Pensions Bill

Debate between Mark Durkan and Guto Bebb

Monday 17th June 2013 Commons Chamber

[Guto Bebb]

That will need to be considered. As I am well aware, parts of north Wales have long-term unemployment issues that might have an impact on the changes. We need to consider the detail, but the changes should still be welcomed. As I conceded in my opening remarks, some issues will need to be considered in Committee, but the overall direction of travel should be warmly welcomed, whether one is a Member in Wales or in any other part of the United Kingdom. A key point that should be mentioned is that there has been no mention from Government Members of a regional level of state pension. Having heard some of the comments from Opposition Members in recent weeks, I shudder to think what the Labour party might propose in due course on a regional level of basic state pension.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman has made the point that he wants work to pay and for people to know that doing the right thing will not cost them. Does he accept that we must take care with the transitional arrangements in that regard? People could find that they lose out in the tight transition, not least because of the costs that could be imposed on schemes that might force their closure—for example, those schemes that were contracted out would now have to be contracted in. The opportunity to simplify those schemes does not really exist, as such direct benefit schemes are notoriously complicated and some people could find that their schemes close as a result of the costs imposed.

[Guto Bebb]

I will come back to some of the important points about the transitional changes, but I suspect that I will have to allow the hon. Gentleman’s specific points to be debated in Committee.

In introducing pension changes, this Government have tried to deal with the excessive level of support offered to public sector workers. At the time we were constantly accused of wanting to level down pension provision in this country, but it is clear that with auto-enrolment being brought forward by this Administration and with the single-tier state pension, we are trying to ensure a more level playing field between those people who are doing extremely important work in the public services and those who are earning a living differently. We are trying to make sure that there is a more equitable system for both.

It is interesting to note that the vast majority of people whose employers might need to pay more in national insurance contributions as a result of these changes are in the public sector. Only today I received a briefing on the issue from the National Union of Teachers. For the National Union of Teachers to state that it has no real concerns about the impact of these proposed changes on its members says a lot about the fact that the changes are very beneficial. I had not previously seen a single press release from the National Union of Teachers that had not attacked this Administration. Despite the 1.4% average increase in national insurance contributions that would have to be made by those who are currently contracted out of the system, there is an acknowledgement that a higher level of pension will then be enjoyed. That comment was made clearly by a union.

I want to emphasise how extremely welcome this change is for the self-employed, and express my amazement at the comments from the right hon. Member for Birkenhead (Mr Field). If it is said that the pensions Minister is introducing these changes for the self-employed because he believes there are votes in it for Liberals, long may he continue to bring in changes that will benefit the Liberal vote. In my constituency of Aberconwy and in many parts of rural Wales, a significant percentage of the population are self-employed, and a significant percentage of the population were paying their 9% class 4 contribution and did not know what they were getting for their money. The class 2 contributions made by the self-employed ensured that they got the basic level state pension. Anything that they paid into class 4 was deemed to be on top. That could amount to a significant sum and there was no feeling that anybody was getting anything for that contribution.

In an area such as mine, where about 27% of the population are self-employed, it is imperative that they feel that the state is treating them fairly. It is not their fault that they have had to create their own job in order to stay employed in their own community, and it is unreasonable to argue that because there is no employer making a contribution on their behalf they should be treated worse than other employees. If the self-employed are contributing on a par with or at a similar level to the employed, we should not bring into the equation the employer contribution, because the employee, the worker, the person making an effort to pay their way, support their family and ensure a future for themselves should have the confidence that when they come to retire, they will be treated by this Government in the same way as any employee.