instructing officials to manipulate the unemployment figures downwards?

Employment: Universal Jobmatch

Lord Lea of Crondall Excerpts

Tuesday 11th March 2014 Lords Chamber

[Lord Lea of Crondall (Lab)]

Does the noble Lord recognise that some jobs advertised at the minimum wage do not get the minimum wage—not because of national insurance but because of deductions of commission or something like that? What steps are the Government taking to investigate practices along those lines?

[Lord Freud]

That is one of the specific areas in which our terms and conditions rule out going on to Universal Jobmatch. We will look at those jobs and employers and suspend them and withdraw those jobs.

Employment: New Jobs

Lord Lea of Crondall Excerpts

Monday 27th January 2014 Lords Chamber

[Lord Freud]

Youth unemployment is clearly a critical part of our strategy. I am pleased to be able to say that the number of youth claimants for JSA went down this year—by 105,000—to 315,000, which is an enormous percentage change but it has been going down now for 19 consecutive months. Long-term youth unemployment has also been going down at a very sharp rate, and the number of young NEETs is the lowest for a decade. We have been pumping up the number of apprenticeships, with 1.5 million places created; work experience is vital—there are 113,000 places. The sector-based work academies are all pushing youngsters into the employment market. As noble Lords know, the key measure I always use is that we manage to make a turnaround in the number of youngsters out of work and out of education, which rose through the boom years of the previous Government. We have now turned that round.

[Lord Lea of Crondall (Lab)]

Will the Minister repeat the figures he gave in terms of full-time equivalents?

[Lord Freud]

The figures I have are the actual figures: the number of youth claimants is down, by 105,000 in the year, to 315,000.

Social Mobility: Public Schools

Lord Lea of Crondall Excerpts

Tuesday 17th December 2013 Lords Chamber

Asked by

[Lord Lea of Crondall]

To ask Her Majesty’s Government what assessment they have made of the degree to which those educated at public school disproportionately occupy senior positions in both public and private sectors in the United Kingdom; and whether they have plans to reduce any imbalance.

[Lord Bates (Con)]

My Lords, improving social mobility is the principal goal of this Government’s social policy. The Social Mobility and Child Poverty Commission was established to monitor the progress of government employers, the professions and universities in improving social mobility. Current evidence shows that, while improvements are being made in some areas, there is still much work to be done.

[Lord Lea of Crondall (Lab)]

My Lords, I thank the Minister for that reply, which I think means no. I have two supplementary questions. First, would he not agree with the recent and widely reported observation by Sir John Major to the South Norfolk Conservative Association on 8 November:

“In every sphere of British influence the upper echelons of power in 2013 are held overwhelmingly by the privately educated or the affluent middle class. To me from my background I find that truly shocking”?

Secondly, would he accept that to give tax relief to public schools as charities is also truly shocking? Charities are supposed to be about assistance from the rich to the poor, not from the poor to the rich.

[Lord Bates]

My Lords, I thank the noble Lord for his question. He quotes Sir John Major; let me offer him a quote from Alan Milburn in November. In responding to criticism about why the previous Government had not done more to advance social mobility under their 13 years in office, he said that it is,

“wrong … to argue this is the consequence of the actions of any one government. Deep-rooted … and flatlining mobility have been decades in the making”.

That is why this Government have introduced the pupil premium, which is targeted at disadvantaged pupils; free childcare; and an increasing number of apprenticeships. As for the noble Lord’s point about charity status, that is for the Charity Commission. Of course, it has to demonstrate that there is a public benefit to that status, and I know that many independent schools take that very seriously and forge many partnerships with schools in the state sector as well.

Marriage (Same Sex Couples) Bill

Lord Lea of Crondall Excerpts

Monday 17th June 2013 Lords Chamber

[Lord Armstrong of Ilminster]

My Lords, as both the noble Lord, Lord Phillips, and the noble Marquess, Lord Lothian, referred to Amendment 46, which is in my name, I will take this opportunity to speak to it.

