“Bereavement Benefits for the 21st Century”
Steve Webb Excerpts(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Today my noble friend Lord Freud, the Minister for Welfare Reform, is publishing a Command Paper, Government response to the public consultation “Bereavement Benefits for the 21st Century”. This sets out the Government’s strategy for providing effective support after the loss of a spouse or civil partner, and includes a summary of the responses to the public consultation on how to achieve this.
Our strategy reaffirms the Government’s commitment to providing financial support after spousal bereavement as an important part of the state safety net. Our primary aim is to improve an out-of-date system, targeting additional resources on bereavement benefits over a Parliament, to ensure that existing recipients are protected, and that those who claim the new benefit get the help that they need when they need it most.
We are shifting the focus of bereavement benefits, to provide a short-term intervention, helping people deal with the more immediate costs caused by the death of a spouse or civil partner, and to provide some breathing space to start to come to terms with the emotional and practical upheaval caused by this loss.
It will be paid as a lump sum with monthly instalments to avoid the risks associated with making a large lump sum payment. This period is not intended to reflect the time required for “recovery”, but instead to provide a buffer for the immediate financial impact of bereavement. Payments will be disregarded from universal credit and the benefit cap for a period of 12 months.
This refocusing will improve the targeting of bereavement benefits, providing greater support in the period that social research tells us is particularly challenging financially. The strategy also involves ongoing support being provided through other parts of the welfare system, such as universal credit, and contributory jobseeker’s allowance and employment and support allowance, depending on circumstances.
Recipients of the bereavement support payment, who also receive universal credit, or contributory JSA or ESA, will be able to access Jobcentre Plus support on a voluntary basis from three months after bereavement. They will not be subject to conditionality for a further three months. This means that those who need to start work, or change their working patterns after bereavement, receive the support they need to do so.
The Government acknowledge the value of simplifying the rules that govern conditionality easements for bereaved people across the benefit system, so that they are consistent, supportive and easy to understand. These exemptions from conditionality will therefore also apply after the death of a child or partner, where there is no entitlement to bereavement benefits.
Contribution conditions will be simplified and people will be entitled to receive the full payment as long as their late spouse or civil partner paid national insurance contributions at 25 times the lower earnings limit for any one year prior to their death.
This builds on changes to bereavement benefits in 2001, and on recent fundamental reforms to the welfare landscape. In the same way that universal credit has been designed to create a simpler system of support, the proposed simplification of bereavement benefits will make it easier for people to understand their entitlement, and to be able to plan accordingly.
In order to effect these changes, after legislation has been introduced, existing bereavement benefits will be replaced with the new bereavement support payment. This will not impact those already in receipt of bereavement benefits at that time or payments made under the war pensions scheme or armed forces compensation scheme.
Credit Unions (Modernisation)
Steve Webb Excerpts(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The fact that this is a well-attended debate notwithstanding the fact that Parliament’s focus has been on other matters today reflects the importance of the issue, and I congratulate the hon. Member for Bridgend (Mrs Moon) on raising it. I pay tribute to the work of the all-party group on credit unions. I see that its chair and vice-chair are here, and, I sense, some of its other members. We as a Department very much support and welcome the work of that group. My noble Friend Lord Freud is closely engaged with it, and he will continue to be so.
The hon. Lady paid tribute to Bridgend Lifesavers, her local credit union. I am happy to add my tribute to the work that it and many other small, medium-sized and large credit unions do in providing affordable credit at a time when there are, as she said, many sources of unaffordable and exploitative credit. I think that we are united across the House in wanting the credit union movement to prosper. That is why the Government have identified a further £38 million for the credit union expansion programme to which she referred and to which I will return in more detail. She asked that the goose that laid the golden egg should not reach a scrambled end, so we will take a gander at the evidence.
The hon. Lady made the important point that the difference between the United Kingdom and other countries is that we have massive potential for expansion of credit unions. As she said, 2% of the adult population of this country are in credit unions, while that figure is 40% in America and 70% in Ireland. I am pleased to say that credit union membership has just broken through the 1 million barrier. That is a significant milestone, and we praise everyone who has been involved in reaching it. The question is how we move on to the next million.
There is a balance to be struck between cherishing the historical traditions and roots of the community credit union, and recognising that the small community credit union will not survive indefinitely without ongoing state subsidy, unless we do something about revenues, costs and awareness, which the hon. Lady also raised. The working group that we set up, which was expertly chaired, identified a number of things that had to happen.
We are asking groups of credit unions to work together as part of this process not so that they lose their individual identity, which is crucial, but so that they benefit from scale in the things that they all have to do, such as their back-office functions, publicity, branding, the automation of decision-making or working on their websites. Notwithstanding the individual characteristics of each credit union, much that credit unions do is common to all of them.
Through the expansion project, we are not trying to help an individual credit union in a local place to expand; we want the entire movement to expand. That is why we want to support significant projects that will be of benefit across the sector. There is no reason why Bridgend Lifesavers or any other credit union should not be part of that, but they have to see themselves as part of a bigger project. We are trying to generate a step change in the scale, efficiency and activity of credit unions.
