Post Office Card Account

Debate between Steve Webb and Mike Weir

Tuesday 16th December 2014 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend for his work on the crucial issue of financial inclusion. I stress that we see the Post Office card account as being particularly suitable for vulnerable people such as elderly pensioners. Over the next few years, people of working age will move from these types of accounts to more transactional accounts. The credit union movement is clearly an important part of this financial inclusion agenda. The crucial thing is to ensure that whether it is through a POCA, a basic account or any other sort of account, people can, if they wish, go to the local post office for their money, and they cannot do that if it has been shut.

[Mr Mike Weir (Angus) (SNP)]

It might be the Christmas spirit, but I find myself in the unusual position of actually welcoming a statement from the Minister. The Post Office card account is welcome, but I have to say that the Minister is wrong in what he says about Post Office modernisation. Many of the post offices in my constituency are suffering changes, with stand-alone post offices being closed in favour of local post offices. There is real concern about the lack of positions for POCAs in local post offices, where queues can build up—many quite large communities have only one local post office to serve the whole community—and banks are beginning to close some of their branches. In those circumstances, how can he be certain that the POCA will be a stepping stone to mainstream banking?

[Steve Webb]

I will take what I can get: I am grateful to the hon. Gentleman for his enthusiastic response. The 3,760 POCA holders in his constituency, as of last year, will welcome this announcement. On the issue of post office locals, each proprietor has to think what works in their premises, but I am advised by a normally reliable source—the Minister with responsibility for postal services—that queuing times are falling in the local model.

Pensions Strategy

Debate between Steve Webb and Mike Weir

Thursday 20th March 2014 Commons Chamber

[Steve Webb]

My hon. Friend is right. The key word she used was “opportunities.” If people want to take more of their pension wealth earlier in retirement—perhaps when they are more fit and able—they should be free to do so. As she says, however, they need to make informed choices, which is why the guidance guarantee is so important.

[Mr Mike Weir (Angus) (SNP)]

Although I am generally supportive of the changes to the private pension—they are sensible, especially for those with smaller pots—I wonder what the difference is between one of these new pensions and other savings vehicles. Will there be any impact on the assessment of someone in their late 50s who unfortunately finds themselves seeking means-tested benefits? Will they be looked at differently compared with the current pension plans, given that they will now be able to draw down money at any time and it will no longer be necessary for them to purchase an annuity at the end of the scheme?

[Steve Webb]

The hon. Gentleman is right to say that we are going to have to think about pensions and retirement saving in a new way. One of the differences between workplace pensions and other forms of saving is the employer contribution. Whereas someone of working age can save through any savings vehicle they like, it is only through workplace pensions that they get not only tax relief but the employer contribution. They will, therefore, remain particularly attractive products, including for people on low wages.

Housing Benefit (Under-occupancy Penalty)

Debate between Steve Webb and Mike Weir

Wednesday 27th February 2013 Commons Chamber

[Steve Webb]

No, I want to make some progress.

For social sector tenants alone, the bill totalled £14 billion. That is why we have had to look at this area of spending. The system for tenants renting in the private sector has already been tightened in a number of respects, and there is a fundamental fairness issue involved here. Is it right to squeeze private sector tenants’ housing benefit while making no change in the social sector, where rents are already subsidised and where people already have an advantage? That is what we are trying to address.

At the moment, there is a spare bedroom subsidy. We subsidise a million spare bedrooms in the social rented sector through housing benefit. We have a situation in which two households next to each other can be treated inequitably. We heard the hon. Member for Banff and Buchan talk about fairness. We have to be fair to the different sorts of tenancies. Those living in the social sector already benefit from a subsidised rent. Should they also benefit from a subsidised spare room? When we have a million spare bedrooms, and over a quarter of a million households living in overcrowded accommodation, we must do better. We have to regard the spare bedrooms in the social housing stock as a precious resource that we can make better use of.

[Mr Weir]

What would the Minister say to people who wish to downsize from a larger home to a smaller one, but who find that such accommodation simply does not exist in their areas? In mainly rural areas such as mine, such accommodation does not exist. People could be offered another home many miles away from where they have grown up, from where they work or from where their friends are. This is a ridiculous policy.

