(12 years, 6 months ago)
Commons ChamberMy right hon. Friend is prompting the Minister with the answer. We will look carefully at the detail of the proposals. Presumably, they are going to appear in regulations; they are certainly not in the Bill. It is helpful that the Minister has told us that, however.
Concerns have been expressed to me by parents who have tried to save for their disabled children. They have put money aside for them, but the proposals will affect them because the money will be in their children’s names.
The Minister has told us that someone who receives an inheritance should lose all their support from the state. Those could be similar circumstances to those that the hon. Lady has just mentioned.
Returning to the issue of the time-limited employment and support allowance, there is real concern about an arbitrary time limit. As was kindly pointed out by the right hon. Member for East Ham (Stephen Timms), at a party conference the Liberal Democrats showed their concern by passing a motion against arbitrary time limits. However, the amendment from the Lords and the Government’s original proposal both set arbitrary time limits; it is just that one is longer than the other. Neither of the options in front of us would get rid of an arbitrary time limit, as a number of Members have highlighted.
One way to make the system less arbitrary is to ensure that people are in the right category in the first place, with those in the greatest need in the support group, so that they are not affected by a time limit. My colleagues and I have looked long and hard at the issue, and the important thing is to get the assessment right in the first place and make sure that people are in the right category, as those in the support group are exempt from the time limit. We need to make sure that people who need long-term, indefinite support are in the support group and can get that. That is a more effective way to protect those who need the most help than changing one arbitrary time limit for another.
I share the hon. Lady’s concern about getting the test right in the first place, but is she confident that the work capability assessment is working as it should?
I was going to come on to that. If the hon. Lady will bear with me, I will hopefully answer her question.
I will make some progress, because I have hardly said anything yet, and I am being intervened on left, right, and centre.
The Harrington process is critical to getting the assessment right. I welcome the work that has been done looking specifically at cancer patients, which will ensure that the vast majority go into the support group. That is the right way forward. I also welcome the fact that Professor Harrington is looking at how we assess chronic pain and fatigue, because in many chronic, long-term conditions—particularly fluctuating conditions—those are the elements that cause people most difficulty in thinking about returning to work, and the elements that, at the moment, the work capability assessment is not very good at identifying and reflecting. I really hope that Ministers will implement whatever recommendations Professor Harrington makes on those issues; on past experience, his recommendations have been sensible and have made a significant difference to the assessment.
On the point made by the hon. Member for Banff and Buchan, there is evidence that the system is improving. I looked earlier today at the latest figures on the outcome of the work capability assessments, which I found quite reassuring when it comes to the Bill. We have to treat the figures with caution, but they show that initially, following the work capability assessment, more people are going into the support group than the work-related activity group. That is a crucial point. If we are getting the assessment right, and more people are going into the support group in the first place, the time-limit for people in the work-related activity group becomes less of an issue, because the people who need the most care are getting support indefinitely.
My concern remains that far too many people are having to appeal against their work capability assessment result, and those appeals are overturning the original decision, so the system really is not working as well as it should.
I understand the hon. Lady’s concern, and the issue has been raised over a number of years by those on both sides of the House.
If that was the case, there would not be a problem with the legislation. Everybody would get what they were due and there would not be the apparent cut.
For the third time, I shall try to conclude. We must give dignity to those people, who are in most need, and stop the war against those in need.
I will try to keep my comments brief, given the time pressure on us.
The Lords has done us a big service by highlighting the impact and implications of these measures for sick and disabled people. The 12-month limit to contributory ESA is arbitrary. Regardless of the people in the support group, the measure will affect people who are adapting to radical and serious changes in their health, income and life. They might be suffering from life-limiting conditions, long-term disability or fluctuating conditions. They might be people who have been used to living on an average income, but will have to get used to living on a very low income. Those adaptations take time; getting better takes time. Some people will take less than 12 months, some considerably more. Macmillan thinks that 94% will need support in the work-related activity group for more than 12 months. In that respect, while I do not accept the principle of an arbitrary time limit, I suspect that two years would catch more of those people and see them getting the support they need.
Fundamentally, these measures will upset the contract that we all like to think we have when we pay our national insurance contributions—that there will be some limited safety net for us if we are unfortunate enough to become sick or disabled. That could happen to any one of us in this Chamber, at any time. We do not know when we are going to have an accident or develop a serious illness, so not only cancer is involved, although we know that people across society are affected by it. Other conditions are just as serious, and the same principles apply.
On insecurity, I should draw an analogy with what happened when banks tried to prey on people’s insecurities about the future by asking them to take on insurance for loans they had taken out. The banks have had to pay out seven-figure sums in compensation to people who were mis-sold insurance policies. I hope that that does not happen again as people think, “If I get a serious illness, there will not be support for me.” I am worried that there will be an opportunity for unscrupulous selling of insurance policies to vulnerable people at the most vulnerable times in their lives.
I am concerned about the knock-on impact of the proposals on carers too. In my constituency, I have seen families working longer hours, often in low-paid jobs, just to provide financially for family members who are no longer able to work, but who once were. There is particular concern around young people; that was mentioned earlier in the debate, but it has not been focused on so much. Parents of disabled young adults have often saved throughout their lives as they are concerned about what will happen when they are no longer able to look after their children. They have saved for their children to ensure that they have independent means and a bit of money behind them for when they are adult and their parents are no longer in a position to provide.
It would be unfortunate if the capital of those young people were eroded at a time when they still had some support from their parents. They might be prevented from having an independent old age and might be made more dependent on the state than they would otherwise be. That is about the dignity of young disabled people as much as anything.