The hon. Lady is right that there is no shortage of demand, but a big shortage of awareness. She asked about publicity campaigns. I can confirm that we anticipate supporting national marketing campaigns for credit unions. We see a value in branding and marketing via the collaborative process that I have talked about.
The hon. Lady asked about the link with post offices. One of the challenges is that if we want post offices across the country to provide access to credit unions, it will only be viable if there is a common brand. While there will still be Bridgend Lifesavers, there might be a common credit union brand so that there can be standardised stationery in post offices and standardised training for people behind the counters. The Bridgend post office will not deal only with the local credit union. That is how we see the link with post offices working, but we are not at that stage yet. Part of the point of the expansion project is to create the scale and branding that would enable the post office link-up to be more effective than it currently is.
We see great potential for expansion in the credit union movement. To give just one example, when universal credit comes in and payments not just of regular benefit, but of housing benefit, are made direct to claimants, budgeting skills will be critical so that people can manage their money and ensure that it gets through to the landlords. Credit unions in a local area will be well placed to assist people with things such as jam jar accounts to ensure that although the individual sees the money and becomes familiar with it, just as they would with a wage, it gets through to the landlord. I am aware of credit unions that are generating a business from that by saying to social landlords that they will run such accounts when the money is paid direct to the claimant to ensure that the landlords get their money, obviously with the consent of the account holder. Social landlords are willing to pay for that service because it is valuable in guaranteeing their rent. That we are moving the entire working-age housing benefit system over to the universal credit platform offers huge potential for the expansion of credit unions, which I am sure the movement will harness.
The hon. Lady asked specific questions about the feasibility study. The proposition was that, as I have said, £38 million would be required between 2012 and 2015. We are looking for tight project management and discipline to maximise the chances of success. In a sense, it is a payment-by-results model. In the past, when the Department has funded growth funds, they have helped and the money that has gone in has been lent, but there has not been a step change in the infrastructure. That is what we are trying to achieve. We want to keep the values and ethos of the credit unions, but are also keen to see professionalism and efficiency, because the point of all of this is to achieve value for money for the lower-income saver.
The hon. Lady raised the issue of interest rates, which we have considered. It is a sensitive issue. We have the rather strange situation at the moment in which credit unions are the only financial institutions that are regulated for interest rates. That seems anomalous in a sense, considering the interest rates that the same client group routinely pays—we have heard about Wonga week. We therefore believe that there could be a modest change, perhaps from 2% to 3%. It would be a permissive change—if credit unions did not want to make it or did not feel they needed to, they would not have to—but we believe it would be a move in the right direction.
That change is a sensitive and difficult issue and will take a bit of time to make, not least because two separate Departments hold the reins of the legislation. If credit unions are ready for the challenge of modernisation and expansion, we will support them. The Treasury will start the process of the rate cap consultation this autumn, which will lead to the Treasury and the Department for Business, Innovation and Skills making any regulatory change next summer. The credit unions will then need time to prepare for and implement the change, so provisionally we are looking at the following April. That is quite a long time away, and if the process can be speeded up we will certainly be willing to consider it, but we need proper consultation because it is a sensitive issue. However, the hon. Lady said that her credit union supported raising the cap, and we are sympathetic to that and want to make progress as rapidly as we can.
For projects to qualify, we will want them to include automated decision making, which is much more efficient, integrated and centralised services and the provision of new financial products. I mentioned jam jar accounts, but there are many more. We will want partnerships to be developed to expand projects such as payroll deductions. As my hon. Friend the Member for Wells (Tessa Munt) said, credit unions are not just about low-income households, and it will help if we can get a spectrum of people using credit unions and make them more mainstream, I imagine with a bit of cross-subsidy. We also want projects to improve marketing, and in due course there will be the potential for working with post offices. Cumulatively, those approaches will lead to a major uplift in membership and create the delivery capacity required to deal with demand.
As the hon. Member for Bridgend said, the credit union expansion project report was recently published. We have already engaged with the credit union sector this month to inform it of the project’s requirements. Early next month we will advertise the procurement process for the exercise, and we anticipate that it will move fast, with proposals being received perhaps the following month. We want to get on with it. Ideally, we want to have contracts in place by January. Although the interest rate change is perhaps happening a bit slower than she would wish, it is a priority of the Government to get the money through, get the contracts in place and get things moving. We want that to happen by the turn of the year or not long thereafter.
The hon. Lady mentioned some research that she had seen on the scale of the demand for credit unions. The credit union expansion project commissioned its own research, and we were struck by the fact that of the 4,500 people surveyed, three in five said they would use credit union services if such were available. As she and the chair of the all-party credit unions group, my hon. Friend the Member for East Hampshire (Damian Hinds), will know, credit union use is still patchy. There are still places where nobody is aware of a local credit union, and one of the challenges of the project is to improve geographical coverage so that even if someone does not have a local credit union they can access one through, for example, a local post office. We want people to be aware of the credit union brand through national advertising, because credit unions will not get their next 1 million users in good order without breaking out geographically.
