CPI/RPI Pensions Uprating
Baroness Primarolo Excerpts(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dawn Primarolo)
Order. I must inform the House that Mr Speaker has not selected the amendment.
Mr Crausby
I think that members of the public have been mis-sold pension schemes over a generation by a series of Governments. It is about time that this House instructed its leadership to behave decently to pensioners. That is why I am trying to make the principled point that one Government should stick by the promises made by previous Governments. To effectively backdate the reduction in an individual’s pension throughout their entire life through this move on RPI and CPI must be completely unacceptable—[Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. I was waiting for Members to stand. I call Stephen Lloyd.
Madam Deputy Speaker (Dawn Primarolo)
Order. I do have to remind hon. Members that, having indicated that they want to speak, they have to carry on standing—not looking at their phones.
Gregg McClymont
The Labour party’s position is that, if the Government had introduced the switch to CPI as a temporary deficit reduction measure, it would have been worthy of serious consideration, but since they have made it clear that they view it as permanent, we cannot support it. [Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. If the hon. Member for Gloucester (Richard Graham) wants to intervene, he should stand up. It is impossible to conduct a debate when comments are shouted across the Chamber and Hansard cannot properly record them. If the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) does not mind, perhaps Mr Richard Graham will intervene.
Richard Graham
Thank you, Madam Deputy Speaker. I do apologise. I was following the example of the shadow Chancellor.
Will the hon. Gentleman confirm for the record that his party’s policy, therefore, is to revert to an indexed inflation link with RPI if it gains power?
John McDonnell
I am grateful to all who have contributed to the debate. I think that it has been incredibly constructive, and a credit to the House.
The hon. Member for West Worcestershire (Harriett Baldwin) displayed her experience of these matters, but I do not agree with her. She criticised the CPI, but argued that it was about the best we have. Not even the Government accept that—they are undertaking a review of the CPI in order to install the housing costs that we have argued should be included in it. Within two years, or perhaps one, they will produce their report, and the system will change again. In the meantime, however, people will lose out as a result of the removal of the RPI link. I believe that although the hon. Lady was clear in her defence of the CPI for the moment, she acknowledged the need for change at a later date.
My hon. Friend the Member for Bolton North East (Mr Crausby) hit the nail on the head: this is a matter of trust. People were told that if they contributed to a pension scheme, they would receive a certain defined benefit. It is no good the Minister’s saying that they should have looked at the scheme rules, because in leaflet after leaflet and in scheme after scheme, they were told that they would be protected by the RPI. It is almost like a dodgy car salesman saying “You didn’t look at the hire purchase agreement in sufficient detail.” My hon. Friend mentioned Maxwell, and that resonates in this context.
The hon. Member for Eastbourne (Stephen Lloyd) mentioned the calculations that would need to be verified. As was explained earlier, according to one calculation someone with a £10,000 pension would lose out, because he or she would not even gain as a result of the other measures.
There are two issues. We expect the changes in the state pension to improve matters, but that improvement should not be at the cost of people’s employment pensions. It is not acceptable to wrap the two together as if they would be of some benefit to people with employment pensions, because those people will lose out whatever happens. As my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) rightly pointed out, the long-term prospect is that some people will give up on their pension schemes and will not contribute, and as a result the viability of some pension schemes will be at risk.
Today’s debate smacks of the debate that took place many years ago about the link with earnings. People now regret the breaking of that link, because it led to the erosion of the state pension over the years. Unless the Government’s decision is reversed, the same despair and anger will be expressed in 20 years’ time.
The hon. Member for Gloucester (Richard Graham) spoke eloquently about the need for sustainability, and he was exactly right. We must ensure that pension schemes are sustainable. Most contributory schemes are, and we must ensure that state-funded schemes are as well. That means ensuring that contributions are made, both through tax—a fair taxation system means tackling evasion and avoidance, so that there is a sufficient amount in the Exchequer—and from scheme members themselves. The unions have made it clear that if the costs increase because of the increasing longevity of their members, they will be willing to pay more, but not to subsidise the Treasury.
My hon. Friend the Member for Easington (Grahame M. Morris) presented his assessment of the Government’s decision in his usual honest and extremely thoughtful manner. He said it was about placing the burden of the deficit and the economic crisis on the pensioner rather than on the tax avoider and tax evader, and I entirely agree with him.
The hon. Member for Aberconwy (Guto Bebb) was entertaining as always, and irrelevant as always. [Interruption.] I do not wish to be too cruel to him, but the fact is that we are not debating the Labour party’s pension fund. That is a debate for another day and, possibly, another Back Bencher’s application.
We are debating a serious matter. As we have pointed out time and again, firefighters will lose between £25,000 and £50,000 as a result of these changes, and the Forces Pension Society has emphasised that some former military personnel who were injured in action will lose up to £200,000. As the Minister said, the Secretary of State has the right to set any indexation level in law, but I think there is a moral obligation to abide by the commitment given over decades that the link should be with RPI, because the link with CPI will undermine the pensions that people are paid.
The issue of retrospection was raised. People feel that they are having their pensions cut retrospectively.
There will be a debate about what is the appropriate index. My view is that CPI is not the right index. I urge the Government to introduce the reforms to CPI as rapidly as possible. Pensioners face the threat of losing significant sums of money. They must not do so.
The judgment in the courts was very clear. The objective of—
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Gentleman knows that he is supposed to be speaking for only a few minutes, but he has now been speaking for about eight minutes. I will therefore be very grateful if he completes his remarks.
John McDonnell
This is an important debate, but I apologise, Madam Deputy Speaker.
The judges made their view very clear. The Government’s motivation is to do with deficit reduction and cuts, not which inflation measure should be adopted. The Government are placing the burden of the cuts on pensioners. Pensioners will never forgive them for that.
Question put.