The Bill reminds me irresistibly of Humpty Dumpty, as other noble Lords have said it does them. Your Lordships will remember that, from his seat on the wall, Humpty Dumpty said to Alice:

“When I use a word, it means just what I choose it to mean—neither more nor less”.

A little later, he said:

“You see it’s like a portmanteau—there are two meanings packed up into one word”.

I should not of course think of casting the Prime Minister, with his many other qualities, as Humpty Dumpty but I am sure that the noble Baroness, Lady Stowell, and her colleagues will not have forgotten Humpty Dumpty’s fate. Sitting on his wall, he failed to assess the risk of falling off it and had a nasty accident. Unfortunately, he could not be saved, even though the military were called upon in aid of the civil power.

The Bill would change the meaning of the word “marriage”, which has hitherto denoted a loving and lifelong commitment between a man and a woman, often—although as the noble Lord, Lord Phillips has said, not always—leading to the procreation of children and the perpetuation of the human race. If and when the Bill becomes law, marriage would become a portmanteau word. Marriage between same-sex couples would be lawful as well as marriages between a man and a woman. The intention is that same-sex couples who choose to marry should enjoy equality of rights and equality of esteem with men and women who choose to marry. I have no problem whatever with that, although equality of rights is something that can be, and largely has been, achieved by changes in the law without any change of nomenclature while equality of esteem, although it may be assisted by a change in the law, will not be achieved by that alone.

My amendment today is concerned solely with the law. The Bill changes the meaning of the word “marriage”, which is where Humpty Dumpty comes in. It makes marriage between same-sex couples as lawful as marriages between a man and a woman. As the noble Lord, Lord Cormack, said, there still remain some ineluctable differences between the two kinds of marriage. The law will need to recognise, and be able to provide for, this distinction. The Bill already shows that some of the existing legislative provisions which apply to marriage, as we have known it, cannot apply to marriages between same-sex couples, although we should want them still to apply to marriages between a man and a woman. My amendment proposes that, for the purposes of the law, marriages between a man and a woman should be “matrimonial marriages”. This would mean no change in the meaning of the word “matrimony”, which would continue to mean what it has always meant: the act of two free persons mutually taking one another for husband and wife. I do not need to pray Humpty Dumpty in aid of my amendment.

There are precedents for a qualifying adjective for certain kinds of marriage. For instance, in continental legal systems—although not I think in English law—there used to be morganatic marriages, where a man and a woman were lawfully married but the children of the marriage were disqualified from inheriting the father’s hereditary honours. The amendment which I am proposing would provide a convenient means of distinguishing in legislation, where necessary, between marriages of a man and a woman—matrimonial marriages—and marriages of same-sex couples. The word and concept of marriage would apply to both kinds of marriage, but the amendment would provide a serviceable legal distinction for one kind of marriage. It implies no moral, ethical or value-based judgment, or discrimination, between the two kinds of marriage. I commend it to the House.

[Lord Lea of Crondall]

My Lords, I would like to know the basis on which any noble Lord would disagree with the sentiments expressed by the noble Lord, Lord Armstrong of Ilminster.

[Lord Waddington]

My Lords, I agree entirely with my noble friend Lord Phillips. We are talking about two types of union which are entirely different: different in the way in which the union is manifested, in the obligations that flow from that union, and in the sanctions that can be obtained if one party defaults.

At Second Reading my noble friend Lord Jenkin missed the point entirely, which is very rare for him. He did not think that lumping together these two unions was redefining marriage, and said that it was not going to redefine his marriage. With respect to my noble friend, that is not the point. What about those coming up to marriageable age who are contemplating whether to marry? Might not this mishmash of traditional marriage and the union of two people of the same sex, with the accent no longer on family, make some people wonder whether to go ahead? What will they feel when denied the opportunity to have a traditional marriage?

