Oral Answers to Questions

Mhairi Black Excerpts

Monday 6th June 2022 Commons Chamber

[David Rutley]

We have important guidance in place to support local authorities, but they are best placed to provide support for people in their individual localities. That is why the household support fund has been designed with that in mind.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

24. What (a) information and (b) financial advice her Department provides to people approaching state pension age on deferring their entitlement to the state pension.

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

Information regarding deferral is published on gov.uk and provided in the state pension claim invitation letter and through the “Check your State Pension” forecast service, or someone can speak to the Pension Service direct. Deferring a state pension is a personal choice, and whether deferring a claim to the new state pension is the right decision will depend on a range of factors that are relevant to the personal circumstances of the individual, but no specific financial advice is given.

[Mhairi Black]

The DWP wrote to my constituent encouraging him to defer his pension. Unfortunately, he passed away last year, but the DWP told his wife Caroline that she was entitled to a £30,000 lump sum and £100 a week. After weeks of being passed from pillar to post, the DWP is now saying that Caroline is entitled to nothing, but it will give her £50 for the emotional distress and incorrect information. All the correspondence that she has from the DWP contains conflicting information and no warning of the risks of deferring a pension. Will the Minister meet me to rectify the situation and ensure that it does not happen to anyone else?

[Guy Opperman]

If the hon. Lady sends me the correspondence, I will make sure that it is looked into within a matter of days.

Draft Scotland Act 2016 (Social Security) (Adult Disability Payment and Child Disability Payment) (Amendment) Regulations 2022

Mhairi Black Excerpts

Monday 7th March 2022 General Committees

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I have no doubt that the whole Committee will be grateful that I am going to keep my remarks brief. The Scottish Government have long maintained that we are determined to implement a just and fair system of assessment for people with disabilities. We want to see a removal of unnecessary reassessments. We want to see people treated with respect and dignity at the forefront. If this statutory instrument will help to enable us to make that a reality, we will not stand in the way of it.

Automatic Enrolment: Lower Earnings Limit

Mhairi Black Excerpts

Tuesday 12th March 2019 Westminster Hall

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I beg to move,

That this House has considered the lower earnings limit for automatic enrolment.

I am very grateful to have been granted time for this debate, especially during a rather chaotic week. It serves as a reminder that although all eyes are on Brexit, a number of massively important issues still need to be dealt with; that is the day job for some. One of those problems is the low earnings limit for automatic enrolment.

I want to make it clear that we support automatic enrolment. It has had a lot of positive impacts, as I am pretty sure all hon. Members agree. An estimated 10 million workers have been enrolled in workplace pensions by more than 1.4 million employers. That is an estimated £18.4 billion a year extra in workplace pensions due to auto-enrolment. Opt-out rates have been lower than expected, and participation by eligible 22 to 29-year-olds has increased. There are obvious moves in the right direction but, as with most things relating to pensions, the devil is in the detail.

The first issue is the delay in scrapping the limit. I have a problem with the lower earnings limit, and I am glad that the UK Government agreed to scrap it eventually, but I cannot understand why it is taking so long. All we have been told is that no changes will take effect until the mid-2020s. TUC research shows that a delay of six years in scrapping the limit could cut a saver’s pension pot by £12,000. That is for workers with annual earnings of £10,000, and it includes missed contributions and investment growth on funds. An employee who earns £10,000 would get more than double the amount of employer pension contributions when the limit is scrapped. The UK figures show that that would mean an extra £2.6 billion a year going into workers’ pensions, including £1 billion more from employers. If we are serious about creating a culture that recognises our ageing population and the problems relating to pensions that are on the horizon, and if we want people to save persistently throughout their lives, the low earnings limit cannot continue. It does not make sense.

The positive impacts of auto-enrolment are evidence that it is working and that things are moving in the right direction. We should be trying to include everyone in auto-enrolment. Those who are paid the least are the very people we should be looking out for the most, because they are the most likely to slip through the cracks. Their pension pot, no matter how small it is, is probably the only useful capital they have in retirement. Will the Minister give a concrete guarantee, rather than a vague timescale, about when the limit will be scrapped?

The second issue is that those on the lowest incomes are the most likely to lose out as a result of an increase to the lower earnings limit. For the lowest earners, £6,136 is a large proportion of their earnings. If employers do not include that amount in people’s earnings when calculating pension contributions, pension savings will be affected considerably. Worryingly, the changes will predominantly affect women in multiple part-time jobs, as the rise means that less of a low earner’s salary attracts pension contributions. The TUC has rightly pointed out that there is no mechanism to include those working multiple jobs with earnings below £10,000 in auto-enrolment.

The Pensions Policy Institute calculated that if income from multiple jobs was taken into account, a further 80,000 people could be saving for retirement. That breaks down to 60,000 women and 20,000 men. Once again, the Government are not responding fast enough—or, arguably, at all in some cases—to women’s concerns about their pensions. That is a theme that I have seen since I was elected.

Those concerns have been raised previously. Baroness Drake put it perfectly when she said:

“we are designing a private pension system that does not work for women who work part-time.”—[Official Report, House of Lords, 10 February 2014; Vol. 752, c. 201.]

I would argue that women do not have an adequate state pension to rely on at the moment. Ultimately, this increase is contradictory to the apparent aim of scrapping the limit altogether.

The third issue is that as the gap widens between the personal allowance and the lower earners limit, low earners are in a pension lottery through no choice of their own. The Treasury has said that the personal tax allowance will rise to £12,500. However, under the net pay method, pension contributions are deducted before tax is calculated, and savers’ tax relief is based directly on their marginal rate. That means that savers who earn less than the £12,500 tax threshold do not receive the 20% relief that they would through their employer if they were in a relief-at-source scheme. This issue affects more than 1 million people who earn more than the earnings trigger of £10,000, but less than the personal allowance of £12,500. As auto-enrolment brings in more lower-paid earners, the number caught in the net pay trap is likely to increase.

I am grateful for the fact that Her Majesty’s Revenue and Customs has said that it recognises this issue and is looking at ways to resolve it. It has said that one of the possible routes is a digital answer. I only hope that it is within closer reach than the so-called digital answer to the Irish border question. It would be helpful if the Minister could update us and say what conversations he has had with colleagues in HMRC about potential fixes.

On top of that, there are rumours that the UK Government will reduce tax relief on pension contributions in the upcoming Budget. Will the Minister give us a concrete commitment that that will not happen under this Government? Has he sought confirmation from the Chancellor that the inconsistency between the net pay schemes and other schemes will be corrected before the spring statement?

I have made these comments in this Chamber and elsewhere quite a few times. Pensions are a mess just now, and anything we can do to get more people saving has to be seen as a positive. The evidence so far suggests that auto-enrolment is a positive, so I ask the Government to stop dragging their heels and get this in motion.

--- Later in debate ---

[Guy Opperman]

I will give a long answer to the hon. Gentleman’s question, but I promise that I will answer it. Some 1.4 million employers have met their duties and are now offering members of staff a pension as a right. That is a significant change for those employers, and a significant burden for them. Raising the threshold, from 2% to start with, up to 5% last year and going up to 8% in April, is a significant burden. We are not talking about just the bigger employers, who can cope with it much better and have advanced payroll systems. Some of them have been paying over the odds from the word go and, to their great credit, some companies up and down the country immediately went to 5% or above. There are two key impacts that need to be assessed. We have only just got the information about the April 2018 increase and the opt-outs that took place then. The hon. Gentleman will be aware that there was just under 1% opt-out out because of the increase to 5%.

One of my main jobs in this position, which, contrary to popular belief, I actually asked to do and enjoy doing, is to take the 1.4 million employers and the 10 million employees in this country up to 8% with the minimum number of opt-outs, and the minimum impact on the economic outlook of the country. The harsh reality is that there will be a significant change to the deductions made from individuals’ pay packets, but also to the burden on businesses, whether they are large FTSE 100 businesses or coffee shops or corner shops in our local communities. Dealing with how things go this April is one of the most important, if not the most important, job I have, given the massive impact of this on all our communities. We have only just raised the threshold to 5%. We have the most important rise—a double jump—this April. It would be wrong if the Secretary the State and I, and the wider Government, talked about changing the basis for auto-enrolment before assessing how the 8% rise had gone.

This is quite a complicated process; it will genuinely take the best part of 9 months to go through all the data and get a definitive understanding of where we are on the 8%. At best, I will not know the degree of opt-outs until Christmas. It seems utterly wrong for me to seek to change the nature of the legal basis until I have a real understanding of the impact of the 8% increase.

[Mhairi Black]

The Minister says that we have to wait for more evidence. As I said in my speech, the DWP assumed that roughly 25% of those eligible would opt out, and the 2017 average was 9%. The Minister has talked about getting updated figures, but the participation among 22 to 29-year-olds increased from 35% in 2012 to 79% in 2017. The evidence already suggests that we are heading in the right direction and that the changes are working. Further to that, the logic of the lower earnings limit being set was that some people will not earn enough to get value for money out of their pension towards the end. Would it not be an easier answer just to pay people more, and to introduce a real living wage?

