Shailesh Vara answers MPs’ questions on the state pension.
State Pension Eligibility
1. Martyn Day (Linlithgow and East Falkirk) (SNP): What support his Department has made available to women born in the 1950s who are affected by recent changes in the age at which they become eligible for the state pension. [903344]
2. Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP): What support his Department has made available to women born in the 1950s who are affected by recent changes in the age at which they become eligible for the state pension. [903345]
7. Ian Blackford (Ross, Skye and Lochaber) (SNP): What support his Department has made available to women born in the 1950s who are affected by recent changes in the age at which they become eligible for the state pension. [903350]
10. Sir David Amess (Southend West) (Con): What recent representations he has received on the pension arrangements of women aged between 60 and 65. [903354]
14. Rachel Reeves (Leeds West) (Lab): If his Department will make an assessment of the merits of options for transitional protection for women who will adversely be affected by the acceleration of increases in the state pension age. [903358]
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): Working-age benefits are available for those who have not yet reached state pension age. A concession of £1.1 billion was made, and 81% of those affected will see a delay of one year or less. For the rest, the delay will be no more than 18 months. There are no plans for further transitional arrangements.
Martyn Day: In 2005, the Pensions Commission said that
“a policy of significant notice of any increase (e.g. at least 15 years) should be possible”,
to mitigate the impact of any such changes. I would argue that the start of that 15-year process should be the beginning of the changes in 2010. In effect, the retirement age for women will be 63 from April this year, so will the Department look again at smoothing out to 2025 the increase in pensionable age for women aged 63 to 66?
Mr Vara: The equalisation measures of the Pensions Act 2011 were introduced, and the matter was expedited, to ensure that we covered for the fact that there had to be a sustainable pensions budget. It is also important to remember that people are living a lot longer. We have to take that into account, which is why we had to accelerate the issue.
Ms Ahmed-Sheikh: The Minister speaks often of equality, but his Department’s policies clearly have a disproportionate impact on so many women in this country. Not only are women born in the 1950s unequally affected by the pension plans, but many women will also lose out under the new single-tier pension rules. Should not the Government act now to allow people to opt to have a year treated as a qualifying year if, by including the income from two or more jobs, that person’s earnings are at least equal to the earnings factor for that year?
Mr Vara: I remind the hon. Lady of the record issues we have achieved for female employees. We now have record female employment, at a rate of 69.1%, and there are more than 1 million more women in work since 2010. The number of older women in work is at a record high, with more than 100,000 more than last year. The people to whom the hon. Lady refers are all benefiting from the measures I have mentioned.
Ian Blackford: I hope the Minister will answer my question, given that he ignored the one asked by my colleague. Will he apologise formally for the utter shambles his Department has made of communicating the changes to the acceleration phase, as raised by Women Against State Pension Inequality, and for the inaccurate communication to pensioners regarding national insurance contributions? We learned over the weekend that the Government Gateway website is still showing that the pensionable age for women is 60. How does the Minister expect the House—and, indeed, the public—to have confidence in his Department’s ability, given that it has failed so spectacularly to communicate and to deliver fairness?
Mr Vara: The issue to which the hon. Gentleman refers is isolated and he should regard it as such. The matter has been corrected. It is about time that he took on board all the other arguments that have been raging about this particular issue, rather than a solitary, individual mistake on a website, which has been corrected.
Sir David Amess: I fully accept that we are talking about huge sums of money. I was here in 1995 when we first announced the changes, but will my hon. Friend consider whether the Government have taken appropriate action in communicating to women these significant changes so that they can prepare for their retirement? Have the changes been clearly advertised on the Government websites?
Mr Vara: The initial changes were made in 1995. Until 2010, when the coalition Government came to office, there had been at least 10 Labour Pensions Ministers, one of whom held the position twice, and they made absolutely no effort in terms of communication. I want to put it on the record that, as far as the Pensions Act 2011 is concerned, more than 5 million people were written to, including the women affected, using the addresses we had from HMRC. For those who want more information, it is available on the Government website.
Rachel Reeves: Many of the women whom we are talking about are caring for elderly parents or young grandchildren. Many have been working since they were 15 years old, and very few of them have significant pension savings. Will the Minister give those women some hope and look at transitional arrangements, such as allowing women who are affected to draw their pension credit early to help them through this difficult time?
Mr Vara: A concession was made in 2011. On Second Reading, the Secretary of State said that he would go away and consider matters. He did so, and when he came back he made a concession worth £1.1 billion and reduced the two-year extension to 18 months. In the case of 18 months, 81% of women affected will have to work no more than 12 months.
Angela Rayner (Ashton-under-Lyne) (Lab): More than 2.6 million women will be hit by this change, more than 5,000 of them in the Minister’s constituency. The least they deserve is to be given the facts to allow an honest debate. We know that the Government considered £3 billion-worth of transitional protection but allocated only £1 billion, as the Minister outlined. In the spirit of an open and honest debate, will the Minister release to the House details of all the options for transitional protection that the Government have considered?
Mr Vara: Perhaps an apology should come from the hon. Lady about the fact that there was no element of communication when her people were in power for 13 years. Let us not forget—[Interruption.] Precisely! The hon. Lady mentions 1995; she will recall that within two years there was a Labour Government, who were around for 13 years. As I have said, there was no communication from any of the 10 Pensions Ministers. As far as the transitional arrangements are concerned, I responded to the hon. Member for Leeds West (Rachel Reeves) that a concession worth £1 billion was made, and the time period was reduced.
Sir Edward Leigh (Gainsborough) (Con): I am not sure that it helps these ladies, some of whom are in very difficult circumstances, for both Front-Bench teams to trade insults. Although everybody accepts that there should be equalisation, I want to mention the case of a widow who came to see me on Friday, who has worked hard all her life but has no occupational pension. Because she paid into the state earnings-related pension scheme, she says that she will lose up to £55,000. That is a real blow for her, because she has little in the way of savings. Is there no way in which we could look at further transitional concessions, or perhaps a cap, so that we could help some of these disadvantaged ladies?
Mr Vara: My hon. Friend is absolutely right that we need to discuss the matter in a measured way, but that means that we need to look at it in a broad context. A whole lot of other benefits are available to the women who may be affected—for example, jobseeker’s allowance, employment and support allowance, income support, carer’s allowance and personal independence payment.
Let us not forget that pensions will be uprated. There is the triple lock, and the simplified new state pension will be introduced in April. Pension freedom allows those who have a pension some flexibility. There has been a permanent increase in cold weather payments. Winter fuel payment has been protected, and more than 12 million pensioners benefited from it last year. As far as female employment is concerned, I have mentioned a number of benefits that we have brought in for female employees. It is important that we look at things in a broad context, rather than simply looking at people in the narrow confines that Members prefer to debate in this Chamber.
Mr Speaker: No one could accuse the Minister of excluding from his answer any matter that might in any way, at any time or to any degree be judged to be material, and we are grateful to him.
Barbara Keeley (Worsley and Eccles South) (Lab): The Minister talks about life expectancy, but he is not giving us the full picture. Life expectancy for women fell in 2012-13, and Salford has some of the worst life expectancy figures in the country. Female life expectancy in one ward in my constituency is only 72 years, and healthy life expectancy is only 54. Why should 1950s-born women in Salford carry the burden of the equalisation of the state pension age given that working until 66 is clearly going to be difficult for them? Those women need transitional arrangements.
