Carer’s Allowance

Julie Elliott Excerpts

Monday 22nd April 2024 Westminster Hall

On resuming—

[Julie Elliott (in the Chair)]

Order. The debate may now continue until 7.55 pm, although that depends on there being no more votes, of course. I call Beth Winter to continue.

[Beth Winter]

Like many other Members here, I have lots of constituents who are carers and come to me for assistance. One constituent has been a carer for his wife for more than 40 years following her diagnosis of schizophrenia. He is now a pensioner with a low income, but that impacts significantly on his entitlement to carer’s allowance. Another constituent who cares for her grandfather had her carer’s allowance revoked, before we intervened, for exceeding the income threshold during a period of financial difficulty and mental health impact. The DWP confirmed that a payment should not have stopped and she received over £1,000 back. There is the issue of overpayment, but I also worry about how many carers may be being underpaid significantly without accessing support or advice. There is also a large proportion of people who do not claim the benefits that they are entitled to.

Only 71% of carer’s allowance claimants in 2023 were receiving a payment, and the remaining approximately 400,000 claimants met the conditions set out above but were not receiving the benefit due to the overlapping benefits rule—including nearly all pensioner carers, which hon. Members spoke about earlier. The e-petition asks that carer’s allowance be raised to the rate of 35 hours per week at the level of the national minimum wage. That would equate to £400 per week. The Government’s response says that carer’s allowance is

“a benefit that provides some financial recognition that a carer may not be able to work full-time.”

But should someone earn more than £151 per week, they lose all access to carer’s allowance; that is the cliff edge situation that others have mentioned today. That £151 is only around 13 hours of work at the adult national minimum wage, and the number of minimum wage hours that can be worked before hitting the threshold has declined in recent years. That is completely inadequate and unacceptable, and it is in need of urgent reform. That is why the Government must commit to improving the carer’s allowance.

I have previously spoken in the House about the Work and Pensions Committee’s call for an increased earnings limit and the introduction of a taper. Here today is the Chair of that Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms), who has spoken about the issue in much more detail. I have also said that the uprating of the carer’s allowance needs to be synchronised with the real living wage.

Carers UK has set out a number of demands ahead of the election. It calls for an increase in the earnings limit for carer’s allowance to the value of 21 hours per week at the national living wage rate and for that link to be defined in law, so that the ability of carers to earn is not eroded over time. That would take the earnings threshold to £240 from the current £151. It also calls for reform to the eligibility rules for the carer’s allowance, including ending the cliff edge, giving access to a tapered rate for those working more hours each week, enabling more than one person to receive the benefit if multiple people care for the same person, and extending the run-on payments for bereaved carers from eight to 12 weeks. Most importantly, Carers UK urges the Government to carry out a full review of the link between caring and poverty across the UK and to commission an independent inquiry to explore longer-term solutions to bringing more unpaid carers out of poverty.

The Carer Poverty Coalition says the carer’s allowance itself should be increased and I think that is vital, having spoken to many carers in my constituency. The current rate is undoubtedly a poverty payment, and the earnings threshold cliff edge makes a mockery of social justice. The reality is that many carers work full time as a carer and the state refuses to recognise that financial benefit to society, as well as the invaluable contribution that carers make. The idea of earning a minimum wage for a full-time job has long been accepted, and we should do the same for those people caring.

I want to comment more generally on the demonisation of people who receive social security benefits, which are an entitlement and a right. More recently, that demonisation was demonstrated by the Prime Minister’s comments about a “sick note culture”, which were dangerous and absolutely disgraceful and will do nothing except exacerbate the hardship that people experience. The demonisation and stigmatisation of claimants, including millions of carers, must stop. As an example, in my constituency of Cynon Valley, we have high rates of social security claimants, including people in receipt of carer’s allowance. [Interruption.]

[Julie Elliott (in the Chair)]

Order. There is another Division. We will suspend for 15 minutes.

Private Pension Schemes: Regulation

Julie Elliott Excerpts

Wednesday 21st June 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)]

I congratulate the right hon. Member for North Durham (Mr Jones) on securing the debate and I thank all hon. Members who have contributed to it.

It is absolutely vital that pension savers have confidence in the running of their pensions, as we have discussed this evening. Employers and trustees must be open and transparent with their pension scheme members, and be absolutely clear when they make changes to the benefits members will receive or how they are able to take their pensions.

Savers in defined-benefit schemes are in entirely advantageous positions, which is why the Government require specialist advice to be sought in advance of anyone wanting to transfer significant savings out of a defined-benefit scheme and into a defined-contribution scheme.

