CPI/RPI Pensions Uprating

Andrea Leadsom Excerpts

Thursday 1st March 2012 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move,

That this House notes that the e-petition entitled Public and Private Pension Increases—change from RPI to CPI attracted over 100,000 signatures very quickly, revealing a high level of concern about the Government’s decision to change the indexation for occupational pensions from the Retail Prices Index to the Consumer Price Index, which will mean that many people, both those retired and those yet to retire, will receive less in their pension payments than they were led to expect; and calls on the Government to reintroduce the RPI measure immediately.

The motion is tabled in my name and those of a number of colleagues, and I should like to inform you, Madam Deputy Speaker, that I would like to press it to a Division.

This important debate would not be taking place today were it not for the efforts of one individual. This is real democracy in action. Jim Singer is a member of the Public and Commercial Services Union, and he was so angered by the Government’s unilateral decision to switch the methodology of how his pension would be calculated from the usual retail prices index to the consumer prices index that he launched an online petition. Within weeks, that petition had secured more than 100,000 signatures in support. I should like to thank Jim and all those who have signed the petition. I should also like to thank the Backbench Business Committee for agreeing to the request for the debate, on behalf of myself and my colleague, my hon. Friend the Member for Aberdeen South (Dame Anne Begg). Hon. Members might know that she has recently suffered a serious accident, and she is unable to attend the debate today. I am sure that the whole House will join me in wishing her a speedy recovery.

Part of the reason that so many people signed the petition so quickly is the anger felt by so many at what they see as a betrayal of the promises that they were given before the election, particularly by the coalition parties. Those parties gave a firm undertaking that they would not interfere in people’s pensions in such a detrimental way. Within weeks of the general election, however, in June 2010, the Chancellor announced in his emergency Budget the replacement of RPI with CPI for the purposes of uprating public sector pensions and the state second pension. That is having a direct impact on 12 million public sector workers and 4 million private sector workers whose scheme rules link upratings with statutory orders. In my constituency, the switch has hit large numbers of pensioners in the British Airways pension scheme, who feel deeply aggrieved. It is not just the broken promise that has angered people; there is also a sense of unfairness that people who have done the right thing—

[Andrea Leadsom (South Northamptonshire) (Con)]

If the hon. Gentleman feels that the proposition is completely unreasonable, will he explain why the Labour party has moved its own pension scheme into CPI on the ground of affordability?

[John McDonnell]

That is also a move that I would not have supported, so I am being consistent in my opposition. I am sure that delegations of Labour party organisers and others will be making representations to the party on the matter.

As I was saying, there is also a sense of unfairness, in that people who have done the right thing, joined a pension scheme and saved through their scheme to protect themselves in their retirement are now seeing their pension undermined and, in some instances, even put at risk. The effects of the shift from RPI to CPI are serious for millions of ordinary people who have pursued a career and invested in a pension with the expectation of a decent pension.

--- Later in debate ---

[John McDonnell]

I can tell the hon. Gentleman that if I form the next Government, it will be. I ask him to stick with me.

[Andrea Leadsom]

I feel the need to challenge the hon. Gentleman’s suggestion that those who created the financial crisis should pay for it. How exactly does he think they would do that? Specifically, why does he think that the real, long-term problem that we have with sustainable pensions is linked to the very recent financial crisis, which I presume is what he is referring to?

[John McDonnell]

I will answer the hon. Lady’s question in a moment, but let me first respond to the point made by the hon. Member for Montgomeryshire (Glyn Davies) about private pensions. I think that they are sustainable. The only reason we currently have a private pension crisis—and it has happened in my constituency as well—is that in the 1980s and 1990s private companies took pension holidays and undermined the pension schemes themselves. What we need now is a period of security during which we can rebuild the balances in those schemes. If public support is required, I will back that as well. The last Government established the Pension Protection Fund so that we could bail people out when there was an individual pension scheme crisis.

Let me end—because I have spoken for long enough—by responding to the point made by the hon. Member for South Northamptonshire (Andrea Leadsom). As I said earlier, there is a straightforward, fair and equitable alternative, namely the adoption of something similar to the principle that the polluter should pay. Those who created the crisis, and who gained most from it, should pay for it. Let me suggest two simple measures. First, we should tackle tax avoidance and evasion, which, as we now know, amount to anything between £120 billion and £150 billion a year. This week—I commend the Government on the way in which they dealt with this—just one bank, Barclays, tried to introduce a £500 million tax avoidance scheme, and that is just the tip of the iceberg given what has gone on over the years and what is currently going on.