Pensions and Social Security
Baroness Primarolo Excerpts(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dawn Primarolo)
I understand that for the convenience of the House, motions 1 to 3 are to be taken together.
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.
Dr Whiteford
Obviously I cannot speak for the Northern Ireland Member who raised the issue pertaining to his constituents, but as I represent a rural constituency in which people pay excess prices for their fuel and often have no access to social tariffs, I am very concerned about that as well.
The underlying issue, which I raised with the Minister, is that older people and people with disabilities who spend a lot of time in their houses are increasingly more affected by inflation than those of us who spend most of our day outside our homes. Both the Office for National Statistics and the Institute for Fiscal Studies have pointed out that older people experience inflation at a higher rate than the rest of us, as do people on low incomes. The evidence is there. What concerns me is that CPI does not measure accurately the actual experience of people’s costs, which are higher than either CPI or RPI—
Madam Deputy Speaker (Dawn Primarolo)
Order. I remind the hon. Lady that she is making an intervention, not a speech—yet.
Before the hon. Member for Truro and Falmouth (Sarah Newton) resumes her own speech, may I point out to her that we are discussing uprating orders, not projects in Cornwall, however fantastic they are. She must make her speech relevant to the uprating orders, not to future grant applications for very worthy projects in her constituency.
Sarah Newton
I entirely take those points on board, Madam Deputy Speaker. I hope that the House will forgive my enthusiasm for the excellent work that is being done in my constituency. I will now confine my comments to the subject of the debate, but I beg your indulgence, Madam Deputy Speaker: I should like to respond to the comments made by the hon. Member for Banff and Buchan (Dr Whiteford) by touching slightly on the issue of the costs of heating a home. They are part of the cost of inflation, which obviously has something to do with the pension upratings.
As the Minister has acknowledged, it is difficult to come up with a measure that truly reflects the costs of individual households. People with disabilities and pensioners will often be at home for many more hours in the day than other people, and will also need to keep their homes warmer, because as people age their bodies are less able to regulate temperature. That is a well-known fact. However, I feel that the efforts that the Government are making, and especially the move towards flat-rate pensions of £140 a week, will start to provide people with a reliable amount of income with which they will be able to afford to heat their homes.
A huge problem at present is that people do not claim benefits that could make a real difference to them. Pensioners are the people who most need the benefits, but they are also least likely to claim them. That applies particularly to the group to whom the hon. Member for Banff and Buchan referred—people in their eighties. Theirs is a proud generation, a generation that has fought and lived through the war and we owe them a great deal. They are very stoic and very proud, and they find it difficult to apply for the benefits to which they are entitled. I think we all have an important job to do in speaking with one voice and saying to people of that generation that they have earned the right to claim those benefits. There should be no stigma, and we must make it as easy as possible for them to claim. I urge anybody who knows an older person whom they feel may be struggling to make sure they are claiming the benefits to which they are entitled. The Government have been doing a lot to simplify the application process and to make information more widely available, and there are also wonderful charities and organisations, including the National Association of Citizens Advice Bureaux, that are doing just that.
I am very proud to support the Government on these measures. There has long been great uncertainty about what will happen to the state pension. With the upratings and the triple lock, there is now certainty. There is a commitment to making the state pension the cornerstone of planning for retirement. As the Minister said, we cannot right the wrongs of the last decade in one fell swoop, especially as we are facing the most difficult financial situation in a generation, but the message that today’s measures and commitment send out is that people can plan for the future as they can have confidence in respect of their pension. That is very important.
The right hon. Member for East Ham (Stephen Timms) rightly said that we should consider the upratings in a broader context. I had the great privilege of serving on the Welfare Reform Bill Committee, and I think his description of the broader context of how we are supporting pensioners was not sufficiently generous. What is of most importance for pensioners and their families is both having enough income to live on and the safe knowledge that there will be an NHS for them when they need it. Elderly people are far and away the largest users of the NHS, and it is hugely helpful to them that this Government committed not to cut NHS expenditure—whereas the Labour party said it would do that, and would have done so in this Parliament. The fact that we are finally linking social care and the whole range of other services that elderly people and their families need to be able to have the quality of life and independence they want—
Madam Deputy Speaker (Dawn Primarolo)
Order. We are talking about pensions and benefits uprating. We are not having a wider debate on all the Government’s policies. The hon. Lady must refer specifically to the measures discussed by the Minister when introducing this debate.
Sarah Newton
The shadow Minister, the right hon. Member for East Ham, referred to the wider context of these measures, and I was merely responding to his comments. I shall, however, now desist from referring to the range of policies that the Government are putting in place to support elderly people and their families.
I support the Government’s measures. They constitute a huge step in the right direction and I am very proud that my Government are honouring their commitment and delivering a decent level of income for pensioners and people living with disabilities in retirement. I urge Opposition Members to desist from misrepresenting what the Government are doing, especially for people with disabilities and pensions, as that is creating fear and anxiety. That is why there are 100,000 signatories to the petition. If the people who signed it knew the truth, they would not have done so. It makes me very angry that people are contacting me because they have been needlessly frightened by Opposition scaremongering that, somehow, the Government are going to take away the benefits for disabled people and slash the benefits for pensioners. As the Minister has made clear today, nothing is further from the truth.
Let us have a constructive Opposition. The people of this country want a constructive Opposition who join the Government in tackling the difficult decisions of the day. They want the Opposition to stop this dangerous party political point scoring.
Sarah Newton
I completely disagree with the suggestion that we are targeting the most vulnerable people, but my question to you is: can you remind the House what happened to the gap between the richest and poorest people in this society under Labour?
Madam Deputy Speaker (Dawn Primarolo)
Order. I would love to answer that question, but I am prevented from doing so. The hon. Lady knows that she is not supposed to address the Chair in that way. In responding to her point, I hope that the hon. Member for North Ayrshire and Arran (Katy Clark) will come back to discussion of the uprating order.