It is equally important that when members opt to make changes to the way they receive their benefits, or indeed any pensions, they can access the information and guidance they need to understand what the implications of that would be. It is extremely concerning that there seems to have been a lack of communication, as the right hon. Gentleman outlined. It is of course the case that many schemes offer members a number of choices of how to take their benefits, such as partly in a lump sum if the scheme rules and tax rules permit it. In these cases, the scheme rules detail the calculations to be used, and the trustees can change the details of the scheme rules if they are able to do so within the scheme.

Although legislation is silent on the way in which these rules and calculations must operate, there are safeguards for members. Trustees, as discussed, have a duty to act in the interest of all members rather than of any particular group, and to do so they must take into account a range of factors. They will, for example, take into account the funding position of the scheme to protect the interests of current and future members and may make changes to the shape of benefit arrangements in the pursuit of that goal provided that the scheme rules allow it. Trustees should also work closely with the scheme actuary to ensure that all members get a fair value from the commutation arrangements. But— this is the key point of the debate today—it is crucial that each member has sufficient information before deciding whether alternative arrangements, such as taking a lump sum, are the best course of action for them. If members feel that they were given incorrect or insufficient information to make an informed choice, or if the trustees did not act according to the scheme rules, then they can take their complaint to the pensions ombudsman.

The right hon. Gentleman said that he wrote to the regulator and to the ombudsman and both referred him to the other, and he asked what redress there is for members in this situation. Let me clarify the role of the two organisations. The Pensions Regulator is the UK regulator of workplace pension schemes. It makes sure that employers put their staff into a pension scheme and pay money into it. It also makes sure that workplace pension schemes are run properly, so that people can save for their later years. Its focus is on the running of those pension schemes, trustees and scheme managers. There are duties on those parties and those working with them, including to report breaches to the regulator.

The pensions ombudsman, on the other hand, adjudicates on disputes between pension schemes and their members, as we are discussing in this case. If members of any scheme would like help in understanding options for retirement income and any documentation they have received for their scheme, I encourage them in the first instance to contact MoneyHelper, which is provided by the Money and Pensions Service, an independent, non-departmental public body.

[Julie Elliott (Sunderland Central) (Lab)]

Many dozens of my constituents are affected by the Nissan pension scheme. We have discussed in this debate the role of the ombudsman. The answer the ombudsman has given in this case is entirely unsatisfactory, and I know that all my constituents affected think so too. What was the Minister’s view of the ombudsman’s response in this case?

[Laura Trott]

I will come to that in a moment. If the hon. Lady thinks I have not answered her question properly, then she is very welcome to intervene again.

As I was saying, the Money and Pensions Service is an independent, non-departmental public body, which provides a free information and guidance service to the public on all matters related to workplace and personal pension schemes. In this case, I understand that in determining one case—not the individual case of Mr Steve Clare, but a case relating to identical issues in the Nissan pension plan—the ombudsman noted that the plan members were presented with an illustration of future benefits and options in retirement. However, if that was not the case—and certainly from the speech of the right hon. Member for North Durham that is not what appears to have happened—I ask him to provide me with all the details that he has and I will raise it directly with the ombudsman myself and provide a copy of the response.

Local Housing Allowance

Julie Elliott Excerpts

Wednesday 15th March 2023 Westminster Hall

[Mims Davies]

The hon. Gentleman points out the many questions he is asking about transparency, and I welcome that. Where policy is in development, we need to protect it, but, ultimately, if it needs to be transparent, I am very happy, where suitable, to share it.

On the point made by the right hon. Member for East Ham and others about temporary accommodation, it is, of course, an important way of ensuring that no family is without a roof over their heads. We are committed to reduce that need for temporary accommodation by preventing homelessness. We are investing £366 million into the homelessness prevention grant to support local authorities to prevent homelessness. The key point, and our main duty, is how best to support people so that they are not in that situation. I very much understand that, and I am keen to respond about how we are trying to do a little more about that.

It is important for Members to understand that the local housing allowance is not intended to cover all rents in all areas. In April 2020, in direct response to the covid-19 pandemic and the influx of new claimants because of the pandemic, we increased local housing rates to the 30th percentile of local market rates, costing nearly £1 billion and giving claimants on average an extra £600 in 2020-21. We have maintained that increase since then, ensuring that all those who benefited from the increase continue to do so.