One of the strangest assertions I have heard during this debate is that marriage will be strengthened if we go ahead with this Bill. There is not a jot of evidence to support that proposition; in fact, all the evidence is to the contrary. Some of us may have heard Dr Patricia Morgan when she—

Growth and Infrastructure Bill

Lord Lea of Crondall Excerpts

Monday 28th January 2013 Lords Chamber

[Lord Lea of Crondall]

I am grateful to the noble Lord for giving way. I used to dabble in this myself some years ago and I know how unenthusiastic the Treasury generally is about hypothecation. In so far as the proposition in this case is that that Treasury likes hypothecation, I suppose that the question could be posed—and it would be very interesting to know the answer: who are these other people in the rest of society who should be paying this if they are not in category A or category B under this supposed hypothecation?

[Lord Deben]

I am not sure that I entirely follow the noble Lord’s point, but it is true that the Treasury is keen on hypothecation when it suits it and against it when it does not, and this is one of those occasions. The trouble is that hypothecation ought to be between the payment of the bill and the advantages from the bill, but in this case it is not that, and many of those who have to pay the cost of Section 106 agreements are only just above the level of benefiting from them. It is because this is a fundamental flaw in the whole system that I come to be extremely disappointed in the Growth and Infrastructure Bill. As I have said previously, it is a pretentious title for a series of very small alterations, some of which are not terribly helpful.

However, there is a big alteration that we ought to make if we really want people to have housing, which is to say seriously that the cost should not be a tax on a small number and those who are most vulnerable; the cost should be a tax that we all bear for a proper social end. In case the Opposition say that I am moving in their direction, I say that they are as guilty as anyone else. They have imposed taxes in this area that are just as large and always excuse it as a tax on the developer. The developer does not pay taxes; he charges the cost to the people who buy his houses. That is the nature of the market; there is no way of avoiding it. I am very happy to support the drive of the amendment, which suggests that, if we are going to do this, we may as well make sure that we get bang for our buck by tightening it and toughening it. But, my goodness, what a disappointment it is that yet another Bill comes before this House masquerading behind this fraudulent concept that supported housing should not be supported by the nation as a whole but should be a price borne largely on the shoulders of first-time buyers. It is not right, it should not be and we ought to find a different way of dealing with it.

Social Security Benefits Up-rating Order 2011

Lord Lea of Crondall Excerpts

Monday 14th March 2011 Lords Chamber

Finally—and I agree that this is a bit of a cheap shot—the Public Accounts Committee report of 10 March points out yet again that the DWP’s annual accounts have been qualified for 22 years because of the amount of error and fraud. Of course, the Government have a strategy, which I welcome. It was set out in October 2010 and has put some money—£400 million or so between now and 2015—into reducing the cost of overpayments. Although that is important work, so is the £1.3 billion underpayment identified by the Public Accounts Committee year after year. Of course, this is a measure of complexity. If we get the benefit that we hope for from the universal credit moves proposed in the Welfare Reform Bill, that will perhaps lead to simplicity, which, as my noble friend said, would be welcome. However, surely we must do something about the recognised £1.3 billion underpayment. I know that my noble friend is on the case and is deeply, personally concerned about fraud, but will he give us an assurance that he will use his best offices to get that underpayment down just as fast as he wants to get the overpayments down between now and 2015? If he does that, certainly I for one would rest happy in my bed at night.

[Lord Lea of Crondall]

Perhaps I may say how interesting I find the noble Lord’s analysis of the difference between the RPI and the CPI. Some 30 years ago, I was a member of the RPI advisory committee when it had a great row with the Treasury about mortgage interest payments. The philosophical argument was that you cannot have the cost of money as a factor in the national income. I respect that that was always the Treasury position. It might be slightly provocative to say this, but perhaps an organisation such as the Office for National Statistics or the new Office for Budget Responsibility could objectively set out the pros and cons for the different purposes. Whether one is dealing with national accounts or the cost of bus fares, one has to disaggregate the RPI. This issue arises all the time. Therefore, it would be useful if the Cabinet Office or somewhere else could produce a paper on the strengths and weaknesses for different purposes of the RPI and the CPI, including European standardised statistics and all the rest of it.

