Pensions Bill [Lords]

William Bain Excerpts

Monday 20th June 2011 Commons Chamber

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

I would like to say that it is a pleasure to follow the hon. Member for Grantham and Stamford (Nick Boles), but that might be pushing it somewhat. He made a characteristically rumbustious and entertaining contribution and I would like to respond directly to some of the issues he raised. He spoke about rough edges, but the view that we have heard from Opposition Members and even from some Members on the Government Benches is not of rough edges but of rough justice for women aged 56 and 57. He spoke about the road to ruin, but we see other countries engaged on a different path, as President Obama said when he spoke to us in Westminster Hall. Those countries are engaged in growing their economies more. The hon. Gentleman spoke about fairness, but may I say to him that fairness and restoring trust in politics are not about making a commitment in a coalition agreement 13 months ago and cynically breaking it in the way that this Bill will if it receives a Second Reading tonight.

Reform of the pensions system is best conducted with the agreement of as many shades of political and other opinion as possible. It is far too important for short-termism, and the principles and as much of the detail as possible should be above partisan politics. That is why there are some aspects of the Bill that Opposition Members could support, but the glaring unfairness at the heart of the Bill in its treatment of half a million women in the acceleration and equalisation of the state pension age in 2018 means that I will be opposing it tonight.

Rising life expectancy and other demographic changes mean that there is agreement across the House that the state pension age should change to reflect the longer period of retirement that people in younger age groups are likely to enjoy. There are currently 10.5 million people aged 65 and over, compared with just 5.5 million in the same age group in 1951. It was the previous Government who established the Turner commission to examine in detail on a non-partisan basis the necessary changes in the state pension age in a way that was fair to future taxpayers, just for people approaching retirement, and long term in its scope, to allow people to save for their retirement in the full knowledge and with sufficient notice of changes in the state pension age.

The Bill, particularly in part 1, breaks those three basic principles by adjusting the settlement in a way that hurts 500,000 women across the country who were born between December 1953 and October 1954, including 900 in my constituency. It fails in the aim of delivering an improved basic state pension. It also breaches the terms of the coalition agreement, which ruled out any equalisation of the state pension for women before 2020.

[Nicky Morgan]

On that point—I speak as a former lawyer—my understanding of the explanation given earlier this afternoon was that there was a legal reason that the coalition agreement could not be fulfilled as it was drafted. Is the hon. Gentleman honestly saying that his Government would have proceeded with something that is deemed to be illegal, however desirable?

[Mr Bain]

I am grateful for that intervention. The way to get round all the problems, legal or otherwise, is to follow the excellent suggestion that my hon. Friend the Member for Leeds West (Rachel Reeves) has already made in the debate and will restate in her winding-up speech: prevent this unfair change from going ahead and instead look at some of the accelerations in pension age that can be made, particularly in respect of people retiring at 66 or 67, which can also save money for the Exchequer.

The Minister and the Secretary of State did not spell out to the House what the legal problems were. Some Members have speculated that they relate to matters of European law. I hope that when the Pensions Minister winds up the debate, he can outline the legal issues. They certainly were not outlined to the country when the coalition agreement was signed, or during the press conference—the love-in—in the rose garden thereafter.

The Bill also fails the test of fairness, because it places too great a burden for savings on one group of the population when the Government should be looking elsewhere, such as at equalising state pension eligibility at 67. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) pointed out, even before these deeply unjust proposals were announced by the Government, women had been disadvantaged in pension provision for some time. As she said, median pension saving of a 56-year-old woman is just £9,100, almost six times lower than that of a man which, on average, is £52,800. Research by Prudential establishes that the average woman retiring this year can expect an annual income in retirement of £12,900 per annum, compared with an expected income of £19,400 for the average retiring male. Further, the same study found that 28% of women planning to retire this year have no savings in private or company pension schemes, compared with just 10% of men.

