State Pension Age

Debate between Iain Duncan Smith and Nigel Mills

Wednesday 2nd March 2016 Commons Chamber

[Mr Duncan Smith]

I can tell the hon. Lady that it is very clear when she and those her age will retire. It is very clear that the independent review will make recommendations. If she wants to make her position clear and give her view, she should give evidence to the independent review. We will have a review in every Parliament. I do not understand why her party is against having a review. Surely we want an independent review so that it can be fair and balanced. I would have hoped that she welcomed that.

[Nigel Mills (Amber Valley) (Con)]

Does the Secretary of State agree that the advantage of an independent review in every Parliament is that we should be able to give greater visibility to when changes will happen? Will he commit to not having a change with less than 10 years’ notice for those affected?

[Mr Duncan Smith]

That is exactly the flow of timings at the moment. Sir John Cridland has to consider that, and we want him to look at making sure that such a process happens. We want people to have plenty of notice, and I know recommendations have been made about that. As I said earlier, he will look at that under his terms of reference, as will the next review and so on. I would simply say to my hon. Friend that if he has an issue, he should put it to the review.

Oral Answers to Questions

Debate between Iain Duncan Smith and Nigel Mills

Monday 7th December 2015 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

18. What progress he has made in rolling out universal credit; and if he will make a statement.

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

Universal credit is rolling out as planned: on track and on time. I can announce today that it will be in every jobcentre by April next year. Estimates of the total cost of implementation have fallen from £2.4 billion to £1.7 billion, with £0.6 billion having been spent to date. Over a quarter of a million people have now made claims to universal credit.

--- Later in debate ---

[Mr Duncan Smith]

With respect, I meant the Labour Member sitting just below him. The number of people getting back into work directly as a result of universal credit has had a net benefit to the Exchequer of £3 billion-plus. I call that a real benefit in real terms.

[Nigel Mills]

I welcome the fact that universal credit reached my constituency about five weeks ago, but for the benefit of constituents concerned about what will happen when they move from tax credits to universal credit, will the Secretary of State confirm when that move will now take place?

Welfare Reform and Work Bill

Debate between Iain Duncan Smith and Nigel Mills

Monday 20th July 2015 Commons Chamber

[Nigel Mills]

We need to give carers every possible support. They perform an important and difficult role. Having done a bit of caring in my time, I know how hard and stressful it can be. We can look at that, but I cannot stand here tonight and say I would vote for it.

The reduction in the benefits cap is a hugely popular policy. Everybody I spoke to in my constituency said that the benefits cap was a great idea, but £26,000 a year was far too high. It was higher than the average wage in my constituency, so people did not think that it would affect a lot of people. In fact, the number of people who were affected by it in my seat was extremely small.

It is right to bring the cap down and to have different levels in London and the rest of the country. There are different levels of housing benefit around the country and that is one of the biggest costs that trigger the benefits cap, so it is right to have a different level in London. Twenty thousand pounds is the right level for the cap. It is a bit less than the average wage in my constituency. That will show people clearly that anyone who goes out to work will be better off than those who live solely on benefits.

I support the hard decision to have a benefit freeze for four years. When we have to find savings, perhaps one of the least bad ways of doing it is to freeze what people are already getting, rather than taking more people out of the system completely.

The point that the acting shadow Secretary of State raised about the withdrawal rates for tax credits and universal credit showed how fiendishly complicated the tax credits system is. It is difficult to work out exactly who will be hit at what level and by what amount by the new withdrawal rates and the new starting position. That reinforces the case for universal credit. Everyone will be able to see from every pay packet they get that when they work more hours in a month, they are better off than in months when they work fewer hours. We need that system to be in place, rather than the incredibly complex, slow and clunky tax credits system, which applies a year behind or a year ahead. Nobody quite understands how what they get in tax credits bears any relation to the work that they have done in the year.

[Mr Duncan Smith]

Even with the changes to universal credit, the taper remains exactly where it was, so every hour in work will mean better pay. That principle still stands.

