Universal Credit and Welfare Reform

Debate between Steve Webb and Baroness Primarolo

Tuesday 11th September 2012 Commons Chamber

[Steve Webb]

I have got only two minutes, so I had better not give way.

We were asked about the position on domestic violence, an important issue raised by my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood). It is an important issue in respect of provision for splitting payments, for example. The Government are absolutely committed to protecting those who are subject to domestic violence. For example, under universal credit, victims of domestic violence will be exempt from things such as work search requirements for a three-month period. Although shared payments would normally be appropriate, because we know that most households budget together, clearly we will make alternative arrangements in exceptional cases. We have therefore retained powers to split payments between members of a couple, for example, in cases of domestic violence. Details of those exemptions will be included in guidance.

We heard a large number of contributions and I cannot do justice to them all, but the key theme from Government Members has been a unified view that we must make work pay and that we should not listen to the naysayers. Frankly, it is always possible to get a newspaper headline by saying “Big Government IT project bound not to work”, because if it does work nobody will ever remember. That is always the way in which the Opposition conduct themselves, but we are in the business of making things happen. When my right hon. Friend the Secretary of State explained how closely he monitors the programme, he was not exaggerating. This project has probably had more hours of testing, evolution and making things work than any other with which I have been associated.

The hon. Member for Makerfield (Yvonne Fovargue) mentioned the 1988 benefit changes, which were a “big bang” change. Income support, supplementary benefit, family credit, the family income supplement and housing benefit were reformed all on a single day. This is a roll out over four to five years and we will get it right by doing it gradually, testing it, having pathfinders and bringing in groups one step at a time. We all saw what happened under the previous Government to the tax credit system when the changes were done in a “big bang”, but we will make this change gradually, get it right and make work pay, so we should reject the naysayers and reject the motion.

Question put.

The House proceeded to a Division.

[Madam Deputy Speaker (Dawn Primarolo)]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

Pensions and Social Security

Debate between Steve Webb and Baroness Primarolo

Thursday 23rd February 2012 Commons Chamber

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

I beg to move,

That the draft Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) (Amendment) Order 2012, which was laid before this House on 30 January, be approved.

[Madam Deputy Speaker]

With this we shall take the following motions, on pensions and on social security:

That the draft Guaranteed Minimum Pensions Increase Order 2012, which was laid before this House on 30 January, be approved.

That the draft Social Security Benefits Up-rating Order 2012, which was laid before this House on 30 January, be approved.

[Steve Webb]

The draft Guaranteed Minimum Pensions Increase Order 2012 provides for contracted-out defined-benefit schemes to increase their members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 3%. Increases are capped at that level when price inflation exceeds 3%. That, of course, is an entirely technical matter that we attend to on an annual basis, and not something that I imagine we shall need to dwell on today.

The second, smaller draft order comes about for a sequence of reasons. The Pensions Acts 2007 and 2008 gave the Government the power to abolish contracting out on a defined-contribution basis. A written ministerial statement set the point of abolition as 6 April 2012. In June 2011, the House debated and approved the Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) Order 2011, which makes consequential amendments to primary legislation, consistent with the abolition of defined-contribution contracting out. At the time of that debate, a minor defect in the operation of article 3 of the 2011 draft order came to light. I therefore made it clear to the House that I would return with a further amending order before the 2011 order came into force.

Accordingly, the Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) Order 2012 will remove the exclusion of protected rights payments from what counts as income for the purposes of income payments orders made under section 310 of the Insolvency Act 1986, and from the scope of section 159 of the Pension Schemes Act 1993, which provides that guaranteed minimum pensions and protected rights payments cannot be assigned or charged. The draft order will bring consistency with our original policy intention, namely that the tracking of protected rights should cease after the abolition of defined-contribution contracting out.

Social Security

Debate between Steve Webb and Baroness Primarolo

Thursday 17th February 2011 Commons Chamber

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

I beg to move,

That the draft Social Security Benefits Up-rating Order 2011, which was laid before this House on 3 February, be approved.

[Madam Deputy Speaker]

With this we shall discuss the following motion on pensions:

That the draft Guaranteed Minimum Pensions Increase Order 2011, which was laid before this House on 3 February, be approved.

[Steve Webb]

I shall deal briefly with the Guaranteed Minimum Pensions Increase Order 2011. The order provides for contracted-out defined benefits schemes to increase by 3% their members’ guaranteed minimum pensions that accrued between 1988 and 1997. Increases are capped at this level when price inflation exceeds 3%. This is a technical matter that is attended to on an annual basis, and I suspect that it will not be the focus of our discussions.

The broader uprating of social security benefits this year is a landmark event for two reasons. First, it enshrines the restoration of the earnings link for the basic state pension. Secondly, it introduces a clear and consistent approach to price measurement through the move from the retail prices index to the consumer prices index. I suspect that a lot of our debate will focus on that issue, but I want to turn first to pensions and pensioners. It is more than 30 years since the link between the basic state pension and earnings was broken. Although Labour Members talked a good game towards the end of their time in office, they had 13 years in which to restore that link, and they failed every year to do so.

The coalition Government said that they would restore the earnings link for the basic pension, and that is precisely what we have done. Indeed, we have gone one better with the introduction of our triple guarantee, which means that the basic pension will be increased by whichever is highest of earnings, prices or 2.5%. We estimate that the average person retiring on a full basic pension this year will receive more than £15,000 extra in basic state pension income over their retirement than they would have done under the old prices link. This important change will be a benefit to existing and future pensioners. It will provide a more generous basic state pension, giving a solid financial foundation from the state. So from this April, the standard rate for the basic state pension will rise by £4.50 a week, taking it from £97.65 to £102.15 a week. The introduction of this triple guarantee will finally halt the decline in the value of the basic state pension for current and future pensions. It will also mean that even in times of slow earnings growth, we will never again see a repeat of derisory increases such as the 75p rise presided over by the previous Government in 2000.

In addition to restoring the earnings link, we have taken action to ensure that the poorest pensioners do not see the increase to their basic state pension clawed back in the pension credit. This has been done by linking the minimum increase for the pension credit to the cash increase for the basic state pension this year. Therefore, from April 2011, single people on pension credit will receive an above-earnings increase to their standard minimum guarantee of £4.75, which will take their weekly income to £137.35. Of course, as you will be well aware, Madam Deputy Speaker, this is in addition to the key support for pensioners that the coalition protected in the spending review: free NHS eye tests; free NHS prescription charges; free bus passes; free TV licences for over-75s; and winter fuel payments exactly as budgeted for by the previous Government. In addition, we have reversed a planned cut—one of Labour’s many ticking time bombs that I discovered in my in-box. The previous Administration had planned to reduce the cold weather payment from the pre-election—I use that phrase deliberately—rate of £25 a week to just £8.50 a week. We took the view that despite money being tight, helping elderly people on a low income to heat their homes in winter was vital and a priority for the coalition. I can update the House by saying that we have paid slightly more than we thought—an estimated 17.2 million payments worth an estimated £430 million, which we believe is money well spent.