Oral Answers to Questions

Steve Webb Excerpts

Monday 28th November 2011 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

10. What steps he is taking to ensure that individuals are able to build up pension pots under automatic enrolment.

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

I am pleased to confirm that we will go ahead with the introduction of auto-enrolment next year as planned, and I can confirm further that all businesses remain in scope. We have, however, decided to extend the reform’s current five-year implementation, so that small businesses will not have to start enrolling their workers until the start of the next Parliament. The revised plans will, nevertheless, still result in more than half of all workers being enrolled before the end of this Parliament. This is a positive programme, and there will be no exemptions.

[Sajid Javid]

This Government are doing a huge amount to help people deal with the challenges of old age. In that context, does my hon. Friend have any plans to change the rules governing short-service pension refunds?

[Steve Webb]

As my hon. Friend points out, certain pension schemes but not others currently allow people to take money out within the first two years, and that is an anomaly. We need to ensure that money put into pension savings stays there, and that is why short-service refunds for defined contribution schemes will not be part of the long-term landscape under automatic enrolment.

[Harriett Baldwin]

Does the Minister agree that auto-enrolment will bring into pension savings for the first time millions of low-paid workers in the private sector, both men and women, and that they can begin to look forward to the same kind of retirement income that we rightly offer our public sector employees?

[Steve Webb]

As my hon. Friend points out, at the moment not only do literally millions of people in the private sector not have a moderate pension; they have no pension at all. Auto-enrolment remains key to our policy goals, and as I just observed, more than half the work force will have been auto-enrolled by the next election.

[Dame Anne Begg (Aberdeen South) (Lab)]

I am disappointed to hear that there will be a delay in the roll-out of auto-enrolment, but I appreciate that the Minister was under a lot of pressure from noises off to bring in some exemptions, so I am pleased that that is not to be. What guarantee can he give to businesses, however? They need an absolute guarantee that the scheme will go ahead on time and to a new timetable, and that there will be no stepping back by the Government.

[Steve Webb]

I am grateful to the Chair of the Work and Pensions Committee for welcoming our decision to keep everybody in. In terms of certainty, everybody who was due to be enrolled this side of July 2013 will see no change in their dates, and we will publish early in the new year the revised schedule. I entirely agree that certainty is needed, and I can confirm that there will be no further changes to the timetable.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Auto-enrolment is—or should I say, was?—central to the Pensions Minister’s strategy, so his resorting to bureaucratic language, saying that “all businesses remain in scope,” is not going to reassure anyone. The fact is, as I hope he will confirm, that the schedule has been moved back and millions upon millions of the employees whom he was keen to get saving in a pension scheme will not be auto-enrolled until after 2015. Is that correct?

[Steve Webb]

I am not sure whether the hon. Gentleman is aware of this, but under his party’s plans the roll-out of employers with one to 50 employees was already scheduled to go into 2016. I can confirm that the majority of the work force will be auto-enrolled during this Parliament. There was already a five-year roll-out for auto-enrolment, so it was already a phased process. Yes, we have changed the schedule, but, as he may be aware, his party changed it twice in a three-month period.

[Mr Julian Brazier (Canterbury) (Con)]

Does my hon. Friend agree that the difficulties and dilemmas involved in deciding what to do about the pension pot, particularly with regard to small businesses, should send a message out there to all those who can look forward to index-linked public sector pensions that they should be grateful?

[Steve Webb]

My hon. Friend is right that we do not want to see a levelling down in pension provision. We want quality pensions for our public servants, but we want to make sure that many more people in the private sector get quality pension provision as well, and auto-enrolment will help to achieve that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

11. If he will amend his proposed welfare reforms to minimise the risk of children entering poverty.

--- Later in debate ---

[John Robertson (Glasgow North West) (Lab)]

18. How much his Department paid in winter fuel allowance in (a) Glasgow North West constituency and (b) Scotland in 2010; and how much it will pay in 2011.

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

Winter fuel payment expenditure in 2010-11 was £3.6 million for Glasgow North West and just under £240 million for Scotland. If those shares of total Great Britain expenditure in 2010-11 were maintained in 2011-12, the projected figures would be approximately £2.8 million for the hon. Gentleman’s constituency and £185 million for Scotland.

[John Robertson]

This year, 440 fewer households will receive winter fuel payments in my constituency, and 3,560 fewer in Glasgow as a whole. With the elderly population and housing numbers growing, how can that happen?

[Steve Webb]

As the hon. Gentleman knows, it was the policy of the previous Government to link the age of eligibility for the winter fuel payment to the women’s state pension age. As that increases, the number of pensioners within its scope will fall.

[Mr Philip Hollobone (Kettering) (Con)]

20. What estimate he has made of the potential cost to the public purse of the removal of the habitual residency test.

--- Later in debate ---

[Chris Kelly (Dudley South) (Con)]

T2. What assessment has the Minister made of the potential effect on UK defined benefit pension schemes of the European Union proposal to review the institutions for occupational retirement directive and align it with the solvency II directive? Is not that just a further EU assault on the hard-pressed UK occupational pension sector, and the last thing we need? Will the Minister stand firm against that?

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

We are gravely concerned about these proposals. The UK Government do not accept the need for new solvency arrangements for defined benefit schemes based on solvency II, which would have potentially serious effects for UK defined-benefit pension schemes. We are especially concerned about any proposals that would increase costs for employers at a time when we are looking to keep costs down, or that might affect the vital role pension funds play as investors in the UK. We will oppose these proposals.

[Karl Turner (Kingston upon Hull East) (Lab)]

T4. Has the Minister revised his previous estimate that, by 2012, 25,000 single parents will be in work when their income support ends when their youngest child is five years old? Does he not accept that unemployment in my area, Hull, is at a record high, thanks to his Government’s policies?