Pensions and Long-Term Savings Trials (Self-Employed)
Guy Opperman Excerpts(5 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Automatic enrolment has transformed pension saving among today’s workers. Almost 10 million workers have been automatically enrolled into a workplace pension by their employer, and only 9% of those enrolled chose to opt out. And, this success is continuing with automatic enrolment continuing to be delivered and implemented successfully by employers, and increasing individual pension participation and savings levels as highlighted in the 2018 Automatic Enrolment Evaluation Report published today.
As part of the 2017 review of automatic enrolment the Government committed to scope, develop and test targeted interventions aimed at establishing what works to increase retirement saving among the self-employed.
I am pleased to announce that following the Government’s Good Work Plan published yesterday the Government are publishing the “Enabling retirement savings for the self-employed: pensions and long term savings trials! report. This report sets out our delivery plan for delivering research and trialling activity as a step towards implementing the Government’s manifesto commitment to increase retirement saving by the self-employed. This will provide an evidence base for future policy development, using insights from the success of automatic enrolment.
Our plan focuses on testing behaviourally inspired messages and tech tools, which may prompt self-employed individuals to save through a range of approaches in relation to both joining a pension scheme, and facilitating and making regular saving into pensions or other savings vehicles. The preparatory work has already started and trialling activity will go forward into 2019.
It will focus on three areas: marketing interventions aimed at people who are saving or have previously saved to encourage them to continue or recommence their saving behaviour; marketing interventions using trusted third parties to promote the value of saving and provide an easy connection to an appropriate savings vehicle; and behavioural prompts, such as messages delivered through payment mechanisms and/or banking interfaces, to seek to engage self-employed people to think about starting a regular saving habit.
The Department for Work and Pensions will be working with a range of delivery organisations and service providers for the self-employed to commence a programme of research and trialling activity, following preparatory work already done. The report published today is also a call to action to organisations in sectors including payment services; accounting services; self-employed workspaces and growing fintech firms, to work with Government to co-design and test interventions.
The report complements our agenda to empower and improve the consumer experience, in particular through the pensions dashboard and the Single Financial Guidance Body.
The Government’s long-term ambition is for future generations to have confidence in retirement saving—no matter what type of employment or self-employment they experience during their working lives—so that they can prepare for greater security in later life.
I will place a copy of the report in the House Library. These papers will be available later today on: www.parliament. uk/writtenstatements website.
[HCWS1194]
Single Financial Guidance Body Launch
Guy Opperman Excerpts(5 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Department for Work and Pensions is launching the Single Financial Guidance Body, established under s1 of the Financial Guidance and Claims Act 2018 in January 2019. The new body will deliver money guidance, pensions guidance and debt advice to the public. However, the launch date is in advance of the Department for Work and Pensions Supplementary Estimate 2018-19. This will give the confirming authority of the Supply and Appropriation Act to this expenditure. This will not be published until February, and not authorised until mid-March. In order to continue to provide these services to the public, DWP has therefore requested a Contingencies Fund advance.
Parliamentary approval for resources of £35,000,000 for this new service has been sought in the Supplementary Estimate for the Department for Work and Pensions. Pending that approval, urgent expenditure estimated at £35,000,000 will be met by repayable cash advances from the Contingencies Fund. This sum is equivalent and no different from existing resources.
Once Royal Assent to the Supply and Appropriation Bill is achieved, the advance will be repaid.
[HCWS1192]
Work and Pensions
Guy Opperman Excerpts(5 years, 10 months ago)
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Guy Opperman
Those affected by the 1995 Act changes were sent letters informing them of the change to their state pension age between 2009 and 2011, with letters sent to 1.2 million women. Those affected by the Pensions Act 2011 changes were sent letters between January 2012 and November 2013, which involved sending over 5 million letters with an accompanying leaflet. [Official Report, 8 February 2018, Vol. 635, c. 1693.]
Letter of correction from Guy Opperman:
An error has been identified in my closing speech.
The correct information should have been:
Guy Opperman
Those affected by the 1995 Act changes were sent letters informing them of the change to their state pension age between 2009 and 2011, with letters sent to 1.2 million women. Those affected by the Pensions Act 2011 changes were sent letters between January 2012 and November 2013, which involved sending over 5 million letters. Both lots of letters had appropriate supporting information.
State Pension: Women born in the 1950s
The following is an extract from the Westminster Hall debate on State Pension: Women born in the 1950s, on 22 November 2018.
Guy Opperman
Cohort life expectancy at birth in Scotland is currently 87 for men and 90 for women, and cohort life expectancy at age 65 in Scotland is currently 19 years for men and 21 years for women. [Official Report, 22 November 2018, Vol. 649, c. 425WH.]
Letter of correction from Guy Opperman:
An error has been identified in my closing speech.
The correct information should have been:
Guy Opperman
Cohort life expectancy at birth in Scotland is currently 88 for men and 90 for women, and cohort life expectancy at age 65 in Scotland is currently 19 years for men and 21 years for women.
