Social Security
Harriett Baldwin Excerpts(3 months, 1 week ago)
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Liz Kendall
My hon. Friend is absolutely right. I would make that point in response to the faux outrage of Conservative Members, who left 880,000 pensioners, the very poorest, not getting the pension credit they are entitled to. I urge all hon. Members to work with us that their local councils to ensure pensioners get the money to which they are entitled.
As my right hon. Friends the Chancellor and the Prime Minister have said, this is not a decision we wanted or expected to make, but when we promised we would be responsible with taxpayers’ money we meant it, because we know what happens when Conservative Members play fast and loose with the public finances: working people and pensioners on fixed incomes pay the price with soaring interest rates, mortgages and inflation.
Dame Harriett Baldwin
I thank the Secretary of State. Will she confirm from the Dispatch Box that if every pensioner who is eligible for pension credit takes it up, the cost to the Exchequer will actually be substantially more than the savings from axing the winter fuel payment?
Liz Kendall
Is that the reason why Conservative Members never took the action needed to increase pension credit uptake? We take a different approach. All the savings the Chancellor has announced take into account the increased uptake that we want and intend to achieve. When money is so tight, it cannot be right that all pensioners, including some of the wealthiest pensioners, receive a payment worth £200 to £300 a year regardless of their income.
Oral Answers to Questions
Harriett Baldwin Excerpts(1 year, 3 months ago)
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Mel Stride
Given that there has never been a Labour Government who have left office with unemployment anything other than higher than they found it in the first place, I do not think I would leave employment to Labour. On the hon. Lady’s point, economic inactivity is important and it is a major focus for my Department. It has of course reduced substantially since its peak during the pandemic, having fallen by around 350,000.
Harriett Baldwin (West Worcestershire) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
The Government recognise the pressures people are facing and we have acted. We are providing cost of living support worth over £94 billion between 2022 and 2024 to help households and individuals with those rising costs. That includes cost of living payments totalling up to £900 in 2023-24 for over 8 million households on eligible means-tested benefits. We successfully delivered the first payment of £301 to 8.3 million households earlier this year, and the second payment of £300 will be paid in the autumn.
Harriett Baldwin
The Government are indeed giving generous cost of living support to households on certain means-tested benefits this winter, but if someone is on one of those means-tested benefits and they earn £1 more, they have the potential to lose the full payment. I wonder if the Minister has noticed any change in people’s behaviour as a result of that disincentive to take on extra work.
Mims Davies
It is vital that those on low incomes, or indeed those who are keen to work more, see the incentives. In the spring Budget, we announced an ambitious package of measures to support people to take up work and, importantly, to progress by making sure that they are always better off. We are also supporting them with a significant investment in childcare and, of course, the largest ever cash increase to the national living wage, taking it up to £10.42. I would say to those people that they should look at the benefits calculator on gov.uk, because they will always be better off in work.
Oral Answers to Questions
Harriett Baldwin Excerpts(3 years, 9 months ago)
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Dr Coffey
I have not yet responded to that letter—I understand that officials will be responding to the embassy —partly because, and some of the aspects of this have been raised, I wanted to explore some of what our policies—[Interruption.] The hon. Gentleman is trying to intervene and I am trying to give him an answer. [Interruption.] I think I have probably said enough as he does not want to hear the answer.
Harriett Baldwin (West Worcestershire) (Con) [V]
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
We welcome the involvement of all employers of all sizes in all sectors in the kickstart scheme. We have made it even easier to bring in small employers and sole traders by developing an important kickstart gateway-plus model to accommodate their specific needs. They can apply through an approved gateway-plus organisation that can provide a suitable pay-as-you-earn scheme process for young people on placements with them. With regard to working on agriculture, I am engaged with Department for Environment, Food and Rural Affairs Ministers on this and we are focused on supporting all sectors that need labour. There is a covid economy and growing jobs in some sectors and we are keen to support them.
Income Tax (Charge)
Harriett Baldwin Excerpts(3 years, 9 months ago)
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Harriett Baldwin (West Worcestershire) (Con)
Unlike the hon. Member for Norwich South (Clive Lewis), I think that this was a Budget that put in place the genesis of a strong recovery. It is one that supports people and businesses through the pandemic, and puts the economy in the best possible position to bounce back strongly in the second half of this year. Every vaccination is boosting the chances of a vigorous recovery with strong job creation. I put on record my thanks to everyone who is helping with the blistering pace of vaccination roll-out across the country, and say, “Please, when you’re offered your vaccination, have one right away.”