My second proposal is that the assets of those who benefited most in the boom should be taxed. Professor Greg Philo—I urge Members to look at his work—suggests a 20% wealth tax on the assets of the wealthiest 10%, which amount to £4,000 billion. That would raise £800 billion. Wealth taxes are currently being discussed throughout Europe.

Those two measures would eradicate the structural deficit and significantly reduce the country’s debt, thus enabling us to protect our pensions. The Government’s new measures are due to come into force on 1 April, but there is still time for them to pull back from the brink. I urge them to do so, on behalf of the 100,000 petitioners, but also on behalf of the millions of members of pension schemes who will suffer so much as a result of the switch from RPI to CPI.

--- Later in debate ---

[Harriett Baldwin]

The hon. Gentleman has clearly forgotten the imposition of a tax on private pension schemes in that first Labour Budget of 1997, which I think many people realised at the time would be a recurrent year-on-year tax that would lead to the erosion of private pension funding over time. Private companies then acted very rationally. Many of them ceased to offer defined benefit pension schemes.

Let me give some figures which I take to be rough estimates. There are approximately 29 million people in Britain’s work force today, 23 million of whom are employed in the private sector. I was shocked to learn that only 3.2 million of those 23 million were currently active members of a pension scheme in which the employer makes any contribution. That contrasts with the position in the public sector, in which about 5.5 million of the 6 million employees are members of pension schemes. That is the proportion that we should aspire to in terms of pension provision throughout the work force. I know that our pensions Minister aspires very much towards movement in that direction.

[Andrea Leadsom]

Does my hon. Friend agree that, many years ago, public sector salaries were lower and therefore pension provision was always higher, but over the last decade or more salary levels have equalised, and in many cases the lowest-paid public sector worker now earns more than the lowest-paid private sector worker and has a pension that the private sector worker can only dream of?

[Harriett Baldwin]

Personally, I aspire to a future in which all Britain’s pensioners can rely on a secure retirement income, which will come from three main elements.

I welcome measures taken by the pensions Minister and the Chancellor to provide a triple-lock guarantee: the linking of the basic state pension, and increases in that pension, to CPI, average earnings or 2.5%, whichever is the highest. That, I think, is an extremely robust foundation. As the Minister knows, I look forward to the inclusion in the Queen’s Speech of further legislation simplifying the state pension system, eliminating the means-testing deterrent to saving and creating a stable, predictable and inflation-linked state pension that will be the foundation for a basic level of income in retirement.

Of course, we need to aspire to be a country where everyone has an additional employment-related pension. About 12 million people are already pensioners, and we welcome the fact that their inflation-linked increase will rise by over 5% this year: I believe that that is the largest cash increase in the history of the state pension. This Government’s budgeting decisions are therefore focusing on the needs of current pensioners, and for future pensioners the largest employers will from October start to auto-enrol their employees into employment-linked schemes. That measure enjoys cross-party support, and it will mark the beginning of a savings programme that is estimated to bring in a further 5 million to 8 million pension savers and add a substantial sum to the savings of this country. Otherwise, we will be woefully under-pensioned in future. We are currently a very under-pensioned country. It is tragic that our country has eroded its position in respect of pensions so much. In 1997, we were one of the leading pension countries in the world, but we now have a lot of catching up to do. I welcome all the steps the pensions Minister is putting in place to improve the situation.

Having mentioned the triple lock and auto-enrolment, I shall now make a few points about the difference between CPI and RPI. We all know that inflation is the big enemy of the pensioner, as nothing erodes retirement income more. Lower inflation results in less erosion of retirement income, of course, but all pensioners must understand that they need to protect their fixed retirement income from inflation.

CPI is the inflation measure that we have instructed the Bank of England to target and to average out over time. I therefore think the Bank of England should, perhaps, consider moving its own pension scheme on to a CPI link. That scheme is currently linked to RPI, but it would increase everybody’s confidence in the Bank’s long-term ability to meet its CPI target if it were to adopt that measure for its pensions. That is a cheeky aside, however.