I urge the Government to consider the fact that ESA needs to be assessed on the basis of medical need, not an arbitrary time limit. People should get the support they need according to their health, not some arbitrary category that they may or may not fit into.
What we have heard today is that there is a big divide between the parties on our views of what the welfare state is for. The Minister opened the debate by saying that the welfare state is a safety net, by which he meant a safety net only on financial grounds; those who are very poor get help, but those who are not do not. That is not how I see it. The welfare state was set up to help us through the times when we are in difficulties, including illness and poor health. It is the social security that gives us the confidence that we will be provided for when we need it. This distinction clearly illustrates the divide between the parties.
It was very odd to hear the hon. Member for Cardiff Central (Jenny Willott) argue that this matter was somehow not as important as the Opposition think it is because people will end up in the support group. That goes against everything that many disability organisations are saying, which is that people who have an illness or a disability do want to get back to work. Perhaps they are not quite ready to go back to work within a year, but they do want to work. Parking people in the support group is a very odd solution indeed, because we will end up going back to the situation that the Government have so heavily criticised. Where people have saved, they should have that opportunity. If someone falls ill at that age, they will already have incurred considerable financial losses and no doubt bitten into their savings. We are talking not about welfare, but about people who will start to lose benefits when they have savings of over £6,000 a year.
The hon. Lady definitely is not getting in—certainly not at the moment.
The hon. Member for Argyll and Bute (Mr Reid) said that there are communities in all nations of this country—smaller communities, but sometimes larger ones—where there is an insufficient supply of houses, which is very true. People might have lived in them all their lives and would be unable physically to move.
The hon. Lady makes an extremely important point. This problem is not isolated to Argyll and other island communities. In Scotland, 44% of social tenants need a one-bedroom house, yet only 24% can have one. That is the fundamental nature of the housing stock in the whole country.
(12 years, 6 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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My hon. Friend makes an important point. I wanted to give some examples of constituents who have had to appeal. One is a man almost at retirement age who has worked in a manual job since leaving school at 15, who became unfit to work. He requires a tube to be inserted into his gullet so that he can eat and drink. He could not bend forward during the assessment process or when he came to speak to me, because if he did so anything in his stomach would be emptied out; he has no muscular control. Initially he was told that he was fit for work. With our assistance he won his appeal. On the other hand I have another constituent, with a progressively degenerative eye condition, who is registered blind and can just about read a 42 point font, which is fairly large. She lost her appeal. There seem to be different circumstances and different approaches.
The hon. Lady makes an important point. My concern about people who must go to appeal is that they do not get the advice and support they need. People who get it are more likely to succeed in their appeals, but Citizens Advice talks about a threefold increase in impact on its services since the process was introduced. I am sure that many hon. Members have had increased mail in that time.
The hon. Lady makes an important point. I do not think that anyone would doubt that there is pressure on advice services. Organisations for individual conditions, such as Parkinson’s UK or the Multiple Sclerosis Society in my area, will talk about their concern that, although they can help so many people, there are others they cannot reach. I know from my case work that more people are coming to me to raise their concerns. They want to be put in touch with advocacy services to help them with appeals; my office cannot take on the job of representing people at every appeal, on account of the numbers involved.
Let me be absolutely clear—particularly in relation to the comments made by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), who proposed the debate, and the hon. Member for Ogmore (Huw Irranca-Davies)—that we are trying to do the right thing. We are trying to identify people with the potential to go back to work and provide them with the help to do so. Sometimes, those people will have a health condition—in the United Kingdom, 7 million people with a health condition are in work—so the number of points that people receive in the work capability assessment does not automatically mean that they do or do not have a health condition. The judgment is all about helping people return to work, perhaps in different roles. Their health condition might prevent them doing what they did before, but that does not mean that there is nothing they can do.
I approach this debate in a non-partisan spirit, but I want to explain the time lines to hon. Members, so that they understand exactly where we are in the process. In June 2010, 18 months ago, prompted partly by a report from Citizens Advice but also by concerns such as those raised by hon. Members, I asked Professor Harrington to take a careful look at a process that was already well under way. Employment and support allowance and the work capability assessment were established in 2008. The work capability assessment had been working since 2008. Statistics on the growth of appeals matched the flow of new claimants into ESA and worked down to some change 18 months ago, but I was unhappy that the process did not seem to be right, so Professor Harrington went away, reported in November 2010—interestingly, the date at the end of the period that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) mentioned when she quoted the Parkinson’s statistics—and made several recommendations to us.
The right hon. Member for East Ham (Stephen Timms) made a point about pilots and roll-outs. Crucially, we did not simply pilot the work capability assessment and then start it. At that time, the questions that we were addressing were whether we could sort out the process and whether we should go ahead and roll out incapacity benefits, which would increase the number of people going through the work capability assessment.
Professor Harrington went away and made his recommendations to us, which we accepted in full and have implemented. He told me, “I believe the system is in sufficient shape for you to proceed with incapacity benefit reassessment.” We set ourselves a goal to put his recommendations in place, improve the quality of the process and address many of the issues to which hon. Members have referred today by the end of last May, when the assessments in the incapacity benefit reassessment were to start alongside the existing process of assessing ESA new claimants. We did that, and we started.
I have heard a lot today about the number of people who have sat through appeals and the number of cases overturned. It is crucial for hon. Members to understand this. I am almost certainly right in saying—I could not swear to being absolutely, 100% right, because there may be a small number of exceptions—that since the Harrington changes were introduced last summer, not a single appeal has been completed. Therefore, all the examples cited today that relate to the appeals process refer to what took place before the Harrington changes to the system that we inherited, which I accept was not doing the job as it should have done. I want everyone to understand that.