Automatic Enrolment Annual Earnings Trigger and Qualifying Earnings Band Review
Guy Opperman Excerpts(5 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Automatic enrolment into a workplace pension has been a great success to date with over 9.9 million people having been automatically enrolled and all employers now having to comply with their automatic enrolment duties following the completion of the staged roll-out of the duties in March this year. More than 1.4 million employers have met their duties and overall annual pension saving for eligible employees has increased by £11.7 billion since 2012. The second phased increase in the minimum contribution rates to 8% will happen in April 2019.
The main focus of this year’s annual review of the automatic enrolment thresholds is to ensure the stability of the policy during the contribution increase next April. We also want to ensure that our approach continues to enable individuals, for whom it makes economic sense, to save towards their pensions whilst also ensuring affordability for employers and Government. The review has concluded that the earnings trigger will remain at £10,000 and both the lower and upper earnings limits will continue to be aligned to the national insurance contribution thresholds.
I intend to lay an order before Parliament in the new year which will include the following, for 2019-20:
£50,000 for the upper limit of the qualifying earnings band.
£6,136 for the lower limit of the qualifying earnings band.
The automatic enrolment earnings trigger will be maintained at £10,000.
I will place a copy of the analysis supporting the proposed revised thresholds in the House Library. These papers will be available later today on the www.gov.uk website.
Attachments can also be viewed online at: http://www. parliament.uk/writtenstatements
[HCWS1135]
Pensions Dashboards Feasibility Report and Consultation
Guy Opperman Excerpts(5 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Pensions dashboards will give consumers information about their pensions savings from multiple sources through an online service. Consumers will be empowered by the presentation of information, helping them to engage with their pensions savings. The service support informed decisions and prepare the consumer for the transition between working age and retirement.
Conscious of the complexity of this project, my Department has undertaken an extensive study of the elements required of pensions dashboards. The Government believe that dashboards will deliver for savers, and today we have published the feasibility report so starting the process of consultation.
It is my firm belief that industry is best placed to finance and deliver this project and to create a technical dashboard infrastructure. This will advance a range of dashboard options.
The Government have listened to views that suggest compulsion is needed to maximise pension scheme participation in a reasonable timeframe. We propose to act to deliver this legislation, when parliamentary time allows, and following the creation of a robust delivery model with the appropriate governance. It is not our proposal to compel all schemes to provide data—we have outlined limited exemptions. We will work with the regulators and industry to help ensure responsibilities to protect consumers are upheld, while ensuring the safeguarding of consumer data.
We have met with the Chair and the Chief Executive of the Single Financial Guidance Body. We believe that this body is ideally suited to oversee the industry delivery group. It will bring together industry representatives, FinTech and consumer organisations to ensure successful implementation. We propose that a non-commercial dashboard, hosted by the Single Financial Guidance Body, will offer an impartial service to those for whom there is not a commercial offering.
It is a continued priority of this Government, with the support of the pensions, financial services and consumer community, to restructure the UK’s pension savings culture against the backdrop of a new generation of savers. Dashboards will build upon the successful introduction of automatic enrolment, which has led to almost 10 million people either newly saving or saving more towards their retirement.
We are confident that the “Working together for the consumer” document, published today, demonstrates the Government’s and the Department’s strong and sincere belief that pensions dashboards have great potential to transform the pensions landscape for the consumer’s benefit. We look forward to receiving feedback and proposals as to how Government can best facilitate an industry-led delivery of this online service.
For ease of reference, I shall deposit a copy of the feasibility report and a related fact sheet in both Libraries of the Houses of Parliament.
[HCWS1130]
State Pension: Women born in the 1950s
Guy Opperman Excerpts(5 years, 11 months ago)
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Westminster 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.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
It is a pleasure to serve under your chairmanship, Ms Ryan. I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this debate and thank all individual hon. Members for their forthright and impassioned contributions.
The background is well known. The change, announced in 1993, was made for a number of different reasons, notably equality legislation and various cases in the European courts. At the same time, life expectancy and pressures on state spending were being considered. The reality of the present situation is that the number of people receiving a state pension is expected to grow by one third over the next 25 years, and by 2034 there will be more than twice as many people over 100 as there are now. The old age dependency ratio is projected to rise significantly over the next 20-odd years.
Following the passing of the Pensions Act 1995, the actual and projected growth in the pensioner population continued faster than anticipated, due to increasing longevity. As a result, the then Labour Government decided that a state pension age fixed at 65 was not affordable or sustainable. The Pensions Act 2007 was introduced, increasing state pension ages to 66, 67 and 68 years. The coalition Government, as has been explained today, set out further changes in the Pensions Act 2011, which accelerated the equalisation of women’s state pension age and brought forward the increase in men and women’s state pension age to 66, so that it would be completed by 2020. The Pensions Act 2014 then brought forward the increase in state pension age to 67 by eight years, so that it would be completed by 2028, and introduced regular reviews of the state pension age, the first of which was the Cridland review of 2017, to ensure that the system remains fair, sustainable and affordable for taxpayers on an ongoing basis.
There has been much discussion about life expectancy, which I will touch on briefly at this stage. The reality is that since the second world war there have been dramatic transformations in NHS care, in the quality of healthcare generally and in the nature of healthy lifestyles. Cohort life expectancy projections have also been transformed in that time, rising by more than 10 years for individual men and women. By 2018 those figures had increased by more than 10 years for newly born girls and by more than 12 years for boys, to 92 and 89 respectively. It remains the case that women live significantly longer than men. [Official Report, 17 December 2018, Vol. 651, c. 4MC.]