On the good that credit unions can do, the evidence that we have shows that 1.4 million people do not currently have a transactional bank account. I was impressed when I met a representative of my local credit union in Bristol. I must admit that before I spoke to her, I was not aware of the range of services that it offered. She described how online access and other things that we take for granted in our regular banking are now becoming far more normal in credit union accounts. We have to get away from the image of credit unions as the poor man’s banks and recognise that low-cost lending by an organisation and people who are familiar is attractive to people, particularly given the current reputation of some of the banks. We need to build on that trust and confidence and expand awareness, and that is what the current project is about.
It is very striking—this is also from our research—that up to 7 million people are using sources of high-cost credit. Even with a higher interest rate of 3% a month rather than 2%, people would save hundreds of pounds by borrowing from credit unions compared with borrowing from Home Credit, and far more compared with borrowing from other institutions.
It was crucial for our research to involve credit unions as well potential consumers. We were encouraged that four in five of those we consulted
“recognised the need for fundamental change in their organisation and that they wanted to offer a wider range of modern financial services to…consumers.”
This is a decision point for the movement. In the past, we have subsidised some credit unions and felt that they did not modernise and move forward when they had that public subsidy. When the public subsidy was withdrawn, a number of them closed or had to merge to avoid closure. We do not want that to happen. Therefore, we are both standing alongside the credit union movement and inviting it to take up the challenge.
The Government believe credit unions have a bright future. I am sure hon. Members on both sides of the House will work together to ensure that it happens.
Question put and agreed to.
Workplace Pension Reform (Qualifying Schemes)
Steve Webb Excerpts(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Later today the Government will publish the following documents:
“Automatic enrolment: Guidance for employers on certifying defined benefit and hybrid pension schemes”;
“Automatic enrolment: Guidance for actuaries on certifying defined benefit and hybrid pension schemes”;
The Hybrid Schemes Quality Requirements Rules 2012; and
The Government response to the consultation on “Automatic enrolment: career average schemes as qualifying schemes”.
We will also be publishing an updated version of:
“Automatic enrolment: Guidance on certifying money purchase pension schemes”.
The guidance and rules were the subject of consultation in 2011 and we are grateful to all of those individuals and organisations who provided responses on these as well as those who responded to the career average scheme consultation.
The guidance will help employers who are already providing good workplace pension schemes to continue to do so under the reforms.
Our response to the consultation on career average schemes confirms that we intend to lay an amended draft regulation before Parliament. The changes that this introduces will give career average schemes greater flexibility over the way in which they can provide for the revaluation of benefits that is required for them to be used as qualifying schemes.
I will place a copy of these documents in the House Library. They will also be available later today on the Department’s website at:
www.dwp.gov.uk/policy/pensions-reform/workplace-pension-reforms/guidance/ and www.dwp.gov.uk/ consultations/2012/auto-enrol-career-ave-qual-sch.shtml.
The hybrid schemes rules were signed on 29 June 2012 and took effect on 1 July 2012.
Minister for Older People
Steve Webb Excerpts(12 years, 5 months ago)
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Liz Kendall (Leicester West) (Lab)
I start by thanking the Backbench Business Committee for enabling this important debate to take place, and I congratulate the hon. Member for Portsmouth North (Penny Mordaunt) on securing it. I know that she has been very committed to the issue and I am delighted that we have discussed it today. I also thank my hon. Friend the Member for Bolton West (Julie Hilling), the hon. Member for Stourbridge (Margot James), my hon. Friend the Member for Manchester Central (Tony Lloyd), and the hon. Members for Southend West (Mr Amess), for Central Suffolk and North Ipswich (Dr Poulter) and for Blackpool North and Cleveleys (Paul Maynard) for their speeches.
In particular, I thank Anchor for the superb Grey Pride campaign it has run and the 137,000 people who signed its petition, which made today’s debate possible. As hon. Members might know, the Leader of the Opposition created the post of shadow Minister for older people in the shadow Cabinet in October last year, and I feel privileged and honoured to have been appointed to the position. I hope the Government will follow suit and appoint their own Minister for older people in the Cabinet, and I will use my speech today to explain why.
My first point is obvious, but none the less important: older people are not an homogenous group. They have different views, needs and expectations, just as people in any other age group do. We would not treat everyone aged nought to 50 as a single group, yet this is exactly what we do for people aged 50 to 70, 80, 90, 100 or even beyond. Our discussions and debates about older people tend to be based on one image or stereotype, usually that of a very elderly person, frequently frail or dependent and in need of care and support. The need to develop a better, fairer system of care is a huge challenge and one that I will return to later, but the reality is that most people in their 50s and 60s are not frail or dependent and they want never to be so. Rightly, many do not regard themselves as old at all—my mum and dad certainly do not. Many older people are still in paid work, and local businesses and the economy benefit hugely from their skills, experience and incomes. They play a part in their local community, in voluntary groups or as councillors, and they help with local public services and in churches and faith groups. They also help to look after their grandchildren, and sometimes their own elderly parents; an increasing number do both.
Before I came to the Chamber, I was at a very interesting event organised by Grandparents Plus where I was told that 28% of grandparents have parents still living. They are a sandwich generation, helping out with the kids as well as helping their own parents. We have what I would call the young old as well as the older old, and the young old want to try new things, especially when they have retired, to develop new skills and to travel to different places. They want to enjoy their lives. They want to have fun, if they have time to do so after all the other things they are doing.
