Category Archives: Pensions
Conference – It’s a privilege to open this debate, a debate we approach with a passion and care.
That’s not a sign of weakness, that’s a sign of our strength.
We are so much stronger and our policy is so much better for the work of Unison’s Liz Snape, the TUC’s Kay Carberry, for the leaders of our ten biggest councils, to those from business and the third sector who’ve worked so hard on our youth jobs taskforce.
It’s stronger for the Labour councillors all over Britain who have helped us think radically about how we revolutionise the Tories’ failing back to work system.
It’s stronger for Sir Bert Massie, a pioneer of disability rights, for his taskforce, and for the hundreds of disability activists who have helped us think radically about how we make rights a reality for disabled people.
And it’s stronger for all our brilliant PPCs, fighting in key seats, who brought together residents to tell us how they want Labour to rebuild social security and a different kind of Britain.
And what sort of party would we be if we were not passionate about the stories we hear.
Like the woman I met with MS who told me how her carer, her teenage son, had lost all his support; it’s tough she said, for a boy to lose to that help when he knows his mum won’t get better.
Or the Remploy workers on a GMB picket line, fighting for work, who said to me: this isn’t just my job; this is my life.
Or the thousands of young people, I fight for in East Birmingham, hunting for work, who speak of the hundreds of CVs they send and never even get a reply – and still they keep going.
You know, there’s a Tory minister – and I’ll let you guess where he went to school – who tells us: our young people lack grit.
Well, let me tell you this: the young people fighting for work in East Birmingham have got a damn sight more grit than you need to get through Eton College.
Good people all over Britain hear these stories too.
And right now they’re asking themselves what kind of country are we becoming?
Once upon a time the Tories told us they cared: all those speeches in Easterhouse.
And people gave them the benefit of the doubt.
We were promised a Tory party that cared about the poor.
We were promised a welfare revolution.
We were promised we’re all in this together.
Three years on I tell you the jury is in.
A cost of living crisis.
A million young people out of work.
Long term unemployment at record highs.
Disabled people living in fear.
Child poverty rising.
Living standards hammered.
A promise that started in Easterhouse has ended with the spectacle of a Tory Minister, Michael Gove, blaming the poor for the temerity to turn up at a food bank.
He should be ashamed.
Three years on, I tell you the verdict is simple:
These Tories have let their prejudice destroy their policies.
And just as bad as the prejudice is the incompetence.
They say to err is human.
But if you want someone to really screw it up you send for Iain Duncan Smith.
And Conference that’s why we need to fire him.
But let me level with you, we won’t win power with a plan to roll back the clock.
To restore the status quo.
To ignore the calls for change.
The vast majority of people in this country believe the welfare state is one of our proudest creations.
It’s a mark of a civilised society.
But the vast majority don’t believe the system works for them or for modern times.
So let’s not be the defenders of the status quo, we must be the reformers now.
Today life is very different to the days of Beveridge.
The job for life is gone.
If you’re without a skill, you’ll most likely to be without a job.
Two thirds of couples both work – yet struggle with child-care.
Millions struggle on low wages while company profits rise.
Hundreds of thousands save for decades just to buy a home.
We’re aging, and yet fewer have a pension.
Getting a job, setting up home, working as a parent, caring for another, saving for the future.
These are the challenges of the real world you can’t solve by demonising others.
These are the challenges for One Nation Social Security.
And the truth is today the system doesn’t help.
So we need to change the system.
And build a new consensus rooted in our values, our party’s values, our country’s values.
Where we listen not to our demons but to the better angels of our nature.
Were we move from a language of division to a language of respect.
Where we match the personal responsibility to work.
With the collective responsibility to care.
These are the founding principles of the system we built in 1945, and these are the principles we must restore.
And today I want to tell you how.
With the ideas we’ve hammered out in hundreds of conversations and debates all over Britain this last year.
And the cardinal principal is this, full employment first.
Full employment has always been the foundation for rebuilding Britain. It was for Atlee’s Labour, it was for New Labour, it will be for One Nation Labour.
The Tories system doesn’t work.
So we need a better way.
So let’s start with a tax on bankers bonuses’ to fund a job for every young person out of work long term.
But let’s go further.
Let’s take the ideas – like Apprenticeship Agencies, pioneered in Labour Glasgow, Liverpool, Manchester, Sheffield, Newham and Wales.
And use them to revolutionise the path from the classroom to the career.
But, let’s go further.
Let’s stop fighting unemployment with one hand tied behind our back.
Let’s deliver a large devolution of power from the DWP to local councils.
Let’s build a new partnership between our job centres and town halls.
Let councils shape the programmes to get people back to work.
And let’s go further; let’s set a limit on the time we’re prepared to let people languish out of work.
Let’s invest in jobs for anyone out of work for two years, but say it’s got to be a deal.
We’ll invest in new chances, but if you’re fit to work, we’ll insist you take it.
Full employment first, that’s the Labour way.
Conference, any job is better than no job. But a good job is better than a bad one.
When the welfare state was started, its big idea was to ‘minimise disruption to earnings’.
Now our task is different. It’s to ‘maximise potential of earnings’.
That why we need Universal Credit to work.
So if the government won’t act to save it, we will.
The Tories’ system may prove dead on arrival. So we need a better way.
So, today we announce our Universal Credit Rescue Committee.
And I’m grateful to Kieran Quinn, leader of Tameside, the first pathfinder, for his offer to drive our work.
But, we’ll need more.