The previous Government’s strategy of seeking to link the basic state pension to earnings and making private pensions opt out instead of opt in sought to redress the balance and would have been implemented if we were in government. More safeguards should have been established through the Bill, rather than entrenching inequity, as it appears to do. Following the Bill, women affected will have less than seven years to react to the changes, and may be less likely to be in a pension scheme at all, with less disposable income to supplement savings for retirement, and with greater care responsibilities. Women are also much more likely to wind down in later years of employment, be that to care for elderly relatives or for young grandchildren. Furthermore, it will be more difficult for women to move from part-time to full-time work, or indeed back into employment of any form, given current economic conditions. The Office for Budget Responsibility’s projection of 310,000 public sector job losses in the coming years will disproportionately impact women, who make up 65% of that work force.

The Prime Minister said on Radio 2 today that retirement should be

“a process rather than a cliff edge”

and that

“many people, when they get to retirement, would like to go on doing some work or part-time work”.

The reality is that the cliff edge imposed by the Bill is an unfair burden on 56 and 57-year-old women who have done the right thing and saved for retirement but are now being grievously abandoned by the Government.

Recent decades have seen a change in employment patterns among women. The dated notion that a woman’s role is to stay at home and look after the children has been well and truly dispelled, but for women in their late 50s who are due to be affected by the proposals, such changes in social attitudes may not have been reflected in the earlier parts of their working lives. The Government’s reckless haste in changing the state pension age for those women makes adapting to that change even more difficult.

As Carers UK indicated last month, these changes will have a disproportionate impact on other social groups. About 58% of carers—3.4 million people—are women, as are one in five carers aged between 54 and 60. Of the estimated 662,000 carers who combine part-time work with caring, 89% are female. For carers, there is little opportunity to make contributions to a private pension plan or savings, even if they are in part-time employment. For women who are carers, provisions in the Bill collude to put them at even greater disadvantage.

In responding to the comprehensive spending review last October, Joanne Segars, chief executive of the National Association of Pension Funds, noted that any changes must include an improved and secure basic state pension. Savings from the Bill’s proposals on the state pension age will not even exceed £l billion until 2018-19, which is well outwith the range of the Government’s fiscal consolidation plan. The Bill does not spell out how they plan to increase the basic state pension for all. Again, there is little in the way of incentive and assistance for people who will now have to work longer. As the Equality and Human Rights Commission notes:

“Rather than focusing on increasing men’s State Pension Age and perpetuating the gap between men and women, Government should focus on how to help women and men extend their working lives, if they wish to do so, and thus reduce the disadvantage that women face in the workplace by shortened working lives.”

Women will also be penalised by the design of the Bill’s provisions on auto-enrolment in pension schemes, which will reduce the number of people enrolled by almost 600,000.

This is a Bill of broken promises from a deeply dysfunctional Government. It changes the terms of the social contract between women, low-paid workers and the state, with insufficient notice and scant regard to the effects on rising inequality. They are unjust proposals that bear the imprint of the Chancellor, despite having nothing to contribute to his deficit reduction plan during this Parliament. They put the burden of further departmental savings on the shoulders of too few people, and those people have worked and saved for the pension contributions they have accrued. That is why the Bill deserves to be opposed in the Lobby tonight.

Oral Answers to Questions

William Bain Excerpts

Monday 13th June 2011 Commons Chamber

[Chris Grayling]

I absolutely agree. Let me be clear that I believe it is extremely important to get health and safety right. As the hon. Member for Wansbeck (Ian Lavery) suggested, we need to protect people against real dangers in the workplace. However, we have to understand that if the system is over-bureaucratic, it will lead to the closure of businesses and cost jobs, and that does nobody any favours. The job of Government is to find the right balance, and that is what we seek to do.

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

5. What arrangements he plans to put in place for transitional payments for those who will be affected by the introduction of universal credit.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

A package of transitional protection is being developed to ensure that there will be no cash losers as a direct result of the move to universal credit where circumstances remain the same.

[Mr Bain]

I note the Secretary of State’s reply, but has he not taken into account the criticisms made of the policy by Family Action? They are, first, that it will not apply to new recipients; secondly, that changes in circumstances leading to the loss of cash protection have not been sufficiently defined; and most importantly, that the failure to give a commitment to uprating cash protection in line with inflation could mean up to 400,000 people losing out in real terms as a result of the policy.