Mr Vara: The general trend for longevity is increasing. The new state pension will ensure that 650,000 women will receive £8 extra a week. Women live longer and, in the longer run, they will benefit a lot more.
Ben Howlett (Bath) (Con): Although I appreciate that emotions are high on both sides, it is important to ask why, in 13 years of government, the Labour party did nothing to address the issue, especially since they knew that women were living longer. Does the Minister agree that a triple-lock single flat-rate pension would be much fairer to women than the old system?
Mr Vara: Absolutely. Such a pension will be much fairer. When such passionate comments come up at oral questions and in the various debates we are having on this issue, it is worth remembering that not one party—neither the Scottish National party nor the Labour party—put such a measure in its manifesto. That is because simply to reverse the 2011 measures would cost over £30 billion, and it would cost countless billions more to reverse the change made in 1995. Those parties should be mindful of the fact that the issue was in not in either of their manifestos.
Single-tier Pension
5. Kelvin Hopkins (Luton North) (Lab): What estimate he has made of the number of people who will receive a lower state pension under the single-tier pension. [903348]
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): Provided that people have at least 10 national insurance qualifying years, they will not receive a lower pension under the new state pension based on their own national insurance contributions than they would have already built up under the current system.
Kelvin Hopkins: The truth is that under the Government’s new pension system, substantial numbers of pensioners will lose money. Why did the Government turn their face against the obvious solution, which is to move to a much higher basic state pension, backed up by a compulsory state earnings-related scheme for all, with defined benefits?
Mr Vara: It is important that the hon. Gentleman appreciates that the new state pension is based on national insurance contributions. He will be aware that for many years many people have contracted out, and a small portion of their national insurance has gone towards a work pension or a private pension. If they add the new state pension to their other pension, which was paid for by national insurance contributions, they will find that in many cases they will be better off than they would be under the new state pension, which is £155.65.
Andrew Stephenson (Pendle) (Con): Will not the new state pension remove injustices that have persisted for far too long, benefiting women and low earners especially?
Mr Vara: Absolutely. As of April this year, with a new state pension and the triple lock, people will be £1,000 better off than they would have been under the old system whereby pensions were uprated. The triple lock will benefit people by £1,000 by April this year.
Pensioners’ Incomes
8. Huw Merriman (Bexhill and Battle) (Con): What steps he plans to take to maintain the level of pensioners’ incomes during this Parliament. [903351]
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): The Government will triple lock the basic and new state pension, top up income to a guaranteed minimum level for the poorest pensioners, and protect benefits for older people, including free eye tests, NHS prescriptions, bus passes, television licences for those aged 75 and over, and winter fuel payments.
Huw Merriman: Given that 28% of my constituents are over 65, compared with a national average of 17%, the Minister’s answer is welcome news indeed. What steps are the Government taking to ensure that pensioners claim all their state entitlement?
Mr Vara: My hon. Friend makes a good point. I can assure him that the Government use a wide range of channels. On pension credit, we believe that one of the best ways to reach people is through community partners, and we provide a web-based pension credit toolkit containing a range of resources to encourage take-up among pensioners. Information and leaflets on other benefits are also available from the Department’s offices, advice agencies and local authorities, as well as some post offices and doctors surgeries. Information about all benefits and how they may be claimed is readily available on the gov.uk website.
Andrew Gwynne (Denton and Reddish) (Lab): A triple lock of nothing is still nothing. The women of the Women Against State Pension Inequality campaign have been done an injustice by this Conservative Government. We also know that a group of women from 1956 will miss out on the new state pension benefits too. What has the Minister got against women from the 1950s?
Mr Vara: The hon. Gentleman has a problem understanding, so I will say this very slowly: as a consequence of the triple lock, which means an increase in line with whichever is highest out of inflation, earnings and 2.5%, when the new state pension comes into place in April, pensioners will get £1,000 a year more than under the old system. As he should remember, Gordon Brown insulted pensioners with a 75p rise, so we will take no lectures from the Opposition on who really cares about pensioners.
Topical Questions
William Wragg (Hazel Grove) (Con): What steps are the Government taking to ensure that all employees are fully informed of the new auto-enrolment pensions?
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): I can assure my hon. Friend that the Government are working closely with the pensions regulator to ensure that small employees in particular are informed of the new auto-enrolment changes. Online facilities are easy and simple to use for many people. Offline facilities such as leaflets and so on are also made as easy as possible.
Shailesh Vara outlines pension reforms to address increasing life expectancy and to introduce the equalisation of the pension age for men and women.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): It is a pleasure to serve under your chairmanship, Mr Hanson.
I start by thanking the hon. Member for Warrington North (Helen Jones) for moving the motion today, and for doing so very passionately, convincingly and articulately. I also thank all other Members from across the political divide who have spoken today. Indeed, I commend all those who signed the petition that triggered this debate. As we have already heard, we have debated this issue extensively in recent weeks and months, and I am grateful to have another opportunity to put the Government’s position on record.
The debate has centred considerably on state pension age equalisation, and in particular its impact on the women who are affected by it. However, it is important that we do not look at this topic in isolation. We cannot look at the changes to women’s state pension age without also acknowledging the significant changes in life expectancy in recent years, the huge progress made in opening up employment opportunities for women and the wider package of reforms—
Barbara Keeley: Will the Minister give way on that point?
Mr Vara: I will not give way; I wish to make progress.
As I was saying, we must also acknowledge the wider package of reforms that we have introduced to ensure a fair deal for pensioners.
On life expectancy, people now live longer and stay healthier for longer. I took on board what the hon. Member for Worsley and Eccles South (Barbara Keeley) said, but although she may have quoted a specific figure, other figures show that life expectancy is projected to increase for both men and women. In just a decade, the length of time that 65-year-olds—
Barbara Keeley: Will the Minister give way on that point?
Mr Vara: No, I will not give way. A number of points have been made. I have listened very carefully for just under three hours and I am keen to put the Government’s views on record.
Caroline Flint: The Minister is wasting time when he could have taken an intervention.
Mr Vara: The right hon. Lady is a former Pensions Minister, so—
Caroline Flint: No, I am not.
Mr David Hanson (in the Chair): Order. I call Mr Vara to continue.
Mr Vara: In only a decade, the time that 65-year-olds live in good health has gone up by just over a year. Of course, this is welcome news, but the reality is that it puts increasing pressure on the state pension scheme. Even when the state pension age changes are taken into account, women in this group will on average receive a higher state pension over their lifetime than any generation before them.
Ian Blackford: Will the Minister give way?
Mr Vara: I will not give way.
The Government have a duty to ensure the sustainability of the state pension scheme, and it would be irresponsible to ignore such developments.
Employment prospects for women have changed dramatically since the state pension age was first set in 1940. The most recent figures show a record female employment rate of 69.1%, with more than 1 million more women in work than in 2010. I am sure that Members welcome figures showing that the number of women aged between 50 and 64 in work is also at a record high, with more than 100,000 older women in work than at this time last year.
Lady Hermon: Will the Minister give way?
Mr Vara: I will not.
Turning to our broader reforms, we have introduced a package of measures to transform the pensions system. The triple lock is massively boosting the state pension, which will be £1,000 higher from April than would have been the case if we had uprated by earnings over the past six years. In addition, we have protected the winter fuel payment and permanently increased cold weather payments. We have created a new, simpler state pension, which will come in from April with a full rate of £155.65 a week. That means that 650,000 women will receive an average increase of £8 a week for the first 10 years. As that will be set above the basic means test for pensioners, people will have a clear platform to save on.