I recognise that there are circumstances where extra help is needed, which is where we distribute the discretionary housing payments according to local need. Those payments play a critical role in providing support to the most vulnerable households in meeting their housing costs. Since 2010, we have provided nearly £1.6 billion in DHP funding to local authorities.

Of course, the competitive nature of the private rented market is driving up prices, alongside the annual review of LHA rates. I say to the hon. Member for Westminster North and the Chair of the Select Committee, the right hon. Member for East Ham, we are absolutely determined to work around the quality and supply challenges that are ultimately driving that. Overall, the DWP Budget measures today represent £3.5 billion over the next five years to boost workforce participation.

In conclusion—

[Julie Elliott (in the Chair)]

Order. Very quickly, please.

[Mims Davies]

I will wind up. I take all the points from hon. Members from all around our wonderful nations today, and I am sorry I cannot tell them any more than that this issue is a very strong focus for me, and that we will continue, I hope, to work together for all our communities.

Oral Answers to Questions

Julie Elliott Excerpts

Monday 19th November 2018 Commons Chamber

[Sarah Newton]

The benefit system is there to provide personalised and tailored support for its recipients. There were factual errors in the reporting by the UN rapporteur. For example, on mandatory reconsiderations, he absolutely denied the fact that decisions were overturned, yet 19% of mandatory reconsiderations found in favour of disabled people. We have undertaken a huge number of independent reviews of our benefit system and we do not hesitate in making improvements when they are identified.

[Julie Elliott (Sunderland Central) (Lab)]

8. What recent assessment her Department has made of the effect of the roll-out of universal credit on the personal finances of claimants.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Universal credit allows claimants to work and earn more, and the evidence is that people on universal credit are moving into work faster. We believe that everyone who can work should be given every support to get into work. That is what the job coaches are doing.

[Julie Elliott]

The Child Poverty Action Group found that almost half of those moving on to universal credit needed support, which is often not available, to set up their claim. If they miss their deadline, they receive no transitional protection and no back-dated credit, and they have to wait a further five weeks for payment. With the new Secretary of State leading the Department, is it not time for the Government to pause the roll-out of this benefit and look again at wiping out these very, very serious wrongs in the system?

[Guy Opperman]

If the individual claimant is vulnerable, there can be backdating, but for those who need extra support, there are advances of 100% from day one and also budgeting support. We are creating a brand new partnership with Citizens Advice to deliver a better universal support service.

Oral Answers to Questions

Julie Elliott Excerpts

Monday 20th February 2017 Commons Chamber

[The Minister for Employment (Damian Hinds)]

Mentoring has a critical role to play, and I would encourage those employers in my hon. Friend’s constituency, if they are not already doing so, to get in touch with local schools and colleges and to seek out more opportunities.

[Julie Elliott (Sunderland Central) (Lab)]

T7. Will the Minister look at the assessment of people with long-term progressive conditions who are applying for PIP, in the light of some of the issues that have been raised? Would she consider removing the need for continued assessment of people with long-term progressive conditions when, by the nature of those conditions, they are getting worse and not improving day by day?

[Penny Mordaunt]

The hon. Lady makes a good suggestion. We are looking at that, and if we can share data better—not just across our own systems but with local government—we could improve things, because we could cut down on a huge administrative burden for claimants.

Oral Answers to Questions

Julie Elliott Excerpts

Monday 9th May 2016 Commons Chamber

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

11. If his Department will introduce transitional protection for women adversely affected by changes in the state pension age.

[Julie Elliott (Sunderland Central) (Lab)]

12. If his Department will introduce transitional protection for women adversely affected by changes in the state pension age.

[Kate Hollern (Blackburn) (Lab)]

19. If his Department will introduce transitional protection for women adversely affected by changes in the state pension age.

--- Later in debate ---

[Mr Vara]

The Secretary of State made it absolutely clear earlier in these questions that he has no intention of revisiting this issue.

[Julie Elliott]

Why has the Minister not used the opportunity of a majority Conservative Government to put right the wrongs of the last Government, which have had an impact on some 4,290 women in my constituency, by introducing proper transitional arrangements—or is this just compassionate Conservatism in action?

[Mr Vara]

During the debates in 2011, the then Secretary of State for Work and Pensions and the then Pensions Minister said on Second Reading of the Pensions Bill that they would go away, consider and reflect, and they did precisely that: on Report, they made a concession worth £1.1 billion and reduced the timeframe from two years to 18 months. Transitional arrangements were put in place, and at a substantial and significant cost, notwithstanding the very tough economic climate at the time.

