Oral Answers to Questions

Debate between Jim Cunningham and Steve Webb

Monday 8th December 2014 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

T6. Her Majesty’s Revenue and Customs is sending letters to taxpayers detailing how their tax revenues are being allocated. This is being done in the name of transparency, but will the Minister tell his colleagues in the Treasury that teachers’ pensions are not welfare?

[The Minister for Pensions (Steve Webb)]

As the hon. Gentleman appreciates, the letters are sent by HMRC on behalf of the Treasury, and he is welcome to address his concern to our colleagues there. However, we clearly appreciate that there is a distinction between social security benefits and pensions paid to public servants in retirement.

Fairness in Pension Provision

Debate between Jim Cunningham and Steve Webb

Tuesday 8th April 2014 Westminster Hall

[Mr Jim Cunningham]

My problem with what the Minister has said about zero-hours contracts is that surely a situation is possible in which someone falls below the threshold because there is not continuity of employment. That is a “suck it and see” situation. How would the Minister deal with that, 40 years down the road?

[Steve Webb]

A zero-hours contract is a contract. If someone has a contract of employment, in the weeks or months—whatever the period is—when they are above the earnings threshold, money goes into the pension. We will not insist on pension contributions being made in weeks when people do not earn any money. How would they put money in?

I think the zero-hours contract argument is greatly overdone, in the sense that the typical person on a zero-hours contract does 20 hours a week, on average. It may vary—when they earn a lot in a good week, they will put a lot into the pension; when they earn less, in a bad week, less will go in. As long as they get work through the contract they will be in a pension, possibly for the first time. I think that many people on zero-hours contracts will do better, because employers would not generally have put them in a pension at all. We are making that happen.

As to people with multiple jobs, a small number of people have jobs that, taken together, would put them into the system, but, taken separately, do not. Sometimes they will have children, and if they do they are credited in the state system anyway. Only 35 years of contributions are needed for a full pension, so someone might not make contributions for a number of years and still get a full pension.

The House of Lords, in about half an hour, I think, is going to talk about the issue in the debate on the Pensions Bill. We will gather more data on it. We think the issue is small, but clearly we need to ensure that we know what is going on. The number of women, for example, doing multiple part-time jobs went down in the past 12 months, so we do not think that the assumption that the numbers are all going up and that it will all get worse is borne out by the data. However, it is a serious point and we will look into it.

The hon. Gentleman is right that people often do not have a clue. It would be lovely to think that one letter from Downing street would fix things. I have two views on the matter. We need to make sure that pensions work for people who do not get it and never will, because with the best will in the world, expecting tens of millions of people to understand all this stuff is a heck of an ask. For me, we have to make sure that the system works for people who do not understand it and do not make active choices. That is where the state pension reforms come in.

State Pension Reform

Debate between Jim Cunningham and Steve Webb

Monday 14th January 2013 Commons Chamber

[Steve Webb]

Yes, the new system is designed to treat people as people, rather than as dependants. It removes the distinction between employee and self-employed, contracted in and contracted out. Given that these boundaries are somewhat permeable—people might be self-employed one year and part time the next and so on—this will streamline the system and make it easier for people to build up the 35 years they need.

[Mr Jim Cunningham (Coventry South) (Lab)]

Somebody mentioned the 75p increase earlier. The reason for that was that the previous Conservative Government broke the link and then it was related to prices, so let us be clear about that. Secondly, the problem with pensions actually started when the previous Conservative Government, in terms of industry, gave incentives to people to opt out of SERPS and into private schemes—that is how we got ourselves into this mess today. How many people will lose out under these proposals?

[Steve Webb]

We are publishing later this week, along with the Bill, a detailed impact assessment of the changes over a series of decades. In the White Paper we have published today, the hon. Gentleman will see a chart that shows that, for I think at least 35 to 40 years, a majority of people affected by the changes will gain rather than lose.

Oral Answers to Questions

Debate between Jim Cunningham and Steve Webb

Monday 23rd January 2012 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

May I ask the Minister whether employers can still take a pensions contributions holiday and, if so, how many?

[Steve Webb]

Where employers run defined benefits pension schemes, if they are in deficit and have a recovery plan agreed with the Pensions Regulator, there is no obligation on them to overfund above 100%, and there are Inland Revenue rules that affect surpluses, which are still in place.

Pensioners and Winter Fuel Payments

Debate between Jim Cunningham and Steve Webb

Tuesday 22nd November 2011 Commons Chamber

[Steve Webb]

Absolutely, and I shall come on to the whole subject of the fuel poverty strategy that we have adopted. I suspect, as my hon. Friend the Member for Meon Valley (George Hollingbery) suggested in an intervention, that the correlation between the rate of the winter fuel payment and the depth and impact of fuel poverty is incredibly weak, if it is there at all. In other words, we have seen the winter fuel payment go up and go down, yet if that was plotted against the terrible problem of excess winter deaths or fuel poverty, I suspect there would be no correlation at all. When money is tight, we should be prioritising how we spend it so that it will do the most good.