[Nigel Mills]

I was not doubting that for a second. With the tax credit changes, we need to be sure that the people who are still claiming tax credits understand that they will be better off doing more hours and earning more than they would have been otherwise. That is why universal credit needs to be rolled out. Everyone will be able to see that they are better off month by month, rather than having to work out if they might have been better off a year ago if they had worked a bit less in a complex way through online calculators. That cannot be a sensible system.

On the child tax credit limit, it has to be right that people who spend a life on welfare have to take the same decisions as people who are going out to work. It is therefore right to draw the line at two children for where the welfare system stops helping. There will still be a lot of help through child benefit and the Prime Minister confirmed that we would not seek to limit that. I think that we have got the line in the right place. It should be clear to people that from 2017, if they have more than two children, there will not be more tax credits.

Child Poverty

Debate between Iain Duncan Smith and Nigel Mills

Thursday 25th June 2015 Commons Chamber

[Mr Duncan Smith]

I do not agree with the hon. Gentleman. Most of my colleagues are hugely involved in food banks and help them. I welcome food banks: I welcome decent people in society trying to help others who may, for various reasons, have fallen into difficulty. I do not accept that the single cause of that is welfare reform—quite the contrary. Food bank usage has been rising over a period. It was never part of the British system, but in Germany, where we can argue that their welfare payments are higher, 1.5 million people a week use food banks—much more than people do here.

[Nigel Mills (Amber Valley) (Con)]

I welcome the Secretary of State’s commitment to tackling the root causes of poverty, but one big issue for low-income families is their level of debt. What more can the Government do to help families in that situation?

[Mr Duncan Smith]

Problem debt is a huge issue. With universal credit, through “Universal Support—delivered locally”, we are working with local authorities so that if people have a debt problem, we will continue to pay their rent but insist that, working with the council, they are put on debt programmes to help them manage their money and become independent. If they are in debt, they will not sustain themselves through work. That is the key thing to change; my hon. Friend is right.

Oral Answers to Questions

Debate between Iain Duncan Smith and Nigel Mills

Monday 9th March 2015 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

10. What progress his Department has made on the roll-out of universal credit.

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

We have begun the national roll-out of universal credit. Those plans are on track, and universal credit is now available in nearly 150 jobcentre areas for single claimants and in nearly 100 areas for couples and families. Universal credit will be available in over 500 jobcentre areas—seven in 10—by the end of the year, and it will be rolled out to all our 714 jobcentres next year.

[Nigel Mills]

In contrast to some reports today, the staff in the jobcentres in my constituency are looking forward to the roll-out of universal credit because they know the advantages it will bring to local jobseekers. Has my right hon. Friend made a recent assessment of the benefits of universal credit following the roll-out so far?

[Mr Duncan Smith]

We have indeed. From what I have read of the reports my hon. Friend mentions, every single point made in them is wrong and misleading. We will be making our position clear on that. The analysis that he asks for has shown that the benefits of universal credit are statistically significant. Findings now show that, compared with similar claimants on jobseeker’s allowance, universal credit claimants spend more time looking for work, enter work more quickly and spend more time in work. They also end up earning more.

Universal Credit

Debate between Iain Duncan Smith and Nigel Mills

Tuesday 25th November 2014 Commons Chamber

[Mr Duncan Smith]

As the hon. Lady knows, we started with single people, but whenever somebody’s circumstances changed—they may have become a couple or had a family—they stayed in the system and have been dealt with. It is not correct, in any way, to say that these are the simplest cases. The roll-out to families introduces further complications, but we are doing this in way that makes sure that we get it right. By the end of this year, the north-west will have universal credit, so if someone falls unemployed and then goes into work, they will do so on universal credit. That is the key point. All the complications will be dealt with within the existing system.

[Nigel Mills (Amber Valley) (Con)]

I welcome the progress announced in the Secretary of State’s statement. Will he confirm that the Treasury has now signed off the whole business case and laid to rest the fear that it was not going to do so?