[Guy Opperman]

We are getting slightly off topic, but I am very happy to make the point that in 2010, when the coalition came into government, the living wage—the minimum wage as it was then—was £5.80. It is now £8.21, going up to £9, as the hon. Lady will be aware. I am happy to have a discussion about the tax threshold, which means that individual members of our communities have a huge amount more in their pockets. The tax threshold was £6,500 in 2010. It is now going up to £12,500, which will make a massive difference to the individual take-home.

All those things are good things. There is also the benefit of free childcare. We have gone from having no free childcare available whatever, up to 15 and 30 hours. It depends on how one values childcare, but taking it even on a very low basis, individual low earners would have the benefit of 30 hours a week free childcare, in those circumstances where that applies. If they have 30 hours a week childcare, that is a benefit of £150 a week minimum. I have worked it out on a £5 basis, but other statistics could give the rate.

My point is that if one looks solely at individual earnings on a long-term basis, taken in isolation that is one thing, but we also have to look at the impact of the rise in wages. It may not be as high as the hon. Lady would like, but she is making my point, so I will stop being partisan and saying, “Aren’t we doing well on the living wage, the tax threshold and childcare?” Park that for a moment. Some of those matters are burdens on individual employers.

The harsh reality is that the corner shop in the hon. Lady’s Paisley constituency, or the coffee shop—forget about the big employer—is now paying a considerably larger wage bill, because the low earners who were previously on the minimum wage are now on the living wage. The larger employers are also potentially paying the apprenticeship levy, and in April will pay up to 3% on auto-enrolment. The engagement that took place in the 2017 review indicated that time should be allowed before we reassess the way ahead. I am absolutely sure that there should be consideration of that. I accept that there is pressure on that.

I will try to address the other couple of points that the hon. Lady made, before moving on to some of the other questions. She asked about the reduction of pensions tax relief and the difference between net pay and relief at source. It is entirely right to raise those matters; she will understand that they dealt with by the Chancellor and the Treasury.

The idea that I have full control over the spring statement or the Budget, as the hon. Member for Airdrie and Shotts (Neil Gray) suggested, is something that I think we all understand is not the case. I do not have advance sight of the spring statement, but if he wishes to push for my promotion, I would be very keen for that—not that I want to be promoted, because I actually enjoy this brief.

The reality of the situation is that there is clearly a difference between relief at source and the net pay arrangement. It is acknowledged; there is no question but that something must be done on an ongoing basis. HMRC and the Treasury are aware, and there is ongoing discussion with them on that particular point.

While I am dealing with the Treasury, the question was raised about where we are in relation to long-term tax relief on pensions. Again, that is a matter for the Chancellor, but although I accept that there was some discussion about it in some comments made before the last Budget, hon. Members will be aware that there was no fundamental change to the tax relief on pensions.

I have rather disregarded my speech, but I will go back to a couple of key points. First, hon. Members will be aware that we debated this matter briefly in January, and the House debated and then agreed that the lower and upper limits of the qualifying earnings should be aligned with the national insurance earning bands in 2019-20, at £6,136 and £50,000 respectively. Not only does that provide stability and harmonisation on an ongoing basis, but we maintained the earnings trigger at £10,000, meaning a real-terms decrease due to anticipated wage growth, which brought an additional 40,000 savers into automatic enrolment, three quarters of whom were women.

I will address a couple of the other points raised. The hon. Member for Lanark and Hamilton East, whose constituency I know very well, having ridden at the Overton point-to-point far too many times—not very well; I did not win there—will be pleased to know that there are 14,000 individual employees in her constituency who benefit from the automatic enrolment. She specifically raised the issue of somebody aged between 16 and 22 who was earning but not able to get access to a pension. It is not often known—I have the great delight of telling the House this and urge the hon. Lady to tell others—that that individual aged between 16 and 22 can opt into an automatic enrolment pension with their employer. They have the ability to do that. Similar comments apply to the self-employed; they can opt in and be addressed on an ongoing basis.

The hon. Member for Airdrie and Shotts called for a pensions commission. With respect, we had that: it was called the Cridland report, an independent pensions commission to which all political parties, including the SNP, along with trade unions and the Labour party, made submissions. Whether they agreed with it or not, it was definitely the case that they made submissions.

On the self-employed, the reality is that we are continuing to expand in a great deal of detail the trials that are going on. We are considering the Taylor review, and it is my strong view that we should expand that more. I am certainly pressing to ensure that the self-employed have greater access to a pension.

--- Later in debate ---

[Mhairi Black]

Just very briefly, on the Minister’s end point there, it would be very useful if he could at least tell us whether the scrapping or lowering of the limit will be phased in, or whether it will be a blanket switch-over one night. Some detail on that would be much appreciated.

The thing that makes me quite uncomfortable in this speech and in this debate is that one of the key arguments here is that women will again bear the brunt of this. I am actually glad that we cannot get through any debate on pensions without someone mentioning WASPI, because, if anything, WASPI actually shows exactly the kind of reputation that the Government are gaining with regard to pensions. To see problems such as this being pointed out to the Government and there being no real answer as to how they are going to support women, who are yet again bearing the brunt of the worst that is happening, is quite depressing. I hope that is something that the Minister will reflect on.

I am grateful, finally, to my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) for pointing out that if people can work at the age of 16, they should be able to contribute to their own pension. I do not see why the age reduction should stop at 18. If people can start working at 16, they can start saving for a pension, especially if it is at the point where their employer does not actually have to contribute.

Again, I am grateful to everybody—all six of you—for attending the debate. This is a very important issue, and I hope that we have given the Minister food for thought.

Question put and agreed to.

Resolved,

That this House has considered the lower earnings limit for automatic enrolment.

State Pension: Women born in the 1950s

Mhairi Black Excerpts

Thursday 22nd November 2018 Westminster Hall

[Alex Burghart]

I am grateful for my hon. Friend’s scene setting. Forgive me if I skipped a sentence earlier— I should have said that the retirement age of 65 was introduced in the Contributory Pensions Act 1925, so I am grateful to have been put right.

The Pensions Act 2011 dealt with the circumstances of 2008 and was introduced in the context of the emergency Budget brought forward by the then Chancellor in 2010, which offered the triple lock. To remind Members, that guarantees, each and every year, a rise in the basic state pension in line with earnings, prices or a 2.5% increase, whichever is the greatest. That policy meant that between April 2010 and April 2016, the value of the state pension rose by more than 22%, compared with growth in earnings of about 7.5% and growth in prices of 12%. Pensioners saw their incomes rise at almost double the pace of the average worker in that period. In 2018-19, the state pension is more than £1,450 a year higher than it was in 2010.

We know that the triple lock will be in place for the duration of this Parliament. For people reaching state pension age after April 2016, a new pension has been introduced at a single flat rate of £159.55 a week, which also has been triple-locked. All the women affected by the 2011 state pension age changes will draw their state pension under the new system.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I am quite confused. It is lovely to hear all this information about what happens when people retire, but we are debating the issue of those women being left in limbo, where they are expected just to fend for themselves.

[Alex Burghart]

I appreciate the hon. Lady’s point, which I am coming to.

The Pensions Act 2011 sped up the equalisation of women’s state pension age and required men and women’s state pension age to be raised to 66 by 2020. During the passage of that Act, the Government spent £1.1 billion—we might dispute the amount—on capping the maximum increase that any woman would see in her state pension age at 18 months, relative to the timetable set out in the Pensions Act 1995. Having heard the stories and spoken to some of the women involved, I know that this has been a hard transition and has caused difficulties and distress for many of them.

--- Later in debate ---

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I will try to sum up as succinctly as I can. First, let me say that it is a pleasure to follow the hon. Member for Isle of Wight (Mr Seely). His was one of the few sincere speeches we heard from Government Members. Since this problem first rose to prominence, I have made every effort to be as factual and politically neutral as possible. I think everyone who has been active in the campaign throughout would agree with me about that. It is great to see the same sensible comment and genuine constructiveness in the Conservative party, because this issue affects every constituency in the UK. It is an honour to follow the hon. Gentleman.

I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson)—also known as Patricia—on bringing this issue forward for debate again. I honestly cannot remember how many times we have debated it—this must be the 13th or 14th. I find myself thinking, “What the hang am I supposed to say that’s new? What more evidence can we give?”

While I praised the sincere comments by Government Members, I want to address some of their more insincere comments. First, however, I want to try to frame this issue a little. What underlies the entire issue is the fact that austerity does not work. We have been arguing that for years. If someone is a millionaire, their money sits in the bank—it is not the most productive—whereas if we make a conscious effort to ensure that the average worker has more money in their pocket, they spend it and we find that local economies start booming, people start picking themselves up off the ground and communities thrive. We have witnessed from consecutive Conservative Governments the total destruction of any chance of recovery after the economic crash. That is the underlying thing.

