Housing Costs
Debate between Eilidh Whiteford and Anne Begg
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I, too, commend the hon. Lady and the Committee for this valuable report. Does she agree that the cross-party efforts to mitigate fully the impact of the bedroom tax in Scotland would be greatly aided if the UK Government were to allow the Scottish Government to raise the threshold for discretionary housing payments? Can she suggest how Government intransigence on this issue might be tackled?
Dame Anne Begg
We mentioned that in the report, because obviously the situation is different in Scotland and needs a solution there. Anything that will help to ensure that the Scottish Government are in a position to implement their policies is welcome, but I also know that there are discussions going on in Scotland about how else the situation can be mitigated for the people who live there.
Fairness and Inequality
Debate between Eilidh Whiteford and Anne Begg(10 years, 3 months ago)
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Dr Whiteford
My hon. Friend makes a useful point.
It is also important to note that those fiscal levers are not the only tools at the Government’s disposal for tackling inequality. Addressing the underlying drivers of wage inequality requires sustained effort and a fresh mindset about the policy choices that we can make to further a more equitable model of economic growth and to build a fairer, more inclusive and less divided society.
My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) outlined some of the positive ways in which equitable growth could be pursued in Wales. He opened the debate by drawing our attention to the geographical distribution of inequality across the UK, and argued convincingly that while much of Government policy was oriented towards the needs of London and its surrounds, the consequences of that for the other nations and regions of the UK could be dire. Many of us have paid a heavy price for London’s prosperity.
It is notable that, with a few honourable exceptions, the speakers in today’s debate have come from Wales, Scotland and Northern Ireland. Perhaps that shows how seriously the issue of inequality—which is distinct from, but related to, poverty—is taken in these islands. It is obviously a pertinent issue in the context of Scotland’s referendum later this year, as we weigh up the two futures that are opening up before us and consider not only the benefits of making policy decisions based on our own values and aspirations but the uncertain consequences of continuing along the path that the UK seems determined to follow, with wealth and opportunity being increasingly concentrated among a small elite.
Dame Anne Begg
Obviously, if we are going to pursue a more equal society, we will have to ensure that those at the top do not get richer. What are the SNP’s policies for ensuring that those who are already rich become poorer in order to narrow the income gap?
Dr Whiteford
Had the hon. Lady been here for the earlier part of the debate, she would have heard some back-and-forth chat about tax rates and such like. I will not rehearse those arguments. For Labour, there still seems to be a zero sum game in which rich and poor have to share out a very small cake. The fundamental point that my hon. Friend the Member for Carmarthen East and Dinefwr made earlier was that if we want to tackle inequality, we need to grow the economy. Once we have done that, we will be in a much better position to tackle inequality and poverty alike.
Food Banks
Debate between Eilidh Whiteford and Anne Begg(10 years, 4 months ago)
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Dame Anne Begg
I might give way later, if I get through my speech quickly.
The number of organisations operating food banks is growing, as is the number of food parcels that are distributed each week. Before 2010, there were some people who required food parcels but their numbers were tiny and the food parcels were a stopgap measure to get them over an immediate crisis. However, in the first six months of this financial year, 27 tonnes of food were distributed across Aberdeen by just four of the organisations operating food banks. That figure does not include the food distributed by the Trussell Trust. Something must have changed between the financial crash and today. One thing that has changed is the Government; another thing is the Government’s social security reforms. The attitude of the Government towards those on welfare has changed, too. So even in relatively affluent areas such as Aberdeen, families are depending on food parcels to eat.
Many organisations point to failures in the benefits system as the primary cause of the increase in the use of food banks. Oxfam and Church Action on Poverty thought the situation serious enough to encourage their supporters to lobby their MPs and ask them to lobby the Work and Pensions Committee to look into the link between the increase in the use of food banks and the increase in the use of sanctions, as well as the increase in long delays and mistakes in benefit payments by Jobcentre Plus. A large number of MPs on both sides of the House—reflected by the large number in attendance here today—passed on their constituents’ concerns to us on the Committee.
