Universal Credit

Debate between Lord Flight and Lord Freud

Monday 24th November 2014 Lords Chamber

[Lord Freud]

We have a system with the spare room subsidy where there is support at a local level through discretionary housing payment, and this is exactly the kind of case where you would expect to see that payment made.

[Lord Flight (Con)]

Can the Minister tell the House how many more people are in employment as a result of the incentives offered by universal credit?

[Lord Freud]

We have some financial incentives within universal credit to encourage people to go into work compared with the legacy system. The best and most recent data we have show that over a six-month period, 69% of people would have had some work in universal credit compared with 65% in the comparable JSA cohort.

Jobseeker’s Allowance

Debate between Lord Flight and Lord Freud

Monday 21st July 2014 Lords Chamber

[Lord Freud]

Apprenticeships are a cornerstone of this Government. Overall, we have had more than 1.1 million extra apprenticeships for youngsters since the election—a 40% increase on the equivalent period before the election, although I acknowledge that the previous Government were also pushing up the apprenticeship rate.

[Lord Flight (Con)]

My Lords, the figures on employment are extremely good news but the data on productivity, so far, are not quite such good news. Does the Minister have any views on why productivity has been so slow to increase? Might it have anything to do with Labour’s tax credits subsidising wages?

Housing: Discretionary Housing Payment

Debate between Lord Flight and Lord Freud

Wednesday 9th April 2014 Lords Chamber

[Lord Freud]

My Lords, I am not sure of the exact number of evictions, but I do not think that there are very many at all, if any. Clearly it is a matter of great concern. I can let the noble Baroness know that the data from the Homes and Communities Agency, which are based on the 266 largest housing associations with more than 1,000 homes, show that the average arrears in the final quarter of last year—the third quarter of the financial year—fell to 3.9% from 4.1% in the previous quarter and that rent collection rates for the year stood at 99%.

[Lord Flight (Con)]

The Minister will be aware that in central London and, in particular, the borough of Westminster—and I declare an interest as my wife is a councillor—there have been cases where very substantial housing benefit amounts have had to be paid particularly to house those categories that the local authority is obliged to house. Is there any system or intent to limit the amount of housing benefit that can be paid on an individual property?

[Lord Freud]

My Lords, my noble friend draws attention to the point that we have introduced a cap on the amount of housing benefit to stop the very large amounts that were paid on local housing allowance.

Pensions Bill

Debate between Lord Flight and Lord Freud

Wednesday 26th February 2014 Lords Chamber

[Lord Freud]

Various figures have been talked about, but I do not think I can pre-empt the answer to that question, which will be issued very soon.

In contrast to legislating radically to change the market, we see pot follows member as a way of building on the existing automatic enrolment structure quickly to reach a point where transferring pots is an integral part of the industry. Pot follows member does not prevent industry from innovating in future. Indeed, as individuals become more engaged in pension saving, they may want to be more involved in deciding where their pension pot is and in choosing a preferred scheme.

In response to the point made by the noble Lord, Lord Hutton, there is even scope to introduce an aggregator in future if there is demand for it, so we are not closing any doors by pursuing this route now.

[Lord Flight]

I think that the Minister just said it, but can he confirm what I view as a crucial point, which is that the individual is still free to choose where he might wish to place his consolidated pension savings and that we are talking only about the default option? Therefore, as people become more informed, some may choose not to consolidate in their employer’s scheme.

[Lord Freud]

I can confirm my noble friend’s question—or I can give the answer to confirm it.

At this point in time, when we are just starting out with automatic enrolment and successfully getting people saving for the first time, we need to make it as easy as possible for them to build their pension. We need to use inertia in the right way. That means moving a small pension pot to the current live pot where the individual can see it growing, rather than sending it off to a scheme with which the individual has no engagement and in which they have no interest.

Now is not the time to break the link between the individual and his or her employer. Automatic enrolment is going well, with 3 million individuals newly saving and less than 10% opting out. It is reinforcing the workplace pension as a key element of the benefit package that employers offer their staff after decades of decline in occupational pensions.