The aspirations of today’s over-60s are in many ways quite different from those of previous generations. My parents have quite different expectations from their parents of the kind of life they want. My expectations, those of my niece and those of the one in three babies born this year who will live to be 100 years old will be very different in the future too.
If older people are not an homogenous group, if they have different views, needs and expectations, why have a Minister for older people? The first reason is that despite all their differences, one thing that the young old and older old frequently say is that they too often feel invisible to politicians, businesses, public services and the media. That is a key reason behind the Grey Pride campaign: to ensure that the needs and views of older people are heard and understood at the highest level, so that we can change attitudes about older people, challenge the stereotypes and put older people at the forefront of British political debate. Of course, a Minister for older people could not do that on their own: local businesses, councils, public services, voluntary groups and the media all have a vital role to play, but the Government can and must take action. The previous Labour Government’s Equality Act 2010 will be crucial in helping to turn the tide on some of the age discrimination we see, including in goods and services, but Governments must also take positive steps to ensure that older people’s needs and concerns are actively promoted in every area.
That leads me to the second reason why we need a Minister for older people: to ensure that all Departments understand the issues facing older people and that work is properly co-ordinated across Government. Many hon. Members have discussed the different Departments that need to understand the views, feelings and expectations of older people. Let me repeat some of those and add some more.
The Minister of State, Department for Work and Pensions (Steve Webb)
I am listening to the hon. Lady with great interest and I congratulate her on her role. Does she think that because for 13 years the previous Government did not have someone in this role, they failed older people?
Liz Kendall
I think we made big improvements for older people, but far more needs to be done. One of the biggest challenges—transforming the care system for older people—requires action across Government. It is not something that a Minister for older people could do on their own. They would need the Treasury, No. 10, the Department for Work and Pensions and other Departments to be closely involved. It is a matter of having someone who can help to co-ordinate action across Government and provide a stronger voice at Cabinet level. That is the role a Minister for older people would perform.
Let us consider some of the other areas in which we need to make sure that older people’s needs and concerns are heard. Take education policy, which some might not think would be relevant. We need to understand that as people live longer and need to work for longer, lifelong learning is essential to help them to develop new and different skills. In family-friendly working, we need to understand that a quarter of all grandparents— 3.5 million in total—are still working as well as helping to look after their grandchildren.
Several hon. Members have mentioned housing policy. We must ensure that there is a range of good-quality options for people as they get older, so that they are not given a choice between living in their own home or a care home; there should be various stages in between. Transport policy is also very important. I am sure that many hon. Members find that bus services are a big issue in their constituency. Making sure that services are linked up is a big challenge. Our energy policy must also take into account the needs of older people, many of whom have very high energy and heating bills, particularly if they have long-term health conditions.
Having a Minister for older people in Cabinet would help to ensure that all Departments were more aware of the issues and concerns I have raised, but the final and most important reason why we need the role is that, as a society and a country, we need to face up to the major economic and social challenges of demographic change. That is a key issue behind Grey Pride’s campaign and is highlighted in the motion. Many hon. Members have spoken about pensions, and I am sure the Minister will speak about them too, but I will focus on care and support.
That must be one of top priorities for the Minister for older people because it is one of the biggest challenges facing Britain today. That is why one of the options would be to have the Minister for older people in the Department of Health, because the key to transforming the care system is in transforming the NHS. Social care budgets have been under increasing pressure for many years, but the care system has now reached breaking point. Adult social care makes up around 40% of local council budgets—up to 60% in some areas—and it is their biggest discretionary spend. When the Government are cutting local council budgets by a third, it is inevitable that services for older people will suffer. Figures from the Department for Communities and Local Government show that more than £1 billion has been cut from local council budgets for older people’s social care since the coalition Government came to power. The result is that councils are raising their eligibility criteria: 80% now provide care only for those with substantial or critical needs, up from 50% only four years ago.
The Minister of State, Department for Work and Pensions (Steve Webb)
There were just eight contributions—but eight high-quality ones, from Members on both sides of the Chamber—to this debate on an important issue. The unanimous view of all those who took part was that we should congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who introduced the topic in a very effective way. I also congratulate her on the work of the all-party group on ageing and older people, which she chairs, and I congratulate the Backbench Business Committee—some of its eminent members are here today—on making sure that we had the time to discuss the crucial issue of how we best ensure that older people have an effective political voice. That would be the united perspective.
We have heard diverse views. We heard a suggestion that the Minister for older people should be an additional role for the Home Secretary. We heard it suggested that it should be the Chief Secretary to the Treasury, or perhaps another Cabinet Minister. My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) suggested that the Government were doing pretty well without a Minister for older people, although the post might be a welcome addition.