As a result of the Harrington changes, we tried to create a more humane, careful and thoughtful system. We have sought to change systems to provide greater protection to those with long-term problems. The right hon. Member for East Ham referred to the internal review that his Government carried out and that we implemented in the belief that it would increase the size of the support group—those who receive long-term unconditional support—and that is what has happened. We believe that the changes that we have introduced will lead to more people receiving long-term support.
One issue that I raised with the Minister was that of people turning up for appointments and being turned away because they were double-booked. My constituents who were part of the pilot scheme travel, on average, three or four hours to get to and from an assessment. To be turned away when they have had to rely to get there on family and friends who have taken time off work is a real problem. The Minister has apologised to one of my constituents, but has the policy of triple-booking appointments been changed?
A situation in which people are treated like that can never be acceptable. Of course, we have an issue with some people not turning up to appointments, and because it is an intensive programme, we do not want a health care professional sitting there without anything to do. Sometimes, we will get it wrong. We will try hard not to, but there is no such thing as a perfect system. That is true of all parts of the system. I openly accept that we will sometimes get it wrong, but we have done everything that we can to create a system that gets it right as often as possible. We have changed the nature of the work capability assessment in the process.
We make a much greater effort to ensure that we have proper medical evidence at each stage of the process from the consultants and specialists working with the people concerned. One reason why so many appeals were successful was that new evidence was emerging only at the appeal stage. We have worked hard to ensure that such evidence comes in much earlier in the process, so if we get it wrong in Jobcentre Plus, we will get new evidence there at a point of reconsideration. That is a crucial change. We are now ensuring that we seek out additional information in Jobcentre Plus before we take the first decision, but we have bolstered the reconsideration process to make it much quicker and more straightforward, so that if we get it wrong the first time, people can get a quick second opinion in Jobcentre Plus. That is crucial to getting the process right.
(12 years, 7 months ago)
Commons ChamberThe Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is in the Councils on this one. My hon. Friend refers to the Commission’s idea that the habitual residency test should be abolished. That is quite wrong and we disagree with it fundamentally, but we are not alone: a large number of European nations disagree with the Commission and we join them in saying that this is a step too far—a leap into an area that has always been preserved for national Governments and in which it has no right. We will fight this, and I believe that we will win.
This is a very serious issue, but will the Government’s programme of closing the DWP’s overseas network in many countries around the world help or hinder efforts to ensure that benefits are paid only to those entitled to them?
I believe that the hon. Lady’s question is not directly relevant to whether we are able to spot whether people are eligible, because anybody who claims will have to go through exactly the same checks as they would in the UK. That in itself will be a bit of a deterrent in their trying to claim something from a foreign doctor.
(12 years, 8 months ago)
Commons ChamberToday’s employment statistics make extremely sobering reading. They spell out more clearly than any of our speeches today just how much our economy is struggling and how the recovery is faltering. We know from the Office for Budget Responsibility that the UK economy is already contracting in the final quarter of this year and we can predict with some confidence that there will be more turbulent times in 2012.
Has the hon. Lady seen the latest statistics showing that Scotland had the second-worst unemployment in the UK in the last quarter? Does she think that her Government in Holyrood have any responsibility for those figures?
I am certainly happy to look at that because the sharp increase in unemployment in Scotland is very concerning. However, over the past year as a whole, unemployment in Scotland has fallen and employment has risen. That compares very favourably with the record of the hon. Lady’s Administration. For most of the past few years, employment in Scotland has outperformed employment in the rest of the UK. That record contrasts sharply with the situation when Labour and the Liberal Democrats were in coalition in Scotland.
We have to look at the big picture and remember that when the Government set us down the path of austerity a year and a half ago, many of us warned that taking the feet out from under the public sector was not the way to boost employment and growth in the private sector. We said that the cuts went too far too quickly and it gives me no pleasure whatever to be proved right on that front. It is now abundantly clear that the medicine is not working and is not achieving the results we want. I accept that the Government have not been in control of some of the external circumstances, but nevertheless those risks were always apparent. The Government need to acknowledge that their plan is not working and that it is time for a change of direction.
What has been disappointing this afternoon is the very ideological and doctrinaire approach taken by Members on the Government Benches to their prescriptions. It would be helpful if we acknowledged the interdependence of the public and the private sectors. The bottom line is that the UK as a whole is losing public sector jobs faster than the private sector can create them. We all know that borrowing is still very difficult for small and medium-sized enterprises, which is a major source of potential growth. We know that business confidence is low, but in that circumstance it makes no sense at all to punish the public sector when the private sector just cannot keep up.
Paradoxically, that is the opposite of what has been happening in Scotland. One of the interesting things—
Not at the moment, thank you.
It has been evident in Scotland over the past year that the growth of private sector employment has outweighed falls in public sector employment. We now have the highest share of private sector employment that we have had since the advent of devolution. [Interruption.] Although unemployment has fallen across the piece in the past year, it shows that the Scottish Government’s decision to boost investment in the public sector and in infrastructure as far as possible has been a way of offsetting the problems of investment that have been apparent in other parts of the UK—[Interruption.] If the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) wants to make an intervention, I am happy to accept it. If not, perhaps he could stop heckling.
If we are serious about tackling unemployment, we need to accept that the cuts introduced by the Government are biting very hard indeed across the whole UK, and that the announcements in the Chancellor’s autumn statement do not go far enough. Crucially, they will not address the immediate challenges of high levels of unemployment and a high benefits bill. I am not sure how we will pay for that in the current circumstances.