I have heard the argument that these amendments are designed to give the Government another option, which appears on the surface to be a generous approach. Providing the Government with greater flexibility is one thing, but listening to the debate today, I suspect that few on the Opposition Benches want the Government to have the flexibility to chose anything but the aggregator model.

In practice, the amendments will leave us in limbo and bring back uncertainty at a time when industry is beginning to get behind, and position itself to deliver, pot follows member. As my honourable friend in the other place announced on Monday, officials are currently exploring the feasibility of using HMRC’s PAYE data and system to help us to deliver a secure, efficient and straightforward pot-matching element to implement the process.

In response to the assertion of the noble Baroness, Lady Sherlock, that pot follows member would be hard to set up, we have recently had some very positive workshops with industry representatives and HMRC. The model is already inspiring some exciting and innovative approaches to transferring money with an employee as they move jobs. The cost of the transfer was specifically mentioned by the noble Baroness, Lady Drake. It will be the same for an aggregator as for pot follows member. Altus has challenged the claim that pension transfers are too hard and too expensive by stating that transfers for ISAs and funds cost £1 or less, and that this can be replicated for pension transfers.

After two years of discussion and debate on this issue, even if we cannot agree with the Opposition on the right delivery model, I hope that we can agree that we need to take a positive step forward. On the “pause to reflect” point made by the noble Lord, Lord Hutton, I do not believe that we are rushing into this measure. We first consulted more than two years ago and followed up with two policy papers. We also held extensive discussions with industry and consumer groups within that period. I urge the noble Lords to withdraw their amendment to allow us to work together, and work with industry, to make automatic transfers a reality.

Pensions Bill

Debate between Lord Flight and Lord Freud

Monday 16th December 2013 Grand Committee

[Lord Freud]

I think that in practice it will be a mean average. However, I will make that absolutely clear.

By withdrawing the facility to build a pension above the flat rate and modernising the system, removing elements such as savings credit and derived entitlement that no longer reflect the needs of the working-age population, we are able to fund the single-tier pension and improve the outcomes of groups such as the self-employed, carers and low earners, who have historically seen lower state pensions. It follows, therefore, that there are two means by which we could apply the new state pension to existing pensioners.

First, we could simply increase the pension of all existing pensioners to the full single-tier rate, if they are currently receiving less. In response to the question asked by my noble friend Lord Flight, we estimate that this would cost around £10 billion.

[Lord Flight]

Per annum?

[Lord Freud]

It would be £10 billion per annum.

Child Poverty

Debate between Lord Flight and Lord Freud

Tuesday 14th May 2013 Lords Chamber

[Lord Freud]

My Lords, I could not agree more. One of the most dismaying things that I have ever read is the 2007 UNICEF report that put us right at the bottom in terms of child well-being. The latest report from 2011 shows us crawling up four places, but we have a long way to go and we need to find the right ways in which to help children genuinely to get out of poverty.

[Lord Flight]

My Lords, is not the related problem of feral children who engage in gang warfare and drug dealing and whose parents are not parenting properly even more serious? The solution to that is shown to be provided increasingly by the new technical colleges which motivate such children and teach them a skill. They then start to want to learn generally. That is the sort of measure that really addresses our problems rather than just giving out money.

[Lord Freud]

My Lords, we are in the middle of a genuine consultation on how to tackle child poverty. Maintaining the income measure so that we know what is happening but getting at the measures that will make a real underlying difference to entrenched poverty is absolutely vital in that exercise.

Youth Unemployment

Debate between Lord Flight and Lord Freud

Monday 14th May 2012 Lords Chamber

[Lord Freud]

I am sure that the noble Lord will agree that the lump of labour fallacy is not how one should run an unemployment policy and that a competitive employment approach is the right approach. The way that one achieves that is by skilling up the workforce so that people can take jobs. That, in itself, expands the economy by more than it would otherwise expand. I am sorry that the noble Lord does not agree. I know there are noble Lords on the Benches opposite who dislike the lump of labour fallacy as much as I do.

[Lord Flight]

My Lords, the apprenticeship scheme is already achieving a lot and can achieve a lot more, but one of the problems is that when people come off jobseeker’s allowance their pay on an apprenticeship is very modest and they often cannot afford the travel costs. The Mayor of London is happily providing the travel costs for apprenticeships in London. Will the Minister look at expanding this where it is needed elsewhere in the country?