The belief that much of the problem is caused by errors in benefit payments is shared by Citizens Advice Scotland, which reports that 73% of the people using food banks cite problems with their welfare payments, that 30% are experiencing delays in getting the payment to which they are entitled, and that 22% are the subject of jobseeker’s allowance sanctions. However, people who have been sanctioned make up less than a quarter of those who are using food banks. All too commonly, people are using them because they have fallen on hard times through no fault of their own. People are still falling ill and losing their jobs as a result, only to face a long delay in getting any benefit. Those delays have got worse in recent years. It also seems to be taking longer and longer to get benefits reinstated once they have been stopped, even by accident. Cuts are also being made to the benefits that people get, including the most pernicious of all—the bedroom tax—and this is all before the largest change of all, universal credit, has been introduced. So things could get worse.
We should be breaking dependency, not making it worse. The Government need to recognise that the increase in the use of food banks is no accident, that it is not just a result of the economic downturn, and that it is not happening just because the food banks are there. It is a result of the policies being actively pursed by the Government. The use of food banks will not drop until the Government realise that and do something to ensure that those who have fallen on hard times are able to feed themselves, rather than having to rely on charity.
Pensions Bill
Debate between Eilidh Whiteford and Anne Begg(10 years, 11 months ago)
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Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I have followed this debate closely and it is important to say from the outset that simplification of the state pension system is an entirely laudable aim and that I think there is a great deal of consensus throughout the House on the move towards a more inclusive pension system.
It is also important to appreciate, however, that our starting point is one of the lowest levels of state pension provision anywhere in Europe. We have relatively high levels of pensioner poverty and pensions have consistently fallen behind and failed to keep pace with earnings over a number of decades. We also still have deep and persistent inequality not just between women and men, as has been mentioned, but between those who have occupational pensions and those who have not. Far too many people who worked very hard throughout their working lives still end up living on the breadline in later life. Meanwhile, the challenges of an ageing population and increasing life expectancy drive the need for reform.
I have talked in the House a number of times about the dramatic social and geographic disparities in life expectancy and healthy life expectancy, and I do not plan to rehearse those arguments again this evening. The bottom line, of course, is that we need pensions that are affordable and sustainable and fair to pensioners. Our pension system also has to provide us with long-term stability and security. When people look decades ahead, they need to know what they are likely to get back and that the sands will not shift every time we play musical chairs in the House of Commons.
In his opening remarks the Secretary of State made much of his so-called triple lock, but those of us who saw the Financial Times this morning could be forgiven for thinking that the pensions Minister has let the cat out of the bag by acknowledging that the triple lock is a short-term fix and that there is no certainty that it will continue beyond the life of this Parliament or that the value of the single-tier pension will keep pace in the longer term, given that all the modelling that has been done is predicated on the triple-lock guarantee.
Although today’s debate has focused heavily on those people who will gain in the short term—some certainly will gain in the short term, particularly, as has been said, the self-employed and those receiving a pension for the first time—there will be losers as well as winners in the transition. It is extremely difficult to work out which are which, because the side of the line on which an individual will fall depends on a wide range of factors, including how long they live after retirement, which few are able to predict.
We have heard a lot less this afternoon about the longer-term impact of the scheme, yet most commentators agree that it is less generous than that which it replaces and that many people, including most of those born since 1970, will lose out. The most positive claim that has been made for the single-tier pension is that it is undoubtedly less complex than the scheme it replaces, but if the new scheme has the virtue of simplicity, the transition process certainly does not.
Last week, the Association of Consulting Actuaries, the National Association of Pension Funds and the Association of Pension Lawyers briefed the all-party group on pensions at a meeting chaired by the hon. Member for Gloucester (Richard Graham). One of their chief concerns was the complexity of the transition process and, in particular, the extremely tight time scales within which the Government are seeking to enact the Bill and its attendant regulations. Establishing the foundational amount for everyone with a national insurance contribution record who has not retired by 6 April 2016 will be a huge and challenging project in itself, and there are real concerns about how the end of contracting out will be managed within the proposed time scale.