I will not at the moment, thanks. Time is pressing.
In Scotland we are experiencing 32% real-terms cuts to the capital budgets and even after the announcements in the autumn statement, the Scottish capital budget will still be cut by £3 billion over the spending period. More importantly, 70% of the new consequentials announced in the autumn statement will not be available until the year after next. Waiting until 2013 will not deal with the problem that we need to tackle now. What we need is investment in infrastructure.
Much has already been said today about youth unemployment. For those of us who came of age in the 1980s there is a horrible sense of déjà vu. I was one of those who had to put up with the 1980s and see the problems at first hand. When I hear young people in my constituency bemoaning to me the prospects that they are now facing, I have great empathy. It was exactly the same in the 1980s, when we were all told that unemployment was a price worth paying, and a whole generation was relegated to the scrapheap. We are still living with the legacy of that and dealing with the social consequences of it. It was not just about economics. It was about our society and the prospects of a whole generation.
Across the UK we have seen diverse approaches to tackling youth unemployment. It is far too high everywhere, but, as we have heard today, there has been a range of approaches in the devolved Administrations. In Scotland there have been 25,000 apprenticeships, a significantly higher number than before. It even exceeds what the UK Government are doing. University and college places have been maintained. Efforts have been made to ensure that apprenticeships that fall through because companies have gone under as a result of the recession are continuing and those young people are getting back into work. The Opportunities for All initiative is making sure that every young person aged 16 to 19 will get a work or training opportunity.
I hope Ministers will take the opportunity to sit down with Finance Ministers across the devolved Administrations and look specifically at how we can tackle youth unemployment. There are different approaches and there are good ideas coming from different parts of the UK. It is such an urgent problem and such a challenge with such serious long-term consequences that I hope the Minister will take action. We were told in the 1980s that unemployment was a price worth paying. It was not a price worth paying. It is never a price worth paying. It must be the Government’s top priority.
(12 years, 9 months ago)
Commons ChamberIt is my view that had we not taken those steps, interest rates would be higher, investment would be lower and unemployment would be higher than it is today. I know it is a point of difference between the two sides of the House, but Labour’s alternative strategy would simply involve Britain borrowing more money. I do not understand how it is possible to solve a crisis created by too much borrowing by borrowing even more.
I welcome the Minister’s acknowledgement that youth unemployment is to a large extent symptomatic of the fragility of the wider economy, but will he also acknowledge that the Government’s approach to the wider economy is not working and is actually exacerbating youth unemployment?
I do not accept that. I shall briefly set out some of the measures we are taking on the broader economic front that will make a difference to unemployment.
The regional growth fund is now delivering investment to parts of the economy where the private sector is too small, and where we want to see private sector growth, and the research and development and investment in infrastructure that creates jobs. The introduction of enterprise zones in parts of the country where the private sector is weak will encourage businesses to grow and develop. The cut in corporation tax will deliver the lowest headline rate in the developed world. Those are examples of measures that will help to make Britain a better place to do business.
(12 years, 10 months ago)
Commons ChamberI will have to wait and see what the recommendations are, but as a result of Professor Harrington’s first report, it is now decision makers in Jobcentre Plus who take the decision about an individual. I have told charitable groups representing people with a variety of conditions that the door is open to them to brief, train and discuss with those decision makers the issues facing such people so that they are as well informed as possible.
Last week I met representatives of the Royal National Institute of Blind People, who expressed concerns about the descriptors attached to vision. Will the Minister meet the RNIB and other representatives of blind and partially sighted people to address those concerns so that we have vision descriptors that are fit for purpose?
I have regular meetings with groups representing not just blind people, but those with various disabilities, and I will continue to do so. The object of the exercise is to help those who are blind or visually impaired back into work. Surely it is much better to find them a place in the workplace than leave them on benefits for the rest of their lives.
(12 years, 10 months ago)
Commons ChamberThat bears precisely on the point. We are talking about real women and we must give due credence to their fears and anxieties, especially about due notice.
On fair notice, the fact remains that under the Government’s amended plans some women will have only five years to prepare. The shock of having to adjust at such short notice to a rise in the pension age of between 12 and 18 months cannot be overestimated—this reflects the point made by my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). These women feel genuine anxiety. The 500,000 women in question made decisions based on what they thought was a contract with the Government that they had paid into the system for a certain amount of time and would get their state pension at a certain age. The Government have moved the goalposts dramatically for these women; there is no getting away from that and it is another way in which the Government are breaking the consensus we appeared to have in 2010.
The Government are going down a dangerous path with this Bill, which sets a precedent by which the principle of reasonable notice of changes in citizens’ state pension age is dramatically reduced. The precedent is important because as longevity rises and as the Minister already suggested, there will inevitably be further uplifts in the state pension age. The principle of reasonable notice is broken by this Bill.
The independent Pensions Policy Institute was very clear in its evidence to the Select Committee on Work and Pensions on that point. The 1995 Act gave women 15 years’ notice and although the Pensions Policy Institute understood that longevity is rising and that it is necessary to make changes more quickly, it still maintained that 10 years needed to be the minimum notice that any woman was given.
I am grateful to the hon. Gentleman for giving way and I share his concern that the principle that the goalposts can be shifted with very short notice is serious. Does he agree that the problem with the longevity argument is that there are huge disparities in longevity according to people’s occupations as well as geographically? I am sure that affects his constituency, as it does mine.
