Housing Benefit and Supported Housing

Brandon Lewis Excerpts

Wednesday 27th January 2016 Commons Chamber

[The Minister for Housing and Planning (Brandon Lewis)]

Once again, I stand at the Dispatch Box grateful for the subject chosen by the Opposition for debate. We are always happy to discuss welfare reform, because it is at the heart of the Government’s agenda. We make no apology for this commitment to the people of Britain.

Our aim is simple. We need to balance the books and introduce a welfare system that is fair to taxpayers, where work pays and where having a job is always preferable to a life on benefits. The right hon. Member for Wentworth and Dearne (John Healey) speaks as though we are debating in a vacuum. We have to bear in mind where we have come from in order to understand where we are going, and the wider picture. Let us remember that in 2010 we inherited a welfare system that failed to reward work, hurt taxpayers, and was a millstone around the neck of the British economy. During the 13 years of the Labour Government, welfare spending had shot up by 60% in real terms and 1.4 million people had spent most of the previous decade trapped on out-of-work benefits. The result was a benefits system in disarray, which was costing taxpayers an extra £3,000 a year.

[John Glen (Salisbury) (Con)]

Was my hon. Friend as surprised as I was when he heard his opposite number talking about good policy, when in the last 10 years of the Labour Government housing benefits increased by 46% in real terms? How could that be considered good policy?

[Brandon Lewis]

My hon. Friend, as ever, makes a powerful point about the way the Labour Government worked to trap people in dependency. We want to work with people to drive aspiration, while giving a fair deal to the British taxpayer.

[Julian Knight (Solihull) (Con)]

Does my hon. Friend agree that the contribution from the Opposition Front Bench was long on flannel but short on facts? The independent Institute for Fiscal Studies predicts that despite small initial savings, there will be long-term benefits from capping housing benefit. My hon. Friend may wish to comment on that.

[Brandon Lewis]

My hon. Friend highlights the weakness of the Opposition’s position. They never look at the entire picture; they just want to make short-term political points.

[Owen Smith (Pontypridd) (Lab)]

Will the Minister confirm that the coalition Government, including the Tory party, spent £130 billion more than the previous Labour Government on welfare, breaching £1 trillion for the first time under any Government? Is that not a fact?

[Brandon Lewis]

The hon. Gentleman highlights the terrible mess that the coalition Government inherited. There was no fairness for hard-working taxpayers in such a system. There was nothing progressive in trapping people in lives without hope for a brighter future. The welfare system that his party left was broken, yet the Opposition have since then opposed every single decision we have taken to fix it. We have never heard from them proposals for alternative reforms, which can mean only that they oppose making any difficult decisions at all. It is easy to make noise, but much harder to do the right thing by the British people. We have seen one tactic time and again—scaremongering, exploiting the concerns of the very people they claim to represent, and playing politics with the lives of vulnerable people. Today’s debate is no exception.

[Chris Leslie]

If the Minister wants a specific proposal to save money on housing benefit and welfare, why does he not look at the £4.6 billion lost through fraud and error in the administration of our housing benefit system? Why does he not get a grip on that and introduce some better credit rating agency checks for applications? That is where the savings should be made, rather than on the backs of the most vulnerable people in our society.

[Brandon Lewis]

We have been clear about protecting the most vulnerable people in our society; I will come to that in a moment. The hon. Gentleman is right. We need to continue to make progress in cracking down on fraud and error, and in local government as well—something that the Labour Government did nothing about.

[Graham Evans]

My hon. Friend is making some powerful points. Will he remind the House that the Government are issuing £800 million to be allocated to local authorities for discretionary housing payments, and that a further £40 million was announced in the autumn statement for supporting the vulnerable, particularly for refuges for beaten women?

[Brandon Lewis]

My hon. Friend makes a strong point. It is rare that I disagree with him, but the figure is slightly better than he says. There is £870 million coming through. He highlights the Government’s clear focus on these issues.

[Robert Jenrick (Newark) (Con)]

Does my hon. Friend share my surprise that until we heard from the former shadow Chancellor of the Exchequer, we had not heard, in 25 minutes of listening to the shadow Minister, any suggestion or acknowledgement that housing benefit is now an issue that any responsible Chancellor needs to look at? We spend more on housing benefit than on secondary education and it represents 50% of what we spend on the defence budget. No responsible Chancellor of the Exchequer would not be losing sleep about housing benefit and looking to reform it.

[Brandon Lewis]

My hon. Friend makes another clear and important point. Not just in the past 25 minutes, but in the past six years, Labour has said nothing constructive about how to deal with these issues for the benefit of the British taxpayer.

[Several hon. Members rose—]

[Brandon Lewis]

I shall make a little progress and then take more interventions.

This Government have always been clear that the most vulnerable will be supported through our welfare reforms. We know that the welfare system is vital for supporting vulnerable people, and we know it is essential that all vulnerable people have a roof over their heads. That is why we have been determined to support their housing needs. We have set aside over £500 million to create a strong safety net against homelessness; we recently pledged £40 million for domestic abuse services, ensuring that no victim is turned away from the support they need; at the autumn statement we announced a further £400 million to deliver 8,000 specialist affordable homes for the vulnerable, elderly or those with disabilities; and the Department of Health committed to fund up to 7,500 further specialised homes for disabled and older people.

We spent an extra £2 billion on main disability benefits over the course of the last Parliament, and by 2020 we will be spending at least £10 billion a year extra over and above inflation on the NHS, including a record £11.4 billion a year on mental health, which we can do because of the stronger economy that the Chancellor has brought to our country.

[Yasmin Qureshi (Bolton South East) (Lab)]

The Minister is giving us the statistics on how much money the Government have put aside or will be spending. I ask him a straight question: will people currently in supported housing be protected, rather than being turfed out and made homeless? That is a simple question.

[Brandon Lewis]

As I will set out in more detail later, we will make sure that the most vulnerable people are protected. That is what the welfare system is all about.

[Neil Gray (Airdrie and Shotts) (SNP)]

The Minister talks about women’s refuges. The manager of Monklands Women’s Aid, Sharon Aitchison, has just emailed me. She says:

“There is no doubt that our current set-up with housing benefit is already stretched to the max, so the refuge provisions viability would most certainly be in question and the reality is we would be unable to fund refuge provision if the cap went ahead for us.”

What does the Minister say to Sharon Aitchison, the manager of my local women’s refuge, which provides a brilliant service for women and children in desperate situations?

[Brandon Lewis]

As I have just outlined, this Government announced an extra £40 million for domestic abuse services.

Funding for supported housing is part of the Government’s wider financial settlement to councils, which includes £5.3 billion in the better care fund in 2015-16 to deliver faster and deeper integration of health and social care. That will result in councils being better able to work together and invest in early action to help people live safely in their own homes for longer.

[Barbara Keeley]

I am amazed. The Minister has started trotting out figures for the better care fund. That fund is back-loaded: the money will not reach councils until 2019-20, and is cancelled out by the new homes bonus being taken back at the same time. We have already lost an awful lot of support for older and vulnerable people.

Does the Minister believe, as he seems to have just said, that the most vulnerable will be supported by the welfare reforms? That is just not true, as we see from all the court cases that are going through. How will people in 2,300 units of housing for older people in Salford be protected? I advise the Minister not to talk about discretionary housing payments, as those have been shown to be insufficient.

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[Brandon Lewis]

I think that the hon. Lady, in talking about the settlement, is referring to the new £1.5 billion coming through. As I am sure she is aware, our affordable homes programme actually delivers 6% more supported homes a year than Labour’s equivalent did.

Of course, the supported housing sector is wide and varied, but all the different kinds of provision have one thing in common: they all provide dedicated support for some of our country’s most vulnerable people.

[Several hon. Members rose—]

[Brandon Lewis]

I am going to make some progress, because many Members wish to speak, but I will give way again shortly.

Many supported housing tenants have multiple physical and mental health problems, histories of offending and dependency issues. They might be elderly, socially isolated or face barriers to accessing employment or living independently. We know that supported housing can also reduce costs to the wider public sector—for example, in health and adult social care or in criminal justice.

I am sure that the whole House will agree that we want all our families, friends and constituents to live fulfilling and independent lives, wherever possible in a home of their own. Some people need more help to do that, and supported housing gives them that assistance. It provides a place of safety and stability. It helps people get their lives in order. It improves their health and wellbeing, and it provides the platform from which they can reach their full potential.