Katy Clark
I am very grateful for that, Madam Deputy Speaker.
The impact of the changes to benefits and pensions uprating will be similar to the impact on wages that is being seen at the moment, whereby the incomes of the lowest paid are decreasing in real terms; the change from RPI to CPI means, as I have said, that the rate of increase in the incomes of those on the lowest incomes will reduce. I am sure that many of the hon. Lady’s constituents will come to see her to discuss benefit issues over the forthcoming period, and the impact of all this will become clear over a long period of time. It will have an impact on the communities we represent.
Welfare Reform Bill
Baroness Primarolo Excerpts(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jenny Willott
I am not going to give way.
Another concern is that it will take a while to move people and for accommodation to become available. Registered social landlords are concerned to know how long the process will take, so that they can enable a managed process. While that happens, there will be an impact on their income as arrears are likely to build up before alternative accommodation becomes available. Some RSLs have done work on this, including Riverside housing association, which is based in Merseyside. It has calculated that it will take it at least three years to move everybody around. [Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. I am having some difficulty in hearing the hon. Lady because of all the private conversations going on in the Chamber during this important debate. If hon. Members want to have private conversations, perhaps they could step outside the Chamber.
Jenny Willott
Thank you, Madam Deputy Speaker.
Will the Minister look at what an appropriate time frame would be and how long it is likely to take housing associations to move people around properties? Will she ensure that discretionary housing payments are available throughout that period so that people do not receive a large cut in their benefit while they are waiting for alternative accommodation to become available? This is a difficult issue and I know that the Government have made provision for those living in adapted accommodation and for foster carers.
Yvonne Fovargue
I, too, would like to address the issue of under-occupancy and say that the concerns of my local housing department, Wigan and Leigh Housing, are so strong that we have been in correspondence with Lord Freud. There are very few one-bedroom properties, private or council, in my local area, and it will take eight to 10 years to move the 1,450 to 1,800 people who, on the estimates, might want to downsize. During that period, it is estimated, on Lord Freud’s own research, that 35% of those people— [Interruption.]
Madam Deputy Speaker
Order. I am sorry to interrupt the hon. Lady, but I did ask Members of Parliament who wish to have private conversations to leave the Chamber, because those conversations are disrupting the debate. This is the second time of asking. Please listen to the debate.
Yvonne Fovargue
During that time, 35% of those involved are likely to end up in arrears. That is 2,540 residents, and 83% will struggle to find the extra money. A total of more than 6,000 people will find difficulty in meeting their commitments, on top of the increases in food and fuel prices, and the fact that the Government have imposed rent rises of 8% for 2012-13. What are the Government going to do? I hear the Minister say that discretionary payments will be provided until 2014, but that is not the eight to 10 years that my association says it will take for even the people who want to downsize. That association is extremely concerned that the burden will be pushed on to housing benefit, even when people move, and that hard-pressed local authorities will have even more problems.
Madam Deputy Speaker (Dawn Primarolo)
I now have to announce the results of Divisions deferred from a previous day. On the motion relating to the mayoral referendum for Liverpool, the Ayes were 324 and the Noes were 212, so the Question was agreed to. On the motion relating to the mayoral referendum for Nottingham, the Ayes were 320 and the Noes were 213, so the Question was agreed to. On the motion relating to the mayoral referendum for Leeds, the Ayes were 322 and the Noes were 212, so the Question was agreed to. On the motion relating to the mayoral referendum for Bristol, the Ayes were 321 and the Noes were 212, so the Question was agreed to.
Unemployment
Baroness Primarolo Excerpts(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Grahame M. Morris (Easington) (Lab)
I am grateful to the hon. Gentleman for giving way, but may I urge him to focus on the issue of joblessness rather than worklessness? I think that was an offensive remark, although I am sure that he made it unintentionally. We have Office for National Statistics data giving the numbers of vacancies and the numbers of people who are unemployed, particularly young people. In neighbouring constituencies, such as Hartlepool, which is just to the south of me—
David T. C. Davies
I take the hon. Gentleman’s point. I am focusing on the fact that there are jobs out there for some people and that there are some people who will not take jobs. I accept that there are not enough jobs and we would all like to see more.
One thing the Government can do—I think they are considering this—is look at the red tape imposed on small businesses. When I ran a small family business, I was reticent to take people on because if we took on a contract to move goods from A to B that lasted for nine or 12 months and took on some extra drivers to do that, we were stuck if we suddenly lost the contract because we found it very difficult to get rid of people. We ought to look at lifting the red tape so that companies can take a risk by taking somebody on. If that does not work out, sadly, they might have to let them go but a lot of companies would hang on to people if they could. It is not the public sector out there—things are a lot harsher. The hon. Member for Stretford and Urmston (Kate Green) is laughing, but I wonder whether she has ever tried to run a small business. We are also, I am glad to say, looking at the green taxes that have been levied on the big industries, because there is absolutely no point in hitting big manufacturing companies with carbon and environmental taxes if they are simply going to relocate to the other side of the world and make their goods over there, taking jobs with them and probably creating even more carbon as they ship back whatever it was they were making.
I have only 45 seconds left, but I must mention the right hon. Member for Birmingham, Hodge Hill, who was going to give way to me, but failed to do so, when he mentioned Clement Attlee. We all supported the grandiose schemes of—not Clement Attlee, sorry, Bevin, who was supported by Winston Churchill at the time, the Conservative leader—[Hon. Members: “Beveridge!”] Beveridge, sorry. Not Bevin, no, I accept that.
The right hon. Gentleman will know, however, that Beveridge’s plans were built on the back of a war loan from the United States, which had to be paid off for decades afterwards; that Callaghan’s Government ended in failure; that Wilson had to devalue the pound; and that his own, previous, Government were responsible for the biggest boom and bust in financial history—
Chris Evans (Islwyn) (Lab/Co-op)
Government Members are obsessed with immigration, when there is youth unemployment and young people are leaving school without the skills to fill the jobs that are going to come up. In future we will have to bring more people to this country to fill those jobs for which we do not have the skills.