The Government say problems such as WASPI just have to be suffered because they are all in the national economic interest. They also say things such as, “The national debt has fallen.” It has not—it has just been transferred to households. Household debt is getting worse because people are being forced to face all the debts for which the Government have decided, “That’s not my responsibility, end of.” That just cannot be okay.

As well as transferring that debt to households, the Government are trying to transfer political responsibility for this issue to the Scottish Government. When I say this issue is too important to play politics with, that is exactly that kind of guff I am talking about. I notice that the hon. Member for Brentwood and Ongar (Alex Burghart) is not here to hear my responses to what he said, but I will indulge other hon. Members with my comments.

Let me make this absolutely clear: section 28 of the Scotland Act 2016 states that the Scottish Government cannot assist

“by reason of old age.”

I do not know how that could be clearer. We cannot pick a group of people and say, “We’re going to give you money because of your age.” This Government are trying to peddle the mistruth that we can but are choosing not to. The Scottish National party, along with individuals from other parties, has been at the forefront of doing the Government’s work for them. We provided a report—I hand-delivered it to Downing Street, so I know they have a copy—yet there has been no progress. We have yet to hear anything from the Government other than, “Look, we tried our best. We’re just going to ignore it.” That is not good enough from any Government.

I was amazed that the hon. Gentleman also said that this was typical SNP and that we did not want any of the responsibility. I am sorry, but that is just untrue. The SNP’s stance is for independence. We want all the powers because we want responsibility. We are tired of having Governments we did not vote for dictating to us, creating problems and then turning to us and saying, “You fix it.” The idea that Scottish people should be taxed more to fix it by a Parliament and a party they voted for who are completely against austerity is ridiculous. If anything, I suggest that any tax increases to mitigate the Tories’ policies should be referred to as a Union tax, because that is the price Scotland will pay so long as it is part of this Union and allows the Conservatives to have control over pensions.

Let me make it clear again, in case it has been lost in previous debates: if the Minister wants to give us power over pensions we will gladly accept it. We will accept that responsibility and try to do our utmost, but please stop peddling mistruths and trying to deliberately confuse people.

[Joan Ryan (in the Chair)]

Can I give the hon. Member some advice?

[Mhairi Black]

Yes.

[Joan Ryan (in the Chair)]

You could say that an hon. Member or a Minister is incorrect but you cannot say that it is an untruth. I hope that is helpful.

[Mhairi Black]

Even if it is untrue?

[Joan Ryan (in the Chair)]

I have given you my advice.

[Mhairi Black]

Okay. Of course, out of respect for this place that is absolutely fine.

[Joan Ryan (in the Chair)]

I think you know the rules about implying that an hon. Member has told a lie.

[Mhairi Black]

Forgive me. I am just explaining things as they are in front of me. Of course, I will take that back now.

[Joan Ryan (in the Chair)]

Thank you.

[Mhairi Black]

I will happily accept that the Ministers and several Conservatives might just be very confused and they may have got their facts wrong, which in itself is quite worrying. I would suggest that they do not make statements making demands of other Governments until they have read the Act themselves.

My last point is that this is all about equality—that is the one thing that pretty much everyone in the Chamber can agree on, and we will no doubt hear the Minister say that this is all about equality. Yesterday I took part in a panel at the Fawcett Society. As hon. Members will be aware, we have had 100 years of women in Parliament—we have had many events. Last night, we had a big photograph on the Terrace with all the male and female MPs and it was all great, with everyone celebrating how far we have come, but these things mean something only if the Government’s actions back them up.

Equality is defined as

“the state of being equal, especially in status, rights, and opportunities.”

We have to accept that this generation of women have not had equality throughout their lives. They have suffered so much. To be honest, we are still only at the tip of the iceberg in understanding just the effect on them. I am not talking just about the money in their purses; I am talking about anxiety, depression and other different things, the repercussions of which we are still trying to work out fully. Yet here we are battling the Government again at the last hurdle. It cannot be justified in any sense.

The events in Parliament should be solidifying and celebrating how far women have come, to prove how much we have learned from feminism, to show a true understanding of the double burden that has been placed on women for generation after generation, and to show a true understanding of why the female experience of life has been so different. But here we are. These women are still being patronised, misled and ignored. They are constantly treated as less and by repeating something for long enough the Minister is hoping it will just become true. That is not the case.

Let me be clear: equality is not about treating everyone exactly the same. It is about treating everyone fairly. It is acknowledging who they are, what they have been through, what their experience of life has been, what their experience of Government and policy structures have been and what it has done to affect them. The job of Government now is to make sure that our policies help to mould a society that satisfies and respects all its citizens and their needs—

“the state of being equal especially in status, rights and opportunities.”

If the Minister truly believes that the Government has delivered on that then I am afraid he has not listened. If he, like me, cannot argue that the Government is furthering these women’s rights or opportunities, that should be his starting point. I can only hope that his conscience takes him there.

--- Later in debate ---

[Guy Opperman]

I take the hon. Lady’s point, but that matter was unquestionably considered by female Ministers such as the right hon. and learned Member for Camberwell and Peckham and the right hon. Member for Normanton, Pontefract and Castleford. As the matter has been debated on an ongoing basis, it has been an evolutionary process throughout the past 23 years. I am the latest of many different Ministers who have stood in this post, and I continue to defend the actions of Governments and Ministers who went before me.

[Mhairi Black]

Will the Minister give way?

[Guy Opperman]

I will give way to the hon. Lady, but first I want to address the point about complaints that was raised by the hon. Member for Weaver Vale (Mike Amesbury) and others.

A number of different processes were raised in respect of complaints, including departmental complaints. The Government have worked extensively—there is no change in the policy approach to departmental complaints under this Government or previous Governments—to engage with a significant amount of correspondence from women who have contacted them on this issue. There have been approximately 8,000 complaints on the topic and a significant amount of resource has been dedicated to it. The Government believe there has been no maladministration within the Department for Work and Pensions with regard to the communication of state pension age changes under this or previous Governments.

We have an Independent Case Examiner. If the House will bear with me, I will explain the processes. The steps the Department took to notify the general public about changes to state pension age have undergone additional scrutiny by the Independent Case Examiner, an independent office holder who reviews complaints about the Department for Work and Pensions. The Independent Case Examiner does not consider policy or legislative issues, but examines whether the Department for Work and Pensions has appropriately administered stated policies or procedures. The Independent Case Examiner’s team has concluded investigations into approximately 185 women’s state pension cases to date, and in every case there was no finding that the Department had failed to provide appropriate notice of the changes.

I will finish the last two aspects on complaints and then I will give way to the hon. Member for Paisley and Renfrewshire South.

We also have a Parliamentary and Health Service Ombudsman. Some complaints have been escalated to the ombudsman, who has identified a sample of cases that they feel reflect the issues raised in the WASPI complaints. They are now considering whether to investigate, and, if so, the scope of that investigation. Should they decide to investigate, the Government will co-operate in full with that process.

Finally, colleagues will be aware that there is an ongoing judicial review application. It would be inappropriate for me to comment in any detail on the legal case. I can confirm that the High Court has refused the claimant permission to apply for judicial review, but I understand there is a reapplication for oral permission. I spent 10 years both suing and defending the Government as a judicial review lawyer. My last client was a gentleman by the name of Ed Balls when he was Secretary of State for Children, Schools and Families. I will not comment on the merit of the matter, because it is for an individual judge to decide. Now I give way to the hon. Lady.

[Mhairi Black]

I am genuinely grateful to the Minister for giving way; no doubt I am probably getting on his nerves after all this time. Can the Government not concede that there has clearly been terrible communication? It was 14 years before letters went out, and now that women are coming forward and saying how hard this issue is hitting them—and bearing in mind the lives and the inequalities that they have suffered—the Government are still not listening to them. When he talks about intergenerational fairness, my generation is looking at how the Government are treating the older generation because they are our aunties or grannies, so how can we have any faith in the pension system? Will there even be a pension system years from now?

[Guy Opperman]

The point of having a balance between spending on state pensions and the number of people coming into receipt of the state pension is to ensure that there is a state pension in the future. With a larger number of people becoming pensioners, any Government has to make assessments, as has been shown, and that is what has happened.

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[Guy Opperman]

We may take some time to dissect the specific figures on that, but I will attempt to do so—[Interruption.]—if the hon. Lady bears with me.

One starts with the basic principle that the figure used to be at 40% for relative poverty and is now down to 16%. The reason for the 300,000 increase is that more pensioners are in relative poverty after housing costs. That is the issue in relation to relative poverty, because in the past few years the housing costs of those of working age have reduced, because of lower mortgage rates. That reduction in housing costs increases income for those with mortgages, and that pushes median income up. That then feeds through to increase the number of pensioners who are below the 60% of median income poverty line, as the vast majority of pensioners do not have a mortgage and so do not see any benefit from lower mortgage rates. There can be a discussion about relative and absolute poverty and how to measure them, but the overall trend is dramatically down for such poverty, and I believe the explanation of what the rapporteur said is as I have just set out.