Amendment of the Law

Julie Elliott Excerpts

Monday 23rd March 2015 Commons Chamber

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend the Member for Foyle (Mark Durkan), who spoke with characteristic passion on behalf of his constituents in Foyle and more broadly in Northern Ireland.

In his speech last week, the Chancellor of the Exchequer said that

“the north grew faster than the south”.—[Official Report, 18 March 2015; Vol. 594, c. 767.]

However, when we scratch beneath the surface, the Chancellor’s headline figures do not match the reality on the ground. In the region where my constituency is situated, the north-west, it is true to say that in a single year, 2012-13, the north-west was the fastest growing region in the country, and that is welcome, but if we look at the first three years of this Government, 2010 to 2013, the overall figures for the north-west show that we have grown more slowly than any region other than Northern Ireland. So yes, there is welcome news in that one year, but taking the three years as a whole, the picture is not quite the one that the Chancellor set out.

I welcome the fact that unemployment is down. In my constituency in Liverpool, the memories of jobless economic recoveries of the past are very real, especially the impact of the Thatcherite policies of the 1980s. Unemployment can leave a scar on communities that may last for generations. As we all know, the evidence shows that once people are out of work, it can be very hard for them to get back into it. In my constituency many people are managing to find work. Over the past year the claimant count is down by 28%. Work is a good thing, but the quality of jobs is surely critical as well. Once again, the story is more complicated than that set out by the Chancellor last week or the Secretary of State earlier this afternoon.

Too many of the jobs in Liverpool are insecure, low paid jobs. The growth in agency work lies behind a large part of the fall in unemployment in my constituency. Recently, I met two local people, one of them a constituent, who worked at a factory in Liverpool. They had worked there for several years. However, they are paid and technically employed not by the company that runs the factory, but by one of the biggest agencies and suppliers of contract labour. They do the same work as regular staff, but are paid £2 an hour less, and the supply of hours is sporadic and uncertain. Their holiday and sick pay entitlements are far worse, and scandalously, one of them told me that when he suffered an injury at work, the medical centre at the factory turned him away because technically he was not an employee. Surely such working arrangements are unfair and wrong.

[Julie Elliott (Sunderland Central) (Lab)]

However bad those contracts are, does my hon. Friend accept that the explosion of zero-hours contracts, which are even worse than agency contracts, has occurred under this Government because of the tightening of some regulations to try to stop the abuse of agency worker regulations?

[Stephen Twigg]

I am grateful to my hon. Friend, who is absolutely right to make that point as we seek to understand the reasons for that and find solutions. I will come to that next.

I pay tribute to the employment, enterprise and skills select committee of Liverpool city council and its chair, Councillor Barry Kushner, for undertaking painstaking research that shows the extent of this problem. Their work has revealed that there are currently about 6,500 vacancies in Liverpool, over half of which are agency jobs. The council has identified the Swedish derogation as a major cause of the increase in exploitation. This derogation allows for agencies to employ staff directly and the eventual engager—the employer—to treat workers less fairly than their directly employed workers. Without the derogation, the system would still allow for the use of agency workers, which can still be of real use in various sectors, but the engager would be obliged to give the agency workers the same rates of pay as their permanent staff after a 12-week period in employment. The two local people I met who have been working for years at the same factory, but are paid less than the colleagues they are working alongside, feel like second-class citizens. Reforming this area would make a real difference for them. That is why I am delighted that my hon. Friend the shadow Business Secretary has promised that a Labour Government would end the Swedish derogation for agency regulations—a change that cannot come soon enough.

Other long-term changes need to be made. To tackle the structural problems of a low-pay, low-skilled job market, we need to ensure that entrants to that market have the appropriate skills. As a country, we have failed for far too long in this respect. My right hon. Friend the Leader of the Opposition has talked about the “forgotten 50%”—the young people who do not get the opportunity to go to university. It is welcome that fewer young people are unemployed, but our youth unemployment rates are still significantly higher than those of countries such as Germany, Austria and Norway that have invested in high-quality technical, vocational and practical education that breaks down the barriers between different sorts of learning.

We need to strengthen devolution within England. That is why the Andrew Adonis review recommended an English devolution Act, a central plank of which would be to devolve powers and funding for skills, and commission 19-plus further education provision based on local decision making. On top of this, city and county authorities should have the power to commission the Work programme in order to get the long-term unemployed back to work. I pay tribute to Liverpool’s mayor, Joe Anderson, and to Liverpool city council for the extraordinary work they have done to promote apprenticeship and work opportunities for people of all ages, but particularly young people.