[Mr Duncan Smith]

That is exactly what was being asked before the summer break, and the answer is that the Treasury has done that. The MPA has also signed off the roll-out process in saying that it de-risks the nature of the roll-out and approves it exactly as it stands at the moment.

Universal Credit

Debate between Iain Duncan Smith and Nigel Mills

Wednesday 9th July 2014 Commons Chamber

[Mr Duncan Smith]

I respect the right hon. Lady enormously for the job she does, but I say to her clearly that it was on the recommendations of her Committee and the NAO that we instigated—by the way, I think this is the way ahead for all future programmes—a programme in which, at every stage and in every separate part of development, we would have approvals from the Treasury and with the Cabinet Office, which is what is going on at the moment. My point is that the answer that Mr Kerslake, the head of the civil service, gave was correct in the sense, as I have said today, that the overall strategic business case for the full lifetime of the programme is in discussion right now for that completion. However, all the elements that are relevant—the strategic business plan for this Parliament, which includes all the roll-out, all the investments, of which the right hon. Lady will be aware, and the roll-out through to the north-west—have been approved. There will be no further need for approvals this Parliament, so the reality is quite clear: universal credit is on track and is rolling against the plan we set out last year. All those approvals are agreed, and we hope that the final element, which would logically come at the end of the process, will be agreed shortly with the Chief Secretary.

[Nigel Mills (Amber Valley) (Con)]

The Secretary of State has me convinced about the benefits of universal credit, but will he consider publishing the business case so that the House and the public outside can see the full benefits?

Oral Answers to Questions

Debate between Iain Duncan Smith and Nigel Mills

Monday 13th January 2014 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

18. What plans he has for the habitual residence test.

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

Migrants must now meet a much tougher habitual residence test than before, showing the efforts they have made to find work before coming to the UK and that their English language skills are not a barrier to getting a job. They must also have been resident in the UK for three months before being able to access out-of-work benefits. We have plans to make it even stronger, by introducing a minimum earnings threshold, with tougher questions on whether work is genuine, and job seekers from the European economic area will not receive housing benefit.

[Nigel Mills]

I am grateful to the Secretary of State for that detailed answer. I urge him to go a bit further and listen to the representations he has received to extend the qualifying period for the habitual residence test, and make people have to be here for a year before they can get those benefits.

[Mr Duncan Smith]

As has been made clear beyond this Chamber, we are looking at that matter at the moment, and we have been discussing it with a number of other European nations, the vast majority of which are clear and with us on the idea that freedom of movement should not result in an opportunity for people to take benefits from wherever they want and to pick and choose their benefit areas. We are looking at how we can come to an agreement on those time scales and limits.

Universal Credit

Debate between Iain Duncan Smith and Nigel Mills

Tuesday 10th December 2013 Commons Chamber

[Mr Duncan Smith]

I have more credibility than the Labour party, which wasted money galore. My answer is that I will deliver this and we are already delivering welfare reforms—[Interruption.] The right hon. Member for East Ham (Stephen Timms) needs to remember that he was in a Government who watched welfare spending rise by 60% under their watch.

[Nigel Mills (Amber Valley) (Con)]

Although writing off anything is disappointing, will the Secretary of State confirm whether he has analysed what a comparable write-off would be for schemes in the public and private sector elsewhere?

Universal Credit

Debate between Iain Duncan Smith and Nigel Mills

Thursday 5th September 2013 Commons Chamber

[Mr Duncan Smith]

That is exactly one of the reasons why we intervened back in 2012—the system they were trying to integrate was not going to work correctly. That was already evident by the end of 2011 and early 2012. The problems were such that when I introduced the independent inquiry, it told me categorically that this was not going to work, so we have changed it and reset it. In conjunction with the Cabinet Office, we have seen that there is a better way to do this, and we believe that the integrated fraud programme will deliver results in the new roll-out.

[Nigel Mills (Amber Valley) (Con)]

When the Select Committee visited the north-west we saw universal credit working, albeit in a limited manner, and being well received by the staff working with it. It was having a positive impact on the claimants they were working with. Surely, however, it is right not to roll out this programme so fast and risk millions of people not getting the benefit that they are expecting to get. So may I urge the Secretary of State to say to the House that he will not rush this and that he will get it right before it is rolled out to more people?