Madam Deputy Speaker (Dawn Primarolo)
Order. Lots of Members are doing this: when they make an intervention or speak they have to face the Chair, not turn their back to it. So, if everybody could remember that, it would be very handy.
Mr Barron
Long-term youth unemployment has increased. In Yorkshire and Humberside, it increased from 7,160 in January 2011 to 13,895 in November 2011. That is an increase of 94% in long-term youth unemployment. In my constituency it has increased by 68.8%, while in the two neighbouring constituencies in the Rotherham borough it has increased by 125% and 80% respectively. We are talking about the life chances of young people in our constituencies being taken away from them. I have not seen such increases in youth unemployment since the 1980s, when my constituency and neighbouring constituencies suffered from the Government’s run-down of the coal industry, which not only put thousands of people on the dole, but struck off the life chances of people in education trying to get into work, as one of the major employers for young men in my constituency was systematically closed down. The consequences of that have run on not just for a few years, but for generations.
Madam Deputy Speaker (Dawn Primarolo)
Order. There are still 12 hon. Members remaining to speak. The debate must end by 5.36 pm. I am therefore reducing the time limit from now to four minutes for all subsequent speakers. That will just about get everybody in, unless there are lots of interventions.
Alec Shelbrooke (Elmet and Rothwell) (Con)
This debate is about unemployment and what can be done about it. However, the consideration of what unemployment means has been lost in some of our discussion. On Thursday, when travelling, we were delayed for an hour because someone had fallen in front of train in Alexandra Palace. I do not know whether it was a suicide attempt. At the weekend, we had the news in Leeds that a father had murdered his family and killed himself. Suicide is increasing and there must be a link with the economic situation. I hope that all hon. Members would deem that the personal disaster that it is.
I find it deeply offensive that Opposition Members mocked this afternoon every time Government Members said that we were trying to do something for the unemployed in this country. They are laughing at the unemployed. Do you know why you are laughing at the unemployed? Because the left has always used the unemployed as a political tool. If you keep people down, you try to use them as a tool. And what did you do in 13 years of government? You borrowed huge amounts of—
Madam Deputy Speaker (Dawn Primarolo)
Order. I understand the hon. Gentleman feels very strongly about this, but he is addressing me, the Chair. He will not use the word “you”; he will please refer to “hon. Members”.
Alec Shelbrooke
I apologise, Madam Deputy Speaker, but for 13 years, the Labour party bought jobs and did not lay a foundation for moving forward. It was left to this coalition Government—two of the major parties of this country coming together—to try to put in place the proper foundations.
The smiles of glee cannot be wiped off the faces of Opposition Front Benchers when there is bad economic news. That is reprehensible. Jobs cannot be bought by borrowing; economic stability that will last must be put in place. The difference between Government Members and Opposition Members is that we try to govern for the future of this country. Whether or not we are in power, we mean to ensure that we do what is right for this country. All the Labour party did was try to hang on to power, which is why we today face one of the biggest economic crises and the fastest growing level of unemployment in decades.
It is no good Opposition Members harking back to the ’80s and ’90s. We should not forget the very different circumstances, especially of the 1980s. The fact is that this Government have been dealt a terrible economic hand. I make the point again: it is not a Tory Government, as was said earlier, but a coalition Government of the two main parties of this country, which came together to sort this mess out. We have been mocked this afternoon. I have listened carefully and although the hon. Member for Bolton West (Julie Hilling) made a good speech, the most impassioned was by the right hon. Member for Rother Valley (Mr Barron)—he was the one who meant what he said. Other than that, unemployment has been used as a political football.
Kate Green (Stretford and Urmston) (Lab)
Let me make a few brief points. There is a lot of emotion and pain about rising unemployment, for the many reasons that were eloquently expressed by many Members from across the Chamber, including, as the hon. Member for Elmet and Rothwell (Alec Shelbrooke) said, my hon. Friend the Member for Bolton West (Julie Hilling) and my right hon. Friend the Member for Rother Valley (Mr Barron). We make those emotional points strongly not because we want to re-fight the class wars of the 1980s and 1990s, but because we want to ensure that we learn to understand the impact of letting unemployment rise unchecked without properly and effectively intervening. I therefore hope that Government Members will not misinterpret me when I say that one of the things that we should learn about—in addition to what happens when whole generations are lost, along with the insult and disrespect that they feel—is what that leads to, in terms of alienation and the kind of behaviours it can drive. When we look at the lessons from the interim report of the official inquiry into the riots, I hope that we will take note of the rising sense of alienation among our young people and ensure that our employment policies specifically address it.
I want to ask a couple of questions about the Work programme. It cannot resolve the shortage of jobs, but it can prepare people to be better able to take the opportunities if and when they are made available. It is a matter of great regret to many Labour Members that there is so little transparency about how the Work programme is performing.
I hope that the introduction of the wage subsidy, which it seems might be related in some way to the operation of the Work programme, will not mean a double payment to Work programme providers or a double cost to the economy. I hope the Minister can reassure us on that. I hope, too, that he will say something about whether providers continue to see Work programme contracts as viable. Providers in my region are certainly expressing the concern to me that the lack of jobs means that it will not be possible for them to carry on without coming back to have further discussions with the Government about the payment structure and rewards built into the contracts. We need to know just how Ministers see the economic and financial viability of the Work programme in these very different economic circumstances from those in which the contracts were designed and let.
