Benefits Uprating

Debate between Harriett Baldwin and Steve Webb

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

Debate between Harriett Baldwin and Steve Webb

Monday 28th November 2011 Commons Chamber

[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.

State Pension Reform

Debate between Harriett Baldwin and Steve Webb

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.

Oral Answers to Questions

Debate between Harriett Baldwin and Steve Webb

Monday 28th March 2011 Commons Chamber

[Steve Webb]

The hon. Lady has raised an important point about the financial support available to the group concerned. In fact, about 70% of them are in paid employment, and that section of the labour market is doing better than other sections. We reckon that three in five of these women have built up occupational pension rights on which they will be able to draw before they reach the age of 66, and both ESA and JSA will be available in certain circumstances. A combination of sources of income will be available to them.

[Harriett Baldwin (West Worcestershire) (Con)]

In his statement last Wednesday, my right hon. Friend the Chancellor said that he was hoping for

“a new, more automatic mechanism for future increases in the state pension age based on regular, independent reviews of longevity.”—[Official Report, 23 March 2011; Vol. 525, c. 961.]

With longevity increasing by about a year every year, that brought to my mind the vision of a cohort of people who might never actually reach pension age. Will the Pensions Minister comment?

[Steve Webb]

Tempted though I am, we do not propose to abolish retirement. What my right hon. Friend the Chancellor said was that we need to take account in a more automatic way. I do not recognise the improvement of one year per year, although it is rising very rapidly. The key is that we need to do things with proper notice and make sure people have successful longer working lives and therefore build up bigger pensions when they come to draw them.