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Audrey Wise: My right hon. Friend says that a great many women work, but he does not seem to take account of the fact that they are still largely congregated at the lower end of the wages table and that many of them work part time rather than full-time, or are on temporary work or in other disadvantaged jobs. Will he look at that again? One job does not simply equal another.
Mr. Darling: We have introduced the working families tax credit, underpinned by the minimum wage, precisely to tackle that problem, which my hon. Friend rightly raised for years while the Tories were in power--and nothing happened.
The Government's strategy has to be looked at right across the board. We are trying to deal with the problems of low pay and, in some cases, exploitation, particularly of women who work for ridiculously low sums. We are also ensuring that we have fairer benefit and bereavement systems, which is one reason why we want bereaved husbands and their children to be treated on the same basis as widows, through a weekly non-means-tested benefit. That will help low-paid people more than it will help others, because we believe that the current system does not provide enough help with immediate costs, unpaid bills or funeral expenses. We are doubling the lump sum payable on death to £2,000.
We are also providing transitional help to those without children in the period immediately following bereavement. The Bill provides for non-means-tested help for widows and widowers without children for six months following bereavement and for older widows over 55 without dependent children, without income and without the prospect of work. We want to ensure that they are no worse off from these changes by providing extra help through income support.
Finally in that regard, we are also ensuring that the system does more to help the poorest widows and widowers and their children who, until now, have lost their benefit pound for pound. They will be able to get additional help worth an extra £10 a week. In respect of disability benefits and widow's benefit, our objective is to focus help where it is needed most.
These reforms look to the long term and to the needs that we know that we will face in the future; because we are looking to the long term, we are reforming the pensions system. In December, I published proposals for far-reaching reform of the pensions system, and the Bill is the first stage of our reforms. A large part of the Bill--clauses 15 to 43--delivers on our commitment to enable pension sharing on divorce. For the first time, pension rights can be shared like other assets at the time of divorce, which will provide greater flexibility and choice for divorcing couples and for the courts.
Mr. Hilton Dawson (Lancaster and Wyre):
That change is extremely welcome, but I understand that the Government intend that provision to apply only to people who have not commenced divorce proceedings when the Bill becomes law. Surely it would be more logical, and no more retrospective, to allow the provision to apply to people who have not reached the decree absolute stage. Such people would still be married, after all.
Mr. Darling:
The Bill will affect only cases initiated after it comes into force. Any degree of retrospection causes immense difficulties. [Hon. Members: "The CSA."] My hon. Friends mutter about the Child Support Agency; it provides an example of what happens when one revisits matters that were otherwise settled. I cannot help my hon. Friend on that issue; the provision will not be retrospective.
Miss Anne McIntosh (Vale of York):
Has the right hon. Gentleman considered the position of professional couples with no dependants, especially those couples where the lady might be the major breadwinner? The measure might cause problems on divorce that otherwise would not have arisen. Has he considered the implications of that?
Mr. Darling:
It will be up to the courts to decide how the assets are divided, if the divorcing couple cannot decide, and the measure provides an option that is not otherwise available. It is more common to find that the man works and has a substantial pension, which he gets to keep. That is unfair to the woman, who may have contributed, if not in cash then by helping the man to build up his pension rights. The measure will give additional options, but it will be up to the court to decide what is equitable.
Clauses 1 to 7 also provide a framework for the new stakeholder pension schemes, which are central to our objective of ensuring that those who can save for their pension do so. I believe that everyone who can save has a responsibility to do so, but not everyone has that opportunity. For the third of employees who do not have the option of joining an occupational scheme at the
moment, a personal pension scheme is the only option, but such schemes are not suitable for many people, especially low earners or contract workers.
Mr. Steve Webb (Northavon)
rose--
Mr. Jeremy Corbyn (Islington, North)
rose--
Mr. John Greenway (Ryedale)
rose--
Mr. Corbyn:
There is one behind you.
Mr. Darling:
I will start with the Liberals and then look behind me.
Mr. Webb:
Would the Secretary of State feel that his reforms had failed if someone on a modest income--say £10,000 a year--who had taken out a stakeholder pension found that he was still dependent on income support a few years after retirement?
Mr. Darling:
Our objective is for everybody who works during a normal lifetime to retire with sufficient income above income support. The hon. Gentleman was clearly not referring to someone who had earned £10,000 for a short period--and it is unlikely that such a person would ever have considered a personal private pension, unless badly advised--but the objective is for people who have worked throughout their lives for £10,000 a year to retire with an income above income support, either through the state second pension or through an occupational or a stakeholder pension. The objective under those options is for people to retire with an income above income support, but they will have to take advice on whether or not to go in for a stakeholder pension. I have always been clear on that point.
Mr. Corbyn:
The Secretary of State will be aware of the pamphlet produced last year by Barbara Castle and Peter Townsend on the future of the state earnings-related pension scheme. He will also be aware that his Bill, in effect, ends SERPS. Is he not concerned that the Bill is creating a big market for private pensions, when we could be refunding the SERPS scheme to ensure that that good system, which was introduced by the previous Labour Government, is allowed to continue?
Mr. Darling:
My hon. Friend has raised an important and interesting point, with which I want to deal. Our proposals replace SERPS with the new state second pension. SERPS is earnings related, so it does not do much for poorer pensioners. When I considered pension reform, I of course looked at SERPS and whether or not we should reinstate it, in whole or in part. A lot has happened over the past 25 years. There are many more people in occupational schemes--they have made their own pension provision--than was the case, or than was even anticipated, in the 1970s, but the group that is losing out particularly badly is the low-paid.
I urge my hon. Friend, if he has not already done so, to look at the Green Paper that we published last December and, in particular, the table about half way through that document showing how we are giving
significant help to people earning £9,000 a year or below. The system now assumes that people are earning £9,000, whether they are or not, and a considerable amount of pension can be accrued with such an income. That will benefit low-paid people in a way that SERPS could not, because it was not designed to do that.
Over the past 25 years, and gradually during the century, more people have made funded provision for themselves. Generally, they will be better off than if they had relied purely on the state. My approach to introducing pension reform was to work within the present system, but to tackle the deficiencies. One of the main deficiencies was that we were not helping people on lower incomes.
Mr. Greenway:
I am inclined to agree with the right hon. Gentleman. There are many people who have taken out personal pensions for whom stakeholder pensions, particularly if such pensions are introduced by their employers, will be attractive. Will he reconsider the illogicality of not allowing people to invest in both? Many personal pension policyholders will lose out badly if they are advised to come out of such a scheme and go into a stakeholder pension.
Mr. Darling:
The hon. Gentleman has a lot of experience in the industry, and I understand the point that he makes, but there are a lot of people for whom stakeholder pensions might be a better option than personal private pensions. A lot of people who were put into personal private pensions should never have gone into them in the first place.
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