I assure the House, from my now extensive experience—two years—in government, that the idea that the views and priorities of older people are not in every room, in every discussion, is not something that I have ever encountered. To give just one example, the Department for Work and Pensions had to make some very difficult decisions as part of the comprehensive spending review, but if we look at the areas where savings were made—at the reduction in the growth in the budget for disability living allowance for people of working age; at the local housing allowance; at the employment and support allowance; at child benefit, tax credit, and social housing; and at the benefits cap—virtually without exception, those changes apply wholly or predominantly to those of working age. The benefits of those above pension age were protected, almost exclusively. As we have heard from a number of hon. Members, crucially, the basic state pension has been enhanced through the restoration of the earnings link and the triple lock. I assure hon. Members in all parts of the House that the political priorities of pensioners and older people more broadly—as we all know, they are the people who turn out and vote—are very much in the Government’s mind at all times.
My hon. Friend the Member for Portsmouth North suggested that there had been some discussion about who should reply to the debate, and she is correct. Part of the reason is that so many Ministers have a keen interest in the concerns of older people. There were many potential candidates, but I fought them off. I want to respond to some of her particular points, and in doing so, reassure my hon. Friend the Member for Southend West (Mr Amess), who was sceptical—I was shocked by this—that there is still joined-up government when it comes to older people. As I run through my response to some of the concerns of my hon. Friend the Member for Portsmouth North, I hope that it will be apparent that I am giving a litany of examples of joined-up government.
My hon. Friend raised the very important issue of loneliness. A number of people mentioned nobody visiting the care home, but everyone coming to the funeral for the reading of the will. That was a powerful point. There is a powerful cross-departmental partnership between the DWP and the Department of Health. The Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), the Minister responsible for care services, has pioneered work on loneliness. We have worked with the Campaign to End Loneliness. There was a summit on 15 March that I attended, which my hon. Friend chaired, on how Government and local government can act effectively on loneliness. Something that has emerged from it is the importance of equipment for local authorities that want to tackle loneliness in their area, including “how to” guides, websites and so on. We take the issue very seriously: too often, we talk about care, transport, health or pensions, but the fundamental issue of whether someone sees anyone from day to day and whether anyone cares whether they are there or not is a vital one, and I am grateful to all the hon. Members who mentioned it.
Something that has come out of our work is the age action alliance, which brings together more than 200 organisations, including Government Departments, private sector bodies, charities and voluntary groups. The alliance operates under the umbrella of Age UK, and is supported by the Department for Work and Pensions. It tackles a range of issues affecting older people in a joined-up way across sectors. Loneliness is one of the key themes that it is looking at.
My hon. Friend the Member for Portsmouth North mentioned taxation and older people. Let me say on the record that if tax and national insurance were brought together in a single operation, national insurance would not, I can assure her, be applied to pensions. There is no proposal to bring pensioners into that higher combined tax rate. In an example of joint working, the DWP and Her Majesty’s Revenue and Customs are working together on the recommendations from the Office of Tax Simplification. I can assure her that, as Pensions Minister, I will scrutinise exceptionally closely any suggestion that tax might be withdrawn at source from the state pension.
My hon. Friend and my hon. Friend the Member for Central Suffolk and North Ipswich raised the abolition of the default retirement age, and the position of older workers more generally. As I mentioned in oral questions this morning, that is something of which the coalition Government can be resolutely proud. There were years of talk about abolishing mandatory or forced retirement, but we have done something about it. There is still more to be done: employer attitudes to older people still need work, which is why the DWP and the Department for Business, Innovation and Skills work jointly on that. In fact, BIS-led legislation has been introduced. We have worked with employers and business organisations on the “Age Positive” initiative to challenge outdated assumptions about older workers and to encourage improvements in the employment and retention of older workers as part of a mixed-age work force.
Older workers are good business. I said this morning in the House that research evidence from McDonalds has found that McDonalds restaurants that employ over-60s have on average higher customer satisfaction than those that do not do so. Some people might find that surprising, but it is an example of enlightened employers who get it, and who do well as a result. We shall certainly spread the word.
My hon. Friend the Member for Portsmouth North raised the issue of someone who goes into a care home and wants to be able to get something from the value of their home. I think she referred to the Redbridge “FreeSpace” pilot, and spoke about it very positively. I can assure her that my hon. Friend the Minister for Housing and Local Government has encouraged other local authorities to look seriously at that innovative project, and is trying to promote it, as she suggests.
My hon. Friend suggested that we do more to communicate with people and that it was important to piggyback messages. I agree, which is why the DWP is working with the Department of Energy and Climate Change on a pilot scheme to promote the green deal. When we write to people about winter fuel payments, we take a target sample of 1.2 million letters, and those recipients will receive a separate flyer in the envelope promoting the green deal to encourage them to take up energy efficiency schemes. My hon. Friend the Member for Stourbridge (Margot James) mentioned excess winter deaths which, she is absolutely right, remain a scandal. It is not so much about giving people an extra pound to pay an exorbitant fuel bill but about trying to make sure that their home is properly insulated. She will know, as I do, that in Scandinavia, excess winter deaths are almost unknown, not because it is warmer—it obviously is not—but because people have properly insulated homes. We must make sure that there is more action across government on that issue.
