Pension Schemes Bill [Lords]
Shailesh Vara ExcerptsMonday 16th November 2020
(3 years, 5 months ago)
Commons ChamberRead Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 16 November 2020 - (16 Nov 2020)
Stephen Timms
I am very grateful to the Minister for that assurance, and I look forward to monthly publication resuming.
To answer my hon. Friend the Member for Wallasey (Ms Eagle), who I am delighted to see in her place, at the Treasury Committee a couple of weeks ago the chair of the Financial Conduct Authority spoke about defined-contribution pension savers. He said:
“This issue about people making poor choices when exercising the freedoms…is probably the one that I worry about most of all.”
He went on to say that safeguards need to be
“as strong as they humanly can be”.
The FCA has had a go. As the Minister pointed out in Committee, last November the FCA introduced new rules requiring clearer signposting and promotion of pensions guidance. However, it has not worked. FCA data shows that just 14% of pension pots were accessed after guidance was taken in the six months from October 2019 to March 2020—exactly the same proportion as before the new rules.
It was not just George Osborne who had the ambition that everybody should benefit. The Treasury’s public financial guidance review, published for consultation in March 2016, said:
“Guidance is vital to ensure that individuals are fully aware of their options before they make a decision on what to do with their retirement savings”.
The then Economic Secretary, the hon. Member for West Worcestershire (Harriett Baldwin), said the following month that the Government were introducing
“a requirement that, in effect, ensures that consumers with a high-value annuity receive appropriate financial advice before making the decision to sell their annuity”.—[Official Report, 19 April 2016; Vol. 608, c. 876.]
Today, unfortunately, there is no such requirement. Two years later, in April 2018, her successor, the hon. Member for Salisbury (John Glen), who is the current Economic Secretary, said that, before proceeding with an access or transfer application,
“subject to any exceptions, schemes must ensure that individuals have either received Pension Wise guidance or have opted out.”—[Official Report, 24 April 2018; Vol. 639, c. 831.]
That aspiration has simply not been delivered. Today, the Government are taking steps that their own investigation says would make it true in 11% of cases. New clause 1 would finally deliver on the commitment that the Economic Secretary thought he was delivering on two years ago.
It was not just the Treasury. The noble Baroness Buscombe, who was a Minister in the Department for Work and Pensions at the same time as the current Minister, said in the other place on 1 May 2018:
“We all want people to make more informed decisions and to make it the norm to use Pension Wise before accessing their pension.”—[Official Report, House of Lords, 1 May 2018; Vol. 790, c. 1995.]
Everybody agreed that it should be the norm. Today, the Minister has set his ambition at 11% take-up. How can it be that ambition in his Department has shrunk so far? New clause 1 would resolve it using auto-enrolment to increase the take-up of guidance, just as it has been used so successfully to increase pension saving.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
The right hon. Gentleman speaks with huge authority on this subject, having formerly been Pensions Minister. He will, however, appreciate that no matter how many times some people are written to, they simply will not respond, so there will be a proportion of people to whom letters are written who will not take up the option of an appointment and will not indicate that they wish to opt out. What does he propose for those people? I dare say there will be a significant number of them. For them, it will be maintenance of the status quo.
Stephen Timms
The proposal in new clause 1 is that people should be auto-enrolled into an appointment—that everyone should be given an appointment. That would have the effect, I believe and submit, of very significantly increasing the number of people who access Pension Wise. Pension Wise is a very good service. It is funded by an industry levy. Nine out of 10 of those who use it report high or very high satisfaction—that is a pretty impressive level of satisfaction—but it is hidden away from most people. Lots of people have never heard of it.
Mr Vara
I note that the right hon. Gentleman says people would be given an appointment, but if the notification were by email, the fact is that people simply ignore a lot of emails. People do not always look at all the letters that are sent to them, or they mean to refer back to a letter, thinking, “Oh, I’ve got an appointment; I’ll get back to that,” but they do not, for whatever reason. There are also people who move home address and so on, who will never be notified if the letter goes to the wrong address and there has been a time gap, and the pensions people have not registered the new address. I accept where the right hon. Gentleman is going and I have huge sympathy with what he seeks to achieve, but there will still be a substantial number of people who will ignore the appointment that will simply be sent to them as a fait accompli.
Pension Schemes Bill [Lords]
Shailesh Vara ExcerptsWednesday 7th October 2020
(3 years, 6 months ago)
Commons ChamberRead Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 104-I Marshalled list for Report - (25 Jun 2020)
Dr Coffey
Our aim is to empower consumers through dashboards and the Government believe that they are best served through multiple dashboards. Of course we have listened carefully to the concerns expressed in the other House as well as in this place. We are still on Second Reading, and I think it is fair to say that we will be considering the contributions carefully and that any matters that may need to be looked into further can be considered in Committee.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
I welcome the Bill, particularly the part that my right hon. Friend is referring to at present. Sometimes, when people have multiple pensions with various pension schemes, they wish to put them into one pot, or two or three pots, rather than having to deal with so many. When that happens, some pension schemes seek to charge administrative costs when passing the funds on. Is there any mechanism to ensure that those administrative costs can be kept to a reasonable level, rather than being extortionate, which would ultimately impact on the pension pot for the individual?
State Pension Age: Women
Shailesh Vara Excerpts(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Shailesh Vara (North West Cambridgeshire) (Con)
If the former Pensions Minister is to be referred to, it would be helpful to put the facts correctly. He said that the difference required was £30 billion. He went to the then Chancellor of the Exchequer and Prime Minister and asked for £3 billion. Then, when he was given a concession of £1.1 billion, he said, “That’s a hell of a lot of money.” So let us be clear: the difference was £30 billion but he only asked for £3 billion, which is a tenth of what the hon. Gentleman is arguing about.
Ian Blackford
We are not talking about concessions; we are talking about these women’s pension entitlement. How dare the Government talk about concessions, when people have paid into their pension and deserve to get it!
This is not a comedy but the reality of a Government letting women down.
Damian Green
I am not being remotely dismissive, and if the right hon. Gentleman will be patient, I will come to the measures that the Government are taking to help women in that age bracket. I can absolutely assure him that I am not being dismissive.
Mr Vara
Does my right hon. Friend agree that one of the luxuries for the Opposition is proposing to spend money that they do not have? Does he also agree that the comments from the Opposition parties ring hollow, given that these matters were not mentioned in their manifestos? They were not mentioned in the Labour manifesto or the Scottish National party manifesto.
Damian Green
My hon. Friend makes a pertinent point.
I want to deal specifically with some of the issues raised by the hon. Member for Ross, Skye and Lochaber. He talked about communications. Since 2000—a long time before the 2011 Act—the Department for Work and Pensions has issued 14 million state pension estimates, which include mention of the state pension age. Between 2003 and 2006, the Department issued about 16 million automatic pension forecasts, which were accompanied by a leaflet about equalisation. There was also a media campaign in 2004. After the 2011 Act, as the hon. Gentleman admitted, the Department wrote to all those directly affected. There has been quite a significant communications campaign, going back more than 15 years.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
I think we all recognise that in the world of politics, there are very few easy solutions, and solutions are certainly never cheap. As far as the matter that we are debating is concerned, the cheap version—to undo the Pensions Act 2011—would cost some £30 billion, and to undo the Pensions Act 1995 would cost many billions more. We must recognise that any pension scheme that we have must be sustainable, and the Government have a duty to keep it so. It would be irresponsible for the Government not to act with a view to keeping the pension scheme sustainable.
Much has been said about transitional arrangements. It is important that colleagues realise that there have already been transitional arrangements. Those who take the trouble to read Hansard will find that on Second Reading of the Pensions Bill of 2011, the Minister speaking for the Government said,
“we will consider transitional arrangements”.—[Official Report, 20 June 2011; Vol. 530, c. 52.]
On Report, the Government delivered on their promise, because they made a concession worth £1.1 billion and reduced the time period from two years to 18 months. For 81% of the women affected, the increase in the time period will be no more than 12 months. It is fundamentally wrong to say, as the last line of the SNP motion does, that there should be transitional arrangements.
Mr Vara
Forgive me; I am mindful of the time limit.
If people want to seek a change to what has already been done, they should have the courage to say so. They should say that they do not accept the transitional arrangements that have been made, and that they want further changes. To say that no changes were made is, frankly, disingenuous. As far as notification and the 1995 Act are concerned, let us not forget that the Labour party was in government for 13 years and it did very little—in fact, it did nothing—in the way of notification, even though some 10 Pensions Ministers could have done so. In 2012, research by the DWP found that only 6% of women who were within 10 years of reaching their pension age thought that their state pension age was still 60.
