Oral Answers to Questions

Steve Webb Excerpts

Monday 28th March 2011 Commons Chamber

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We recognise the importance of giving people notice so that they can prepare, which is why the timetable for the state pension age changes will not begin to affect people who are due to retire until after 2016. However, life expectancy has increased dramatically. We believe that the timetable in the Pensions Bill provides the best balance between the impact on individuals and fairness to the taxpayer, who will fund the cost of that increased longevity.

[Mr Sanders]

I think that we all accept what the Minister has said, but it remains the case that a very small group of women who just happen to have been born at a particular time are affected. It cannot be beyond the scope of Government to do something for that group, who at present are being more disadvantaged than anyone else simply because of the time at which they were born.

[Steve Webb]

My hon. Friend has raised an important point, but of course as soon as we do something for that particular cohort, another of people born a month earlier or later will say “That’s not fair”, and before we know it we will have delayed the change until 2020 at a cost of £10 billion. Although my hon. Friend asked his question in a characteristically beguiling way, I must tell him that there is no simple way of dealing with that one group.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

The Minister will be aware that it is increasingly difficult for women over the age of 50 to obtain employment. Given the later pension age that the Government are introducing and the changes in employment and support allowance, women who find it impossible to obtain jobs may find themselves with no financial support at all.

[Steve Webb]

The hon. Lady has raised an important point about the financial support available to the group concerned. In fact, about 70% of them are in paid employment, and that section of the labour market is doing better than other sections. We reckon that three in five of these women have built up occupational pension rights on which they will be able to draw before they reach the age of 66, and both ESA and JSA will be available in certain circumstances. A combination of sources of income will be available to them.

[Harriett Baldwin (West Worcestershire) (Con)]

In his statement last Wednesday, my right hon. Friend the Chancellor said that he was hoping for

“a new, more automatic mechanism for future increases in the state pension age based on regular, independent reviews of longevity.”—[Official Report, 23 March 2011; Vol. 525, c. 961.]

With longevity increasing by about a year every year, that brought to my mind the vision of a cohort of people who might never actually reach pension age. Will the Pensions Minister comment?

[Steve Webb]

Tempted though I am, we do not propose to abolish retirement. What my right hon. Friend the Chancellor said was that we need to take account in a more automatic way. I do not recognise the improvement of one year per year, although it is rising very rapidly. The key is that we need to do things with proper notice and make sure people have successful longer working lives and therefore build up bigger pensions when they come to draw them.

[Rachel Reeves (Leeds West) (Lab)]

I could not agree more with the points made by the hon. Member for Torbay (Mr Sanders), because the Government’s proposals mean 500,000 women will have to wait for more than a year longer before they receive their state pension, while 33,000 women will have to wait for exactly two years longer. With 10,000 signatures now on a petition calling for a rethink, and full-page letters in today’s Times and Telegraph asking the Government to think again, will the Minister now accept that the strength of opposition both in this House and outside is too great for the Government not to think again?

[Steve Webb]

I am surprised the shadow pensions Minister chose not to raise the issue of the state pension reform announced by the Chancellor in the Budget statement, which will be of particular benefit to this group of women. Many of the women who are aged about 57 spent considerable amounts of time out of work bringing up children, and we will reform the state pension system so that they get a proper pension for the first time.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

5. What recent progress has been made on implementing the recommendations of the Harrington review of work capability assessment.

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[Stuart Andrew (Pudsey) (Con)]

18. What recent progress his Department has made in reducing pensioner poverty.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We have restored the earnings link for the state pension and given a triple guarantee that the pension will rise by the highest of earnings, prices or 2.5%. We will pay the winter fuel payment in 2011-12 exactly as budgeted for by the previous Government. We have made permanent the increase in the cold weather payment from £8.50 to £25 a week.

[Mr Evennett]

I welcome the approach the Government are taking on this very important matter. What estimate has the Minister made, however, of the impact of the single-tier pension proposals on future levels of pensioner poverty?

[Steve Webb]

We will shortly publish a Green Paper with a range of options for state pension reform. As my hon. Friend says, one of those is a single flat-rate pension. One of its great advantages is that whereas many pensioners do not claim their means-tested benefits and therefore live in poverty, everyone claims their pension.