The hon. Member for Manchester Central (Tony Lloyd) raised an important issue, and mentioned the very recent report on hospital care and the management of medicines. His home city is recognised as a World Health Organisation centre of excellence for the way in which it approaches older people—he will be aware of that—and that is something that has come out of cross-government working. He is right that the issue of medicines management in care and nursing homes is important, which is why early last year, the Department of Health agreed to fund a project to improve medicines management in residential care. The project is driven by the sector and led by the national care forum. The goal is to design and test a set of practical tools to help care-home staff, doctors, pharmacists and nurses to provide safer care and reduce the incidence of medication errors and what are known euphemistically as “near misses” in care and nursing homes. The hon. Gentleman is right to raise that issue, which the Government take seriously.
Coming back to the point made by my hon. Friend the Member for Stourbridge about excess winter deaths, she will be aware that in December 2011 the Department of Health published a cold weather plan for England and identified up to £20 million for 2011-12 to support local authorities to reduce levels of deaths and morbidity during cold weather. It is designed so that local government —again, a partnership approach—working with voluntary and community sector partners can address the risk factors of cold weather for vulnerable older people. I accept my hon. Friend’s point that we need to do more work on the issue.
We heard some powerful contributions, including a very moving one from the hon. Member for Bolton West (Julie Hilling). It sounds as though her mother is rather well known. My hon. Friend the Member for Southend West mentioned that he had met her on the Terrace, on an outing to see the flotilla, as I understand it, so she is becoming quite a celebrity. The hon. Lady spoke powerfully about both the excellence and, shall we say, the lack of excellence in the care that her mother had received. There is indeed too much variability in the quality of care. The hon. Lady also talked, rightly, about wrong attitudes to older people, which others mentioned as well. That is something we need to challenge, which we are trying to do in Government.
My hon. Friend the Member for Central Suffolk and North Ipswich mentioned Age UK’s five tests for a Government taking office, and he was generous enough to point to a number of things that the Government have already delivered on and others on which we are trying to make further progress. My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) mentioned that it was important that what happens is not fluffy or soggy. I want to assure him that there is a lot of unfluffy and unsoggy work going on, and to highlight the UK Advisory Forum on Ageing, which was set up just before the last election. It meets quarterly. I attend every meeting. The Minister of State, my hon. Friend the Member for Sutton and Cheam who has responsibility for care services, is a regular attender as well.
We co-chair the forum and it is attended by about 30 representatives of advisory forums for older people from the regions of England, the Welsh Commissioner, the Northern Ireland Commissioner, organisations that are not great fans of the Government, such as the National Pensioners Convention, Age UK and others. We come face to face with these groups once a quarter. I have attended every meeting since the election, and that group sets its own agenda and decides what it wants to talk about. One possible fruit of this debate might be that that work, which has been extremely effective, might be expanded and might bring in other Government Departments more systematically and perhaps other Ministers. That might be a response to some of the concerns that have been expressed.
I should mention that the Home Office is finally—in the sense that these things have been talked about for many years—bringing forward legislation to ban discrimination in goods and services for older people, which is long overdue and very welcome.
I was interested to see that Age UK had commented ahead of our debate. Its position on the proposal for a Cabinet Minister with separate responsibility was, perhaps, more nuanced than we might have expected. Although Age UK obviously welcomed the debate, it said that the appointment of a Minister would not be a panacea, which I do not think anybody suggested. It also suggested that it might create risks as well as opportunities. For example, it says that there is the potential that other Departments might decide that they are no longer responsible for thinking about older people. It says that there is a further potential risk of confusion over the responsibilities of the Minister for older people vis-à-vis those of other Ministers.
I was interested to hear my Labour shadow, the hon. Member for Leicester West (Liz Kendall), say that the important issues all related to care, and that what we need is a Minister in Cabinet responsible for those issues. The Minister of State, my hon. Friend the Member for Sutton and Cheam, who I am pleased has been able to join us at this point in the debate, is doing an excellent job. We do not need two Ministers doing the same job. The hon. Lady said that the issues needed to be discussed at the highest level in Government. I can absolutely give her the assurance that on a regular basis the very issues that she identifies are discussed round the Cabinet table with the principal players of the Government.
Liz Kendall
What I said was that, although a Minister for older people would make a big difference, responsibility must lie at the highest levels of Government—with the Prime Minister, the Chancellor and other members of the Cabinet. I am glad that the hon. Gentleman put that on the record.
Steve Webb
I am sure the House would expect the Prime Minister to take a very close interest in these matters.
Age UK says that a weak and ineffective post of Minister for older people could do more harm than good. None of my ministerial colleagues are weak or ineffective, so that is not something we need to worry about. It is clear that all Cabinet Ministers, even the Chief Secretary, have a pretty full inbox at present. It was generous of my hon. Friend the Member for Portsmouth North to give him an extra role. I will have a chat to him about it. The worry would be that if an additional role is given to an already stretched Minister, either it becomes marginal and is not done properly, or it ends up being duplicated. That is the challenge for us.
Responding on behalf of the Government to this important debate, I very much welcome the terms in which the whole debate has been conducted. We are united in the view that older people need a proper voice right at the heart and right at the top of Government. We need to think very hard about how we deliver that.
I welcome the terms of the motion, which proposes that the Government should consider—we certainly should—whether that role would best be done by a Cabinet Minister with additional responsibilities. My proposition is that one response might be for the UK Advisory Forum on Ageing to have a more cross-government role. There are plenty more things we could do, but I stress that there are plenty of cross-government and co-ordinated things already being done. I hope that I have been able to give the House some reassurance on that point.