[Mr Duncan Smith]

I agree, and I must say what the problem has been throughout all this. When I introduced the pathfinder, which said that there would a delay in the way we rolled this out, Labour criticised us for delaying the roll-out. Then, later on, it criticised us for not doing it properly. The reality is that we are doing this properly. We will not do it against artificial timetables, but it will be done in the overall four-year timetable and it will be effective.

Pensions Bill

Debate between Iain Duncan Smith and Nigel Mills

Monday 17th June 2013 Commons Chamber

[Mr Duncan Smith]

We plan to head that off. We will have much more stringent quality standards, which will ensure that the process is properly managed. We will keep that constantly under review, to ensure that there is no opportunity for people to abuse the process. It is worth noting that we have already talked about areas where we want to ban and cap. For example, we announced our intention to ban consultancy charges in auto-enrolment schemes and we are considering how to do that. The Office of Fair Trading report is due in the summer, I think, and the Government will be consulting after that. We plan to publish our consultation, including on proposals to introduce a charge cap. Defined ambition pensions should also give us greater risk sharing and certainty. I hope that that answers the hon. Lady, and there will be more to come from my hon. Friend the Minister of State.

[Nigel Mills (Amber Valley) (Con)]

Small pots cannot currently be transferred to the National Employment Savings Trust. Will the Secretary of State update the House on the Government’s plans to change that? I cannot see any such plans in the Bill, so might they appear at a later stage?

[Mr Duncan Smith]

This is obviously Second Reading, but we will have further discussions on that subject. We know that it needs addressing and my hon. Friend the Minister of State is already aware of that. Although we will not cover it on Second Reading, we will, I suspect, tackle it during the passage of the Bill. If my hon. Friend the Member for Amber Valley (Nigel Mills) wants to be on the Committee, now is the time to volunteer. Volunteering in this place is always dangerous, but, none the less, I urge him to do that.

Even with auto-enrolment, it is critical that people understand what they get from the state and are able to save with some confidence. I recognise that that is the biggest area, and it is what the single-tier pension is all about. Auto-enrolment on its own without single tier would be difficult, but single tier underpins auto-enrolment, making it all the more important. The single tier will be all about setting a basic level of pension above the means test.

Let me give an illustrative example: 2012-13 prices would mean a single tier of £144 a week, a basic state pension of £107 and pension credit of £142. Under single tier, every individual would therefore qualify for a pension in their own right. The full rate payable for 35 years of national insurance contribution—the right hon. Member for Birkenhead has made the point about contributing to one’s future wealth—reflects that we are combining both the basic pension, based on contributions for more than 30 years, and the state second pension, based on 49 or 50 years of contributions. We are merging the two together. Yet even as we abolish the whole complicated system of the additional state pension on the one hand and contracting out on the other, we will still recognise people’s existing contributions. This is an important matter which has been raised with us a number of times. For example, someone who reaches state pension age in 2016 under single tier who is due £160 under the current system in whatever form will still get that pension of £160, so it is locked in.

Workers who were contracted out at implementation will start to pay full national insurance contributions, as 70% of those who are in work already do. In return, we believe they can build towards a pension at full single rate. Rather than today’s much lower basic state pension, they will get a reward for that effort to save, as I said earlier, referencing the already existing auto-enrolment. As a result, the vast majority, some 90% in the first two decades, will receive enough extra over their retirement through a single-tier pension to more than offset the higher contributions. Let us take a 40-year-old in 2016 contributing an extra £6,000 of national insurance before reaching state pension age in 2043. Over their retirement they would receive £24,000 more in state pension—a net gain of £18,000. That is the point that I was trying to illustrate earlier.

We must honour the past and deal with its complexity. That is the key. Going forward, whether previously contracted out or not, people will become entitled to the single-tier pension in the same way. This is an important feature.