The hon. Lady makes a good point. That is an issue that my right hon. Friend the Member for Croydon North (Malcolm Wicks) often raises: averages can hide great disparities in social class as well as gender. That is a very important issue and I am sure the Minister is well aware of it.
The principle of reasonable notice is broken by the Bill. The Government’s concessions do not meet the fair and proper notice test, which is a principle of crucial importance. The second test we set for the Government was the proportionality test. They are unfairly and disproportionately singling out women aged 57 and 58 for harsher treatment. I do not suggest that they have singled them out deliberately—of course not—but I do say that they are not doing enough to compensate those women who have lost out in a birth date lottery that is not of their making. These women cannot, on the whole, afford the burden that the Government are placing on them, and they have certainly done nothing to deserve it. The Government should not make those women carry the heaviest burden of rising longevity—that is unfair and unjust. Some 500,000 women will still have to wait between a year and 18 months longer than they would have to reach state pension age. As I have previously stated, 330,000 women—one third of a million—will have to wait exactly 18 months longer, with the psychological and financial burdens that imposes.
Absolutely. This is causing not just anxiety but fear among those women, many of whom have been barred, until recently, from private company pension schemes because they were having to work in several part-time jobs with very low incomes in order to keep their families. They are now being let down by a Government who are simply not giving them sufficient time, which is all that they are asking for, to plan for the change.
Given what we have heard from the right hon. Member for Croydon North (Malcolm Wicks) about the failure of people’s health to keep up with the increase in longevity, does the hon. Lady agree that many of those women will not be in the best of health and will be having to look for jobs at a time when their health might be compromised and they are not nearly as fit as they used to be?
I absolutely agree.
The Chancellor has told us that he will not balance the books on the backs of the poor abroad, so why is he prepared to balance the books to a disproportionate degree on the backs of 500,000 women who just happen to have been born between 6 October 1953 and 5 March 1955? Why is it okay to do that to those women? The Government need to listen to the women of this country and accept Labour’s amendment so that no woman will have to wait more than an extra 12 months to reach their state pension age.
Let me address that directly. What is striking as soon as one looks at the evidence on longevity is just how far behind the curve we are. When the male state pension age was set at 65, it was not so much a case of Lord Hutton writing reports on pensions as a case of Len Hutton striding out at the Oval. That was the era that we were talking about. In that almost 100 years, there have been incredible increases in life expectancy, yet the male state pension age will still be 65 for another seven years. That shows how far behind the curve we are.
The views of Lord Turner were cited by the hon. Member for Cumbernauld and by others, with some suggestion that we are breaching the Turner consensus. However, Lord Turner has breached the Turner consensus, if I may say so. He said in a news interview a couple of years ago, and the world has moved on even since then:
“If I was redoing my report I would be more radical, arguing for an even faster increase in the state pension age.”
That is exactly what we are doing, in line with the Turner consensus.
Does the Minister accept that although longevity has increased, healthy working life has not kept pace with longevity, and that there is a serious issue, especially for the particular group of women under discussion, many of whom will not be in the best of health in their late 50s and early 60s? That is one of the reasons why shifting the goalposts twice for this group of women is having such a disproportionate impact.
The issue of health is certainly important. Almost all the figures that have been quoted through the debate assume that the women whose pension age is being delayed will have no money. If, as the hon. Lady rightly says, they are unable to work because of ill health and the household has no other resources, they will get a significant amount of that money through employment and support allowance and other benefits.
Clearly, there are differences between individual groups and, as the hon. Lady and the hon. Member for Arfon (Hywel Williams) pointed out, between different parts of the country, but if we look at England, Wales and Scotland, for example, in terms of life expectancy at 65, in England for men since 1981 life expectancy has increased by seven years. In Wales for men it has increased by seven years, and in Scotland for men it has increased by seven years. For women, each of those figures is six years, respectively. So although there are differences, there have been substantial increases across the board.
Yes, there is big variation. I accept that point, but there have been increases across the board and we cannot say that because they have not happened for every individual in every part of the country and in every social group, we will do nothing. That is what got us into the present mess in the first place.
(13 years, 2 months ago)
Commons ChamberI have given way a lot and I am not sure that we are going anywhere new on this. I have repeated myself several times. I will give way once more and leave it at that.
I want to emphasise the point that the hon. Member for Aberdeen South (Dame Anne Begg) made about people who have already retired. The latest health statistics show that healthy life expectancy for women and men does not necessarily keep pace with actual life expectancy. Many women in their 60s are trying to wind down their working hours because they are in poor health. The key point is not equalisation, but that people have not had time to plan for it. It is a great burden on people in the latter stages of their career who suffer ill health.
I fully recognise the hon. Lady’s point. It applies to the whole debate. One could argue that even an extra year’s planning does not allow people time if they are not well. People living longer but being more ill is an issue for the health service—it is already having an impact on the health service. It is a reality—and a good thing—that people are living longer and are able to enjoy their retirement properly. For the most part, they can do that in good health, but I recognise that there are problems for those in poor health.
It is a pleasure to follow the hon. Member for Cardiff North (Jonathan Evans), but I will disagree with quite a bit of what he said.
I am disappointed about the change in the financial assistance scheme from the retail prices index to the consumer prices index, particularly in relation to Richards Textile factory in Aberdeen, which went bust with the collapse of its pension scheme. Although the very hard work of many Labour Back Benchers ensured that those pensioners did not lose all their money, they still feel aggrieved that they do not have the same cover as those who subsequently entered the pension protection fund and that they do not get quite as much as those covered by it.
