Intergenerational Fairness

Richard Graham Excerpts

1st reading: House of Commons
Tuesday 28th February 2017 Commons Chamber

[Justin Tomlinson]

I thank my hon. Friend for that powerful intervention. He is a real champion for his constituency. On his point about universities, my Swindon constituency benefits from having a huge influx of graduates, so we benefit from the network of local universities within striking distance of Swindon, which is why our area has seen such strong economic growth.

My hon. Friend is absolutely right to highlight the importance of university technical colleges. My constituency had one of the first UTCs—a £10 million facility in Swindon. It has had its teething problems, but the principle is fantastic, because it is identifying the people who would ultimately be doing advanced engineering and technical work, giving them a real focus on that. They are working with local businesses, which can help to shape the curriculum to fill the skills gaps that can be identified in the local economy. This means that young people will have the best chance of having a career at the end of their education.

The challenge with university technical colleges is how to attract the best and most able students for that type of education at the age of 14. Not unsurprisingly, schools, which are all judged by league tables, are not always brilliantly keen to encourage their most able students to transfer, because it will have a detrimental effect on their place in the league tables. I would urge the schools Minister to consider having a dual score in the league tables, whereby the student remains attributed to the original school, but the results can be shared with the UTC. That would get around the disincentive facing schools if they lose some of their best students. It will give them the opportunity to say, “Look, they are doing great; but they can do even greater with that type of specialist education”. Undoubtedly, apprenticeships and UTCs are making a huge difference.

Not everybody has the opportunity to walk straight into work. As a society, we therefore have a duty to make sure that our jobcentre network is at its most able to support people. I was not the Minister responsible for jobcentres during my time in the Department for Work and Pensions but we had a lot of joint meetings and I got very excited about the need to refresh our jobcentre network. I had been on a number of visits and I was fundamentally depressed when I saw the 1960s and 1970s concrete structures and the security guards who are, understandably, needed. Let me imagine, though, that I am going to a jobcentre. I am almost certainly nervous, and I am then greeted by a security guard in bleak surroundings. There is no celebration of the successes, and no highlighting of those who have faced the same challenges that I fear but know that I must overcome.

I also visited a Shaw Trust community hub that helped a number of people who were a long way away from entering the workplace. There were bright colours and great furniture. This security guard had a different uniform to show that he was a welcomer: as soon as people arrived they were made to feel special, were congratulated on taking this step, and were made aware that he was there to be their anchor throughout the process. It was a real hub of activity. I could see nervous people coming into the building, but as soon as they met the guard they were at their ease, keen to engage in the process and fulfil their potential.

I am delighted that the Government have rolled out this system. When I visited the Swindon jobcentre a few weeks ago, I was not sure what to expect. I was greeted by senior members of staff, who told me excitedly that although the jobcentre had a budget of only about £3,000, they had painted the walls, changed the furniture around, changed the way the entrance worked, and provided work stations so that people could use computers to look for jobs independently after receiving support from the staff. Those staff members were excited because those improvements had transformed their morale and engagement among those with whom they sought to work.

The staff were then keen to talk to me about the difference that universal credit was making by simplifying what had been an incredibly complex benefits system. Under the old system, involving about 167 benefits, it was necessary to be a nuclear physicist to work out what people were or were not entitled to. All too often, through our casework, we would discover that, because of the complexity of that system, our constituents were missing out on support to which they should have been entitled.

Everyone supports the idea of a simplified single benefit that enshrines the principle that the more people work, the better off they will always be, and removes the ridiculous 16-hour cliff edge that prevented people from progressing from part-time to full-time work, to the frustration both of employers and of those whose circumstances were changing and who wished to build up their hours. Crucially, real-time technology now allows people with fluctuating health conditions to have a minimum income. As the condition goes up or down, the system automatically kicks in, so that people no longer constantly have to reapply and experience complicated bureaucracy when they want to focus on dealing with their health challenges and with remaining, or progressing, in work.

Often it is the simplest things that make the biggest difference. Another exciting development is that, for the first time, there are named work coaches. When people arrive at the jobcentre, they do not just need direct help with their search for work; there are a number of other challenges that they may need to navigate, such as securing childcare or additional training. The named coach will help them through that process, giving them significantly more time to concentrate on looking for the work that they would like. The coach will stay with people when they start work, which will also make a huge difference.

Many of us, looking back on our careers, will realise that we were probably driven mostly by our parents encouraging us to make progress—encouraging us not to be complacent; encouraging us to push ourselves—but that is not a given in life. When I was at school, it was a given that many people had no interest in going to work. That was a shame, because they were brilliant people, and with the right encouragement they could have made huge successes of themselves.

Often, people—especially those who have been out of work for a long time—will enter work, but on the lowest wage. Sometimes they will then stagnate, and will not have the confidence to kick on to higher levels. Let us suppose, for example, that I have been out of work for a long period, and have secured work in a supermarket. I am determined to make it a success, so I turn up every day, work my hours diligently, and stay there. Now, however, the named work coach would contact me and ask, “How is it going?” I would say, “For the last three months I have turned up every day and worked as hard as I possibly can.” The named work coach might say, “Have you thought about asking to become the supervisor?” The reply would be, “I’m too shy to do that.” The named coach would say, “No problem,” and then ask the supervisors and managers in the store, “Is he ready to take that step up?” Therefore, the coaches help people to progress in the workplace.