[Lord Kirkwood of Kirkhope]

I certainly think that that is a good idea and I would support it.

--- Later in debate ---

The noble Lord, Lord German, asked about the RPI. It is impossible to be ruder about the RPI than I have been in explaining why the difference between the RPI and the CPI is less here than elsewhere. The reason one could potentially be rude is that the RPI incorporates something called the “average of relatives” as its way of calculating the arithmetic mean—to the extent of 38 per cent of the total. That creates a bounce effect and that is why that particular index has been banned for international comparison. If you wanted to have a posse against the RPI, that is where the suspicions are likely to lie.

[Lord Lea of Crondall]

Can I just point out that that is by no means the whole argument about the merits of the RPI?

[Lord Freud]

It is an attempt to find an explanation for why our RPI is so different from the CPI compared with other countries. I was just looking for a clue to answer the rather potent question asked by my noble friend. It was not a complete answer, but I tried to give a more complete answer earlier.

My noble friend Lord Kirkwood asked about the child poverty strategy, which we are aiming to publish shortly. The strategy will set out our plan to transform the lives of children in poverty now and in the future. It will be a step change from previous approaches, which focused solely on income poverty, to a more sustainable and effective approach that addresses the root causes of poverty rather than the symptoms.

On the National Insurance Fund, I am sure that my noble friend Lord Kirkwood, has had this answer back many times and I almost do not want to say it again. The formal answer is that there is no fund in the sense normally meant; there is no pot of money to hand out. But I shall not go into that.

There may be one or two other items that I have not covered, but if there are I shall write and clear up all other points—otherwise I shall be here all night.

I shall try to wrap this up. We are taking an approach that seeks to balance the interests of benefit and pension recipients and the interests of the taxpayer. The CPI is an appropriate measure of inflation and one that helps to put the welfare system on a sustainable footing. The CPI is a legitimate measure for price inflation; it increases in line with real world prices and protects purchasing power. As such, there are good reasons for concluding that it is more appropriate than the RPI for our purposes. Despite the fact the nation’s finances remain under severe pressure, this Government will spend an extra £4.3 billion in 2011-12 to ensure that people are protected against the cost of living increases. Through the restoration of the earnings link and the triple guarantee for the basic state pension, the increase to pension credit and the continued protection of benefit and pension value, we are fulfilling our commitment to ensure that no one is left behind. I commend the orders to the House.

Pensions: Automatic Enrolment

Lord Lea of Crondall Excerpts

Thursday 10th June 2010 Lords Chamber

[Lord Fowler]

My Lords, I congratulate my noble friend on his speech. We have spent most of our time in the other place and here debating against each other, but it is extremely good that on this, and I suspect many other issues, we are very much on the same side. He made an excellent speech. I also congratulate the Minister on his appointment. He comes with a wealth of knowledge and we wish him the very best of fortune in his new post.

I start in a way which may seem a little away from the detail of automatic enrolment, but I hope that the House will soon see the relevance. Next week is the 40th anniversary of my coming to Westminster in June 1970. I spent 31 years in the House of Commons and nine in this House. I have to say that 1970 was another age. There was no Portcullis House with private offices and research assistants. I shared an all-party office. On one side I had Kenneth Clarke with his smelly cigars and dark brown Hush Puppies—or was it the other way around? Facing me was John Prescott—soon to be of this parish—who visibly scowled as I dictated down the telephone press releases defending the Government of Ted Heath. At the end of the room was our very much non-coalition partner, Cyril Smith, who happily did not come too often to the office. The noble Lord, Lord Pendry, and I tried to find space as best we could. To add to my problems, the first Queen’s Speech of the new Government abolished my then constituency of Nottingham South. It was not altogether a happy beginning at Westminster.