Dame Anne Begg
I am interested in the hon. Lady’s comments on the complexity of the transition. Will she clarify for those us who live in Scotland what that complexity would mean for the SNP’s plans for the state pension, should there be a vote for independence?
Dr Whiteford
The most important point I can make in response to the hon. Lady is that Scotland is spending a lower proportion of its GDP on social protection than the UK as a whole, and that has been the case for every one of the past five years. Moreover—I have made this point several times in the House—Scotland has lower life expectancy by almost two years, and that is not simply a geographical disparity; it goes across every social class. To my mind that means that we have to look at tailored solutions for Scotland and understand that the scheme will not result in equal benefits for people who are likely to live two years less than the average in the UK.
Dame Anne Begg
The hon. Lady said that it would be complex to find out people’s national insurance contributions in the UK, but surely it would be even more complex for Scotland to negotiate that as an independent country. Does she envisage that happening easily?
Dr Whiteford
I do not think that that is beyond the wit of Members in this Chamber or those in Holyrood. We have a lot of able people who will be able to do that. In fact, as we move into a new system, actuaries and pension fund managers are raising pragmatic questions about how the change will be managed. A new, simpler system will be significantly easier to unravel and manage than the current one, which is why I have said that I welcome the general direction of travel.
On the fundamental issue of uncertainty, the key thing arising from the pensions Minister’s intervention in this morning’s Financial Times is that there is no certainty. We do not know how the modelling will play out or what our decisions will mean for the future.
Universal Credit
Debate between Eilidh Whiteford and Anne Begg(11 years, 2 months ago)
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Dame Anne Begg (Aberdeen South) (Lab)
On 22 November last year I was privileged to launch in the Chamber a Work and Pensions Committee report entitled “Universal Credit implementation: meeting the needs of vulnerable claimants”. That day I was the only one officially allowed to speak. As a result there are a number of hon. Members who are—I was going to say frustrated—itching to speak. I hope they will have the opportunity to do so now.
That day showed that there was huge interest in various aspects of universal credit and its implementation, so it is excellent that we have the chance to have this debate today, especially as the Government have now published their response to that report and we can look in more detail at the issues raised by the Select Committee. I expect hon. Members will also raise their own issues that we did not examine. It is a good time to revisit the findings of our report to see whether, three and a half months on, the Government have made progress in addressing some of our concerns. This has become more urgent because the first claimants in the pathfinder areas will begin to be assessed for universal credit in just over a month, and the roll-out for new claimants begins in October this year.
Universal credit is the Government’s flagship welfare reform. Everyone of working age who claims one or more of the many income-related benefits will, over the next four years, be moved on to universal credit. Some 8.3 million households will be affected once it is fully rolled out. Not all of them will be on the new universal credit, but they will be affected in some way, so if universal credit does not work in the way that it is designed to do or if the IT fails to deliver, it has the potential to cause a great deal of stress and anxiety in families who depend on the state for some or all of their income.
The size of the Government’s ambition in introducing universal credit became clear to the Select Committee as we began to receive evidence. Such a large-scale reform of the benefits system has so many aspects to it that we realised we would not be able to cover all the provisions in detail. We did not have time to explore fully all the incentives and disincentives to see which families would be better off and which would be worse off, who would lose money and who would manage to survive. Other questions were raised with us that we did not deal with in as much detail. Would families with high child care costs be better or worse off, for instance?
We did not have time to interrogate properly how robust the Government’s often repeated assertion is that under universal credit all people would be better off in work than not in work under all circumstances. Some doubt has been cast on whether that will be true. We know that under the system there will be notional losers, although the Government have promised that there will be some cash protection. We were aware, for instance, that second earners in the family may not mean that the family is better off under universal credit. We were aware also that families with particularly high child care costs might not be better off once those are factored in.