My ministerial colleagues and I have been out and seen for ourselves, over not only the past few months but the past few years, the difference that supported housing can make. Homeless hostels, such as Shekinah in Plymouth, which I visited last January, provide not only accommodation but invaluable opportunities for people in recovery. The same is true for specialised housing for older or disabled people, such as the Lady Susan Court development in Basingstoke, which I have visited. The residents there are delighted with their homes, which have allowed them to maintain their independence. Their only regret is not having moved in sooner.

My colleague Baroness Williams has also seen how domestic abuse refuges, such as the Saheli Asian Women’s Project in Manchester, are helping women flee terrible abuse and violent relationships and start new lives. Protecting the most vulnerable in society and supporting their housing needs is just as much a priority as driving down the deficit. There need be no contradiction between those two aims.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

Last week I visited Camberwell Foyer in my constituency, which is run by Centrepoint; I was shown around by Shante and Tia, who live there. The Foyer provides brilliant support for young people who would otherwise be homeless for a period of time. It has expressed grave concerns to me about the impact that the withdrawal of housing benefit from 16 to 21-year-olds will have on youth homelessness, in relation to the demand for their services, which it fears it would be unable to meet, and also on young people who are ready to move on and will not be able to access housing benefit for the homes they need. How does the Minister answer that point?

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[Madam Deputy Speaker (Natascha Engel)]

Order.

[Brandon Lewis]

I think there was an intervention somewhere in that speech. The hon. Lady has experience of the excellent work that those organisations do, as do I—I was a trustee of a Foyer. That is why it is important that we ensure that we protect the most vulnerable in society.

[Mr Jackson]

Is not the difference between the two sides of the House the fact that we on the Government side have got 339,000 disabled people into work and off benefits, whereas in 2010 the Labour party, to its eternal shame, presided over a situation in which 70% of people on disability living allowance had never been systematically re-assessed? That is a shocking and disgraceful record.

[Brandon Lewis]

My hon. Friend highlights the difference between the two parties. We want to ensure that we get a deal that protects the most vulnerable in society, helps them out and gives them an aspirational opportunity to move forward in their lives while getting a right and proper deal for the hard-working taxpayer.

In the autumn statement we announced that social sector rents eligible for housing benefit will be limited to the level of the relevant local housing allowance rate, including the shared accommodation rate for single claimants under 35 who do not have dependent children. It will be effective from 1 April 2018, affecting all tenancies that commenced from 1 April 2016. I know that has raised some concerns, so let me be clear that we will always ensure appropriate protections for the most vulnerable in supported housing. We will work closely with the sector, through the supported housing review, to ensure that we do that in exactly the right way.

[Several hon. Members rose—]

[Brandon Lewis]

I give way to the Chair of the Communities and Local Government Committee.

[Mr Betts]

The Minister has rightly recognised the importance of supported and specialist housing. He has now just indicated that the Government will somehow protect people in these circumstances. Can he give any indication of how that will be done and when these measures will be announced, given that housing associations are already having to plan for potential change in 2018 that could lead to the closure of existing accommodation and to new accommodation not being built?

[Brandon Lewis]

The hon. Gentleman has effectively asked me to continue my speech, because I was just about to say, as I am sure he will appreciate, that the underlying principles are the bedrock of this policy formation. He, along with the right hon. Member for Wentworth and Dearne, urges the Government to note the concerns of supported housing providers, so let me reassure all Members of the House that we have of course been listening very carefully to those concerns, and we will continue to do so.

My ministerial colleagues and I have met representatives of the National Housing Federation and chief executives of housing associations that provide supported housing. We have listened very carefully to all these representations and noted everything that we have been told. We know that the costs of supported housing provision are higher than general needs housing and that providers rely on housing benefit funding for support elements such as wardens, security and the up-keep of communal facilities.

[Jess Phillips (Birmingham, Yardley) (Lab)]

I thank the Minister for finally giving way. Could he just point out exactly how he has been helping to protect the most vulnerable in the 34 specialist women’s refuges that have shut since the Conservatives came to power? I also wonder whether he would like to join me this afternoon at the all-party group on domestic violence to meet pretty much every CEO from all the Women’s Aid organisations across the country and see what they think.

[Brandon Lewis]

I am slightly surprised by the hon. Lady’s comments. If she looks back at the Hansard report of this debate, she will see how many interventions I have already taken, so she might want to talk to her colleagues about the fact that they got in before her. I am sure that she appreciates that I will always take an intervention from the Chair of the Select Committee first.

The future of supported housing matters, which is why my Department and the Department for Work and Pensions have jointly commissioned a fact-finding review of the sector. This will report by the end of March and will deepen our knowledge and understanding. The research has included extensive consultation with local authorities, supported accommodation commissioners and all categories of supported housing providers, be they charities, housing associations or, indeed, those in the commercial sector. It will provide us with a better picture of the supported accommodation sector.

In the meantime—Lord Freud has written to all interested parties outlining this today—the 1% reduction will be deferred for 12 months for supported accommodation. We will get the findings of the review in the spring. We will work with the sector to ensure that the essential services it delivers continue to be provided while protecting the taxpayer, making sure that we make best use of the taxpayer’s money and meet the Government’s fiscal commitments. We will look at this urgently to provide certainty for the sector.

[Andrew Gwynne]

I am grateful to the Minister for giving way and for setting out the next steps. I put it to him politely that he ought to have done that kind of research before making the announcement in the first place. In order to give those housing providers certainty, can he now also tell the House precisely what kinds of measures will be implemented to offset the changes in housing benefit?

[Brandon Lewis]

I say gently to the hon. Gentleman that the financial mess in which the previous Labour Government left this country means that we have to make difficult decisions and move quickly to ensure that hard-working taxpayers are properly protected. I am proud to be working with a Chancellor who sees that as one of our first and foremost duties.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Can I be the first on the Government side of the House to warmly welcome the announcement that my hon. Friend has just made? It makes eminent sense to postpone this decision for one year on the basis of proper evidence and facts. His supported housing review will report at the end of March. After the review has concluded, will he come to conclusions on the matter rapidly? I was lobbied about this on Saturday by Bromford housing association in my constituency. There is a lot of uncertainty in the sector, so I urge him to come to conclusions rapidly after the review has concluded.

[Brandon Lewis]

As my hon. Friend rightly says, as the findings of the review come in we will look to work urgently with those in the sector to provide certainty for them.

[John Healey]

I welcome this partial step as an indication of progress. It has taken Labour’s forcing this debate to get Ministers to take this 12-month backward step on the reduction in rents. However, what about the cuts to housing benefit for supported and sheltered housing? A pause is not enough. It will not remove the alarm or anxiety of residents or the uncertainty for providers, and it will not affect the schemes that have already been scrapped. The Minister must provide an exemption. Will he announce that now?

[Brandon Lewis]

It is almost as though the right hon. Gentleman forgets that when he was a Minister—I think in the DCLG, although he might well still have been at the Treasury—the Government of the time moved the spare room subsidy, which was first introduced under Labour, into the private sector and created the unfairness that we now see. I am not going to stand here and take a lecture from him about this Government doing the right thing in working with the sector to deliver the right outcome and to do what we have always done, which is to protect the most vulnerable in our society. Labour—I am afraid that the right hon. Gentleman is guilty of this—simply wants to get a headline by scaremongering around the country.

[Craig Williams (Cardiff North) (Con)]

I, too, hugely welcome the exemption for a year as a really meaningful announcement. Like the £40 million for domestic violence refuges—a tripling of the budget—it is really significant and contrasts with the political point-scoring we have heard from the Opposition.

[Brandon Lewis]

My hon. Friend clearly highlights the difference between the two parties. Labour spends a lot of time on bluster while the Government are focused on getting the job done for the people of Great Britain.

[Richard Graham (Gloucester) (Con)]

Can my hon. Friend confirm that those who will benefit from this exception from the 1% rent reduction during this year of consideration include those fleeing domestic abuse, and that it affects homeless provision and housing for ex-offenders as well as supported housing for older and disabled people? Does he recognise how much this will be welcomed by many of us? Will he pay tribute to those who are working with him on it, including Homeless Link and St Mungo’s?

[Brandon Lewis]

My hon. Friend makes a very good point. A large number of people provide phenomenal services, across the sector and across the country, in working with the most vulnerable. We are keen to work with them to make sure that, as we have said all along, the right protections are in place for the most vulnerable people.

