Work Experience

Harriett Baldwin Excerpts

Tuesday 13th March 2012 Westminster Hall

[Mr Jones]

I totally agree with my hon. Friend. There is a cohort of people who have perhaps looked after children but are willing and able and capable of returning to the labour market although they may lack confidence. In time, the Work Experience scheme could be widened in the way that she suggests.

I also wish to focus on some of the ladies and gentlemen of Her Majesty’s press who have perhaps not given this issue the fairest of hearings. I appeal to them to dismiss any rhetoric or old-fashioned and outdated views from the far left that they may have, and to think about young people and look to support this policy. By setting out to try to destroy work experience, all they will do is destroy a route to work and an opportunity for our young people. Work experience is not the be-all and end-all for young people, but it is a route into employment nevertheless, and Members of this House should seek to provide as many such routes as practicable to help our young people into work.

[Harriett Baldwin (West Worcestershire) (Con)]

As I am sure my hon. Friend will agree, it is welcome that many media outlets, notably the BBC, ITV and The Guardian, offer work experience to young people.

[Mr Jones]

I think that is absolutely fantastic. It is a shame, however, that some of those who work for the publication to which my hon. Friend referred may not share the same view as that taken by their employer. That is sad, and I hope that people will think a little more carefully before making the sorts of comment that may destroy the life chances of the most vulnerable young people in this country.

Safeguards must be in place and we must ensure that we protect young people who may be vulnerable. No hon. Member would want any young person to be exploited, but that does not detract from the fact that employers need positive support and encouragement to be offered through the leadership of this House and its Members. It is, therefore, incumbent on Members of Her Majesty’s Government and Opposition to do all they can to encourage employers to offer work experience, and to fight against the small minority of people who seem intent on putting their ideology before the needs of the most vulnerable people in society who need a little extra help to get on the work ladder and into a job.

I will conclude by saying that we must move this debate away from the discussions of the past couple of weeks and towards the political centre ground and a sensible viewpoint that is shared by most people in this country. Most people are supportive of this policy, and I look forward to hearing from the Minister about how the Government intend to support it and ensure robustly that we do not give in to that small minority. I also look to the Opposition Front-Bench spokesman to back the policy to the hilt and do the right thing for young people in our country.

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[Harriett Baldwin (West Worcestershire) (Con)]

Thank you for calling me to speak, Mr Howarth, despite the fact that I have an awful cold. I hope to get through my speech without coughing too much.

I congratulate my hon. Friend the Member for Nuneaton (Mr Jones) on securing the debate. I asked for a debate on the same matter in business questions recently. It is important to use this opportunity to clarify the terminology, which I shall do in the form of a media guide, as it were. I hope the Minister will confirm my understanding of the categories. The three that get most confused are Work Experience programme, the Work programme and workfare.

My experience of the media confusion came when, like my hon. Friend the Member for Great Yarmouth (Brandon Lewis), who is a colleague on the Select Committee on Work and Pensions, I was invited on to “Newsnight”. The producer said to me, “We are going to have one young person with a good experience of work experience, and one with a bad experience, and we would like you to come and debate it.” I thought it seemed sensible, but when I turned up there were three people, one of whom was a young person who had had a positive experience of work experience. However, there was also a 48-year-old gentleman who was clearly either in some form of the Work programme, or had some other experience, and a 40-year-old gentleman. It did not help—I do not know whether it was deliberate or accidental—that the producer had accumulated three people with experience of different aspects of back-to-work activity.

It would be helpful to use the debate to clarify the fact, which does not seem to have got through loud and clear to certain segments of the media, that the Work Experience programme is a voluntary one for people under 24. It changes the unfortunate situation that existed under the previous rules. We have heard that the BBC, ITV and The Guardian offer work experience, often in four-week tranches. Under the previous rules, a young person looking for work who was fortunate enough to be offered work experience by one of those organisations would have to give up jobseeker’s allowance for taking work experience that lasted longer than two weeks. That is profoundly unfair, because we all know, as my hon. Friend the Member for Great Yarmouth said, that many perhaps more middle-class families can afford to subsidise their young person under the age of 24 to take that kind of work experience. It is extremely progressive that the Government have changed the rules, so that now a young person whose family relies on their jobseeker’s allowance can take the work experience opportunities that have been largely the preserve of sharp-elbowed middle-class people.

The Work programme is completely different. It is not age-dependent. The Government put out contracts, which became live last June. The Work and Pensions Committee is looking forward to hearing from the Minister next Monday some of the early indications of the results of the contracts. Obviously, there is regional variation in providers and who won the contracts. The important thing about the Work programme is that, rather than being prescriptive about the contracts, the Government have for the first time created a black box: the providers can do what they find works to get people back into work. It is a completely different kettle of fish from voluntary work experience for young people. Yes, participation in the Work programme comes about when someone has either spent a period on incapacity benefit or been out of work on jobseeker’s allowance for an extended time, and those activities do tend to be mandatory in many cases. That is the second thing that gets confused when it is brought into the picture.

I would like to ask the Minister for clarification about workfare. My understanding is that the Department’s use of workfare—having to work while on benefits—is quite limited, particularly where it is mandatory. However, it is a tool that jobcentre advisers have in their armoury. If they suspect, for example, that someone is working and claiming benefits, they can use workfare to identify those situations. It would be helpful to hear from the Minister whether that is the correct way to define workfare.

I think that there has been media confusion. I hope that in my speech I have created a helpful media guide for any producers out there who may be doing programmes on the subject, and I look forward to clarification of the definitions from the Minister.

CPI/RPI Pensions Uprating

Harriett Baldwin Excerpts

Thursday 1st March 2012 Commons Chamber

[John McDonnell]

I am pleased that the National Pensioners Convention supports the quadruple lock, because that is what I have proposed in the House when we have debated this matter previously. It would come as a bit of a surprise if the NPC were to support the switch to CPI, given that a number of its members handcuffed themselves and blocked the road outside Parliament last week in protest against the measure. That is a form of direct action that I support.

The switch has had an impact on millions of people, as I have said. That is because, historically, the difference between CPI and RPI has been between 0.7% and 0.9 %. When the Government introduced their statutory instrument to force through the change, the Office for Budget Responsibility assessed that the difference would be 1.1%. Since then, in November, the OBR published a working paper that indicated that the gap would widen, and so increased its forecast for the long-run difference between CPI and RPI to 1.4%. What that means in practical terms for people’s pensions is that after 15 years a CPI-indexed pension would be 17.4% lower than an RPI-indexed pension, and after 20 years it would be between 23% to 25% less. That is a significant amount. That was confirmed by the much-cited Hutton report on pensions, which stated:

“This change in the indexation measure, from RPI to CPI, may have reduced the value of benefits to scheme members by around 15% on average. When this change is combined with other reforms to date across the major schemes the value to current members of reformed schemes with CPI indexation is, on average, around 25% less than pre-reform schemes with RPI indexation.”

Many hon. Members will have received representations from people working in different jobs about what the switch means to them. Let me cite some examples to give the House a flavour of why there is such depth of feeling out in the country on this issue. Let us take the case of Jim Singer himself, the creator of the e-petition. Jim has worked for the Department for Work and Pensions as a partnership development manager in the east of Scotland, based in Aberdeen. He has worked for the civil service for 35 years. He has just turned 60, and he will retire on a salary of £29,000.

As a result of the pay policy imposed by his Department and the Government, Jim has had a pay increase of only 3% in the last five years. That has had the effect of reducing the value of his final salary by around 25%, as against RPI inflation over the past five years. Even if his pay had kept pace with the Government’s favoured indicator, CPI, his final salary would have been 13% higher. That in turn means that his pension will start at a level of over £3,000 a year lower than if his pay had kept pace with RPI, and that his lump sum will be cut by over £9,500. So, he will have a £1,600 pension loss and a £4,960 lump sum under CPI. In addition, the switch from RPI to CPI is likely to cost Jim nearly £23,000 in pension over a normal retirement. Jim’s wife, Sheena, worked for British Telecom and has a pension which is also affected by the switch from RPI to CPI. She stands to lose £9,000 over a 20-year retirement.

[Harriett Baldwin (West Worcestershire) (Con)]

I thank the hon. Gentleman for giving us the range of examples. Is it his understanding that it is not his party’s policy to fight the next general election on a promise to revert to RPI?

[John McDonnell]

I scoured the Welfare Reform Bill Committee discussions on that point, and as I understand it, those on the Labour Front Bench made it clear that they were not going to write their manifesto in advance of 2015. The hon. Lady can be assured, however, that I shall be pressing for that policy to be adopted.

Let me press on with Jim’s example. The guide to his pension—the “principal civil service pension scheme, classic”, as it is called—was published by the civil service in 2009. It explained that his pension would be “index-linked”. On page 24, the guide explained that this index-linking meant that

“your pension is guaranteed to increase in line with inflation, as measured by the retail price index”.

When he heard that the Government had changed the index-linking of his pension to CPI, he wrote to the Minister for the Cabinet Office and Paymaster General, the right hon. Member for Horsham (Mr Maude). He received the following reply:

“In hindsight, because the Minister has the discretion to decide which indicator best reflects the general level of prices, perhaps the booklet should have been drafted differently”.

That gives no satisfaction to Jim, who has lost so much money. He worked for 35 years with a guarantee of RPI, then, within a year of reaching his 60th birthday, the Government reneged on that guarantee. Over his retirement, the switch from RPI to CPI will not just be a minor change to an inflation indicator. For him, the switch will cost thousands.