The Minister should acknowledge that the payment structure in the Work programme does not reward people only for getting someone a job and keeping them there for two years. There should be interim payments all the way through. When we look at the way in which people are moving into employment, I am particularly concerned that we do not move them just to short-term, stop-go, sporadic episodes of employment, whereby Work programme providers pick up some of the payment and redesign their model to make it sufficiently economically viable for them to keep the contract manageable, but do not deliver the sort of long-term sustainable jobs that I think we all want.
Finally, let me support the comments of my hon. Friend the Member for Llanelli (Nia Griffith). The Government have tools at their disposal not to make the situation worse. I ask them to look urgently at two aspects of tax credits. The first is about the operation of the rule that, as my hon. Friend said, requires couples to work a minimum of 24 hours. We know that employers are not able to offer more hours in the current economic climate, and that rule is going to drive people out of the workplace. I also ask Ministers to look once again at the operation of the child care element of working tax credit. Aviva has shown us that about 32,000 women are leaving the workplace because they cannot make work pay. That is a false economy, and I hope Ministers will—
Living Standards
Baroness Primarolo Excerpts(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jessica Lee
I disagree completely with the hon. Lady’s comments. That sort of scaremongering about local children’s services is not helpful. [Interruption.] This Government have gone out of their way—[Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. I do not think we need any shouting across the Chamber, either from the Government or the Opposition Benches. We should listen to the debate—although this might be the umpteenth time that that has been said this afternoon.
Jessica Lee
This is a Government who have shown from the outset, within the first few weeks of their formation, a genuine commitment and a refreshing approach to how we deal with the most vulnerable children. I support what they are doing on that.
There are many other aspects that I do not have time to go through in detail. I mentioned empowering people and giving them opportunities. The Secretary of State has spent years in his work for the Centre for Social Justice examining what is wrong and where the difficulties are in society, and pinpointing the problems. He has been coming forward with radical proposals such as universal credit. We in this House may not agree on the outcomes of those policies, but it is that type of bold, progressive move that we must adopt. Such moves help families who have been trapped in cycles and years of poverty to move on, and give them opportunities that they might otherwise never have.
In the brief time that remains, I want to deal with business. Another aspect of this debate is women and how the Government are working to support them. There are many women in businesses in Erewash who are doing a fantastic job. I welcome recent policies such as establishing 5,000 mentors to help existing women entrepreneurs to develop their businesses. We all know that many women will have to struggle with child care and family commitments, but many start-ups begin at home, on laptops or round the coffee table. We need to support women much more, so I welcome those and other policies such as the Women’s Business Council.
Last week, I spoke in the House during the manufacturing debate. I happen to be the only female MP to have made a substantive speech in that debate, but manufacturing is very important to my constituency, so I want to say in conclusion that it is by supporting business, manufacturing and the policies to help families which I have mentioned that we will improve living standards.
Madam Deputy Speaker (Dawn Primarolo)
Order. I am going to reduce the time limit again. There are still 21 Members who wish to contribute to the debate, and the wind-ups are due to start in 55 minutes. Starting with the next speaker, the time limit will be four minutes.
Glenda Jackson (Hampstead and Kilburn) (Lab)
Yesterday, the Chancellor of the Exchequer, as for the last 18 months and assiduously supported by his Back-Bench colleagues, blamed our flatlining economy, constantly rising unemployment and failure of small businesses to obtain loans from banks on the enormous debts that this country was left by the previous Labour Government. His other argument was that the Labour Government had failed to mend the roof when the sun was shining. Those of us who had lived through 18 years of Conservative Government knew that it was not only the roof that needed mending, but also the foundations: our schools, our hospitals, our infrastructure, our social services.
The interesting point that the Chancellor of the Exchequer made yesterday was that our flatlining economy, constantly rising unemployment and consistent failure of small businesses to obtain loans was because, actually, the debt was even greater. What puzzles me is why the Chancellor of the Exchequer, after 18 months and with all the services that the Treasury provides to him, has clearly failed to make the numbers add up. Are we really left with the realisation that we have a Chancellor of the Exchequer who cannot count? I rather worry that we probably are.
The Chancellor then went on with the other canard that his Government have floated ever since they entered office—that this particular crisis is one in which we are all in it together, and that his economic polices will protect our state from the storm. His idea of protecting our state from the storm reminds me of the old Grecian city of Sparta, where the state was protected by exposing the most vulnerable on the harshest, coldest, stormiest mountain that could be found. That seems to be the example that his Government are following, because we simply are not all in this together.
The Secretary of State for Work and Pensions seemed today to state, with great sang froid, that the lowest three deciles in our society carry three times the burden of the top decile, and Government Members throughout the afternoon have stated that all our children must be protected from the terrible debt burden that they will have to face if we do not continue with an economy in which there is almost no growth—because we are all in this together.
It is highly unlikely that any child whose parent and/or parents sit on the Government Benches is in the situation facing many children in families in my constituency, where there is a strong possibility that, owing to the changes that the Government have introduced, most markedly to housing benefit, they will lose their homes. Indeed, they will lose not only their homes, but their schools—that is, those who are fortunate enough to have a place at a school in their area, because in my constituency, although apparently we are all in this together, there is a terrible dearth of school places. The dearth used to be in secondary schools; now it is in junior schools.
We hear from the Government all these wonderful stories about the free schools that will come in down the road, and about the academies that will be built, but they have not been built yet. It is simply not true, as we have heard. The Government’s changes—in relation to the abolition of the ring-fence around children’s centres and the supposed protection of Sure Start—are taking place throughout the country. I have mothers in my constituency who simply cannot find adequate child care—
Youth Unemployment
Baroness Primarolo Excerpts(12 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dawn Primarolo)
Order. For goodness’ sake, I am losing my voice. Mr Browne, you will not stand at the Bar and shout across the Chamber. Thank you.
Pensions Bill [Lords]
Baroness Primarolo Excerpts(12 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dawn Primarolo)
Order. May I help the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe)? I follow closely the question of women’s pension age and longevity, but he should not be addressing me—which is what he is doing when he says “you”—he should be addressing the rest of the Members in the Chamber. He has used that term several times now, and I gently ask him to observe the convention.