Grahame Morris
I wonder whether the Minister might address the issue I raised about not just life expectancy, but the anticipation of a healthy and active lifespan after retirement. Many of my constituents have worked in quite demanding occupations and are physically not capable of further work, which the Minister has previously suggested they should take advantage of. They really need to access their state pension.
Guy Opperman
I was going to come to that, but I will turn to that point now. I will deal first with general life expectancy and then with the point on healthy life expectancy.
On general life expectancy, I was going to answer the point made by the hon. Member for Glasgow East (David Linden), who is no longer in his place; I know we all have other commitments in other bits of the House today. The Office for National Statistics releases period life expectancy by local area of the UK, but not by individual parliamentary constituency. Life expectancy at birth in Glasgow is 73 years for men and 78 years for women, and it has increased by four years for men and more than two years for women since 2001 to 2003; it has increased in every area of the UK over the same period. Cohort life expectancy at birth in Scotland is currently 87 for men and 90 for women, and cohort life expectancy at age 65 in Scotland is currently 19 years for men and 21 years for women.
I turn to healthy life expectancy. The latest ONS statistics show that 65-year-olds in the UK are expected to live over half their remaining life in good health, at 11.2 years for women and 10.4 years for men. Healthy life expectancy as a whole has increased over recent decades, and healthy life expectancy at age 65 as a proportion of total life expectancy has been relatively stable since the year 2000. I apologise that I do not have the data for the specific area of the hon. Member for Easington (Grahame Morris), but I am happy to write to him on the specifics. I know his constituency very well; it is down the road from mine. In Scotland, healthy life expectancy at age 65 has increased in recent years. I believe that addresses that point.
I stand here defending not only the Conservative Government but the coalition Government and the Labour Government who were in power for 13 years, as well as the nine different Secretaries of State for Work and Pensions and 11 Pensions Ministers over that time, some of whom are still serving in this House today: the right hon. and learned Member for Camberwell and Peckham (Ms Harman); the Deputy Speaker, the right hon. Member for Doncaster Central (Dame Rosie Winterton); and the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper); and various other Members such as the right hon. Member for East Ham (Stephen Timms), the hon. Member for Wallasey (Ms Eagle) and the right hon. Member for Birkenhead (Frank Field), all of whom supported the policy changes that took place because of the increase in life expectancy.
Mrs Hodgson
I am grateful to the Minister for giving way. I was waiting until he finalised his point. This issue goes all the way back to when it started in 1995, under various Governments who had decades of opportunities to let people know about the changes. The ball has got to stop somewhere. The buck that gets passed around has stopped here with this Government. This is real now. These women are being left destitute. Given all the failures of the past, will he now do something to help the women rather than just say, “Oh, well, it’s not just me. Other people could have done something and didn’t.”? It is him now and he can do something about it.
Guy Opperman
The issue of communication has been addressed on an ongoing basis in this House and in the Work and Pensions Committee, which did a highly detailed assessment of the matter a couple of years ago. The matter began in 1993 and received considerable publicity at the time. Since 1995, the Government have gone to significant lengths to communicate the changes in various ways—
Guy Opperman
She asked me the question—let me finish. The Government have gone to significant lengths to communicate the changes to ensure that those affected were fully aware of their rights. That has been done using a range of formats, communication methods and styles—as I have explained, it has been gone through in a multitude of ways by the Work and Pensions Committee—including communication campaigns, information online, and individual letters posted to approximately 1.2 million women who were directly affected by the 1995 Act changes. A further 5 million letters were sent later to those affected by the 2011 Act changes between January 2012 and November 2013. Between April 2000 and the end of September 2018, the Department for Work and Pensions provided more than 24 million personalised state pension statements, and we continue to encourage individuals to request a personalised state pension statement.
On transitional arrangements, the coalition Government and previous Governments gave careful consideration to a range of options that were debated at great length in this House on repeated occasions. The matter was debated during the passage of the 1995 Act, the 2007 Act, the 2011 Act and the 2014 Act. Any amendment to the current legislation that created a new inequality between men and women would unquestionably be highly dubious as a matter of law. Secondly, causing younger people to bear a greater share of the cost of the pension system in that way would be unfair and would undermine the principle of intergenerational fairness that is integral to our state pension reforms.
Mrs Hodgson
On that point about intergenerational fairness, we have to factor in the unfairness that the 1950s women face for all the reasons that have been set out: historical reasons such as paying a lower stamp, women not working as often as men, and spending time at home when they had children. With regard to intergenerational fairness, I think the younger generation accept that it is different for the 1950s women.
Guy Opperman
I take the hon. Lady’s point, but that matter was unquestionably considered by female Ministers such as the right hon. and learned Member for Camberwell and Peckham and the right hon. Member for Normanton, Pontefract and Castleford. As the matter has been debated on an ongoing basis, it has been an evolutionary process throughout the past 23 years. I am the latest of many different Ministers who have stood in this post, and I continue to defend the actions of Governments and Ministers who went before me.