Neither the RPI nor the CPI measure will ever accurately reflect the inflation that pensioners experience. We have talked about the fact that mortgage interest is not included in the RPI basket. Interest rates fell dramatically in 2008 and that led to the RPI being negative in 2009—it was minus 1.4%. Do we want to follow an index that results in people having reduced income in some years? In that instance, we decided that we did not want that so we maintained a zero rate, but people still complained to me that their pension had not increased that year.

Oral Answers to Questions

Andrea Leadsom Excerpts

Monday 23rd January 2012 Commons Chamber

[Maria Miller]

As I have already said, the Government are not really into the forecasts that the hon. Gentleman is looking at, but we are firmly committed to eradicating child poverty. The IFS projections do not tell the whole story; they do not take into account fundamental things such as behaviour change, or our significant investment in early intervention, our education reform policies and our policies in other areas.

[Andrea Leadsom (South Northamptonshire) (Con)]

Bearing in mind the great importance given to the issue of child poverty across the House, will my hon. Friend tell us what steps she is taking to assess the amount of child benefit being paid to the non-resident children of EU workers in this country? What can be done to ensure that those benefits are minimised?

[Maria Miller]

We all want to ensure that the money available goes to the children who need it most, and I am sure that we will look carefully at my hon. Friends’s question.

Living Standards

Andrea Leadsom Excerpts

Wednesday 30th November 2011 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

I agree with the hon. Member for Broxtowe (Anna Soubry); I do welcome the work on the A453. However, if her Government had not cancelled it 18 months ago, work would already have been under way.

Families in Nottingham are finding life hard this autumn. They tell me that they are worried about turning up the heating because gas bills have shot up. It costs more and more to do the weekly shop, they pay more for the bus and it costs a fortune to fill up the car. Thousands have found themselves out of work, but even if they have a job, their wages are likely to be frozen or rising by less than inflation. There certainly is not much left over for Christmas presents or occasional treats, let alone holidays or major purchases.

[Andrea Leadsom (South Northamptonshire) (Con)]

What has happened to their mortgage rates?

[Lilian Greenwood]

Obviously those who are home owners are paying low interest rates, but many who rent their home are having to pay a lot more.

People in my city are angry that the irresponsible behaviour of a small number of people in banks brought our economy to the verge of collapse. They do not feel that those who caused the damage are doing enough to pay for the costs. They are also angry that the Government are making the situation much more difficult by putting up VAT, freezing child benefit, cutting the support families get for child care, taking away their children’s education maintenance allowance, or closing down services they rely on. A year ago, the Chancellor claimed that his £40 billion of extra cuts were necessary to get borrowing down, but now we know that borrowing will be £158 billion higher than he planned—a lot of pain for no gain. It was his decision to cut too far and too fast that choked off growth and led to rising unemployment: more people are claiming benefits and fewer people are paying taxes; people have less money to spend, so businesses struggle and more people lose their jobs. It is a vicious circle that this Government helped to create.

Thousands of people in my constituency face an even bigger hit. Public sector workers are being told that they have to find an extra 3.2% from their pay packets to help the Government pay down the deficit. Teaching assistants, nurses and youth workers are all being asked to pay more. The Government say they need to pour more money into their pensions, but the money is not going to boost their pension scheme; it is going straight to the Treasury. That is why people who have never taken part in a strike in their lives are doing so today. They feel they have no choice. This is the last resort when their employers simply will not listen or negotiate properly.

Let me tell the House about one hard-working family in my constituency that this Government are squeezing. Mark Thomas works for the city council as a neighbourhood enforcement officer. His job is to inspect houses in multiple occupation, of which there are thousands in Nottingham, particularly around our universities. Mark does vital work protecting public health and ensuring that young people are not exploited by unscrupulous landlords. In July this year, Mark and his partner Alison bought their first home together, and Mark’s 14-year-old son lives with them every other week. Like most people, they worked out how much they could afford, taking account of all the other bills they would have to pay each month and how much they had coming in through their wages. In addition to the usual utility bills, Mark pays child support to his son’s mother. Alison went to university to improve her career prospects and has student loan payments deducted from her salary. As Mark says,

“We are not a wealthy family. I would class us as average, getting by”.