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[Harriett Baldwin (West Worcestershire) (Con)]

Thank you for allowing me to speak in this important debate, Madam Deputy Speaker. I congratulate the hon. Member for Hayes and Harlington (John McDonnell) and the Backbench Business Committee on organising the provision of parliamentary time for discussion of this topic. Having been a professional pension fund manager myself, I leapt at the opportunity to speak today. It is not often that, on a Thursday afternoon, we experience the excitement of discussing the difference between the geometric and the arithmetic mean in indexing. I thought I would put in a few words, as I also represent a constituency that is inhabited by a higher than average number of pensioners.

As a former pension fund manager, I recall the days when Britain had a pension fund system that was the envy of the world. We had a terrific private sector-led system, and workers in the public sector were also in very good schemes. I believe that Britain’s leadership in that regard began to unravel in the first Labour Budget after the general election in 1997, when the then Chancellor imposed a tax on pension schemes. It was pretty apparent at the time that that would undermine a private sector pension system which, as I have said, used to be the envy of the world.

[Jeremy Corbyn]

I think the hon. Lady is in danger of misreading history. The Social Security Act 1986 promoted the destruction of occupational pension schemes, promoted personal private pension schemes, and eventually led to a gross mis-selling of pensions which had to be corrected by the incoming Government in 1997. I think the hon. Lady needs to take her historical narrative a little further back.

[Harriett Baldwin]

The hon. Gentleman has clearly forgotten the imposition of a tax on private pension schemes in that first Labour Budget of 1997, which I think many people realised at the time would be a recurrent year-on-year tax that would lead to the erosion of private pension funding over time. Private companies then acted very rationally. Many of them ceased to offer defined benefit pension schemes.

Let me give some figures which I take to be rough estimates. There are approximately 29 million people in Britain’s work force today, 23 million of whom are employed in the private sector. I was shocked to learn that only 3.2 million of those 23 million were currently active members of a pension scheme in which the employer makes any contribution. That contrasts with the position in the public sector, in which about 5.5 million of the 6 million employees are members of pension schemes. That is the proportion that we should aspire to in terms of pension provision throughout the work force. I know that our pensions Minister aspires very much towards movement in that direction.

[Andrea Leadsom]

Does my hon. Friend agree that, many years ago, public sector salaries were lower and therefore pension provision was always higher, but over the last decade or more salary levels have equalised, and in many cases the lowest-paid public sector worker now earns more than the lowest-paid private sector worker and has a pension that the private sector worker can only dream of?

[Harriett Baldwin]

Personally, I aspire to a future in which all Britain’s pensioners can rely on a secure retirement income, which will come from three main elements.

I welcome measures taken by the pensions Minister and the Chancellor to provide a triple-lock guarantee: the linking of the basic state pension, and increases in that pension, to CPI, average earnings or 2.5%, whichever is the highest. That, I think, is an extremely robust foundation. As the Minister knows, I look forward to the inclusion in the Queen’s Speech of further legislation simplifying the state pension system, eliminating the means-testing deterrent to saving and creating a stable, predictable and inflation-linked state pension that will be the foundation for a basic level of income in retirement.

Of course, we need to aspire to be a country where everyone has an additional employment-related pension. About 12 million people are already pensioners, and we welcome the fact that their inflation-linked increase will rise by over 5% this year: I believe that that is the largest cash increase in the history of the state pension. This Government’s budgeting decisions are therefore focusing on the needs of current pensioners, and for future pensioners the largest employers will from October start to auto-enrol their employees into employment-linked schemes. That measure enjoys cross-party support, and it will mark the beginning of a savings programme that is estimated to bring in a further 5 million to 8 million pension savers and add a substantial sum to the savings of this country. Otherwise, we will be woefully under-pensioned in future. We are currently a very under-pensioned country. It is tragic that our country has eroded its position in respect of pensions so much. In 1997, we were one of the leading pension countries in the world, but we now have a lot of catching up to do. I welcome all the steps the pensions Minister is putting in place to improve the situation.

Having mentioned the triple lock and auto-enrolment, I shall now make a few points about the difference between CPI and RPI. We all know that inflation is the big enemy of the pensioner, as nothing erodes retirement income more. Lower inflation results in less erosion of retirement income, of course, but all pensioners must understand that they need to protect their fixed retirement income from inflation.

CPI is the inflation measure that we have instructed the Bank of England to target and to average out over time. I therefore think the Bank of England should, perhaps, consider moving its own pension scheme on to a CPI link. That scheme is currently linked to RPI, but it would increase everybody’s confidence in the Bank’s long-term ability to meet its CPI target if it were to adopt that measure for its pensions. That is a cheeky aside, however.

Neither the RPI nor the CPI measure will ever accurately reflect the inflation that pensioners experience. We have talked about the fact that mortgage interest is not included in the RPI basket. Interest rates fell dramatically in 2008 and that led to the RPI being negative in 2009—it was minus 1.4%. Do we want to follow an index that results in people having reduced income in some years? In that instance, we decided that we did not want that so we maintained a zero rate, but people still complained to me that their pension had not increased that year.

[Mr John Leech (Manchester, Withington) (LD)]

Does the hon. Lady agree that people might have more confidence in the Government’s decision to move to CPI if we were to use CPI for all other calculations, such as train fare increases?

[Harriett Baldwin]

I do not think that either the CPI or the RPI basket accurately represents inflation as experienced by pensioners. Most of them will have paid off their mortgage by the time they retire. Also, the CPI basket does not include council tax. Following the 100% increase in council tax under the previous Government, many council taxes have been frozen for the past few years. That is helpful for pensioners, as council tax represents a substantial proportion of their outgoings.

Food also represents a significant element of pensioners’ costs, and food inflation has been very high recently. Over the past 20 or 30 years, however, it has been largely on a downward trend, and food now represents a smaller proportion of overall costs than it did in the past. The cost of fuel and of heating the home is also an important factor for pensioners. That has also been rising sharply. Neither CPI nor RPI accurately represent pensioners’ experience of inflation.

[Grahame M. Morris (Easington) (Lab)]

Does the hon. Lady therefore support the GMB proposal for a bespoke pensions index that more truly reflects the cost of living of pensioners? As my hon. Friend the Member for Hayes and Harlington (John McDonnell) said, they are not generally active shoppers who can readily switch between electricity and gas supply companies, for instance.

[Harriett Baldwin]

I certainly accept the point that CPI implies that people are active shoppers. Most of the pensioners I have come across are extremely good active shoppers, however.

Every individual faces a unique rate of inflation. We have given the Bank of England the task of managing the CPI rate. It is therefore sensible to use that measure for assessing pension increases.

We have talked about the high proportion of Britons who do not have any pension savings for retirement, the fact that many private companies have closed down their pension schemes, and the fact that Britain has become woefully under-pensioned. Giving private sector companies the flexibility to shift their index and linking pensions to CPI are both wise policies. They serve to put the overall public sector pension liability on a more sustainable footing, which is important for all future public sector workers. They also make the bargain between those with no pension provision and those who enjoy final salary, inflation-linked pensions fairer.

The Chancellor and the pensions Minister have faced a series of difficult choices, and they have made the right decisions. I believe the new measures will lead to more people across the work force saving for a comfortable retirement, which is an objective we all want to achieve.

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[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The debate has been interesting so far, with the temperature raised a little at the end by the hon. Member for Aberconwy (Guto Bebb). [Interruption.] My pronunciation of the hon. Gentleman’s constituency is almost as good as the attempt by the hon. Member for Gloucester (Richard Graham) to pronounce Kirkcaldy and Cowdenbeath.

I pay tribute to my hon. Friend the Member for Hayes and Harlington (John McDonnell) for securing the debate, which has covered several matters. I want to touch on four in particular. The first is the notion of a broken promise, which was mentioned by my hon. Friend, as well as by my hon. Friends the Members for Easington (Grahame M. Morris) and for Bolton North East (Mr Crausby).

Before the general election, the then shadow Chief Secretary to the Treasury, the right hon. Member for Runnymede and Weybridge (Mr Hammond), stated in a letter on 27 April 2010 that the Conservative party

“has no plans to change the current index-linking of public sector pensions in payment. We agree with the view that the right to indexation of pensions already accrued is part of the accrued pension rights and those rights will be protected.”

That is at the heart of the debate and of the legal challenge by the trade unions. My hon. Friend the Member for Hayes and Harlington emphasised that point and also the cost to 16 million pensioners—12 million in the public sector and 4 million in the private sector. He rightly paid tribute to Mr Jim Singer, who played such a big part in pushing the e-petition. I note that Mr Singer’s pensions booklet referred to indexing by RPI and that, according to my hon. Friend, he is likely over the course of a normal retirement to lose up to £23,000. Clearly, that is a lot of money, and it shows why there is such interest in the matter.

Much of the debate revolves around whether CPI is an accurate measure of inflation for pensioners. The subject was debated as recently as last week and the Minister made it clear that the Government view CPI as the most appropriate measure of price inflation for the purpose.

[Harriett Baldwin]

Will the hon. Gentleman confirm my understanding that it is not the Opposition’s current policy to restore the link to RPI?

--- Later in debate ---

[Gregg McClymont]

Alas, the hon. Gentleman must wait for the next Labour party manifesto to satisfy his curiosity.

Clearly, the issue is whether CPI is an accurate measure of inflation. The Government and the Minister are clear that it is, but some important authorities, including the Royal Statistical Society, have emphasised that CPI fails to reflect the spending patterns of pensioners and the rising costs they face, especially housing costs, which were mentioned by some of my hon. Friends. The UK Statistics Authority has indicated that it does not believe that CPI should become the primary measure of data inflation until housing costs are included.

I know from our previous discussions that the Minister will look closely at the consumer prices advisory committee proposals on adding housing costs to CPI. We await that with great interest. Heating, which was also mentioned by a number of my hon. Friends, is also important in that context. Heating costs have been rising fast, which could mean that pensioners face higher inflation on average than other groups in society, which is significant given the removal of £100 from the winter fuel allowance.

