Pensions Bill [Lords]

Anne Main Excerpts

Monday 20th June 2011 Commons Chamber

[Jonathan Evans]

I am trying to get my head around the idea of Tony Blair standing at the Dispatch Box and taking his instructions from my right hon. Friend the Member for Richmond (Yorks) (Mr Hague). It is a little bit too difficult for me to accept.

I think it important for us to recognise real concerns that have been raised throughout the country. All Members of Parliament have received many letters, e-mails and other representations relating specifically to the proposals to increase the age at which the state pension kicks in and the impact that that will have on a number of people, not least women.

[Mrs Anne Main (St Albans) (Con)]

Before my hon. Friend moved on from his powerful previous argument, I wish he had remembered to add to his list the discreditable way Equitable Life victims were treated. Their pension shortfall dilemmas were kicked into the long grass for many years.

[Jonathan Evans]

I am grateful to my hon. Friend for making that observation, but I hope she will forgive me for not going down that road. If we were to do so there would be no time left for the debate in hand, because we would all be pointing out the many Labour shortcomings on pensions.

There has been a lot of misinformation about the proposals we are debating. I listened to a staggering example of that at 9.30 this morning on Sky News, when the otherwise excellent Charlotte Hawkins said that today we were going to vote on a proposal to make women work a further five years before receiving their pensions. It amazed me that that could be said; I am sure it must have been a slip of the tongue. Later, I opened my e-mails and came across a letter from a lady who will be required to wait a further two months as a result of these proposals, but who stated that she believed she will have to wait a further six years. That highlights the exaggerations, and in some cases the dishonesty, in the campaign that has been waged against the proposals.

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[Jenny Willott]

I thank my hon. Friend for his intervention, and it will be interesting to hear what the Minister says to that when he sums up the debate. I am sure that during the debate several suggestions will be made on how to tackle the issue, and that is one.

The changes have to feel fair, but the current proposals do not. The hon. Member for Aberdeen South said that fairness is extremely important, and as the Pensions Minister has said it is extremely important that the basic state pension, whatever its structure, has to feel fair, because it has to last a long time and be free from arbitrary political intervention. The current proposals, however, do not pass the fairness test.

[Mrs Main]

The hon. Lady, who is making a powerful speech, seems, like me, to agree with an awful lot of the very good that is in the Bill, and it would be a shame to ditch the baby with the bathwater, as Opposition Members plan to do tonight. My hon. Friend the Member for Cardiff North (Jonathan Evans) has come up with an interesting proposal, and her hon. Friend the Member for Eastbourne (Stephen Lloyd) has just come up with one as well. Does she agree that Second Reading is the time to do so and to take such ideas into Committee? Like me, the hon. Lady will, I hope, have been encouraged by the sympathetic noises from Government Front Benchers, who are listening to the sensitive arguments from Government Members.

[Jenny Willott]

I absolutely agree. As the hon. Lady says, the point of Second Reading is that we have the opportunity to air a whole load of different options and concerns about the Bill, and as she says also, there have already been a couple of proposals for tackling the issue. I am sure that we will hear more as the debate goes on.

I completely agree that the Bill contains a huge amount that is valuable and important, so I am concerned about the Opposition saying that they will vote against it as a whole. Our constituents, living in our local communities, will be disappointed that the Opposition have taken that approach to the legislation and are not prepared to give a Second Reading to its positive elements.

Welfare Reform Bill

Anne Main Excerpts

Monday 13th June 2011 Commons Chamber

[Mrs Anne Main (St Albans) (Con)]

Is there some sort of structure in process so that if EU migrants who work in the country and are eligible for benefits move out of country when they no longer wish to work here, any overpayment of benefits could be clawed back, should those migrants move through other EU countries?

[Chris Grayling]

My hon. Friend makes an important point. Although in theory mechanisms do exist to recover payments, the process is much more difficult than one would wish. I take her point, and my ministerial colleagues and I will continue to seek ways of ensuring that in such an eventuality, we can make recoveries.