I have not addressed the specific point about the Scottish National party proposals and the vexed question of the Scotland Act 2016. As I understand it, various previous proposals—and specifically the one outlined today—would reverse the 2011 Act in its entirety. The SNP’s projected cost for that is £8 billion. We manifestly disagree and suggest it would be in the region of £30 billion, with further costs as long as women’s state pension age was below 66.

As to the Scotland Act powers, I accept that the hon. Members for North Ayrshire and Arran and for Paisley and Renfrewshire South (Mhairi Black) and I have had robust debate on many such occasions, but I would always say as I have previously, “Don’t take this from me.” I will read the letter from Jeane Freeman of 22 June 2017, in which she sets out what payments can potentially be made under sections 26, 28 and 24 of the Scotland Act 2016. Under the heading of section 26 she states:

“This power is limited to providing help with ‘short term needs’, and those needs must require to be met to avoid a risk to a person’s wellbeing… Their needs and the risks to their well-being would have to be assessed individually.”

[Mhairi Black]

Will the Minister give way?

[Guy Opperman]

I will set these things out, and then the hon. Lady can come back at me.

On the creation of the benefit under section 28, I point out with great respect to the hon. Member for Paisley and Renfrewshire South that in paragraph 3 of the same letter, her own party’s Pensions Minister in Scotland rebuts the point on old age—and she puts “old age” in inverted commas:

“I accept that ‘old age’ is not defined in the legislation, and that most people would not regard this age group as old”.

Under section 28, there is the capability to create a new benefit. That is the heading that Jeane Freeman gives to the relevant part of the letter: “Creation of a new benefit using section 28”. Finally, the situation on top-up and reserve benefits under section 24 is also set out.

[Mhairi Black]

I am very appreciative again that the Minister has given way. I want to say something very directly. First, if he is suggesting that the Scottish Government should mitigate the situation, that does not solve the problem for the rest of the UK, where women are suffering just as much. Secondly, that leads me to question who is responsible. If he wants us to take the burden, will he devolve pensions control to us to let us do it? Currently he is saying, “With the limited powers you have, try and fix this whole problem.” It is like giving us control over the window wipers and complaining about the direction of the car. What he suggests has nothing to do with the issue. Does the Minister support the Scottish Government taking full responsibility for pensions?

[Guy Opperman]

I am not going to re-litigate and re-debate the Scotland Act 2016. I accept that the Scottish Parliament cannot provide assistance by way of a pension to individuals who qualify by reason of old age. However, those who have not attained state pension age are, by definition, of working age, and are not therefore being provided support by reason of old age, and therefore the restriction relied upon by the hon. Members for Paisley and Renfrewshire South and for North Ayrshire and Arran does not apply.

We spend about £50 billion a year on welfare disability support in this country, and the key choice facing any Government of any form when seeking to control and manage state pension spend is whether to increase the state pension age or to pay lower pensions, with an inevitable impact on pensioner poverty. The only alternative is to ask the working generation to pay an ever-larger share of their income to support pensioners. Successive Governments have made appropriate, difficult decisions to equalise and increase the state pension age, and we do not intend to change that today.

Universal Credit

Mhairi Black Excerpts

Wednesday 17th October 2018 Commons Chamber

[Neil Gray]

I will give again later, but I will make some progress now.

When universal credit is thrust on people, it is catastrophic. The Secretary of State said as much last week. For many people on universal credit, incomes will fall by £2,400 a year, which is £200 a month or £50 per week. The Child Poverty Action Group estimates that taking all working age social security cuts together since 2010, they reach £37 billion. The benefit freeze is the single biggest cut, as support has failed to match rent or inflation rises for years. Over the decade, this will cost the poorest 10% of households over 10% of their income, and by far the worst hit are families with children and particularly those with more than two children.

Some 500,000 disabled people have lost £30 per week from the ESA work-related activity component cut, while 100,000 disabled children and 230,000 severely disabled adults will also have their money cut via universal credit. Bringing that together, the CPAG estimates that a single parent with a disabled child is set to lose £10,000 from tax and benefit reforms this decade. That should bring shame on every single Government Member. We cannot sit back and allow that to continue; we have to act for proper change. This does not need tinkering at the edges, but fundamental reform.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

Talking about the incredible losses under this policy, is it not tremendous that the Scottish Government are continually being asked by the UK Government to mitigate the policies and mistakes this UK Government have made and that Scotland never even voted for?

Defined-benefit Pension Schemes

Mhairi Black Excerpts

Tuesday 10th July 2018 Westminster Hall

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. First, I congratulate the hon. Member for Crewe and Nantwich (Laura Smith) on bringing to Westminster Hall such an important debate and such a good-natured debate—it feels like a while since we have had one of those in this place.

There is agreement. Everyone recognises that DB schemes have been in decline for the past 15 years. I would like to give a bit of perspective on the numbers. The 1.3 million active, contributing members of private sector DB schemes account for only about 10% of the total 13.5 million private sector DB memberships. That gives people an idea of just what the burden is on those who have not yet retired under these schemes.

I also agree that there are many factors as to why DB schemes have declined as they have. There have been umpteen tax and regulatory changes and legislative changes. There have been changes in the financial market; there was the financial crisis in 2008. Ultimately people are living longer, which has a huge impact on pensions in general.

I was very happy when I read in the Green Paper the Government saying that DB pensions are certainly not unaffordable. It is a case of being realistic and seeing what we can do. Pensions have not always worked out as planned, as I have seen since I have been looking at and working on pensions. However, it is good that the Green Paper said that the evidence in relation to unaffordability was far from conclusive.

The hon. Member for Solihull (Julian Knight) explained something really well in saying how we can rebuild, restructure and consolidate these things to have a realistic and practical approach to how to answer some of the questions that are being flung up. I will explain where the scepticism comes from. He used a phrase that stuck out when he said that we need to know “exactly what we are getting”. I think that is all that anyone ever looks for when it comes to dealing with their pension, but unfortunately the goalposts continually move. That is the problem with pensions in general, not only DB schemes, just now. The goalposts are constantly moving, so it does not matter whether it is five years or 30 years down the line; people will probably have a very different deal from the one that they signed up to.

Let me give an example as to why it is right to be sceptical of some of these companies. In 2015, FTSE 100 companies paid about five times as much in dividends as they did in contributions to their DB pension schemes. The 56 FTSE 100 companies with a DB pension scheme deficit paid 25% more in dividends. Therefore, in theory, these companies would have the ability to repair immediately their pension scheme deficits were they to feed their dividends into deficit repair contributions.

I was very grateful to see the Government set out in the White Paper an approach that would involve enforcing a stricter body of regulation—tougher rules, tougher legislation, proactive powers—so that the Pensions Regulator could intervene quickly and effectively. All those things are tremendous steps in the right direction. However, if we recognise the reality of what the financial market is like just now, failures such as Carillion, BHS and even, more recently, Toys “R” Us show that this situation can become very toxic very quickly.

It is clear that the UK Government did not have a robust enough system to protect savers. What we are seeing now is only the start of steps in the right direction—towards having a robust enough system. As we know, the loss of pension savings can shatter an entire life in the days when people should be enjoying life most. We have to take this issue really seriously, which is why one of the disappointments of the White Paper was that at no point did it mention Brexit. We will probably all have differing views as to what Brexit will mean for the UK. Brexit could well be the answer to pensions; it could solve everything, but I still think it is right for us to see some detail of it or some Government predictions. What effect will this really big change have practically on our pensions day to day? For an entire White Paper not even to mention Brexit stood out.

Just now, 300,000 more pensioners are in poverty. That is the first sustained increase in pensioner poverty in 20 years. The UK has a wider than average gender pensions gap. We see that with things such as the WASPI Campaign and throughout all the different aspects of pensions policy. As I have said, the publication of the White Paper is welcome, but a sense of urgency seems to be lacking in this Tory UK Government. The Department for Work and Pensions itself has said that the legislation needed to enact the new regime will not be ready until, at the earliest, 2019-20. That means that until then unscrupulous businesses seeking to avoid their pension obligations might find it easier to do so.

I will conclude my remarks with something that I have said many times. The Minister is probably fed up of hearing us ask for this, but the SNP has long called for the establishment of an independent pensions commission, so that we can take a step back from pensions and look at the issue holistically and from a totally fresh point of view in order to see whether we can do anything radically different. That said, I think the Government are heading in the right direction, so I hope that they reflect on the comments made today.

Financial Guidance and Claims Bill [ Lords ] (Second sitting)

Mhairi Black Excerpts

Thursday 1st February 2018 Public Bill Committees

[Yvonne Fovargue]

With respect, I think the Minister probably underestimates the public’s disengagement with pensions. I sat through many pensions discussions when I worked with Citizens Advice, and also discussions on my own pension, and I stared out the window and wondered when I could stick nails under my fingernails—and I was vaguely interested in the subject.