In the end, this is a political decision. The UK Statistics Authority observed last year:

“Questions about compensation, who to compensate and what for, are straightforwardly political questions, not for statisticians.”

We cannot support adopting that approach in the long term. In just five of the last 20 years has RPI been lower than CPI. As was mentioned by my hon. Friend the Member for Hayes and Harlington, the Office for Budget Responsibility November economic and fiscal outlook states that the long-run difference between RPI and CPI is likely to be 1.4% rather than the current 0.7%.

[Harriett Baldwin]

On the hon. Gentleman’s last point, can I therefore clarify that it is a 2015 Labour manifesto pledge to restore the link to RPI?

[Gregg McClymont]

The hon. Lady’s desire to write the Labour party manifesto three years before a likely general election is admirable, but I cannot advance on the answer I gave to the hon. Member for Gloucester.

Whether CPI is an accurate measure of inflation is an issue—the hon. Lady made important points on heating and housing—but in the few minutes remaining, I want to raise some broader questions. We can talk about CPI or RPI pensions uprating in isolation. The uprating of the state pension using CPI, which happened for the first time this year, is one thing, but as was indicated in the debate, the flat-rate, single-tier state pension, to which the Minister is committed, is important to the debate, as is the future of NEST.

I do not want to misquote the hon. Member for West Worcestershire (Harriett Baldwin), but I believe she said that she was looking forward in the Queen’s Speech to legislation on a single-tier, flat-rate state pension. The Opposition are hopeful that the Minister can move in that direction quickly. I wonder whether the Treasury has a significant role in that. Perhaps negotiations must continue before we can get there. The Opposition will be keen to consider very closely such proposals when they come to the House.

NEST, which has been mentioned throughout the debate, has a huge role to play in moving towards a more sustainable pension system. The Opposition are disappointed at the delay in the staging dates for the move to auto-enrolment. It is not just a question of the companies: contributions from both the Treasury and employers will be lost for those saving into a pension for the first time.

Finally, the hon. Member for Aberconwy emphasised the private pension system. Both he and the hon. Member for West Worcestershire suggested that all the difficulties in the private pensions world have arrived since 1997.

Welfare Reform Bill

Harriett Baldwin Excerpts

Wednesday 1st February 2012 Commons Chamber

[Jenny Willott]

I was going to come on to that. If the hon. Lady will bear with me, I will hopefully answer her question.

[Harriett Baldwin (West Worcestershire) (Con)]

The hon. Lady is making many interesting points. Does she agree that when a person has a degenerative illnesses such as multiple sclerosis, their condition may change during any finite period, so it is important to emphasise that people can be reassessed and put into the support group if their condition deteriorates?

[Jenny Willott]

The hon. Lady is right, and many conditions get worse at varying rates—very slowly for some people, and very quickly for others. It is important to make sure that people get the benefit that they should, and that the assessment is right, as the hon. Member for Banff and Buchan (Dr Whiteford) said.

--- Later in debate ---

[Chris Grayling]

We need to be clear about what has happened. We have been through months of debate. The Labour party has got itself on to an almighty hook on the issue of the benefit cap—it is on the wrong side of the argument—and is desperately trying to wriggle free. The Government are having none of it. We are standing by our proposal. The benefit cap that we propose is the right thing and we will press ahead.

[Harriett Baldwin]

My right hon. Friend is right that in the 26 sittings of the Welfare Reform Bill Committee, which I had the pleasure of attending, we did not hear once about the regional benefit cap. Fifty-seven per cent. of those affected live in London. Does the timing of the Opposition proposal have anything to do with the London mayoral elections?

[Chris Grayling]

There might be an element of that—it is difficult to escape that conclusion. The Opposition proposal would have more credence had it not been made at the 59th minute of the 11th hour. We should not take them seriously when they make such ill-thought out, last-minute proposals.

The Government are clear that average earnings are the right way to determine the level of the cap. We do not need the Opposition’s proposed independent body—another quango, I hasten to say—to tell us otherwise. The cap needs to be a single, national one for the policy to make sense. The Government will lay before the House a report on the policy’s impact evaluation after a year of operation.

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[Mr Byrne]

I am going to do exactly that. The Minister makes an important point about regionalisation and localisation, but the point has already been made that we have a local component to the benefit system, and we have had it for 70 years. It was such a big feature of the benefit system that in 1942 William Beveridge devoted an entire section of his report to “the problem of rents”, as he put it. I know that the Conservative party tried to block the Beveridge report back then and that Conservative Members do not want to admit this problem now, but I am afraid that it is a problem that bedevils their policy.

[Harriett Baldwin]

I am glad that the right hon. Gentleman enjoyed my recently published Centre for Policy Studies policy that mentioned regional benefits. On that subject, for the most expensive part of the London would he set the benefit higher or lower than £26,000?

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[Mr Byrne]

My hon. Friend is right, and what has been noticeable by its absence this afternoon is any argument from any Government Member relating to what we should do about private landlords.

[Harriett Baldwin]

rose—

[Mr Byrne]

I promise that I will give way to the hon. Lady in a moment.

A one-cap-fits-all approach will not work in London, and it will not work elsewhere. As has been pointed out by many Members representing all parts of the United Kingdom, the cap that the Government propose may not send people the signal that they are better off in work. Our argument is in our amendment, which says that the cap should reflect differences in housing benefit costs in different parts of the country. That has always been an element of our benefits system, but we would add a couple of extra safeguards. There should be a safeguard against homelessness and the kind of costs that the Minister has had to fix this afternoon, and—in my view—there should also be a safeguard against child poverty. Heaven knows, that is worsening enough under the present Government, and we do not want it to become worse still.

[Harriett Baldwin]

Will the right hon. Gentleman answer my second question? Would the regional benefit cap in central London be set higher or lower than £26,000?

[Mr Byrne]

The hon. Lady will have read our amendment, so she will know that we propose to take politics out of the issue, and to establish an independent commission to set the level of the cap. As has been demonstrated this afternoon, when it is left to politicians, they make a pig’s ear of it.

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[Mr Redwood]

This is rightly difficult territory. I am relieved to hear that Ministers have reconsidered the transitional arrangements, and I am pleased that the Opposition welcome that. In the noise and heat of the debate, important truths are getting lost or ignored. We are not generous enough towards the disabled, and I was pleased to hear that they are completely exempted from the proposals, which should be widely welcomed across the House. The exemption of war widows, who often have very little to live on and whose former husbands sacrificed so much to help our country, is extremely welcome, as both parties in government have asked their loved ones to go into battle on our behalf.

I am also pleased to hear that anybody in work is exempted. The Government’s case revolves around something with which I believe the Labour party normally agrees: working should always be worth while. In today’s debate, there has been more heat than light. If the Labour party, the Conservative party and the Liberal Democrat party all believe that it should be more worth while to work, we need such a provision to achieve the desired effect. It comes down to the last-minute proposal that there should be some regional differentiation of the cap. We are no longer arguing for or against caps—we all now believe in that type of headgear—but Labour believes that there should be different fashions of cap across the country whereas, on the Government Benches, the passion is apparently for uniform caps.

[Harriett Baldwin]

Does my right hon. Friend agree that it is difficult to set a cap if one is not prepared to name a level for it?

[Mr Redwood]

My hon. Friend is ahead of me in my argument. So far, I think I have carried an expectant and worried Labour party with me. Labour agrees with all the exemptions, agrees with the delayed transition and agrees that we need to make working worth while.

Benefits Uprating

Harriett Baldwin Excerpts

Tuesday 6th December 2011 Commons Chamber

[Steve Webb]

I am glad that the hon. Gentleman has raised that point, because it is a selective quotation from the autumn statement. As well as making the changes to tax credits, we are over-indexing benefits relative to average incomes. As poverty is measured in relation to average income and we are putting up benefits according to CPI, which is about twice the rise in average income, child poverty will be reduced compared with the figure that he gave. There is more to this than meets the eye.

[Harriett Baldwin (West Worcestershire) (Con)]

The Minister will be aware that many more women than men are on pension credit and that about 60% of pensioners are women. Does this increase not therefore disproportionately help women?

[Steve Webb]

My hon. Friend is quite right. Not only does the pensions boost help women, but the pension credit boost helps women. Reflecting on the Opposition’s question about the combined effect of our measures, it is worth saying that the one measure excluded from that question was the VAT rise. They excluded that because men, on average, have higher incomes and higher spending. In particular, they have higher spending on VATables, so the impact of the VAT rise hits men more than women. For some reason, the Opposition did not count that measure.

Oral Answers to Questions

Harriett Baldwin Excerpts

Monday 28th November 2011 Commons Chamber

[Sajid Javid (Bromsgrove) (Con)]

7. What steps he is taking to ensure that individuals are able to build up pension pots under automatic enrolment.

[Harriett Baldwin (West Worcestershire) (Con)]

10. What steps he is taking to ensure that individuals are able to build up pension pots under automatic enrolment.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am pleased to confirm that we will go ahead with the introduction of auto-enrolment next year as planned, and I can confirm further that all businesses remain in scope. We have, however, decided to extend the reform’s current five-year implementation, so that small businesses will not have to start enrolling their workers until the start of the next Parliament. The revised plans will, nevertheless, still result in more than half of all workers being enrolled before the end of this Parliament. This is a positive programme, and there will be no exemptions.

[Steve Webb]

As my hon. Friend points out, certain pension schemes but not others currently allow people to take money out within the first two years, and that is an anomaly. We need to ensure that money put into pension savings stays there, and that is why short-service refunds for defined contribution schemes will not be part of the long-term landscape under automatic enrolment.