Let there be no doubt: this Government will always protect the most vulnerable and provide them with the support they need and a safe home to live in. We are a one nation Government. We want everyone to have the opportunity to live happy and fulfilling lives, whoever they are and wherever they live. We want workers to earn a living wage and benefit from our strong economic growth. We want to support aspiration, boost productivity, reward work over welfare, and allow people to keep more of the money they have earned in their own pockets. That is our new settlement for Britain—to keep moving from a low-wage, high-tax, high-welfare economy to a higher-wage, lower-tax, lower-welfare country.

On this journey, we will, I repeat, always support vulnerable people and make sure they have a safe home to live in. The whole House should support that aim. Instead, Labour Members are resorting to their favourite tactic of scaremongering for a short-term political headline. It is time to stop that kind of poor politics. It is time to stop playing politics with the lives of vulnerable people while we are working to help to provide the support they need and deserve—and we will provide it.

[Several hon. Members rose—]

--- Later in debate ---

[Brandon Lewis]

rose—

[Owen Smith]

I will give way to the Minister if he will tell us what he is going to do about local housing allowance.

[Brandon Lewis]

The hon. Gentleman has managed to brush over the fact that his colleague who spoke earlier was a Minister who was involved in bringing in the spare room subsidy originally. Perhaps he could confirm that our affordable housing programme has delivered 6% more supported homes per year than did the Labour equivalent?

[Owen Smith]

It is interesting that the Minister did not ride to the rescue of his hon. Friend the Member for Lewes: he knows that she does not know what she is talking about on this subject.

The hon. Lady could have a further look at the Budget book produced by the Government for the same spending review, which shows clearly that £515 million is the saving anticipated from the cuts. The IFS goes further and says that by the time the cuts are fully implemented, the Government might save £1.1 billion. The largest part of that is the change equalising housing benefit with local housing allowance, not the one-year stay of execution that we have heard about today. Now that I have explained the position, does the hon. Lady wish to intervene?

Work Experience

Brandon Lewis Excerpts

Tuesday 13th March 2012 Westminster Hall

[Brandon Lewis (Great Yarmouth) (Con)]

I thank my hon. Friend for being so generous with his time. To follow on from the point made by the hon. Member for Edinburgh East (Sheila Gilmore), does he agree that a key reason why the scheme is so important and why young people who have taken part speak so highly of it is that the experience that they get and where they are placed is based on the experience they want in an industry that they are interested in going into?

[Mr Jones]

My hon. Friend hits the nail on the head. Most of the placements that have been offered to the cohort of young people are relevant to them, and it is important to bear that in mind.

On the debate about the Work Experience scheme over the past few weeks, and the fact that there has been a red herring, or an elephant in the room, about whether it is compulsory, we all know that it is voluntary, and that the only sanctions relate to conduct, and willingness to see the placement through when someone has embarked on that route. That is not irrelevant, but it is not the most relevant issue. The most relevant issue is to give young people, sometimes with what some people call tough love, the opportunity to go out and get themselves into a position where they can compete in the labour market.

In a moment, I shall discuss employers, but before doing so I want to tackle negativity and ideology, which are damaging opportunities for our young people. Later, I shall use the word “unskilled” with extreme caution. There is no doubt that there is a skill in doing any job properly. I am worried about the rhetoric from some people who seek to demean jobs such as shelf-stacking, because there is no doubt that all jobs are important. We all need to start our career somewhere. For some, that may be shelf-stacking. For some that may be their niche, but regardless of that we in the House should show that any job that is legal and above board should be respected. We need to drive the job snobs out and to promote the fact that we support all people who work, whatever they choose to do or whatever they have to do to make a living and to achieve self-respect.

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[Sheila Gilmore]

I am not convinced, from the young woman’s description of her experience, that she was in the shop window of anything. I should like to quote the chief executive of the Centre for Economic and Social Inclusion. His view is not that there should be no work experience, but that there should be

“a good ‘match’ between the nature of the work experience and the young person”.

He gives an example. He says that

“for someone with a law degree doing work experience at a legal firm would be a much better match than, say, the night shift at a pound shop. We have learned time and again that the better the match,”

the better the prospect of someone getting employment.

[Brandon Lewis]

I thank the hon. Lady for giving way again and being so generous with her time. This scheme is voluntary and the work experience that people do is based on an area and an industry in which they are interested. The hon. Lady is a member of the Select Committee on Work and Pensions, but I suggest that she look at what her constituent has brought her, because she may be getting confused—mixed-up—between the work experience scheme and other schemes such as the mandatory work scheme, the skills and training schemes and even the Work programme. It seems as though she is talking about a totally different scheme, which is part of the problem that the Socialist Workers party has had in purposely trying to confuse the situation.

[Sheila Gilmore]

I accept that there is a plethora of schemes and some confusion—the media have been confused—but I am absolutely certain that the mandatory work experience scheme was not involved in this example. It is not good enough to have the view that when people make the point about relevant work experience—relevant to people’s existing experience and skills—they should simply be condemned as snooty job snobs and people who are not willing to work. That is not the case.

--- Later in debate ---

[Brandon Lewis (Great Yarmouth) (Con)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Nuneaton (Mr Jones) on securing this important debate.

It is important to start off with why we are here. The scheme, which has worked successfully, has been in place since January last year, and it is only in the past few weeks that it has gained any publicity. It has been working very nicely, the companies involved in it have been taking people on and more than 34,000 people have been through it. That tells us that something has happened in just the past few weeks to bring it to public attention.

[Sheila Gilmore]

I hope the hon. Gentleman will accept that some of us did, in fact, raise questions considerably longer ago than the past few weeks, but we were put down with exactly the same suggestions that we were being over-fussy and supporting people who thought they were too good to work.

[Brandon Lewis]

I thank the hon. Lady for outlining that she supports the Socialist Workers party position on this. The reality is that the publicity came about a few weeks ago, when the Socialist Workers party started a campaign, having placed an advert that was wrong.

[Tony Baldry]

Would my hon. Friend not pass on to the hon. Lady the advice that when one is in a hole, one should stop digging?

[Brandon Lewis]

I thank my hon. Friend for that helpful intervention. He has probably said everything that needs to be said.

Over the past couple of weeks, I have debated this issue a few times with people from Right to Work and various other groups that are backed or supported by the Socialist Workers party. What has been particularly noticeable, however, is that there has, until very recently, been a lack of Labour Members debating it. It was therefore somewhat surprising, if not frustrating, that when Labour Members started agreeing to come out during the last couple of days of the real media coverage, they quite openly said that they supported the scheme’s principle—I hope the shadow Minister, the right hon. Member for East Ham (Stephen Timms), will do so again today—but then complained that the problem was miscommunication.

The miscommunication has come about, however, purely because the Socialist Workers party and its representative protest groups have purposely confused things in every single debate. Before one debate I took part in, a member of the Socialist Workers party was chatting quite happily outside the studio. He understood exactly what the different programmes were and how they worked. When we went in to debate them, however, he straight away confused the mandatory Work programme with work experience—he knew exactly what he was doing. It is a real shame that Labour Members did not come out with us, even if they do disagree with the programme, to clarify that work experience is a straightforward and simple voluntary programme that gives people experience in an industry or field they have expressed an interest in going into.

We should remember to congratulate the companies involved in the scheme, and it is great that hundreds more are joining, thanks to the publicity it has had—we should possibly thank the Socialist Workers party for giving it that extra coverage. Those companies should be congratulated for doing young people a service by providing opportunities and experience of a range of issues. They are providing not just the skill sets that people want, whether that is in engineering, technology, retail or any other industry, but the interpersonal skills that Members mentioned and the skills that come with simply understanding what it means to get up and go to work. Last week, The Sunday Telegraph carried a story about people on the work experience programme of a company in Kent. Those people said how much higher their self-esteem was as a result of getting up in the morning and having a project, and most of them were going on to full-time jobs with the company.

We must, however, be careful. The real shame is that if we do not make it clear what a good scheme this is, organisations such as charities that run work experience schemes could lose the benefit of them. Through the Prince’s Trust, I have had people work in my office for a couple of weeks. They have been excellent people, and they have used that experience on their CVs and gone on to really productive ways of life, which was perhaps not the case before. A range of charities could be threatened if we are not careful.