[Mr Duncan Smith]

I hear what the hon. Gentleman says, but I would have thought he would welcome the idea that as we move to the new benefit, we are planning to cash-protect those who are already in receipt of other benefits. I do not think I really need to take too many lessons from his party, because when it scrapped the 10p tax band, it did not cash-protect anybody.

Welfare Reform Bill

William Bain Excerpts

Wednesday 9th March 2011 Commons Chamber

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

It is a pleasure to be called to speak in this debate.

With more than 2.5 million people unemployed, youth unemployment soaring to 20% and persistent levels of intergenerational unemployment, it is clear that the status quo is not working. The hon. Member for Eastbourne (Stephen Lloyd) cited Beveridge, but Beveridge and the Labour Government of 1945 envisaged the welfare state as a system that would redistribute not just wealth but power and opportunity. It was a welfare state built on reciprocity, but we cannot characterise the package of reforms in the Bill as being built on sufficient reciprocity. This is a Government who are introducing a Work programme that will help 250,000 fewer people than the programmes it replaces.

[Chris Grayling]

It is very important to deal with this point head on. That is absolutely not the case: every single person on JSA or ESA who needs and wants support through the Work programme will get it, and the total numbers will be higher than under the previous Government.

[Mr Bain]

If Members look at the details of what is being spent on the Work programme, they will see it does not match up to the initiatives of the previous Government.

We also foresee huge problems for the losers under these reforms. Labour supports a simplification of the universal credit system, but it must be a fair simplification. Yes, about 1 million households will benefit, but it is absurd that that is being paid for by 1.7 million households with incomes of between £16,000 and £24,000 losing out. The squeezed middle will not only be defined; they will be heard loud and clear in respect of the money they will lose as a result of this Government’s policies.

The Government have shown a bizarre lack of clarity regarding whether self-employed people hoping to start a new business will be eligible for the universal credit. The transition for individuals to the universal credit lacks detail and could create disincentives. The credit does not deal with transport costs to and from work, and the cash protection for individuals’ incomes will apply only until their circumstances change, which could be only a few weeks after taking up a job if their hours of work are altered. Changes to crisis loan alignment payments are also likely to affect many claimants. No work has been done to identify the costs of transferring delivery to local authorities, or to identify the most affected groups.

Labour Members know that one of the best means of reducing child poverty is to encourage more second earners to take on part-time work around their family or care commitments. It is extraordinary that the proposals in the Bill will reduce the work incentives for up to 330,000 second earners. This is not a strategy that will reduce child poverty in the short or medium term. Despite the Secretary of State’s statement today, there is a shocking lack of clarity about the provision of child care, the cost of which presents a huge barrier, particularly for women returning to the labour market. Council tax benefit is being devolved to local authorities in a completely unspecified way that lacks clarity and threatens to create new disincentives to work.

The Institute for Fiscal Studies has concluded that, overall, under the universal credit the incentive to work for low earners will be stronger for single people and for those in couples where one partner does not work, but that it will weaken incentives for couples to have both partners in work, owing to a higher withdrawal rate than the current tax credit system. It has also concluded that lone parents will lose out in the long term.

This week, the Social Market Foundation established that 400,000 families with children that currently receive tax credits will lose their entire eligibility for financial support under the universal credit if they have savings of more than £16,000, and that a further 200,000 families with savings of between £6,000 and £16,000 will lose some of their entitlements. As Ian Mulheim, the director of the foundation, said,

“The Universal Credit will punish working families trying to save for the future, such as those trying to get a foot on the property ladder.”

We urge the Government to reconsider the shambolic way in which they have designed the credit, and to introduce a more adequate Bill that is fit for purpose.

On housing benefit, the hon. Member for Manchester, Withington (Mr Leech) mentioned the incredibly harmful effects of the proposal to extend the shared-room rate from people aged under 25 to those up to the age of 35. Some 88,000 people across the country will lose out, with an average loss of £47 a week. In Glasgow, my home city, the impact will be to move people from the social rented sector into the private rented sector, with a resulting increase in rents.

