Oral Answers to Questions

Steve Webb Excerpts

Monday 18th July 2011 Commons Chamber

[Richard Graham (Gloucester) (Con)]

2. What steps he is taking to address incentivised transfers out of defined-benefit pension schemes.

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

We recognise that employers need some flexibility to manage their scheme liabilities and that well-managed transfer exercises can be a useful tool, but we are concerned about scheme members being offered cash inducements to encourage them to take a transfer that might not be in their best interests. We have discussed the issue with a number of industry groups and we are actively looking to see what action needs to be taken to combat any bad practice.

[Richard Graham]

As the Minister knows, I support him on the principle that enhanced transfers do not necessarily advantage many members of pension schemes. What does he think about the other side of the equation, however? In my constituency of Gloucester, we have at least a dozen very successful family-owned manufacturing firms whose ability to grow is impeded by the residual liabilities of their closed DB schemes. How does the Minister think we can balance our responsibilities to members of the scheme with the desire to help such companies grow?

[Steve Webb]

I enjoyed my visit to my hon. Friend’s constituency, when we discussed pension issues with local employers. The important consideration is fairness, as he says. We have no problem with people transferring out of such schemes in a fair exchange, but because these are complex and difficult financial transactions we must ensure that people have the proper advice and information on which to make such choices.

[Kelvin Hopkins (Luton North) (Lab)]

The reality is that most occupational schemes are disappearing, private pension schemes are often not good value and are subject to stock-market vagaries, and millions of people will not be in any kind of pension scheme in the future. Is not the real long-term solution a compulsory state earnings-related pension scheme for everyone?

[Steve Webb]

We believe that both the state and the private sector have an important part to play. We have published Green Paper proposals for state pension reform that would provide a firmer foundation, perhaps of the sort that the hon. Gentleman has in mind. We also believe that many people could be in decent-quality workplace provision with an employer contribution and that is why we will begin auto-enrolment as planned next year.

[Karl MᶜCartney (Lincoln) (Con)]

3. What recent progress he has made on delivering the Work programme.

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[Graeme Morrice (Livingston) (Lab)]

19. What steps he is taking in respect of women affected by proposed changes to the state pension age.

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

While the Government remain committed to treating men and women equally in state pensions sooner, and to equalising at age 66 sooner, as my right hon. Friend the Secretary of State for Work and Pensions said on Second Reading of the Pensions Bill:

“I recognise the need to implement the change fairly and manage the transition smoothly…I say to my colleagues that I am willing to work to get the transition right, and we will.”—[Official Report, 20 June 2011; Vol. 530, c. 50.]

[Graeme Morrice]

I thank the Minister for his answer, but 1,300 women in my constituency will have to wait up to two years to receive their state pension following the changes made by this coalition Government. Indeed, I have received a huge amount of mail on this issue, in which constituents have described the Government’s plans as unfair, unbelievable and cockeyed, among other things. Notwithstanding transitional relief, will the Secretary of State think again and give those affected enough notice to plan adequately for their retirement?

[Steve Webb]

Clearly, there is a balance to be struck between catching up with the very dramatic improvements in life expectancy, which are moving ahead faster and faster, and recognising the need for fairness and notice. We are trying to strike that balance. We recognise that we need to refine the Bill’s proposals to do so, and we will come back with proposals.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

May I thank the Minister for his answer in that regard? Will he give some reassurance to those in Thirsk, Malton and Filey who have written to me? Successive Governments, and the Turner report, have said that it takes some 10 years to plan for retirement. Will that be reflected and recognised in the Government’s transition proposals?

[Steve Webb]

As my hon. Friend will be aware, if we were to delay the whole transition for 10 years we would need to find an extra £10 billion of savings out of the £30 billion in the Pensions Bill. We believe that many of the people who are affected by the transition are affected by a lot less than the two years that the hon. Member for Livingston (Graeme Morrice) mentioned. We are therefore trying to tackle those who are most adversely affected, and I am confident that we will be able to do so.

[Rachel Reeves (Leeds West) (Lab)]

May I take this chance to wish the Pensions Minister a happy birthday?

The House knows that changes to the state pension age mean that 500,000 women in their mid-50s will have their pension delayed by more than a year, and 33,000 will have to wait an extra two years. We all welcomed what the Secretary of State and the Minister said about transition on 20 June, yet in Committee the Government tabled no amendments to their legislation, and we have heard not a word from the Minister or the Secretary of State on what those transition arrangements will look like. With the recess starting this week, what hope can the Minister give to those 500,000 women that the Government will put in place some transitional arrangements for a fairer timetable that gives people the chance to prepare, and gives them some certainty as they look forward—they hope—to their retirement?

[Steve Webb]

I thank the hon. Lady for her good wishes for my birthday, and reciprocate by offering her good wishes for her wedding later this summer.