The most important people in all this, however, are the young people who take part in the scheme. They have voluntarily said they want to do something with their lives; they want to think out of the box and take a different path. As we have heard, many of us, and many people who work in the media, have had work experience. I was fortunate enough to do so when I was young because my father happened to know somebody who offered me work experience, and that led to other opportunities. Other young people do not necessarily have those connections and opportunities. It is right and courageous of the Government to put the scheme forward, to give a chance to people who may not have those contacts. That is hugely important.

We have all perhaps worked in jobs that we have seen as only the first step. My first paid job was in a warehouse. I did not particularly want to spend my life working in a warehouse. I wanted to be a buyer, and move on from there, but to get into a particular company I needed to take a job in the warehouse. It was step one on the ladder. We must encourage the 34,000-plus young people who have done the work experience programme to feel that they have done a good thing. They have shown motivation, and are inspired to go and do something different—to take a step on to the first rung of the ladder, and not to expect to jump on to rungs four, five or six, which too often is the case these days. We should really congratulate the young people who have had the motivation to get involved with the scheme, as much as the companies that give them the opportunity. It is a good scheme and we should support it.

Oral Answers to Questions

Brandon Lewis Excerpts

Monday 5th March 2012 Commons Chamber

[Chris Grayling]

The Department’s contract with Atos runs until 2015. We have taken no decisions about how the contracting structure will work beyond that point. Consistency of provision was necessary through the incapacity benefit reassessment process, but we will not take decisions on the detailed structure of the renewal of that contract for some while to come.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that rather than let the Socialist Workers party and their protest groups continue to confuse a good programme such as work experience with others, we should congratulate not only the companies that are doing so much for young people, but the young people who are taking up the scheme and have the motivation to build their CVs?

[Mr Duncan Smith]

As ever, my hon. Friend has hit the nail on the head. Work experience is a great programme, which is helping lots of young people to get into work at a reasonable cost to the Exchequer. Those two things need to be borne in mind. It is no good the Opposition sitting quiet, watching while trade unions back these anarchists and try to stop decent people getting into work.

CPI/RPI Pensions Uprating

Brandon Lewis Excerpts

Thursday 1st March 2012 Commons Chamber

[John McDonnell]

Those most in need and those who saved the most will be the mostly greatly affected. My hon. Friend’s constituency, like mine, is a working-class constituency in which many people suffer from deprivation. They will now suffer that deprivation long into their retirement as a result of this measure.

To return to the point raised by my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) about the impact on the stability of future schemes, it is quite clear that if fewer people are saving for their retirement, there will be a greater cost to the Exchequer as more people become dependent on means-tested benefits. Similarly, if fewer people are paying into the schemes, it will put those schemes at risk—thus thrusting many more on to state benefits. As I said, this decision is so short-term.

[Brandon Lewis (Great Yarmouth) (Con)]

The hon. Gentleman is generous with his time. He refers to people not paying into pension schemes, but does he agree that the Government’s move to auto-enrolment will mean that there will not be that big a drop, as the organisations involved have said? The fact that the schemes will be sustainable will be a part of the bigger picture—one of benefit in the long run.

[John McDonnell]

I support auto-enrolment, which is a good thing. What these pensions do is enable people to have an element of security in the future. The auto-enrolment process will work out over time; unfortunately, a number of these pensions will be caught in that gap as a result of the significant cuts being made.

I know that the cuts are said to be necessary because we have a deficit, but there is a straightforward, fair and equitable alternative, namely to make those who caused the crisis—and who benefited most in the boom years—pay for it.

Unemployment

Brandon Lewis Excerpts

Wednesday 14th December 2011 Commons Chamber

[Chris Grayling]

We know that just over 50% of those people were off benefits within a total of 12 weeks from day one of their placement. It is an eight-week placement, so the answer is, in effect, within a month of the end of the work experience period. That is the first set of figures. The right hon. Gentleman said, “No more figures till February”, and he is right. He cannot berate me for misuse of national statistics—he and I can argue about that offline sometime—and at the same time demand that I misuse them to give him more evidence now. We will publish the figures for the programme at the appropriate moment, but I am confident that they will continue to show the real difference that it is making to young people.

[Brandon Lewis (Great Yarmouth) (Con)]

Does the Minister agree that the best thing is the Government’s bringing everything together to ensure not just that private sector businesses grow to employ people, but that we put good, solid training, work experience and apprenticeships in place so that people can not only get into work but have sustainable long-term employment, unlike through some of the fad projects of the past?

[Chris Grayling]

I agree. The second part of the support that we are providing to young people—and, indeed, to older workers, for whom apprenticeships are also available—is a substantial increase in the number of apprenticeships. More than 100,000 new apprenticeships have been announced since the general election—the total across the Parliament will take apprenticeship provision far beyond where it has been previously. We believe that an apprenticeship that combines training and a real job for many young people is a better vehicle for delivering a long-term career option for them than simply putting them into a temporary six-month work experience placement at significant cost to the taxpayer, as we experienced with the future jobs fund. I accept that we do not agree on that: Labour Members believe that their approach was better. However, we believe that sustained employment in the private sector with an apprenticeship for a substantial proportion of young people is the best option. I am delighted that my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, who is responsible for that, has put in so much effort and won so many extra resources for apprenticeships.

Pension Plan Charges

Brandon Lewis Excerpts

Wednesday 7th December 2011 Westminster Hall

[Brandon Lewis (Great Yarmouth) (Con)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Gale. I declare an interest: I have a pension myself, and I draw Members’ attention to the Register of Members’ Financial Interests, as I have an interest in a company that has a pension scheme.

“Annual management charge”, “reduction in yield” and references to “bid/offer spread” are just a few of the descriptions that can be attached to our pension pots. When our annual pension statement arrives, do any of us study it in great detail, or do we just glance at it before scratching our heads and filing it away?

I imagine that most consumers feel confused when they see phrases such as “annual management charge”, “reduction in yield” and “bid/offer spread”. A natural reaction is to assume that pension companies and fund managers understand it all and know what is best for us. Many, however, feel that the information is important, but do not understand why that is so, or what it means, particularly, for their final pension pot. That is why the pensions industry and the financial media will carefully watch our deliberations today. Perhaps the complexity of the issue means that many people are unable to understand and see the purpose of it, or why it matters so much. That may well be an indication of why Members are present today.

It is right for there to be constant demands for transparency about pension fund investments, as the hon. Member for Dagenham and Rainham (Jon Cruddas) highlighted in an Adjournment debate last year, and transparency about pension charges should be no different. It is easy for us, as politicians, to exhort that everyone should save for retirement—they are easy words. We want people to do that to be able to provide for themselves when they are older. In Government, it is easy and clear, with our experts to advise us, to see why that matters and why money put away when we are young matters more as we get older. The biggest challenge for the Government and the pensions industry is to overcome consumers’ attitude towards pensions—only half of working adults between the ages of 20 and 64 are currently saving for retirement.

Although the biggest reason given by consumers for the lack of saving is their inability to afford the contributions required to build a pension pot, there are other interesting underlying problems. A quarter of respondents in a study by the National Association of Pension Funds stated that they did not trust the pensions industry. Other surveys indicate that 80% of people want greater transparency about how pensions operate and what they cost. Although research conducted by a pension provider, Aviva, suggests that only 2% of people cite charges as the single prohibitive factor preventing them from investing in a pension, the proportion rises to a worryingly staggering 20% for the under-24 age group.

Can we assume that the lack of transparency about pension charges, alongside a misunderstanding about the system of charges, is a fundamental problem holding back a wider retirement savings culture? If so, it is particularly pronounced among the lowest age groups and lowest earners. We need to target the transparency at the new generation of workers, whom we need to get saving as soon as they enter the workplace.

My position in today’s debate is not to focus or comment either way on the level of charges; it is for the companies that provide pensions and advice on pensions to argue why their charges are at a particular level when the charges of others are at another. The point of today’s debate is to highlight the need to be able to compare and understand charges and costs.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing the debate. Regarding the lack of transparency about charges, we sometimes see what I believe to be helpful information in the financial press. We should push companies to ensure that they provide information on the impact that those charges will have, year on year, on the final pension received by a payee.

The point that needs to be clarified is the effect that charges will have at the age a person retires—60, 65 or 68; it is not just about making sure that the charges are transparent. Surely, if the ongoing and year-on-year impact of those charges were transparent, there would be a huge impact on a person’s choice of company.