Malcolm Wicks
I cannot tell the hon. Gentleman how many of those people were still working when they died—although I want to say something later about the circumstances of that group of people.
Madam Deputy Speaker (Dawn Primarolo)
Order. I think the hon. Lady knows—and the Minister certainly does—that the debate has nothing to do with the future jobs fund.
Fiona O’Donnell
Perhaps we can have that conversation another time. The point is that the Government do not have the political will to do something about this. In opening for the Opposition, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East mentioned that it is not just the Prime Minister of this Government who does not “get” women; the whole team do not “get” women.
At Prime Minister’s questions two weeks ago, I watched the Prime Minister’s Parliamentary Private Secretary gathering—almost dragging—women from their seats in order to create a female halo around the Prime Minister. He and his Government need to understand that the reason he is turning women off has nothing to do with stage management or presentation. The reason is the policies—such as the one we are discussing—which are adversely and unfairly impacting on women. I urge Liberal Democrat Members in particular, who have at times pushed the Government on this issue, to go the whole hog tonight and back the amendment.
When a Government consider an inequality impact assessment, that is not political correctness gone mad—it is not just something the previous Labour Government left for the current Government. Rather, it is about good government and good decision making, so that when a Government make a decision, they are in full possession of the facts about how that decision will impact on people.
Madam Deputy Speaker (Dawn Primarolo)
Order. A number of Members still want to speak, and the Minister also has to respond to the debate. I intend to call him at about 7.20 pm, and I ask Members to be brief so that everybody can contribute.
Welfare Reform Bill
Baroness Primarolo Excerpts(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John McDonnell (Hayes and Harlington) (Lab)
I beg to move amendment 53, page 52, line 21, leave out clause 69.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following: amendment 39, page 52, line 22, leave out subsection (1) and insert—
‘(1) Section 138(1)(b) of the Social Security Contributions and Benefits Act 1992 (discretionary payments out of Social Fund) may be repealed, if the Secretary of State—
(a) publishes a detailed proposal for a replacement scheme, or schemes, based on wide consultation with relevant stakeholders;
(b) ensures that such a scheme, or schemes, will provide financial protection for applicants in an emergency or crisis, with the eligibility criteria for applicants specified in regulations;
(c) demonstrates the feasibility of such a scheme, or schemes, through a pilot or pathfinder process; and
(d) demonstrates how an independent appeals mechanism will be implemented.’.
Amendment 40, page 52, line 24, leave out subsection (2) and insert—
‘(2) In consequence of the provision in subsection (1), the office of the social fund commissioner may be abolished.’.
Amendment 54, page 128, line 28, leave out Schedule 8.
John McDonnell
Amendment 53 relates to the abolition of the social fund and addresses a number of the concerns that Members raised on Second Reading and in Committee.
The Government propose to abolish key elements of the social fund—the community care grants and the crisis loans—and to replace them with support through local authorities. The social fund, particularly the crisis loan, is critical to many Members in representing their constituents. That is the case not only in my constituency but across the country. These mechanisms support people in desperate need and at key times in their lives, and they are safety nets when people are facing essential expenditure that they cannot meet. My concern is that many organisations have made representations to the Government, Committee members and Members of the House urging that the social fund should not be abolished without robust and effective alternatives put in its place. The proposal should certainly be fully explored and tested before any change is made.
Social funds have been critical. The numbers of recipients of social funds and of applications demonstrate their importance. In 2009-10, there were 640,000 applications for community care grants, 3.64 million for crisis loans and 1.69 million for budgeting loans. Some 263,000 CCGs were awarded, 2.7 million crisis loans were awarded, and 1.2 million budgeting loans were awarded, so the expenditure was significant. They have a significant impact on individuals’ lives and in tackling poverty across the country. Some £139 million was spent on CCGs, £109 million net was spent on crisis loans, and £482 million gross on budgeting loans. This is therefore a large-scale activity that is vital to the most vulnerable and poorest members of our society. Even at this level of expenditure, however, the Public Accounts Committee concluded, having investigated CCGs, that only 32% of legitimate demand was being met.
I am extremely pleased that the Department for Work and Pensions is retaining budgeting loans and advance loans for alignment payments. However, I and many Members and voluntary organisations working in this field are unclear about what will replace the crisis loans and the CCGs. I am gravely concerned about the proposals to transfer responsibility to local authorities, which will be expected to design their own schemes for emergency support. Those responsibilities are being transferred at a time when local authority budgets are being cut. My understanding is that the funding will not be ring-fenced. In their consultation, the Government suggested that local authorities could also meet some of the demands with payments in kind—food parcels and second-hand furniture were mentioned as examples. I am also concerned that without clear guidance councils might be able unilaterally to introduce and force new conditions on those applying for emergency support.
I tabled the amendment because of the real danger that we will now be faced with numerous schemes being developed by local authorities, and that vulnerable people will lose this essential support. I am concerned that if the funding to local authorities is not ring-fenced, it will be diverted to other priorities.
Let me give the example of what happened to the playbuilder grant in my area. I chair the local play association, which I also helped to set up. When the ring fence was lifted, the Government initially sought to withdraw elements of the second year of the scheme. I am grateful that the Secretary of State for Education reinstated them and returned significant amounts to local authorities, which was a real breakthrough. However, because the money was not ring-fenced, much of it unfortunately appears to have been diverted into other areas of council expenditure, rather than going to improve play for children. That is just one example, from the most recent period, of funds that were not ring-fenced being allocated to local authorities and then spent for purposes other than those that the Government had intended. The Minister has agreed that allocations will be based on social fund spending, which will be regularly reviewed and the data updated. However, my concern is that if money is not ring-fenced in the first stages, it will be creamed off in the early years to be spent elsewhere.