I can confirm that the Government are very happy to support the motion and look forward to further discussions, because I have a feeling that, if we do not make sure that older people have a proper voice right at the heart and at the top of Government, my hon. Friend the Member for Portsmouth North will not let us hear the last of it.
Credit Union Expansion Project
Steve Webb Excerpts(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
On 10 May 2012, the Department for Work and Pensions published the credit union feasibility study looking at the sustainability of credit unions. It also examined what more can be done to expand them to serve many more people on lower incomes. The study has been well received by the sector and a range of stakeholders.
Credit unions are doing a good job offering access to credit and other financial services for people on lower incomes. They provide a real alternative to higher cost credit available from the commercial sector and illegal loan sharks. Therefore, if credit unions are ready for the challenge of modernisation and expansion we are willing to support them. Today, I am announcing that the Government will take forward the findings of the feasibility study. In particular, the DWP will make a further investment of up to £38 million over the next three years in credit unions. This investment, which is in addition to the £13 million we invested in 2011-12, will be conditional upon the credit union industry meeting a number of agreed milestones for collaboration, modernisation and expansion. Our aim will be to ensure the industry’s financial sustainability by the end of the project.
The feasibility study showed that at present even the biggest credit unions struggle to meet the operating costs of making small loans to people on lower incomes. Therefore, in addition to our investment in modernisation and expansion, we plan to consult on raising the cap on the interest rate that credit unions are permitted to charge on loans, to determine whether it will help credit unions achieve financial sustainability and reach a wider range of customers.
The Department for Work and Pensions, HM Treasury, and the Department for Business, Innovation and Skills will continue to work closely on all aspects of the credit union expansion project, including the formal consultation on the interest rate cap and any subsequent legislative changes.
Oral Answers to Questions
Steve Webb Excerpts(12 years, 5 months ago)
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Peter Aldous (Waveney) (Con)
17. What steps he is taking to introduce a flat-rate state pension.
The Minister of State, Department for Work and Pensions (Steve Webb)
The Chancellor confirmed in Budget 2012 that the Government will introduce a simpler, single-tier pension for future pensioners set above the basic level of the means test to better support saving for retirement—and I am pleased to say that the Prime Minister has reiterated that commitment today.
Mr Hollobone
Will the Minister assure the House that, were such a scheme to come in, existing pensioners would not be permanently disadvantaged relative to new pensioners? If that is the case, is it possible to explain it in plain and straightforward language so that everyone can understand it?
Steve Webb
I am grateful to my hon. Friend. We need to explain what are often very complex matters in simple language. The simple truth is that today’s pensioners have got the best deal in a generation through the restoration of the earnings link, which will be real cash in their pockets year after year, and that the new system will cost no more than was going to be spent in any case. We are taking a planned budget, simplifying the system, but not treating anyone adversely.
Peter Aldous
I am grateful to the Minister for that answer, but there is real anxiety among current pensioners that with the introduction of the single-tier pension they will become second-class citizens. Will he give an assurance and take that point on board?
Steve Webb
I do appreciate that point. It is often not well understood that pensioners coming down the track—tomorrow’s pensioners—are due to receive substantially higher pensions on average without our reform because the state system has been maturing. Our reforms are not doing that—it is in the system anyway—but our reforms do take the money and simplify so that today’s workers have a simpler system into which to retire.
Mr Frank Field (Birkenhead) (Lab)
Will the Minister give an undertaking that those coming down the track—[Interruption.] I am already there; I am one of those pensioners being discriminated against. Will he give an undertaking that those who would be entitled to a higher pension than his flat-rate pension would provide will get the entitlement that they have paid for and not his lower flat-rate pension?
Steve Webb
I can reassure the right hon. Gentleman that the next generation of pensioners will be well looked after and specifically that the starting point for our calculation will be what people have in the bank—that is to say, rights already accrued—and specifically, therefore, if people are heading for a pension of more than £140 at the point we change it and have got that in the bank, it will be respected.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
We are hearing from all sides today concern and anxiety about the move to a flat-rate, single-tier state pension. In order to end that anxiety and to answer these questions, will the Minister confirm that a White Paper will be published on this reform? Will he tell us when it will appear?
Steve Webb
I am pleased to give the hon. Gentleman the assurance that a White Paper is under active preparation and will be produced.
Helen Goodman (Bishop Auckland) (Lab)
3. What his policy is on the application of the work capability test to people with cancer; and if he will make a statement.
Charlie Elphicke (Dover) (Con)
T9. Does the Minister agree that pensions tax and pensions means-testing help destroy our pensions system? What are the Government doing to ensure that it always pays to save for a pension?
The Minister of State, Department for Work and Pensions (Steve Webb)
My hon. Friend is right that at the moment there is a concern that if people save small amounts of money, all they do is deprive themselves of means-tested benefits. That is why our state pension reform is absolutely essential to ensure that when people do save they are better off as a result, and we look forward to that being a firm foundation for auto-enrolment when it starts later this year.