Ian Blackford: On a point of order, Mr Hanson. May I ask for your guidance about what can be done? This is a specific debate about the WASPI campaign, but the points that the Minister is addressing have nothing to do with that debate—
Mr David Hanson (in the Chair): Order. With due respect to the hon. Gentleman, the content of the Minister’s speech is for the Minister to elucidate and defend accordingly. It is not for the hon. Gentleman to comment on in a point of order.
Mr Vara: We have also abolished the default retirement age so that people can work for as long as they wish without fear of age discrimination. We have introduced the most fundamental reform to how people can access their pension in almost a century through pension freedom, which has abolished the effective requirement to buy an annuity.
No one can say that the changes have not been fully considered. The parliamentary process was fully followed. We held a full, public call for evidence alongside extensive debate in both Houses. Between January 2012 and November 2013, the Department for Work and Pensions wrote to all those affected.
Rachel Reeves: Will the Minister give way?
Mr Vara: I will not.
More than 5 million letters were sent to addresses then recorded by HMRC. Crucially, the Government also listened during the process. On Second Reading of the Pensions Bill in 2011, the Government said:
“we will consider transitional arrangements.”—[Official Report, 20 June 2011; Vol. 530, c. 52.]
On Report, after considering the matter, Ministers made a concession worth £1.1 billion, and the time period was reduced from two years to 18 months. For 81% of those affected, the increase in the time period will be no more than 12 months.
To reverse the Pensions Act 2011 would cost more than £30 billion, which simply is not sustainable, and nor is it sustainable to reverse the 1995 changes, which some wish to do, as that would cost many billions more. It is noteworthy that if we went back to the 1995 position, it would mean that women would be campaigning for a state pension age of 60—[Interruption.]
Mr David Hanson (in the Chair): Order.
Mr Vara: Over the past decade, women have on average stopped working later than 60. In the first quarter of 2010, the average age of stopping work was 62.6 years, while in 2015 it was 63.1 years. In fact, the actual women’s state pension age is approaching 63 years.
Rachel Reeves: Will the Minister have some courtesy and give way?
Mr Vara: I will give way to the hon. Member for Warrington North, who moved the motion, but I will not give way to others as I have limited time.
Helen Jones: Very well then. The Minister cites average ages, but that does not address the issue. The issue is the extra time that women have to wait for their pension and the fact that they have not been informed. The average means nothing to that.
Mr Vara: If the hon. Lady is a little patient, I will tell her about the issue concerning communications.
Rachel Reeves: Get on with it then.
Mr David Hanson (in the Chair): Order.
Mr Vara: If the hon. Lady will stop interrupting, I will get on.
I mentioned in the House earlier and I say it again now that when people need extra funds, other benefits are available. That is the case for those who are in work and those who are not. A 2004 Department for Work and Pensions report entitled “Public Awareness of State Pension Age Equalisation” found that 73% of those aged between 45 and 54 were aware of changes to women’s state pension. In 2012, further research by the DWP found that only 6% of women who were within 10 years of receiving their pension thought that their state pension age was still 60.
Several hon. Members have mentioned Steve Webb’s comments. If one reads the full transcript, one sees that he referred to £30 billion. He said that he sought a concession of £3 billion, but got £1 billion. He added that
“a billion quid is a serious amount of money”.
Reference has been made to other European countries. To put the balance right, I point out that there are countries that have already accelerated the process and equalised the pension age for men and women, such as Germany, Denmark, the Czech Republic and Greece.
The Government recognise the huge contribution that older workers make to the workforce and the country, and we are working with stakeholders to ensure that they recognise those benefits. The number of women aged 50 to 64 is at a record high, as I mentioned earlier. Hon. Members talked about carers. Under the new state pension, people who care for others will qualify for credits that will go towards their contributions to that pension.
Our collective responsibility now is to support the package of reforms. Rather than causing continuous confusion for those affected, we need to build further awareness of the measures I have set out. I again thank all those who have contributed.
Shailesh Vara outlines the Government’s decision not to go ahead with the introduction of the legal aid “dual contracting” system and to suspend for 12 months the second reduction in litigation fees.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara): As the Lord Chancellor and Secretary of State for Justice announced yesterday, the Ministry of Justice has had to play its part in reducing the budget deficit, and economies have had to be made in every area of expenditure. In the last Parliament, spending on legal aid was reduced from £2.4 billion to £1.6 billion. Further changes in the legal aid system were due to be implemented in the current Parliament, with a second reduction in litigation fees in July 2015.
At the time when the fee reduction was proposed, the market was made up of about 1,600 legal aid firms. After careful negotiation, the then Justice Secretary decided to adopt a system of “dual contracting” to drive greater efficiency and consolidation in the market. Over time, however, opposition to that model has increased. Solicitors’ firms feared that it would lead to a less competitive market, and barristers feared that choice and quality would diminish. Besides, a process of natural consolidation was already taking place in the market.
Although we understood those arguments, we also needed to deliver reductions in expenditure, but since July 2015 there have been two significant developments. Her Majesty’s Treasury has given us a settlement that allows greater flexibility in the allocation of funds for legal aid, and it has become clear that there are real problems with pressing ahead. We currently face 99 legal challenges and a judicial review of the entire process. Litigation will be time-consuming and costly for all. We have therefore decided not to go ahead with the introduction of the dual contracting. We have also decided to suspend for 12 months the second fee cut. The Legal Aid Agency will extend current contracts to ensure that the service continues until replacement contracts come into force later this year.
We will review progress on joint work with the profession to improve efficiency and quality before returning to any decisions on the second fee reduction and market consolidation.
...
Mr Vara: I welcomed the comments made by the hon. Member for Hammersmith (Andy Slaughter), although they were very brief. I must add, however, that his attempt to criticise what has been described as the Lord Chancellor’s sensible decision was opportunism, pure and simple. He obviously has a selective memory. I remind him that in 2009, when Jack Straw was Justice Secretary, he abandoned the criminal legal aid best value tendering scheme at a very late stage, just before the 2010 general election. I do not recall the hon. Gentleman’s grumbling to his boss at the time, and Jack Straw certainly does not recall hearing his voice. This needs to be put into proportion.
Let me now deal with the hon. Gentleman’s questions. When we embarked on the dual contract process, we had the support of the Law Society; the hon. Gentleman may wish to reflect on that. We have said that we will suspend the second fee cut for a year. We will then work with the professions, and will form a definite view in due course. As for the Legal Aid, Sentencing and Punishment of Offenders Act, the hon. Gentleman knows only too well—because I have said it many times at the Dispatch Box—that a review will take place within three to five years.
[Interruption.]
The hon. Gentleman is chuntering away, as he is wont to do on a regular basis. He says, “How much money?” He knows full well that all shades of Government, both Conservative and Labour, if they have listened to people and feel that a decision needs to be changed, will make that change. Just as the Labour Government made decisions to change policies, we have made such a decision. I do not recall previous Governments wasting time and effort in trying to make calculations when they have made a change of direction.
Our decision has been welcomed by the profession, and we are pleased about that. We now want to look forward and move ahead.
Robert Neill (Bromley and Chislehurst) (Con): The intelligent lawyer and the intelligent decision maker are alert to the dictum attributed to Keynes: “When my information changes, I change my conclusions.” Surely the Lord Chancellor should be commended rather than criticised for doing that on this occasion.
Will my hon. Friend give us some more details of the particularly welcome initiative to involve the professions themselves through the proposed advisory council?