The Chancellor’s Budget also began the process of repairing our public finances. The Treasury Committee report, which we put out this week, on tax after coronavirus stated that the public finances are on an unsustainable path and even a strong recovery may not be enough to bring current spending back into balance. Every expert we heard from some said that the economy still needs both loose monetary and fiscal policy now, but it is right that the Budget put in place fiscal tightening that comes down the road. It is not right away, but it needs to be there for the year after next.
There are some really innovative measures in the Budget. The super deduction on capital investment is a huge signal to business and should shift the long-standing under-investment by businesses in our economy. The future fund breakthrough will tackle another challenge: the difficulty that small businesses find scaling up capital to go from being a small business to being a big, high-growth businesses. The Help to Grow initiative offers business education, and will help the long-standing challenge in our country of low productivity in the small business sector. The Budget gives the great entrepreneurs and business owners in this country the very best chance to rebound from the lockdown.
We all know that economic forecasts are bound to be wrong, and I hope that the OBR’s forecasts will prove to be far too pessimistic; however, I was also struck by one of the Chancellor’s phrases about the sensitivity of the UK Government debt to interest rates. He said that a 1% increase in rates would add £25 billion to current spending because of the size of the debt. That is a truly startling statistic. It reminded me of a phrase from James Carville, the US political strategist of the 1990s, who said that, when he died, he wanted
“to come back as the bond market”
because it intimidates everyone.
Rates are low today because the Bank of England is buying £895 billion through quantitative easing. The Bank of England is doing that because of the deflationary shock in the economy, but that could change. The Bank is independent. It is possible that the economic rebound leads it to conclude that current rates are too low to keep inflation under control. I am a fiscal conservative above all. A budget deficit is simply a tax increase or a spending cut that we are not prepared to do today, but are prepared to pass on to another generation.
I know I sound a bit like Cassandra, but I worry about the bond market and that it might decide to reprice. I am probably one of the few MPs in this House who traded bonds during the markets of 1994. I assure Members that yields can rise very fast, which is why personally I would have preferred to see a lower budget deficit next year—not the 10% planned and the £234 billion deficit budgeted for. There are measures that could have been implemented, such as freezing income tax allowances immediately, reactivating the fair fuel stabiliser, widening the sugar tax to tackle obesity, adding a small surcharge on online deliveries, and raising the cost of carbon.
All those things would have been practical, and I think we could have brought the public with us. Given the unpredictable character of the bond market, it could have been a prudent decision. It would also have meant that the big cut to the UK aid budget would not be needed. As the Chancellor knows, I personally am ashamed that we are breaking our manifesto pledge to the world’s poorest. I would be interested to hear from the Minister when the vote on this measure is likely to come before the House because, as things stand and given that we have 0.7% in statute, the Government are currently planning to break the law next year, and I am sure they will want to rectify that before long and test the opinion of the House.
I am confident that this Budget puts in place the best conditions for a strong recovery for jobs and the livelihoods of the British people. I add that note of warning that we should not be bouncing back on the backs of the world’s very poorest. As a former bond vigilante myself, I add that further message of caution that the Chancellor may need to take some further tax measures next year if the growth rebound alone is not bringing the current budget deficit down fast enough.
Oral Answers to Questions
Harriett Baldwin Excerpts(3 years, 10 months ago)
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Justin Tomlinson
We are doing absolutely everything we can to ensure that claimants are accessing the support as quickly as possible, which is why we introduced at pace telephone assessments and now video assessments. Wherever possible, we are also conducting paper-based assessments. We continue to do all we can, and we will return to include face-to-face assessments as soon as it is safe to do so.
Harriett Baldwin (West Worcestershire) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman) [V]
Winter fuel payments of between £100 and £300 are provided to all those of state pension age. In addition, certain benefit recipients can also receive payments from the warm home discount scheme and the cold weather payment scheme. As mentioned by the Secretary of State earlier, we have introduced a covid winter grant scheme, which has made £170 million available to English local authorities.
Harriett Baldwin
Obviously the weather has been very cold and families are spending much more time at home, so I welcome all that additional support to help with heating. Will the Minister clarify whether the money is paid automatically or families must actively apply for it?
Guy Opperman
Worcestershire received £1.6 million to provide support to vulnerable households and families. This can be used to support the costs of heating, utility bills and various other items, and is available at the local authority’s discretion. Clearly, my hon. Friend should contact her local councillors and the leader of the local authority for further details.
Pension Schemes Bill [ Lords ] (Second sitting)
Harriett Baldwin ExcerptsTuesday 3rd November 2020
(4 years, 1 month ago)
Public Bill CommitteesRead Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 3 November 2020 - (3 Nov 2020)
Harriett Baldwin (West Worcestershire) (Con)
The Minster is making a powerful case for rejecting the approach that was taken in the other place. Could he elaborate on the costs of this platform, and who ultimately will pay for building a pensions dashboard?