I praise the work of the Behavioural Insights Team, of which I am a big fan. It is about time we made policy based on what people actually do, rather than what we think they should logically do. It has some interesting analysis. The extent of consumer distrust and disengagement was evident from the trials of the Behavioural Insights Team’s pre-retirement “wake-up” packs last year. Those trials were run in collaboration with Pension Wise, the free pension guidance provider. The packs had a limited impact on the number of customers who subsequently used guidance. The strongest performing wake-up pack increased customers’ likelihood of calling Pension Wise by only 3.5%. Nothing indicates better the impact of disengagement and distrust and the low capability. It is unrealistic to expect customers to absorb the level of information required from provider communications or online contact. The FCA’s retirement outcomes review found that only 10% of customers had even read the pre-retirement wake-up guides, which also indicates why provider signposting is likely to have a limited impact.

Pension providers have exploited that inertia. Three previous investigations into the old annuity market identified low levels of shopping around and poor awareness of the available product options. That is still evident today on a timeline that has been produced, showing attempts since 2001 to make an impact on people’s awareness of pensions.

The FCA retirement outcomes review interim report said:

“We are concerned that consumers motivated by mistrust in pensions”—

I do not think that trust has been increased by such matters as Carillion, the state pension scheme or women of state pension age. It brings distrust of the whole pensions system, whether state pensions, occupational pensions or cash purchase pensions, which make it extremely difficult to understand what will be paid at retirement age.

The report goes on to say that such people

“may be making uninformed decisions that result in paying more tax than they would have paid otherwise…or missing out on the benefits of staying invested”

and that they

“do not always take advantage of the help and guidance”.

People need to take advantage of that before making a decision. It is not like switching bank accounts. People cannot switch pensions for a year and then think, “Actually, I’m not very happy and I want to go back.” It is a long-term decision, and an important one.

Let us stop pretending that the wake-up packs are a legitimate source of information, and not build on them. I am pleased that we will consider measures further, but they need to be strengthened now. New clause 1 does not strengthen anything; it weakens it. Relying on looking at it later is not good enough for something as important as a pension.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I apologise for my lateness, Chair; there were travel disruptions outwith my control. No discourteousness was intended. I appreciate the Minister saying that he would get in touch with me about my amendment.

[Guy Opperman]

On the hon. Lady’s previous amendment, which we did not get to, I will write to her before Report or Third Reading with a detailed answer.

[Mhairi Black]

I also appreciate the Minister’s honesty in getting straight to the point and saying that he will reject amendments 40 to 41. To return to my point, I think that if we do not strengthen clause 5, it will be a real missed opportunity. The Lords amendment was a welcome move in the right direction—that is why I was quite looking forward to building on it—so it is a disappointment to hear him say that the Government will carry on with this watered-down version.

It seems totally counter-productive if we are now at a stage where we acknowledge as we write policy that people do not understand pensions and they do not have a clue about them, on the whole. That is the gist. People want someone to hold their hand through the process, not ask them, “Have you had advice?” “No, I haven’t.” “Right. Okay, we’ll move on.” The Minister said that the onus would be put on the individual. To me, what the Government are suggesting does put the onus on the individual rather than on an independent body to hold people’s hands and guide them through the process. It seems like a missed opportunity. Forgive me if this is the wrong time, but I will press amendments 40 and 41 to a vote at the appropriate time.

[Craig Mackinlay (South Thanet) (Con)]

It is always a pleasure to serve under your chairmanship, Mr Rosindell. I declare a couple of interests: I am a member of the Institute of Chartered Accountants in England and Wales and of the Chartered Institute of Taxation. Part of the Chartered Institute of Taxation has a low-income tax reform group, which includes a couple of charities that play a leading role in helping those who are on low pay: TaxAid and Tax Help for Older People. Before my time in Parliament, I was the north Kent volunteer, as a member of the Chartered Institute of Taxation, for Tax Help for Older People. Often there would be a widow or widower facing consequences that they did not quite know how to deal with, and that would be where the charity came in to help. Obviously, a lot of that work now happens through our surgeries on a weekly basis.

We live in a different world now, with auto-enrolment accumulating very nicely among millions of people across the country. If we are having difficulty today, we will have some very serious money in the future that needs to be dealt with, and people will need appropriate advice. I mentioned on Second Reading that the amounts involved across the country over the next 10, 15 or 20 years could amount to literally hundreds of billions of pounds.

Even without auto-enrolment, there are a number of choices that people need to take on board. Someone may be lucky enough to have a defined-benefits scheme. They are in the descendancy, for many reasons, but I have heard of instances of people who work for banks, in particular, having a defined-benefits scheme. They could be cashing that in, and thinking about a change to a different scheme of up to 50 times the annuity rate. Again, we are talking about very big figures.

People need to make a number of choices at various stages when approaching retirement: whether they should have a defined-contribution pot; whether an annuity is right for them—probably not a decision that many people are making, given the current low interest rates—and whether to change provider. I can see there being hundreds of thousands, if not millions, of people in a few years’ time who have been using NEST, for instance—the easy provider that many small employers are using—reaching the age of 55 or above and asking themselves, “Well, what now? Would changing to a different provider be better for me? Would a draw-down facility on my pension by best? Should I consider the inheritance tax benefits?” We are now in a new world where pensions are a very generous potential inheritance tax-saving product. They might also ask, “What are the factors of my health?” Health might play a very big part in whether someone wants to take all their income now as a full draw-down, or eek it out into the future. There will be a multitude of choices that people should make. People’s personal tax position should also never be forgotten, so that they take their pension in the most efficient way possible.

I would call this group of amendments, very simply, “the scam blockage and advice enlightenment measures.” They are very welcome and, from what I have seen of the Government’s proposals, I am fully supportive of them. I think they take on board the suggestions of the Work and Pensions Committee. However, I have spoken many times, and remain concerned, about what constitutes advice. I note in new clause 1(1)(d) that the FCA will be entitled to put together rules about what constitutes advice.

I remain concerned that somebody with a smaller pot—perhaps a pot of £30,000, which will be a very common position for many people to be in under auto-enrolment in the future—may get involved with SFGB and take the full advice. They will be told, “These options are available to you.” However, I do not think that the legislation provides for advising people what the best provider and tax situation is for them. It is still hoped in new clause 1, as good as it is, that people go and get advice. That advice is simply not available in the market because independent financial advisers will look at a small pot and say, “Well, for the fees involved, I don’t really want to take you on.”

I have spent considerable time pushing for flexibility under FCA rules to allow people to see an IFA on almost a no-liability basis. Instead of the IFA having to do a full “know your client” assessment, which takes a long time and costs a lot of money, I propose an appointment with no liability on the IFA’s part. That would at least give people some help and guidance, which is infinitely better than none.

Financial Guidance and Claims Bill [ Lords ] (First sitting)

Mhairi Black Excerpts

Committee Debate: 1st sitting: House of Commons
Thursday 1st February 2018 Public Bill Committees

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is an honour to serve under your chairmanship, Mr Stringer. Let me start by paying tribute to the three organisations that are being merged into one—the Money Advice Service, the Pensions Advisory Service and Pension Wise—for the work they have done over many years. The Minister is right that all three agree about the good sense of bringing them together into one body. Why? Because all three know from experience, and have advocated, that high-quality advice—independent, trustworthy and there when it is needed—is of the highest importance, particularly in circumstances of redundancy, death or divorce, when the financial consequences for the citizen can be very serious.

I will give some examples. In Port Talbot, the staff supervisor told Michelle Cracknell, the chief executive of the Pensions Advisory Service, that he was distraught that he had been badly advised on pensions and that the 20 others on his shift had followed his lead. He burst into tears when he said, “It’s not just the mistake that I’ve made; it’s the mistake that others have made following my example.” I remember a victim of domestic violence in my constituency saying, “I borrow to pay the debt, because I borrow to pay the debt, because I borrow to pay the debt.” That is the downward spiral into which citizens all too often fall at a time of crisis in their lives. A Kingstanding dustman said to me, “I’m an agency worker on a zero-hours contract and I would love to buy a house, because my wife is pregnant and we’re paying a fortune in rent.” He went on to say, “It’s not just that: because I’m on a zero-hours contract, I can’t plan. I keep getting into debt. I’ve had bad advice.”—he used stronger words than those—“Where do I turn?”

That is why we made it clear on Second Reading that this is a welcome Bill and a strong step in the right direction, and it has been strengthened by constructive debate in the other place. Our intention is to make a good Bill better still and to inject a sense of urgency into some of its proposals, because the dignity and financial wellbeing of our citizens, in opportunity or adversity, is of the highest importance.