There are, of course, a number of other factors that need to be taken into account. It is wrong that debates such as this focus solely on state pension age equalisation and its impact on the women concerned. We have to take account of life expectancy, which is increasing. [Interruption.] It is good news, but nevertheless we have to take it into account. Employment prospects for women are far better than they have been at any time since the state pension was introduced in 1940. There is record female employment and record employment for older women. The Government have worked hard to engage with stakeholders and employers to make sure that they recognise and value all the contributions that older workers can make. There are also our broader reforms. We have protected the winter fuel payment, permanently increased cold weather payments, created a new and simpler state pension system, abolished the default retirement age and extended the right to request flexible working.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the hon. Gentleman give way?
Mr Vara
I will not give way, because I want to leave other hon. Members as much time as possible in which to speak.
We must also mention other countries. Nine EU countries, including Germany, Denmark and the Netherlands, introduced equalisation as far back as 2009. I conclude by simply saying one thing: we have had many debates on this issue and the Government have repeatedly made their position clear, which is that they do not intend to revisit this issue. The issue was not in the Labour or the SNP manifesto, and by continuing to debate it, Labour and SNP Members are doing a disservice to the good women affected by giving them false hope. They should understand that doing so is opportunism pure and simple and political irresponsibility of the highest order. They should not give these good women false hope, and they should recognise that the Government will not give way.
Ian Blackford
On a point of order, Mr Deputy Speaker. We are being traduced by the hon. Gentleman. For clarification, this matter was in our manifesto, and perhaps the hon. Gentleman will correct what he has said.
Oral Answers to Questions
Shailesh Vara Excerpts(7 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Jim Cunningham (Coventry South) (Lab)
2. What assessment he has made of the potential effect of the UK leaving the EU on British pensioners living overseas.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
There will be no immediate changes, as a result of the referendum, in the circumstances of British pensioners. Negotiations for Britain’s future relationship with Europe will begin under the new Prime Minister.
Mr Cunningham
What discussions has the Minister had with European countries about the exchange rate and its effect on pensioners abroad?
Chris Bryant (Rhondda) (Lab)
But would it not make sense for the Department for Work and Pensions to do some investigative work now, when there are thousands if not millions of British pensioners living elsewhere in the European Union? Those people currently have free access, for example, to the NHS in their local areas without contributing, but they might suddenly find their finances to be in dire jeopardy and wish to return to this country. Should not the DWP act immediately? Let me gently suggest to the Minister that just waiting as if the new Prime Minister is going to be some way away might be a bit of a mistake?
Ian Blackford (Ross, Skye and Lochaber) (SNP)
This is about doing what is right. We are talking about British pensioners living overseas who have paid national insurance. Why not remove that uncertainty? Why not guarantee what they are entitled to? It is all about doing the right thing with a new Prime Minister. Let us get off on the right foot and make sure that happens..
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Minister not aware that the role of pensioners is a very sophisticated and complex one? Many of them depend for support on free access for their relatives in this country and on freedom to travel, as do young people going to places such as Spain to work. Has the Minister not already looked at this in some detail?
Mr Vara
As I said, the result of the referendum came only some few days ago, but I can assure the hon. Gentleman that detailed conversations are going on in the Cabinet unit. Let me provide him with the further assurance that Britain still remains a member of the EU. I want to reassure British people living in EU countries and those EU citizens who are living in the UK that there will be no immediate changes in their circumstances.
David Mowat (Warrington South) (Con)
3. What progress his Department has made on auto-enrolling people into workplace pensions.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Automatic enrolment has been a great success with nearly 6.3 million people automatically enrolled into a workplace pension by almost 143,000 employers. We will continue with our programme to get many more people enrolled.
David Mowat
Auto-enrolment has met or exceeded all initial targets. However, to maximise pensions in the long term, we need to bear down on charges. Two years ago, the Government put in place a cap of 0.75%, which is half that permitted by the Opposition when they had one for stakeholders. The Government said they would review the level of the cap, with a view to it being lower in future. Will the Minister update us on the status of that review?
Andrew Gwynne (Denton and Reddish) (Lab)
The Minister will know that in September last year, in evidence to the Work and Pensions Committee, the Economic Secretary said that if there was not transparency and comparability in fees, the Government would legislate. Does he think there has been transparency? If not, when will he legislate?
Jeremy Quin (Horsham) (Con)
I congratulate the Minister on the successful roll-out of auto-enrolment. What more could be done to help the self-employed to engage in the process?
Mr Vara
We are working very closely with the Pensions Regulator to ensure the whole programme of auto-enrolment is easily understood, in particular for self-employed people and those who have one or two employees, so that the rules are in very clear easy-to-use language on the website and in offline literature and any other offline facilities.
Jessica Morden (Newport East) (Lab)
4. If he will make it his policy to introduce transitional protection for women adversely affected by the acceleration of increases in the state pension age.
Barbara Keeley (Worsley and Eccles South) (Lab)
9. If he will make it his policy to introduce transitional protection for women adversely affected by the acceleration of increases in the state pension age.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Transitional arrangements are already in place. We committed over £1 billion to lessen the impact of the changes for those worst affected, so that no one will see their pension age change by more than 18 months compared with the previous timetable. We have no plans for further changes.
Jessica Morden
My constituent who turned 60 this year has not received any information about the changes. She was the primary carer of her children and now cannot work because of disability. but now looks forward to having to work another six years. The Minister has been presented with many proposals, including transitional arrangements. When will the Government give these women the justice they deserve?
Mr Vara
The hon. Lady refers to notice. At the time of the Pensions Act 2011, more than 5 million affected people did receive notification. That was done using the addresses Her Majesty’s Revenue and Customs then had. As far as the proposals are concerned, they all, regrettably, cost a huge amount of money. We therefore have no plans to go down that route.
Barbara Keeley
In reality, it is the 1950s-born women who are bearing the cost. My constituent is 62-years-old and is about to be made redundant in July. She suffers with diabetes, a heart condition and COPD. She tells me that, owing to limited childcare, she worked part-time when her family were young and could not contribute to her pension. She is now very anxious that she will never be able to secure another job, and will not receive her state pension until she is 66. She has a large black hole now in her life. How does the Minister advise her on facing that bleak future?
Mr Vara
I assure the hon. Lady that, under the coalition Government and the present Government, we have record levels of employment for women, including older women. That is something to bear in mind. We are working extensively with employers to ensure they appreciate the value of older workers, which they do. That is why we have record levels of employment, particularly for women.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I suspect that most hon. Members have been acquainted with difficult cases like the one mentioned by the hon. Lady. Will my hon. Friend the Minister keep an open mind on pension credit arrangements for these people? They are, after all, means-tested and could deal with the worst hardship cases.
Ian Austin (Dudley North) (Lab)
Two thousand women in Dudley North worked hard to save and plan for their retirement, but have been affected by the changes. Will the Minister meet me, my constituent Hilary Henderson and the other women from Dudley North to discuss the changes in detail? If not, why not?
Mr Vara
I recently met the leaders of the Women Against State Pension Inequality campaign, and I have met many members of the campaign in my constituency, so I am very well aware of all the details and facts. As the hon. Gentleman knows, there have also been a huge number of debates about the subject in the Chamber in recent weeks.
Nia Griffith (Llanelli) (Lab)
Given the imminent takeover by the new Prime Minister, who herself falls into the category of women affected by the pension changes, would this not be the ideal moment to look again at the various proposals that have been advanced for much fairer transitional arrangements—such as the one from Mariana Robinson of Wales—for all the women who do not have a prime ministerial salary to fall back on?
Angela Rayner (Ashton-under-Lyne) (Lab)
A little over a week ago, thousands of women from across the United Kingdom came to Parliament in a display of solidarity that reminded me very much of the Dagenham women some decades earlier. Is not the Secretary of State’s refusal to revisit the financial issues faced by the 2.6 million women whose pension ages have been increased without adequate notice a slap in the face for those women? Given that the former Pensions Minister admitted that the coalition Government had got it wrong, why is the Under-Secretary being so unreasonable?
Mr Vara
I find it deeply regrettable that Opposition parties seek to make capital at the Dispatch Box, and indeed from the Back Benches, when they do not have a solid proposal. They cannot provide a proper, credible solution that will ensure that the financial position of the country is taken into account. I might add that if the Opposition parties are so keen on this issue, they should bear in mind that although the Pensions Act came into being in 2011, the issue was not raised in any of their manifestos.