The Secretary of State has not been able to give the House sufficient assurances on the disability living allowance. Yes, we hear of a review, but he has not taken back, nor has he had permission from the Treasury to recoup, the amount he proposed to save by withdrawing the mobility component. His own Social Security Advisory Committee has referred to the terrible impact of the loss of independence that people who lose the mobility component will experience. We therefore urge the Government not just to review these proposals but to withdraw them.

On the move to personal independence payments, we think it unacceptable to require a disabled person to wait six months—double the length of time under the present system—before coming eligible. Richard Hamer, director of external affairs at Capability Scotland, has said:

“The welfare benefits system is the UK Government’s strongest tool to promote equality for disabled people. The changes announced in the Welfare Reform Bill will instead push disabled people and those who care for them further into poverty.”

I encourage Members throughout the House to seek a better Bill than the one the Government have proposed today. I urge Members to vote for the amendment and to seek a better Bill than the shoddy and shambolic effort the Government have proposed today.

Oral Answers to Questions

William Bain Excerpts

Monday 10th January 2011 Commons Chamber

[Steve Webb]

The consultation that we undertook on the RPI-CPI change was about occupational pensions, and the majority of responses were from occupational pension organisations. Unsurprisingly, as CPI is generally lower, members of the schemes were not so keen and those who have to pay for the schemes were rather keener.

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

Is the Minister aware that, at the weekend, the disability charity Scope described her plans to remove the mobility component of disability living allowance as “a callous decision”, which would

“result in people being prisoners in their own homes”,

and that disability lawyers have expressed concerns about the compatibility of the changes with the European convention on human rights? When will the Minister join the growing national consensus that the plans are unfair and unacceptable, and withdraw them?

[Maria Miller]

I thank the hon. Gentleman for his question. It is important to make it clear that our proposals apply to people who live in residential care homes, not those who live in residential accommodation. That was slightly unclear from the question. Obviously, any measure that the Government propose is subject to a full impact assessment, in which human rights and other legislation will be examined in detail. I can assure the hon. Gentleman that we have already taken advice on the matter, and that the measures fully comply with human rights legislation.

Disability Allowance

William Bain Excerpts

Tuesday 30th November 2010 Westminster Hall

[Mr Clarke]

Transport is vital to the quality of life of the vast majority of disabled people, but particularly those living in residential care. My hon. Friend makes her point very well.

I come now to the views of organisations of and for disabled people. It must be well known to right hon. and hon. Members that they have been virtually unanimous in their response. For example, Scope says:

“Disabled people are particularly vulnerable to cuts in services and benefits. They are disproportionately reliant on health, social care, housing and transport services, and also, as a result of low employment rates and the additional costs associated with living with an impairment, more likely to live in poverty and/or rely on benefits for a large proportion of their incomes.”

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

Given the extent and the nature of my right hon. Friend’s campaigning on behalf of disabled people over almost three decades in this House, when he speaks it is always sensible for Governments to listen. On his point about Scope, I remind him of the information it has given to Members on the kinds of activities that will be put at risk by the loss of the mobility component. They include access to work and volunteering; access to friends and family; community activities, health care services and leisure activities, such as swimming, shopping and even going to the cinema; and the ability to maintain relationships with a partner. How does my right hon. Friend imagine that any Government could justify this savage cut?

[Mr Clarke]

My hon. Friend, who has added substantially to the quality of debate in the House on these matters, asks the kind of question that people are asking, including, I am sure, people in his constituency. I know that he will always tell it like it is.

I was dealing with organisations of and for disabled people, and so I turn to Mencap:

“Mencap believes the government have misunderstood how disabled people use this important benefit. Without this vital lifeline, many disabled people in care will lose much of their independence, be unable to take part in many community activities and have fewer opportunities to meet with friends and family. Mencap is concerned that by removing this benefit many disabled people who live in residential care…will be unable to lead fulfilling and independent lives.”