We agree to the concept of the new organisation and support the direction of travel. We will seek to amend the Bill in certain key areas in order to strengthen it further, so that it delivers, particularly for those in desperate need and in circumstances in which there are still too many rogues taking advantage of the vulnerable. There is a joint determination across the House to ensure that nothing but the best is provided in the future for the British people. I am talking about high-quality advice that they can count on in all circumstances.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I echo much of what the hon. Member for Birmingham, Erdington has just said. I am very grateful, on a Thursday morning, that the Bill is not contentious—I do not know about anyone else here, but I am not in the mood for arguing. We have proper concerns about only three areas of the Bill. The first relates to how young people are involved and educated through it. The second question is whether we can clear up some of the difficulties between guidance and advice. The third and most important issue is dealing with clause 5, because what we have from the Government now is wholly inadequate. With that said, I look forward to having genuine discussions in Committee.

[Guy Opperman]

I am grateful to colleagues for their comments, which I endorse. I look forward to responding to the specific points. I accept and anticipate that there will be a legitimate discussion as to the appropriate way forward in respect of default pensions guidance, on which I know both Opposition Front Benchers wish to address the Committee. I thank them for their comments.

Amendment 1 agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

--- Later in debate ---

[Jack Dromey]

The Minister has said some helpful things, and he is absolutely right that it is about getting the right balance between accountability and operational independence. The proposal for a framework document is welcome. I simply ask that there is consultation on the nature of that framework document, including with stakeholders, at the appropriate stage.

On the establishment of the new body, the governance of it and precisely how that will be structured, we have heard what has been said thus far, but it will be important that we have high-quality and independent individuals engaged in the governance, including on a day-to-day basis.

On the basis of what I and the Minister have said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2

Transfer schemes under section 1

Amendment made: 18, in schedule 2, page 32, line 3, at end insert “and the devolved authorities.”—(Guy Opperman.)

See explanatory statement for amendment 1.

Schedule 2, as amended, agreed to.

Clause 2

Objectives

[Mhairi Black]

I beg to move amendment 37, in clause 2, page 2, line 19, leave out from “accordingly” to end of line 20 and insert—

“(da) to ensure the needs of people in vulnerable circumstances, including but not exclusively—

(i) those who suffer long-term sickness or disability,

(ii) carers,

(iii) those on low incomes, and

(iv) recipients of benefits,

are met and that resources are allocated in such a way as to allow specially trained advisers

and guidance to be made available to them.”

This amendment would require that specially trained advisers and guidance are made available to people in vulnerable circumstances and would provide an indicative list of what vulnerable circumstances might include.

The amendment came about because we were chuffed, when reading the Bill, to see that there was a mention of vulnerable people, especially given the nature of pensions and how much is at stake with them, but to be honest we felt that the wording was a little weak. I would like the wording tightened up to ensure that it is clear and means what I think it does. That is why we have suggested what we consider “vulnerable people” to mean, and it will be good to see whether the Government are happy to accept that.

We want to make sure that the new body is as accessible as possible for all people, regardless of their circumstances. Specially trained advisers and resources should make up part of that new body, so that people can have confidence and the ability to make the right decisions. I do not think that the amendment is that contentious; it just tidies up the Government’s wording.

[Jack Dromey]

I rise to support the proposition. We will deal with the issues of vulnerability and disability later in the Bill, but although it is true that not everyone who needs urgent and independent advice is necessarily in circumstances of vulnerability, the nature of the world of work and of the economy means that a lot of people’s backs are against the wall, especially after the high-profile collapses of late. We should make explicit what is implicit: the new body should proceed in the right way. I hope the Minister will give the assurance that everyone who turns to it will receive high-quality independent advice. A specific focus on support for the vulnerable is a legitimate objective.

--- Later in debate ---

[Mhairi Black]

I appreciate what the Minister says, but it is strange to say that the amendment is too prescriptive after talking about how important it is that the Bill has cross-party support and saying that it is about trying to bring about genuine change. I do not see what is contentious about fleshing out what vulnerable people means. The only downside that I can see to having the amendment in the Bill is the possibility of helping too many people. I appreciate that the Minister says that it is up to the body to decide, but that is where we will have to disagree, because I think that the purpose of the Bill is to ensure that people do not fall through the cracks anymore, so I would not be comfortable withdrawing the amendment.

Question put, That the amendment be made.

--- Later in debate ---

[Jack Dromey]

It is legitimate mission creep. What is good about our exchange is that we recognise that making progress with the issues identified by the MAT and the hon. Member for South Thanet may be difficult in Committee, but we can move forward at a later stage. The Minister’s point is absolutely right, but no one is suggesting that we should duplicate the functions of other bodies. If we can move forward at a later stage, jointly engaging with the organisations that represent the self-employed and those who advise them, it will be welcomed both by the organisations concerned and by the self-employed who need that advice and guidance. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Mhairi Black]

I beg to move amendment 38, in clause 2, page 2, line 32, at end insert—

“(4) The single financial guidance body must, within three months of being established, define the following terms within the context of its objectives and functions—

(a) “information”,

(b) “guidance” and

(c) “advice”.”

This amendment would require the new body to define “information”, “guidance” and “advice” so that consumers are better able to understand which of the three would be most helpful to them.

[The Chair]

With this it will be convenient to consider clause stand part.

[Mhairi Black]

The amendment is pretty straightforward and sensible. It would clarify the important differences between information, guidance and advice, which we know have a major impact on people’s decisions and how reliable they are if things go wrong. It is not often that parliamentarians admit ignorance, but before I became pensions spokesperson, I did not realise that there was any official difference between the three terms. I am a Member of Parliament and I have only recently found that out, so the Committee can imagine what it must be like for the general public. As long as the Government clarify the definitions of the three terms, I will be happy to withdraw the amendment.

[Yvonne Fovargue]

I support the hon. Lady’s request for definition of the terms, although I recognise that it is difficult not to stray into other areas. A further concern is that the information, guidance and advice need to be free and impartial. There are too many pensions providers that spend a lot of money—I heard of one spending £15 million—on ensuring their advice is compliant with all the FCA impartiality rules. As somebody said, if pension providers are spending £15 million on making their advice impartial, they must be expecting some return on their investment. That worries me—that people are gently steered towards a particular product if they go to a particular service.

I believe that some of the comparison websites that people use are not always impartial. If they take money for the top rankings, they are not providing a properly impartial service. People do not understand the differences between those comparison website that have paid-for rankings at the top and those that are completely impartial, based on objective criteria. Guidance on the types of investment can be different when it leads to a product sale, unlike when it is just helping a consumer through their options, completely free of any sales pitch.

--- Later in debate ---

[Mhairi Black]

I understand the reference that the Minister makes to the functions described in clause 3, but the functions are meaningless so long as people do not understand what the difference is between information, guidance and advice.

[Guy Opperman]

I will come to the comprehension point in a second, if the hon. Lady will permit. I will deal with all three points.

After the legislation was suitably amended, debated, discussed and agreed with their lordships, it was specifically written into the Bill that the information, guidance and advice should be free and impartial. I take the point that the hon. Member for Makerfield raises, but I hope that she is reassured that that has been specifically written into the Bill, and is addressed there.

On the definition of terms, may I address the points made by the hon. Member for Paisley and Renfrewshire South that go to the fundamentals of her amendment? One of the key recommendations of the financial advice market review—sometimes known as FAMR—was to clarify the regulatory definition of financial advice. The Government consulted on revising the definition of regulated advice in the existing Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, so that regulated advice was based on a personal recommendation. That definition is in line with the EU definition set out in the markets in financial instruments directive 2004, catchily known as MFID. The Government agreed that revision, which came into force in early January 2018. We therefore suggest that introducing a new definition of advice in the Bill is unnecessary and potentially duplicative. It would cut across existing regulatory architecture, not just in respect of what the Bill is trying to do and the clients it covers, but across other aspects of the Treasury and dealings with the Financial Conduct Authority and industry and consumer groups. In addition, using legislation to establish definitions for those terms would not provide the flexibility in the future to adapt the definitions appropriately, if and when that needed to take place.

I also take issue with a number of points regarding the amendment. First, the three organisations that we are merging to form the single body do not seek the definitions that the hon. Member for Paisley and Renfrewshire South is seeking to persuade us of. Those organisations are a pretty good guide to what the Government are doing, because we have consulted at length, asked them what they want us to do, and they most definitely have not said, “Go away and define those individual points.” They want the degree of latitude to continue.

Secondly, the hon. Lady asked the body to do this within three months. To answer my hon. Friend the Member for North Warwickshire on timings, we hope that the body will be created—subject to the good will of the House and Her Majesty signing on the dotted line—between the end of October and the beginning of December. Asking the body to make, within three months of its creation, having merged three organisations, a definition that would probably apply across all financial sectors is, with respect, putting quite a big burden on the body. Also, it is not the appropriate organisation to do that. That should be done by the independent Financial Conduct Authority, suitably engaged in consultation with wider parties. We have done that in relation to advice; that is why we had the FAMR review. To be fair to the FCA, it took two years of long, hard struggle to come up with the specific definition that all parties were content with. I go back to the point that while those particular points are not sought by the individuals, I believe that it is not appropriate to give the definitions.