[Steve Webb]

I want to stress that there will a range of responses to the under-occupation charge. Some people will move. About one in six of the households we are talking about are in work, and there are options for people who are in work. People could take work. It is often said that there are no jobs, but there are more people working in this country now than in the whole of human history. The number of people in work in this country is now approaching 30 million, so, for some, working or working more hours will be an option. It will not be the answer for everybody, but it will be the answer for some.

[Mr Weir]

rose—

[Steve Webb]

Let me just address the hon. Gentleman’s point before he replies to my reply. I have not finished replying to his first point yet.

There has to be better use of the social housing stock. I pay tribute to the housing associations in the Liverpool area, 20 of which have come together with local authorities to pool their housing stock. I take the hon. Gentleman’s point that a small housing association might have limited stock and limited scope for moving people around, but by pooling their stock, those organisations are able to make better use of it so that more options will be available. I entirely accept his point that the answer to this question will be different in a city from in a remote rural area, and that is why we are more than happy to look at whether the allocation of discretionary housing payments to help people in rural areas is the right answer. As it happens, the allocation of DHPs is slightly over-represented in rural areas, compared with city areas, because of the way in which it has been done. We recognise that there is an issue there.

[Mr Weir]

I thank the Minister for that answer, but he said that there would be a range of responses to the policy, including paying the difference. However, people on housing benefit are, by their very nature, on low wages. They are already under intense pressure from rising energy and fuel prices and from freezes on benefits if they are receiving any. It will be difficult for those people to make up the difference in that way. Their choices will be very limited, and many will be forced to move by financial necessity when the change comes in.

[Steve Webb]

We have already seen the impact of our restrictions in the private rented sector, and we know that people make certain choices. It would be wrong of any of us to belittle those choices, given the financial situation, and I do not do so, but we have seen people on relatively modest incomes in the private rented sector saying that paying £2 a day for a spare room is worth more to them than spending that money on something else. Some people in that sector are making that choice, and that is part of where the saving comes from. Some people in the social housing sector will do the same thing.

Benefits Uprating (2013-14)

Debate between Steve Webb and Mike Weir

Thursday 6th December 2012 Commons Chamber

[Steve Webb]

The focus of the uprating Bill will be on those benefits over which the Secretary of State has discretionary powers, particularly working-age benefits, JSA and ESA. We will also look at tax credits and child benefit. It is our policy to ensure that carer’s allowance is protected against inflation.

[Mr Mike Weir (Angus) (SNP)]

Does the Minister accept that many of those on working-age benefits spend much of their money on food and, in particular, energy, for which the rate of inflation is much higher than CPI? A 1% increase is not the difference between CPI and 1% for these people but is in fact a much greater cut in their living standards.

[Steve Webb]

This issue is raised every year, and every year it is argued that the rate of inflation for people on benefits is always above the prevailing rate of inflation, but in the long term there is no reason to think that that would be the case. We have made provision for the most vulnerable groups to be protected—those receiving disability benefits and pensioners—but unless the hon. Gentleman can suggest serious ways of saving money elsewhere in the Budget, for which the Scottish National party has not been famous, I am not sure that his opposition to our plans is credible.

Winter Fuel Allowances

Debate between Steve Webb and Mike Weir

Tuesday 27th November 2012 Westminster Hall

[Steve Webb]

I will not, if the hon. Gentleman will forgive me, as I want to respond to the points made by the hon. Member for Angus.

The hon. Member for Angus wants to ensure that the Government get payments to people. We want to ensure that we do so when we need to. Even with our systems, we do not manage to get the money to everybody before Christmas, although we get it to the vast majority—more than 95%, I think. One way to address his concern would be to bring forward the eligibility date for everybody; for instance, we could bring it forward from September to July. That would achieve his goal of getting the money to the folk who are off the grid when they need it.

The problem is that the vast bulk of people would then get their lump sum in autumn, rather than when the winter fuel bill arrives, which would be to their detriment. Surprising research by the Institute for Fiscal Studies found that because the money is labelled, branded and seen as a winter fuel payment, even though it is just cash and people can spend it on what they like, they are far more likely to use it for fuel bills than other cash coming in. We would be reluctant to move the bulk of payments away from the time when people’s principal bills arrive.