Sense says:

“The Government’s initial justification for this decision, was that the situation of people in residential care homes is the same as those in hospital. This is a totally incorrect assessment; residential care settings are individuals’ homes and they should expect to be able to access their families and local communities. Yet Sense’s experience as a provider of residential services to deafblind people is that in the vast majority of cases, local authorities will take the DLA mobility component into account when deciding on funding levels.”

Oral Answers to Questions

William Bain Excerpts

Monday 22nd November 2010 Commons Chamber

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

One of the key differences in the Work programme, compared to previous programmes, is that it will pay providers not simply for getting someone into work, but for supporting them while they are back in work over an extended period. That is crucial to ensuring that people do not come off benefits, stay in work for a few weeks and then return to the unemployment registers, as has so often happened in the past.

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

T9. Is the Minister aware that his own Department’s statistics show that the impact of restricting local housing allowance to the 30th percentile in Glasgow is that 92% of recipients in one-bedroom properties will lose out by, on average, £7 per week? The Glasgow Housing Association told me on Friday that that is likely to lead to higher levels of rent arrears and lower levels of available investment for its properties. Does not that show how unfair and badly designed the proposals are?

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

I can only agree entirely with the hon. Gentleman on the manifesto on which he stood for election, which stated that we have to cap the rents that we are paying. His analysis assumes a static situation in which rents do not change. The Department puts more than £21 billion into the local housing allowance. If we changed the rules for that, we would change the market. We are trying to put pressure on rents so that they will go down, which will improve the situation.

Housing Benefit

William Bain Excerpts

Tuesday 9th November 2010 Commons Chamber

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

It is a pleasure to follow the hon. Member for North East Hertfordshire (Mr Heald) and the other right hon. and hon. Members who have contributed so far.

The Secretary of State likened his welfare reform programme to that of William Beveridge in the 1940s. I welcome his ambition, but I suspect that Beveridge would have major criticisms of the unnecessary hardship that the Government’s housing benefit proposals will cause. It is a matter of great regret that no member of Beveridge’s party has yet risen to their feet to criticise these unjust proposals. Beveridge supported a contribution-based welfare state and the Government doing more to stimulate job creation. That would represent the foundations of genuine welfare reform, and I hope that the Government will reconsider their plans, which will unduly punish those who have the least. They cannot in any shape or form be described as progressive.

There are three key issues of concern to my constituents: the proposals to slash housing benefit payments by 10% for those who find themselves on jobseeker’s allowance for 12 months or more; the restriction of local housing allowance payments to rent for properties in the lowest 30% of rental levels, rather than the median level; and the plans for a crude national cap on housing benefit payments.

The 10% cut hides the inconvenient truth for the Government that affected tenants will have to make up the difference from their jobseeker’s allowance. A single, childless person will therefore experience a drop of almost 30% in their disposable income, as the Scottish Federation of Housing Associations established in its briefing. For the 970 people in Glasgow North East who have been out of work for more than 12 months, the measure could mean a loss of £25 a week in their incomes. Across the UK, the proposals are expected to save £110 million a year from 2013, but at what price to my constituents and to 4.7 million constituents of right hon. and hon. Members throughout the House, who face being pushed into higher levels of poverty?

The SFHA underlined in its briefing that approximately 700,000 people in the social and private rented sectors would be affected by the new rule, losing an average of £9 a week. Overall, 5,445 people in Glasgow who have been on JSA for 12 months or more will lose out—some 22% of all housing benefit recipients in the city. The loss for the 2,750 Glaswegians receiving the allowance for a one-bedroom flat will be £7 a week, for the 2,390 affected people in two-bedroom houses it will be £10 a week, for the 590 recipients in a three-bedroom house it will be £15 a week, and for the 50 families in four-bedroom houses it will be £22 a week.

The Glasgow Housing Association has said that between 11 and 16% of its tenants will be affected by the changes to the rules on presumed under-occupancy of properties. Unable to make ends meet, tenants will suffer higher expenses and the prospect of substantial debts. At worst, they will lag behind on their rent payments and perhaps ultimately face eviction. People will be pushed out of prosperous areas where they have the highest prospects of finding work, and there will be an increase in unemployment and social tensions in areas that are already marginalised and suffer multiple deprivation.