Mark earns £2,500 less than the national average wage and currently pays £120 a month towards his pension. If the proposals to increase pension contributions go ahead, Mark will be paying half as much again—an extra £60 a month. Perhaps a member of the Cabinet would not notice £60 a month, but ordinary people who are not completely out of touch know that that is a lot extra, especially when their pay has been frozen for two years already. Mark and Alison face a double whammy because Alison also works for the city council, as an environmental health officer. She earns a bit more than Mark and pays £155 a month toward her pension, so her 50% increase will be £77 a month. One Nottingham family, an average family, getting by, is being asked to find an extra £137.50 each month, not to benefit their pension fund, but to help the Treasury pay down the deficit—a deficit caused by bankers; a deficit that this Government are making worse.

Mark and Alison are worried sick about finding that extra money. Mark says,

“£137.50 would pay our council tax, or buy gas and electric credit for the month, or pay for a large amount of grocery shopping. We already have to save over a number of months to buy necessities such as glasses and dental treatment.”

Mark is anxious that he will not be able to give his son the life he wanted to. He is worried that his son might choose to spend more time at his mum’s house because she is able to provide for him better financially. I am pretty sure that Ministers do not lie awake at night worrying about their family like that, and Mark and Alison should not have to either.

Of course pensions have to be sustainable and affordable, but changes have to be fair. They have to be fair to taxpayers—of course, public servants are taxpayers themselves—but also fair to the people who care for us when we are sick, educate our children and keep our streets clean and safe. The Government need to stop attacking the people our communities rely on day in, day out. They need to listen to why people are so angry and they need to try to resolve the dispute by engaging in real negotiations.

--- Later in debate ---

[Jessica Lee]

I do agree. Other policies will also be helpful, although sadly I have not enough time to list them all. We have the pupil premium and the reports that have been commissioned, including those dealing with social workers produced by Eileen Munro and other experts.

[Andrea Leadsom]

Does my hon. Friend also agree that the Government will be able to save money at local council level by promoting infant early intervention programmes? By helping struggling families at the outset, they will save society much more money further down the track, because those families have been supported from the beginning.

[Jessica Lee]

I entirely agree. I know that my hon. Friend has spent some years examining the issue while running a charity. I think that all Members agree that early intervention will benefit young people, and that we must do all that we can to implement it.

--- Later in debate ---

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

This Government are having a big impact on poorer people. We see that particularly clearly in my constituency, where 21% of households have an income of less than £15,000 per annum. Indeed, we have the dubious honour of being beaten in that regard by only one other London borough. As of March this year the majority of young people in my constituency—just over 58% of those aged up to 19 years—lived in households in receipt of means-tested benefits. In Hackney, 39% of adults live in households receiving benefit, and that proportion rises to a staggeringly high 71% when we combine those in social housing and lone parents with two or more children.

I would therefore be very concerned about the impacts on real people of the policies of any Government. In this House, we often hear esoteric debate about the impacts of quantitative easing and the big economic arguments. However, although it is important that we deal with the deficit, we are not accountants. Rather, we are politicians, and we need to challenge Government about such impacts on people and we need to bring people with us.

I want to tell Members a little about some of the people in my constituency, therefore. Many Members have spoken about the many financial pressures facing people, and I might add that businesses in Hackney central, my area’s main shopping centre, tell me that footfall is down by about 40%. Things are hard for them too, therefore, as greater pressure on household incomes means people have less money to spend.

Some families facing financial pressures in my constituency will also face a shortfall in housing benefit from next year, and they will have to cover that by finding some money from their other income. Where will they find that money, however, given all the other price increases, such as for food and energy?

This week, I met a young mother who works at McDonald’s. She does the 5 am to 9 am shift so that her husband can look after the children, and she works 16 hours so that she can get help in the form of tax credits, but the Chancellor’s announcements of this week will have an impact on that.

My constituency may have higher than average deprivation figures, but there is no lack of aspiration. In the last week alone, I have met two middle-aged women who used to work in schools before losing their jobs, but who are keen to get new jobs—to do any job in order to work—and I met a young African woman, immaculately turned out and at a good school, who is keen to go on to university, but her home is minimally furnished, with clothes stored in suitcases and the household investing only in necessities, as their income does not stretch to purchasing items that Members of this House would expect to be able to have.