Let me start by saying which parts of the Bill I agree with to show that not everything in it is bad, although quite a lot is. I agree wholeheartedly with the lifting of the default retirement age and I only wish that my Government had done that. I have a friend who has been told by his employer that he has to retire at 65 and he does not want to, but unfortunately his birthday falls on the wrong side of the divide.
I am also very glad that the Government are going ahead with the national employment savings trust. There was a bit of worry at the time of the election that some people in business who were not too keen on it, particularly on auto-enrolment, might put pressure on the coalition Government, who I am glad resisted. NEST is certainly the way forward for occupational pensions, to ensure that there is pension cover for everyone and that most people will not have to depend on the basic state pension as their sole income in retirement. That is very important.
I also agree with the proposal to bring auto-enrolment forward to July 2012 for large companies. If they are ready to go, the sooner the scheme gets up and running the better and the sooner it is tested the better, because part of the reason for rolling out auto-enrolment is to test how it works in practice.
So those things are all good, but that is as far as that goes and there are issues of concern. Like my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), I am concerned about the lifting of the auto-enrolment earnings threshold by £2,500. I tried to intervene about this early in the Secretary of State’s speech, but lots of other people were jumping up and down at the time. The problem is that low earners might not always be low earners. Auto-enrolment is important in getting people into the scheme as soon as possible and in ensuring that even low earners are enrolled in a pension scheme. If those people continue to earn similar amounts for the rest of their working life, the scheme might not have the returns that they would expect, but no one knows, at the start of their working life, what their eventual earnings will be and we should always err on the side of caution in ensuring that people enrol. The raising of the threshold could result in about 600,000 people not being enrolled who otherwise would have been. It has been said that those people could opt in, but it is highly unlikely that many people on such low incomes would do so. If the Government introduced a foundation pension or a pension for the state, which the Secretary of State put into context, the scheme would make a difference for people making such low contributions. Even someone earning just over £5,000 a year could make a valuable contribution to their eventual occupational pension.
I worry about that issue and I worry when I hear that the threshold might go up to £10,000 or more in future, because the whole point of auto-enrolment and of NEST was to make things easy, to make belonging to an occupational pension fund a no-brainer and to ensure that everyone who was in work would automatically pay into an occupational fund. People who are not auto-enrolled and who are not in the pension fund will lose out on the employers’ contributions as well, so they will lose out not only on their potential pension earnings towards the end of their life but on what we often think of as deferred wages in the employers’ contribution.
I am also concerned about the introduction of the three-month wait, for many of the same reasons I have just given. The shadow Secretary of State has already made the arguments, which are important to remember.
All those issues could probably have been swallowed if they had been the only things we were concerned about, but the big sticking point in the Bill, which I suspect most Members will be talking about this afternoon, is the acceleration of the state pension age, particularly the anomaly that hits the 500,000 women who at very short notice will have to wait more than a year for their pension. I wonder whether the Government have analysed exactly who will lose out as a result of the measures and which women will not be in work at the age of 66, when they get their state pension. The figure of £10 billion has been bandied around for how much it would cost not to go ahead with the proposal, but I suspect that is a gross figure. I do not know whether the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), has any idea how much the welfare bill will go up as a result of people’s falling out of work before they reach the age of 66.
I agree that it is right that the state pension age should rise and indeed inevitable that it will rise, and I accept that there are issues to do with longevity, but I am concerned that we are potentially creating not the pensioner poor but a group of people who become the new poor because they have fallen out of work in the last years of their working life and are struggling to get by on benefits. It is not good enough for the pensions Minister to say that for anyone who falls out of work before reaching the state pension age and who does not have a pension they can draw early, there is always jobseeker’s allowance or employment and support allowance. The contributory element of JSA lasts only six months and the Government propose that the contributory element of ESA will last only a year. Nowadays, women expect to have their own wages, but their qualifying for income-related JSA or ESA will depend on the household income and whether they have a working partner. For many women, that misses the point. Quite a few women in my constituency say, “I’ve only got a pension of £1 a week.” What they mean is that they have 60% of their husband’s pension and £1 a week on top of that, but they still see that £1 a week as their pension and they feel very aggrieved about that.
Does the hon. Lady share my concern that the healthy life expectancy for men in Scotland is currently 60 years and for women is 62 years? In that context, a dramatic increase in the pension age for those people is simply displacing on to the benefit system the burden that will have to be met.
Indeed. The hon. Lady says more eloquently what I was trying to say about displacing people out of pension age into the working age poor. There is nothing to be gained for those people if all we are doing is delaying when they get their state pension. There will be the odd situation that when people retire, their income will go up, rather than people being able to work until they reach retirement age.
I thank the hon. Gentleman, but I fear he misunderstands me: I am not accusing him and his colleagues of being ideological, and that, in a sense, is my point. Actually, the Opposition are perpetrating a grand deceit on the British people, which is that there is anything fair about protecting all these things that we can no longer afford; that there is anything fair about arguing to the British people that we—
No, I will not give way for the moment; I am in the middle of replying to the previous intervention. The Opposition are perpetrating the grand deceit that there is anything fair about pretending to the British people that this country is not poorer than it was; that it is not permanently poorer than we thought we would be in each of the next 20 years.
The point about what happened in the past three years is that the economy suffered a permanent drop. We can grow again from that drop—we can again achieve higher living standards—but we will never have back the growth that we lost in the past 10 years, and it is not fair to anyone to argue that this or any Government can proceed as if no sacrifices need to be made, no losses need to be felt and there can be an entirely victimless process of recovering from the terrible economic situation that the Government of the hon. Member for Stockton North (Alex Cunningham) helped to create.