The reason it is often very difficult to reform a complex welfare system, of the kind we have in this country, is that there can often be unintended consequences, and I am sure UC will be no different. I am fairly sure that Ministers will admit that that is bound to be the case. Even if everything goes incredibly well, there will be unintended consequences. The real test for the Government will be how adept and quick the Department for Work and Pensions is in dealing with the inevitable blips; how it irons out the kinks, how it ensures that families do not face difficulties while it sorts out any problems and how quickly it responds when the inevitable difficulties arise.
It would have been impossible for the Committee to give detailed consideration to every aspect of universal credit, so we decided to concentrate on its implications for vulnerable claimants, which explains the report’s title. Not all benefit claimants are vulnerable; far from it. It is worth remembering that most people of working age who receive benefits are in work and are not dependent on the benefits system for all their income. However, it is probably true to say that all vulnerable people are benefit claimants. It is therefore imperative that the Department takes account of that and does not design a system that can be accessed only by people who can manage their lives fairly well. It must also be easy to navigate for someone who finds life a struggle. I mean someone who struggles to pay their bills, struggles to follow basic written instructions, struggles with poor health, struggles to use public transport, struggles to heat their home or struggles to put a nutritious meal on the table—someone who just struggles with daily living. Those are the people who face a complete overhaul of the benefits they receive. It was to those who might find the introduction of universal credit a real challenge that the Committee paid most attention.
The biggest barrier a vulnerable claimant might face is making a claim in the first place, because the Government are determined that universal credit will be an online benefit—“digital by default” is the phrase they use. The application will be made online, any change in circumstances or other information will have to be reported online, as will any change of earnings, but the sting in the tail is that the information might come from Her Majesty’s Revenue and Customs, so obviously the information has to get from HMRC to the DWP computers.
The most important aspect of universal credit’s delivery will be the IT. If it goes wrong, the whole system will grind to a halt. However, a digital system, in order to work, requires users—in this case the claimants—to have access to, and be able to use, the internet. There is still great concern that the people who need to apply for universal credit will not have access to the internet, or indeed to a computer, in order to make the claim in the first place and that, for those who are not computer literate, there might not be sufficient help for them in the right place.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The hon. Lady makes an important point about accessibility. Does she share my concern that 36% of low-income households in Scotland do not have internet access at home?
Dame Anne Begg
The figures the Committee received vary greatly. We were told that as many as 80% of claimants might struggle with some of the IT and that as few as 20% would not have internet access. Although some people might be able to use Facebook and other social media sites, that is quite different from making a claim that, by its nature, has to include very personal information. Many people who do not have a computer at home might not be able to use computers in the public domain, such as those in internet cafes, because of security issues. There are many questions about access to computers and IT.
Housing Benefit (Under-occupancy Penalty)
Debate between Eilidh Whiteford and Anne Begg(11 years, 2 months ago)
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Dr Whiteford
I will not give way.
Although the mismatch between the housing stock and tenants’ needs is the glaring flaw in this ill-thought-through and unworkable policy, the under-occupancy penalty will have serious unintended consequences for social landlords who depend on reliable and steady flows of rent to maintain their credit rating, keep rents low, and reinvest in new and existing properties. I have repeatedly raised with Ministers the impact of welfare reform on social landlords, but to date Ministers have repeatedly failed to take seriously the concerns of housing associations and others about the impact that the bedroom tax and the shift to universal credit will have on social landlords’ finances. Last week, in response to a question from the hon. Member for Glasgow North (Ann McKechin), the Under-Secretary of State for Scotland said that he had met social housing providers in Scotland and satisfied the concerns of housing associations and local authorities. However, since then, the Convention of Scottish Local Authorities and the Scottish Federation of Housing Associations have written to him to make it abundantly clear that they are not satisfied, and that their concerns have in no way been assuaged. The president of COSLA has made it absolutely clear to the Government that all local authorities in Scotland continue to have deep concerns about the 14% and 25% penalties associated with under-occupying. Those key stakeholders recognise that the bedroom tax penalises people on low incomes who cannot move to smaller properties. They are concerned that no safeguards are in place to protect the finances should tenants fall into arrears.