What is the purpose of this example, apart from alerting news editors throughout the country of this significant anniversary next week? My purpose is to make a fundamental point about the history of pensions policy in the 40 years that I have been at Westminster. In this period, we have had one government scheme after another. In my first Parliament, we dealt with the pension plan of Dick Crossman and then that of Keith Joseph. When in opposition I became my party’s spokesman on pensions and social security—to universal surprise, including my own—we had to deal with the Barbara Castle-Brian O’Malley plan and, in particular, the unlovely-named state earnings-related pensions scheme, SERPS. I learnt during that first debate how it is in Westminster that when the subject of pensions goes up on the screen, Chambers—here and in the Commons—miraculously empty, much to the disadvantage of our debates.

I admit that when I got into office, Parliament had to deal with the Fowler plan on personal pensions and the end of discrimination against early leavers. Then we had the plans of Peter Lilley in the Conservative Government, while under the party opposite the ideas of Frank Field were considered—briefly. His ideas were so unthinkable that he was immediately sacked. Later, when plans were subcontracted to the noble Lord, Lord Turner, we made more substantial progress.

In the past 40 years, we had the basic pension which was earnings-related; then it was price-indexed; now it will be earnings-related again. Also, there has been one variation after another of the state second pension. We have had SERPS; we have had modified SERPS; we have had son of SERPS; and now we have an ailing cousin of SERPS called S2P. At the same time, we have seen the decline, and almost fall, of final salary occupational pension schemes in this country, for which, frankly, the party opposite must bear some responsibility. I am trying to put that in the most moderate way by saying “some responsibility”. The noble Lord on the Front Bench shakes his head but I think that the party opposite must bear some responsibility for it, although I certainly accept that it does not have total responsibility. However, we should now be trying to get as much agreement between the parties as we possibly can on the way forward.

Pensions are a long-term investment and require long-term policy-making. In the current economic circumstances, it may not be possible to introduce every part of such an agreement at the same time, but I do not think that that should dissuade us, even at this point, from seeking as much agreement as we can. Indeed, I think it can be argued that in the past we have been too impatient in trying to introduce pension plans—not least in implementing the original Beveridge proposals. Therefore, my first point in this debate is that we should seek to agree on the goal of a pensions policy, getting as much agreement between the parties as we conceivably can and, above all, seeking to avert a pensions crisis whereby many of those in retirement will be living in hardship. That, I believe, is a cause that all parties can embrace.

I suggest that the basis for such an agreement—in a sense, it is what I proposed 25 years ago—is a twin-pillar system. The first pillar is undoubtedly state provision. The second pillar is personal provision, very much including workplace pension schemes of the kind that my noble friend has described. I say in parenthesis that such a twin-pillar system has been in place in Switzerland for many years, and it has worked to the great satisfaction of the public there. However, the important point is that both sides are essential. Without good state provision, you will not sufficiently encourage personal saving. The basis must be as generous a platform state pension as can conceivably be afforded. The structure that we have at present is not particularly generous but it is, without doubt, extremely complex and administratively extremely expensive. It is, above all, ill understood by the public. I remember that when we carried out our own pension review in the 1980s, most people who were members of the state earnings-related pension scheme did not know what the scheme was. I wonder how many today know the detail, or even the outline, of S2P. I would guess not very many. I also wonder how you can plan for old age if you do not know the basis of your pension provision.

Therefore, I think that the basic state pension should now be put together with the state second pension with the aim of lifting the pension level above pension credit. There would then be a decent platform pension. I accept that it may not be possible to do all that at the same time but affordability can come, for example, from adjusting the pension age. Again, it was a quarter of a century ago that I advocated flexible retirement up to the age of 70. As for paying the pension, I propose—it has already been proposed and I think it is very sensible—that you start with the over-75s and then move down the age scale. However, my basic point is that even in the present circumstances we can make some moves towards the goal of better pensions in this country.

