Pensions Bill [Lords]

Debate between Harriett Baldwin and Anne Begg

Tuesday 18th October 2011 Commons Chamber

[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 ---

[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.

Welfare Reform Bill

Debate between Harriett Baldwin and Anne Begg

Wednesday 9th March 2011 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

This is a huge Bill with a huge amount in it, so it is impossible to cover it all in a six-minute speech. I always call my Select Committee colleagues my hon. Friends, and I shall point out that our report on housing benefit, which my hon. Friend the Member for North East Hertfordshire (Mr Heald) mentioned, will be debated in Westminster Hall tomorrow afternoon. I hope that many Members will come along so that we can go into greater detail than we can today. Other elements of the Bill include the abolition of the social fund, and the moving of responsibility for council tax benefit to local authorities and how that cuts across the universal benefit principle and the sanctions regime; I shall not have time to go into that, but perhaps others will.

The biggest fundamental change to the welfare system in the Bill is, of course, the proposal for the introduction of a universal credit. As has already been said, and as confirmed in almost all the briefing papers I have received, the idea of a universal credit has been accepted in principle. I have always said, however, that the devil is in the detail. That is where the problem lies for Labour Members, who are well aware that we do not yet have much of the detail.

Despite what the Secretary of State said today, we still do not have any detail on how child care will be incorporated into the universal credit. We know that housing costs will be included, but we do not know how they will be dealt with. We are not sure about the disability premium or about the issues that my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) raised about passported benefits, free school meals and all the other aspects of the present benefit system that put significant amounts of money into the hands of those who have the least. That often includes people in work, but low-paid work. As I say, we do not yet know from the Bill how all those matters will be dealt with; we will not know until the regulations come out.

We know that carer’s allowance will be outside the universal credit, but we do not know how kinship carers will be treated. Changes are proposed to the disability living allowance, which is the key benefit that allows carers to access their benefits, and a lot of questions remain to be answered.

Furthermore, we still do not know what the marginal deduction rates will be. We know that 65p in the pound is proposed, but when we look in detail at someone in low-paid work paying income tax, we find that the marginal deduction rate will go up—and in connection with child care costs, it could go up by more than 100%. Child care costs will, in any case, go up, simply because more people will need child care if the Government proceed with their proposals to start imposing obligations on lone parents to start looking for work when their youngest child reaches five. Extra expenses are therefore associated with the Bill, but we do not know how they are to be dealt with.

We do not yet know how some of the claims will be fulfilled—whether, for example, the Bill will succeed in making work pay. The previous Government did make work pay in almost every case—apart from where there were high housing costs and many children. What we did not do was make work pay enough.

[Harriett Baldwin (West Worcestershire) (Con)]

I thank the hon. Lady, who is such a marvellous Chair of the Select Committee, for giving way. Does she agree that it is disappointing that the Labour party is not supporting Second Reading of this Bill, because the points that she rightly raises are the sort of detailed issues that could addressed in Committee?

[Dame Anne Begg]

I hope that they will be addressed in Committee, but the problem is that there are still too many unknowns about the Bill. That makes it impossible at this stage to give that kind of support to it. That is the danger.

There are reasons for suspicion, particularly among disabled people, about the Bill’s intentions. The Bill was published two days before the consultation on what amounts to the abolition of disability living allowance was announced. Again, we do not know the details. I do not understand why the Government need to change the name of the disability living allowance. Yes, there might be a case for reform, but this is a wholesale replacement. That is what worries people, particularly when the evidence suggests that it is going to be based heavily on the test.

Discussion this afternoon has been about the test for disability living allowance—but our experience is of the work capability assessment. We know that that is discredited and not fit for purpose, and disabled people fear that that is what is going to be imposed. As soon as the Government announce a proposal to change or reform a measure in order to make a 20% budget saving, suspicions enter people’s minds. Given the Government’s proposal to remove the mobility element of disability living allowance from those in residential homes, it is no wonder that some people are now frightened.

I realise that most of the time allotted to me has gone, but I want to say something about the proposal to withdraw contributory employment and support allowance after only one year. I believe that the Government should reconsider. I have always said that it is easy to reduce welfare bills: all that is necessary is to stop giving people any money—and that is what the proposed withdrawal of the allowance would do.