In that case, the hon. Gentleman’s proposition is that we identify a separate category of people who are off the mains gas grid. He said in his remarks that people would have to claim only once. I will return in a moment to the point about the claims process, but we would have to ensure that the data were accurate every year. To give a simple example, when I bought the house that I live in, which is not in the middle of nowhere by any means, it had no mains gas, so for one year we were off-grid. Had I been a pensioner when I bought it, I would have been entitled to early payment. The next year, we were connected to the gas grid. Somebody would have had to know that I was no longer entitled to the early payment. Either I would have had to report it to the Department for Work and Pensions, or the Department would have had to send people into back gardens; I do not know.

We would need a mechanism. Although the bulk of properties would be the same from one year to the next, there would be in-flow. New properties are built off the grid, and properties off the grid would come on to the grid. It is not as straightforward as the hon. Gentleman suggests. It would not be a one-off process in which once someone was in, they would qualify for ever.

[Mr Weir]

I understand what the Minister is saying, but I have two points. First, surely the churn would be relatively low. Secondly, with other payments, it is not unusual for claimants to have to notify the Department of changes in circumstance. Why would it be such a problem in this case?

[Steve Webb]

When the Department’s books are audited, we cannot say, “We think it’s broadly all right in most cases.” We have to make efforts to ensure that we are paying money only to people who are entitled. Although the stock would, as the hon. Gentleman rightly says, be largely the same from year to year, with some in-flow and out-flow at the margins, we have to ensure that the records are accurate every year. We need a mechanism in place to ensure that that is so.

To get this scheme up and running, we would have to identify which of the 12 million households were eligible for it and we would have to invent a claims process—I assume that the hon. Gentleman would suggest that people should be able to make a claim to us—and advertise that. We would then have manually to separate the potentially hundreds of thousands of cases, if not more, and process them differently. We estimate that the running costs to the Department would be several million pounds. It is not a trivial task. Is this the best way to help vulnerable households of the sort that both the hon. Gentleman and I want to help and support?

The hon. Gentleman raised an interesting issue about data on vulnerable households, which we deal with at the moment through the warm home discount. We have a deal with the big energy suppliers, through electricity bills, which helps people who are off the gas grid. We tie up their data, as customers, with ours on pension credit, age, and so on, and send a flag to the electricity companies to say, “This is a vulnerable household. Will you make a deduction at source from the electricity bill?” The figure at the moment is £130 this winter.

[Mr Weir]

I did not particularly mention that issue. Those who get the warm home discount will get it whether they are getting winter fuel allowance on-grid or off-grid. At least one large energy supplier told me that it would be interested in something similar, but because the Energy Act 2010 only allows data sharing with electricity companies, they cannot get hold of that information. Will the Minister at least consider whether it is possible to extend that regulation to gas and off-grid suppliers, some of which are fairly major now?

[Steve Webb]

Yes, I will. Our data sharing with pension credit customers is covered by the Pensions Act 2008, so in principle we can share our data, although we would need separate regulations for a different scheme. I am happy to explore that. If the hon. Gentleman provides me with details of the suppliers who expressed an interest, we could perhaps have a conversation with them. We might be able to do something constructive.

I take the hon. Gentleman’s point that some of the properties that we are talking about are hard to insulate, but I have always thought that far and away the best way to help people who are in fuel poverty is to tackle energy efficiency and wastage. I would far rather pay somebody £200—the winter fuel payment figure—to get their home better insulated, than pay them £200 simply to help them pay a sky-high bill for a house that is poorly insulated. Although some properties in the 1 million, or however many we are talking about, are of the sort that the hon. Gentleman described, many are not. These are important issues. My hon. Friend the Member for Brigg and Goole (Andrew Percy) mentioned his English constituency experience. Many properties are off-grid because of where they are, but they are not necessarily solid-wall insulated, or whatever.

We need to do a lot more. We have set up the energy company obligation, which is specifically designed to ensure that help goes to low-income and vulnerable households to enable them to heat their homes more affordably in the long term and to improve the energy efficiency of their homes. We are now setting up the green deal. The capital costs of home insulation are often quite large, but because of the cost of off-grid fuels, such as liquefied petroleum gas, oil, and so on, people could get substantial saving on bills. Under the green deal, essentially, people take a loan up front for large capital expenditure, but they then have a flow of savings. The golden rule of the green deal is that people are not lent more at the start than will be covered in repayments by savings on the energy bills. That is similar to the hon. Gentleman’s argument about there being a capital cost up front, as people would get their insulation done up front. That scheme might be particularly relevant to the sorts of households that we are talking about, because if their unit cost of energy is high, the savings they get from insulation will be high and the loan will be paid back within a reasonable time.