[Brandon Lewis]

The hon. Gentleman makes a good point, and I will touch on it later. I fully agree that one of the issues that people do not understand is that a figure that seems small now can have a huge impact on how a pension pays out later on—up to 25%, as I will touch on later. The hon. Gentleman is absolutely right. That is exactly the clarity and understanding that we need.

Provident Financial’s clients are low earners, who often borrow just £100 or less to get through to the end of the month. The company told me recently that the issue for many of them is not so much about whether they can save. They may be able to save only a small amount; I know that the Minister appreciates that, because we have had a conversation about it. In some cases, it could even be just a few pounds a week or month. However, all that money can add up to mean something later.

The hurdle that those customers find is psychological. The company said to me that people who are on the lowest incomes understand and learn how to manage their money and how to get their family through a week or a month. Within that, they will still do certain things—£1 or £2 a week on sweets for the children, or something like that. What they do not do is trust an unnamed and unknown big organisation with some of their money, because it is complicated and there is no face to it. That is why they use organisations such as Provident Financial rather than high street banks.

By dealing with the issue of transparency, we may well be able to break through that psychological barrier and get more people saving. If the industry is clearer and puts things across more simply, it will instil more confidence in the customers that it is looking to pick up. I will return to that with a clear example in a moment.

The system is complex. People’s underlying attitude is unsurprising, given that we have such a diverse and complex pensions industry, with a wide range of schemes and options alongside an array of different regulatory regimes. A wide range of items may be included in pension charges—and alas, with no clear industry standard at the moment, providers often differ on what is included. Just to name a few, any or all the following may be included: product management, communications, services, administration, regulatory requirements, some investment management and, possibly, the cost of providing advice. How can any consumer find an easy way to compare like with like when there is such a range of options and figures printed on a statement? It is simply not possible.

[Jim Shannon (Strangford) (DUP)]

I, too, congratulate the hon. Gentleman on bringing the matter to the House today. We need clarity about hidden charges—charges that people do not know are being made and which are removed from people’s funding regularly—and about sales commission. There are often hidden charges before someone can leave a scheme.

There is also excessive trading in respect of those who are trying to keep on top of the portfolio; there is a charge every time that happens, and customers do not know that. There are a lot of hidden charges that customers do not know about. Does the hon. Gentleman think that such charges should be made known to the pension holder, so that they are aware of the costs involved?

[Brandon Lewis]

It is absolutely right that as much as possible should be transparent—potentially, everything should be as transparent as possible. The hon. Gentleman is right. As I will come on to say, people do not necessarily understand that when they come out of certain schemes or change jobs, the potential cost to them can as much as double. The costs are effectively hidden, because they are not clear or transparent at the time of entry, let alone of exit. That is why we need regular transparency. I will touch on that further in a moment.

It does not seem possible to find an easy way of comparing like with like. Just last week, the Work and Pensions Committee was taking evidence on pensions and it became very clear from looking at different operations that there are major variations in style between companies. What highlighted the issue of transparency for me more than anything was the fact that one company said that the simplicity and transparency of its charges is its single biggest marketing advantage. If Members will bear with me, I will read a short quote from that session. Adrian Boulding of Legal & General, which I congratulate for having this kind of transparent operation, said to the Committee:

“We compete on price in the market place and we are able to do that because we have invested heavily in technology. If I look at pension schemes that we have sold this year, they have all been sold within a price range of 0.3% at the bottom to 0.8% at the top. 90% of them have been sold at 0.5% or less.”

Again, that is a range of figures that many people will struggle to understand. However, Mr Boulding went on to say:

“One of the particular features of our pitch to the market is that we charge just a single charge for the scheme, whereas some providers now want to charge £1.50 in addition to a fund management charge. NEST charges a contribution charged at 1.8% in addition to a fund management charge. Some insurance companies charge higher fund management charges when people leave the scheme. We charge a simple, straight fund management charge and it is the same for all members whether they are in the scheme or whether they have left, and there is only the one charge. We find that gives us an edge in the market place.”

It was interesting that a company specifically said that the simplicity of its charging—it only has a single charge—was its marketing edge.

What is included in the charge element of a pension fund varies, but the inconsistency in how charges are communicated is an additional complicating factor. In fact, the wide range of approaches is needlessly complicated. Some pensions are regulated by the Financial Services Authority and require an illustration of the effects of charges. Other pensions, mainly those that are trust-based, have no requirement for such disclosure. The stakeholder pensions were introduced in 2001 and I credit the previous Government for introducing something that provided some simplicity and clarity. Stakeholder pensions require disclosure of individual deductions.

The lack of comprehensive and consistent information prevents effective monitoring by the FSA, the pensions regulator, and, potentially, by the Department of Work and Pensions itself. We risk creating a regulatory black hole if we fail to create a clear communications framework. That is why there is also a need to specify which regulator covers which area and to define regulators’ powers to avoid market confusion over which regulator covers which issue—let alone confusion among consumers or among the employers that are implementing a scheme.

The approach taken by different pension providers and schemes also varies widely, as the National Association of Pension Funds has helpfully highlighted. Some providers quote an annual management charge as a percentage; others illustrate the effect in cash terms. Some present information in a personalised form, where charges are illustrated in a very varied way over different periods, whereas others provide information with a generic example. In some cases, the information is prominent, but in others it can be hard to find. In some cases, there are even charges for different parts of the process—for example, fund management prices can be shown separately.

We should compare the pensions sector with the banking sector, in which statements now clearly show what bank charges are on a weekly or monthly basis. The example of the banking sector is certainly one that the pensions sector should look at.

There is also financial jargon, which is unhelpful in any industry. If the range of charges and the communications about those charges are inconsistent, a pensions fog is created, and the impenetrable financial jargon that consumers must navigate has created a further consumer whiteout. In fact, I have used much of that jargon in my opening remarks today. I want to illustrate that point by giving two real-life examples, courtesy of the National Association of Pension Funds. They highlight how difficult it is for any consumer or business to understand what they are taking on with pensions. The first example is taken from a handbook provided to employees on a trust-based scheme. The handbook says:

“The manager’s charges differ according to the type of fund. The charges are made within the fund and are reflected in the price of fund units. With some funds, two unit prices are shown - the “bid” price, at which units are sold, and the “offer” price, at which units are bought; the difference - the “bid/offer spread” - reflects the manager’s dealing costs. The bid/offer spread on these funds vary.”

Then there is an impenetrable table listing six funds, showing for each one:

“a percentage annual charge on fund and a percentage bid/offer spread”.

Just looking around the Chamber now, I can see that Members are already somewhat glazing over with the difficulty of trying to understand what we ask ordinary people to understand in their daily lives.

[Richard Graham (Gloucester) (Con)]

I congratulate my hon. Friend on securing this debate on a really important topic and on building a strong case for transparency and clear communications. Does he think that the example that he has just given proves the point that Einstein used to make when he said, “If you can’t explain something to your grandmother, you probably don’t really understand it”?

[Brandon Lewis]

My hon. Friend has just summed things up with exactly the sort of clarity that we need in pensions charges, and I agree entirely with him.

Let me further enhance that point by giving another example, which is from a different type of scheme: a contract-based scheme. The quotation comes from a block of text headed “Additional expenses” that goes into a pension fund member’s handbook:

“Additional expenses such as trustees’, registrars’, auditors’ and regulators’ fees may be deducted from some investment-linked funds. In addition, where the [name of insurer] investment-linked fund links to a Fund of Funds (a fund that holds other underlying funds as its investments) the additional expenses may also include the cost of managing the underlying funds. Where these expenses arise within the fund they have been taken into account in the calculation of the unit price. Details of the Annual Management Charge and any Additional Expenses can be obtained from your [insurance company] Pension Pack.”

I assure Members that that is not an excerpt from a Monty Python sketch. It is, however, what people are having to deal with, and it is absolutely no wonder that consumers are confused and indeed suspicious of pensions when they are presented with information in such an opaque, complicated and almost incomprehensible fashion.

As I have already mentioned, many other financial products—such as mortgages and loans—now present information in a much clearer way, generally as a result of consumer pressure. I hope that similar consumer pressure will be brought to bear on the pensions industry.

It is rare for pension providers or schemes to show the actual cash amount of charges on an individual statement. Surely that would be the clearest way to provide vital information that the majority of people can understand. It is time to move away from a too long and too complicated explanation of charges towards greater clarity and understanding.