Benefit Claimants (North-east)

Julie Elliott Excerpts

Wednesday 7th January 2015 Westminster Hall

[Julie Elliott (Sunderland Central) (Lab)]

It is, as ever, a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) on securing the debate, and I applaud the graphic, detailed way in which she outlined the problem faced by all Members of Parliament in the north-east. Sadly, the cases she outlined are not unusual. They are common—even the case where the gentleman died. There has been more than one such example in recent times in the north-east, and that is completely unacceptable.

I will start by talking about the staff at Jobcentre Plus and the DWP in general. They work hard and are put under enormous pressure. Staffing levels have diminished dramatically since 2010. We hear anecdotally about the pressures of informal targets on sanctions—we all know they are in place—from people who are too frightened to say something, so they tell us off the record. I sympathise enormously with them about the job they are being asked to do every day.

The other thing I want to discuss before I go on to the example I will talk about is the north-east’s economy. I have lived in the north-east my entire life. I live two miles from where I was born, which is very common in the north-east. We are a close-knit, supportive community, and that is replicated throughout the north-east, not just the part I am from. We have had high unemployment throughout my lifetime—obviously, there have been peaks and troughs, but it has been consistent. Although more jobs are available at the minute, their quality has to be questioned: a lot involve zero-hours or temporary contracts, so they give no stability.

We have a lot of people who, through no fault of their own, rely on benefits. We are also a low-wage economy. Furthermore, most people’s families do not have massive wealth, so if people fall on hard times, their families do not have the wealth to support them informally. If somebody’s benefits are sanctioned, they really do have no money. They cannot go to their families to ask for a little help, because their families simply do not have the money. It is not that they do not want to help—they simply do not have the finances to.

The other thing to say about the background of people in the north-east is that we are a hard-working area. Life is pretty tough for many people, but people have an ethos of working hard, paying their way and doing a fair day’s work for a fair day’s pay. That is the mindset of people in the north-east, and I take great offence when I read or hear about people criticising the area and talking as if people there were just scroungers, because that simply is not the case. I have no truck with people who really try to fiddle the system, and I would be the first to remove their benefits and sanction them, but they are not the norm, and they are not the people we are talking about.

People who need to claim benefits should be treated with dignity and respect, not only by those they deal with at the DWP and Jobcentre Plus, but by the rest of society. They should not be made to feel that they are worth any less than the person next to them because, for whatever reason, they have to live on benefits. However, the treatment people receive often falls short; in some cases, it is absolutely appalling and unacceptable.

I want to give an example of a case study I have had. Like my hon. Friend the Member for Newcastle upon Tyne Central, I get a staggering number of cases every week. A few months ago, I had a constituent who was unable to attend an appointment at Jobcentre Plus because he had suffered an asthma attack and was in A and E. He telephoned his adviser to tell them, although, to be fair, it would have been perfectly reasonable if he had not managed to do that. However, he did, and he spoke to the receptionist about the Jobcentre Plus appointment that had been scheduled for that day, which he would clearly be unable to get to. He explained his reasons and, on returning from hospital, he sent a letter.

A few weeks later, he received a letter saying that he had failed to comply with the scheme’s requirements and that his jobseeker’s allowance would be sanctioned for one month. Extraordinarily, the letter went on to say that an asthma attack was not a sufficiently good reason for missing an appointment. I am an asthmatic myself, and I know how crucial it is for people to get to hospital pretty darn quick if they have an attack that is out of control. The difference between not getting treated correctly in a timely fashion and surviving is paper-thin, and we read every year about the tragic cases of people who have not got to hospital quickly enough. However, if people get to hospital in time, they can be treated and brought back to health quite easily. The time element is crucial, which is why I said that, although my constituent took the time to ring, it would have been acceptable if he had not.

Miraculously, when my constituent came to me and I got involved, the decision was overturned. The most annoying thing is not that it was overturned—that was absolutely the right thing to do—but that it was made in the first place and that my constituent ever had to come to me. That is the problem, and that is what needs sorting out.

If people are ill, or have other genuine reasons for not being able to get somewhere at a certain time, they need to be treated fairly. They need to be treated like anybody else in any other system, and to be believed. In this case, my constituent had discharge letters from hospital; there was no question but that he had been at hospital, but that was not seen as a reason not to attend an appointment. That is just one case, but it graphically explains the problem.