Guy Opperman
The costs are substantial. There are a variety of ways in which this is being paid for, but first and foremost, it will not be paid for by the individual. Our constituents will be able to access the dashboard, and the facility that we are creating, for free. My hon. Friend will have to forgive me for giving a generalised answer, because I cannot give the pounds, shillings and pence now, but I will be happy to do so in writing before Report.
The cost is fundamentally met in respect of the work on state pension; there was a budget announcement many years ago for the expensive work that is required by Her Majesty’s Revenue and Customs to provide the state pension provision as part of the dashboard, as it is our intention that state pensions will be part of this from day one. I believe that £5 million was set aside to pay for that part.
There is ongoing payment for the Money and Pensions Service, which is through a variety of means. Some is from Treasury funding, but it is paid for primarily through the pension levy, which pays for a variety of things in the usual way, from the regulator to the Pension Protection Fund and the Money and Pensions Service. Ultimately, the cost is borne by individual schemes and members, but not by the individual constituent accessing the dashboard—it is not expected in any way that there should be a cost for doing that.
It is clearly our intention and desire that a commercial dashboard should be available. That leads me to a point that I will come back to in more detail: do we go to where the customer is, or do we make the customer come to us? In this particular example, we strongly believe that we should go to where the customer is.
It is entirely right that we design a system with a data portal that could in no way be utilised for bad purposes, but that could be accessed by an individual, whether they are presently with Aviva, PensionBee or another organisation. They can then work with a particular independent financial advisor—whether my hon. Friend the Member for Delyn in a former life or other independent financial advisors—who would have to be specifically approved to do this work. They already have a relationship with those people and they are already in the position of having an understanding. If we do not have that commercial capability, we will lose out on a significant chunk of the market and there will be a significant deficit in the ability of what we all believe is a great idea to have a practical effect. That is the fundamental point in respect of costs. I am happy to give my hon. Friend the Member for West Worcestershire a detailed breakdown before Report and Third Reading.
I may return to Government amendment 7 but I shall first try to address amendments 1, 2 and 15 on the state pension. I am certain that I will be invited to comment on a variety of matters relating to the women’s state pension increase, but my only comment at the outset is that it is not the Government’s intention to amend the Pensions Acts of 1995, 2007, 2008 or 2011. We intend that the state pension will be part of the original provision of the dashboard. We are working with HMRC, which is responsible for that information, so that we can identify the date of state pension age and the amount that people might be expected to receive at the present stage. We do not intend to take into account what their entitlement would have been with or without the amendments to the 2011Act, as proposed in amendment 1, or what it would have been with or without the benefit of the triple lock, as proposed in amendment 2, or in respect of the 1995 Act, as proposed in amendment 15. I am sure that I will be tempted to cast a view on the future of the triple lock, but I am delighted to say that that is a matter for the Chancellor. As we discussed in the Social Security (Up-rating of Benefits) Bill, the decision has been made in respect of the upcoming year of 2021-22, and that is the extent of the matter at present.
Amendment 14 concerns the extent to which the dashboard should add information on environmental, social and corporate governance matters. I am delighted to have been the Minister who brought ESG into part of this country’s pensions system and drove forward change in the pension and asset management systems, with due credit to Chris Woolard and the Financial Conduct Authority for changing their original views and coming on board with our timetable. I am utterly in support of the principle of ESG and of ensuring that individuals have as much information, on a long-term basis, about what their pension fund is being invested in. However, I shall resist the amendment for several reasons.
First, we intend that the dashboard should start with simple information. We want to ensure that the information available in the dashboard service is easily understood by consumers and that the impact on user behaviour is considered. Trustees must have a policy on ESG and must disclose it in any event, but we do not think that the provision of that information should be prescribed in the Bill, and nor do I want to prejudice the pensions dashboard programme consultation, which began earlier this year, about what information could be shown. The consultation specifically includes signposting users to schemes’ statements of investment principles and implementation documentation, including information on schemes’ ESG policies and work. The programme will publish an initial version of a proposal for data standards by the end of the year, and we will respond in respect of what specific information will flow from that at a later stage.
Amendments 4 and 5 in the name of the hon. Member for Airdrie and Shotts deal with people in vulnerable circumstances. Although I applaud the principles behind them, the matter is slightly more complicated than the amendments necessarily make it appear. I am happy to explain in more detail at a later stage, but it starts with the fundamental principle that the Money and Pensions Service, which oversees the dashboard programme, has a statutory objective to ensure that information and guidance is available to those most in need of it, bearing in mind in particular the needs of people in vulnerable circumstances. It must have regard to that in the development of pensions dashboards.