[Harriett Baldwin]

Does the Minister agree that auto-enrolment will bring into pension savings for the first time millions of low-paid workers in the private sector, both men and women, and that they can begin to look forward to the same kind of retirement income that we rightly offer our public sector employees?

[Steve Webb]

As my hon. Friend points out, at the moment not only do literally millions of people in the private sector not have a moderate pension; they have no pension at all. Auto-enrolment remains key to our policy goals, and as I just observed, more than half the work force will have been auto-enrolled by the next election.

Pensions Bill [Lords]

Harriett Baldwin Excerpts

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

After the hon. Gentleman’s previous intervention, he did not listen to the answer; given that intervention, he did not listen to the answer I gave the hon. Member for East Dunbartonshire. He just does not seem to get it.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the hon. Gentleman give way?

[Gregg McClymont]

I am happy to give way to the hon. Lady, who I know is an expert on these issues.

[Harriett Baldwin]

I thank the hon. Gentleman for giving way, welcome him to his post and declare an interest also as a woman whose state pension age was increased to 66 under the previous Government. Given the £10 billion—

[Mr Duncan Smith]

Eleven billion.

[Harriett Baldwin]

Eleven billion, that’s right.

Given the £11 billion commitment that the hon. Gentleman is making, and the £12.5 billion commitment that the shadow Chancellor has made, at what point do these billions of pounds add up to real money in the minds of Labour Front Benchers?

[Gregg McClymont]

The hon. Lady talks about real money, but the situation is clear: we are proposing £20 billion of savings starting in 2016; her Government are proposing £30 billion of savings. This measure would involve £1 billion a year over 10 years.

I understand that the hon. Lady has some actuarial experience, so she must understand that no sensible Opposition or, indeed, Government would put down in law that five years down the line they will still be committed to the same proposal. That is just common sense.

--- Later in debate ---

[Malcolm Wicks]

Yes, hence my introduction, when I argued that pensions policy in this country has always been at its best when it goes with the grain of how people live and makes long-term decisions that individuals can plan around. It is the acceleration of the process that we are now discussing. It is extraordinary that, having taken so much money out of the pensions system, the Conservatives—and, I suppose I have to say, the Liberals—now want credit for putting some of it back. That is a bit of Tory arithmetic that I am not terribly impressed by.

[Harriett Baldwin]

Does the right hon. Gentleman not welcome, as I do, the additional £25 billion going into the triple lock of the state pension, which, as of today, will protect pensioners from the rise in inflation?

[Malcolm Wicks]

That issue—how the shift from the retail prices index to the consumer prices index will affect the real value of pensions in future—is a subject for another day, although colleagues might want to touch on it today. My guess is that that shift, which seems quite dry and technical, will become the big pensions swindle of the 21st century. I am therefore not quite as impressed by the triple lock as the loyalist hon. Lady is.

[Harriett Baldwin]

rose—

[Malcolm Wicks]

However, I will give her another chance.

[Harriett Baldwin]

Does the right hon. Gentleman not acknowledge that whereas his proposal was to uprate the state pension in line with average earnings, which would mean an increase of 1.8%, the triple lock chooses the best of the three? That is an incredibly important reinforcement of our state pension.

[Malcolm Wicks]

Yes, but I hope that the hon. Lady will consider my point about CPI and RPI, because we are talking about billions of pounds that could be lost to British pensioners when that change is implemented over coming decades.

Let me reach my conclusion. We suffer from over-generalisations in this field. I am fed up with macho commentators, often from the political, professional and business class, who somehow assume that everyone will live to a ripe old age and that those in their 60s will have portfolios full of all sorts of opportunities—a directorship here, writing a book or doing a television programme there. Many people, not least those on the Government Benches, talk about a world of that kind—I do not want to get the hon. Lady over-excited: she has had many chances to respond, but she knows who I am talking about. Given the typical life cycles for the late 20th and early 21st centuries, more and more of our children and grandchildren will effectively not get started in their careers until their early 20s or even their mid-20s. With the rise of university education, the pattern of many people’s working lives will be like that.

However, that pattern is not at all typical of everyone in our society. When we recall the question that the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) asked about the mortality of those people, let us remember that there are still many working people coming up to retirement who started their working lives as 15 or 16-year-olds. They are the packers, the cleaners, the van drivers, the heavy manual workers and the care workers. By the time they reach retirement they are worn out. They are physically knackered, if I am allowed to use those words. They are tired, they are exhausted and what they need, in an old-fashioned sense, is a rest. They need to retire. They are not people like the hon. Gentleman, who I suspect will still be sprightly in his late 60s and 70s, with his portfolios and all the rest of it; they are physically worn out. They have been working since they were children, and they need a rest.

--- Later in debate ---

[Dame Anne Begg]

It is not a solution for the 90%, because they will still have to work for an extra year, on top of the extra years for which they were already having to wait for their state pensions. I believe that Age UK made that comment at the time of the Government’s announcement. Of course all Members agree that the position is better than it was before, but it is still not good enough. If my inbox is anything to go by, women who thought that their problems would be solved when they first heard the announcement have now made their calculations and discovered that for a large number the goalposts have not been moved at all, and that they have been moved by only a small amount for others.

In my view, it is a pity that the Government ever went down this route. They could have begun the accelerated rise in the pension age to 66 after the completion of the equalisation, between 2020 and 2022, rather than in the period before 2020. Obviously some wonk at the Treasury thought “What a good idea this is—it will save billions of pounds”, without recognising the anomaly that it would create and the difficulty that it would cause for this group of women. If Conservative Members want to know why their stock among women is falling rapidly, I will tell them. The fact that the Tories do not understand that decisions such as this suggest that they imagine women can somehow cope with reductions in their income has made women realise that many of them simply do not understand their lives or appreciate their problems.

The Government’s proposal may be better than what was in the original Bill, but if we vote for it tonight our decision will be final, because that will then be the timetable for the acceleration of women’s pension age to 66. Labour Members believe that certainty is necessary when it comes to pensions and that we must allow people to plan in advance, but whoever wins the next election, the last thing that any Government will be in a position to do is start fiddling with the system. What is fundamental to our argument is that a group of women have had no chance to plan, and I see no way in which any Government will be able to deal with that.

[Harriett Baldwin]

Is the Chair of the Select Committee confirming that a pledge to reverse the position, in line with the amendment, will not feature in the next Labour manifesto?

--- Later in debate ---

[Harriett Baldwin]

I should like to discuss auto-enrolment in general, and new clause 1 in particular. The new clause has been tabled in my name and those of my colleagues on the Work and Pensions Select Committee and several other hon. Friends. This part of the Bill enjoys much greater cross-party consensus than the matters that we were discussing earlier.

Auto-enrolment will improve the pensions landscape in this country for ever. For the first time, millions of ordinary workers will be brought into personal pensions. Between 3 million and 4 million women will begin pension savings, and a total of 10 million pension savers could be created by the massive nudge that they will get from this part of the Bill.

For a typical worker on an average income, the expectation is that, from the age of 22 until their retirement at, say, 67, there is much more likely to be a persistency of saving. For example, a woman earning £25,000 who is saving 5% of her income would save £100 a month. Her employer would make up a similar amount and, with tax breaks over her working lifetime and reasonable investment growth, that regular savings habit could create a pot worth some £200,000 in today’s money. Pessimists have said that that would provide an income of only about 45% of that person’s earnings in retirement, but I say that that is 45% more than they would have had without this enormous nudge. I welcome this step, which I believe will, in the fullness of time, reduce the number of my constituents who as pensioners really worry about making ends meet.

--- Later in debate ---

[Dame Anne Begg]

Does the hon. Lady accept that there might also be a nudge to the pension providers? If they know that they will not automatically get the business from those who have saved with them throughout the lifetime of their pension savings scheme and that that group of people is likely to shop around, those pension providers might improve the annuity on offer to individuals.

[Harriett Baldwin]

That is an excellent point, and I hope we all fervently agree that competition in this area would be an excellent improvement. Locking in your retirement income is the second most important financial decision that you will ever make. I apologise; I do not mean you, Madam Deputy Speaker, but an individual. Unlike buying a house, however, it is a completely irreversible decision—one that will last for the rest of the individual’s life.

The different rates offered by different providers could mean one’s retirement income being as much as 20% lower if one does not shop around. If we are unlucky enough to suffer from high blood pressure, diabetes, a heart condition, kidney failure, certain types of cancer, multiple sclerosis or chronic asthma or if we smoke, the one bright side is that a 40% higher retirement income could be achieved by shopping around. People who have enjoyed good health in their career but been in a hazardous occupation such as mining might find someone who will offer them a better retirement income. The right hon. Member for Croydon North (Malcolm Wicks), who is no longer in his place, knows that this does not apply to the state pension, but for the pensions we are talking about that involve the insurance market, those factors do apply. My fellow Select Committee members and I thus feel strongly about the value of this particular approach.

[Kate Green]

I am pleased to welcome the hon. Lady’s new clause. Does she agree that many people are reluctant or even in denial when it comes to facing decisions about their pensions and that there is a real opportunity here to spread a good news message about both the value of saving and making positive decisions about how to invest the product of that saving, thus providing an opportunity for the pensions industry to get on the front foot in engaging people in their long-term financial security?

[Harriett Baldwin]

I welcome that sensible intervention. I think this will completely transform the landscape. I spoke about an individual with a £200,000 lump sum at retirement. If we multiply that by the up to 10 million additional savers that we could be looking at, it shows how this country’s savings culture is going to be transformed. The scale of the issue to which new clause 1 refers will get much bigger over time.