[Jesse Norman]

Like many Members, I welcome the single-tier pension. Will the Minister help us consider whether there could be an interesting interaction between that and a lifetime savings account, whereby people can take money in and out of an ISA-style savings account?

[Steve Webb]

Although policy on the tax treatment of savings is a matter for our friends in the Treasury, it is absolutely the case that the single tier provides a firm foundation for saving. Whereas under the current system, every pound one saves results in the clawback of means-tested benefits, a decent single pension will get one clear of means-testing to a far greater extent.

[Stuart Andrew]

Will my hon. Friend confirm that thanks to the re-linking of the basic state pension with earnings, the typical person retiring this year can look forward to receiving an extra £15,000?

[Steve Webb]

My hon. Friend is absolutely right. Although earnings are temporarily depressed, this is a policy for the long term, as many pensioners will draw a state pension for 20 or 25 years. He is absolutely right to say that the typical person retiring this year will have an enhanced state pension of about £15,000 through the restoration of the earnings link.

[Kelvin Hopkins (Luton North) (Lab)]

Even with the Government’s reforms, the restoration of the link and so on, the basic state pension will still be below the official poverty level, and way below comparable basic state pensions on the continent. What are the Government going to do to address the problem?

[Steve Webb]

We have a twin-track strategy that does right by today’s pensioners and that puts in place reform for tomorrow’s. For today’s pensioners, as well as restoring the earnings link we are looking at measures to make sure that people claim the means-tested benefits to which they are entitled, but we will also be consulting on a much firmer foundation of state pension for the future so that we guarantee that more people do not have to retire into poverty, as too many people have had to in the past.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

On Radio Sheffield last week, the Deputy Prime Minister did not seem aware of the Government’s decision on the winter fuel allowance which means that pensioners will receive up to £100 less this year. Were the Minister and his team aware of the changes, and can he confirm that winter fuel allowance payments to pensioners will be up to £100 lower this year?

[Steve Webb]

My right hon. Friend the Deputy Prime Minister pointed out that the budget for winter fuel payments is exactly as budgeted for by the previous Government. The winter fuel payment increases that were, mysteriously, for two years before the election and one year after—I cannot think why—were always temporary. However, what we have not done is cut the cold weather payment, which the hon. Lady’s party had planned to do.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

What made the Government think they could get away with reducing the winter fuel payment by £100 by smuggling it through and not mentioning it in the Budget statement? If they think that they have got away with it and that pensioners have not noticed, they should have been in my constituency at the weekend.

[Steve Webb]

Well, the right hon. Gentleman must not have been paying attention last year when the Chancellor announced in his comprehensive spending review that the winter fuel payment would be exactly as budgeted for by the previous Labour Government. Perhaps he was not listening.

[Paul Uppal (Wolverhampton South West) (Con)]

13. What assessment he has made of the potential effects on pensioners of the uprating of pensions using the consumer prices index.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The net effect of the triple guarantee for the basic state pension—the figure we gave a moment ago—and CPI for the additional pension is estimated to be a lifetime gain of around £10,000 for the average person reaching retirement in 2011. The impact on private sector occupational pension schemes will vary from scheme to scheme.

[Paul Uppal]

Can my hon. Friend confirm that the triple guarantee will ensure that pensioners will receive a decent offering from the state in their retirement?

[Steve Webb]

My hon. Friend correctly points out that for the past 30 years the value of the state pension has been falling and falling relative to the living standards of the working population. We are proud to have put a halt to that.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Will pensioners be worse off or better off should income tax and national insurance be combined?

[Steve Webb]

Obviously, this idea is at a very preparatory stage, but my right hon. Friend the Chancellor has made it clear that pensioners will not simply face an increase in overall tax as would be the case if the two tax rates were simply added together. The idea is in its very early stages, a lot of preparatory and consultative work is going on, and I am sure that the Chancellor is entirely mindful of the points that the hon. Lady raises.

