Hansard - United Kingdom Parliament

123 Pensions Bill [Lords]
20 JUNE 2011
Pensions Bill [Lords]
124
Dr Whiteford: Will the Minister give way?
Steve Webb: In a little while; I want to make some
progress first.
The Bill’s third key element—which, again, voting it
down would stop—is making judges put some money
into their pensions. I think that Members were rather
shocked when they discovered that the taxpayer put
32% of a judge’s salary into a judge’s pension, and that
the judge in respect of their own pension entitlements
puts a big fat juicy zero. This Bill will correct that. If the
Opposition succeed in voting it down, they will stop us
doing so. We need to make progress with the Bill,
therefore. Second Reading is about the principles, and
we stand firmly behind them.
In the debate, the shadow Secretary of State, the right
hon. Member for Birmingham, Hodge Hill (Mr Byrne)—
who has rejoined us now—glossed over the auto-enrolment
provisions and said the Labour party will vote against
the Bill. That would leave £30 billion to be found, as
that is what the Bill would put into the Exchequer.
When asked where the money would come from, he
replied, “Well, we’d move a bit faster on age 67” and
then added, in brackets as it were, “in the 2030s.” For a
former Chief Secretary to the Treasury to tell us that
the way to find money for a problem in the next
Parliament is to look to somewhere in the 2030s sounds
vaguely familiar. The answer is always, “Tomorrow, and
tomorrow, and tomorrow”—
Mr Byrne: Will the hon. Gentleman give way?
Steve Webb: In a second. [HON. MEMBERS: “Give
way.”] I will give way. The reason there is no money, as
the right hon. Gentleman said, is because difficult decisions
were always deferred to tomorrow.
Mr Byrne: I am grateful to the Minister for giving
way. He is making his remarks with his customary
eloquence. As the following figure has not been presented
this afternoon, will he remind the House precisely how
much the acceleration of the state pension age for
women before 2018 will save? Is the sum about
£1.2 billion—yes or no?
Steve Webb: Interestingly, the right hon. Gentleman
and his colleague the shadow Minister are saying two
different things. The right hon. Gentleman knows that
the sum for the changes up to 2020 is £10 billion. His
shadow Minister, the hon. Member for Leeds West
(Rachel Reeves), says we should delay to 2020 and find
£10 billion therefore, while he wants to vote against the
Bill and find £30 billion at some time in the 2030s. I
think the House knows where we stand on that.
I am grateful to those Members who took the trouble
to address auto-enrolment, but the shadow Secretary of
State glossed over that issue. He said we ought to enrol
at £5,000, which is not the right figure, but let us accept
it for the sake of argument. He then said we should not
put up the threshold. Therefore, under his scheme with
the threshold at £5,000, someone who earned £5,100
would be auto-enrolled on that £100, and as we start at
1%, they would have to put in £1—not £1 a week, but
£1 a year, or 2p a week. That is what will happen if we
do not let this Bill make progress. We will be requiring
employers and employees to put 2p per week into the
employee’s pension. Does the right hon. Gentleman
think that might in any sense undermine the credibility
of our proposals?
Dr Whiteford: I agree with the Minister that this issue
has been glossed over in today’s debate, but in our
debate on welfare reform last week great store was set
by so-called mini-jobs. It seems to me that those are
exactly the jobs that will not be included in auto-enrolment.
Can the Minister understand why that fuels concern
that a mini-job is simply a euphemism for a low-paid,
low-skilled job that keeps women trapped in poverty?
Steve Webb: The hon. Lady will be aware of the
national insurance floor of roughly £100 a week. Many
of these mini-jobs, as she describes them, will be below
that and would not be covered by auto-enrolment anyway,
but once such people are above the threshold for national
insurance, they will be able to opt in should they want
to. Moreover, if a mini-job occurs later in life and they
have some track record of a connection with pensions,
they might well have a conversation with their employer
about opting in and triggering the employer contribution.
Several hon. Members rose—
Steve Webb: As there were 25 contributions to the
debate, I want to try to respond to some of the points
that were made, and then I will certainly give way some
more.
My hon. Friend the Member for Cardiff North (Jonathan
Evans)—indeed, Cardiff was well represented in the
debate: by my hon. Friend the Member for Cardiff
Central (Jenny Willott) and by the hon. Member for
Arfon (Hywel Williams), who raised issues relating to
Allied Steel and Wire—pointed out Labour’s track record
on pensions. He was right to do so, because although
one or two Opposition Members glossed over history,
he reminded us of the 75p pension increase—something
that can never happen again under our triple lock. He
reminded us of the failure of the previous Government
to get to grips with Equitable Life; of the tax grab by
the previous Chancellor and Prime Minister on company
pensions. That is not a proud record.
The hon. Member for Aberdeen South (Dame Anne
Begg), the Chair of the Work and Pensions Committee,
made a characteristically thoughtful contribution and I
am grateful for her support for our abolition of the
default retirement age. The link to that issue has not
often been made in today’s debate. The previous
Government were planning to raise the state pension
age to 66, 67 or 68—but to leave it as legal to sack
people for turning 65. There is a logical flaw there, and I
am sure the House is ahead of me on that. It is therefore
right that we have taken away employers’ ability to sack
people for the “sin” of turning 65.
I am also grateful for the hon. Lady’s support for our
going ahead with the National Employment Savings
Trust and the flexibility around auto-enrolment in 2012.
She asked whether our £10 billion estimate of the cost
of delay to 2020 was a gross or net figure. It is a net
figure, taking account of benefit offsets. However, a lot
of the points that she and a number of other Members
made would apply whenever we raised state pension
ages. For example, it was the hon. Member for Erith
and Thamesmead (Teresa Pearce), I think, who asked,