Oral Answers to Questions

Steve Webb Excerpts

Monday 24th February 2014 Commons Chamber

[Lorely Burt (Solihull) (LD)]

6. What steps he has taken to help those reaching retirement age before the introduction of the single-tier pension.

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

For those who will reach pension age before the introduction of the new state pension, we have introduced a new class of national insurance contributions, which will allow those pensioners the opportunity to increase their state pension in retirement. More details of the scheme will be announced later this year.

[Lorely Burt]

I am grateful for that answer and it is extremely encouraging. Can my hon. Friend the Minister say what the Government have done to ensure that pensioners in my constituency are able to manage the cost of living rises in this Parliament?

[Steve Webb]

As my hon. Friend knows, the manifesto on which she and I stood proposed a triple lock, which was implemented by this coalition Government. It means that each year the pension will rise by the highest of the growth in average earnings or prices or by 2.5%, so the state pension is now a higher share of national average earnings than at any time in more than 20 years.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

The Minister has today laid before the House a pensions written ministerial statement that intimates that following a year-long Labour campaign the Government intend to ensure that pension fund managers in the City disclose the fees that they charge for trading all of our pension assets. That is welcome, but of course the devil will be in the detail. On that basis, can he confirm today that that disclosure will include the number of times that fund managers churn our pension assets for a fee?

[Steve Webb]

I know that the Opposition like to bluster a lot to cover their embarrassment at taking no steps at all on this in 13 years in government. By contrast, this week this Government are legislating to shine a light in the murky corners of the pensions industry, so that value for money is finally achieved for pension savers.

[Mr Andrew Turner (Isle of Wight) (Con)]

9. How many people have had their benefits reduced to the maximum of £26,000 (a) nationally and (b) on the Isle of Wight to date.

--- Later in debate ---

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

10. What assessment he has made of the effectiveness of councils’ use of discretionary housing payments in this financial year.

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

Details of how local authorities used discretionary housing payments in the first half of this year were published on 20 December. That report gives an early indication of how that funding is supporting people, including disabled people living in specially adapted accommodation, and of the type of choices that people are making in response to the changes, such as seeking to move to alternative accommodation or looking for work.

[Annette Brooke]

Does the Minister agree that councils should use all available funds provided by his Department to offset the ending of the spare room subsidy for those who are disabled and have a clear need for two bedrooms or more, and those who cannot find smaller accommodation? Will the underspending this year affect next year’s allocation?

[Steve Webb]

I entirely agree with my hon. Friend that the funding being made available to local authorities for cases where it would be inappropriate for individuals to make up the shortfall should be spent. In addition, this Government have made available an extra £20 million, in-year, but less than a quarter of local authorities bid for that money. We want local authorities to spend the money being made available, so that those who can move do so, but those for whom that would be inappropriate have the top-up that they need.

[Ms Karen Buck (Westminster North) (Lab)]

One of the worst cases that I have dealt with recently was of a homeless mother with a severely disabled child who receives disability living allowance. That allowance was taken into account in deciding their discretionary housing payment, which left the family with virtually nothing to live on. Will the Minister issue guidance to local authorities saying that they should not take into account disability living allowance when making DHP payments?

[Steve Webb]

The hon. Lady is very knowledgeable about these matters, and she will know that local authorities make their decisions on a case-by-case basis. Clearly, they do not have to include income from DLA, but they are free to do so. If she believes that her local authority should not have done so in an individual case, she should make representations to it.

[Mr Clive Betts (Sheffield South East) (Lab)]

Following on from that question, the Minister must know that in assessing entitlement to income-related benefits, entitlement to disability benefits is not taken into account. The one exception to that policy is discretionary housing payments. It is specifically in the guidance that local authorities can take them into account and means-test them in the way that he described. Will he change and reissue the guidance, so that this one area where disability payments are means-tested is removed from the scene?

[Steve Webb]

As the hon. Gentleman knows, the key is in the word “discretionary”. Local authorities can ignore DLA if they think that that is appropriate, but they have the freedom to judge on a case-by-base basis; that seems to be the right way to respond to individual need.

[Andrea Leadsom (South Northamptonshire) (Con)]

11. What progress he has made on implementation of the pot-follows-member model of automatic pension transfers.

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

I can announce that we have been working closely with Her Majesty’s Revenue and Customs to examine the feasibility of using the pay-as-you-earn data and system to deliver a secure, efficient and straightforward pot-matching element to the pot-follows-member system. A pot-follows-member system leads to more efficiency, potentially better member engagement, greater consolidation and better outcomes in retirement.

[Andrea Leadsom]

I am grateful to my hon. Friend for his answer, but as we are all living longer, which is great news, it is an ever greater priority to ensure that people save for their retirement. Is he looking at options such as the auto-enrolment system in place in Australia? Will he also consider a savings and retirement account for future pensioners?

[Steve Webb]

My hon. Friend will know that our auto-enrolment programme, which we are in the middle of rolling out, has been highly successful, with nine out of 10 people choosing to stay in that programme. The Australian version is compulsory; we have chosen not to do that in this country. The fact that most people are choosing voluntarily to stay in pensions saving is a judgment that we have made the right choice. I should add that the Australians have said that they wish that they had introduced from the beginning the pot-follows-member system that we are introducing.

[David Mowat (Warrington South) (Con)]

The pensions Minister is consulting on a charges cap. For the avoidance of doubt, will he confirm to the House that he still plans to introduce the cap during the lifetime of this Parliament?

[Steve Webb]

I refer my hon. Friend to the written statement that we issued today, which confirms precisely that we will shortly bring forth our announcement, and that we will see through our agenda during the course of this Parliament.

[Jessica Morden (Newport East) (Lab)]

12. What assessment he has made of the effectiveness of the implementation of personal independence payments.