I then come to the second pillar—personal provision. Here workplace pension schemes are fundamental and I certainly support everything that my noble friend has said about that, particularly what he said about automatic enrolment. As he said, the policy must be right in the long term. Automatic enrolment is an important step forward. I listened with concern, as I am sure the House did, to the figures of the survey that he quoted. That is not good news for future policy. He made important points about the detail of the automatic assessment. I shall not repeat all those points but they are important.

The essential point is that we know enough about how people put off making a contribution to realise that something of this kind is needed in the public interest. It is also entirely fair that personal pensions should be a combination of personal contribution, employer contribution and tax relief. Again I remember when we were going round this course in the 1980s with the state earnings-related pension scheme. At one stage we were proposing that it should go and considering what we should put in its place. I proposed exactly the kind of workplace pensions now in legislation. I think that we proposed a rather bigger contribution from employers than that being proposed today. The Treasury predictably opposed us on grounds of the tax relief bill and the decisive intervention in that debate came from the Prime Minister, Margaret Thatcher, who supported absolutely our proposal, including employer contribution.

It should be emphasised and underlined that a pension contribution is a very good investment for any company that is intent on trying to keep good staff and employees. We are also trying to make saving as attractive as we possibly can. In that respect I welcome very much the decision of the Government to do away with the absurd restriction that you must take an annuity at the age of 75. We have been fighting about that in the previous Parliament and before. There was never any particular justification for that policy and it is encouraging to see the Government moving so quickly. I am sure that my noble friend needs no instruction here, but I observe that not all pensions policy is made in his department. I am sure that the ex-Pensions Ministers from the previous Government who seem to be around the House today did not have their hearts set entirely on defending compulsory annuities at 75. I note that the noble Lord does not shake his head on this occasion.

However, that is what the Treasury decreed. Let us make no mistake; it is not something exclusive to Labour Governments. I say from personal experience that such interference is not unique. I could write a chapter of a book on how my own review was damaged. In fact, from memory, I think that I have written a chapter of a book on that. Let us hope that the sensible decisions on annuity mark a new era in the intervention of the Treasury.

I always said when carrying out my own review that we were making policy in a cold climate. If it was cold then, it is positively arctic today. Even so, I believe that we can make progress. The Chancellor has already shown that on annuities. As for the parties, we can certainly debate the speed of improvement and the other important improvements that can be made for, say, married women and the details of automatic enrolment. It would be of enormous benefit if the parties, after 40 years of debate, could agree the principles and the structure of what we want to achieve. That would be an enormous step forward and it would also be in the spirit of today when we are all seeking as much common ground as we conceivably can in all areas of policy-making. We are seeking to prevent hardship in old age and pensions policy is a crucial part of that.

[Lord Lea of Crondall]

Can I be clear that the noble Lord is strongly supporting the automatic enrolment principle? There is all this talk about people not being aware of it, not supporting it, and so on. We have had the big review—the Turner review—and we have a policy to make sure that for the first time everybody has some buy-in through the company for which they work. It includes both employers and employees, and we have heard neither the noble Lord, Lord Kirkwood, whose speech I very much admired, nor the noble Lord, Lord Fowler, saying that we have to sell this harder despite some of the propaganda against it by the private insurance industry.

[Lord Fowler]

It is marvellous that when one tries to reach agreement the noble Lord immediately looks for disagreement. There is no disagreement with him on that point; there is no disagreement from my noble friend and none from me. We want automatic enrolment. I said that about five times but the noble Lord may not have been listening at the time. Of course we need to promote and sell it, but let us not have a bashing match and go back to the old business at which the noble Lord is rather adept of having a go at the industry or whoever his latest target happens to be. Of course I agree with automatic enrolment and of course it needs to be sold. That is also the view of my noble friend.