I thank the hon. Lady, but I fear that this man is a lot more substantial than just straw—even if the Leader of the Opposition sometimes appears to be exactly the straw man she refers to. The entire membership of the Labour party is signed up to the deceitful argument that we can correct this budget deficit, restore sustainability to our public finances and rescue this country from decline without taking painful decisions that cause people loss. That very same argument has been made in every single one of these debates—in the debates about education maintenance allowance, about tuition fees and about all the other benefit changes. We are hearing that argument here again tonight. This is not really an argument about pensions, but one about the future of this country, and the argument used by the Opposition is always exactly the same.
The hon. Gentleman has been using a lot of rhetorical questions in this debate. For me, the key question, if we accept the premise of his argument, is: why should women born in 1953 and 1954 take a disproportionate amount of the pain and take all that pressure for everyone else?
The hon. Lady is eloquent, as so many people have been, on behalf of a particular group, and I would accept and understand that were they not equally eloquent on behalf of every single other group that is being affected by the process of getting our public finances on to a stable footing. I would have some respect if an Opposition Member said to me, “I voted for EMA, I voted for tuition fees and I am voting for the benefits cap, but this one I cannot bear because it is egregious, outrageous and singles out this group in a way that no other group is being treated.” But we do not hear that. All we hear is the same cry—“It isn’t fair”—applied every day, every week, to a different group of people. Opposition Members need to understand that it is not fair to pretend to people that we can do this without pain or loss. It is not fair to perpetrate on the British people the deceit that we can somehow grow our way out of this deficit without cutting off some things that everybody appreciates.
In a little while; I want to make some progress first.
The Bill’s third key element—which, again, voting it down would stop—is making judges put some money into their pensions. I think that Members were rather shocked when they discovered that the taxpayer put 32% of a judge’s salary into a judge’s pension, and that the judge in respect of their own pension entitlements puts a big fat juicy zero. This Bill will correct that. If the Opposition succeed in voting it down, they will stop us doing so. We need to make progress with the Bill, therefore. Second Reading is about the principles, and we stand firmly behind them.
In the debate, the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—who has rejoined us now—glossed over the auto-enrolment provisions and said the Labour party will vote against the Bill. That would leave £30 billion to be found, as that is what the Bill would put into the Exchequer. When asked where the money would come from, he replied, “Well, we’d move a bit faster on age 67” and then added, in brackets as it were, “in the 2030s.” For a former Chief Secretary to the Treasury to tell us that the way to find money for a problem in the next Parliament is to look to somewhere in the 2030s sounds vaguely familiar. The answer is always, “Tomorrow, and tomorrow, and tomorrow”—
Interestingly, the right hon. Gentleman and his colleague the shadow Minister are saying two different things. The right hon. Gentleman knows that the sum for the changes up to 2020 is £10 billion. His shadow Minister, the hon. Member for Leeds West (Rachel Reeves), says we should delay to 2020 and find £10 billion while he wants to vote against the Bill and find £30 billion at some time in the 2030s. I think the House knows where we stand on that.
I am grateful to those Members who took the trouble to address auto-enrolment, but the shadow Secretary of State glossed over that issue. He said we ought to enrol at £5,000, which is not the right figure, but let us accept it for the sake of argument. He then said we should not put up the threshold. Therefore, under his scheme with the threshold at £5,000, someone who earned £5,100 would be auto-enrolled on that £100, and as we start at 1%, they would have to put in £1—not £1 a week, but £1 a year, or 2p a week. That is what will happen if we do not let this Bill make progress. We will be requiring employers and employees to put 2p per week into the employee’s pension. Does the right hon. Gentleman think that might in any sense undermine the credibility of our proposals?
I agree with the Minister that this issue has been glossed over in today’s debate, but in our debate on welfare reform last week great store was set by so-called mini-jobs. It seems to me that those are exactly the jobs that will not be included in auto-enrolment. Can the Minister understand why that fuels concern that a mini-job is simply a euphemism for a low-paid, low-skilled job that keeps women trapped in poverty?
The hon. Lady will be aware of the national insurance floor of roughly £100 a week. Many of these mini-jobs, as she describes them, will be below that and would not be covered by auto-enrolment anyway, but once such people are above the threshold for national insurance, they will be able to opt in should they want to. Moreover, if a mini-job occurs later in life and they have some track record of a connection with pensions, they might well have a conversation with their employer about opting in and triggering the employer contribution.
(13 years, 2 months ago)
Commons ChamberI thank my hon. Friend for that point, which reinforces why we should not accept the Government’s proposals and instead vote for this amendment. Simply to shrug aside the points that have been made or—as I suspect the Minister will argue—to pass on the obligation for meeting these costs to local authorities that are already feeling the strain of funding would be unfair and a great insult to many victims. Cancer patients are already the victims of the decision to time-limit the contributory employment and support allowance to just one year, as the Prime Minister now understands. Why should they be punished yet again at the hands of this Government when it comes to reforming DLA? We had controversy this morning about how cancer patients are being treated by this Government and now we have more concerns and more difficulties for cancer patients.
As it is carers week, it is also important to remember that when someone is having treatment in a hospital that may be some distance from home, there is also an impact on family members, who end up taking time off work and have to pay high travel costs. That has an impact on the whole family’s income, not just the person who is suffering the illness.
Indeed, and there is often an impact on the wider family, not just the immediate family.