Mr Vara: My hon. Friend is right to say that the Lord Chancellor should be commended. Mark Fenhalls, QC, the chairman of the Criminal Bar Association, said yesterday:
“It takes courage to make such decisions.”
Perhaps the hon. Member for Hammersmith will reflect on that sentiment.
The Lord Chancellor has his advisory board, and he will be working with the profession to ensure that as we progress further, the public will benefit, and the taxpayer who funds the legal aid budget will gain the maximum possible value.
Sarah Champion (Rotherham) (Lab): Steve Hynes, director of the Legal Action group, has said:
“In its planning and execution the MoJ has demonstrated shocking incompetence with this tender exercise.”
Will the Minister now launch a review of his own Department’s competence?
Mr Vara: I appreciate that the announcement was made a relatively short time ago, and that the hon. Lady has probably not had an opportunity to hear what the profession has said. The profession has wholeheartedly welcomed the proposals, and I think she should note those comments, rather than individual comments.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Will my hon. Friend write to me, explaining what impact the proposal will have on lawyers in the west country, especially those in my constituency, which contains, at Charles Cross, the busiest police custody suite in England?
Mr Vara: I urge my hon. Friend to look at the details of the statement made by my right hon. Friend the Justice Secretary yesterday, wherein the way forward is stated, but I will happily write to my hon. Friend with further details.
Nick Thomas-Symonds (Torfaen) (Lab): I should first say that I used to be a barrister before entering Parliament, and remain a non-practising member of Civitas Law in Cardiff.
A year ago, the previous Lord Chancellor said these very reforms were both sustainable and essential. I thought that was completely wrong and I am delighted that the current Lord Chancellor agrees with me, but can the Minister tell us why the previous Lord Chancellor got so many things so badly wrong?
Mr Vara: It lowers the tone of this debate when, not for the first time, the hon. Gentleman takes his lead from the hon. Member for Hammersmith by resorting to personal abuse. There have been two significant developments, which have allowed us to make the announcement. First, thanks to the economies we have made elsewhere in the MOJ, Her Majesty’s Treasury has given us a settlement that allows us greater flexibility in the allocation of funds for legal aid; and it has also become clear, as I have said, that there are real problems in pressing ahead as initially proposed. We recognise those issues and we want to do the best for the profession, and that is why we have taken this decision.
Mr Steve Reed (Croydon North) (Lab): The Minister’s Department has wasted close to £15 million now on ill-judged projects. What does this latest U-turn bring the running total to?
Mr Vara: The hon. Gentleman talks about millions of pounds; may I just remind him of the billions that were squandered and wasted when his party was in government, and that if it was not for its squandering and mismanagement, this Government would not have had to take the tough decisions we are having to take?
Conor McGinn (St Helens North) (Lab): The Saudi prison contracts, the secure college, the book ban, the outsourcing of the collection of fines by courts, the criminal courts charge, and now two-tier, the latest in the long line of U-turns by the Justice Secretary on measures taken by his predecessor. If he is looking for his next U-turn, may I suggest he looks at the repeal of the Human Rights Act—and, of course, the closure of the court in St Helens?
Mr Vara: I am sure the hon. Gentleman’s constituents will be grateful that he managed to slip in that last bit concerning his court. As I have told him previously, no firm decisions have been taken on that issue. On other matters, I am pleased that the hon. Gentleman pays such detailed attention to what is happening in the MOJ.
Carolyn Harris (Swansea East) (Lab): I welcome the Justice Secretary’s move to scrap the two-tier system. He said HM Treasury has given him a settlement that allows him greater flexibility in the allocation of funds for legal aid. Will he give us more detail about the settlement and whether it will extend further than what he has already said?
Mr Vara: I refer the hon. Lady to the Chancellor’s autumn statement. He said he would be allowing £700 million-plus for the courts reform programme and there would be £1.3 billion for reforming the Prison Service. We in the MOJ are also consolidating our estates programme generally in terms of the offices and space we use. If the hon. Lady reads the statement, she will also be aware that my Department will be making 50% administration cuts by 2019-20.
Mike Kane (Wythenshawe and Sale East) (Lab): The Justice team must be spinning like tops at the moment. Would the Minister care to estimate how many U-turns there have been since the new Secretary of State took his position?
Mr Vara: I will just mention that Labour’s 13 years of squandering taxpayers’ money, which has meant that we have to take these decisions, puts into total insignificance the very cheap jibe that the hon. Gentleman seeks to aim at this Government.
Shailesh Vara answers MPs questions to the Ministry of Justice.
Access to Justice
5. Stephen Timms (East Ham) (Lab): What steps he is taking to ensure that access to justice does not depend on ability to pay. [903238]
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara): We are committed to ensuring that our justice system delivers faster and fairer justice for all our citizens. Reform of our courts and tribunals will bring quicker and fairer access to justice and create a justice system that reflects the way people use services today. We have also ensured that legal aid remains available for the highest priority cases, for example where people’s life or liberty is at stake, where they face the loss of their home, in cases of domestic violence, or where children might be taken into care.
Stephen Timms: The result, as the Lord Chief Justice extraordinarily reported two weeks ago, is that:
“Our system of justice has become unaffordable to most”.
Two constituents were sacked unfairly. One went to tribunal but was unable to afford legal representation and therefore lost. The other immediately gave up. With justice now available to only the well-off, does the Minister have any serious proposals to open up access to justice to ordinary people?
Mr Vara: I am grateful to the right hon. Gentleman for raising the issue of employment tribunals, because it allows me to say that this Government’s aim is to ensure that people do not have to go to court or tribunal in the first place, and therefore do not have to incur the legal expenses or experience the stress. In the case of employment tribunals—he might not be aware of this—the ACAS early conciliation service, which is free, was used by 83,000 people in its first 12 months. I very much hope that when constituents bring problems to his surgery in future, he will point them towards that free service.
Andrew Bridgen (North West Leicestershire) (Con): Since the Government changed the criteria for access to legal aid there has been a huge increase in claims of domestic violence. Has the Minister made any assessment of the link between those two items?
Mr Vara: We constantly ensure that matters are kept under review. We are committed to having a review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 three to five years after its implementation.
Rachael Maskell (York Central) (Lab/Co-op): The Law Society describes access to justice as being
“on the verge of a crisis”.
Funding for civil cases has fallen by 62% since civil legal aid was cut. Will the Minister carry out a full review to understand the equality impact of the changes in civil legal aid?
Mr Vara: As I have just said, we will be carrying out a full review of the implementation of LASPO. We still have one of the most generous legal aid budgets in the world, notwithstanding the reductions we have made.
Jake Berry (Rossendale and Darwen) (Con): Some of the people who would struggle the most to pay court fees are those affected by family breakdown, often in chaotic families. Will my hon. Friend update the House on what plans he has to simplify and reduce costs to access child arrangements orders, and will that include any further statutory rights for grandparents?
Mr Vara: On court fees, what I will say is that where people have difficulty attending court, there is a fee remission system available, which can be for remission in full or in part.
Christina Rees (Neath) (Lab): We learnt this week that a district judge is suing the Ministry of Justice, blowing the whistle on the rising number of death threats and the increasingly violent claimants that our judges are having to deal with day in, day out. Given that that comes so soon after the Lord Chief Justice’s warning that judges face a rising number of challenging and emotionally charged cases, what action is the Minister taking to address these claims, or is this just another admission that his party’s failed austerity policies have made our courts more dangerous, both for judges and for victims?