[Jo Swinson (East Dunbartonshire) (LD)]

15. What assessment he has made of the potential effects on women of his proposals on pensions.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

My hon. Friend will be aware that the Chancellor announced in the Budget that the Government will shortly consult on various options, including one for a simpler state pension. In looking at these options one of our key priorities will be to consider how we deliver improved outcomes for women. Under proposals for a single-tier pension we would expect many women to benefit and we will publish more details of our proposals shortly.

[Jo Swinson]

I thank the Minister for that reply, and I warmly welcome the single-tier pension, which bears a striking similarity to the citizen’s pension on which he and I have campaigned. May I bring him back to the answer he gave to my hon. Friend the Member for Torbay (Mr Sanders) about the injustice faced by women born in 1953 and 1954, which he said there was no simple way of dealing with? The Minister is widely respected for his great expertise on the intricacies of the pension system, so even if there is not a simple way of dealing with the problem, may I urge him to look hard to find a complicated way of tackling it?

[Steve Webb]

I am very grateful to my hon. Friend. The issue, unfortunately, having dealt with the one-month cohort about whom I understand there is particular feeling, is that it is not only that group who face an increase of more than a year. When one looks at the neighbouring months, an obvious way of dealing with the problem is by delaying until 2020, but if we did that, we would soon rack up a £10 billion bill. That is the sort of difficult trade-off we have had to face.

[Guto Bebb (Aberconwy) (Con)]

16. What progress his Department has made on delivering new enterprise allowance support in Merseyside.

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[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T5. In his earlier response, the Minister implied that levels of winter fuel payment under Labour were based on the electoral timetable. In fact, the UK has the highest level of excess winter deaths, according to National Energy Action. Can he explain why pensioners in my constituency will be receiving less this winter than last?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

For the first seven or eight years in which the winter fuel payment existed, it was set at exactly £200. For three years only, it was temporarily increased, and the budgeted amount was set to reduce this coming winter. Last year—the hon. Lady may not be aware of this—we ensured that poor pensioners got an £80 electricity rebate. This winter, subject to regulations going through the House, we plan that over 1 million poor pensioners will be entitled to a £120 electricity rebate—real help for people who need it.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

T6. Next week, pensions get linked to earnings for the first time since Mrs Thatcher abolished the link in the 1980s. I do not think that pensioners have yet got all the good news messages that they should be getting from this Government. Can Ministers assure us, and pensioners, about what those messages are? Can they then make sure that every pensioner and pensioners’ organisation understands the range of good things from which they have already benefited thanks to Ministers in this Government?

[Steve Webb]

My right hon. Friend is absolutely right. I spend a good deal of my time going out around the country talking to pensioners’ groups. I shall be talking to one such group in Birmingham on Wednesday, and I will tell them that restoring the earnings link for the first time in 30 years will provide a firm foundation and dignity for pensioners. That is long overdue.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

T8. Under new welfare rules, jobseekers will be required to undertake mandatory work activity placements such as stacking shelves for 30 hours a week for at least four weeks, and if they do not comply, their jobseeker’s allowance could be withheld. Can the Secretary of State tell me what safeguards are going to be put in place to prevent exploitation and whether sanctions will be placed on Work programme providers if it is found to be occurring?

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[Stuart Andrew (Pudsey) (Con)]

T10. I have been approached by a number of constituents who are private landlords, who are concerned that they have not received payments that have been made to their tenants. What measures are the Government considering to alleviate that problem?

[Steve Webb]

We recognise that payments do not always get through to landlords. There is a provision that allows direct payment when there are eight weeks of arrears, and we have added a provision under our new rules so that direct payment can be made to a landlord when it will secure or maintain a tenancy.

[Dame Anne Begg (Aberdeen South) (Lab)]

I was contacted last week by a constituent who is in her 50s, has advanced multiple sclerosis and lives in a residential home. Her elderly mother has moved into a nursing home on the other side of Aberdeen. The taxi that allows my constituent to visit her mother costs £50 there and back—exactly the amount she gets from the mobility component of disability living allowance. Will the Minister guarantee that my constituent will continue to have access to those funds after the changes to DLA, and that she will not have to go through a reassessment to make sure that she really deserves it?