Alan Brown (Kilmarnock and Loudoun) (SNP)
5. What assessment he has made of the potential policy implications for his Department of the UK leaving the EU.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
10. What recent representations he has received from the Women Against State Pension Inequality campaign; and if he will make a statement.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
The Pensions Minister, Baroness Altmann, and I recently met WASPI representatives to listen to their concerns. We made clear the Government’s position that we will not be unwinding past decisions and that there are no plans to change policy.
Margaret Ferrier
Between 2016-17 and 2025-26, more than 5,000 women in my constituency alone will be affected by the changes. Some of them will need to work six years longer than they had anticipated. For the last time, I ask the Minister to show some leadership. Rather than shrug his shoulders, will he step up to the mark and end this injustice?
Mr Vara
No one is shrugging shoulders. As I said, no credible alternative has been put forward by any of the parties in this House; it was not in their manifestos. Members do not help the WASPI women by leading them to have expectations when the position of the Government is absolutely clear. A £1.1 billion concession was made in 2011; the period involved was reduced from two years to 18 months; and for 81% of the women affected the period concerned is no more than 12 months—81% of the women will not be affected by more than 12 months.
Mr Dennis Skinner (Bolsover) (Lab)
A few moments ago, the Secretary of State made a statement saying that Britain’s economy was booming—or words to that effect. [Interruption.] It was as near as dammit. If it is that good, why does he not make sure the WASPI women get the proper pensions, and not this load of crap the Government are chucking out now?
Mr Vara
Let me just correct the hon. Gentleman: my right hon. Friend the Secretary of State said that the economy was fundamentally strong. As for the other issues, it would have been helpful if the hon. Gentleman had listened to some of the answers I had given earlier, while he was rehearsing his question. If he had listened, he would have appreciated—
Sir Henry Bellingham (North West Norfolk) (Con)
13. What recent assessment he has made of job creation and employment trends in East Anglia; and if he will make a statement.
Henry Smith (Crawley) (Con)
T2. What support is my right hon. Friend’s Department offering to those in later middle age and older who are seeking work?
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
My hon. Friend raises a very good point. We are doing a number of things in this area. For example, as well as access to a full Jobcentre Plus offer of personalised support, the Department for Work and Pensions introduced older claimant champions in each of the seven Jobcentre Plus groups to work with work coaches within jobcentres to raise the profile of older workers, highlight the benefit of employing older jobseekers and share good practice.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
T5. Will the Secretary of State explain to the WASPI women from the north-east, some of whom have already retired in the mistaken belief that they would be receiving their state pension sooner and who live in a region that continues to have the highest level of unemployment in the country, how they are to make ends meet?
Ben Howlett (Bath) (Con)
T3. Thanks to the work of this Government, the unemployment rate in Bath is just 1.5%. Does the Minister agree that, as well as providing a steady income, working also provides health benefits, both physical and mental?
Diana Johnson (Kingston upon Hull North) (Lab)
T10. The disabilities Minister just agreed to meet a Member of Parliament and their constituent regarding an issue they were concerned about, so can I try again with the Pensions Minister? Will he meet me and some of the 10,000 women born in the 1950s who are affected by the pension changes? Will he come to Hull to meet some of these people and hear directly from them?
Mr Vara
I have met the leadership of the WASPI campaign, and I have met my own constituents. The hon. Lady has articulated the views of her constituents, as have many other MPs on a regular basis. I know very well all the facts; the issue here is that Members such as her should not be giving expectations to women, when the position has been made absolutely clear at the Dispatch Box: the Government have no intention of changing their policy.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I thank the disabilities Minister for accepting the recommendations of the review I chaired into learning disability apprenticeships. Will he confirm that he will look into which of those recommendations can now be applied to other hidden impairments, such as hearing loss and sight loss?
Oral Answers to Questions
Shailesh Vara Excerpts(7 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
James Berry (Kingston and Surbiton) (Con)
18. What steps he has taken to increase the number of younger workers subscribing to pension schemes.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
The Government continue to roll out the programme of automatic enrolment of all eligible workers into workplace pensions. Of those eligible workers, approximately half are under 40, and the largest increase in pension membership in 2015 was among those aged 22 to 29.
Nigel Mills
I welcome the progress the Minister has outlined. Now that we have announced the lifetime ISA, will he consider allowing people, especially young people, to be auto-enrolled into a lifetime ISA, rather than a pension, to give them a chance to save for a house and have improved financial resilience while they are young?
Andrew Bingham
Will my hon. Friend agree that the new state pension provides clarity for younger workers, who will now know what to expect from their state pension when they reach pensionable age? Will that not have a positive impact on how much they choose to save in a private pension, because, with this clarity, will come understanding and an ability to plan?
Mr Vara
I most certainly agree with my hon. Friend. The previous state pension system was extremely complex—it was difficult for people to know how much state pension they would get before they reached the state pension age—whereas the new state pension provides clarity from an early age as to what they can expect. In future, they will know that they can expect over £8,000 a year from the state—a solid foundation upon which to plan their own retirement savings.
James Berry
Having spent time with charities and high street banks in Kingston, I have been surprised by the low level of financial literacy they report, even among people with secondary and tertiary education. What steps will the Government take to ensure that young people receive the high-quality information and guidance they need, particularly on pension planning, which often feels a long way off to younger people?
Mr Vara
I thank my hon. Friend for that very good question. He will be aware that last October the Department and the Pensions Regulator jointly launched a refreshed communications campaign entitled “Don’t Ignore the Workplace Pension”, to help build on and maintain the success of the previous campaign in raising awareness of automatic enrolment. The campaign includes digital and social media advertising, as well as television and radio, and has helped to raise awareness and guide people towards further information.
Jenny Chapman (Darlington) (Lab)
It was pleasing to hear the Minister say that predictability and clarity were important in pensions. Will he apply those principles to the 2.6 million WASPI women?
Chris Leslie (Nottingham East) (Lab/Co-op)
The younger generation are more likely to be self-employed, and 15% of the workforce are now self-employed, yet only one third are saving into a pension pot. Will the Minister look at the recommendations from the Federation of Small Businesses, which is calling for incentives and support for self-employed pension provision?
Mr Vara
The hon. Gentleman raises a good point about a particularly important sector of our economy, and we will certainly look at anything put forward. I emphasise that the Government are keen to ensure that people, including the self-employed, think about and prepare for a better future in terms of their pension.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Pension saving has been undermined by the new lifetime ISA, a new gimmick from the Chancellor, which will promote ISA saving from taxed income over pension saving from pre-tax income—in other words, it is a convenient tool to increase tax receipts today. No employee will be better off saving into an ISA than through workplace pension saving. The Association of British Insurers has forecast that someone saving 4% of an income of £25,000 in an ISA would be £53,000 worse off by age 60. Will the Minister tell the Chancellor to stop his gimmicks, stop this nonsense and get back to pension savings? We need no more con tricks from this Government.
Chris Skidmore (Kingswood) (Con)
4. What recent progress he has made on reducing long-term youth unemployment.
Paula Sherriff (Dewsbury) (Lab)
22. If his Department will introduce transitional protection for women adversely affected by changes in the state pension age.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Women affected by changes made in 2011 face a maximum increase in state pension age of 18 months, rather than two years, as a result of a Government concession, and will retire under the new state pension, which will be more generous for many than the previous system. No further transitional arrangements are planned.
Mr Cunningham
Will the new Secretary of State look again at these transitional arrangements? Will he also see whether or not the cost of this could be offset by some adjustments in his budget?
Julie Elliott
Why has the Minister not used the opportunity of a majority Conservative Government to put right the wrongs of the last Government, which have had an impact on some 4,290 women in my constituency, by introducing proper transitional arrangements—or is this just compassionate Conservatism in action?
Mr Vara
During the debates in 2011, the then Secretary of State for Work and Pensions and the then Pensions Minister said on Second Reading of the Pensions Bill that they would go away, consider and reflect, and they did precisely that: on Report, they made a concession worth £1.1 billion and reduced the timeframe from two years to 18 months. Transitional arrangements were put in place, and at a substantial and significant cost, notwithstanding the very tough economic climate at the time.
Kate Hollern
Recently, the Minister for Small Business, Industry and Enterprise talked about how
“people have been working…for up to 30 years and paying into a pension fund in the expectation that…they will have a certain amount of money on which to live”.