Mr Vara: I welcome the hon. Lady to her new post on the Opposition Front Bench. She will appreciate that, given that there is ongoing litigation, I cannot possibly comment on that from the Dispatch Box.
David Rutley (Macclesfield) (Con): I know that my hon. Friend regards access to justice as a clear priority. With that in mind, and given the large area of north-east Cheshire that will be without easy access to a court under the proposals in the current consultation, can he tell the House what progress is being made in considering the Macclesfield proposal for a single, combined Macclesfield justice centre?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara): I thank my hon. Friend for the meeting we had and for the justice centre report that he and his constituent presented to me. He will be aware that we are giving serious consideration to that report and, indeed, to the 2,000-plus submissions made in the consultation, to which we will respond soon.
Conor McGinn (St Helens North) (Lab): In 2012, the Minister’s own Department spent £1.7 million refurbishing St Helens courthouse to accommodate civil and criminal proceedings in the same building, declaring that it was efficient and logical. Are we to assume therefore that considering the closure of the same courthouse just four years later is illogical and inefficient, or would the Minister like to rule that out today?
Mr Vara: No final decisions have yet been taken, and we are taking into account a whole variety of considerations. The consultation concerns 91 courts throughout England and Wales, and it is about making our system better and one of the best in the world.
Kevin Foster: Thank you, Mr Speaker. I greatly appreciate that.
The Minister will be aware of the strength of representations from Torbay about the proposal to close Torquay magistrates court. What progress is being made in the consideration of that proposal, and in the making of a decision to keep justice local in the bay?
Mr Vara: I hear my hon. Friend’s message loud and clear. We have met and corresponded, and I am giving serious consideration to all that has been said about the court in his constituency.
Following the recent announcement by the Ministry of Defence regarding the proposed future development of RAF Molesworth, Shailesh Vara MP said:
“ We need more local housing and if the proposals put forward by the Ministry of Defence for RAF Molesworth proceed then they would certainly help to meet that demand. Given the location of RAF Molesworth, it is important that any proposals ensure that there is the proper infrastructure to accompany any development.
I will be working closely with Cllrs Jim White and Jason Ablewhite from Huntingdonshire District Council to ensure that once the US Air Force leave the site, we work with the Ministry of Defence to secure the best possible outcome.
I have already had a meeting with Defence Minister, Mark Lancaster MP, and he has agreed to meet again with me and members of the local community to discuss ways of working together as we move forwards.”
Shailesh Vara outlines the Government’s commitment to a one nation justice system that safeguards and protects the vulnerable, supported by a strong and sustainable legal aid system to provide advice and support for the highest priority cases.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara): May I say what a pleasure it is to serve under your chairmanship this morning, Mr Bailey? I congratulate the hon. Member for Aberavon (Stephen Kinnock) on having secured the debate. I also thank the other hon. Members who have contributed. This important subject is capable of arousing many passions, and I am pleased that the debate, although lively at times, has been conducted in a measured tone. I very much hope that will continue.
Let me be clear at the outset: the Government share the passion for a justice system that works for everyone. I have spoken previously about our commitment to one nation justice, which is fundamental to the rule of law. At the heart of one nation justice is equality. We are committed to making sure that our justice system delivers faster and fairer justice for all citizens, not just some. We are committed to a justice system that safeguards and protects the vulnerable and that works better for victims and witnesses. It must be recognised that legal aid is only one part of the balanced provision of access to justice, but it is nevertheless an important part, and I accept that there is a responsibility on the Government to ensure that it is available for those in the greatest need.
When the programme to reform legal aid commenced in 2010, the scale of the financial challenge facing the Government was unprecedented. The coalition had to find significant savings, which meant making difficult choices. Despite that, we have made sure that legal aid remains available for the highest priority cases, such as those where people’s life or liberty is at stake, where people face the loss of their home, as in cases of domestic violence, or where people’s children might be taken into care. It is also available in relation to the treatment and detention of people experiencing mental health problems and in cases concerning the best interests of people who lack mental capacity.
Tackling domestic violence remains a Government priority. For that reason, we have retained legal aid for the purpose of obtaining urgent protection via an injunction. In addition, in private family law cases—those concerning child arrangements and financial matters—funding may be available for those who will be materially disadvantaged by facing their abuser in court.
I hope hon. Members will accept that it is reasonable to ensure that the correct cases attract funding. However, we have listened and responded to specific concerns. That is why, during the passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, we made changes to make evidence easier to obtain. In April 2014, we expanded the list of evidence accepted in applications for legal aid in private family cases. We also extended the definition of health professionals to include psychologists. We made further changes in July 2015, including by adding new offences to the list of domestic violence and child abuse offences. Further regulatory changes ensure that, once a particular form of legal aid has been granted, no further evidence needs to be submitted for someone to receive legal representation for their case. We will, of course, continue to keep the evidence requirements under review.
Mention has been made of exceptional case funding, and funding has been provided where it is required by law under European Union legislation or European convention on human rights regulations.
Stuart C. McDonald: The Minister explains how legal aid is still available in some of the most urgent situations—for example, when someone’s house is at risk of repossession. However, does that not raise the question, why wait until we get to that stage? Why not provide legal aid earlier, so that people do not get into that mess in the first place?
Mr Vara: It is important that the hon. Gentleman recognises that there must be some limit, and I will come in due course to how much money is spent. However, his criticism is ironic, given that he admitted in his speech that there is less expenditure per capita in Scotland than in England and Wales.
Stuart C. McDonald rose—
Mr Vara: The hon. Gentleman did explain the reasons for that, but I have to say that the facts speak for themselves. He should not try to explain away the fact that there is less expenditure per capita in Scotland than in England and Wales—it is easy to be disingenuous in explaining things away. As I will explain later, the fact is that the legal aid budget for England and Wales is one of the largest in the world.
Stuart C. McDonald: The Minister misses the two key points I made in my speech about per capita spend. First, it is not fair just to compare legal aid spending per capita; we have to look at justice spending overall.
Secondly—this is a matter of fact, not explaining things away—the higher per capita spend in England and Wales is a result of things such as the larger number of expensive fraud cases prosecuted south of the border. The proportion of people eligible for civil legal aid in Scotland is about 75%—well in excess of that in England and Wales. The Minister must also bear it in mind that the financial eligibility rules are more generous and the number of legal cases covered is far broader. He should try to learn lessons from the Scottish jurisdiction, so that savings can be made not by removing all sorts of cases and people from the scope of legal aid, but by achieving efficiencies in the system and other changes.
Mr Vara: I would simply say that the hon. Gentleman should look at some of the cases in England and Wales. He will find that some of the fraud cases in this jurisdiction are pretty complex. However, I am grateful to him for saying that it is important that we look at matters from an overall perspective. With the best will in the world, some of those who have spoken already have not done so—they have seen legal aid in a narrow confine, rather than from the overall perspective the hon. Gentleman speaks of.
Even after the reforms we have put in place, we still have a very generous legal aid system, compared with other countries. Last year we spent more than £1.6 billion on legal aid, which is about a quarter of the Ministry of Justice’s departmental expenditure. As I said, that is one of the most generous legal aid budgets in the world.
Jo Stevens: Is it not the case, though, that the Ministry of Justice budget has been cut? Therefore, to boast that the Government are spending that proportion, when the overall amount of money has been reduced, is not really a boast at all.