As the hon. Member for Angus (Mr Weir) rightly says, fuel bills have shot up. Surely the priority should be stopping people paying a fortune for their fuel when half the heat goes out through poorly insulted walls, windows and lofts. Every year, it is tempting to say that this winter we should put cash into people’s hands because it is cold. Of course that is true, but if we always put off the hard work of insulation, energy efficiency and so on, the situation will be the same the next winter and the one after that. Money spent on energy efficiency will save pensioners and others money every winter, rather than our giving them cash one year, only for the heat to go out through poorly insulated roofs and windows.

[Mr Jim Cunningham (Coventry South) (Lab)]

The Minister has outlined one facet of the problem, but one of the major facets has not been touched on today, although it has been mentioned in Adjournment debates in Westminster Hall. We really need to look at the cartels among the oil companies and to ask what discussions the Government have had with the oil companies. Equally, the increase in VAT is having an impact.

[Steve Webb]

Obviously, the VAT increase does not affect fuel prices directly as they are on a reduced rate, but the hon. Gentleman is right that competition in the energy sector is a key concern of the Government, whether that is in gas, electricity or oil. Our colleagues at the Department of Energy and Climate Change are in regular and close contact with the competition authorities, but one thing the Government are doing is ensuring that people are aware of their ability to switch and get much better tariffs—that is particularly the case with electricity and gas. Clearly, we can do things for the long term, such as sort out the housing stock, but we can also do things for the short term, such as ensure that people get the best price available. There is huge potential to do a lot more that does not necessarily involve hundreds of millions of pounds of Government spending but would benefit people substantially.

Social Security

Debate between Jim Cunningham and Steve Webb

Thursday 17th February 2011 Commons Chamber

[Steve Webb]

When we produced the initial impact assessment on the changes, we divided schemes into four groups according to whether they revalued by RPI or CPI and whether they indexed by RPI or CPI. We found that a good deal of revaluation was done in terms of the revaluation order and hence would go to CPI, but that a lot of the indexation was in terms of RPI. We have gone out into the field and talked to those administrating schemes, and we are revising our estimates of the proportion that will respond to this change.

The hon. Lady brings me on to the point that I wanted to make: some schemes have RPI hard-wired—for want of a better phrase—into them. We faced the difficult decision of whether to override that and put CPI in or whether to say, “Rules are rules, scheme promises are scheme promises,” and keep it how it was. We announced at the start of December that we felt that people’s confidence in pensions is important, and therefore that we would not override scheme rules. If someone has joined a private sector occupational scheme that has RPI in the scheme rules, we will not override it. Obviously, each scheme will make its own decision on how to respond if they have the flexibility to do so, but many schemes do not have that, and therefore will not make the change. We will publish updated estimates of the proportions.

[Mr Jim Cunningham (Coventry South) (Lab)]

I apologise to the Minister and to you, Madam Deputy Speaker, for coming in late to the Chamber.

Will that also apply to the public sector schemes, because I have had a number of letters about those? Will the Minister clarify that matter for me?

[Steve Webb]

I am grateful to the hon. Gentleman for that point, because there is a difference between public and private schemes. The latter very often have the words “retail prices index” or “in line with statutory provisions” in their rules. The rules of public sector pensions did not have the words “retail prices index” in them; statutorily, they simply link to whatever the Government of the day do with state earnings-related pension schemes. Whatever amount or percentage SERPS went up by has always been the legal entitlement for members of public sector schemes, and we have not changed that or the law on it. Obviously, we are defining inflation differently, but the legal entitlement of members of public sector schemes was always whatever happened to SERPS, and we have not changed that.

Oral Answers to Questions

Debate between Jim Cunningham and Steve Webb

Monday 18th October 2010 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

5. What plans he has to amend the eligibility criteria for winter fuel allowance; and if he will make a statement.

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

In winter 2010, the winter fuel payment will continue to be paid at the higher rate of £250 or £400, according to family circumstances. Decisions about the rates for future winters will be taken as part of the annual Budget cycle, as normal.

[Mr Cunningham]

Will the hon. Gentleman give the same undertaking with regard to the chill winter allowance?

[Steve Webb]

I think the hon. Gentleman is referring to the cold weather payments. The rate of cold weather payment will be announced on Wednesday in the comprehensive spending review. As the House knows, for the first 11 years of the previous Administration, the cold weather payment was frozen at £8.50 and, although it was increased to £25 for two years in the run-up to the election, the previous Administration made no financial provision at all to keep it at £25.

Oral Answers to Questions

Debate between Jim Cunningham and Steve Webb

Monday 14th June 2010 Commons Chamber

[Steve Webb]

The coalition Government are sympathetic to the idea of giving people greater choice over annuities. We already have a commitment to scrapping the rule that forces people to annuitise at 75. We also want to look at how people can achieve better value for money from the annuities that they buy, and possibly also have earlier access to accrued pension funds. We take the view that it is their money, not the Government’s money.

[Mr Jim Cunningham (Coventry South) (Lab)]

T10. Has the Minister had any discussions with the Treasury regarding the pay-out for Equitable Life, bearing in mind that when they were in opposition, that crowd over there on the Government Benches hounded us week in and week out about a pay-out? Now can they deliver?

[Steve Webb]

The hon. Gentleman will know that Sir John Chadwick will produce his report in July. I understand from discussions with the Treasury that a compensation package will be produced on the basis of that, and legislation to bring that forward was included in the Queen’s Speech.