The pensions dashboard programme usability working group—a catchy title, I accept—will explore how best to help users to understand the information being presented to them and where they can get more help, including those who are most vulnerable. That could include making recommendations about mandatory signposting to guidance and/or advice. Money and Pensions Service guiders are trained to recognise that some customers may need additional or different types of help.
The Financial Conduct Authority will seek to introduce a new regulated activity and amend the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, consulting on rules relating to that activity. That may also include a requirement to signpost users to guidance and to provide information about how to find regulated financial advice. We believe that the best way to do that is through the FCA rules and not in the Bill.
I will make two other points on the vulnerability issue. The Department for Work and Pensions, the FCA and the Money and Pensions Service all have a duty to comply with the public sector equality duty in section 149 of the Equality Act 2010. Although dashboard providers will be regulated, there has also been a recent consultation on guidance on the fair treatment of vulnerable consumers, and that will be responded to in guidance published by the FCA either later this year or in early 2021.
My final comment on the proposals on vulnerable individuals would be on the potential difficulty where, as I explained a dashboard is merely a find-and-view service. Were the amendments taken to their ultimate conclusion, they would require a pension scheme to make further inquiry of the individual themselves before the release of the information. I fear that the practical reality of that in a find-and-view service of this nature is neither appropriate nor in the best interests of all parties. I entirely accept the principle behind the amendments, but I believe that we may be able to navigate the problem in an alternative way.
Pension Schemes Bill [Lords]
Harriett Baldwin ExcerptsWednesday 7th October 2020
(4 years, 2 months ago)
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Harriett Baldwin (West Worcestershire) (Con)
I welcome the Bill, which is a milestone in the country’s journey to a safer, better and greener financial future, in which more people are saving for their old age. I echo the warm words spoken by the Secretary of State about the work of the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman)—the Pensions Minister—who has a true passion for improving the future not only of his constituents in Hexham but of all our constituents.
This has been an incredibly well-informed debate and I hesitate to add anything, but I do want to bring my perspective, as someone who used to work on the dark side as a pension fund manager, and to make the obvious point that there are three main things that ensure that people have a good pension in old age. The first is starting as young as possible. I was interested to hear Members arguing about starting as early as 18. I certainly think that the Government should seriously consider such a provision, if people meet the earnings criterion. The second thing that makes people’s pensions better over the long term is tax breaks and employer contributions. The earlier that people can pay in the maximum before tax that they are allowed to and get the employer matching that amount, the better off they are going to be in retirement.
The third thing that makes people better off through their pension is lower charges. This subject has not yet come up during this debate, but it is incredibly important to put on the record. The charges in this incredibly competitive industry, in which the UK leads the world, can vary dramatically. I hope that the powers in the Bill will enable our constituents to see much more clearly on their pensions dashboard what they are being charged and for what. As someone who used to work in the industry on the receiving end of the charges, there is no question but that the compounding effect can have a meaningful impact on the final outcome of people’s pensions.
Will the Minister comment in his closing statement on the charges that the National Employment Savings Trust levies on our constituents? NEST is the body that was set up because, through auto-enrolment, there will be some very small and uneconomic pots that the industry will not want to take on. I recall from my time on the Select Committee on Work and Pensions that NEST itself charges really quite vicious amounts to people who are putting their money into a NEST scheme. I seem to recall that it was something like 1.8% up front and then an ongoing annual charge of 0.3%, which sounds low, but is not actually that competitive these days. Despite that, I understand that NEST has not been able to make enough money to repay the loan that the taxpayer gave to establish it. I would be interested in an update and in the Minister’s thoughts on how we can ensure that people who are using NEST do not end up paying particularly onerous charges.
Let me turn to climate change risk. The Treasury Committee, on which I serve, is currently doing an inquiry into green finance, and it is clear that the UK has a huge opportunity to make the most of our leadership—not only on climate generally, but also as a financial centre—to be the go-to place for green finance, green investment and green bond insurance. I heartily endorse the call of my hon. Friend the Member for Grantham and Stamford (Gareth Davies) for the UK to show the way not just by being the place where other countries come to issue green bonds, but by being the country that issues green bonds itself to invest in greening our economy.
I want to highlight something that we heard clearly in evidence this week. The former Governor of the Bank of England, Mark Carney, has repeated that the cost of climate risk is not being priced into our stock market. There is quite a significant risk that investments in some large companies that form a large part of the index in this country—we should bear in mind how much investment goes into indexed funds—are held as assets that could end up being trapped in value.