We need to focus on the impacts on real people, and I therefore welcome the Government’s support for disadvantaged two-year-olds. All Members regardless of party allegiance agree that early intervention is crucial, but the key question is how we do that. Other Government measures are having a disproportionately great impact on poorer households, of which I represent many.

[Andrea Leadsom]

Is the hon. Lady aware that an all-party group inquiry into Sure Start found that fewer than 10 children’s centres had closed? Local councils have shown huge commitment to the ongoing success of this important matter.

[Meg Hillier]

It is easy for the Government to talk in figures, but many centres have been run down to the bare minimum and are helping just a few families, whereas before it was a universal service, which was one of the benefits.

The children in my constituency who turn up at school without breakfast because of their alcoholic or drug-addicted parents—the same children who turn up malnourished at the end of the school holidays—are the young people whom we should be helping to have a better future. All the Government’s actions—all the talk as though the Government are accountants—do not help those families. Whatever our party, we should not be hoodwinked by academic and esoteric debate but should govern for the people we represent and remember that not all of them enjoy the same advantages as we in this place do.

Pensioners and Winter Fuel Payments

Andrea Leadsom Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I thank the right hon. Member for Belfast North (Mr Dodds) and his colleagues for bringing this important matter before the House today. The debate is extremely timely, as we are at that point in the year when pensioners are already worrying about what the coming winter weather has in store for them. In my constituency—and in the right hon. Gentleman’s too, no doubt, since he is just across the water from me—we are already experiencing rather colder weather than we have here in London.

All of us on the Opposition Benches know, and many on the Government Benches also know, although they may not openly admit it, that people are feeling the squeeze of rising prices. They are increasingly worried about the basic costs of living, particularly food and fuel prices. With unemployment at its highest level for 17 years, and more women out of work than at any time since 1988, more and more people are struggling to make ends meet.

The real problem is that this out-of-touch Government seem to have no idea what it is like for ordinary people who are trying desperately to keep their heads above water. It is time that out-of-touch Ministers realised how tough things are for pensioners right now and how their policies are making things even harder. This year, pensioners are facing not just a double whammy, which was referred to earlier, but a triple whammy of higher VAT, soaring energy prices and what is effectively a cut to the amount of money that they receive in their pockets to assist with winter fuel payments.

I do not think that the Government understand why people are so outraged that the energy companies can increase their profit margins eight times over at the same time as every household in the country is seeing their bills go sky high. The “Plug the Debt” campaign launched by Consumer Focus and Citizens Advice has highlighted:

“The average energy bill has risen by over 21% since autumn 2010 from £1,069 per year to £1,273.”

I have heard the Minister say that that is only a pound a week, or a small amount, and £200 a year might not mean much to the well-off or the millionaire, but believe me it is a huge amount for a pensioner household with a fixed income, where every penny is a prisoner.

[Andrea Leadsom (South Northamptonshire) (Con)]

Is it the Opposition’s policy to reverse the decrease from £250 to £200 a year that they proposed and increase it back to £250?

[Cathy Jamieson]

I will spend some time dealing with that point during the course of the debate, but I want to say at the outset that it is time this Government took responsibility for their actions, rather than constantly blaming someone else for unpopular decisions.

Oral Answers to Questions

Andrea Leadsom Excerpts

Monday 24th October 2011 Commons Chamber

[Fiona Bruce (Congleton) (Con)]

9. What steps he is taking to help women who are most affected by the state pension age proposals contained in the Pensions Bill.

[Andrea Leadsom (South Northamptonshire) (Con)]

16. What steps he is taking to help women who are most affected by the state pension age proposals contained in the Pensions Bill.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We have amended the Pensions Bill so that women with the largest delay in receiving their state pension will find this delay reduced by six months.

[Steve Webb]

Now that we will hopefully have certainty about the dates next week—subject to their lordships’ approval—we will want to ensure that people know exactly when their retirement date is. We will write to 750,000 people shortly, so that they know where they stand, and all the services of Jobcentre Plus and the Work programme will be available to those who become long-term unemployed later in life.