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[Mrs Main]

Does my right hon. Friend agree that it is unhelpful for the hon. Member for Bridgend (Mrs Moon) to talk about the Department for Work and Pensions “harassing” women who are considering going back to work? All these measures are an attempt to be mindful of the public purse and to encourage people to go back to work and do the best they can for their families—because being in work is good for their families.

[Chris Grayling]

My hon. Friend makes an important point. The whole purpose of universal credit is to provide assistance to people who are trying to get back to work and to ensure that work always pays. I hope that the women of Bridgend will benefit, like those across the country, from the introduction of universal credit and the extra support that it will provide to ensure that they are better off in work.

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[Chris Grayling]

Every organisation has to look at how it operates in tougher times financially, and at how best to spend the money that it has available. I am sure that Citizens Advice will be no different in that respect.

Amendments 23 and 24 deal with the capital limit and propose that for claimants who work, the universal credit assessment should ignore savings that they hold in individual savings accounts up to a prescribed maximum of no less than £50,000. We fully understand the importance of saving. Working families should seek to provide for their future needs and larger purchases. However, families with substantial savings should draw on those reserves when their incomes fall, not look to the taxpayer for support. Our analysis suggests that in 2014-15, there will be up to 100,000 households on tax credits with savings over £16,000 who could be affected by the capital rules in universal credit. However, transitional protection will ensure that there are no cash losers at the point of the transition to universal credit where circumstances remain the same.

However, it is important to be fair to the taxpayer. Although nearly one in three pensioner households have savings in excess of £16,000, only 13% of households with a working-age adult in them have that much in savings. A typical working-age household has only £300 in savings. It cannot be right that people with significantly greater savings than the average family can claim universal credit. A maximum limit of at least £50,000 in ISA savings, as proposed by the right hon. Member for East Ham, is a large sum to be excluded from the capital ceiling. We are striking the right balance between protecting people with modest savings and placing responsibility for their own support on those with substantial resources. Once again, we are talking about an uncosted spending commitment. The right hon. Gentleman said that it would cost £70 million a year to uncap totally, but not that many people on universal credit would have savings of more than £50,000, so the majority of that £70 million would be spent on his measure. The reality is that this is a multi-tens-of-millions-of-pounds spending commitment. Once again, we have not heard from the right hon. Gentleman where the money would come from.

Amendment 30 to clause 10 would mean paying at least as much in the additional elements for disabled children as we did in benefits and child tax credit prior to the introduction of universal credit. As we announced in policy briefing note 1, “Additions for longer durations on Universal Credit”, we will retain two levels of payment for disabled children in universal credit. The higher element will be payable to more severely disabled children receiving the highest rate of the care component of disability living allowance. The lower rate will be payable to children receiving the other rates of the disability living allowance care component. The higher rate will be increased by £52 a year, with eligibility extended to children who are severely visually impaired, who currently receive only the lower entitlement.

The key change is that we propose to align the elements for disabled children and disabled adults. That means that the lower rate would be around £26.75 and the upper rate £74.50 a week in current figures. The lower rate for a less severely disabled child in universal credit would be less than now, but we have pledged that where universal credit entitlement is less, transitional protections will be put in place. Our aim is to simplify and align the additional elements for disabled children with those for adults. We do not think it right that when a young person claims benefits in their own right, the extra amounts payable for disability are different. We also want to focus resources on the most severely disabled children and adults. Savings from abolishing the adult disability premiums and changes in the child rate are not going back to the Exchequer. This is not a cutting exercise; it is about recycling that money into higher payments for more severely disabled people.