I have experience of being responsible for a company’s pension scheme. In that scheme, people had to contribute nothing themselves but they were given money by the company to enter the scheme. That money did not come from their salaries; it was money over and above their salaries. However, on far too many occasions, even educated people with degrees turned the scheme down. When we asked advisers why that happened, we heard on a number of occasions that it was because people simply do not trust the forms or the companies, and they do not want to get into filling in forms and giving things away. They do not understand that, as in the case of my former company’s pension scheme, it is about effectively trying to give them money; they still turn the money down. The system is so complicated that it puts people off, even people who are highly educated.

The problems that the system creates and the benefits of reforming it are what I will turn to next. The introduction of auto-enrolment next year will see between 10 million and 11 million extra employees being given access to a workplace pension. The Government’s aim is the provision of low-cost pension options for savers, yet consumers’ suspicion or wariness of pensions means that there is a risk of a high opt-out rate, which is something that we all obviously want to avoid. We must avoid exacerbating the problem because charges and their structure are difficult for people to understand.

Small businesses particularly face that problem. The complexity of schemes for businesses to choose from could risk disengagement by employers. At this point, I must congratulate the Federation of Small Businesses on considering establishing its own pension scheme. It understands that there is an onus on companies, particularly small and medium-sized enterprises, to do something. However, those SMEs are not only worried about the potential cost of auto-enrolment; in many cases, they see their staff as being part of a family. They care about their staff and want to provide the best for them, so they will want to ensure that they are making the best offer, the best investment and the best decision for their staff. They do not necessarily have the time to become involved with a range of pension providers but they know and trust the FSB, because they are members of it, so the idea that the FSB itself should have a brand of pension for SMEs to be part of makes a lot of sense.

For many businesses, independent financial advice will be unaffordable and, as I have just said, they will not have the time or expertise to cut through what can be a dense, even impenetrable, amount of financial information. Transparency can lead to better decision making on behalf of employees.

Much of our discussion today is about the information provided when someone joins a scheme, yet there is often scant information about what happens once they are involved in a scheme, as has already been touched on by Members. The lack of comprehensive information does nothing to reassure consumers, and it means that funds are under no pressure to demonstrate value for money and that much further down the line people can be in for a shock when they see where their pension stands, because of the charges. I agree with the sentiment expressed by Aviva, which said that focusing entirely on charges might be

“counterproductive and risks deterring a generation of new savers.”

In terms of what those charges are, I think that Aviva is right, and in terms of making sure that the charges are understandable, we still have an important job to do.

We need to see that charges provide value for money and flexibility, and to do that we need to see what the charges are in a way we can all understand. We need to see whether members can receive value for money if a charge is very low, because the very best pension fund operators might not see that as a viable option for their involvement. Although I want to see the lowest possible charges for consumers, to encourage as many of them as possible to invest and have the best return on their money, we also must ensure that they and their employers receive adequate and proper advice, otherwise it might be that only higher-end earners will get the advice they need and want—and, indeed, pay for. There needs to be an industry culture of charges reflecting the cost and value of the services provided, but providers must continue to find ways to offer better value for money, which means finding additional efficiencies, using new technologies as Legal & General has outlined, and improving processes.

I believe that providing clear financial information using a pounds and pence principle will exert sideways pressure on schemes to maximise value for money. Showing consumers and employers what the bottom line in charges is allows them more easily to compare schemes. With a whole range of products, whether it is high street banking and its charges or anything else we want to buy, we are generally able to go out into the marketplace and find an easy way to compare like with like, and decide if we want to invest in a more expensive or a lower-cost product. If we are looking for the latter, we can see the range of offers from various companies, understand them and make an informed decision about where to invest and what to purchase. With pensions, it is extremely difficult to find like-for-like offers, and when employers have a range of things to do, including running their businesses, this is one more thing that we must make simpler for them.

I have thus far focused on companies, and on information being given to companies that run schemes, but we must not forget the wide range of people out there who have personal pension schemes. There are people at the higher end who can pay advisers whom they trust to make the best decisions, but there are other consumers who have gone to the trouble of taking out their own pensions who are not necessarily at the highest end and able to pay high-value advisers. Nevertheless, they need good pensions, and they need to have faith in them and understand them. We need clarity and transparency so that end-users—consumers—can see what the cost of their pension is when they get their statement, not just when they first enter a scheme but potentially on an annual basis.

I want to turn to what the Government can do. What options are available to Ministers to create a new culture of charge transparency? I argue for a very light-touch approach from the Government. Their role in this transformation should be to guide, encourage and motivate the process, and resorting to regulation or further legislation must be a final option. The introduction of auto-enrolment will mean that the national employment savings trust will become the default option for many. Although we should welcome NEST’s role in pension provision, we must also remember that it is just another provider, and is neither designed nor suitable for everyone. I hope that its existence will assist in driving down charges across the sector, but its own charging structure is not a simple model and I am interested in the Minister’s view on how we can move that forward.

I hope that, even though NEST provides a low-cost option, Ministers will press for greater transparency across the sector, so that there will be benefits of transparency also for people for whom NEST is not the most suitable option. NEST will not necessarily attract higher earners or employees who require a larger choice of investment funds and greater contribution levels, but those people equally need greater charge clarity. NEST will not pick up many seasonal workers or low earners who fall below the threshold, many of whom could be women who work part-time due to child care issues, and we must do more to simplify and open up the system to give them an option to save, if only a few pounds each week. The system needs simplicity and clarity if it is to have a chance of encouraging a wider range of people to come into saving.

I am interested to hear from the Minister how he thinks the Government can encourage transparency, how he thinks charges can be set out clearly and in terms readily understood by savers, and whether he believes, as I do, that this approach should apply equally to contract-based and trust-based pensions, where there are currently no requirements for charges to be disclosed to savers. Will he also outline how his Department plans to provide guidance to consumers and employers ahead of the introduction of auto-enrolment? It is important that we take every opportunity to raise this issue and to clarify the matter.

Employers have a crucial role. They must be fully aware of the costs and charges associated with the workplace schemes for which they will effectively be responsible for their employees. In evidence to the Work and Pensions Committee last week, it was indicated that the code of practice, at least in the first period, will be aimed at giving clarity of evidence and information to employers, so that they can make decisions about the scheme for their staff, rather than directly to the end-user or consumer, and in the long term that will not be enough. We need the clarity and transparency to go right through to the end client. Legal & General has managed it, and we need to ensure that we get it across the sector. Will the Minister also comment on the suggestion by Which? that pensions should be benchmarked against NEST to assure value for money?

Several organisations, including Which?, have expressed concern about active member discounts, which are schemes that have a low charge for people who are actively contributing but in which the charge increases, often significantly, once someone moves job or goes on maternity or paternity leave. That issue was touched on in an intervention earlier. I have heard it expressed that this is more of an inactive member penalty, and should be seen as such. It is potentially one of the biggest issues facing pension costs, and it should be addressed. Again, it can particularly affect women who take a break from work due to child care issues, and low earners who can be out of work for periods of time.

I am particularly concerned about the increase in charges levied by some insurance companies for people who change jobs, and transparency can help to deal with that as well. Which? research has found that some companies have an annual management charge of between 0.5% and 0.7% for active members, but that once someone leaves a company the charge can double. Such high charges could have a big impact on the pension received by the consumer at the end of the scheme, with their pension potentially reduced by up to 25%.

Although I would like to see a commitment from the Government to clarify the governance and regulation of charges, I have mentioned the desirability of a light-touch approach from Government and the impetus for change must come from the industry. The National Association of Pension Funds has taken the lead in responding to the challenge to simplify the communication of charges. Earlier this autumn, it initiated an industry-wide discussion on the preparation of a voluntary code of practice on transparency of fees and charges, which resulted in the establishment of a working group to pursue that goal. I believe that only this morning the working group met to discuss how charges will be presented to employers in future, and I look forward to hearing about that discussion in greater detail.

That is exactly the responsible industry-led attitude that Minsters will be, and I am sure are, encouraging, and I hope that both Her Majesty’s Treasury and the Department for Work and Pensions are able to play an active role in the process. The heavy hand of further statutory regulation or additional legislation should be pursued only if this process fails or proves unsatisfactory. I hope that a new code of practice is agreed and adopted across the pensions sector by next spring, ahead of the introduction of auto-enrolment later in the year, but we must ensure that we are able to move gradually and, potentially, as quickly as possible to ensure that the clarity that is needed and that the industry is now working on developing can be provided not just to employers operating schemes but to end-users.