Madam Deputy Speaker (Dawn Primarolo)
Order. I do not think that the hon. Member for Witham (Priti Patel) is giving way; she has concluded her remarks.
Jim Shannon
I am not against the principle of welfare reform, but I am against how it affects those people who regularly come to see me. Not a week passes in the offices that I look after in which we do not see people who need crisis loans, and we hear from people who are under financial pressure all the time. With respect, I sometimes wonder whether some hon. Members have ever seen a social fund or crisis loan form. Do they know what it is like to be in financial crisis and under pressure?
I support the amendments for a number of reasons, and I hope they will be put to the vote. What happens in the House today will be sent to the Northern Ireland Assembly for its endorsement. On the principle of parity with the rest of the United Kingdom, I expect the Northern Ireland Assembly to endorse the decision of the House. The measure will then become the law for Northern Ireland as well. So if we feel concerned about it, we must oppose it here today. That is what the people I represent tell me.
Most of us are probably affluent enough to be able to borrow money from the bank if we are under financial pressure, but the people who come to me in my office seeking crisis loans through the social fund cannot do that. They do not have the option of the credit union either, because of the credit union methodology. I fully support credit unions. Everyone on the Opposition Benches who has a particular knowledge of credit unions would support them 100%, as we have in the past, but they are not an option for people in financial crisis, as the Government have suggested.
Welfare Reform Bill
Baroness Primarolo Excerpts(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dawn Primarolo)
Order. I say to the hon. Lady, and remind all hon. Members, that any interventions or contributions in the Chamber are supposed to address the whole House and that she should keep an eye on the Chair. Otherwise, she will not know when I am trying to get her to sit down.
Guto Bebb
My hon. Friend makes an important point. It is something that was reflected in the comments of the hon. Member for Edinburgh East, who, in relation to the aim of our welfare proposals to support people into micro-jobs, was quite disparaging of that type of job. Indeed, she stated on more than one occasion that we should consider the “type” of job that people will be able to take up as part of our reforms. I think that that is a symptom of the problem.
In my constituency of Aberconwy we have worked extremely hard to try to turn the tourism industry from something that is seasonal to something that is year-round. We have put a lot of emphasis on trying to ensure that the seaside resort of Llandudno is no longer somewhere that attracts people only for three months in the summer. By investing in conference facilities and so forth, we have tried to ensure that the hotel and service industries supporting tourism in the town work throughout the year. We have seen a huge growth in employment in the tourism sector in Llandudno over the past 10 years, yet that growth has been filled largely by people from eastern Europe who are willing to work hard.
From my point of view, the incredible sadness is that those individuals who have gone into what some Opposition Members would call “poor jobs” have ended up working themselves into positions of responsibility and management. I despair when I go out knocking on doors during election campaigns and meet people in the town who have lived there all their lives but have not grasped those opportunities. They live in a system that has allowed Opposition Members to forget their consciences because they have been able to say that they are providing money. There is more to the welfare state than providing money: we have to provide aspiration and a concept of self-reliance. We have to send out a message not just as a Government, but as a society, that work not only has to pay, but that it is the route to better oneself and one’s family. That seems to have been missing from the Opposition’s contributions to the whole debate.
Finally, it is also worth making quick reference to the comments made by the hon. Member for Bridgend (Mrs Moon), who is no longer in her place. She said that she was sincerely of the view that the Department for Work and Pensions should make no effort to hassle and harass people who are unable to take up opportunities to work because of child care issues and so forth. I was intrigued by the use of the word “harass” in relation to trying to support people back into employment. One aspect of the Bill that we must understand is that it is not happening in isolation, but hand in hand with investment in the Work programme, which will try to ensure that people are not left to fester on benefits or have an existence on welfare. The Government are trying to reform the welfare state, but we are doing so in a way that tries to support people back into employment, and that aspiration should be shared by all Members of the House.
New clause 3 makes an important point. I disagree with it as it has been tabled, but I think that we will need to look very carefully at how we deal with free school meals in the system, because it is an issue of real concern to parents. Yes, of course they want to take the opportunity to have a job, and of course they are reassured by the fact that the reforms we are putting in place will make work pay, but as part of that, if they have three or four children, how we deal with free school meals is clearly appropriate and does not work against the proposals to ensure that work pays.
I fail to understand why the Government are being castigated for not providing enough detail in the legislation. The reason that we have not yet done so is that this is an incredibly difficult proposition to get right, as Members on both sides of the House have agreed. I see nothing wrong with saying that we will endeavour to get it right and that we are going to ask the experts to look at the issue on our behalf. I am reassured by the Minister’s comments in Committee, when he stated categorically that our aim was not to make any family currently in receipt of free school meals worse off.
Amendment of the Law
Baroness Primarolo Excerpts(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr John Leech (Manchester, Withington) (LD)
It is a pleasure to follow the right hon. Member for Birkenhead (Mr Field), who made some very measured comments.
I am delighted to be able to contribute to the debate, and to welcome a number of measures that will be good for Manchester and good for the people of Manchester. I must confess that I approached the Budget with a certain amount of trepidation because of the difficult decisions that the coalition Government had already made in order to deal with the mess with which the previous Government left us. However, I was also well aware of all the work done in the Treasury and between Departments to produce a Budget that would stimulate growth and help to kick-start the economy.
The question is whether the Budget has delivered for Manchester. Before it had even been announced, Manchester Labour councillors tabled a motion which is to be dealt with in the council tomorrow, stating that the council
“notes the damaging impact of George Osborne’s budget on the people of Manchester.”
It was pretty clear that, regardless of what the Chancellor announced, Labour would try to spin it as terrible for Manchester, just as it has tried to absolve itself of any blame for the financial mess in which the country finds itself and the unnecessary and vindictive political cuts that it has proposed in Manchester.