Mr Vara: May I gently tell the hon. Lady that, were it not for the economic mess that the Labour Government left this country in—[Interruption.] Labour Members may well shrug their shoulders, but the reality is that, were it not for the mess they left and their economic mismanagement, we would not have had to take the tough decisions that we are having to take. I will return later to the views the Labour shadow justice team has expressed on the record about whether the cuts should have been made.
During the previous Parliament the coalition Government proposed a civil legal aid residence test, which has been referred to. The Government continue to believe that individuals should have a strong connection to the UK to benefit from our civil legal aid scheme, and intend to implement the residence test following recent success in the courts. I should add that during the previous Parliament the Government were particularly careful to listen to, and take into account, concerns that were raised about the residence test. As a result a number of modifications and exceptions were proposed, including in cases involving particularly vulnerable individuals. We believe that the proposed residence test, with specific exceptions for vulnerable groups, is both fair and appropriate. It has to be right that when British taxpayers’ money is being used for legal aid, the recipient of the legal aid should have a strong connection to our country.
Karl Turner: Will the Minister kindly explain how the residence test will work in practice?
Mr Vara: Clearly, we have said that someone has to be here for a minimum of 12 months. We will ensure that when an application is made that criterion is fulfilled. If the person is in one of the exceptional categories the criterion will not apply.
Karl Turner: Let us say that a solicitor is taking instructions from a client. What evidence will be needed to prove habitual residence in the United Kingdom?
Mr Vara: The hon. Gentleman is an experienced barrister and an experienced politician. He will appreciate that the function of this House is to put policy into implementation, by ensuring that it becomes law. The practical process will need to be thought out—[Hon. Members: “Ah!”]—as is the case with every other measure introduced by the present and previous Governments, and during the 13 years when the hon. Gentleman’s party was in government, and even before that. That is something that will be dealt with and resolved.
The hon. Member for Strangford (Jim Shannon), for whom I have huge respect and regard, spoke passionately; but he will of course be aware that the matter is a devolved one. I wish him well in his dealings with David Ford, with whom I too have had dealings. To the extent that it will help, I will certainly tell him the next time I see him that the hon. Gentleman was speaking passionately and would like him to give a sympathetic ear when he raises the issue. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) will appreciate that, again, the issue is a devolved one; but he has put his views on record—including in our little dialogue during my speech.
I am grateful to my hon. Friend the Member for Warrington South (David Mowat) for bringing a realistic perspective to the debate, and for pointing out the reality of the situation. He repeatedly asked the shadow Justice Minister which of the cuts that we have made his party would reverse. I am not surprised that no reply was forthcoming, because in an interview with The Guardian on 30 January 2015, the former shadow Lord Chancellor, the right hon. Member for Tooting (Sadiq Khan), said:
“I don’t have a magic wand to wave. I can’t commit to reverse the £600m cuts to legal aid made by the Tories and Lib Dems. We will still have to take tough decisions on reducing the deficit.”
However, it was not only the former shadow Justice Secretary who took that view. The person in his team dealing specifically with legal aid, the hon. Member for Hammersmith (Andy Slaughter), was interviewed by John Hyde of The Law Society Gazette on 24 September 2014:
“‘We’re not going to get in a Tardis and go back to before,’ he said. ‘We are in a world where resources are tight and it would not be right to pretend otherwise.’”
The article goes on:
“Slaughter conceded that the Labour party would have been forced to make cuts to family law funding and promote mediation as a cheaper option. He added that a Labour government would seek to promote and improve mediation services on offer.”
He is quoted as saying:
“‘We are going to be honest about the tightness of resources—we can’t tackle everything immediately and other elements”—
of public spending—
“will have a higher place in the queue.’”
Jo Stevens: Will the Minister give way?
Mr Vara: I will give way, but perhaps the hon. Lady might like to say something about those comments from the Labour shadow Justice team.
Jo Stevens: I want to ask the Minister: does he support the principle of mediation?
Mr Vara: I absolutely do support the principle of mediation.
Jo Stevens: There we go.
Mr Vara: The hon. Lady seeks to justify the fact that her party says it will not make cuts reversals of £600 million by saying, “There you are.” Of course we support mediation. In fact we have said that in family cases where there are divorces, rather than the two separating parties engaging solicitors and then barristers, and then going to court—all paid for by the taxpayer—it is far better for them to sit around a table, trying to have a constructive dialogue with mediation. That way of reaching a solution is preferable.
Given that the shadow team has said it would not make any cuts, perhaps its members could reflect on whether the next time one of them speaks they might be supportive of our proposals, rather than simply saying, “Don’t reduce.”
Karl Turner: Will the Minister concede at least that the leader of the Labour party has set up the Bach commission, to look at the issue of access to justice? It would be constructive for Ministers at least to acknowledge that. It is true that my colleagues said previously that they could not just wave a magic wand—of course not; but some of the cuts were badly made and chaotic. Areas—swathes—were taken out of the scope of legal aid, with the consequence that the most vulnerable people suffered; and the reality was that that did not really save money.
Mr Vara: I refer the hon. Gentleman to the comments I just made—that his party’s shadow team said it would not reverse any of the cuts. That kind of contradicts what he says; but as far as Willy Bach is concerned—and he is a man for whom I have much respect—I wish him well with his commission. The hon. Member for Kingston upon Hull East (Karl Turner) will be aware that we have said there will be a review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 three to five years from its implementation. That will be a thorough review in relation to the way forward.
I want to mention some other points made in the debate. The hon. Member for Aberavon referred to some research conducted by Rights of Women, showing that 38% or 39% of women do not have the evidence needed to apply for legal aid. That research was based on responses from 61 people, which I hope even the hon. Gentleman will agree is a small sample—much smaller than researchers would ordinarily use to generalise across the wider population.
There is much debate about the amount of work available and the number of lawyers around to do it. The Law Society has itself accepted that there are far too many people chasing too little criminal work. We must recognise that the legal profession needs to take a wider look—not just to legal aid—at how things are going. In a relatively short time the structure of the legal profession has changed. There was a time when there were simply solicitors, barristers and legal executives; but now barristers in particular face competition from solicitors who have higher rights of audience than previously. There are more people wanting to qualify as barristers, as well. Alternative business structures are coming on the scene. That means that more and more people are chasing the same amount of work.
Jo Stevens: The point is not that there is not sufficient work for barristers to do, but that there is no legal aid available to enable people who need legal advice to go to a lawyer and get help. We have more people going to prison than for many years, and more people going into the criminal justice system. There is plenty of work; it is just that those people cannot afford anyone to represent them.
Mr Vara: Perhaps the hon. Lady missed the point when I said that we have one of the largest legal aid budgets in the world, at £1.6 billion. I would say that that is capable of buying a substantial amount of legal aid assistance and advocacy for people. I go back to the comment from the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East about the importance of looking at matters in the round, from a broader perspective.
Much has been said about employment tribunal fees and the fact that people are not using employment tribunals any more. There should be some recognition of the ACAS early conciliation process, which did not exist before but has dealt with some 83,000 cases in the 12 months since it was introduced. There should also be some recognition of the fact that the economy is improving, and that more jobs are being created out there. It is always the case, looking back at the trend of such things, that there is less demand for employment tribunals when the economy is improving. People should not overlook the fact that more than 80,000 cases have been dealt with by ACAS’s early conciliation process. Furthermore, looking at matters in the round, let us not forget that this Government are committed to spending some £700 million on reforming the courts system, which means there will be a better way of accessing justice than exists at the moment.