The Minister reassured us in his earlier comments that there is a cross-departmental working group. I certainly hope that that group will move quickly to come up with some firm recommendations. I know that all who are signatories to this particular new clause look forward to that. We look forward, too, to seeing the action that will come about as a result.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I strongly support the principle of auto-enrolment. As was pointed out by the hon. Member for West Worcestershire (Harriett Baldwin), it means that from 2012 onwards, millions of people will save for a pension for the first time. We need a low-cost, trustworthy system in the United Kingdom if we are to begin to lift future generations out of pensioner poverty.

I fully support the establishment of NEST, as currently only 50% of employees contribute to a private pension, and for many of those on lower incomes the current system is poor. Research has shown that if a typical British and a typical Dutch person save exactly the same amount for their retirement, the Dutch person will end up with a 50% larger pension under the current scheme. I believe that that is because in the UK it is often not clear how high pension charges can be. For instance, a person who is sold a pension and charged at 1.5% per annum may not realise that over the lifetime of the pension, 38% of their possible income could be lost to fees.

In the past, pension companies were unwilling to provide the low-cost pensions of the type needed under auto-enrolment, as they felt that the ordinary low-paid workers had what the industry deemed “unattractive lives”—a somewhat derogatory term which simply meant that it was not easy to make money out of those policies. Indeed, it was because of the failure of the current structure to provide such pensions that it was necessary to establish NEST.

I welcome auto-enrolment, I welcome NEST and I welcome new clause 2, but three points cause me concern. My concern about auto-enrolment was prompted by some of the evidence given to the Work and Pensions Committee relating to a lack of regulation. I was troubled to hear that there would be no restrictions on how workplace pension savings are invested, and no record-keeping requirements for providers. The meeting between the Select Committee and the Pensions Regulator gave me very little reassurance. It appears that during the drafting of the Bill, many interested parties gained concessions. Employers, whether large, small or micro—along with the pensions industry—have been pleased to note that restrictions will be placed on NEST, but not necessarily on other alternative providers.

I believe that the restrictions placed on contributions to NEST, a vehicle for workers whose employers have no pension provision, may push some employers who are new to the pensions arena towards less scrupulous pension providers, I realise that NEST is aimed at lower earners, but some of the restrictions placed on it may nudge employers who are baffled by the choices facing them towards a pension provider that does not have such restrictions, but may well provide an unattractive pension scheme for the employee. It appears that the industry and employers have been around the negotiating table, but that the employees’ voice has not yet been heard.

If employers reject NEST because of the contribution limit, or other limits, they may place employees in schemes with unfairly high charges. I am deeply concerned about the apparent lack of a quality test for schemes that would be deemed to be a qualifying alternative to NEST. We know from past mis-selling scandals that too few people understand how charges, and pensions, work, and that—as in the case of the mis-selling of endowment policies—it can take many years for such practices to come to light. I ask the Minister to consider, with the benefit of hindsight in regard to previous mis-selling problems, what measures he intends to take to ensure that we do not store up similar troubles with auto-enrolment outside NEST.

My second point, which the Minister has touched on, relates to the ban on transfers to NEST, which resulted from lobbying from the pensions industry and which will benefit that industry at the expense of employees in the scheme. Under the current rules, people who are auto-enrolled in a scheme and go into NEST will not be able to move existing pots into the scheme. Such a ban cannot benefit the very employees and future pensioners whom we are trying to assist; it can only support the industry. I believe that a modern pension in a modern age should be portable, and that provisions for transfers in and out of NEST should be included in the Bill even if they cannot be implemented immediately. I welcomed some of the reassurances given by the Minister in his opening remarks.

My third reason for concern is the three-month waiting period. Although I understand the need to balance the administrative burden for businesses, it means that half a million fewer people will be automatically enrolled. As has been pointed out twice already today, nowadays many people have 11 different employers over their lifetimes. I would support a reduction to one month. Nevertheless, employees are currently able to opt in to the system from the first day of their employment, but they need to know that they have that right. I urge the Minister to amend the measures to require employers to ensure that employees are aware from when they start their employment that they can opt in from day one and receive employer pensions contributions.

The pensions cap combined with the three-month opt-out and the inability to transfer into NEST will prevent casual workers and part-time workers—mainly women—from building a decent pot, even though that is our aim. I ask the Minister to consider these concerns and in his closing remarks to give the House further assurances as to how they can be addressed.

Pensions Bill [Lords]

Harriett Baldwin Excerpts

Monday 20th June 2011 Commons Chamber

[Mr Byrne]

I will give way in a moment.

Let us hear what the impact of the Government’s proposals will be, because the Secretary of State rather glided over this point. Some half a million women will receive their state pension at least 12 months later than they had previously been advised, with 300,000 women—those born between December 1953 and October 1954—experiencing a delay of one and a half years. For 33,000 women—those born between 6 March and 5 April 1954—that period increases to two years. For them, the loss in state pension will be around £10,000. For those on full pension credit, the loss will be closer to £15,000. Those women, with five years’ notice of the timetable change, have almost no time to prepare for their income loss.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the right hon. Gentleman give way?

[Mr Byrne]

In a moment.

We are talking about women in the age group that was asked by a Conservative Government in 1995 to set in train the equalisation of the state pension, a reform that we accepted, because it came with time to plan. However, that cannot be said of today’s proposal. This morning, Age UK warned that

“a sizeable minority are not even aware of the 1995 changes with nearly a fifth expecting to receive their State Pension at the age of 60.”

The Secretary of State’s proposals will now make that worse.

[Richard Graham]

rose—

[Harriett Baldwin]

rose—

[Fiona Mactaggart]

rose—

--- Later in debate ---

[Richard Graham]

rose—

[Harriett Baldwin]

rose—

[Mr Byrne]

In two minutes.

Michelle Mitchell, the charity director of Age UK, has said that

“it’s difficult to see how women can plan properly when the government keeps moving the state pension age goalposts”.

The director general of Saga has said that

“to make just one cohort of women bear all the brunt of this in the very short-term will undermine the concept of planning for retirement over the long-term and cause real distress to the responsible women who have made careful financial retirement plans.”

Can hon. Members tell me how this can possibly be justified?

[Harriett Baldwin]

I thank the right hon. Gentleman for finally giving way. I speak with a lot of interest in this matter, as a woman in her 50s—[Hon. Members: “Surely not!”]—I know, shocking isn’t it?—who has seen her pension age increase, first by five years and now by a further year. However, does he accept that there is an issue with rising longevity and that we therefore need to push forward the retirement age of women such as myself?

[Mr Byrne]

Of course. The hon. Lady makes an extremely fair point, and that is why, after the Turner commission met and the Pensions Act 2007 went through this House, a clear timetable was set for how the state pension age should increase. [Interruption.] The Secretary of State is muttering from a sedentary position about how the longevity assumptions have now been increased. That is perfectly fair, and we should have a national debate about how the state pension age should be brought forward; indeed, the Pensions Minister has issued a consultation. It is just a shame that it closes on Friday, after this debate is concluded.

--- Later in debate ---

[Jonathan Evans]

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

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

[Harriett Baldwin]

Did my hon. Friend also see last week’s Age UK survey, which found that 20% of the women affected by the previous Government’s changes to equalise the pension ages of men and women had not realised what was going to happen to them?

[Jonathan Evans]

Indeed, and one of the difficulties in this regard is to do with the first change, to which almost all e-mails refer: that women were getting the pension at 60 and that that is now gradually being moved up to 65. The right hon. Member for Birmingham, Hodge Hill referred to his family being affected. Well, my wife is affected by these changes, but we in this House were aware of them because we legislated for them in 1995. [Interruption.] Yes, we have known about them, but we have known about them only here, because there has not been much dissemination of this information outside the Chamber to the rest of the public. [Interruption.] I am grateful to the hon. Member for Slough (Fiona Mactaggart) for indicating that that is so. The idea that the retirement age might then be moved up to 66 is not new. It was debated in this House back in 2007, and legislation was put on to the statute book. What we are doing now is moving the first of these dates forward, and in my view that is necessary. It is perfectly clear that a significant saving will be made.

The Secretary of State made a typically sensitive address, which was well received on both sides of the House, and not only because he said he was prepared to listen. I am staggered that any Minister who says they are prepared to listen to an argument is treated with contempt from the Opposition Benches. [Interruption.] Absolutely: it is an indication of what Labour Members were used to when their party was in government. I commend my right hon. Friend on his approach, however, and I am impressed by the sum of £30 billion.

The Opposition propose that we should not take these steps for a while, and that we should instead return to a 2020 or 2022 timetable. The argument that everything the Government do is being done too fast is a familiar Opposition refrain. It in effect suggests that we can somehow just pass the responsibility on to succeeding generations and not grasp it ourselves. I think we must grasp it ourselves, but that does not mean I am unsympathetic to the arguments about that specific cohort of women who are affected in a particularly negative way.

I know there were debates on these measures in the other place, but I am not persuaded that we must defer taking them to beyond 2020. I am not going to talk about the implications of the equality legislation so often supported by Opposition Members, even though that may have led to a situation whereby what was stated in the coalition agreement cannot now be put into effect. However, what I am certainly uncomfortable about is any woman having to wait more than an additional year. My right hon. Friend the Secretary of State will be aware that Sally Greengross—Baroness Greengross, a Cross Bencher widely respected in this area—put forward a compromise proposal that has much merit, based as it is on the idea that no woman waits for more than a year. The restriction was limited in that way, and the measure was exceptionally intelligently crafted.

I have read Lord Freud’s responses to this debate. He said that the proposal would cost not £10 billion, as the Opposition suggest, but only £2 billion. Given that I want to husband public resources—and that we apparently have the Opposition’s support for shifting retirement ages forward from 2034 and 2044 to dates that are significantly earlier, saving perhaps £2 billion—I am much more attracted to the idea of matching that saving and making far greater savings elsewhere.