Guy Opperman
I will give way to the hon. Lady, but first I want to address the point about complaints that was raised by the hon. Member for Weaver Vale (Mike Amesbury) and others.
A number of different processes were raised in respect of complaints, including departmental complaints. The Government have worked extensively—there is no change in the policy approach to departmental complaints under this Government or previous Governments—to engage with a significant amount of correspondence from women who have contacted them on this issue. There have been approximately 8,000 complaints on the topic and a significant amount of resource has been dedicated to it. The Government believe there has been no maladministration within the Department for Work and Pensions with regard to the communication of state pension age changes under this or previous Governments.
We have an Independent Case Examiner. If the House will bear with me, I will explain the processes. The steps the Department took to notify the general public about changes to state pension age have undergone additional scrutiny by the Independent Case Examiner, an independent office holder who reviews complaints about the Department for Work and Pensions. The Independent Case Examiner does not consider policy or legislative issues, but examines whether the Department for Work and Pensions has appropriately administered stated policies or procedures. The Independent Case Examiner’s team has concluded investigations into approximately 185 women’s state pension cases to date, and in every case there was no finding that the Department had failed to provide appropriate notice of the changes.
I will finish the last two aspects on complaints and then I will give way to the hon. Member for Paisley and Renfrewshire South.
We also have a Parliamentary and Health Service Ombudsman. Some complaints have been escalated to the ombudsman, who has identified a sample of cases that they feel reflect the issues raised in the WASPI complaints. They are now considering whether to investigate, and, if so, the scope of that investigation. Should they decide to investigate, the Government will co-operate in full with that process.
Finally, colleagues will be aware that there is an ongoing judicial review application. It would be inappropriate for me to comment in any detail on the legal case. I can confirm that the High Court has refused the claimant permission to apply for judicial review, but I understand there is a reapplication for oral permission. I spent 10 years both suing and defending the Government as a judicial review lawyer. My last client was a gentleman by the name of Ed Balls when he was Secretary of State for Children, Schools and Families. I will not comment on the merit of the matter, because it is for an individual judge to decide. Now I give way to the hon. Lady.
Mhairi Black
I am genuinely grateful to the Minister for giving way; no doubt I am probably getting on his nerves after all this time. Can the Government not concede that there has clearly been terrible communication? It was 14 years before letters went out, and now that women are coming forward and saying how hard this issue is hitting them—and bearing in mind the lives and the inequalities that they have suffered—the Government are still not listening to them. When he talks about intergenerational fairness, my generation is looking at how the Government are treating the older generation because they are our aunties or grannies, so how can we have any faith in the pension system? Will there even be a pension system years from now?
Guy Opperman
The point of having a balance between spending on state pensions and the number of people coming into receipt of the state pension is to ensure that there is a state pension in the future. With a larger number of people becoming pensioners, any Government has to make assessments, as has been shown, and that is what has happened.
Guy Opperman
I will give way in a second. First I will address the poverty point.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) raised the issue of poverty and others have raised the United Nations report. In the early 1970s, roughly 40% of pensioners were in relative poverty. That figure is now down to 16%, one of the lowest rates since comparable records began. No one disputes that more has to be done, but that is a significant improvement. Since 2010, there are 200,000 fewer pensioners in absolute poverty before housing costs. That is a record low. The reality is that we spend approximately £121 billion on benefits for pensioners, which includes the £97 billion spent on state pensions this year—2018-19. The overall trend in the percentage of pensioners living in poverty is of a significant fall over several decades. At the same stage, the basic state pension has risen by £660 more than if it had just been uprated by earnings since 2010.
Ben Lake
I understand the Minister’s argument about the need to ensure that the number of people entering the state pension system is equalled out, but surely if we are to readdress the matter or rebalance any imbalance, it would be far fairer to do so for those in my generation, who have decades to plan for our pension and retirement, than to punish the women who for decades worked and strove, in the reasonable expectation of retiring on a particular date.
Guy Opperman
That is the debate that, clearly, has to be held. I return to the point that the decision was originally taken in 1993 by my—then very youthful— right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and was supported by a series of Governments and Ministers way more experienced than I am, who have been here over the past twenty-something years. I am merely continuing that debate and discussion about how we progress.
Patricia Gibson
I thought I heard the Minister say that there had been a fall in pensioner poverty. That leads me to question where he gets his information. The UN special rapporteur was clear: between 2012-13 and 2016-17 there was a 300,000 rise in pensioner poverty in the UK, which he specifically linked to the rise in state pension age. Is the special rapporteur wrong?
Guy Opperman
We may take some time to dissect the specific figures on that, but I will attempt to do so—[Interruption.]—if the hon. Lady bears with me.
One starts with the basic principle that the figure used to be at 40% for relative poverty and is now down to 16%. The reason for the 300,000 increase is that more pensioners are in relative poverty after housing costs. That is the issue in relation to relative poverty, because in the past few years the housing costs of those of working age have reduced, because of lower mortgage rates. That reduction in housing costs increases income for those with mortgages, and that pushes median income up. That then feeds through to increase the number of pensioners who are below the 60% of median income poverty line, as the vast majority of pensioners do not have a mortgage and so do not see any benefit from lower mortgage rates. There can be a discussion about relative and absolute poverty and how to measure them, but the overall trend is dramatically down for such poverty, and I believe the explanation of what the rapporteur said is as I have just set out.