Amendments 27, 28 and 29 to schedule 1 relate to the regime for self-employment in universal credit. As I told the right hon. Gentleman many times in Committee, we are committed to ensuring that people in self-employment have the financial support that they need. Amendments 27 and 28 would take a power to allow “accruals accounting” of profits and losses from a trade to be used in the reporting of earnings from self-employment. Strictly speaking, that is unnecessary, as the power taken by paragraph 4(1)(b) of schedule 1 already permits such a regulation. Amendment 29 would limit the application of the power taken at paragraph 4(4), which allows for a minimum level of earned income from self-employment to be set. It proposes that the minimum level would not apply where the claimant’s business was conducted on a commercial basis with a view to the realisation of profits.

We recognise that self-employment is a vital element of the economy and will be an important contributor to the sustained recovery from recession that we all want. It is also an important route into work for many people. We are therefore giving careful consideration to the conditions that we set for people claiming universal credit who seek to make their living from self-employment. The enabling framework provided by the Bill allows the treatment of income from self-employment, including the definition of earnings to be taken into account, to be set in regulations. We therefore do not need to decide this question today; we can work to get it right. However, as I have said to the right hon. Gentleman previously, we have to deal with the issue carefully. It is not the intention to make it impossible for people to get into self-employment, particularly in the first few months, when they have difficulties and money does not come easily. However, in the current system, people can report no or very low income from their business activity and continue to receive the bulk of their benefit or tax credits entitlement. We want people to become progressively less reliant on benefits and universal credit. At the end of the day, we cannot have the taxpayer funding someone who is notionally self-employed—and on whom there is no job search requirement—but who generates little or perhaps no income at all from that self-employment. We have to apply a threshold to determine whether someone is credibly in self-employment or whether they are using self-employment as a reason for not looking for other job alternatives. We have to get this right.

[Mrs Main]

My right hon. Friend makes a valid point about people who are considered self-employed. Does he have any view about those who are considered self-employed who sell magazines such as The Big Issue?

[Chris Grayling]

My hon. Friend makes an important point. That is something that we need to address, because the current situation is not right. We need to ensure that the system is fair and justifiable in the eyes of taxpayers and other individuals. I share some of her anxieties, and although it is not in my remit to pursue the issue, I am sure that she will make her representations elsewhere in Government. It is not that we want to do anything that undermines that publication or others in a similar position; rather, we want to ensure that the position is not only fair and equitable, but defensible and justifiable.

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[Sheila Gilmore]

I hope that those figures for Scotland are not like the figures for the whole United Kingdom, which, according to the Sunday newspaper that I read this week, included students. That was in the small print, but the fact remains that the wrong figure is constantly given.

I am not defending circumstances in which people are unable to work. However, we should examine the whole notion of the mini-job much more carefully than we have been able to do so far. We need to be clear about exactly what it will deliver. We already know that many people who have been able to start work over the past 10 or 15 years as a result of measures introduced by the previous Government, including families with children, are still living in poverty.

The mini-jobs, or micro-jobs, that we are discussing may indeed enable people to work, and being able to work for six, eight or 10 hours may be seen as some great moral advantage. I fear, however, that the jobs will be of such poor quality and so poorly paid that those people will remain in poverty, and the path out of that poverty does not appear to be very well mapped. I think that we should have given the proposal much more consideration before using it as a reason to remove child care provision from other people.

[Mrs Main]

The hon. Lady seems to be digging herself into a hole. She has admitted that the measures taken by the last Government did not work, and that people were left in poverty. Surely she should welcome an innovative approach from the present Government, and surely she should stop trying to filibuster their proposal into the long grass by demanding so much blessed detail that nothing will ever get done. We owe our families more than that after the Labour Government’s failure to get people into work and out of poverty.

[Sheila Gilmore]

I cannot accept the hon. Lady’s premise. People were able to work as a result of the measures introduced by the Labour Government, such as the minimum wage, but we did not manage to take all families out of poverty because of the type of jobs that many of those people were doing and the levels of income that they received. It is wrong to suggest that a system allowing people to work for fewer hours will in itself deliver them from poverty.