My hon. Friend the Member for North Warwickshire asked about timings. We will be up and running, with a fair wind, in winter 2018—but beware of Ministers who say when things will happen, and of course winter in parliamentary terms can stretch a long time. The standards by which the single financial guidance body will be judged are set out in clause 10, on which I am delighted to be addressing the Committee this afternoon, so I will not go into detail about the standards now but will ensure I set out a bit of detail in answer to that question when we debate clause 10, so bear with me. He also made a point about resilience and life events, which I will address briefly.

A simple point is made about resilience, as set out in clause 2 through the various objectives described, whether the consumer protection or the strategic function. It is also fundamentally set out in clause 3(9), which mentions

“financial capability of members of the public”.

One may use “resilience” or “capability”, but the words—without getting too much into definitions—are all but interchangeable and, in the circumstances, we believe that those provisions address capability and the points made by my hon. Friend.

Regarding preparation for life events, my hon. Friend is a passionate supporter, as am I, of the concept of the mid-life MOT, which has been pioneered by certain companies, including Aviva. As a Government, in particular the Department for Work and Pensions, we are looking at the idea of people, at different critical points of their life, the middle point in particular, assessing where they are in terms of finances, pensions, guidance and everything. That seems eminently sensible to us, and we encourage all private sector organisations to do it. We are formulating plans.

[Guy Opperman]

The answer is yes. Capability is about the ability to deal with life events, whether the traditional ones such as marriage, birth of a child, retirement or the middle of one’s life generally, or—the hon. Lady is dead right—the washing machine or the car breaking down. There is formulated, as I am sure she is aware, things such as the sidecar proposal that is attached to auto-enrolment specifically to provide a savings pot to deal with life events, so that people are not affected by the sudden events involving £100 or £200 and so on. The Department is definitely working on such things, as we will seek to work with the single financial guidance body to ensure that it formulates those strategies. As the BBC puts it, there are other providers, such as Moneybox, Plum or—the name of the third one that I am particularly impressed by—Chip, which allow people to make small savings through day-to-day earnings and usage, giving them a pocket of savings to deal with things. We very much support all such organisations, and I utterly endorse the points made.

[Mhairi Black]

The logic behind the amendment is that right now we have hit a fork in the pensions road, because we are recognising that we might not be able to sustain a lot of the things in place now into the future. People are making decisions about their pensions when, to be frank, they do not have a clue about what they are doing, and they are ending up in horrendous situations because of a lack of understanding and of clarity. To me it seems perfectly reasonable to point out that those three terms, which may be used interchangeably in general conversation, in reality can have a massive impact on an individual.

The Government are promoting an ethos of educating and informing people, to ensure they make the right decision, and I do not see how the amendment waters that down in any sense. I know the Minister is saying that the body needs freedom, and so we cannot define terms as precisely as we would like, but that sounds like the Government are saying that we just have to trust the body’s good will. This is a Government Bill, so why not strengthen it where we can? In that spirit, I am happy to withdraw the amendment on the basis that my later amendments are given due consideration, and that the Minister takes on board what I said. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 ordered to stand part of the Bill.

Clause 3

Functions

[Jack Dromey]

I beg to move amendment 26, in clause 3, page 3, line 5, at end insert

“including by means of provision to the public of a pensions dashboard within the meaning of subsection (11).”

This amendment would require the single financial guidance body to provide for the public a pensions dashboard as part of its pension guidance function.

Pension Equality for Women

Mhairi Black Excerpts

Thursday 14th December 2017 Commons Chamber

[Grahame Morris]

I will give way again in a minute, but I would like the opportunity to respond to the Minister’s point. We must recognise the injustice faced by these women, because there were many missed opportunities. There is no doubt that the 2011 Act accelerated the changes, and Steve Webb, the former Pensions Minister, is quoted extensively as indicating that. When he wrote to the WASPI women on behalf of the coalition Government, he not only informed them about the change in pension age of one year, as under the 2011 Act, but informed them for the first time about the earlier changes, meaning that some people’s state pension retirement age was being extended by six years.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

As someone who was one year old when the 1995 Act came into effect but is sitting here just like everybody else, may I ask all Members that we get past the party political nonsense of whose fault this is? The mess has been going on for long enough and the current Government are in charge now. This problem is not going away, and the Government need to deal with it.

[Grahame Morris]

Absolutely, and there are things that the Government could do immediately to mitigate the worst cases of hardship. For example, the winter fuel allowance can be worth up to £300. If the Minister is looking for suggestions, that would be a decent start. If the Government were to give the WASPI women that payment each year, they would be able to have some level of comfort during this cold winter weather, but many in my region are having to choose between heating and eating.

--- Later in debate ---

[James Cartlidge (South Suffolk) (Con)]

It is a great pleasure to speak in this debate and I congratulate the hon. Member for Easington (Grahame Morris) on bringing it forward.

I have received a considerable amount of correspondence about this matter from the ladies in South Suffolk who are affected by the change, although I do not know whether they are in the Public Gallery today. As everyone else, quite rightly, is focusing on the specific issue faced by that cohort of women, I want to consider its long-term implications for the state pension system. We need to ask ourselves whether the system is really fit for purpose. Do we have a state pension system that actually delivers any longer?

The key thing is that we have a pay-as-you-go system. The most common argument that we hear from ladies who have been affected by these changes is, “I have paid in contributions all my life; it is my pension pot.” They believe that as they have paid in their money, they have a contract for what they should receive in return. The problem is that there is no such pot. None of us in the state pension system has a pot with our name on it. We have a pay-as-you-go system. This month’s national insurance contributions from the working population pay for this month’s pension liabilities in the state system. I am afraid that that system is extremely vulnerable in the face of demographic change.

[Mhairi Black]

Will the hon. Gentleman give way?

[James Cartlidge]

I always give way to the hon. Lady.

[Mhairi Black]

I am very grateful to my former Committee colleague for giving way. I would just like to ask whether the same pay-as-you-go system applies for the Democratic Unionist party and remaining in power.

[James Cartlidge]

That is not a function of the state pension system. I will resist the bait to which the hon. Lady tries to get me to rise.

It is important that we remember the costs involved. The DWP spends £264 billion a year, of which the largest part is for the state pension. At £111 billion, it is by far the biggest single piece of public expenditure. That sum gives out a state pension of on average just under £160 a week—not exactly a king’s ransom. Of course pensioner poverty would be far higher in the current age were it not for the fact that many of this generation of pensioners are fortunate enough to have occupational pensions—and good luck to them. My parents are in that generation, many of whom own property. Savills estimates that the housing equity of people over 65 is about £1.5 trillion, so that generation has been cushioned to a certain degree. It has also been cushioned by the Government’s actions to protect pensioner benefits and introduce the triple lock, all of which have protected state pension expenditure from the necessary savings made in other Departments.

--- Later in debate ---

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I too woke up this morning and thought, “What the hang am I going to say?” I have said everything multiple times, and there are only so many ways you can state the same facts.

I had an email from a lady called Hazel. She said that, just out of curiosity, she wanted to look at the old TV adverts for the multi-million-pound campaign that the Government had apparently launched. Given that we have focused so much on communication today, I think this is a very valid point. Hazel showed me various adverts; having searched the whole archive, we could find three. The first was presumably aimed at women. It is very patronising, as is the one that is aimed at guys.

Two dogs are talking to each other in a field. One says that it is very confused by pensions because there are so many different types. The other dog says, “Well, the Government have this great new handbook that you can request to be sent to you.” The punchline is “Is that you a guide dog now?” Oh, the banter. That is very good, right? But it was not adequate in the slightest when it came to getting across to people the grave changes that were being made.

My favourite is the third advert. It is only 10 seconds long, and half of it shows a dog chasing its own tail. There is no dialogue whatsoever. That summed up, for me, the Government’s reactions to this entire saga. They are just spinning in the one circle, refusing to acknowledge the facts that people are pointing out to them.

I raised that for two reasons. First, it is the only new thing that I have to add, and secondly, the onus is still on the women to request the information. The onus is still on them to go and find out what the Government might or might not be up to with their pensions.

It is incredible that we are still having to have this debate. As far as I am aware, this is the 13th in which I have taken part since I was elected, and I know that there were others before that. The key issue is that at no point have these changes been explicitly mentioned, and at no point have they been communicated to the women affected.

Until the speech made by my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), I thought that everyone here agreed that there was poor communication for many years. I think that that still stands. It is a historical fact that both Labour and Conservative Governments totally ignored the problem and, to an extent, there is still a huge communication problem that we have to look at.

From the admission that there is a communication problem, we can safely draw two conclusions. The first, which is the more important, is that the women are utterly blameless. The second is that it is actually an admission of guilt on the Government’s part. It is a recognition that the institution of government has failed those same women again and again.