We believe that the Government are misguided in their decision to lengthen the time disabled people must wait before they are given support. The Government are also wrong to remove automatic entitlement for certain severely disabled people who currently have the automatic right to receive the higher rate of DLA. At the moment, the severely mentally impaired—that is the language that is used—double amputees and those who are deaf-blind, undergoing haemodialysis or are severely visually impaired are automatically able to receive higher rates of DLA. Under the Bill, however, only those with a terminal illness will automatically receive PIP. Obviously I welcome the Government’s commitment to protect the terminally ill, but we believe that this obligation does not go far enough. Amendment 43 would ensure that those with a severely disabling condition, who are currently eligible for automatic entitlement, would retain that right following the introduction of PIPs.
It is important that we keep in mind the group of people whom we are talking about in the amendment. Is the Minister planning to inform the House today that an individual who is severely mentally impaired or a double amputee might not now be eligible for the higher rate of PIP? That would be quite an announcement. What reason is there to force this group of severely disabled people to undergo an assessment process of which we can all safely predict the outcome? We now know that the Government plan to spend £675 million on establishing PIP, on the bureaucracy of PIP and on the reassessment of 1.8 million working-age recipients of disability living allowance.
(13 years, 2 months ago)
Commons ChamberThe hon. Gentleman is of course correct, but I am sure that he would also agree that if someone comes to live and work in this country, receives benefit payments and then returns overseas, they carry with them an obligation that they should fulfil. That is the sole point that my hon. Friend the Member for St Albans (Mrs Main) was making, and it is one that I think Members on both sides of the House would see as common sense. There is freedom of movement across Europe, but we must make sure that the mechanisms are in place to ensure that our systems are not abused. The primary purpose of DEA is to enforce recovery where the debtor is in pay-as-you-earn employment and will not make other arrangements for debt repayment. I think that that is a sensible approach to take.
I apologise to the Opposition for the fact that we were unable to bring the new clause forward in Committee. It has been very carefully considered and discussed in our regulatory processes. We have brought it forward at this time and hope that they will not find it controversial. One of the reasons why I hope that they will not find it controversial is that there is currently something of an anomaly in the system. If someone incurs a penalty, for whatever reason, and remains in the benefit system, we can recover that money through a deduction from the benefit payments they receive. However, if they move into PAYE employment and basically say, “No way. Go away,” we currently have no mechanism for recovering the debt that is owed. That is the purpose of the measures that we are considering.
The rates of deduction will be determined in the regulations, which will include a safeguard to ensure that deductions do not take the debtor beneath a given level of earnings. That is necessary and common practice in the operation of similar arrangements in other parts of society where deductions are made—for example, with court-related penalties and deductions for child maintenance. It is essential that we do not deduct money at a rate that will tip the person concerned below a given level of earnings. It is, and will be, a basic principle that recovery of overpaid benefits should not cause undue hardship.
Will the Minister clarify whether any judicial process will be applied to attachments in relation to someone’s earnings? The reason I ask is because, as I am sure all hon. Members know, mistakes happen, sometimes because of errors on a claimant’s part but sometimes because of errors by the bureaucracy, and I am concerned that there may not be enough safeguards to ensure that attachments will not be made erroneously.
The hon. Lady makes an important point, and I will explain in a moment what rights individuals will have. It would of course be inappropriate to have a system in which a DEA could be applied and there was no comeback at all for the individual. A system that allowed no right of challenge or appeal would be wholly inappropriate, and I will explain in a moment why that will not be the case.
I have had this discussion within the Department. We have already brought forward a number of draft regulations—far more, I am told, than was the case under the previous Government, when, I was told, the instruction of Ministers was very much not to bring forward as many regulations. We have produced as much detail, if not more, about this measure than the previous Government did about their measures. They did introduce some sensible measures—for example, their reforms to introduce employment and support allowance, which was the project of the right hon. Member for East Ham himself—but they wrote a framework into their legislation and filled in the detail with secondary legislation.
One of the concerns raised by children’s organisations in Scotland is that not enough consideration has been given to the different statutory framework that pertains to child care in different parts of the UK. In particular, they are concerned that the existing child care infrastructure may not be able to cope with the increased demand that could arise from the introduction of universal credit. I appreciate that the Minister does not want to be drawn on the detail, but can he assure us that parents who are unable to access good-quality affordable child care will not face sanctions if, through no fault of their own, they are unable to find the child care that they need?
Of course, we already provide child care universally through our schools system. The truth is that no parent with a youngest child under school age can be subject to any job search-related sanctions. Only once their youngest child reaches school age are they subject to a work-search requirement and can face sanctions. Under the rules that are pursued at the moment, and under the provisions that we have clearly said will exist within universal credit, we will expect lone parents of children at primary school to do a part-time job only if that fits in with the hours of that school.
I am slightly surprised to hear the Minister describing school as a glorified babysitting service. The real pressure point pertains to older children, and particularly to out-of-school care. That is not covered across the UK by the Childcare Act 2006, which applies only to England and Wales. I urge him to take a closer look at that and to give the House the assurance that parents will not be penalised.
The point is that we do not penalise parents, particularly lone parents. We do not require them to pursue work; that is out of keeping with the reality of their child care responsibilities. I am not describing school as a giant babysitting service; I am saying that for a goodly part of the year children of school age are at school, and therefore do not need additional child care. The requirements placed on parents by Jobcentre Plus in relation to their job search and whether they take up employment are designed to work around what it is reasonable and what it is not reasonable for them to do. For example, we do not expect lone parents of school-age kids to work night shifts. I can certainly assure the hon. Lady that it is not our intention, nor will it be, to seek to sanction parents in relation to a job requirement that is unreasonable and unrealistic given their child care responsibilities.