She went on to say that
“there is an increasingly good case to be made for the right thing to be done by people”.—[Official Report, 25 April 2016; Vol. 608, c. 1183.]
Given the sudden change in the retirement age for women, how can the Government justify this rank hypocrisy from one Minister to another? Will the Secretary of State bring fairness for those women? In his new role, he has an opportunity to show that he will consider things fairly and support the Minister for Small Business, Industry and Enterprise.
Mr Speaker
That would render it orderly. I am very grateful to the hon. Member for Bolsover (Mr Skinner) for proffering advice, especially from a sedentary position.
Mr Vara
With permission, Mr Speaker, I will take the hon. Lady’s reference, “from one Minister to another” slightly broadly and remind her that, following the passing of the Pensions Act in 1995 there were 13 years of Labour government during which a succession of Secretaries of State for Work and Pensions and pensions Ministers did absolutely nothing to try to alter the system that she and her colleagues now seek to change.
Barbara Keeley
While Ministers do nothing, my constituents and other people are really suffering. My constituent, a woman born in the 1950s, told me:
“I feel anxious and distressed about how I am going to manage without an income in what has been, for my generation, the expected retirement age.”
It is six months since we had our first debate on this, so will the Minister and the Secretary of State now commit that civil servants will assist with costing the various options for transitional arrangements that have been put forward by Labour?
Paula Sherriff
Does the Minister accept that there were significant failures from his own Department to communicate the changes to the state pension age, and does he think it unacceptable that some women found out about the changes only months before they expected to retire?
Mr Vara
In 2012, a survey compiled by the Department for Work and Pensions found that only 6% of women who were due to retire within 10 years thought that the pension age was still 60. Moreover, in 1995, people were able to ask for an estimate of when they were likely to retire, and in 2011 more than 5 million people were sent a letter to the address that Her Majesty’s Revenue and Customs then had informing them of the changes.
Jason McCartney (Colne Valley) (Con)
14. With an all-party group on the WASPI campaign being set up later this week, will the Secretary of State confirm that he is willing to meet a cross-party group of MPs and some members of the campaign to discuss the matter further and to open up some good communication?
Steve McCabe (Birmingham, Selly Oak) (Lab)
The latest analysis shows that the young people referred to in Question 3 stand to lose between £30,000 and £20,000 over their retirement, as a direct result of Government policy. Will the Minister explain how that contributes to intergenerational fairness?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
The whole purpose of the auto-enrolment system is to make sure that people can supplement the state pension. At the moment, 10 million people are eligible for auto-enrolment, and we expect 9 million of them to take up that offer. Those 9 million people will end up saving and, in many cases, saving more than they do at present.
Mr David Winnick (Walsall North) (Lab)
Is the Secretary of State aware that he will be assessed on how far he is willing to stand up to the Chancellor over cuts that hit the most vulnerable? His predecessor was not willing to do that until the last moment. Has the Secretary of State got more courage and guts than his predecessor?
Oral Answers to Questions
Shailesh Vara Excerpts(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jo Cox (Batley and Spen) (Lab)
8. What the average notice period was for women whose pension age was brought forward by the Pension Act 2011.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Women whose pension age was increased had a notice period, between Royal Assent and their new state pension age, of between four years and eight months and 14 years and five months. The average notice period was 10 years and 11 months.
Jo Cox
One of the 1,400 women in my constituency affected by these changes recently told me that she is still waiting for official notification from the Department. Does the Minister accept the abject failure on the part of the DWP to communicate these changes to the women affected by them? Does he think it is acceptable that some women have found out only through the brilliant work of the Women Against State Pension Inequality campaigners?
Mr Vara
Between 2009 and 2010, over 5 million notices were sent to people, according to the records held by Her Majesty’s Revenue and Customs. I would point out to the hon. Lady that, in 2012, only 6% of women within 10 years of state pension age thought that their state pension age would be at age 60.
Kevin Foster (Torbay) (Con)
Given the rhetoric in the recent Opposition day debate about the state pension age changes, does the Minister share my surprise that the six options put forward by the shadow Secretary of State would not make much difference at all to many women born in the 1950s? Does he agree that it is time for the Opposition to be clear about the choices they would make and how they would pay for them, and also to be clear about the changes they would not make?
Mr Speaker
Order. I know that the Minister will want to focus exclusively, and doubtless with loving care, on his own policy, and will not dilate on that of the Opposition, which would be disorderly. Knowing the hon. Gentleman, I do not think he does disorderly.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
We are not just dealing with the issue of the notice period: there is a fundamental unfairness. Let us take an example: a constituent of mine born in 1953 would have retired at age 63, but a woman born on 10 February 1954 will not retire until July 2019, two and a half years later. That is patently unjust. What the Government can do is to mitigate the timetable so that people have time to react. That is the right thing to do, and the Government should act.
Mr Vara
The hon. Gentleman talks about mitigating things. May I just say to him that transitional arrangements were made at the time? Those transitional arrangements cost £1.1 billion. The period that women would have to work before they retired was reduced from two years to 18 months, and 81% of the women affected by that period of 18 months will not have an extension of beyond 12 months.
Angela Rayner (Ashton-under-Lyne) (Lab)
I am really disappointed that the Minister still does not recognise that those women were given a totally inadequate notice period. Given that unfairness and the Secretary of State’s earlier comments—this Government are pretending they want to take people out of poverty—will the Minister look at the six options we have presented to the Government to deal with this injustice? Will he, as many Members of his party would support doing, allow those affected—[Interruption.] I am coming to that, if the hon. Member for Hexham (Guy Opperman) would listen. Will the Minister allow those affected to take a reduced state pension at an earlier age and be paid a lower state pension for a longer period?
Mr Vara
As far as the six options are concerned, all of them have a cost. It is time that the Opposition started to think about where the money would come from. The hon. Lady lays the blame at the feet of this Government, but she might reflect on the 13 years during which her party was in power, when it did absolutely nothing. [Interruption.] She is chuntering from a sedentary position about £20-something billion. May I just say to her that the cost of undoing the Pensions Act 2011 would be £30 billion?
Amanda Solloway (Derby North) (Con)
9. What progress his Department has made on reducing the rate of unemployment.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
11. Whether he has had discussions with the Women Against State Pension Inequality campaign; and if he will make a statement.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
It is fair to say that many in the House have had discussions or correspondence with members of the WASPI campaign. The right hon. Gentleman will be aware that, in recent weeks, we have had a number of debates in which Members of Parliament on both sides of the House have expressed the views of their constituents.
Mr Carmichael
I am grateful to the Minister for that answer and encourage him to continue the engagement with the WASPI campaign. One of its achievements has been to bring forward an army of women who say that they were not given proper and effective notice of what was coming towards them in terms of their retirement age. Whether that was the right thing or the wrong thing to do is no longer the issue. The fact is that it was done badly, and that now needs proper attention.
Mr Vara
I have a huge amount of respect for the right hon. Gentleman—I had the privilege of serving in the coalition Government Whips Office when he was one of the deputy Whips. At the time, he supported the Pensions Act 2011 and was responsible for persuading his Lib Dem colleagues to do likewise. One thing that was always the case with the Lib Dems before the coalition Government was that they blew with the wind. There was a temporary pause during the coalition Government. He is now proving that blowing with the wind is part of the Lib Dems’ DNA, and that they are back to normal.
Richard Graham (Gloucester) (Con)
The Opposition suggestion that the Government could allow that group of women to take their pensions early from the age of 63 has not been fully costed by anyone. Will my hon. Friend share with the House what the implications might be in terms of cost, whether it needs primary legislation and whether men over the age of 65 will be affected?
Alberto Costa (South Leicestershire) (Con)
17. What steps his Department is taking to help young people into employment.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
T5. The House will be aware that hundreds of thousands of pensioners live in countries where there is no uprating. Now that we are facing the EU referendum, and given that 400,000 British pensioners live elsewhere in the EU, will the Minister tell us what will happen to either the partial or the full uprating for British pensioners if we leave the EU?
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I remind the hon. Gentleman that the position of the Government is that we are better off in the EU: the people of Britain will be safer and more secure.
Liz McInnes (Heywood and Middleton) (Lab)
T6. The Minister dismisses the six suggestions of my hon. Friend the shadow Secretary of State for transitional arrangements as somehow mathematically challenged—or perhaps it was challenging. This issue is about fairness, however, and about establishing a fair transitional arrangement for the WASPI women. Has the Minister actually costed any of the six suggestions, or has he just dismissed them all out of hand?