Although that step initiated by the industry and the NAPF is very good news, it is not the total solution. For that we need simplicity in the statements, to give clear figures to pension holders of the cost of their pensions on an ongoing basis, going right through to the end client and not just to the employer running a scheme. For consumers, employers and the pension industry itself it is vital that the Government clarify the existing regulation of charges and encourage that transparency. Failure to do so will risk a return to the mis-selling scandals of recent decades and a drain on the new auto-enrolment scheme as employees opt out of the scheme chosen on their behalf. Most importantly, it will risk a massive loss of consumer confidence, jeopardising the radical reform necessary to secure the future retirement of millions.

Across Departments and local government, we have found that the transparency agenda has had a cleansing action. Costs have been cut, people are more aware of what is going on and confidence can be rebuilt. It is the most cleansing initiative before us today, and Government have taken that on board. I argue that the pension industry should also take transparency on board as a way to clarify the issue to restore, rebuild and develop confidence in the pension industry, so that people will save more to provide for their future when they retire.

Living Standards

Brandon Lewis Excerpts

Wednesday 30th November 2011 Commons Chamber

[Brandon Lewis (Great Yarmouth) (Con)]

Given that I represent one of the most deprived wards in the country, I find it ironic that I should be speaking in this Opposition debate. In fact, Nelson ward is in the bottom 1% in England, particularly when we look at the lower layer super output areas.

Great Yarmouth is a constituency that, like many coastal towns, suffered from many years of being forgotten and left at the end of the track by Labour. One of the phrases that people often use is that we were at the end of the line and that the last Government forgot about us for 13 years. One of the problems was that too many things were done in isolation—working in silos with pet projects or with specific, centrally led Government projects that did not have enough focus locally, so were never able to have enough impact on the general living standards of people in my constituency or other coastal towns.

Let me give a clear example. Some years ago, Great Yarmouth was given about £17 million, which had to be spent on improving the seafront. I have to say that our seafront now looks superb; the council have set it up brilliantly. It looks fabulous and I advise all hon. Members to visit and see the great improvement. I also advise them not to step too far back from the seafront into Nelson, Southtown or Cobholm; they would see the areas left behind as industry faltered through lack of support and the last Government drew jobs away from rural areas. That included Government public sector jobs; they closed HMRC and set up the programme that eventually led to the closure of our coastguard call centre.

We need a Government like this one, who see things far more holistically and do not focus on only one specific area. That is why I am so supportive of what the Government, across all Departments, have been doing. It can benefit constituents across our country—including, from my selfish point of view, Great Yarmouth.

[Amber Rudd (Hastings and Rye) (Con)]

Did my hon. Friend experience what I did, in the similar coastal community of Hastings? During those Labour years, there was a dramatic fall in average income in comparison with the rest of the country. In Hastings, it fell by £100 a week per person during that period.

[Brandon Lewis]

My hon. Friend makes a very good point, and I shall give another example. The UK average of gross weekly earnings is about £500 per week or £26,100 a year. In Great Yarmouth, the figures are £420 and £21,900 respectively; in fact, 10% of our full-time workers have earnings of £250 a week or £13,000 a year. That is partly because we have seasonal employment, and nobody did enough to move the situation forward until this Government. What the Government have done in improving things for business is to open up better opportunities for people to earn, look after their families and raise their living standards.

In Great Yarmouth, in conjunction with Waveney constituency and Lowestoft, we now have an enterprise zone. The importance of an enterprise zone cannot be overestimated; it has been set out and led by business people in our area who know what they need to grow businesses and attract them into the area to create jobs. The jobs that we need are not seasonal, but those based on an industry in energy and engineering that has a long-term future. The renewable energy industry believes that there are contracts worth about £80 billion across our coastline, with oil and gas decommissioning and renewable energy. That business will bring jobs to our area.

The enterprise zone, focused on areas designed and requested by local business and business leaders, is already attracting companies. The first company to go into an enterprise zone is likely to be in Great Yarmouth. ScottishPower and Vattenfall have already announced a memorandum of understanding that alone could create hundreds of jobs in one spot in my constituency. That is the kind of thing that will increase living standards. We need a more joined-up, holistic approach.

Education also needs to be part of the issue, to ensure that the skills are right. One of the complaints that I get from businesses, not just in my constituency but across industry, is that there is a shortage of people with the skills required by engineering companies and the energy industry. We need to make sure that we match that skill set to the job requirements of businesses.

Only a few weeks ago I met prime providers for the Work programme. One of them said to me that they were surprised that in certain parts of the country where they expected to have an issue in finding jobs, the problem is not finding jobs, but finding people who will apply for those jobs. In Great Yarmouth, we have third-generation, and in some cases fourth-generation, unemployment. Over the next few years, we need to change that culture—to change the programme so that people want to aspire to that first job. They should understand that that first step on the ladder is not the end of the story. They should not just stay on benefits.

A school pupil actually said to me that their ambition was to go on benefits, because their parents were doing nicely, thank you very much. That does not represent the majority of people, but we need to change that culture so that people look at that first opportunity and want to take the step on the ladder. That first job may not be the perfect one with the perfect salary, but it is the first step on the way to getting where people want to be and can be for themselves and their families. That is good for the entire community.

[Justin Tomlinson (North Swindon) (Con)]

Does my hon. Friend agree that the welcome expansion of apprenticeship schemes is giving young people the opportunity not only to take that first step, but to learn applied, real-life skills that businesses in constituencies across the country are crying out for?

[Brandon Lewis]

My hon. Friend is right, and directs me perfectly to the point I was about to make, which is that apprenticeships are a hugely important part of raising living standards. In my constituency alone, the number of people taking up apprenticeships has increased by about 60%. Apprenticeships give opportunities for people to get real-time work experience and for companies to train people so that they have the skill set that readies them to take on work. One of the things the Government have done well and that we can do more of is highlight the value of apprenticeships, so that young people do not regard university as their only or primary option, but see apprenticeships and going straight into the workplace as a genuine, viable and valuable way to contribute to their own family as much as to society.

[Angie Bray]

Does my hon. Friend agree also that the Government’s creation of the national citizen service scheme, which is giving 16-year-olds the chance to train together, work together and develop projects together, provides a sure-fire way for them to gain the self-esteem and the confidence they need to take them forward into the workplace?

[Brandon Lewis]

Absolutely, and I would add that we also need to look at how to get businesses growing faster and quicker to employ more people. Having more people working in the private sector is without doubt the best way to raise living standards both for them and for our country, because having more jobs reduces welfare costs. That is hugely important and it is why I was so pleased to hear the Chancellor’s announcement yesterday about fuel duty being frozen and not increased in January. That, combined with the work already done to get rid of the fuel duty escalator, will get prices, although high, lower than they would otherwise have been. That is important—

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Brandon Lewis]

No, I will not give way again.

The fuel duty measures are important not only to commuters and consumers—parents trying to get their children to school and young people trying to go to work or get to job interviews—all of whom will be better off, but to firms in transport and logistics, which need to be able to invest more in their businesses, to grow them and to create more jobs.

The Government are also working to protect the elderly, who have given so much already. Making sure that they get their winter fuel allowance and the right protection for their pension, as was announced yesterday, means that we are doing all we can, in the circumstances we inherited from the previous Government, to provide for the people who need help the most.

To me, the key is to bring all that together—education and welfare reforms, and the work being done through the Treasury and BIS on taxation and apprenticeships—in an holistic approach. In that way, our country will be able to move forward and we will see the real improvement in living standards that we all want.

Oral Answers to Questions

Brandon Lewis Excerpts

Monday 24th October 2011 Commons Chamber

[Chris Grayling]

The hon. Lady needs to remember that the system we inherited from the previous Government caused the problems to which she is referring. We made changes after the Harrington review last year that were all in place earlier this summer for the start of the national incapacity benefit migration. We have yet to see the statistical outcome of that, but I am confident that we will see a fall in the number of successful appeals as a result of our decision to implement the Harrington recommendations in full.

[Brandon Lewis (Great Yarmouth) (Con)]

For auto-enrolment to have the maximum impact, it is important that seasonal short-term employees have an equal opportunity to be part of it. Will the Minister outline what incentives the Government are putting in place to encourage take-up by short-term and seasonal employees?

