Jim ShannonMain Page: Jim Shannon (Democratic Unionist Party - Strangford)
Department Debates - View all Jim Shannon's debates with the Department for Work and Pensions
The Government’s annual automatic enrolment evaluation report is a testament to the success of automatic enrolment, with the most recent edition from 2019 showing that more than 10.2 million employees have been automatically enrolled across more than 1.6 million employers. As a result, the number of eligible employees with a workplace pension has skyrocketed from 10.7 million, or 55% in 2012, to 18.7 million—nearly 90%—in 2018. That is very much to be commended.
I have spoken before about the importance of intergenerational fairness in our pensions policy. The decisions we take now will continue to have an impact decades down the line. The automatic enrolment policy means not just that people in the next 10 or 20 years will be better off in retirement, but that the generation who are just entering the workforce now will be, too.
As other Members have referenced, what is perhaps most notable about this order is not what it changes, but what it does not, with only the upper limit for the qualifying earnings band being revised, but not the lower limit or the earnings trigger, which the shadow Minister, the hon. Member for Reading East (Matt Rodda), and the SNP spokesperson, the hon. Member for Glasgow East (David Linden), referenced. While I understand the rationale for making this decision, which the Minister set out in his opening remarks, it is important that the progress made over the past decade does not start to slow down. In the words of the Government’s 2017 review, we must “maintain the momentum”.
The 2017 review contained proposals to lower the age threshold down to 18 and to abolish the lower earnings limit, with an estimated target date of delivery in the mid-2020s. We are now nearly four years on from that review and, as the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Stephen Timms), mentioned, we have seen no change. Although “mid-2020s” can potentially be a bit elastic, that target is inching closer and today’s statutory instrument does not change the lower earnings limit either. Like others, I would be grateful if the Minister updated the House on progress towards the changes.
Another area that the review highlighted was the gaps in coverage, which particularly impact on people with multiple low-paid jobs and young people. The recent Supreme Court judgment on Uber workers has profound implications for the gig economy. Like the Chair of the Work and Pensions Committee, I would be grateful if the Minister set out how his Department intends to respond to that ruling in respect of auto-enrolment and set out a timescale.
A reduction in the earnings threshold for automatic enrolment would also help the ongoing problem of the gender pensions gap, and I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for tabling an early-day motion on that very topic. According to the Chartered Insurance Institute, the average pension pot for a woman aged 65 is just one fifth of the size of average pension pot for a 65-year-old man. Prospect estimated the gender pensions gap to be 39.5% when measured in terms of income, which is more than twice the size of the gender pay gap.
One factor in that inequality is that people with a salary below the earnings threshold are disproportionately women. More broadly, Members will be concerned to see reports in the press by the former Lib Dem Pensions Minister Steve Webb that thousands of women have been underpaid their state pension, so we would be grateful if the Minister updated the House on that issue, as well as setting out his plans to reduce not only the gender pensions gap but other gaps, including the gap in relation to those from black and other minority ethnic groups. Will he set out whether the Government will move forward with changes to automatic enrolment to help to deal with that? As I said at the beginning of my speech, automatic enrolment has been a success.
In the debate on the Ministerial and Other Maternity Allowances Bill, there was much discussion about the use of impact assessments so, finally, I would be keen to hear what assessment the Department for Work and Pensions has made of the impact of today’s changes on women and other minority groups. I look forward to the Minister’s winding-up speech.
It is a great honour and privilege to respond to the debate. As always with pensions, while we are engaging in a debate on a specific topic colleagues across the House never miss the opportunity to raise all manner of issues on pensions, to which I have been asked to respond. I am delighted to do so.
No sooner has Her Majesty signed the Pension Schemes Act 2021 on the dotted line—we thank her tremendously for that, and I thank the House for its endorsement of that wonderful piece of legislation, which will make our pensions safer, better and greener—than colleagues are urging me to bring forth another pensions Bill to further transform the pensions landscape. I am sure that those on the Treasury Bench, and the Deputy Chief Whip and the pairing Whip, will have taken due attention of that when bids for future legislation are put in.