Mr Vara
Yes, we have costed them, and a response to a freedom of information request is coming out today. When the hon. Lady talks about fairness and says that there should be transitional arrangements, I simply ask her to look back at Hansard for the year 2011, where she will find that on Second Reading, the then Secretary of State who is the current Secretary of State said that he would go away and consider—and he did. Four months later, transitional arrangements were implemented. They cost £1.1 billion and a reduction was made to the period from two years to 18 months, so transitional arrangements have been put in place.
Amanda Milling (Cannock Chase) (Con)
Last year, the Under-Secretary of State for Disabled People, my hon. Friend the Member for North Swindon (Justin Tomlinson), met Newlife, a Cannock-based charity that provides specialist disability equipment to children across the country. Will my hon. Friend join me in commending Newlife’s work, and does he agree that the provision of this equipment at this early stage means that these children can have a better quality of life?
Michelle Donelan (Chippenham) (Con)
The Minister will be aware that almost 15% of the working population are self-employed, and that in five years’ time, about 40,000 of them will be living in Wiltshire. Does he agree that something needs to be done and that a self-employed auto-enrolment scheme could be looked at? Would he welcome the inclusion of such a thing in this week’s Budget?
Mr Vara
Auto-enrolment is a very important issue that this Government are undertaking. I am happy to report that some 6 million people have already taken part in the initiative. This is something that will be of particular benefit to women, who will have the opportunity to enrol as part of a pension, which will certainly help their chances in the future.
Mary Glindon (North Tyneside) (Lab)
When the Minister for Disabled People recently met Ravi Metha, Sulaiman Khan and Tanvi Vyas-Brady, campaigners from Muscular Dystrophy UK’s Trailblazers group, he heard at first hand the challenges that young disabled people face looking for work. Will he confirm that he can and will arrange for these young people to meet his access to work team so that their experiences can directly influence future DWP policies?
Oral Answers to Questions
Shailesh Vara Excerpts(8 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rachel Reeves (Leeds West) (Lab)
14. If his Department will make an assessment of the merits of options for transitional protection for women who will adversely be affected by the acceleration of increases in the state pension age.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Working-age benefits are available for those who have not yet reached state pension age. A concession of £1.1 billion was made, and 81% of those affected will see a delay of one year or less. For the rest, the delay will be no more than 18 months. There are no plans for further transitional arrangements.
Martyn Day
In 2005, the Pensions Commission said that
“a policy of significant notice of any increase (e.g. at least 15 years) should be possible”,
to mitigate the impact of any such changes. I would argue that the start of that 15-year process should be the beginning of the changes in 2010. In effect, the retirement age for women will be 63 from April this year, so will the Department look again at smoothing out to 2025 the increase in pensionable age for women aged 63 to 66?
Mr Vara
The equalisation measures of the Pensions Act 2011 were introduced, and the matter was expedited, to ensure that we covered for the fact that there had to be a sustainable pensions budget. It is also important to remember that people are living a lot longer. We have to take that into account, which is why we had to accelerate the issue.
Ms Ahmed-Sheikh
The Minister speaks often of equality, but his Department’s policies clearly have a disproportionate impact on so many women in this country. Not only are women born in the 1950s unequally affected by the pension plans, but many women will also lose out under the new single-tier pension rules. Should not the Government act now to allow people to opt to have a year treated as a qualifying year if, by including the income from two or more jobs, that person’s earnings are at least equal to the earnings factor for that year?
Mr Vara
I remind the hon. Lady of the record issues we have achieved for female employees. We now have record female employment, at a rate of 69.1%, and there are more than 1 million more women in work since 2010. The number of older women in work is at a record high, with more than 100,000 more than last year. The people to whom the hon. Lady refers are all benefiting from the measures I have mentioned.
Ian Blackford
I hope the Minister will answer my question, given that he ignored the one asked by my colleague. Will he apologise formally for the utter shambles his Department has made of communicating the changes to the acceleration phase, as raised by Women Against State Pension Inequality, and for the inaccurate communication to pensioners regarding national insurance contributions? We learned over the weekend that the Government Gateway website is still showing that the pensionable age for women is 60. How does the Minister expect the House—and, indeed, the public—to have confidence in his Department’s ability, given that it has failed so spectacularly to communicate and to deliver fairness?
Mr Vara
The issue to which the hon. Gentleman refers is isolated and he should regard it as such. The matter has been corrected. It is about time that he took on board all the other arguments that have been raging about this particular issue, rather than a solitary, individual mistake on a website, which has been corrected.
Sir David Amess
I fully accept that we are talking about huge sums of money. I was here in 1995 when we first announced the changes, but will my hon. Friend consider whether the Government have taken appropriate action in communicating to women these significant changes so that they can prepare for their retirement? Have the changes been clearly advertised on the Government websites?
Mr Vara
The initial changes were made in 1995. Until 2010, when the coalition Government came to office, there had been at least 10 Labour Pensions Ministers, one of whom held the position twice, and they made absolutely no effort in terms of communication. I want to put it on the record that, as far as the Pensions Act 2011 is concerned, more than 5 million people were written to, including the women affected, using the addresses we had from HMRC. For those who want more information, it is available on the Government website.
Rachel Reeves
Many of the women whom we are talking about are caring for elderly parents or young grandchildren. Many have been working since they were 15 years old, and very few of them have significant pension savings. Will the Minister give those women some hope and look at transitional arrangements, such as allowing women who are affected to draw their pension credit early to help them through this difficult time?
Mr Vara
A concession was made in 2011. On Second Reading, the Secretary of State said that he would go away and consider matters. He did so, and when he came back he made a concession worth £1.1 billion and reduced the two-year extension to 18 months. In the case of 18 months, 81% of women affected will have to work no more than 12 months.
Angela Rayner (Ashton-under-Lyne) (Lab)
More than 2.6 million women will be hit by this change, more than 5,000 of them in the Minister’s constituency. The least they deserve is to be given the facts to allow an honest debate. We know that the Government considered £3 billion-worth of transitional protection but allocated only £1 billion, as the Minister outlined. In the spirit of an open and honest debate, will the Minister release to the House details of all the options for transitional protection that the Government have considered?
Mr Vara
Perhaps an apology should come from the hon. Lady about the fact that there was no element of communication when her people were in power for 13 years. Let us not forget—[Interruption.] Precisely! The hon. Lady mentions 1995; she will recall that within two years there was a Labour Government, who were around for 13 years. As I have said, there was no communication from any of the 10 Pensions Ministers. As far as the transitional arrangements are concerned, I responded to the hon. Member for Leeds West (Rachel Reeves) that a concession worth £1 billion was made, and the time period was reduced.
Sir Edward Leigh (Gainsborough) (Con)
I am not sure that it helps these ladies, some of whom are in very difficult circumstances, for both Front-Bench teams to trade insults. Although everybody accepts that there should be equalisation, I want to mention the case of a widow who came to see me on Friday, who has worked hard all her life but has no occupational pension. Because she paid into the state earnings-related pension scheme, she says that she will lose up to £55,000. That is a real blow for her, because she has little in the way of savings. Is there no way in which we could look at further transitional concessions, or perhaps a cap, so that we could help some of these disadvantaged ladies?
Mr Vara
My hon. Friend is absolutely right that we need to discuss the matter in a measured way, but that means that we need to look at it in a broad context. A whole lot of other benefits are available to the women who may be affected—for example, jobseeker’s allowance, employment and support allowance, income support, carer’s allowance and personal independence payment.
Let us not forget that pensions will be uprated. There is the triple lock, and the simplified new state pension will be introduced in April. Pension freedom allows those who have a pension some flexibility. There has been a permanent increase in cold weather payments. Winter fuel payment has been protected, and more than 12 million pensioners benefited from it last year. As far as female employment is concerned, I have mentioned a number of benefits that we have brought in for female employees. It is important that we look at things in a broad context, rather than simply looking at people in the narrow confines that Members prefer to debate in this Chamber.
Mr Speaker
No one could accuse the Minister of excluding from his answer any matter that might in any way, at any time or to any degree be judged to be material, and we are grateful to him.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Minister talks about life expectancy, but he is not giving us the full picture. Life expectancy for women fell in 2012-13, and Salford has some of the worst life expectancy figures in the country. Female life expectancy in one ward in my constituency is only 72 years, and healthy life expectancy is only 54. Why should 1950s-born women in Salford carry the burden of the equalisation of the state pension age given that working until 66 is clearly going to be difficult for them? Those women need transitional arrangements.