Dame Anne Begg (Aberdeen South) (Lab)
The hon. Lady is right to point out the mismatch between housing stock and housing need. Many people who are building houses in both the private and social sectors build two-bedroom or larger houses because that makes more sense economically than building one-bedroom properties. What are the Scottish Government doing to encourage house builders in Scotland to build one-bedroom properties to address that mismatch?
Dr Whiteford
The hon. Lady makes a good point about the practicalities of building one-bedroom houses as opposed to two-bedroom houses. On the Scottish Government’s record on building houses, 19% of the socially affordable houses built in the UK in the past five years have been built in Scotland. The Scottish Government have built 34,000 affordable homes since they came to power. Given the lack of progress in the past, that is important.
Scotland (Poverty)
Debate between Eilidh Whiteford and Anne Begg(12 years, 5 months ago)
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Dame Anne Begg (Aberdeen South) (Lab)
It will be difficult to follow my two colleagues, who have explained the scourge of poverty in terms of the proportion of people living in poverty in Scotland and the shame that that brings on us as a nation. I congratulate my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) on securing this debate.
I shall confine my comments to a group of people who, by definition, find a much higher proportion of themselves living in poverty—namely, those who are disabled or have a disability. All the problems that, as we have already heard, face families living in poverty tend to be amplified if one of the members of those families happens to have a disability. We know that 21% of families who have one person with a disability living with them are living in poverty compared with 16% of the general population. That figure increases for children: 25% of children living in families with a disabled person live in poverty compared with 18% of children living in families with no one who is disabled.
The concern that I want to get over to the Minister, and to which I hope he will respond, is that those figures are bad enough, but the actions of this Government are about to make matters far worse. Despite the impression given in the tabloids by stories of benefit scroungers and people who have languished on incapacity benefit or disabled benefits for years, employment among disabled people had actually improved over the last 10 years of the Labour Government. The employment gap between those disabled and those non-disabled in 2002 was 36%. By 2010, by the time the Labour party lost power, that gap was down to 29% and all the indicators were that it was improving, so many disabled people were in work. However, it is still the case that anyone with a disability is far less likely to be in work than those who do not have a disability, and therefore dependent on benefits.
What happens to the benefits system? What changes will be made to save the £18 billion that the Government are trying to strip out of the welfare system? Those changes will impact even more directly on those who are the most vulnerable—those who have a disability. What is of concern is not just that individuals and their families will face reduced incomes but, as my right hon. Friend the Member for Stirling (Mrs McGuire) said, the reduction in the money that is available to be spent in those communities and the fact that the communities themselves will become even poorer than they are at the moment.
My hon. Friend the Member for Ayr, Carrick and Cumnock mentioned the report from Sheffield Hallam university, written by Christina Beatty and Steve Fothergill, called “Incapacity Benefit Reform: the local, regional and national impact”. That report makes incredibly interesting reading. It shows not only that there is a concentration of people with disabilities who are living on disability benefits, whether that is incapacity benefit, employment and support allowance or disability allowance, but that it correlates exactly to the areas of high unemployment and the areas of industrial decline. So it comes as no great surprise that, of the top 20 districts where the share of adults claiming incapacity benefit is the highest, three of them are in Scotland. Glasgow comes in at 12.3%, but is followed closely by Inverclyde and West Dunbartonshire. In the bottom 10 districts, of the areas with the least number of people on incapacity benefit not a single one is in Scotland and that in itself acts as a stark reminder that there are areas in Scotland, particularly west central Scotland, that have suffered not just the depression and lack of jobs caused by deindustrialisation but, resulting from that, an increase in the number of people who not only suffer ill health and disability but, as a consequence, are claiming benefit. Any cuts to those benefits will fall particularly heavily on those areas.
The figures in the work that Christina Beatty and Steve Fothergill have done are UK-wide, so we must assume that 10% of those people live in Scotland. Those figures show that, as a result of Government changes already announced, in Scotland alone, 97,000 fewer people will be claiming incapacity benefit. Even more worryingly, 58,000 will be removed from benefits all together. How will that happen? The last Labour Government had already introduced changes to reform incapacity benefit and to move people on to the employment and support allowance. The new Government have speeded up that move and have also cut down on the amount of money to be spent. That is where a great deal of the savings will come from.