I have not addressed the specific point about the Scottish National party proposals and the vexed question of the Scotland Act 2016. As I understand it, various previous proposals—and specifically the one outlined today—would reverse the 2011 Act in its entirety. The SNP’s projected cost for that is £8 billion. We manifestly disagree and suggest it would be in the region of £30 billion, with further costs as long as women’s state pension age was below 66.
As to the Scotland Act powers, I accept that the hon. Members for North Ayrshire and Arran and for Paisley and Renfrewshire South (Mhairi Black) and I have had robust debate on many such occasions, but I would always say as I have previously, “Don’t take this from me.” I will read the letter from Jeane Freeman of 22 June 2017, in which she sets out what payments can potentially be made under sections 26, 28 and 24 of the Scotland Act 2016. Under the heading of section 26 she states:
“This power is limited to providing help with ‘short term needs’, and those needs must require to be met to avoid a risk to a person’s wellbeing… Their needs and the risks to their well-being would have to be assessed individually.”
Guy Opperman
I will set these things out, and then the hon. Lady can come back at me.
On the creation of the benefit under section 28, I point out with great respect to the hon. Member for Paisley and Renfrewshire South that in paragraph 3 of the same letter, her own party’s Pensions Minister in Scotland rebuts the point on old age—and she puts “old age” in inverted commas:
“I accept that ‘old age’ is not defined in the legislation, and that most people would not regard this age group as old”.
Under section 28, there is the capability to create a new benefit. That is the heading that Jeane Freeman gives to the relevant part of the letter: “Creation of a new benefit using section 28”. Finally, the situation on top-up and reserve benefits under section 24 is also set out.
Mhairi Black
I am very appreciative again that the Minister has given way. I want to say something very directly. First, if he is suggesting that the Scottish Government should mitigate the situation, that does not solve the problem for the rest of the UK, where women are suffering just as much. Secondly, that leads me to question who is responsible. If he wants us to take the burden, will he devolve pensions control to us to let us do it? Currently he is saying, “With the limited powers you have, try and fix this whole problem.” It is like giving us control over the window wipers and complaining about the direction of the car. What he suggests has nothing to do with the issue. Does the Minister support the Scottish Government taking full responsibility for pensions?
Guy Opperman
I am not going to re-litigate and re-debate the Scotland Act 2016. I accept that the Scottish Parliament cannot provide assistance by way of a pension to individuals who qualify by reason of old age. However, those who have not attained state pension age are, by definition, of working age, and are not therefore being provided support by reason of old age, and therefore the restriction relied upon by the hon. Members for Paisley and Renfrewshire South and for North Ayrshire and Arran does not apply.
We spend about £50 billion a year on welfare disability support in this country, and the key choice facing any Government of any form when seeking to control and manage state pension spend is whether to increase the state pension age or to pay lower pensions, with an inevitable impact on pensioner poverty. The only alternative is to ask the working generation to pay an ever-larger share of their income to support pensioners. Successive Governments have made appropriate, difficult decisions to equalise and increase the state pension age, and we do not intend to change that today.
Oral Answers to Questions
Guy Opperman Excerpts(5 years, 11 months ago)
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Kevin Foster (Torbay) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The pensions dashboard is the great leap forward for the pensions industry, and the Government are 100% behind it. We have consulted the industry at length and will publish our feasibility study very shortly.
Kevin Foster
I thank the Minister for his answer. The pensions dashboard will be a welcome addition to the information available to Torbay residents about their retirement plans. What work will the Government do, though, to ensure that pension schemes relating to employers of all sizes are included?
Guy Opperman
In Torbay, 7,000 people now have the benefit of an auto-enrolled pension. We want to ensure that my hon. Friend’s constituents have online access to as much of their retirement savings in one place as is humanly possible through the pensions dashboard, and that is what we are going to do.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Many of my constituents contacted me to express concern that the Government were going to scrap the pensions dashboard. I welcome the Minister’s 100% commitment, but can he tell us exactly when it is going to be delivered?
Guy Opperman
The hon. Gentleman will understand that a feasibility study and consultation are pending, but I will be happy to discuss the dashboard with him in more detail if he will bear with me. There is no question but that the thousands of people in his constituency who have had the benefit of auto-enrolment, and the many thousands of employers supporting those employees, will be benefiting from the process.
Mr Gary Streeter (South West Devon) (Con)
Julie Elliott (Sunderland Central) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Universal credit allows claimants to work and earn more, and the evidence is that people on universal credit are moving into work faster. We believe that everyone who can work should be given every support to get into work. That is what the job coaches are doing.
Julie Elliott
The Child Poverty Action Group found that almost half of those moving on to universal credit needed support, which is often not available, to set up their claim. If they miss their deadline, they receive no transitional protection and no back-dated credit, and they have to wait a further five weeks for payment. With the new Secretary of State leading the Department, is it not time for the Government to pause the roll-out of this benefit and look again at wiping out these very, very serious wrongs in the system?