On the specific issue that the hon. Lady raises, she and I have spent the best part of 20 hours debating such things in Committee over the last couple of weeks. The Government wanted to give the Opposition the chance to bring forward some fresh thinking, and we were therefore rather disappointed when they simply retabled the amendments that they had tabled in the House of Lords. We were looking for some fresh thinking—but as it has not come from the Labour party, we will have to do it ourselves.

[Bill Esterson (Sefton Central) (Lab)]

20. What estimate he has made of the number of people diagnosed with cancer who are in the work-related activity group of employment and support allowance and have claimed it for over one year.

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[Iain Stewart (Milton Keynes South) (Con)]

T2. Following the decision by the Payments Council not to phase out personal cheques, may I ask my hon. Friend whether he intends to change his Department’s plan to phase out payments of benefits and pensions by cheques, which is causing concern to blind and visually impaired people?

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

We believe that the current DWP cheque service does not well suit people with a visual impairment. For example, a cheque is sent by post with no distinguishing mark on the envelope and we ask blind people to sign for the payment. We are working with customer representatives, including the Royal National Institute of Blind People, to design a simple payment system that works better for people. However, I can assure my hon. Friend that there is no plan to require a personal identification number as part of that process.

[Yvonne Fovargue (Makerfield) (Lab)]

T4. In 2010-11 there was an increase in incapacity benefit and employment and support allowance appeals of 167% on 2008-09 figures, and 50% of incapacity benefit appeals were decided in favour of the appellant. What steps is the Minister taking to ensure that independent welfare benefit advice is available equally across the country, so that the figures do not reduce simply because claimants have no access to advice?

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[Graham Evans (Weaver Vale) (Con)]

T3. One of my constituents living in Murdishaw, one of the most deprived estates in Runcorn, recently contacted me about the current housing benefit arrangements. My constituent believes that it is deeply unfair that people living on low incomes in areas such as Murdishaw are paying through their taxes for unemployed Londoners to live in multimillion pound houses in trendy parts of the capital. Will the Minister stand up for my constituents and ensure that housing benefit is capped at a fair level?

[Steve Webb]

My hon. Friend is right to highlight the fact that the Government do not want people in low-paid work put at a disadvantage relative to people who are unemployed. We believe that they should face no worse a situation. That is why we have introduced a housing benefit cap that will particularly affect central London and reduce the local housing allowance from the 50th to the 30th percentile—to make things fair between those who are on benefit and hard-working people in low-paid jobs.

[Mr William Bain (Glasgow North East) (Lab)]

T6. Does the Secretary of State accept the analysis of the Joseph Rowntree Foundation that, with child benefit being frozen and child care support through the tax credit system being cut by 10%, families with children will need to earn 20% more this year than last to meet the soaring costs of child care? What will he do about universal credit to ensure that lone parents, in particular, do not face an unacceptable financial burden because of his changes?

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[Gavin Shuker (Luton South) (Lab/Co-op)]

T7. When will the Minister announce the so-called transitional arrangements for the women most affected by his accelerated timetable for introducing changes to the state pension age?

[Steve Webb]

Any changes that require primary legislation will be considered when the House considers the Pensions Bill on Report later in the year.

[Mr John Leech (Manchester, Withington) (LD)]

T8. The overall cap on benefit will result in some larger families living in expensive rented accommodation through no fault of their own being expected to live on £100 a week. May I suggest to the Secretary of State that the solution to that problem is to have two completely separate caps—one for housing benefit and one for the rest of benefits—so that families will not be left in poverty simply because of which part of the country they live in?

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

During his last outing at DWP questions the Pensions Minister undertook to respond to me imminently about Sure Start maternity grant for parents of multiples. Can he tell me how imminent is “imminent”?

[Steve Webb]

I am grateful to the hon. Gentleman for assiduously pursuing that issue. Following oral questions I had discussions with Ministers on the point that he raised, and I hope to come back to him shortly.

[Amber Rudd (Hastings and Rye) (Con)]

I recently led a competition in Hastings to find a young entrepreneur to set up in business, and was amazed and delighted at the quality of the young applicants. Can the Minister assure me that the new enterprise allowance providers will also focus on young people who might not consider themselves to be entrepreneurs, but who often have the energy, commitment and ideas to set up in business?

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

It was the Government who created the anomaly of half a million women being affected by the acceleration in the increase in the pension age, and it was the Government who said that they would make transitional arrangements. I was therefore astonished to hear the Pensions Minister say earlier that he was looking to the Opposition to come up with ideas for those arrangements. The Government have dug this hole, and it should be the Government who get themselves out of it.

[Steve Webb]

My right hon. Friend the Secretary of State said on Second Reading of the Pensions Bill that while we stand by its principles, we will indeed consider those who are most affected. We had hoped that the way to listen to the views of the House would be to listen to some fresh views in Committee, but unfortunately none was forthcoming.