Coming back to the words in the title of this debate, we very much hope that the reforms will particularly assist vulnerable people, including victims, witnesses and others. The reforms will mean, for example, that those people do not have to attend a court to give evidence, but can instead go to a convenient location close to them and give evidence by video conferencing. We will also make more use of modern technology in a broader perspective. We already have prisoners giving evidence from prisons, which avoids getting caught up in traffic jams and all the additional security costs that taking them to court would entail.
Stephen Kinnock: Given the changes that are being introduced and the impact they will have in real time, does the Minister not agree that waiting for three to five years before doing a review of LASPO is simply evidence of being asleep at the wheel? A review of LASPO needs to be brought forward in a far shorter timeframe.
Mr Vara: It is important to recognise that LASPO made a huge change to the whole structure of the legal aid system. It is important that we ensure the changes have sufficient time to bed in, in order to make a proper assessment of whether they have worked. As it happens, the three to five year period is more or less approaching us, and we will do the review in 2016 to 2018, but it is important that we allow such fundamental changes to take place.
Jo Stevens: Can the Minister tell us whether the review of LASPO will be in 2016 or is likely to be at the end of the period?
Mr Vara: I am afraid I cannot tell the hon. Lady when the review will be. Clearly, we are giving much thought to that. We want to get it right and to ensure that the changes we have made already have the effect we wanted. If necessary, we will make changes. As I say, the timing of the review is yet to be decided, but we are committed to doing it and will do so.
I am mindful that the hon. Member for Aberavon must have an opportunity to wind up, so I will simply conclude by saying that I hope hon. Members will appreciate this Government’s commitment to a one nation justice system that safeguards and protects the vulnerable, supported by a strong and sustainable legal aid system to provide advice and support for the highest priority cases. I am grateful to the hon. Member for Aberavon for securing the debate and to all other Members who have spoken.
10.54 am
Shailesh Vara responds to a debate on the transition to the equalisation of the state pension age.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): I congratulate the hon. Member for Paisley and Renfrewshire South (Mhairi Black) on managing to secure this debate, which has attracted many Members on both sides of the House. I also commend all the colleagues who have taken the trouble to come here and speak today. I will try to address as many of their points as I can in the limited time available to me.
I should like to begin by reminding the House of the rationale for reforming the timetable. For our state pension system to function effectively, it has to be fair, affordable and sustainable. The changes made to the state pension age under the Pensions Act 2011 make an important contribution to achieving those aims. Gender equality is one of the main purposes of the changes to the state pension age. Under the previous system, women reaching state pension age in 2010 would spend on average 41% of their adult lives in receipt of the state pension. For men, the figure was only 31%, owing to the longer life expectancy and earlier state pension age of women.
It makes little sense for women to work to a pension age originally set in 1940 which does not reflect the employment opportunities open to them in a modern society. Changes were needed to take account of increased life expectancy and to ensure fairness for working-age people who would otherwise bear the cost of this longevity. Following sharp rises in life expectancy, the previous Government acted to address this and brought forward the timetable for rises in the state pension age. This was vital if we were to continue to meet the UK’s obligations under EU law to eliminate gender inequalities in social security provision and to ensure that the state pension remained affordable and sustainable. It is also important to look at the changes in the context of our wider pension reforms and what these mean for women.
Barbara Keeley: The Minister cannot have been listening to what I said earlier. A substantial proportion of what I said showed that that is not the case, although he and his colleagues are hiding behind that argument.
We were not required to do that. Some EU countries are not equalising until 2040 or 2044, and some are maintaining a difference. Will he please stop hiding behind something that is not true?
Mr Vara: The hon. Lady should respect the views of other people, rather than simply stating that what she says is right. We are bound by EU law, but it is also right and proper that we should have gender equality, irrespective of EU law.
Ian Blackford: Will the Minister give way?
Mr Vara: I will not give way. I am mindful of the limited time that I have, and I am keen to ensure that the proposer of the motion, the hon. Member for Paisley and Renfrewshire South, has time to make her concluding comments at the end of the debate.
The introduction of the new state pension will benefit many women who would have lost out under the current two-tier system, largely as a result of lower average earnings and part-time working. All those affected by the 2011 changes will reach pension age after the introduction of the new state pension. Around 650,000 women reaching state pension age in the first 10 years will receive an average of £8 per week more under the new state pension than they would have done under the previous system. The majority of households reaching state pension age up to 2030 will receive a higher total income over retirement under the new system.
The solution to ensuring that people have a comfortable later life is encouraging and enabling them to work longer. This benefits individuals through the social and financial rewards of employment, it benefits employers through the skills and experiences that older workers bring to the workplace, and it benefits the wider economy. Research by the National Institute of Economic and Social Research has shown that adding just one year to people’s working lives would add 1% to UK GDP per year.
Support is in place to provide extra help for people who cannot work owing to caring responsibilities, ill health or disability. Women affected would be eligible for the same in-work, out-of-work or disability benefits as men of their age, and carer’s allowance may be available, for which national insurance credits are awarded automatically. In 2011, credits were introduced to help adult family members looking after a child under 12 in order to assist the parents who were working, with these credits being able to count towards state pension entitlements.
Much has been made of the comments made by the previous Pensions Minister, Steve Webb, and it is important to recognise that even he was not seeking a restoration that would cost £30 billion. Indeed, he said that he was only looking for a 10% clawback. It is also worth remembering that he does recognise that the £1.1 billion concession that was made was generous. He exact words were:
“and we got £1 billion back in the end, and a billion quid is a serious amount of money.”
Ian Blackford rose—
Mr Vara: I will not give way.
Nick Thomas-Symonds rose—
Mr Vara: I will give way.
Nick Thomas-Symonds: I am grateful to the Minister for being so generous in giving way. He read out the quote about £1 billion being a “serious amount of money”, but he really should have quoted the whole sentence, which begins:
“this was a measure to save 30 billion quid over how many years, and we wanted 10% of that back to soften the blow”.
Steve Webb wanted £3 billion back but got only £1 billion.
Mr Vara: If the hon. Gentleman had taken the trouble to listen while he was preparing his question, he would know that that is what I said, except that I used different words. He might want to check the Hansard record tomorrow morning. In this place, it always helps to listen before speaking.
The Government listened to the concerns expressed during the passing of the 2011 Act, and shortened the delay that anyone would experience in claiming their state pension, relative to the 1995 timetable, to 18 months. That concession benefited almost a quarter of a million women, who would otherwise have experienced delays of up to two years. A similar number of men also benefited from a reduced increase. The concession was worth £1.1 billion in total, and as a result 81% of women affected will experience a delay of 12 months or less.
Mhairi Black: To me, the concessions that were given show that the Government recognise that the transition was not appropriate. Given that the wording of today’s motion is clear in asking the Government to reassess the transitional arrangements, will the Minister confirm that he will do so if the motion is passed, be it unanimously or with a vote—yes or no?
Mr Vara: Much has been made of what was “promised” on Second Reading. What I say to the hon. Lady and others is that this concession was made after it was said that this would be considered, and that the concession is worth six months and £1.1 billion.
Ian Blackford rose—
Mr Vara: I have only a short time left and I must press on.
As for people being aware of the 1995 changes, I should add that research carried out in 2004 by the Department for Work and Pensions found that 73% of people aged 45 to 54 were aware of the changes to women’s state pension age. It is regrettable that people have sought to put this on a political basis and have conveniently forgotten that after 1995 we had 13 years of Labour government. I have here a list of some 10 Labour Pensions Ministers who totally failed to do anything, yet Labour Members conveniently seek to put the blame on the things that have happened post-2010. The shadow Home Secretary made comments earlier, but he was a Labour Cabinet Minister, and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), who also made comments today, was also in the Labour Administration. He is a former Pensions Minister, yet he did nothing then.