Dr Whiteford
The hon. Lady’s constituency, like my own, was part of the pilot scheme that trialled the new work capability assessment. My view is that it has not been working and instead has been causing great anxiety and distress to disabled people. More importantly, the successful appeal rate is out of all proportion to any system that is working. Something like 70% of appeals are proving successful, where people have support from advocacy agencies. That system should go back to the drawing board, but I am also concerned that the burden will start falling even more so on unpaid carers and other family members for people who have been taken out of the system. Does the hon. Lady share my concerns on that?
Dame Anne Begg
Those concerns are shared by all of us. It has been very difficult to get robust figures about the numbers who are being migrated from incapacity benefit on to employment and support allowance, and how many of them will fall out of the benefits system all together or find themselves on jobseeker’s allowance as an alternative. The early indication from the pilot that took place in both Aberdeen and Burnley would suggest that about 30% of those on incapacity benefit will move to JSA. That one single move is immediately a loss of £20, or slightly more, a week for that family. We do not know whether those figures are robust but we do know that, for new claimants, it is far less than that. Part of the reason why the tabloid press has managed to create the impression that there are lots of people languishing on incapacity benefit or disability benefit who do not deserve it is that they conflate the proportions who are new claimants getting the benefit with those already on the benefit but who have been migrated across. Potentially, 30% will be losing £20 or more a week.
We also know that the Welfare Reform Bill proposes to limit contributory employment and support allowance to one year. In areas such as mine and the one represented by the hon. Member for Banff and Buchan (Dr Whiteford), where it is more likely that people will live in a household with some income, because unemployment is relatively low, so a partner, husband or wife might be working, those people will lose benefits altogether because they will not qualify for the income-related benefit that would replace it. That is why 58,000 are likely to fall out of the benefits system completely. These are people who have paid into the system all their lives. They thought that, when things turned difficult for them, when something happened and they were not able to work anymore, the welfare state would be there for them and national insurance would work as the name suggests—as an insurance that they would get that contributory benefit. This Government have decided that that is not good enough and that this group will qualify only for employment and support allowance for a year. In a year, someone might have managed only to get a diagnosis. They might have only just started their cancer treatment, they might still be getting worse but not be bad enough to be in the support group, with a degenerative neurological condition that has just been diagnosed. After a year, their money will stop if they are in the work-related activity group of ESA.
Pensions Bill [Lords]
Debate between Eilidh Whiteford and Anne Begg(12 years, 10 months ago)
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Dame Anne Begg (Aberdeen South) (Lab)
It is a pleasure to follow the hon. Member for Cardiff North (Jonathan Evans), but I will disagree with quite a bit of what he said.
I am disappointed about the change in the financial assistance scheme from the retail prices index to the consumer prices index, particularly in relation to Richards Textile factory in Aberdeen, which went bust with the collapse of its pension scheme. Although the very hard work of many Labour Back Benchers ensured that those pensioners did not lose all their money, they still feel aggrieved that they do not have the same cover as those who subsequently entered the pension protection fund and that they do not get quite as much as those covered by it.
Let me start by saying which parts of the Bill I agree with to show that not everything in it is bad, although quite a lot is. I agree wholeheartedly with the lifting of the default retirement age and I only wish that my Government had done that. I have a friend who has been told by his employer that he has to retire at 65 and he does not want to, but unfortunately his birthday falls on the wrong side of the divide.
I am also very glad that the Government are going ahead with the national employment savings trust. There was a bit of worry at the time of the election that some people in business who were not too keen on it, particularly on auto-enrolment, might put pressure on the coalition Government, who I am glad resisted. NEST is certainly the way forward for occupational pensions, to ensure that there is pension cover for everyone and that most people will not have to depend on the basic state pension as their sole income in retirement. That is very important.