[Lord Freud]

I will look at that because one of the central thrusts of our policy is to ramp up apprenticeships. One of the most encouraging signs I saw when I visited a work programme contractor the other day was the way that having sustained outcomes—long-term jobs—is driving it towards putting youngsters into apprenticeships. That is a very happy fact pulling them together, and I will very happily look at anything we can do to reinforce the drive to apprenticeships.

Retirement Age

Debate between Lord Flight and Lord Freud

Monday 5th September 2011 Lords Chamber

[Lord Freud]

My Lords, as the noble Baroness pointed out, we debated this in some depth when we looked at the Bill. Those concerns, expressed around the House, were taken very seriously. The Secretary of State responded at Second Reading in another place by saying that we needed,

“to implement the change fairly and manage the transition smoothly”.—[Official Report, Commons, 20/6/11; col. 50.]

We are looking at how best to do that. Should there be legislative changes, they will of course come to this House to be considered in due course.

[Lord Flight]

My Lords, I urge the Government to accelerate to a retirement age of 70, not just on grounds of longevity and fitness but on fundamental economic grounds. It is entirely natural, if you have an ageing population and wish to keep economic growth up, that the workforce should remain the same through people working longer. Finally, the highest growth in new jobs now is among people over 65, so this is a reality in the workplace.

[Lord Freud]

Yes, my Lords, it will be extremely expensive if we do nothing. In the past five years we have already seen real expenditure on pensions go up by £20 billion to £81 billion a year. If we do nothing, the projections are that age-related spending will go up to more than 5.5 per cent by the middle of the century. We must do something about it. That is why we have this consultation to look at the best way of moving the pension age upwards to reflect the changes in ageing.

Pensions Bill [HL]

Debate between Lord Flight and Lord Freud

Tuesday 1st March 2011 Grand Committee

[Lord Flight]

I echo the comments of the noble Baroness. One of our failings as a people is that, because people are decent, we try to provide for everything and clutter it up to the extent that the system becomes difficult and expensive to operate. I was interested to note, in seeking to check my state pension entitlements, that the office that you approach got them wrong; we had a pleasant correspondence. I hate to think, even as we stand, that in people’s combination of straightforward state pension, SERPS and whatever else they may have, the records are all over the place. We may sit here and think that it is lovely, but actually it is a shambles.

I can well imagine that, if you start adding all sorts of groups and special things out of decency, you will get, as the noble Baroness described, a huge increase in bureaucracy. It strikes me that pensions is one area that has suffered in this country from too much complexity. My view is that the issues raised need addressing, but that they will have to be addressed in a separate box through welfare arrangements.

Finally, I still take the view that when the arrangements came in after the war, the age of 65 then was something like 78 today in terms of equivalent fitness and health. I desperately want to see a decent state pension for everyone at the age of 70 that will lift them right away from dependency, pension credits and everything else. I should like to see things tidied up, slimmed down and done as cheaply as possible to achieve that as soon as possible. It strikes me that for the overwhelming majority, that is the need. Although there are cases of people who have done heavy work with physical demands and whose bodies have worn out, the great majority of people will be pretty fit until they are 70.

[Lord Freud]

I thank the noble Baroness, Lady Turner, for tabling this amendment and for giving us the opportunity to debate a key concern about increasing the state pension age and longevity. I use the soft “g”, whereas I notice that the noble Lord uses the hard “g”. We probably differ on other things as well. The noble Baroness raised the question of what older people want and whether they want to work longer. Research has found that people want to return to work, whether for financial, personal or practical reasons, and will find ways to do so if they are motivated, have recent work experience and if illhealth does not act as a barrier.

In essence, the amendment is about whether it is fair for the state pension age to be the same for everyone irrespective of their circumstances or whether we should have a variable state pension age for certain groups. To echo what my noble friend Lord Flight said, one of our aims—which is in common with previous Governments—is to simplify an extremely complicated pensions system. The Bill contains various measures to simplify, from the abolition of the fiendishly complicated and fascinating PUCODIs, to which we will come shortly, the flexibility to consolidate additional pension—