Of course, we would expect the Liberal Democrat opposition in Manchester to take a more positive view of the measures in the Budget. We would, perhaps, expect Simon Ashley, the leader of the Liberal Democrat opposition on the council, to say something like
“This is good news for… Manchester.
It’s a double win because not only does it give incentives for new businesses to develop at Airport City, it also generates income we can use to encourage development across the whole of Greater Manchester.”
However, he did not say that, although he has warmly welcomed the good news of the enterprise zone for Manchester. That comment was, in fact, made by Richard Leese, the Labour leader of Manchester city council, who, interestingly, is one of the signatories to the Labour motion that condemned the Budget even before the Chancellor had come to the Dispatch Box to deliver his speech. Yes, even the Labour leader of the council has been forced to admit that the Budget has delivered good news for Manchester.
Under the last Labour Government, private sector job growth in Manchester lagged massively behind that in the rest of England between 2003 and 2008, at less than half the average percentage. That is set to change under the coalition Government. Manchester airport was a beneficiary as one of the first enterprise zones, and up to 13,000 new jobs will be created in the city—more than five times as many as there are unemployed people in my constituency. At the same time, the Chancellor has given the go-ahead for the Ordsall Curve rail project, which will increase rail capacity and improve journey times and encourage investment, growth and job creation in Manchester. During 13 years in government Labour failed to deliver that vital infrastructure project, but it has been delivered in fewer than 11 months by the coalition Government, which is proof of the Government's commitment to investing in our rail infrastructure. Moreover, an extra £873,000 will come to Manchester to help to repair our damaged roads. That will go a long way towards dealing with the thousands of potholes in our streets.
All those measures will help to get people in Manchester into work and protect existing jobs, and the additional 40,000 apprenticeships that have been announced will help more Manchester residents to gain the skills and experience that are needed to grow the economy further.
What about those surviving on pensions? One of the lasting memories of the previous Labour Government was the derisory 75p rise in the state pension. For all their talk, the last Labour Government failed to deliver for pensioners. When the coalition Government were formed, there was a real commitment to give a better deal to pensioners. Pensions have been re-linked to earnings—which was unaffordable, according to Labour—and the triple-lock guarantee will ensure that there is never a repeat of the disgraceful 75p rise. Instead, as a result of this Budget, pensioners will receive an extra £4.50 a week, taking the pension above £100. That is in addition to the decision to make permanent the increase in the excess cold weather payment to £25 for every week of excess cold in the winter. My only objection is that the Chancellor has decided to follow Labour’s plans and not to make permanent the temporary increase in the winter fuel allowance. In my view, that is a mistake and should be looked at again.
Finally, the Budget has also delivered on the coalition promise to take some of the lowest-paid out of paying tax altogether. The increase in the personal allowance by £1,000, and the announcement of a further increase next year, will scrap income tax for more than 1 million of the lowest-paid people. That puts the coalition on track to deliver a key Liberal Democrat manifesto commitment: to increase the personal allowance to £10,000. That has been welcomed by the Institute for Fiscal Studies as “progressive” and by The Times leader column for increasing “the incentives to work.” These changes mark a stark contrast to the Labour Budget that abolished the 10p tax rate, increasing the tax burden for some of the lowest paid.
Overall, the Budget is good news for Manchester—
Graeme Morrice
And 50% of those people continued in full-time employment.
The Centre for Cities report also said that most jobs had simply been displaced from elsewhere and so they may bring short-lived prosperity to one area at the expense of another. That point was ably made earlier by my hon. Friends the Members for Wolverhampton North East (Emma Reynolds), for Kilmarnock and Loudoun (Cathy Jamieson) and for Newcastle upon Tyne North (Catherine McKinnell). Given the Government’s professed enthusiasm for efficiency it seems bizarre that they should pursue such an inefficient means of creating new jobs, but when it comes to unemployment the Tories continue to be stuck in a time warp. They believe that the Thatcherite policies of the 1980s are the solution to today’s job crisis, but we know they are no more the solution now than they were then, when millions were left on the unemployment scrap heap.
The most alarming aspect of unemployment today is the UK’s high level of youth unemployment. As Members will know, the number of unemployed 16 to 24-year-olds increased by 30,000 in the last quarter to reach nearly a million—some 20% of all young people—which is the highest figure since comparable records began in 1992. The Government have been pretending that this is somehow not their problem and that they are not responsible for that record high, but let us look at what they have done since taking office last year. They have axed Labour’s future jobs fund—a criminally short-sighted decision—they have axed the education maintenance allowance, thereby disincentivising young people to stay in further education and improve their skills, and they have axed other employment schemes that were aimed at supporting into the workplace young people who have been out of work for more than six months. Let there be no doubt that this Tory Government and their Lib-Dem pals are the ones who are responsible for the record levels of our young people out of work.
Youth unemployment in my constituency stands at nearly 1,000, which is certainly not the worst figure in the country by any means, but every unemployed young person is one too many. I know from speaking to young people in my area that many feel a sense of hopelessness about their situation. They feel that little is being done to support them, that no one in Government cares about their plight and that their future is bleak. Once again, a whole generation of young people is being cut adrift by the dogmatic policies of the Members on the Government Benches.
The Government’s work experience placements will not improve young people’s employment prospects in the same way that six months of real work would. The Department for Work and Pensions has already said that
“the target group for work experience will be a very small proportion of young claimants aged 18-21”
and that it is not about guaranteeing young people a permanent job. The extra 12,500 apprenticeships a year announced in the Budget are woefully inadequate given that nearly a million young people are out of work and need help.
The Federation of Small Businesses has said that the Chancellor’s Budget did not go far enough to incentivise job creation, so action on job creation is another clear dividing line between the Government and the Opposition. The Government stick with their reckless cuts and do nothing to address the record level of unemployment, particularly youth unemployment, that they are presiding over.