[Andrea Leadsom]

I congratulate those on the Front Bench on changing their minds on this issue. A number of female constituents have written to me expressing enormous gratitude for the fact that we have changed the position for the better. Does the Minister agree that this shows that we care about women in particular and, even more so, that Labour left us with such a mess that we are having to sort it out now and do things that we are not necessarily happy with?

[Steve Webb]

I am grateful to my hon. Friend. The change that we made—a commitment to ensuring that the changes are fair as they affect women—cost £1.1 billion. The difference between us and the Opposition is that their policy cost ten times as much and they had no idea where the money would come from.

Welfare Reform Bill

Andrea Leadsom Excerpts

Monday 13th June 2011 Commons Chamber

[Paul Uppal]

Absolutely; the intervention from the hon. Member for Westminster North was very telling. It missed the point about the message that Governments send out. Let me make it absolutely clear that I am not criticising individuals and families; it is the system that is corrosive. If the system is corrosive and, to quote my constituent, rewards idleness, what do we expect of human beings? I have faith in the British public. We have budding entrepreneurs and young people who have aspirations to achieve the best that they can. However, through unintended consequences, aspiration has been undermined, particularly over the past 10 years. I have seen that so often when I meet young people. They have a choice between work and a life on benefits. They have looked me in the eye and said that a life on benefits is not such a bad option.

[Andrea Leadsom (South Northamptonshire) (Con)]

I recently met a lady in my constituency who is a health visitor, and she told me of a trip that she had paid to a family living in Northamptonshire. The mother had just had her fourth child, and her eldest child was 15 years old. As the health visitor left, the older daughter chased her out and said that her mother was trying to persuade her to have a baby to improve their income, but she did not have a boyfriend and did not really want one. She asked what the health visitor would advise that she do. That is symptomatic of some of the problems that we have in this country as a result of our welfare system.

[Paul Uppal]

I thank my hon. Friend. Sometimes we in the House have to face uncomfortable truths. We may not like them, but they are the reality that we have to face. I believe that the Bill, in its entirety, goes some way to addressing such problems. I have said before, and will say again, that it is very easy to talk the talk in opposition, but the Government are walking the walk. We are delivering something that is popular not just with Conservative voters but with Labour voters. There is consensus across the board on the issue, and it unites most voters whom I have met, whichever party they vote for. They have seen the reality of what we have done to introduce an ethos of work, aspiration and ambition.

I am glad that I am part of a Government who are taking the difficult decisions and doing the important things. This is a seminal Bill, and people will look back on it as one that changed this country for ever. I know that I may have veered away from my original comments on new clause 6, and I am sorry about that, but sometimes we have to say it as we see it. I, for one, am glad that we have introduced the Bill, and I think it will make this country a better place.

Oral Answers to Questions

Andrea Leadsom Excerpts

Monday 14th February 2011 Commons Chamber

[Steve Webb]

The hon. Lady raises the important point that notice periods are important. The challenge we faced was that the time scale for raising state pension ages that we inherited was staggeringly leisurely. The Conservative party manifesto and the coalition agreement made it clear that we would move faster. The state pension age for men was set at 65 a century ago—I think we need to move faster.

[Andrea Leadsom (South Northamptonshire) (Con)]

A constituent of mine who has worked all her life and has saved for her own pension falls into the vintage year of 1954. She cannot bring herself to be on jobseeker’s allowance at the end of a hard-working career. It seems a little harsh to suggest that as the only outcome.

[Steve Webb]

I am grateful to my hon. Friend. Jobseeker’s allowance and employment and support allowance are available as safety nets, but I appreciate that that is not what many people will want. The vast majority of the women in this birth cohort are still working. In the world that we are going into, we anticipate that more people will work into their 60s—that is part of the change. Many of them will be able to support themselves, perhaps through a part-time job, to cover the gap in years.

Oral Answers to Questions

Andrea Leadsom Excerpts

Monday 10th January 2011 Commons Chamber

[Maria Miller]

I can assure my hon. Friend that we greatly value Motability’s work in supporting not only disabled people who are in employment, but disabled people who are not in employment. We will be ensuring that that scheme is robust into the future. Many thousands of people enjoy the support of Motability and get great value from it.

[Andrea Leadsom (South Northamptonshire) (Con)]

19. What steps he is taking to reduce the burden of administration on businesses arising from pension provision.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We are taking forward the recommendations of the independent “making automatic enrolment work” review, many of which were aimed specifically at making automatic enrolment in workplace pensions more straightforward for employers.