Guy Opperman
If the individual claimant is vulnerable, there can be backdating, but for those who need extra support, there are advances of 100% from day one and also budgeting support. We are creating a brand new partnership with Citizens Advice to deliver a better universal support service.
Ms Karen Buck (Westminster North) (Lab)
New figures confirm that one in five jobs in London is now low-paid—below the London living wage. That is the highest proportion there has ever been, so working people are also in poverty and need the protection of universal credit, yet the qualifying period is casting many families into very severe hardship. What action will the Minister take to deal with that problem so that people can understand that work will pay, rather than casting them further into hardship?
Guy Opperman
The hon. Lady will be aware that the Government introduced the living wage, which is enhanced annually, and that we raised the tax threshold, which assisted individuals. She will also be aware that there is child support for education and that we are freezing fuel duty. All these cost-of-living measures have been of assistance to local people.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The UN’s damaging report highlights Wales as having the worst poverty rate in the UK, but because social security powers are not devolved to Wales, the Welsh Government are scarcely able to replicate the Scottish Government’s excellent work in alleviating Westminster-driven poverty. Will the Minister commit to stopping the roll-out in Wales until the present problems are resolved and propose the devolution of universal credit powers to enable our country’s Government to reduce poverty and suffering?
Guy Opperman
My understanding is that 46 out of 59 offices in Wales have now rolled out the full UC service. The hon Lady will be aware that household incomes have never been higher and that 1 million fewer people are living in absolute poverty compared with in 2010, including 300,000 children.
Helen Hayes (Dulwich and West Norwood) (Lab)
Henry Smith (Crawley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Nearly 10 million people are enrolled in a workplace pension thanks to the success of automatic enrolment. In the Crawley constituency, approximately 48,000 eligible jobholders have been automatically enrolled, and thanks are due to the 1,600 employers who have fulfilled their duties locally.
Henry Smith
Will my hon. Friend join me in paying tribute to Crawley-headquartered B&CE and its People’s Pension for playing such an important role in that roll-out of pensions?
Guy Opperman
It was a delight to visit The People’s Pension with my hon. Friend, to see the hundreds of local staff who are doing such a fantastic job and the work that the company is doing as a great local employer, to receive a Crawley Town football shirt—I must confess that I have not yet worn it—and to support a great local business.
Jack Dromey (Birmingham, Erdington) (Lab)
Auto-enrolment was a landmark achievement, a creation of the last Labour Government. I welcome the progress that has been made, but does the Minister agree that the threshold is too high—37% of female workers, 33% of workers with a disability, and 28% of black, Asian and ethnic-minority workers do not enjoy auto-enrolment—and that it cannot be right for workers under the age of 22 to be excluded?
Guy Opperman
I think that the hon. Gentleman will accept that while auto-enrolment has been a cross-party success story, it was this Government who actually introduced it. The issue that he raises was comprehensively addressed by the 2017 auto-enrolment review, which was conducted by three independent support organisations, and the key points that he raises are being addressed in the current AE review.
Victoria Prentis (Banbury) (Con)
Collective Defined Contribution Pension Schemes
Guy Opperman Excerpts(5 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Today the Government are publishing the consultation paper on collective defined contribution schemes. This sets out our vision for this new form of occupational pension scheme. We will be seeking stakeholder views on how we can best implement such schemes. CDC schemes will offer a new option for employers looking to help their employees save for retirement. A copy of this document will be placed in the Library of the House.
The UK has a world-class occupational pension system—but there are always opportunities for further innovation where this can benefit savers and businesses alike. The Work and Pensions Select Committee recently published a report calling for the adoption of CDC schemes in the UK: the Government welcomed this report and are grateful to the Committee for its support and advice. It is important to be clear that CDC schemes are not a panacea, and that members could see their pension incomes fluctuate. However, as the Work and Pensions Select Committee so clearly recognised, a robustly designed and appropriately regulated CDC regime can offer positive outcomes for both employers and pension savers. The Royal Mail and the Communication Workers’ Union are already working closely together to establish a CDC scheme, which the Government see as an encouraging sign of the consensus in this area.
Saving for retirement is an extremely important part of people’s financial planning, representing their hopes for the future. Throughout the last decade, the Government have therefore worked closely with the pensions, financial services and consumer community to strengthen the UK’s pension savings culture. Together we have transformed the pensions landscape, delivering social change on an unprecedented scale. The establishment of CDC pension schemes is a key strand of this work.
[HCWS1075]
Youth Obligation
Guy Opperman Excerpts(6 years ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I congratulate the right hon. Member for East Ham (Stephen Timms) on securing this debate. I have been asked to respond because the Minister for Employment sadly cannot be here.
Everyone on the Government Benches acknowledges that the right hon. Gentleman should be on the Opposition Front Bench, given his massive experience at the Department for Work and Pensions, and I welcome this opportunity both to debate this matter and to discuss in the more detail the subject of youth employment, which I think motivates every single Member of Parliament. We all want to improve the life chances of those whom we represent.