Lord Freud responded to the debate by pointing out the gender equality legislation—the equality provisions of European law—that might make this a difficult proposition. However, I am not persuaded that my right hon. Friend the Secretary of State’s Department lacks minds sufficiently sharp to overcome this difficulty. [Interruption.] Yes, I am absolutely sure that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), could draft the legislation required; but if not, he has all the necessary skill within his Department.

I am very happy to tell all of my constituents who have written to me on this issue that, because of what is happening with longevity, it is fair, if we are asking men to wait a further year, to ask women to wait another year. There are those who say it is a double whammy because we are also seeing equalisation from the age of 60, but that is already a part of the architecture and cannot be taken into account. I am certainly prepared to argue that case.

I want to make two final points that are connected not with this issue but with other aspects of the Bill. In it, adjustments are made to the financial assistance scheme. Many of my constituents have been affected by the collapse of Allied Steel and Wire. On the question of the general attitude of Labour toward pensioners, many of ASW’s pensioners know the “assistance” they got from Labour: none whatsoever. That is the reality. However, the truth is that, under the financial assistance scheme, many people are not even going to get the 90% that was flagged up as their likely reimbursement. I hope we get opportunities to address that issue. I am looking across at my hon. Friend the Member for Arfon (Hywel Williams)—I do not know whether I should call him my hon. Friend; he might be offended by that. My hon. colleague and I have discussed this issue, and it is important that we return to it to address some of the injustices in the operation of the financial assistance scheme as it affects ASW pensioners.

--- Later in debate ---

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Like other Members, I am encouraged by the agreement across the Chamber, particularly on issues related to fairness that mostly affect women. We agree, for instance, that we are all living longer and therefore need to extend our working lives. Contrary to what the hon. Member for South Dorset (Richard Drax) said, the last Labour Government took that into account in the Pensions Act 2007, following the recommendations of the Turner commission.

My right hon. Friend the Member for Croydon North (Malcolm Wicks) made a relevant point about variations in life expectancy connected with socio-economic inequalities, and about the time for which people in a healthy condition can expect to live. I agree that more research should be done on that.

[Harriett Baldwin]

The hon. Lady mentioned the steps that the last Government took to deal with increasing longevity. Does she agree that the figures produced by the original Turner commission suggest that things are moving much faster than was anticipated even in 2004, and that since then longevity has increased by at least a year?

[Debbie Abrahams]

I think that the hon. Lady is referring to the average. It is important for us to consider not just the average, but how the figure is spread across different socio-economic groups. It does not explain or excuse the Government’s failure to protect the women who are being detrimentally affected by the acceleration of the equalisation of the pension age.

As many people have pointed out, this is about fairness. We must focus on what is right, and the Bill fails the fairness test. Many figures have been cited in relation to what the Bill means nationally. Half a million women will have to wait more than a year longer to receive their state pensions, 300,000 will have to wait an additional 18 months, and an unfortunate 33,000 will have to wait a further two years. Moreover, the Government will increase the state pension age for both men and women to 66 in 2018.

I asked the House of Commons Library to conduct an analysis of the impact in my constituency. I discovered that 4,300 women and 3,800 men would be affected, and that approximately 200 women would experience a notional loss of income from their state pensions of up to £10,700. I have been contacted by dozens of women in my constituency who have been working since the age of 14 or 15, including one called Linda Murray. She gave me permission to use her name. She was born in 1954, and left school at 16 to start work. She wrote:

“I have never had a job that provided a pension or had the means to provide one for myself. I have worked full-time apart from a few years when I worked part-time while helping to look after my mother who needed 24-hour care. For most of my working life I expected to receive my pension at the age of 60. However when the age started to rise I accepted this, as did everyone else. My retirement date was set at 64. I now work 47 hours a week in a dry cleaners and it is hard manual work. Due to my personal circumstances, full retirement is not an option for me, at least for a few years, but I was planning to greatly reduce my hours. I know that I won’t be able to continue working as I am now until I’m 66.”

Many Members have mentioned that that is hard to do because of the physical wearing out of the body.

Linda continues:

“But my take-home pay is £267 a week—how am I going to be able to save enough from this to be able to work part-time when I’m 64?...This proposal is ill thought-out and cruel. It’s unfair to move the goalposts for a second time. Women of my age have worked hard and honestly and don’t deserve to be discriminated against in this way. We accept the need to equalise the retirement ages but it should be done in a fair way. I feel that this Act will create an underclass of women unable to continue in their present employment, unable to find another job and denied the pension to which they are entitled. In an interview in The Daily Telegraph…David Cameron said that a sudden rise in women’s retirement age was out of the question.”

So that is another broken promise. There are hundreds of women with similar stories, and there is considerable cross-party agreement that we need to do something about this. I therefore hope that Ministers are listening.

Another fairness issue is the switch from the retail prices index to the consumer prices index. The Department for Work and Pensions impact assessment produced figures that again suggest that the burden will shift from the Government and employers to the individual. Some £500 million will be taken from the Pension Protection Fund.

My final point is about the increase in income thresholds for automatic enrolment into occupational pensions and the delay in that regard. The former Labour Government introduced that measure in the Pensions Act 2008, but the current Government are restricting access to it by both increasing the threshold from £5,000 to almost £7,500 and introducing a three-month waiting period. Again, women and people in low-income jobs will be particularly affected. Indeed, the impact assessment suggests that those who will be most detrimentally affected will be women, people on low incomes, ethnic minority groups and people with disabilities.

We must not allow our pension system to be reformed in a way that pushes pensioners deeper into poverty. Labour did a lot to reduce inequalities—although I would have liked us to have done a lot more—but these reforms will make them worse.

Welfare Reform Bill

Harriett Baldwin Excerpts

Monday 13th June 2011 Commons Chamber

At least with the NHS reforms the Government paused to work out a policy: on this Bill, they have not managed to work out a policy, but they are pressing on all the same. No proposals were presented in Committee and we have none in front of us today. Instead, we just had an informal seminar on options. We know that the Government want to extend provision for child care support to people working fewer than 16 hours a week, but they want to do that within the existing budget. That does not add up—it is a mess.

[Harriett Baldwin (West Worcestershire) (Con)]

I thank the right hon. Gentleman for giving way on this extremely important issue. Is his solution the same as that of the groups he mentioned earlier—to put more money into child care?

[Stephen Timms]

No: our solution is the one in new clause 2, which we are debating. The priority should be to maintain the support currently being received by people working more than 16 hours a week. I understand why the Government say that they cannot simply find more money for supporting child care, but what will be disastrous is what appears to be the Government’s intention to give a lot more people support from the same cash-limited sum of money. If that proceeds, a very large number of people for whom work pays at the moment will find that work no longer pays.

[Harriett Baldwin]

Does the right hon. Gentleman welcome the proposals that would allow people to move into work of up to 16 hours—the mini jobs?

--- Later in debate ---

[Harriett Baldwin]

On the important subject of free school meals, is the right hon. Gentleman suggesting that the taper would begin immediately someone went into work, or would it come into play once the earnings disregard had moved out of the way, and if so, what would be the cost of his proposals?

[Stephen Timms]

The point is that it is a zero-cost proposal; I am simply suggesting that the funding would be provided through the mechanism that I have described. It would be tapered away, along with the rest of universal credit, and would sit naturally on top of existing payments, so that there would be just an additional payment in respect of school meals, where appropriate, which would then be tapered away once the disregard had been exhausted. The budgetary cost would be exactly the same.

We have exactly the same issue with free prescriptions. The current system provides them to people on benefits and to some people with low incomes through the HC2 form, but once again, we have heard nothing from the Government about what will happen under universal credit. Our new clause 4 addresses that.

By the way, it is perhaps worth making the point in passing that the number of pupils receiving free school meals is an important indicator for education policy as well. The pupil premium depends on the number of people receiving free school meals. The fact that we have no idea at all who will be entitled to free school meals under the Government’s proposals will create serious problems with that, too.

--- Later in debate ---

[Sheila Gilmore]

Of course people have to work, and of course they have to be able to work in real, proper jobs. The hon. Members for St Albans (Mrs Main) and for Truro and Falmouth (Sarah Newton) should think, at times, about the type of jobs that they are talking about, and the kind of experiences that people will have. I want to be sure that those who go into work undergo a proper job progression rather than becoming stuck in a sideline meaning that a box can be ticked because they are now working and have some work experience.

[Harriett Baldwin]

Does the hon. Lady not accept that that is exactly what happened when people were stuck in jobs that paid them to work for 16 hours, so that it made no sense for them to work for 15 or 17?

[Sheila Gilmore]

I think that it often made a lot of sense for people to work for 16 hours and more, and issues such as child care were key to that. In many cases, child care costs kick in when hours like that are involved.

We should not try to justify reductions in child care provision simply by saying that they may help another group who need a certain amount of help—and, indeed, they may not do so. We need to examine the model thoroughly, because otherwise we will not know what will happen. Depending on which version of the proposals the Government decide to adopt, help for child care for people working 16-plus hours may be cut and there may not be a call on child care costs for people doing mini-jobs. If that is the case, money would be freed up. I am unsure as to whether there will be a call on it for the following reason.

Some mini-jobs will be at times such as 5 until 8 o’clock in the evening, and those doing them might not have another family member who can undertake child care at that time. Child care costs may therefore be incurred—although I am not sure from what source any child care might be found at such a time of day. When the hours of a mini-job fit in with nursery or school hours, however, child care costs may not be incurred. Therefore, if there is not a call on child care costs for people working fewer than 16 hours, I hope that the available money will be recycled for the people from whom it appears it is to be taken, regardless of whether we know there is a demand for it.