Mr Dave Watts (St Helens North) (Lab)
T4. Is not the problem with the Government’s benefit to work programme the fact that due to economic policies and failures there are no jobs for people to go to? For every five vacancies, there are so many people chasing them that there is no chance of them getting work. When will the Government do something about growth so that people can get back into jobs?
David Mowat (Warrington South) (Con)
Given the increasing evidence of market failure in the private pensions system and the Financial Services Authority’s recent estimate that between 30 % and 50% of private pension pots now go on charges, will the Government consider putting a cap on charges before auto-enrolment comes in?
Steve Webb
I am pleased to say that the early evidence from auto-enrolment—firms are already choosing schemes —is that average charge levels are coming down very dramatically, compared with the stakeholder charge caps that used to be in force, for example, with a norm of around 0.5% for last firms, which is radically below the levels we have seen in the market in the past. However, we need to keep this under review and have reserve powers to cap charges if we think they are becoming a problem as auto-enrolment is rolled out.
Mrs Jenny Chapman (Darlington) (Lab)
In their efforts to get people back into work, will Ministers please make more of an effort to work with colleagues in the Treasury on tax credits? Constituents of mine are taking three-month contracts, ringing up to get the forms, which then take six or seven weeks to arrive, and when they are returned they are being refused the tax credit because there is only four weeks of the employment left. This is putting people off taking temporary work and really is—I use the word again—a shambles.
Workplace Pension Reform
Steve Webb Excerpts(12 years, 6 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Later today the Government will publish a response to the consultation document “Automatic Enrolment and European Employers”.
The Pensions Act 2008 introduces a duty on employers to automatically enrol jobholders into a workplace pension scheme. A jobholder is defined in the Act to include an individual,
“who is working or ordinarily works in Great Britain under the worker’s contract”.
A minority of workers may be “qualifying persons”—that is individuals employed under a contract of service and whose place of work under that contract is sufficiently located in another European economic area state so that their relationship with their employer is subject to the social and labour law relevant to the field of occupational pension schemes of that EEA state.
It is possible that a small number of individuals will have “dual-status”—being both a qualifying person and a jobholder simultaneously. This overlap means that there is a potential conflict between the employers’ duties to automatically enrol eligible jobholders and pension providers being able to offer a suitable product for this purpose.
It is my intention to lay regulations exempting European employers from automatically enrolling “dual-status” workers and ensure that employers are able to comply with the employers’ duties required by the Pensions Act 2008.
I would like to thank all those people and organisations who have offered their views and advice in response to the consultation. A copy of the Government’s response and the associated impact assessment will be placed in the Libraries of both Houses and will be available later today on the Department’s website: http://www.dwp.gov.uk/ consultations/2012/.
Credit Union Feasibility Study
Steve Webb Excerpts(12 years, 7 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The Government have previously announced that we will work with credit unions to look at ways in which the future progress of this sector can best be supported.
A feasibility study looking at how credit unions could become sustainable and what more can be done to grow this sector, so that the affordable credit they offer gets to more people who need it, is now complete.
Credit unions have been doing a good job and we want to work with them to do more to give people on low incomes a real alternative to high cost lenders and loan sharks.
The feasibility study showed there is a market and demand from low income consumers for modern banking products and services, and that the total market could be as large as 7 million people.
Credit unions are ideally placed, serving their local communities, to help meet this demand and serve an additional 1 million people taking their membership up to 2 million.
So we are today publishing the feasibility study report to seek responses on the recommendations and what it means for the sector to ensure our plans reflect these views.
I will place a copy of the feasibility study report in the House Library later today.
Workplace Pension Reform
Steve Webb Excerpts(12 years, 7 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Later today the Government will publish the consultation document “Automatic enrolment: Career Average schemes as Qualifying Schemes”. This addresses an issue that could prevent some good quality pension schemes from being used as qualifying schemes under the reforms.
The Government’s policy on career average pension schemes is to allow them to be used as qualifying schemes and for the purposes of automatic enrolment so long as they provide for the benefits to be revalued at, or above, a prescribed minimum rate.
The consultation proposes amendments to those regulations to give more flexibility for schemes over how they provide for revaluation while still ensuring that members’ interests are fully protected. The period of formal consultation will begin today and last for six weeks, ending on 11 June.
I hope that those people and organisations with an interest in this subject will take the time to offer their views and advice.
Draft regulations will be published alongside the consultation document.
A copy of the consultation document and draft regulations will be placed in the Library of the House and will be available later today on the Department’s website: http://www.dwp.gov.uk/consultations/2012/.
Social Fund Budgeting Loans
Steve Webb Excerpts(12 years, 7 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
On 6 December 2010 I announced that in the forthcoming Welfare Reform Bill, we intended to introduce legislation to make social fund budgeting loans available to help families to buy maternity items or items for a new baby or to help them towards meeting some of the costs of a relative’s funeral.
I am pleased to report that these changes to budgeting loans will be implemented from 8 May 2012 and will apply to all applications made from this date. This help will be available in addition to the Sure Start maternity grant and the social fund funeral payment.
I will place a copy of the new direction covering these changes to social fund budgeting loans in the House Library later today.