[Steve Webb]

We must strike the right balance in respect of those who work for an employer for a very short period, in order to avoid unnecessary bureaucracy. Those who are with a firm for more than three months will be within the scope of auto-enrolment, and those who work for a shorter period will still be free to opt in and trigger a contribution from their firm.

Pensions Bill [Lords]

Brandon Lewis Excerpts

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

My hon. Friend makes her point with greater eloquence than I could muster, and she sums up the crux of our case.

Labour set two tests for the Pensions Bill, and the Government continue to fail both of them. They fail the first test of giving fair and due notice, to which my hon. Friend just referred. Even if amended in line with the Government proposals, the Bill will not give those 500,000 women fair and proper notice of the rise in their state pension age.

[Brandon Lewis (Great Yarmouth) (Con)]

The hon. Gentleman did not respond to the earlier point about needing to strike a balance between what this country can afford economically and what any Government might like to do. As Age UK has said, £1 billion to help 250,000 women is a big step forward. We should welcome that, rather than play petty politics with it.

[Gregg McClymont]

Actually, I did answer that point very simply. This has nothing to do with the deficit, and there is a £10 billion difference between our position and that of the Government over the 10 years after 2016, which amounts to £1 billion a year. If the hon. Gentleman is saying that that £1 billion a year is a fair and balanced outcome, all I can say is that, given the greater burden being placed on 500,000 women, Labour Members disagree with him.

--- Later in debate ---

[Gregg McClymont]

I thank the Secretary of State for his intervention. I am sure that his son is getting a better education than I could manage to provide, as he rather ungallantly suggested. The fact is that this is one 1,000th of the £1.3 trillion debt, and the issue is one of balance and proportion. Is £1 billion—

[Brandon Lewis]

rose—

[Gregg McClymont]

I am sorry, but I have given way enough and I have to make progress.

[Gregg McClymont]

No, I will not give way. I am sorry to be able to quote some relevant arithmetic to Conservative Members—they do not seem to like it— but these are facts. Let me continue my point: £1 billion a year for 10 years is one 1,000th of our national debt.

[Brandon Lewis]

rose—

[Gregg McClymont]

No, I will not give way.

--- Later in debate ---

[Richard Graham]

I will not give way on that point.

The arguments of the Opposition, who tabled amendments 1 to 7, have been extremely disappointing. My constituents will have heard three main points from the Opposition Front Bench. First, the Opposition have opposed the changes made by the Government on the basis that they do not go far enough. Secondly, the Opposition have strongly intimated that if elected in 2015, they would not implement the changes that they recommend tonight, which reeks strongly of hypocrisy. Thirdly, they have made it clear that they are not concerned about the additional £11 billion costs of their proposals, as they could be dealt with in the future and, therefore, should not affect our debate today. That is an entirely irresponsible attitude, which is entirely in keeping with the words of the former Chief Secretary to the Treasury when he announced that he was sorry there was no money left. It is very disappointing that the same philosophy is still strongly in evidence from the Opposition Front-Bench team.

[Brandon Lewis]

I was in the Chamber when the shadow Minister commented on £1 billion a year being only one thousandth of the debt, thus implying that it was a small amount of money. If we are talking about people being in touch with reality, surely my hon. Friend would agree that people outside this place will wonder about the economic credibility of an Opposition party that says £1 billion is not a lot of money.

[Richard Graham]

My hon. Friend is absolutely correct. As an American economist once said, “A billion here, a billion there, and sooner or later you have a large sum of money”. It is disappointing to hear such an irresponsible approach to spending and to the interest being paid by everybody in this country on our vast mountain of national debt.

Let me conclude. Tonight, I shall vote in favour of amendments 13 and 14. I recognise the significant achievement, to which Age UK has paid tribute, represented by the welcome changes that will benefit large numbers of women across the country. I pay tribute again to those women in my constituency who lobbied me on the issue, for whom I fought a long and quiet campaign with Ministers. I shall not vote for amendments 1 to 7, and I greatly regret the fact that the Opposition continue to table motions that they would not implement were they in power.

--- Later in debate ---

[Sheila Gilmore]

That certainly is such an example. If we are to give people the opportunity of saving for their pensions into the future, it is important that we take seriously the proposals for auto-enrolment and NEST and build them up in a way to which everybody should give their full support. Although I am sure that the Government have not officially said that they are not giving them their full support, I was struck as I read an article in The Sunday Times a week last Sunday by a suggestion that the Government might be backing off on the speed of the introduction of auto-enrolment. That might have been a piece of kite-flying, as I gather it relates to a piece of work that is being done internally for the Government, which will not be published and which we cannot see, about how to make yet more savings and attempt to grow the economy, but nevertheless that story reached the newspapers. I am sure the Minister will tell us that we have nothing to fear when we reach the relevant part of the debate.

We are constantly asked where we would find the money and, interestingly, despite the comments that Government Members made from a sedentary position a few moments ago, when my hon. Friends the Members for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and for East Lothian (Fiona O'Donnell) made suggestions, they were pooh-poohed.

[Brandon Lewis]

Does the hon. Lady accept that one reason why people were incredulous about some of the suggestions made earlier is that the £11 billion required by Labour is equivalent to the whole budget for the Department for Environment, Food and Rural Affairs and roughly double that of the Department for Culture, Media and Sport?

[Sheila Gilmore]

We are talking about a spending period over 10 years, so it is not equivalent to the budget in a given year. Even in those terms, we are always making choices, and I will not accept lessons from a party with many members who are publicly saying that, as quickly as possible, they want to reduce or take away the 50% tax rate. That is something they are keen to do and that is their choice. They can make the case for it, but if they bring that proposal forward, I for one will certainly oppose it. That is another way of deciding how money is going to be spent and how money is going to be collected—and that is only one example.

In an earlier intervention, I mentioned the pension tax relief system, which gives a huge amount of money to people who already have a lot of money. If someone wants to save £100 into their pension pot and they are on 20% tax, in order to get £200 tax relief they have to find £800 from their pocket, but if someone is on 50% tax, they have to find only half the amount they want to save. That is unfair; it is a subsidy to those who already have a lot of income and assets. If at the end of this decade we are finding it difficult to make ends meet and we cannot help the group of women we are talking about, perhaps we should be thinking about that system.

The women who are affected by the measure will be making exactly those comparisons. They know that choices are made in politics and that choices are made by Governments, and they know that it is not impossible for the Government to change their mind on this proposal. They did not campaign for it during the election; indeed one of my hon. Friends has suggested that it was probably drawn up in a great hurry and seemed like a good wheeze at the time, but it puts a particular burden on a group of women many of whom cannot easily afford the changes. I want to emphasise, as several of my colleagues have done, that it should not be assumed that these women have a job and can just go on doing that job, or that they will still be in that job in three, four or five years’ time.

Oral Answers to Questions

Brandon Lewis Excerpts

Monday 18th July 2011 Commons Chamber

[Maria Miller]

I, too, have visited Leonard Cheshire homes, and I have met Leonard Cheshire representatives to discuss this issue. I assure the hon. Lady, as I just said to the hon. Member for Huddersfield (Mr Sheerman), that we are not removing the DLA mobility component in October 2012. We will look at the needs of care home residents alongside the needs of all other recipients of DLA as part of the broader PIP reform. Perhaps she can take that message back to her constituents. It would be great to get some good information out there.

[Brandon Lewis (Great Yarmouth) (Con)]

16. What steps he is taking to support young people into work.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are doing three things to help young people into work. Our work experience scheme will provide an opportunity for up to 100,000 young people to get their first taste of the workplace over the next two years. We have launched tens of thousands of new apprenticeships that are designed to build a career for young people. Through the Work programme, we are providing specialist back-to-work support for those who are struggling to get into work, the longer-term unemployed and those who come from the most challenging backgrounds.

[Brandon Lewis]

In an area like Great Yarmouth, which has above average unemployment and in some cases third generation unemployment, those projects are hugely important in getting young people back into work. To help promote the opportunities for businesses, will the Minister outline how many people have undertaken and will undertake work experience this year?

[Chris Grayling]

The latest figures show that at the end of the first quarter, give or take, about 10,000 young people had so far benefited from our work experience scheme. Employers have so far committed to provide about 35,000 places. I am very optimistic that the scheme will deliver real opportunities for young people, some of whom have started to get into work through the placements.