--- Later in debate ---

[Sheila Gilmore]

I shall try to unpick that question. First, it has almost been forgotten—I hope not entirely forgotten—that universal credit will be introduced after £18 billion has been cut from this country’s welfare spending, so many people will already be worse off before universal credit comes into effect. Secondly, we do not know when the transitional protection we keep hearing about will end. Will it end and begin only if somebody gets into work or falls out of work, or will there be other circumstances in which that transitional protection will cease, which would mean that many people would be considerably worse off? The third reason that I have concerns about the assertion that people will be better off under universal credit is to do with all the points raised in our discussion of these amendments. Unless we are clear about issues such as the cost of child care and school meals, and how they will be accounted for under universal credit, we cannot know whether the assumptions made, the figures given and the statements made about people being better off will prove to be true.

[Harriett Baldwin]

The hon. Lady has repeated the much-quoted figure of £18 billion being taken out of welfare spending, but does she acknowledge that £3.75 billion of that is coming from higher rate taxpayers such as myself who receive child benefit on a four-weekly basis? Would she like me to get my child benefit back after 2013?

[Sheila Gilmore]

In answer to that, let me give a personal view that I would not want to attribute to all my colleagues, as I am unsure whether they would all accept it. If we feel that we can no longer pay child benefit as it was previously paid and that we must make savings, it would have been much fairer to have made that part of taxable income. For many reasons, that would have avoided some of the anomalies that the Government’s proposal has set up. However, we have frequently rehearsed those reasons, so I shall not spend a lot of time talking about them now. If savings had to be made, we might have ensured that some of that money came back in the way I have suggested. I personally think that, subject to a fair taxation system, that would be a better way of dealing with this issue than having the suggested abrupt cut-off.

I want to talk about savings, and in particular the savings cap being introduced on people who work. It is astonishing that this change should be made by a Government who have so much to say about their wanting to encourage people to get back on their own feet, to be self-reliant and to save for their future. It is very easy just to say that the average amount of savings of a person of working age is only £300—and that is frightening and appalling for our society if it is true. However, for those people who currently—[Interruption.] I do not know what is so funny. Currently, people who have savings and receive tax credit have been able to get assistance without losing that money, but the Government’s view appears to be different for those who fall on hard times, no matter what their circumstances are, and no matter what situation they find themselves in. We will, no doubt, have this debate again on Wednesday when we discuss non-contributory and contributory employment and support allowances. The Government’s view seems to be that the first thing someone should call on in difficult circumstances is any savings that they have previously been able to make. There is a lot that is unacceptable about that.

--- Later in debate ---

[Sheila Gilmore]

It is important in this debate to get away from the attempt to say that one group of people are hard-working taxpayers and another group do not pay tax and should have their rights diminished. The taxpayer may also be receiving certain benefits, if we feel that it is correct for them to do so. People pay taxes in all sorts of ways. They pay council tax, VAT and often income tax at various points in their life. They may do that while they are receiving benefits or they may have done so just before a change in their circumstances took them below the threshold for paying income tax; they may have had to reduce their hours or they may have been forced to do so. These are not different groups of people.

In our approach to these issues we need to consider the following seriously: we should see our welfare state not only as something into which all of us pay when we can, but as something from which we have an opportunity to take when things happen to us. These two groups of people should not be fighting each other. Someone should not say, “I am hard working; you are not. You should not be getting, because somebody else is working.” At a lot of the income levels that the hon. Gentleman mentions people probably will be entitled to benefits, be that help with their rent or council tax, or some other benefit. I ask the Government to think again about their attitude to people who are doing exactly what they have been asked to do, which is to get into employment, to work hard and to save. I ask the Government not to keep this savings provision in the Bill.

[Harriett Baldwin]

I welcome the opportunity to discuss the child care element of the universal credit. We did not have the chance to talk about it at length in Committee, but we all got invited to a discussion with the Secretary of State on the various different options for child care. This is an essential part of the equation that any parent considers when deciding the best way for them to approach the workplace.

I wish to talk about a slightly different approach from the one in new clause 2. I disagree with new clause 2, because I do not think that it takes the right approach, and I want to say exactly why. First, it retains the characteristic whereby someone has to work for a minimum of 16 hours to qualify for support with their child care. That fails to take into account an entire psychological barrier and frame of reference that a parent can have when they move into work. It is very hard to take the first steps into work, particularly when someone makes that choice—which, as we have heard, is optional, with smaller children. Those are large steps to take, so allowing parents to move into work by doing fewer hours—perhaps two days a week in the office or at work—is an extremely important part not only of encouraging a parent to move into the workplace, but, importantly, encouraging parents to maintain contact with the workplace when their children are small. That is a really important benefit of the approach that the Secretary of State has been discussing with us.

[Bob Stewart (Beckenham) (Con)]

I agree with what my hon. Friend has to say, but does she think it is also very important for a mother to keep contact with her children? When a mother goes into work for three hours a day, she will know that she does not have to do more than that and that she can get back to her children. I think that that is terribly important. I wonder whether my hon. Friend agrees.

[Harriett Baldwin]

Yes. We were reassured earlier by the Minister that any kind of sanction regime would apply only once children joined school at the age of five.

This linear move into work is an important aspect here—it is probably even more important for parents than for any other group in society—so I am pleased to see that it would be possible under the Secretary of State’s proposals. I am also pleased that the £2 billion which has been mentioned will still be in place to provide support for families making that transition into work.

[Ms Karen Buck (Westminster North) (Lab)]

The hon. Lady is making a powerful argument. Will she confirm that Labour Members are not arguing that child care assistance should not be available to people working less than 16 hours? Of course if the financial envelope is large enough it is right that that assistance should be available, for all the reasons she is outlining. What would she say to people who live in high-cost areas, such as my constituency, to parents of larger families, and to parents who have no choice but to work longer hours? Their child care is going to be reduced or lost, because their child care is going to be capped to pay for the things that she is talking about.

[Harriett Baldwin]

I shall deal with some of those other points in my later remarks, because they are all important subjects for debate. Indeed, the proposals in new clause 2 suggest a figure of £300 a week for this element. I was genuinely surprised that there were people who were getting as much as that. I do acknowledge the cost of child care in central London: I have paid it for many years, so I recognise what we are talking about. However, £300 a week is a lot of money—it works out as £15,600 a year. It is indeed a generous cap.

I propose that we turn the child care element on its head. The initial move in what we might call the slide into work should be reimbursed at 100%. When people make the difficult first choice to go into work, the first few hours of child care, perhaps up to the earnings disregard—I ask the Minister to ask the Department to consider some of the maths involved—should be reimbursed at 100% as they make that important transition. When they reach the level of annual earnings represented by the disregards that we are talking about, the tapering of the contribution that the person in work would make to their child care would begin.

[Kate Green]

The hon. Lady has obviously given this matter very careful thought, and I have great respect for the way in which she is approaching it. Does she not see a risk that the mini-job would become a trap, and it would be impossible for people to be incentivised financially to increase either their earnings or their hours of work, because they would start to lose child care support?

[Harriett Baldwin]

The hon. Lady underestimates the extent to which the 16-hour job has already become a trap. I think we all know people who have been trapped in one. I am proposing that when people move on to that slide and have greater support in those initial steps into work, they will become much more familiar with the world of work. When they move into taking on more hours and so on—let us not forget that once somebody has moved into the workplace they often find themselves eligible for a promotion or for the next move up the employment ladder, which might coincide with their children rising five and going to primary school—the fact that they are on more of a slide will mean that because they have extra work they will be able to share more of the cost of their child care. I would like to see some experimentation with the formula so that the child care support for the first steps into work is more generous, and the tapering begins further down the line.

[Charlie Elphicke]

Does my hon. Friend recall going to the seminar where we were consulted about the child care costs, and does she recall, as I do, that the idea that people lose out when they work more hours is a fiction? The Government are funding substantially more money for the system, which means that people will be far better off than under the current system even if they are working all hours, as well as benefiting when they are in 16-hour jobs.

[Harriett Baldwin]

My hon. Friend highlights the complexity of this area, not just because of the formulae and the mathematics but because of the financial behaviours of individuals who are making the choice between working and not working. This is an important behavioural area for people who are not in the benefits system. We all know people who have left work, had a baby and taken time out of the workplace. They make the trade-off and ask whether it makes sense for them to go back to work and pay for child care or not. That happens outside universal credit, in the world of people who are not touched by the benefit system in any way. This is a complex area.

[Sarah Newton]

My hon. Friend is making an excellent case. In addition to the financial considerations for women who are returning to work, there are great psychological concerns. Women ask whether the necessary quality of child care will be available, whether their family will adapt and whether they will cope with the separation from their child. Enabling people to be supported to take those first steps into work, even for a few hours, would help families overcome that barrier and, I hope, go on to increase their hours and ultimately go back into work full-time.

[Harriett Baldwin]

I vividly remember going back into full-time work after maternity leave—and on that first day back, frankly, one is amazed that one’s child is still alive at the end of the day for which they have been left with someone else. The psychological transition is very important, and taking it in smaller incremental steps—perhaps with more generous support—is extremely important, because it builds up trust in the alternative child care while also allowing the child to get used to it in small steps. I urge the Minister to suggest that the Department consider some other iterations along those lines.

My other point concerns the review of the consultation put forward by the Secretary of State.

[Sheila Gilmore]

rose—

--- Later in debate ---

[Harriett Baldwin]

I shall give way to the hon. Lady, who was so generous in giving way to me.

[Sheila Gilmore]

Will the hon. Lady consider whether, in this debate, we have got ourselves into the situation of being forced to contrast one group of people who are trying to work against another? Perhaps she would care to join me—I am not sure whether my Front Benchers would agree with me, and perhaps her Front Benchers would not, either—in saying that it would be better to give child care assistance to people who work all hours. Perhaps we should join forces to argue for that.