I also agree with the proposal to bring auto-enrolment forward to July 2012 for large companies. If they are ready to go, the sooner the scheme gets up and running the better and the sooner it is tested the better, because part of the reason for rolling out auto-enrolment is to test how it works in practice.
So those things are all good, but that is as far as that goes and there are issues of concern. Like my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), I am concerned about the lifting of the auto-enrolment earnings threshold by £2,500. I tried to intervene about this early in the Secretary of State’s speech, but lots of other people were jumping up and down at the time. The problem is that low earners might not always be low earners. Auto-enrolment is important in getting people into the scheme as soon as possible and in ensuring that even low earners are enrolled in a pension scheme. If those people continue to earn similar amounts for the rest of their working life, the scheme might not have the returns that they would expect, but no one knows, at the start of their working life, what their eventual earnings will be and we should always err on the side of caution in ensuring that people enrol. The raising of the threshold could result in about 600,000 people not being enrolled who otherwise would have been. It has been said that those people could opt in, but it is highly unlikely that many people on such low incomes would do so. If the Government introduced a foundation pension or a pension for the state, which the Secretary of State put into context, the scheme would make a difference for people making such low contributions. Even someone earning just over £5,000 a year could make a valuable contribution to their eventual occupational pension.
I worry about that issue and I worry when I hear that the threshold might go up to £10,000 or more in future, because the whole point of auto-enrolment and of NEST was to make things easy, to make belonging to an occupational pension fund a no-brainer and to ensure that everyone who was in work would automatically pay into an occupational fund. People who are not auto-enrolled and who are not in the pension fund will lose out on the employers’ contributions as well, so they will lose out not only on their potential pension earnings towards the end of their life but on what we often think of as deferred wages in the employers’ contribution.
I am also concerned about the introduction of the three-month wait, for many of the same reasons I have just given. The shadow Secretary of State has already made the arguments, which are important to remember.
All those issues could probably have been swallowed if they had been the only things we were concerned about, but the big sticking point in the Bill, which I suspect most Members will be talking about this afternoon, is the acceleration of the state pension age, particularly the anomaly that hits the 500,000 women who at very short notice will have to wait more than a year for their pension. I wonder whether the Government have analysed exactly who will lose out as a result of the measures and which women will not be in work at the age of 66, when they get their state pension. The figure of £10 billion has been bandied around for how much it would cost not to go ahead with the proposal, but I suspect that is a gross figure. I do not know whether the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), has any idea how much the welfare bill will go up as a result of people’s falling out of work before they reach the age of 66.
I agree that it is right that the state pension age should rise and indeed inevitable that it will rise, and I accept that there are issues to do with longevity, but I am concerned that we are potentially creating not the pensioner poor but a group of people who become the new poor because they have fallen out of work in the last years of their working life and are struggling to get by on benefits. It is not good enough for the pensions Minister to say that for anyone who falls out of work before reaching the state pension age and who does not have a pension they can draw early, there is always jobseeker’s allowance or employment and support allowance. The contributory element of JSA lasts only six months and the Government propose that the contributory element of ESA will last only a year. Nowadays, women expect to have their own wages, but their qualifying for income-related JSA or ESA will depend on the household income and whether they have a working partner. For many women, that misses the point. Quite a few women in my constituency say, “I’ve only got a pension of £1 a week.” What they mean is that they have 60% of their husband’s pension and £1 a week on top of that, but they still see that £1 a week as their pension and they feel very aggrieved about that.
Dr Whiteford
Does the hon. Lady share my concern that the healthy life expectancy for men in Scotland is currently 60 years and for women is 62 years? In that context, a dramatic increase in the pension age for those people is simply displacing on to the benefit system the burden that will have to be met.
Dame Anne Begg
Indeed. The hon. Lady says more eloquently what I was trying to say about displacing people out of pension age into the working age poor. There is nothing to be gained for those people if all we are doing is delaying when they get their state pension. There will be the odd situation that when people retire, their income will go up, rather than people being able to work until they reach retirement age.