Nationally, the employment rate for 18 to 24-year-olds not in full-time education is 77%, which is up eight percentage points from 69% in 2010, and only 4.3% of young people aged 16 to 24 are unemployed or not in full-time education, which is a fall of 350,000 since 2010. Moreover, the national unemployment rate for this age group is 10.8%, as the right hon. Gentleman set out, which is a record low. It is worth commenting briefly that the decrease in youth unemployment is markedly better than that in the EU. When one compares our record low youth unemployment rate with that in Spain, at 34%, Italy, at 32%, France, at 21%, and Greece, at 39%, one realises that there has genuinely been a transformation, and one that I believe is among the driving successes of this Government. We all accept, I believe—I think the right hon. Gentleman accepts this—that the single biggest driver of social mobility and improvement of life chances is work, and the reality is that the universal credit programme and the Government reforms since 2010 are helping to create an employment revolution in this country, which is a massive improvement on the old system.
The statistics reflect a real achievement, but while this is worth celebrating we must not be complacent. That is why the Government have introduced a wide range of support for younger people. The principle of support for young people is well known to the right hon. Gentleman; it has dated back through many different Governments and generations and has been developed by the DWP in collaboration with a variety of organisations. We recognise that providing early targeted help at the start of a young person’s adult life helps them secure work and avoid unemployment. It is in that context that we introduced the youth obligation support programme.
The programme is for people aged 18 to 21 who make a new claim in a UC full service jobcentre. It is worth understanding how this programme came into being, and I will briefly outline that. We believe it takes the best types of support that previous individual evaluations have shown to work and puts them together in a single programme. The support starts with the intensive activity period. In 2016, the Department published an evaluation of this approach by the Institute for Employment Studies. It reported that it had an immediate positive behavioural effect on participants. It increased their confidence, and meant they engaged in a wider range of job search activities and made job applications to a higher standard. Earlier this year, the Work and Pensions Committee recognised in its youth employment report of 2018 that the Department had conducted a good quality trial of intensive activity. It said that the intensive activity element of the youth obligation should help young people overcome key barriers to work. We believe it encourages young people to think more broadly about their skills and job goals and identify any training they may need.
An example that applies to both the programme under discussion and the traditional model for younger people are sector-based work academies, which last for up to six weeks and include work experience, some bespoke training and a guaranteed interview for a real apprenticeship or other job. The Department published a quantitative impact assessment in 2016 that showed that young people who took part in this type of support spent on average considerably more days in employment and considerably fewer days on benefit than those who did not take part, and I know it had some success in the right hon. Gentleman’s constituency of East Ham, particularly utilising the work of his local colleges.
Stephen Timms
I am grateful for the way the hon. Gentleman is answering my questions. Does he have any information about how many participants on the youth obligation programme had the opportunity of the sector-based work academy to which he refers?
Guy Opperman
I am going to come to the specific points the right hon. Gentleman raises on numbers and data, but let me make a quick point before returning to my speech. We are in utter agreement that data and statistics are needed on a long-term basis—no one is disputing that—and he will know from his knowledge of the DWP that it likes to focus on long-term figures. However, I am not in a position to give individual numbers in answer to that specific question.
However, the right hon. Gentleman surely accepts that sector-based work academies, which occur in many different types of profession but in particular teaching, retail, hospitality, transport and logistics, social care, manufacturing and engineering, are one of the most successful innovations that apply to all young people whether on the YOSP or the traditional support provided by jobcentres.
In addition, there are traineeships. Like the right hon. Gentleman, I have visited a multitude of jobcentres. In the last year, I have been from Hastings and Chichester in the south to Banff in northern Scotland, from Basildon to Blackpool last Friday, to Birmingham and Lambeth in London, and in the last four years I have hosted a jobs fair in Hexham and worked with my jobcentre, and I have seen the impact of traineeships, which are another part of the YOSP that are utterly key. I must mention Release Potential in my constituency, which provides these traineeships for younger people on an ongoing basis up and down the country, and I have seen their success.
The right hon. Gentleman will realise that this programme began only in April 2017 and that it is still being rolled out around the country. More than 500 jobcentres are now offering this support, but some started only this week. I accept that others started in April 2017, but I believe that the programme still has to be rolled out to 22 jobcentres before completion takes place at the end of this year. In his own area, jobcentres have strong links to Barking and Dagenham College, and there is also specialist guidance on training, apprenticeships, the Prince’s Trust, the movement to work programme, the construction skills programme and English language classes.
I want to address a couple of points that the right hon. Gentleman raised. I take on board his suggestions, which have been noted, on statistical evaluations and pathways. He will understand that the Department takes these matters very seriously, and I will ensure that they are taken back to the Minister for Employment. As I have said, the programme is still being rolled out, and the automated management information process is still being developed as we speak. He raised the matter of young people in particular, and there is one point on which I want to push back. He said that the was no other programme for young people, but he will surely know that the Department is committed to providing targeted support for all young people, including those who are still claiming jobseeker’s allowance or claiming through the universal credit live service. The traditional JSA includes basic skills training, traineeships and support funded through organisations such as the Prince’s Trust. There are also opportunities involving sector-based work academy placements for those individuals. It would therefore be wrong to suggest that there is no other programme over and above the youth obligation support programme.