Ben Howlett (Bath) (Con)
Although I appreciate that emotions are high on both sides, it is important to ask why, in 13 years of government, the Labour party did nothing to address the issue, especially since they knew that women were living longer. Does the Minister agree that a triple-lock single flat-rate pension would be much fairer to women than the old system?
Mr Vara
Absolutely. Such a pension will be much fairer. When such passionate comments come up at oral questions and in the various debates we are having on this issue, it is worth remembering that not one party—neither the Scottish National party nor the Labour party—put such a measure in its manifesto. That is because simply to reverse the 2011 measures would cost over £30 billion, and it would cost countless billions more to reverse the change made in 1995. Those parties should be mindful of the fact that the issue was in not in either of their manifestos.
Damian Collins (Folkestone and Hythe) (Con)
3. What assessment he has made of trends in the level of private sector jobs.
Kelvin Hopkins (Luton North) (Lab)
5. What estimate he has made of the number of people who will receive a lower state pension under the single-tier pension.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Provided that people have at least 10 national insurance qualifying years, they will not receive a lower pension under the new state pension based on their own national insurance contributions than they would have already built up under the current system.
Kelvin Hopkins
The truth is that under the Government’s new pension system, substantial numbers of pensioners will lose money. Why did the Government turn their face against the obvious solution, which is to move to a much higher basic state pension, backed up by a compulsory state earnings-related scheme for all, with defined benefits?
Mr Vara
It is important that the hon. Gentleman appreciates that the new state pension is based on national insurance contributions. He will be aware that for many years many people have contracted out, and a small portion of their national insurance has gone towards a work pension or a private pension. If they add the new state pension to their other pension, which was paid for by national insurance contributions, they will find that in many cases they will be better off than they would be under the new state pension, which is £155.65.
Andrew Stephenson (Pendle) (Con)
Will not the new state pension remove injustices that have persisted for far too long, benefiting women and low earners especially?
Ms Karen Buck (Westminster North) (Lab)
6. What evaluation his Department has made of the effect of the under-occupancy penalty.
Huw Merriman (Bexhill and Battle) (Con)
8. What steps he plans to take to maintain the level of pensioners’ incomes during this Parliament.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
The Government will triple lock the basic and new state pension, top up income to a guaranteed minimum level for the poorest pensioners, and protect benefits for older people, including free eye tests, NHS prescriptions, bus passes, television licences for those aged 75 and over, and winter fuel payments.
Huw Merriman
Given that 28% of my constituents are over 65, compared with a national average of 17%, the Minister’s answer is welcome news indeed. What steps are the Government taking to ensure that pensioners claim all their state entitlement?
Mr Vara
My hon. Friend makes a good point. I can assure him that the Government use a wide range of channels. On pension credit, we believe that one of the best ways to reach people is through community partners, and we provide a web-based pension credit toolkit containing a range of resources to encourage take-up among pensioners. Information and leaflets on other benefits are also available from the Department’s offices, advice agencies and local authorities, as well as some post offices and doctors surgeries. Information about all benefits and how they may be claimed is readily available on the gov.uk website.
Andrew Gwynne (Denton and Reddish) (Lab)
A triple lock of nothing is still nothing. The women of the Women Against State Pension Inequality campaign have been done an injustice by this Conservative Government. We also know that a group of women from 1956 will miss out on the new state pension benefits too. What has the Minister got against women from the 1950s?
Mr Vara
The hon. Gentleman has a problem understanding, so I will say this very slowly: as a consequence of the triple lock, which means an increase in line with whichever is highest out of inflation, earnings and 2.5%, when the new state pension comes into place in April, pensioners will get £1,000 a year more than under the old system. As he should remember, Gordon Brown insulted pensioners with a 75p rise, so we will take no lectures from the Opposition on who really cares about pensioners.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
9. What assessment he has made of the effect on the income of working households of changes to the universal credit work allowance.
William Wragg (Hazel Grove) (Con)
What steps are the Government taking to ensure that all employees are fully informed of the new auto-enrolment pensions?
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I can assure my hon. Friend that the Government are working closely with the pensions regulator to ensure that small employees in particular are informed of the new auto-enrolment changes. Online facilities are easy and simple to use for many people. Offline facilities such as leaflets and so on are also made as easy as possible.
Paul Blomfield (Sheffield Central) (Lab)
The Government have agreed to remove the 28-day waiting rule for terminally ill people who are transferring from DLA to PIP, but for those who are unable to afford to travel to loved ones, or who are worried about bills in their final weeks, it cannot come soon enough. Will the Minister update us on progress?
Universal Credit Work Allowance
Shailesh Vara Excerpts(8 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I should like to thank all those who have spoken in today’s debate. On a Labour Opposition day, however, it is rather regrettable to find more Scottish National party Members than Labour Members present for most of the debate. Labour Members have demonstrated a poor showing on their Opposition day.
Let me make one thing absolutely clear at the outset: universal credit is transforming people’s lives. After years of Labour’s dependency culture, this Government are continuing to reform the welfare system and the labour market.
It is worth reminding the House of the broken welfare system and labour market that were left to us, a legacy that hon. Members have recognised during today’s debate: nearly one in five households had nobody in them working; the number of households where nobody had ever worked had nearly doubled; 1.4 million people had been on benefits for most of the previous decade; and close to half of all households in the social rented sector had nobody in work.
Several hon. Members rose—
Stephen Timms
The Government are not going ahead with the tax credit cuts, so why is it right to go ahead with precisely the same cuts for the minority of people who have the misfortune to be claiming not tax credits but universal credit?
Mr Vara
It is important that the right hon. Gentleman and others take into account the need to consider the broader perspective: the raising of personal allowances; the introduction of the new living wage; the doubling of free childcare to 30 hours; tax-free childcare from early 2017; and, let us not forget, the fact that every time we fill up our tank with petrol there is a saving of £10 because of the freezing of the fuel duty. It is important to consider everything in a broader perspective, not the narrow perspective that we have heard from so many Opposition Members.
A number of speeches have been made today and, unfortunately, time simply does not allow me to address them all. I shall simply say that the right hon. Gentleman made a passionate contribution. I have huge respect for him and I am sorry that he is no longer on his party’s Front Bench. May I also pay tribute to my hon. Friend the Member for Hertsmere (Oliver Dowden), who made a learned contribution, clearly setting out the reasons why Labour’s proposals are simply not sustainable? My hon. Friend the Member for Lewes (Maria Caulfield) made a powerful contribution, telling us of her experiences growing up, which had the whole House in agreement with her.
This is an important subject and we need to recognise that the IFS has pointed out that no one on existing benefits or tax credits whose circumstances remain the same will lose out in cash terms as a direct result of being moved on to universal credit. These claimants will get transitional protection to avoid cash loss at the point of change. It is important to note that the only people who will be directly affected by the change to work allowances in April will be those already in work, the majority of whom will be single claimants without dependants. [Interruption.] The shadow Work and Pensions Secretary chunters away, but we have checked the Hansard record and found that he was wrong and we were right. Conservative Members await a withdrawal of his earlier comments, which we debated. We have checked Hansard and he should do likewise. For those people who are affected, we have been careful to put measures in place to ensure that they are fully supported. As well as the additional work coach support that these claimants will receive, we have increased the amount available through the flexible support fund to help people progress in work and increase their earnings.
Universal credit is a major reform of welfare that is designed to make sure that work always pays. Through the removal of the requirement to work 16 hours per week that exists in the tax credits system, people will see a financial benefit from every extra hour they work. The universal credit taper means that financial support is withdrawn at a consistent and predictable rate, helping claimants to understand clearly the advantages of work. The IFS has said that anyone being moved on to universal credit from tax credits will be protected—they will not be cash losers. Opposition Members need to take that on board—that comes from the IFS.
Mr Vara
I will not give way.
It is also worth noting that universal credit is working: for every 100 jobseeker’s allowance claimants who find work, there are 113 universal credit claimants who do so. It is important to look at the bigger picture. This Government are moving Britain to a higher wage, lower tax and lower welfare society. Universal credit is fundamentally different to the legacy systems it replaces, and it must be recognised that there is no meaningful way of comparing an unreformed tax credit system with universal credit.
As my hon. Friend the Under-Secretary of State for Disabled People highlighted at the start of the debate, Labour’s spending on in-work benefits went up by £22 billion, but the number of working people in poverty actually rose. The system we inherited from Labour was one where, for millions of people, being on welfare was a more attractive option than working or taking on more work.