I do not want to go over other cases, because we all have them. The people we are talking about are vulnerable. Many have not always been on benefits, and the unemployment that has arisen in the last few years is new to them. They are not part of a culture of benefit claiming. Treating them in this absolutely inhumane way is wrong and unacceptable—there is no other way of saying it—and it reflects badly on the DWP, the Government and, in broader terms, us as a society. We should be proud of the fact that we have a safety net for people who fall on hard times.

[Sheila Gilmore (Edinburgh East) (Lab)]

Let me take the debate slightly further north. I was recently astonished to read reports that the DWP was issuing stories and details about people they alleged were scroungers to the media to feed this attitude that my hon. Friend describes. This is therefore coming from the top, not just from a local office level.

[Julie Elliott]

That is not something I have read of, but it would not surprise me, quite honestly.

This week, the Select Committee on Work and Pensions held its first oral evidence session on benefit sanctions beyond the Oakley review. The review was highly critical of what was going on, and I look forward to seeing what comes of that. The Minister needs to accept our comments as constituency MPs who have witnessed the same problem at different jobcentres and offices. It is not one office that is to blame; this is about a culture. I hope that she will listen and act on our comments, because we are genuine people, and I am sure that the way we have described the system working is not what she would intend. I am interested to hear her comments on the situation as it actually is.

Oral Answers to Questions

Julie Elliott Excerpts

Monday 23rd June 2014 Commons Chamber

[Mr Duncan Smith]

Yes, they are, because they are set against means-tested benefits. I wish the hon. Gentleman would get his facts right and learn something about the benefits system. We have a system that will enable us to deliver the free school meals to those who are eligible for them, and not to those who are not eligible for them. The reality is that the mess that the Opposition left us is being cleared up and they cannot bear it. They do not even know whether they support universal credit. They flip-flop more on every policy than any other Opposition ever have.

[Julie Elliott (Sunderland Central) (Lab)]

8. What estimate he has made of the number of people below the threshold for auto-enrolment in a workplace pension.

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

We estimate that around 2.7 million individuals, aged 22 to pension age, who have earnings below the earnings threshold for auto-enrolment are not saving in a qualifying workplace pension in the private sector. About 1.6 million of those individuals are earning between £5,772 and £10,000 and have the right to opt in. Employers must tell workers about this right.

[Julie Elliott]

I thank the Minister for that answer, but does he agree that it would be right to extend pension auto-enrolment to all low-paid workers who are missing out at the moment?

[Steve Webb]

I am grateful to the hon. Lady, but let me explain why I disagree with her. She would enrol people at, for example, £6,000 a year—that is the policy of the Labour Front-Bench team. At current contribution levels, someone earning £6,000 a year would be putting 8.8p a week into a pension. If they did that for 35 years, they would end up with a pension of £1.93 a week. That does not seem a sensible policy to me.

Quality Workplace Pensions

Julie Elliott Excerpts

Thursday 27th March 2014 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend. Stakeholder pensions were the previous Government’s one attempt to limit charges. He will recall that they initially introduced a 1% cap—again, we have seen the colour of their money—before going back on that and allowing 1.5% for 10 years. I have always wanted to say that we will take no lectures from the Labour party, and he has now given me the chance. On defined ambition schemes, we will be taking that agenda forward, and I hope to have more to say about that when we publish our response to the consultation document. With regard to large-scale pension schemes, the command paper we are publishing today included a section on scale that I think he will find interesting. We think that the pot-follow-member model is the best way of ensuring that people build significant pension pots with the person they are currently saving with.

[Julie Elliott (Sunderland Central) (Lab)]

Why is the Minister waiting a year to introduce the full cap and a further year to ban people taking money from pension schemes to pay for sales commission? Why is he not acting much sooner?

[Steve Webb]

There is a perfectly straightforward answer to the hon. Lady’s question. When we asked firms to enrol their staff automatically, we asked them to plan 12 months ahead, because it takes a long time to set up a pension scheme, to choose a pension scheme and to communicate with scheme members. A firm sitting down today to plan for April 2015 knows the rules of the game today so that it can choose its scheme in an informed way. She asked why we have allowed a further year for commission and active member discounts. Clearly, if either of those takes a scheme above 0.75%, which many do, they will have to comply immediately in April 2015, but many of those are based on complicated contractual arrangements in pension schemes. We have to strike a balance between unpicking all those and focusing the pensions industry on delivering automatic enrolment, which is a key priority for the next 12 months.