As the hon. Gentleman says, many people will use budgeting schemes with the larger oil suppliers. A colleague told me recently that they were off the gas grid and bought oil, but paid a flat amount every month. If people are in a position to budget through the year, there is no need for the Government to start moving winter fuel payments of £200 or £300 around a couple of months early. I take the hon. Gentleman’s point that some smaller suppliers might not offer such a scheme.

[Mr Weir]

I understand what the Minister is saying, but although somebody like myself, for example, would pay for my gas or electricity by direct debit and get a lower rate, not everybody is able to do that. Many off-grid pensioners simply cannot afford to do that. That is the basis of this problem and if we are going to tackle it—the same thing applies with green deal—we need to consider whether a pensioner can afford to take out a long-term loan to insulate their house. Probably, they cannot. There are difficulties in that regard.

[Steve Webb]

Perhaps I failed to explain the green deal properly. People can afford to do that, because the green deal only goes ahead if the savings on their energy bills due to insulation more than cover the repayment and debt-servicing costs of the loan. It is not a question of whether they can afford it, because it does not cost them anything. They get the capital up front and they have lower assessed energy bills, because the green deal does not apply unless they pass that test. So even including the repayment on the loan, they would be no worse off overall and they are living in a warmer home.

[Mr Weir]

But are they not effectively creating a larger debt based on their home? Many pensioners will be reluctant to do that.

[Steve Webb]

The requirement to repay is attached to the home, not the individual.

[Mr Weir]

It is effectively another mortgage.

[Steve Webb]

No. Because the home is better insulated than the one next door, the fuel bills are lower. The net effect is the same, except that when the loan is finally repaid people are living in a home with cheaper fuel bills. If I could choose between two properties in a street, one which had been green dealed and one that had not, I would go for the former, because the loan will come to an end and then I will have lower fuel bills than the house next door.

Pensioners and Winter Fuel Payments

Debate between Steve Webb and Mike Weir

Tuesday 22nd November 2011 Commons Chamber

[Steve Webb]

That is entirely the response that I expected. The point is that not everyone would perhaps respond in quite that way. Given the choice between spending the money on at least some folk gracious and generous enough to give it away, or on people who self-evidently desperately need it because they are on a low income or are disabled and it is freezing cold, the priority at a time when money is tight is obvious. This is one decision that I would defend.

[Mr Weir]

Will the Minister address the point? Whether he is saving money on one or the other, he has just admitted that the figure spent in Northern Ireland is lower than it would have been overall. However, the cost of energy has rocketed in the past year or two, so every pensioner in Northern Ireland or in any other place in the United Kingdom is paying more for their energy and is suffering through this system. Would it not be better to put some money in to ease that suffering?

[Steve Webb]

Absolutely, and I shall come on to the whole subject of the fuel poverty strategy that we have adopted. I suspect, as my hon. Friend the Member for Meon Valley (George Hollingbery) suggested in an intervention, that the correlation between the rate of the winter fuel payment and the depth and impact of fuel poverty is incredibly weak, if it is there at all. In other words, we have seen the winter fuel payment go up and go down, yet if that was plotted against the terrible problem of excess winter deaths or fuel poverty, I suspect there would be no correlation at all. When money is tight, we should be prioritising how we spend it so that it will do the most good.

As the hon. Member for Angus (Mr Weir) rightly says, fuel bills have shot up. Surely the priority should be stopping people paying a fortune for their fuel when half the heat goes out through poorly insulted walls, windows and lofts. Every year, it is tempting to say that this winter we should put cash into people’s hands because it is cold. Of course that is true, but if we always put off the hard work of insulation, energy efficiency and so on, the situation will be the same the next winter and the one after that. Money spent on energy efficiency will save pensioners and others money every winter, rather than our giving them cash one year, only for the heat to go out through poorly insulated roofs and windows.