Under Labour, there was a complete abdication of responsibility for managing working taxpayers’ money. Labour’s shambolic welfare policies led to a colossal welfare budget that was simply out of control, and the party has not changed. Page 47 of the 2015 Labour party manifesto said:
“To guarantee a decent social security system for the next generation, we need to keep costs under control.”
Yet when the shadow Work and Pensions Secretary was on the “Daily Politics” programme in December he said:
“We are campaigning for a…full reversal of universal credit...we will put that money back in if we were in power…I’m crystal clear about that.”
The presenter Jo Coburn challenged him—she had to challenge him three times. She said:
“Where will you get the money? The bill would go up under your proposal.”
The shadow Secretary’s reply was:
“Had I been Chancellor…I would have taken the extra £27 billion tax receipts.”
There we have it: the party that wants to continue taxing. That is why it is the party of welfare—it is the welfare party, not the labour party.
Welfare is much more than simply giving money to people and writing blank cheques; it is about removing the barriers that prevent people from finding work and progressing in work. It is about giving people the support they need to stand on their own two feet and live independently of the state. It is about creating the right incentives for people so that they can make the right choices for themselves and their families. That is what universal credit does, and it is working. It is incentivising work, renewing personal responsibility, and rewarding positive choices. Under this Government—this one nation Government—we will continue to deliver for all our citizens.
Question put.
Oral Answers to Questions
Shailesh Vara Excerpts(8 years, 4 months ago)
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Mr David Hanson (Delyn) (Lab)
10. What assessment he has made of the effectiveness of the trial of locating jobcentre advisers at food banks.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Jobcentre work coaches undertake outreach work every day in local communities and have recently been helping people with back-to-work support and advice at the Lalley Welcome Centre in Manchester, where a food bank sits alongside other support services. The test is at an early stage and the Department will make the findings public in due course.
Diana Johnson
Despite the fall in unemployment, many working families across the country will be relying on food banks this Christmas. I pay tribute to Sarah Sidwell and her staff at the food bank in Hull. Is putting jobcentre staff in food banks not actually an acknowledgement of the shambolic nature of the benefits system, which is affecting people? Should the Minister not think very long and hard about sorting out the system rather than applying a plaster and putting jobcentre staff in food banks?
Mr Vara
May I gently remind the hon. Lady that we were invited, at the request of Sister Rita, to go to Lalley Welcome Centre, which also hosts other agencies? I might also say to the hon. Lady that that particular centre has a job club, which makes eminent sense. I presume she does not object to that. If she is happy to have a job club there, why on earth does she object to our going there to help people when we have been invited to go there?
Mr Hanson
Will the Minister confirm whether Lord Prior will join in the evaluation of services at that job centre and food bank? As the Minister will know, Lord Prior has indicated that obesity seems to be a problem, rather than poverty. Will the Minister confirm whether the evaluation will include an examination of the reasons why sanctions and benefit delays cause problems for those going to food banks?
Heidi Allen (South Cambridgeshire) (Con)
From my point of view, there is great potential in co-siting jobcentres and food banks if it is done in the right way. On a related subject, can the Minister envisage a future in which jobcentres and councils are co-located across the country?
Kevin Foster (Torbay) (Con)
In relation to this trial, has the Minister noticed today’s report in the Western Morning News, which says that food bank usage has dropped by 25% in Devon and Cornwall? Does he agree with the Trussell Trust that that is
“a sign that economic recovery is giving more people access to secure work”?
Frank Field (Birkenhead) (Lab)
May I report to the Minister the progress in Birkenhead? A benefits adviser has been working in the food bank there, and the number of people having to come back for a second bag of food has dropped by 65%. Whenever the Secretary of State refers to this experiment, he talks about “benefit advisers”, while other senior people in the Department talk about “work coaches”. Might the Minister persuade the Secretary of State to say that his phrase is not an offensive one? If someone who is hungry thinks that the person at the food bank is a work coach, it might put them off going to the food bank in the first place?
Mr Vara
Both terms are applicable. May I just say that we should not get bogged down in the terminology? The important thing is to make sure that people actually have support to get them back to work. As we just heard in the quote from my hon. Friend the Member for Torbay (Kevin Foster), our long-term plan is working. We want to make sure that as many people as possible are in work so that they do not have to resort to food banks.
Emily Thornberry (Islington South and Finsbury) (Lab)
Is the Minister surprised that the Secretary of State has never bothered to visit a food bank? Presumably, people in his Department have spoken to people in food banks. The message we get loud and clear from people in food banks is that the most important thing the Department can do is to fix its broken system of sanctions and stop benefit delays.
Mr Vara
It is always helpful if, when Front Benchers say things at the Dispatch Box, they are accurate. My right hon. Friend the Secretary of State has visited food banks. As far as sanctions are concerned, may I just tell the hon. Lady that the Oakley review said that 71% of people found sanctions helpful in encouraging them to find jobs?
Neil Carmichael (Stroud) (Con)
5. What steps he is taking to encourage people on low pay to progress through training.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
For the first time, universal credit will support claimants in work to earn more. Work coaches will provide tailored support to claimants on low wages to improve their pay. To help to develop our package of support for people in work, we are implementing a comprehensive test and learn strategy to understand better the impact that labour market policies can have on helping people on low incomes to get jobs in which they earn more.
Neil Carmichael
Does the Minister agree that having a high-skill, high-pay economy is exactly the way to drive up productivity and, crucially, social mobility, which is the key thing underpinning the Government’s strategy?
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Low pay and training needs affect many disabled people. Two years ago, almost to the day, the Department announced the extension of the Access to Work programme to disabled people seeking training, internships and apprenticeships. How many people have benefited from that scheme and when will we hear about its progress?
Mr Vara
We are very close to record levels as far as that initiative is concerned. As I said earlier, our long-term economic plan is continuing. While I am at the Dispatch Box, may I say that the House has considerable sympathy with all that the hon. Gentleman and a lot of his colleagues are going through?
Stewart Malcolm McDonald (Glasgow South) (SNP)
May I pay tribute to your office, Mr Speaker, for the way in which it has combated exploitative internships, which are often unpaid and are used to exploit many young people? Many people begin their career progression with an internship. Will the Minister outline what the Government are doing to ensure that young people are not exploited through long-term unpaid internships?
Mr Stephen Hepburn (Jarrow) (Lab)
6. What estimate he has made of the proportion of working families likely to be affected by the Government’s reforms to benefits.
Owen Thompson (Midlothian) (SNP)
11. What assessment he has made of the potential effect of paying universal credit to households rather than individuals or women experiencing financial abuse.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
For a minority of claimants, including women who may be victims of financial abuse, alternative payment arrangements can be made. We can split payments to members of the household, where necessary, under universal credit. Furthermore, jobcentre staff are trained to identify vulnerable claimants and can signpost individuals, at their request, to local domestic abuse support organisations for further help and support.
Owen Thompson
Research carried out earlier this year by the Trade Union Congress and Women’s Aid, “Unequal, Trapped and Controlled”, found that universal credit had far-reaching implications for women experiencing financial abuse and, in particular, that the single household payment could leave women and their children in financial hardship. Current arrangements could make it difficult for victims to declare the need for a single household payment for fear of their abuser finding out. Will the Secretary of State commit to asking all claimants automatically if they require an alternative payment arrangement, including the choice of paying their landlord directly, to ensure that women and children are protected from destitution and homelessness?
Mr Vara
The hon. Gentleman raises an important point. I think we all agree that there is no room for domestic violence or abuse in a civilised society in the 21st century. Advisers are well trained and look out for victims. They look at who has care and responsibility for children and, where appropriate, can split payments or make them more often than once a month—certainly they can be treated differently from those in normal circumstances.
Kirsten Oswald (East Renfrewshire) (SNP)
12. What steps he is taking to ensure that earnings limits applicable to benefits are well publicised.
Nick Thomas-Symonds (Torfaen) (Lab)
At the election, the Conservative party promised to exempt pensioners from their proposed benefit freeze, yet as a consequence of the autumn statement some 400,000 of those on pension credit will see their benefits cut, and 800,000 will see it frozen. [Interruption.] There is no point in Ministers looking puzzled; I would have thought they would learn to read the small print of the Chancellor’s economic statements by now. How can it be right, when three quarters of pensioners are facing a choice between heating and eating this Christmas, to be taking more than £100 a year away from so many older people?
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
The hon. Gentleman really must move away from student politics. This Government have done more for pensioners than any other Government. They are benefiting more now than they would have under any system introduced by the Labour party. The triple lock is making sure they have more money. We have also maintained a lot of the universal benefits, so we on this side of the House will take no lectures from those on that side of the House.