It is great that we have 2.7 million more people in work and that we have introduced the national living wage, which has helped the 6 million lowest earners to get a pay rise, but the next challenge, as we move close to full structural employment, is to ensure that there is support for in-work progression, so that everyone can not just get a job but fulfil their potential. By working hard, they can then progress through those organisations.

[Richard Graham (Gloucester) (Con)]

I want to come back to the subject of the debate, intergenerational fairness. My hon. Friend has made some points about working issues. Does he agree that for those who have retired or are working but are due a pension a key issue is not only intergenerational fairness but fairness between people who own and run companies and who have responsibilities to people in pension schemes? The news today is a good example of how this place can help to secure the best outcomes for those who are promised pensions in a not very rich retirement world.

[Justin Tomlinson]

I thank my hon. Friend for his intervention. I am always at a loss to understand why he is not a Minister. He is one of our most able MPs. In the debates that I have attended, time and again, he is so thoughtful. I had a brilliant time visiting his constituency as a Minister to see the great work that he had done to help to promote apprentices, before it became fashionable and all of us started to campaign for more apprenticeships. He is always ahead of the curve. Rightly, his intervention highlights that we have to look at people of all ages and at the opportunities. I was an employer myself, so I understand the responsibilities to staff in respect of pensions and other benefits and career progression. As ever, he makes a powerful point.

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

It is a great pleasure to join the debate at this late stage, a debate introduced in a sense with the very good news about BHS pensioners. Many of us serving on the Select Committees chaired by the right hon. Member for Birkenhead (Frank Field) and the hon. Member for Hartlepool (Mr Wright) share the enthusiasm for that result.

On intergenerational fairness, let me start by putting the case for the prosecution, as it were, which was laid out in more detail in the Select Committee inquiry that I and many other Members here today were involved in. The Committee effectively said that the UK economy is skewed. We focused on some key elements: house prices; life expectancy; the burden of looking after the old financed by the young; the triple lock on pensions; and the implicit social contract between generations that we felt had become skewed. That triggered two or three specific recommendations, in particular on the new state pension tracking earnings and doing away with the triple lock.

The factual evidence behind the case for the prosecution is highlighted in the figure that the value of the full state pension as a percentage of average earnings is now the highest it has been since the late 1980s. However, there is of course more to it than that. Some of the points I would like to highlight include the fact that spending on pensioners as a percentage of GDP is falling. That is partly due to a growing economy, increases in the state pension age and the fact that the triple lock applies only to the basic state pension and new pensions. The statistics, therefore, are not always helpful in terms of anticipating the future. One other point is that there is a strong feeling among some of us that the basic state pension needed to increase quite sharply, particularly between 2010 and 2020, because it had fallen behind strongly in the previous decade. Everyone will remember the business of the 75p increase under a previous Government. This is, therefore, not quite as simple a proposition as it first appears.

Among our pensioners today are those who served this country in extremely difficult times, including world wars and other conflicts. Many were brought up in very difficult circumstances in a world far removed from the conditions that most people today can imagine. There is then the matter of the young. The young have always faced challenges; their challenges have just changed over time. One hundred years ago people leaving school at the age of 18 were facing extremely different challenges, many of them on the western front. My own grandparents, as young people, met shortly after the carnage on the Somme, where my grandfather had been severely injured. The woman who became his wife was nursing him. Although the challenges of today are considerable, we should not underestimate those of the past.

One of the ironies of our leaving the EU at this stage is that we are just beginning to adopt a more European approach to the homes we live in and to rent them for much longer, as they do on the continent. In a sense, the Government have recognised that in their ambition to create more social housing available for rent.

Other points have been well made, particularly by my hon. Friend the Member for North Swindon (Justin Tomlinson), who articulated much of what many of us feel about the National Citizen Service, which has so far cost about £1.2 billion—that is not on any balance sheet, of course, in terms of intergenerational fairness—apprenticeships and youth unemployment, which is at its lowest for 12 years, and the openings and opportunities in universities and further education colleges.

In that regard, I hope that the former right hon. Member for Havant, in his current role as chairman of the Resolution Foundation, when he is being provocative from that platform, does not try to set pensioners, those of working age and the young against each other, for that could be extremely counterproductive, as I will go on to set out. [Interruption.] Of course, things can be done to improve the balance in the relationship. Some of those were mentioned by my hon. Friend the Member for Weston-super-Mare (John Penrose), and we could look at a double, not a triple lock.

I can see that you are agitating, Mr Speaker, so I shall finish. In our efforts to make sure that the costs of old age do not cripple the future generations paying for them, we should never forget the hugely positive role that so many pensioners, grandparents and great grandparents play, looking after children and sharing their love and wisdom with their families, especially where the parents’ own relationships have broken down and the children are often being guided by their grandparents. In many ways, older people are always helping out and passing on knowledge. Let us never forget that.

The Resolution Foundation wants to analyse the balance of fiscal contributions and withdrawals. It is right that that should be done by that foundation and not the Government. Let us not forget, however, that incredibly sensitive issues are at stake, some of which emerged as moral issues during our discussion of the Assisted Dying Bill. We do not want to end up inadvertently setting generations’ interests against one another. At the end of the day, let us be mindful of what many in the House believe and the late Jo Cox articulated brilliantly: what we all have in common is so much more than what divides us, including across generations.