Under the stricter medical tests that the Government have introduced, people will be moved off employment and support allowance, incapacity benefit and severe disablement allowance and on to jobseeker’s allowance. They will be at a greater disadvantage in the labour market, and will they not find it more difficult to find a job within 12 months? If healthy and fit people are unable to find work under the Government’s policies, what chance have the most vulnerable ?

In the June Budget, the Chancellor assured the House that he was aiming to protect the most vulnerable in our society, but the Government’s proposals will hurt the most vulnerable and those who are trying to find work, at a time when their fiscal policies will make that much more difficult with the loss of almost 1 million public sector and associated private sector jobs, as PricewaterhouseCoopers established recently. The truth is, as the Office for Budget Responsibility established in June, there is no guarantee that the economy will be in a state to secure the availability of sufficient jobs by 2013.

Singling out those who can least afford to lose money is neither fair nor progressive. The Government should consider investing in affordable housing rather than slashing the budget by half over the course of this Parliament. That would not only secure savings in the long term, but protect the vulnerable and incentivise work in the coming year.

I support welfare reform that ensures that taking a job will pay and that improves work and training opportunities for those whom previous initiatives have not reached. However, my hon. Friends and I cannot support plans that set out to punish the most vulnerable in our society, who make great efforts to seek work, and who deserve a Government who is on their side and not preparing to abandon them at their time of greatest need. These are the wrong proposals targeting the wrong people. I hope hon. Members across the House will reject them and support the Opposition’s motion in the Division Lobby tonight.

Oral Answers to Questions

William Bain Excerpts

Monday 18th October 2010 Commons Chamber

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am delighted to tell my hon. Friend that we are looking to expand the support available to people in parts of the country that are particularly affected by unemployment and that have a small local private sector economy. We will provide enhanced support from early next year, including through more money than is currently on offer to help the self-employed and—this is particularly important—through mentoring for small businesses, to ensure that people have practical advice and guidance so that they not only set up small businesses, but those businesses survive, grow and flourish.

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

T5. Will the Secretary of State join me in recognising the great contribution that the 54 supported employment Remploy factories make to our country? Even at this late hour, will he agree to lobby the Treasury on their behalf? It would be entirely unfair and unacceptable for 3,000 of the most vulnerable disabled workers to be handed their P45s by the Chancellor on Wednesday.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I thank the hon. Gentleman for his question, and I agree that Remploy plays an important part in providing employment services for disabled people. As he would expect, we have been looking at the contribution that Remploy makes as part of the spending review process. I would just urge him perhaps not to believe everything that he reads in the newspaper, and say that he will get further details on Wednesday when the Chancellor speaks.

Oral Answers to Questions

William Bain Excerpts

Monday 19th July 2010 Commons Chamber

[Dr Sarah Wollaston (Totnes) (Con)]

5. What steps he is taking to reduce the level of youth unemployment.

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

6. What steps he plans to take to increase youth employment in 2010-11.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The Government are committed to tackling youth unemployment. Young people can access a comprehensive range of opportunities, support and advice that will help them find employment, as part of the Work programme. As we introduce that programme, it will offer integrated employment support to young people, regardless of the benefit that they claim. I recognise the work that my hon. Friend has done in her constituency among young people. The results there are good, because youth unemployment is lower than the national average and has fallen over the past year.

[Mr Duncan Smith]

Yes, I can. As my hon. Friend knows, we made provision in the Budget for more than 50,000 new apprenticeships. It is also worth remembering that one thing that the last Government set in train, and would have introduced had they been returned, was a hike in national insurance, which would have damaged any prospect of young people in her constituency being in long-term viable jobs. There is a good story to tell, which could not have happened if we had not taken over and found savings within the budget in our first year.

[Mr Bain]

Given the gap that there will be between the prevention of the rolling out of the future jobs fund and the introduction of the Work programme next year, and as apprenticeships are a devolved matter, what practical help will the Secretary of State be able to provide for my constituents, particularly the 1,300 young people who are out of work in Glasgow North East at the moment? Do the Government not need to do more to prevent an autumn, winter and spring of discontent for young people in Glasgow?