Chris White (Warwick and Leamington) (Con)
T6. I recently visited UK Interactive Entertainment to learn more about the work of Special Effect, a charity working with disabled people to make video games accessible to all. How can we further utilise technology to assist those with disabilities?
Ian Blackford (Ross, Skye and Lochaber) (SNP)
T8. I was delighted to hear from the Minister about all the work that the Government are doing for pensioners. In the light of the Pensions Minister’s announcement that they have finally conceded and announced a review of how rises in the state pension age should progress, will they now right the wrong that has been done to hundreds of thousands of women in this country? Does he recognise that this issue has to be addressed, as the Women Against State Pension Inequality—WASPI—campaign has said, to ensure that women are not pushed into poverty?
Mr Vara
When the Pensions Act 2011 was passing through Parliament, the Government made a concession worth £1.1 billion that reduced the period concerned from two years to 18 months. For 81% of the women concerned, the period will not be extended, and will be a maximum of 12 months. I am sorry to tell the hon. Gentleman that this Government have no plans to make any further concessions.
Peter Heaton-Jones (North Devon) (Con)
Does the Under-Secretary of State responsible for disabled people agree that, at a time when we are doing so much to encourage people with disabilities to participate in sport, it is a huge missed opportunity that not one of our inspirational disabled athletes is being honoured by the BBC Sports Personality of the Year awards?
Oral Answers to Questions
Shailesh Vara Excerpts(8 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John Mann (Bassetlaw) (Lab)
1. What estimate he has made of the number of pensioners accessing up-to-date pension advice from his Department.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
The Department itself does not give advice. Regulated financial advice can be given only by a Financial Conduct Authority-authorised adviser. Pension Wise, set up by the Government, offers free, impartial guidance to people aged over 50 with defined contribution pensions. So far, over 20,000 people have received a guidance appointment since April 2015.
John Mann
Twenty thousand is a drop in the ocean, considering the enormity of the changes. How will the Government ensure that pensioners are getting good, sound advice—and quantify that they are—in order that pensioners are not ripped off by people advising them badly and therefore lose out in future years?
Mr Vara
May I bring the hon. Gentleman into the 21st century? There have been over 1.5 million visits to the Pension Wise website. We are confident we will make sure that the public are aware of what Pension Wise has to say, and that people can access the website or have face-to-face, telephone or online interviews.
Mr Philip Hollobone (Kettering) (Con)
I am getting a growing number of inquiries from women in their early 60s who seem to be unaware of the changes to the retirement age. I am worried that these ladies have not been contacted by the relevant Department and seem to be unaware that their retirement date will be rather later than they had imagined. What can be done to help them?
Mr Vara
My hon. Friend makes a very good point. May I put on the record the facts and circumstances? Between April 2009 and March 2011, the Department proactively mailed all women born between 6 April 1950 and 5 April 1953, informing them of their state pension age under the Pensions Act 1995. Following the 2011 changes, the Department wrote to all individuals directly affected to inform them of the change to their state pension age. Sending mail to those individuals, who are due to reach state pension age between 2016 and 2026, was completed between January 2012 and November 2013.
Nick Thomas-Symonds (Torfaen) (Lab)
Ministers will be aware of the recent Work and Pensions Committee report, which contained stark warnings about pension scams since the advent of pensions freedoms and about the risk of people being conned out of their life savings. I am sure that Ministers are also aware of the recent survey showing that one in seven over-55s—about 1 million people—have been targeted by pension scams since April, when the pensions freedoms were introduced. Will the Minister reassure the House that he takes the Work and Pensions Committee report and the findings of the survey very seriously, and will he outline what the Government intend to do to protect people from fraudsters?
Mr Vara
I assure the hon. Gentleman that we do take this issue very seriously. That is why we set up Pension Wise. Let me make it absolutely clear: the Government are not complacent about scams. We are making sure that the public are aware of how to detect a scam, how to deal with it and how to report it. The two regulators are also working with us. Indeed, the hon. Gentleman will find that the Pension Wise website and those giving guidance do advise people on how to deal with scams.
Mr James Gray (North Wiltshire) (Con)
I was about to ask the same question as the Minister just answered. May I take this opportunity to say to him that a large number of my constituents are being badly affected by scams, particularly over the internet? This is a matter of great concern. I am delighted that the Government have taken such strides to deal with it.
Mr Speaker
As I have often had cause to observe, repetition in the House of Commons Chamber is not a novel phenomenon.
Kevin Foster (Torbay) (Con)
As it is one of the best places in the UK to retire, many people in Torbay welcome the freedoms that are being created, but they do need to be protected from scams, as has been mentioned. What steps is the Minister taking to ensure that pensioners can access the advice they need before making a crucial decision about their future?
Mr Vara
Pension Wise is there to give impartial and free advice. When necessary, it will direct people towards professional advisers. The Money Advice Service has on its books a directory of some 2,300 firms throughout the country. In Scotland, there are 162 firms. The total number of advisers is more than 6,000. We are trying to make sure that the public have proper access whenever advice is required.
Callum McCaig (Aberdeen South) (SNP)
2. If he will make an assessment of the potential effect of benefit sanctions on claimants’ mental health.
Pauline Latham (Mid Derbyshire) (Con)
18. What assessment he has made of the effect of auto-enrolment on private sector pension saving.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Since the gradual introduction of automatic enrolment began in 2012, participation in workplace pension saving in the private sector has increased by 21 percentage points, from 42%, or 5.9 million workers, in 2012, to 63%, or 9.2 million workers, in 2014.
Henry Smith
Will my hon. Friend join me in congratulating B&CE, based in my constituency, on so expertly rolling out its people’s pension, an important provision for workers across the country?
Mr Vara
I am happy to congratulate B&CE on its people’s pension product and the work it does. It is important that the roll-out of automatic enrolment receives as much support as possible so that people can make choices that are right for them. I also commend my hon. Friend for his excellent work, which was evident when I visited his constituency.
Pauline Latham
On 4 December, I will hold my second workplace pensions event in my constituency. Does my hon. Friend agree that small businesses need to advise their employees about the pension changes, and what efforts are his Department making to ensure they do?
Mr Vara
I congratulate my hon. Friend on her efforts in helping to spread the important message about this groundbreaking reform. I agree that small businesses need to advise their employees of the changes, which is why the Government have launched a new national communications campaign for small and micro-employers, as well as for individuals.
Kelvin Hopkins (Luton North) (Lab)
Would it not be much more sensible, financially secure and efficient and beneficial to pensioners to establish a compulsory state earnings-related pensions scheme for all, with defined benefits, in place of the Government’s auto-enrolment scheme?
Mr Vara
It is important that we get people to recognise they need to think about the future. Some 10 million eligible people will qualify for auto-enrolment, of whom 9 million will be saving more or saving for the first time. I am also happy to say that 3 million to 4 million of them are women.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
We on the SNP Benches are happy to support the Government’s policy of auto-enrolment, as we think it important that people save for the longer-term. Last week, however, Australia announced it would be stepping back from its policy of pensions freedom after many over-70s ran out of cash. Will the Government reconsider giving guidance to pensioners advising them to secure an income in retirement?
Matthew Pennycook (Greenwich and Woolwich) (Lab)
4. What assessment he has made of the effect of poverty on increases in the number of people living in temporary accommodation since 2010.
Peter Kyle (Hove) (Lab)
According to the Department’s own figures, pension contributions by the self-employed have fallen year on year for the past five years. What is the Secretary of State going to do to reverse that trend?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
We are liaising with companies and individuals and also ensuring that people take some individual responsibility, by looking at their statements and contributions and thinking ahead. We are also encouraging companies to be proactive and to ensure that their workers take part in the auto-enrolment process and that those workers are protected.
Tom Pursglove (Corby) (Con)
Building a broad skills set is crucial for entering the world of work, so is the Department actively promoting schemes such as the National Citizen Service, which provides a really unique opportunity to do exactly that?
Barbara Keeley (Worsley and Eccles South) (Lab)
The Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), said earlier that letters were sent to all women born in the 1950s to inform them of changes to the state pension age. I have to say to him that the campaigning group, Women Against State Pension Inequality, disagrees with him. I have constituents who were not informed of the changes, and they suddenly discovered that they were not going to retire soon and that they had many years to retirement. Will the Minister look again at that issue and reconsider whether that group of women affected—there are many hundreds of thousands of them—can now have transitional protection?