I repeat that we collect information on each individual claimant, but there is not at this stage an aggregated assessment of the kind that the Department traditionally produces. However, the right hon. Gentleman will under- stand that this programme started only in April 2017, that it has not finished being rolled out and that in some jobcentres it started only in the last week. With respect, therefore, I would say to him that we believe the programme is becoming more mature every day, that we are continuing to test and learn and that we are holding workshops with work coaches to get their insight into what works well and into the local barriers that 18 to 21-year-olds can face in the labour market. We are also collating and sharing good practice, and we will obviously take on board the reports that he has outlined today, including the one that came out just this morning. We are genuinely committed to ensuring that any 18 to 21-year-old, whether they are from East Ham or Hexham, Carlisle or Cardiff, has the ability to work towards securing an income, to develop their skills and to improve their life chances. After all, that is what this is all about.
Question put and agreed to.
Oral Answers to Questions
Guy Opperman Excerpts(6 years ago)
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Liz Twist (Blaydon) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The online system has been designed with accessibility in mind, and it has been audited and approved by the Royal National Institute of Blind People for all accessibility needs. Face-to-face and telephone support are in place for those vulnerable claimants who cannot self-serve online.
Liz Twist
Many disabled people are already having problems claiming universal credit. With the regulations for managed migration expected shortly, the Disability Benefits Consortium fears that many people with disabilities will fall through the cracks and lose transitional protection. What steps is the Minister taking to ensure that people with physical or mental disabilities are given the specialist help they need to migrate, and should we not delay migration until that is sorted?
Guy Opperman
There is extensive engagement with the various organisations, and the Department is working hard to ensure there is full support for the disabled claimant, whether that is through the severe disability premium or our recently announced universal support fund.
Stephen Kerr (Stirling) (Con)
Mike Wood (Dudley South) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
An industry-led pensions dashboard, facilitated by Government, will harness industry innovation and provide an opportunity for the pensions industry to step up and take a leading role. We have engaged with the industry and are assessing the feasibility of a dashboard. We will report shortly on the findings.
David Warburton
Ten thousand of my constituents have been automatically enrolled on the pensions dashboard under this Government. Will the Minister confirm that this is one of many options for my constituents for receiving pensions information, and that the dashboard will remain firmly in place?
Guy Opperman
My hon. Friend is right. The dashboard will transform how his constituents keep track of their growing number of pensions. This, along with the Single Financial Guidance Body, which the Government set up last year, will provide free and impartial information and guidance to help people plan for their retirement.
Nigel Huddleston
Will the Minister explain how the development of this online system will benefit my constituents?
Guy Opperman
Some 15,000 people in my hon. Friend’s constituency have been auto-enrolled thanks to the 2,010 employers supporting the system. As auto-enrolment expands, there will be a number of different pension pots, and having an online tool that everybody can access will be a massive addition for his constituents.
Mr Speaker
If the Minister could be good enough to face the House, it would be hugely appreciated.
Guy Opperman
It was a pleasure to visit my hon. Friend’s constituency in the summer and to meet many of the 10,000-plus people there who are auto-enrolled. We are in daily contact with industry figures as we prepare our feasibility report and plan for the roll-out of the dashboard.
Mr Jim Cunningham (Coventry South) (Lab)
Will the Minister give us a date for full implementation of the dashboard?
Guy Opperman
I am sure that the hon. Gentleman will be pleased to await the feasibility report that is pending.
Nick Smith (Blaenau Gwent) (Lab)
Will the pensions dashboard be clear about all the costs related to its production?
Guy Opperman
That is part of the feasibility study and something that we are looking at on an ongoing basis, but I am happy to discuss this in more detail with the hon. Gentleman.
Jack Dromey (Birmingham, Erdington) (Lab)
It is nothing short of astonishing that the Secretary of State sought to pull the plug on the groundbreaking cross-party pensions dashboard, designed to help workers know what they have saved and what they have to save to ensure a decent income in retirement, and all easily accessible in one place. Will the Minister now ensure an obligation on providers to supply the necessary information to the pensions dashboard, and can we be confident that the Secretary of State, whose capacity to get it wrong knows no bounds, will not make a renewed attempt to thwart the pensions dashboard?
Guy Opperman
Is it not rich that the Labour party, which never came up with or implemented a pensions dashboard, is criticising us, who are doing exactly that? Let me make it acutely clear that this is a party that works together, and that my right hon. Friend the Secretary of State and I, and all the members of the DWP team, are completely behind the pensions dashboard.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Some 10,000 of my hon. Friend’s constituents are benefiting from automatic enrolment, with thanks to the 1,800 employers involved, and nationally workplace pension provision for women and young people has now doubled in the last five years.
Stephen Timms (East Ham) (Lab)
Paul Masterton (East Renfrewshire) (Con)
I warmly welcome the announcement by the Under-Secretary of State, my hon. Friend the Member for Hexham (Guy Opperman), of a consultation on collective defined contribution schemes. However, I had anticipated that it would come out before my ten-minute rule Bill on Wednesday. Will he give us an update as to when we might see it?
Guy Opperman
I am delighted that my hon. Friend has raised this point. The consultation will be of assistance to Royal Mail and the thousands of posties in his constituency. We will be consulting on the matter very shortly.