[Harriett Baldwin]

My point is that we should try to concentrate the support that the taxpayer gives into the early hours of going back into work. I would like the taper, and what can be afforded, to be announced annually by the Chancellor at the Dispatch Box, just like the overall taper in universal credit. The country’s potential to support people in those choices would go along those lines.

My second point about the alternatives to new clause 2 that the Department might consider concerns the need to recognise that the cost of child care varies greatly with the age of the child—although I acknowledge this goes somewhat against the simplicity of universal credit. Of course when children go to school the cost of child care out of hours drops dramatically from the cost of providing child care for an 18-month-old child. I suggest some form of annual review of child care support that takes into account the age of the child or children. We should also consider this in terms of the annual envelope, because that would address the issue raised by the hon. Member for Stretford and Urmston (Kate Green) about the predictable fact that holiday cover is an annual challenge for working parents, and reflect the fact that there is that fluctuation for parents of children at school.

I wanted to outline why I do not agree with new clause 2 and why I welcome the fact that the Government are having an open dialogue about the £2 billion that they are putting into child care support, and to emphasise that all families, whether they are on universal credit or not in the benefit system at all, have to make behavioural and financial choices about the world of work. I would like the support that the state gives to encourage people into work to be concentrated on those first few hours of child care.

[Kate Green]

I want to comment first on the proposed child care amendments. Owing to the funding envelope within which we work we face a difficult financial choice about which group of parents to assist with child care costs. I warmly welcome the implication in the comments of the hon. Member for West Worcestershire (Harriett Baldwin). Obviously, one would want to support funding for child care as far as possible, and in making an early selection about which group of parents should benefit we do not want to shut off the possibility of financial support for child care for more parents being an aspiration over time.

In saying that we wish to protect the child care support available for parents who work more than 16 hours, we are certainly not saying that we might not aspire in due course to see child care supported beyond that. The loss of financial support for child care will make working completely unviable and will be a dangerous and retrograde step that I do not believe Ministers have fully analysed.

It is important that we do not see child care provision simply as instrumentalising the return of parents to paid employment. Nowhere in the debate today have we said much about the welfare of the child. We do not know what short hours child care, if any, will be available in the child care market. It certainly seems to be a complicated and unlikely form of child care for parents to be able to access and it does not reflect the way in which child care provision is currently organised. Of course, child care providers might respond if more parents were seeking to buy shorter hours of child care, but the question that arises is whether it is a financially viable model for providers. I am not aware of Ministers investigating that, and I would feel more reassured about the validity of their proposals if they had been able to say a little more about what they meant for the market, its resilience and its potential for growth.

I would also have felt more reassured if Ministers had analysed the extent to which very short episodes of child care are or are not good for children. I genuinely do not know the answer, but I have a sense that putting a child in child care for two or three hours on two or three days a week presents an unstable stop-go approach. We certainly know that, for younger children, one-on-one care with a single main carer with whom the child can form a stable relationship is very important. Although I do not rule out the possibility that shorter episodes of child care could be good for children, I have not seen any sign that Ministers have investigated whether that is the case. It is extremely difficult for us to support a measure that has given no attention to the well-being of children.

On the proposals—or lack of proposals—in relation to free school meals, I do not blame Ministers for seeking to pass the problem to the Social Security Advisory Committee because it is an extremely difficult one to solve. The previous Government had been concerned about the cliff edge that exists as parents move off benefits and into employment and free school meals are removed wholesale. Parents have repeatedly told us as politicians that that is an incredible financial shock to low-income families as parents move into work. We have no idea what Ministers will propose in due course.

We have been struggling to find the model that will work. Models have been bandied around that could leave parents able to afford school meals on Monday, Tuesday and Wednesday, but not on Thursday or Friday, or that might mean that they can afford school meals for some children in the family, but not for others. There is a real concern that what Ministers propose will still lead us to a cliff edge.

We need to be clear about the principles that we seek to achieve. I would like absolute clarity from Ministers that when they receive the recommendations and advice of SSAC, they will ensure that support is available for all children who need free school meals; that the system that is put in place will be simple for families, simple for schools to administer and simple for the Government, too; that child health will not be compromised because children currently eligible for free school meals and therefore accessing a healthier diet are in future shut out of such provision; and that the design of the system will not create work disincentives.

I have not yet seen any evidence that all those circles can easily be squared, unless Ministers are prepared to look again at the direction of travel that the Labour Government were following, which was, over time, to move towards extending the reach of free school meals. I accept that in the present financial climate it will be difficult to get all the way there, but Ministers need to think now about how they design the cliff edges and the tapers, because that is the foundation on which a future extension of free school meals to more children would be built.

The most comprehensive option would be to include a per child school meal element in the universal credit, which crucially would be paid directly to schools to provide meals, so that parents were not—by force, in many cases—obliged to use the money to meet other bills. I would like us to consider how a model could be designed that, when funding allows, would allow the money to be paid in full until the family reached their earnings disregard level, at which stage it would be withdrawn from universal credit at the taper rate, which we would like to have been maintained at 65%. That would mean that both DWP and families were contributing to the cost of school meal expansion. Entitlement could end when universal credit payments end, preferably when the imputed value of the school meal had been fully tapered out.

Achieving that vision immediately would undoubtedly create additional cost, which I recognise that Ministers want to avoid. Nevertheless, it is important that they give us assurances that they will seek at the outset to design a system that could be developed in that direction over time and as funding allows.

Amendment 68 relates to carers. A small group of carers seems to have slipped the notice of Ministers when considering the impact of the design of universal credit, specifically in relation to earnings disregards. We know that many carers can work only a very small number of hours because they are seeking to balance paid employment with substantial caring responsibilities. We also know that those few hours of work are very precious to them. They enable them to maintain contact with the labour market, they widen their social and external circles, and they provide a bit of a respite for the carers from the stress and strain of caring.

Where those carers are in receipt of income support, they can at present earn up to £20 a week from doing a few hours of paid employment without it affecting their benefit. In their proposals for universal credit, Ministers have provided for disregards for carers in a number of situations, but there seem to be some groups who will lose the benefit of that disregard as a result of the proposals before us. For example, some carers are caring for someone who does not live in the same home as the carer. Those carers may no longer enjoy the benefit of the earnings disregard. That seems completely at odds with the aspiration that Ministers have expressed for the universal credit, which is that every additional hour of work will pay.

I hope that Ministers will give careful attention to amendment 68 and consider what can be done to ensure that all carers are incentivised to take on even a few hours of work. What assessment have Ministers made of the number of carers who are left outside the ambit of the current disregard for carers, and of the cost of extending such support to all carers?

Finally, we cannot stress often enough how important it is that we ensure that payments for children go to the main carer of the child. Ministers seem to think it is good enough that couples have the option to make that decision, but very many families will, by default, allow all payments of universal credit to go to one member of a couple in a couple household, and we know from the evidence of the way in which the pension credit has been received in couple households that that is most likely to be the man.

Oral Answers to Questions

Harriett Baldwin Excerpts

Monday 13th June 2011 Commons Chamber

[Chris Grayling]

The hon. Gentleman talks about the causes of youth unemployment. He should look back to when the current increase started in 2003-04, in the good years under the previous Government. He should ask why their policies failed so badly.

[Harriett Baldwin (West Worcestershire) (Con)]

12. What recent meetings he has had on reform of disability living allowance.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Throughout the development of the new personal independence payment, which will replace disability living allowance, we have had extensive discussions and consultation with disabled people, their families and organisations representing them. The insight of organisations such as RADAR, Mencap, Scope, the United Kingdom Disabled People’s Council and People First into how disability living allowance can fail to support disabled people is immensely valuable. We will continue to work closely with disabled people and their organisations as the detail of the assessment criteria is developed and tested.

[Harriett Baldwin]

On the recent “Hardest Hit” march, I met constituents who had the impression that disability living allowance was to end altogether and would not be replaced by the personal independence payment. Does the Minister agree that in representing these disabled constituents, organisations have to ensure that they communicate clearly with those who might be affected, who are some of the most vulnerable in our society?

[Maria Miller]

My hon. Friend is absolutely right. It is important that the organisations working with us in the development of the new personal independence payment use that opportunity to ensure that the people whom they represent are well informed. We need a new approach to disability living allowance. The Labour party has already agreed with that, although we are still waiting to hear exactly what the Opposition’s plan would be.

State Pension Reform

Harriett Baldwin Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

I am grateful to the right hon. Gentleman, who brings great knowledge of these issues to the House. He raises a vital point. Although it is true that life expectancy across the social classes has been improving, which is entirely to be welcomed, there are still very significant differences. One suggested option in the Green Paper is that the review mechanism should take account of a wide range of factors of the very sort that he mentioned. It is possible to have a too formulaic or automatic approach, but the right hon. Gentleman will have noted that the Chancellor referred in the Budget to a “more automatic” approach, taking systematic account of increases in life expectancy, but potentially of other factors such as those that he mentioned.

[Harriett Baldwin (West Worcestershire) (Con)]

In welcoming the Green Paper and particularly the emphasis it places on removing means-testing as a deterrent to saving, will the Minister confirm how he intends to treat caring responsibilities and their role in contributing towards the build-up of a pension?

[Steve Webb]

I am grateful to my hon. Friend and I know of the expertise she brings to the Select Committee on these issues. We propose that bringing up the next generation or caring for an elderly relative will be valued by society just as much as a high-paid job. A year will be a year will be a year. If someone is contributing to society in that way or in paid work or in other ways, it will bring them one thirtieth of a single state pension. We think that is a big step in the right direction, which will be widely welcomed around the House.