[Andrea Leadsom]

I thank the Minister for his answer. Although it is crucial that the Government do everything possible to get people to save for their retirement, does he agree that currently it is even more critical to reduce the burden of red tape and bureaucracy which is preventing small businesses from creating the new jobs we desperately need?

Housing Benefit

Andrea Leadsom Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Duncan Smith]

Let me deal with that question. My Department pays for 40% of all rental housing in Britain—we pay 40% of the total bills—and is the biggest purchaser. What we do therefore has a massive effect on the marketplace. This is the point that Labour Members missed out on when they were in government. Any change they made had a direct effect on the marketplace. My simple point to the right hon. Member for Paisley and Renfrewshire South is that the change in local housing allowance, as we can see from the graphs, fuelled an immediate increase—it was not just down to the recession, but down to two particular factors. In getting the calculations wrong about the median line and the capping, they ended up allowing LHA to rocket to provide landlords with excess amounts of money for providing housing that would have cost less. How do we know that? [Interruption.] I am going to answer this really important question.

We know that for two good reasons. First, if we compare those who remained on what was there before—it did not change for them because it was new people who came on to LHA—we find that the differential between where they are now and where the LHA rate is amounts to 10%. LHA growth is thus 10% above where we might have been had the change not been made. That is the first thing. [Interruption.] Hold on a second. That was one factor that fuelled the problem because it allowed landlords to push up to the 50% point, which is exactly what they did.

The second point is that there are many things we can do. We now know that, according to the Office for National Statistics, the private marketplace in housing—Labour Members are completely wrong about this—fell by around 5% last year. At the same time, LHA rates, which the previous Government had set and left to us, had risen by 3%. There is thus a 7% gap with what is going on in the marketplace. What we want to do, by working with councils, is to drive those rents back down. The purpose of these changes is to give a real impetus to getting the rents down to make affordable housing more available in some areas.

[Andrea Leadsom (South Northamptonshire) (Con)]

I have an excellent researcher who earns £22,000 a year. Just before I came to attend this debate, he pointed out that he has to commute into London because he cannot afford a room in central London. He remarked that his best chance of getting a flat in central London was to resign from his job and make himself homeless.

[Several hon. Members]

rose—

Oral Answers to Questions

Andrea Leadsom Excerpts

Monday 18th October 2010 Commons Chamber

[Rehman Chishti (Gillingham and Rainham) (Con)]

2. What recent assessment he has made of the adequacy of services provided to jobseekers by Jobcentre Plus.

[Andrea Leadsom (South Northamptonshire) (Con)]

8. What recent assessment he has made of the adequacy of the support provided to jobseekers by Jobcentre Plus.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I am aware that my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) has a huge interest in job clubs and has done a lot in her local area. I know that is appreciated.

There are 741 jobcentres, 35 contact centres and 78 main benefit delivery centres that process claims, investigate fraud and deal with inquiries. A full assessment of Jobcentre Plus services for 2009-10 was included in the annual report and accounts published on 26 July 2010. It was generally very positive. Jobcentre Plus has gone through a lot of difficulties over the past year and a half, but has done so really well. It is worth reminding ourselves that Jobcentre Plus helps 75% of claimants leave jobseeker’s allowance within approximately six months.

[Mr Duncan Smith]

I understand that the Minister of State, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has intervened in the case and is busy sorting it out with the jobcentre to make sure that the rules change so that we never see a repeat of it.

[Andrea Leadsom]

My right hon. Friend kindly mentioned the job clubs that I started in South Northamptonshire. They do excellent work, largely through volunteers, with a bit of support from the local council. I should be grateful if my right hon. Friend told us what plans he has to support the work of those job clubs as they make the transition to work clubs.

[Mr Duncan Smith]

As my right hon. Friend the Minister has made clear endlessly, it is critical in the whole Work programme process, which includes the element of work clubs, that we work on the basis of our understanding of previous information to bring people together and make sure that their shared experience can help them overcome some of the barriers. That is a critical component. That shared experience, as my hon. Friend and many other hon. Friends in the Chamber will know, can help people through the difficulties, so that they do not repeat the same mistakes. It will be an essential part of their work experience.