Guy Opperman
I am grateful to my hon. Friend for what she is saying, but on what Mr Mark Carney has said, she will be aware that he is a member of the Task Force on Climate-related Financial Disclosures. Under the Bill, the UK will be the first G7 country to bring that into statute. The advantage of that is that the very aspect that she has highlighted as a problem—FTSE 100 companies are not aware of what the risk is from climate change to the way in which they do business—will be tackled, as they will now be forced to disclose that on an ongoing basis to the wider market and individual consumers with pension investments. I believe that the issue raised by Carney, the Treasury Committee and others is addressed in the Bill and the consultation that accompanies it.
Harriett Baldwin
I welcome what the Minister says, and I did not want in any way to undermine the provision in the Bill and the incredible progress that it represents on our journey to a greener financial future. I welcome those steps wholeheartedly, but I wish to highlight that those risks, although disclosed, will be there. Many of our constituents, every month in their payroll, put investments into index-based funds in which those risks are inherent. It is incumbent on us all to recognise that that could be a big driver of UK returns, given that a significant portion of the index consists of carbon-based industries in the UK.
I make that point, and I make the point about charges, because the pension dashboard will play a vital role in showing people what they are paying for those returns in an environment where interest rates are virtually zero, where the index has quite a lot of climate-affected assets, where charges can be as high as those from NEST, the state-backed provider, and where investment returns could be lower for a protracted period as we recover from the pandemic. It is worth flagging the fact that giving information on charges in particular and the way in which they compound over a lifetime will be a powerful part of the very many welcome changes that we can see in this excellent piece of legislation.
Covid-19: DWP Update
Harriett Baldwin Excerpts(4 years, 7 months ago)
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Dr Coffey
We do not intend to end the five-week wait—that is where advances can help. The hon. Lady is right to point out the difficulties people have with telephony. We have turned that system around, so it should be more straightforward now that the DWP calls claimants rather than the other way around.
Harriett Baldwin (West Worcestershire) (Con) [V]
May I join colleagues in thanking DWP staff, particularly those in West Worcestershire who have worked so hard throughout this crisis? The Secretary of State has been asked a number of times about universal basic income and has resolutely rejected it. Can she confirm that a universal basic income would have to be paid universally —to everybody—including people like us?
Dr Coffey
My hon. Friend is absolutely right. We know that it is not a well-targeted system, and that is why we will continue to say that it is not the approach that this Government will take. May I also wish a belated happy birthday to my hon. Friend, who turned a significant age at the weekend?
Oral Answers to Questions
Harriett Baldwin Excerpts(4 years, 9 months ago)
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Harriett Baldwin (West Worcestershire) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
You have impeccable timing, Madam Deputy Speaker.
Workplace pension participation rates have more than doubled since the introduction of automatic enrolment under the coalition Government in 2012, rising from 42% in 2012 to 85% in 2018. In West Worcestershire, my hon. Friend’s constituency, 9,000 eligible jobholders have been automatically enrolled, and thanks are due to the 2,600 local businesses that are supporting them.
Harriett Baldwin
This has truly been one of the great policy successes of the last decade, but many would argue that people are still not saving enough for a comfortable retirement. Does the Minister plan to use other nudge techniques, such as automatic uplifts whenever a person gets a pay rise, to encourage saving for old age?
Guy Opperman
We have the 2017 review, which we continue to monitor and will implement going forward. Automatic increases are not part of the Government’s present plans, but I am actively looking to learn from private sector companies that are carrying out similar initiatives. I welcome my hon. Friend’s interest and would be happy to discuss this in more detail.
Oral Answers to Questions
Harriett Baldwin Excerpts(5 years, 2 months ago)
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Will Quince
I totally disagree with the hon. Gentleman’s comments. We are committed to helping lone parents into a job that fits around their caring responsibilities. There are now more than 1.2 million lone parents in work. To support parents into work, the Government spend £6 billion on childcare each and every year.
Harriett Baldwin (West Worcestershire) (Con)
Has the Minister read the report from the Resolution Foundation that stated:
“Low pay is falling for the first time in four decades”
and that women were the biggest beneficiaries? It pointed out that since the national living wage was introduced in 2016 the percentage of employees on low pay has fallen from 20.7% to 17.1% last year.
Will Quince
I thank my hon. Friend for raising that matter. I have not seen the report, so I will go away and dig it out. We have invested £8 million to develop the evidence on what works to support people to progress in work, including enhancing our operational capability to support claimants to make good decisions on job switching.