Alan Johnson rose—
Mr Vara: I am afraid I will not give way. [Hon. Members: “Give way.”] I have only a few seconds left, but I will give way.
Alan Johnson: Indeed, I was the Work and Pensions Secretary, but we introduced measures that did not include this anomaly—it was introduced in 2011.
Mr Vara: The right hon. Gentleman spoke earlier of being lobbied, but he took no action on that. Furthermore, big issues arise as to whether notice was given in respect of the changes in 1995, and when he was Work and Pensions Secretary he did nothing to make sure that those women were informed. All the blame has been put on Conservative Members.
I wind up simply by saying that this matter was debated thoroughly and properly in 2011. A concession was made then—by way of time period and financially—which was worth more than £1 billion, and it was thoroughly debated in both Houses of Parliament. I very much hope that I have put the Government’s position on the record. I simply say to some people that they, too, should learn to take responsibility, given that they were in government for 13 years. With that, I shall allow time for the hon. Member for Paisley and Renfrewshire South to speak.
Shailesh Vara outlines Government reforms to the welfare system which are transforming people’s lives and helping move Britain to a higher wage, lower tax and lower welfare society.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara): I should like to thank all those who have spoken in today’s debate. On a Labour Opposition day, however, it is rather regrettable to find more Scottish National party Members than Labour Members present for most of the debate. Labour Members have demonstrated a poor showing on their Opposition day.
Let me make one thing absolutely clear at the outset: universal credit is transforming people’s lives. After years of Labour’s dependency culture, this Government are continuing to reform the welfare system and the labour market.
It is worth reminding the House of the broken welfare system and labour market that were left to us, a legacy that hon. Members have recognised during today’s debate: nearly one in five households had nobody in them working; the number of households where nobody had ever worked had nearly doubled; 1.4 million people had been on benefits for most of the previous decade; and close to half of all households in the social rented sector had nobody in work.
Several hon. Members rose—
Mr Vara: I will not give way, as I have limited time available and I am keen to address as many of the points raised as possible. We have turned that situation around. Our reforms, the centrepiece of which is universal credit, are working and are getting people back into work.
Stephen Timms: Will the Minister give way?
Mr Vara: I will make an exception for the right hon. Gentleman.
Stephen Timms: The Government are not going ahead with the tax credit cuts, so why is it right to go ahead with precisely the same cuts for the minority of people who have the misfortune to be claiming not tax credits but universal credit?
Mr Vara: It is important that the right hon. Gentleman and others take into account the need to consider the broader perspective: the raising of personal allowances; the introduction of the new living wage; the doubling of free childcare to 30 hours; tax-free childcare from early 2017; and, let us not forget, the fact that every time we fill up our tank with petrol there is a saving of £10 because of the freezing of the fuel duty. It is important to consider everything in a broader perspective, not the narrow perspective that we have heard from so many Opposition Members.
A number of speeches have been made today and, unfortunately, time simply does not allow me to address them all. I shall simply say that the right hon. Gentleman made a passionate contribution. I have huge respect for him and I am sorry that he is no longer on his party’s Front Bench. May I also pay tribute to my hon. Friend the Member for Hertsmere (Oliver Dowden), who made a learned contribution, clearly setting out the reasons why Labour’s proposals are simply not sustainable? My hon. Friend the Member for Lewes (Maria Caulfield) made a powerful contribution, telling us of her experiences growing up, which had the whole House in agreement with her.
This is an important subject and we need to recognise that the IFS has pointed out that no one on existing benefits or tax credits whose circumstances remain the same will lose out in cash terms as a direct result of being moved on to universal credit. These claimants will get transitional protection to avoid cash loss at the point of change. It is important to note that the only people who will be directly affected by the change to work allowances in April will be those already in work, the majority of whom will be single claimants without dependants. [Interruption.] The shadow Work and Pensions Secretary chunters away, but we have checked the Hansard record and found that he was wrong and we were right. Conservative Members await a withdrawal of his earlier comments, which we debated. We have checked Hansard and he should do likewise. For those people who are affected, we have been careful to put measures in place to ensure that they are fully supported. As well as the additional work coach support that these claimants will receive, we have increased the amount available through the flexible support fund to help people progress in work and increase their earnings.
Universal credit is a major reform of welfare that is designed to make sure that work always pays. Through the removal of the requirement to work 16 hours per week that exists in the tax credits system, people will see a financial benefit from every extra hour they work. The universal credit taper means that financial support is withdrawn at a consistent and predictable rate, helping claimants to clearly understand the advantages of work. The IFS has said that anyone being moved on to universal credit from tax credits will be protected—they will not be cash losers. Opposition Members need to take that on board—that comes from the IFS.
Owen Smith rose—
Mr Vara: I will not give way.
It is also worth noting that universal credit is working: for every 100 jobseeker’s allowance claimants who find work, there are 113 universal credit claimants who do so. It is important to look at the bigger picture. This Government are moving Britain to a higher wage, lower tax and lower welfare society. Universal credit is fundamentally different to the legacy systems it replaces, and it must be recognised that there is no meaningful way of comparing an unreformed tax credit system with universal credit.
As my hon. Friend the Under-Secretary of State for Disabled People highlighted at the start of the debate, Labour’s spending on in-work benefits went up by £22 billion, but the number of working people in poverty actually rose. The system we inherited from Labour was one where, for millions of people, being on welfare was a more attractive option than working or taking on more work.
Under Labour, there was a complete abdication of responsibility for managing working taxpayers’ money. Labour’s shambolic welfare policies led to a colossal welfare budget that was simply out of control, and the party has not changed. Page 47 of the 2015 Labour party manifesto said:
“To guarantee a decent social security system for the next generation, we need to keep costs under control.”
Yet when the shadow Work and Pensions Secretary was on the “Daily Politics” programme in December he said:
“We are campaigning for a…full reversal of universal credit...we will put that money back in if we were in power…I’m crystal clear about that.”
The presenter Jo Coburn challenged him—she had to challenge him three times. She said:
“Where will you get the money? The bill would go up under your proposal.”
The shadow Secretary’s reply was:
“Had I been Chancellor…I would have taken the extra £27 billion tax receipts.”
There we have it: the party that wants to continue taxing. That is why it is the party of welfare—it is the welfare party, not the labour party.
Welfare is much more than simply giving money to people and writing blank cheques; it is about removing the barriers that prevent people from finding work and progressing in work. It is about giving people the support they need to stand on their own two feet and live independently of the state. It is about creating the right incentives for people so that they can make the right choices for themselves and their families. That is what universal credit does, and it is working. It is incentivising work, renewing personal responsibility, and rewarding positive choices. Under this Government—this one nation Government—we will continue to deliver for all our citizens.
Following today’s announcement by Hinchingbrooke Health Care NHS Trust and Peterborough & Stamford Hospitals NHS Foundation Trust regarding closer cooperation between the two hospitals,
Mr Shailesh Vara, Member of Parliament for North West Cambridgeshire said:
“In the present economic climate it is right that we look at ways of saving money in the public sector, especially for back office work such as management, finance and IT. Where there is duplication, efficiencies should be sought. However, if there are to be closer links, then it is vital that front-line services are not affected and there is a clear understanding that they will remain at both Hinchingbrooke and Peterborough.”