The hon. Member for North Cornwall (Scott Mann) said earlier that the 2011 Act had been rushed, and I agree with him. It was shoved in at the last minute. Then, all of a sudden, people said, “Wait a second: there is a 1995 Act. Oh my God, this has kicked off.” Instead of doing the sensible thing and saying, “Let us step back and see what we can do to soften the blow,” the Government decided to vamp ahead with it anyway. Can we deal with the fact that the job of current Governments is to fix the mistakes made by previous Governments? That is what we are all here for. We are trying to move society forward, and it is not going to get anywhere if the response is always, “We looked at that; it is rubbish, but let us move on.” However, that is all that we are getting from the Government. We can shout about whose fault this is until we are a Tory shade of blue in the face, but it will not fix a damn thing. I recognise that the Government have made slight concessions to the 2011 Act. That gave some women an extra few months, but it was a wholly inadequate response because it totally neglected the chaos that started back in 1995, and the huge leap that nobody knew about. Can we focus on how to fix the issue now, rather than getting drawn into the blame game of whose fault it is or is not?

As has been mentioned, the SNP produced a report that did the Government’s job for them. It stated that with £8 billion spent across five years—one whole Parliament—things could effectively revert back to the original timetable of the 1995 Act. That would allow a lot of breathing space for a lot of women, especially those worse affected. The national insurance fund has a surplus of £23 billion. People can disagree with that all they want—I am happy to talk to them afterwards.

[James Cartlidge]

rose—

[Mhairi Black]

I am about to come specifically to the hon. Gentleman. He mentioned the problems faced by the pensions system, and I completely agreed with the spirit of his speech. I understand that Gordon Brown had a field day with the pensions pot and made things a hell of a lot more complicated for everybody. I accept that as reality and a historical fact. However, the fact that I agree with the hon. Gentleman about those grave concerns shows why we need to fix this problem. We always hear the argument about it being unfair to put costs on to the younger generations because they are the ones who will be footing the bill—the pay-as-you-go system that the hon. Gentleman referred to. I am from that generation, and I am looking at this problem and thinking: these women have done nothing wrong, yet the Government are still able to afford all these things that I really do not think are that important. Are the Government really not going to act because of me? Wait a second—why should I be paying national insurance, if at the last hurdle the Government can change the rules and move the goalposts? Why should my generation take anything that the Government say seriously? We must be grown up about this—I can’t believe I have to say that in here—and we need to address and fix this problem. This is above party politics, so let us be practical.

Where the hon. Member for South Suffolk (James Cartlidge) and I will disagree is when I say that this comes down to tough political choices. The Government have a deal with the DUP to maintain power, and billions of pounds are being spent on Trident. There is the refurbishment for this place, and we have heard about some ridiculous campaigns for boats and royal yachts and so on. I am sorry, but those things are not the priority right now. These women entered a contract—national insurance is a contract; it is a basic fundamental of our welfare state as it functions. We cannot undermine that, yet that is all the Government are serving to do. If this were a private company it would, rightly, be getting dragged through the courts right now, and the Government should reflect on that.

The hon. Member for Bury St Edmunds (Jo Churchill) said that section 28 of the Scotland Act 2016 gives the Scottish Parliament the power to mitigate these changes. I have a problem with that argument because section 28 of that Act states that we cannot give pension assistance or assistance by “reason of old age”. We are not allowed to do that—pensions are completely reserved, and when we campaigned for the devolution of pensions we were told no.

[Douglas Ross]

Does the hon. Lady also agree that an SNP Government Minister stated in a letter to the UK Government about the WASPI women:

“I accept that ‘old age’ is not defined in the legislation, and that most people would not regard this age group as old”?

When she speaks about pensions, does she agree that these women are not pensioners because they have not received their state pension? There may be an opportunity to use that—an opportunity, that is all I ask.

--- Later in debate ---

[Mhairi Black]

I appreciate what the hon. Gentleman says, but the WASPI women are not receiving a pension because the UK Government will not give them one, so that is a ridiculous notion. I commend the hon. Gentleman because he supported us during an Opposition-day debate. That was commendable and brave, so fair play to the guy, but that is a totally ludicrous point of view and I will explain why.

As I have said—I am coming to a conclusion, Madam Deputy Speaker—I disagree with Labour on constitutional grounds, but that is because I want to cut out the middle man. This is the perfect example of why I support independence. Why are we paying taxes to come to London to be told by a Conservative Government what we can and cannot spend the money on? The irony is that, when those policies start to take effect, the Government turn round and say, “We want the Scottish Government to fix it.” I don’t think so! If they want to devolve pensions, great. Until then, this is a UK problem and a Conservative problem, and it is not going away. It has to be fixed, and it has to be fixed soon as. Do the right thing.

Youth Employment

Mhairi Black Excerpts

Wednesday 6th December 2017 Westminster Hall

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

I congratulate the hon. Member for Chichester (Gillian Keegan) on securing this debate on an often neglected but none the less important issue. I also congratulate her on being, I believe, the first female MP to represent her area—well done on that.

When doing research ahead of this debate, I was disheartened, although not surprised, to learn that people aged 16 to 24 are more likely than any other age group to be employed on zero-hours contracts, be in temporary employment, be stuck in part-time employment or be in unskilled work.

[Rachel Maclean (Redditch) (Con)]

The hon. Lady is absolutely right to highlight that issue, but does she recognise that the research briefing shows that, although zero-hours contracts do not suit everybody, they do suit a number of people? Some people study at the same time and welcome the flexibility that zero-hours contracts give them. My son is on a zero-hours contract and it suits him down to the ground. He is 18 and is getting experience he would not otherwise get.

[Mhairi Black]

I genuinely appreciate the hon. Lady’s point, but if she is suggesting that all young people benefit from zero-hours contracts, she is on a different planet. If that is not what she is saying, that is fine. That kind of overly positive attitude towards zero-hours contracts is something that we would read in a Tory party briefing, rather than any other briefing.

I suspect that the Government’s response to any criticism during this debate will be to say that the number of young people not in education, employment or training has been slowly falling—magic! We could say, “Well done,” welcome the fall and simply leave it at that, but like all things in life the situation is more complicated than that. That kind of argument completely ignores the quality of the work. Patting ourselves on the back about the falling numbers is all well and good, but if they are falling because people are working in insecure jobs that do not last long, is it really worth celebrating? If the Government have lowered those figures by pushing people into destitution and poverty—that is my experience since I was elected—is that really something to celebrate? That is not to mention the pitiful minimum wage, which my hon. Friend the Member for Glasgow East (David Linden) talked about, which starts at £4.05 for those under the age of 18. I do not see how anyone can afford to run a household on £4.05 an hour, especially if we consider the fact that the Government have seen fit to take away housing benefit from 18 to 21-year-olds.

Organisations such as the Resolution Foundation are reporting that the Government’s tax and social security policies will drive the biggest increase in inequality since Thatcher. I know that the Government greatly admire that woman, but perhaps they will look past their ideological nostalgia and look again at how they achieved those falling numbers.

The Government could consider following the lead of the Scottish Government, who achieved their target of reducing youth unemployment by 40% four years ahead of schedule. Going further, the Scottish Government will introduce a jobs grant to help even more 16 to 24-year-olds into work. Funnily enough, I highly recommend the Scottish Government’s work, given that Scotland has the lowest youth unemployment in the UK and one of the best youth employment rates in the whole of Europe.

[Stephen Kerr]

Will the hon. Lady give way?

[Mhairi Black]

I am coming to my concluding remarks.

The Government could consider following the lead of Renfrewshire Council, in the area I represent. Following the implementation of its “Invest in Renfrewshire” scheme, youth unemployment fell by more than 80%. I have met some of the people who have reaped the benefits of that scheme. It has motivated nearly 850 local employers to support young unemployed people and has stimulated job creation, taking Renfrewshire from being the sixth- worst local authority area in Scotland for youth employment to being the fourth best. The hon. Member for Stirling (Stephen Kerr) mentioned the importance of working with business and working outwith the community.

I mention those success stories not for the sake of petty political point scoring. Surely any decent Government should listen to constructive criticism and look for solutions. The reality is that young people leaving university have huge debts and have to take on insecure and unskilled work. They face wage stagnation like we have never known—literally the worst in more than 200 years —as well as the huge uncertainty of Brexit and an impossible-to-reach housing ladder. After all these years of watching austerity push people—particularly the young, the disabled and women—towards food banks and into poverty, surely it is time to reconsider this regime and look at other solutions.

--- Later in debate ---

[Mhairi Black]

I accept what the hon. Lady said for the record, but does she also accept that zero-hours contracts—certainly in the experience of my constituents and even people I know—are forced on people? Not only are they expected to function with a household and often with a livelihood and children; they also live with uncertainty about how much money will be coming in. That, unfortunately, is a reality for far too many people.

[Rachel Maclean]

I completely accept the hon. Lady’s point. We have a picture of much lower employment across the country, including in her constituency. The Select Committee on Business, Energy and Industrial Strategy is specifically considering cases of exploitation.