We’ll need a campaign for the living wage because it is wrong that we are spending the nation’s tax credits propping up low pay at firms with rising profits.
The deal has got to be simple. If your workers help you do well, then you need to give them a pay rise.
We the Labour party stand as the party of work – and the party of better off in work.
But, listen, if we want a new consensus, we need to remember this: if working people are strong, then Britain is strong.
So we should help working people.
Yet, those born in the turbulent world of the 1960’s, pay so much in and get so little out.
It’s wrong and we should change it.
Those in their 50’s are the people who’ve worked most, cared most, served most. And what do they get?
I’ll tell you, nothing.
So let’s bring back an idea from Beveridge.
Extra help for those who’ve paid their dues but are desperate for extra help to work again.
After a lifetime’s working or caring, I think it’s the least we can do.
Conference it’s a modest step – but it’s a big signal.
But, there’s something more.
Like most families in this country, I know that disability can affect anyone.
Therefore it affects us all.
Yet, today disabled people are threatened by hate crime, by Atos and by the Bedroom Tax.
Today we deny disabled people peace of mind, a job, a home and care – and I tell you that is wrong.
We need to change it.
So we will change the law so hate crime against disabled people is treated like every other hate crime.
And I say to David Cameron, Atos are a disgrace, you should sack them and sack them now.
And yes Conference we say the Bedroom Tax should be axed and axed now and if David Cameron won’t drop this hated tax, then we will repeal it.
We’ll protect disabled people in Scotland and across the UK.
Conference, we need a system that delivers the right help to the right people.
So assessments have to stay.
But let’s take Andy Burnham’s idea of whole person care and ask why not bring together health, social care – and the back to work system into one comprehensive service.
That’s what Labour did in Australia.
Let’s see if we can learn from that here.
I’m delighted to announce that Jenny Macklin, a fine Labour politician and the architect of the system down under, is going to help us figure out how.
Conference, nearly 10 years ago many of you helped win a very tough by election.
For nearly a decade I’ve served the poorest constituency in Britain.
I know in power we will have difficult decisions to make.
And I passionately believe we judge our success not by the money we spend but the difference we make.
There is no moral credibility without financial viability.
That’s why we’ll cap social security spending.
But, full employment, fair pay, a return to Beveridge, rights a reality for disabled people, fair pensions not for some but for all.
These are our principles for rebuilding social security for new times.
More than 50 years ago, my hero Clement Attlee, a man with the best hair in Labour history, made his final broadcast to a war weary nation hungry to win the peace.
We call you, he said, to another great adventure, the adventure of civilisation, where all may help to create and share in an increasing material prosperity, free from the fear of want.
That’s the Labour way, that’s the Ed Miliband way, and that’s the way we’ll win.
Following on from Iain Duncan Smith’s refusal to guarantee all pensioners will be protected from his bedroom tax,Labour’s Shadow Work and Pensions Secretary, Liam Byrne said,
“David Cameron’s Government is now in such a mess over his shambolic bedroom tax that he doesn’t seem to know who it will hit.
“Ministers once promised to protect pensioners but six weeks before the bedroom tax comes in they are now so incompetent they can’t confirm what will happen.
“Pensioners need certainty over their finances. David Cameron must now end the chaos and confusion and tell older people exactly what is going on.”
On today’s Andrew Marr show, Iain Duncan Smith admitted he didn’t know whether the bedroom tax would hit older people when Universal Credit comes in:
In response to today’s article in The People, IDS said, “The reality is that they’re [The People] looking at universal credit further down the road and they’ve asked a specific question about that and we’ve yet to set finally what we do with that group”. Available from the Andrew Marr Show here: http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/1702132.pdf
In January, however, DWP Minister Steve Webb promised pensioners would be protected:
Steve Webb, Hansard, 22 January 2013, Column 71WH
“She said that these are the lifetime homes of some people, and I entirely accept that. That is why we have exempted pensioners as a group. A set of pensioners have spare rooms, living in the home that they have occupied all their lives, and we are not touching them for the reasons she gave.”
Today’s People however states:
DWP guidance says: “New housing benefit claimants who are mixed aged couples and claiming pension credit will not be exempt when they transfer on to Universal Credit.” So if you are a pensioner living with a younger partner of working age, you will be liable for the bedroom tax.
Liam Byrne MP, Labour’s Shadow Work and Pensions Secretary, said:
“Today’s report from respected industry leaders is fresh evidence for why we need to take action on private pension rip-offs. At the weekend Labour set out a plan for change. We now need a new consensus where savers and good pensions companies come together to make the case for change.”
Gregg McClymont MP, Labour’s Shadow Pensions Minister, added:
“The Royal Society of Arts report confirms the urgent need for full disclosure of pensions costs and charges.”
Labour’s Shadow Pensions Minister Gregg McClymont and I, are today publishing “Pensions people can trust” as Labour sets out its ambition to end private pension rip offs and create the world’s best private pension system for British pensioners.
The Policy Review document, developed over months of consultation, sets out Labour’s new policy agenda highlighted by Ed Miliband, who talked about taking on private pensions rip-offs at this week Press Gallery Lunch, and just months ahead of the October launch of the ‘auto-enrolment’ system which will see an extra 10 million automatically brought in to private pension schemes in the coming years.
Labour legislated for the new system of private pensions for all with cross party support following the Turner Report. The new “something for something” pensions see workers’ contributions equally matched by government and employers.
Labour is determined to be the party of hard-working savers. That’s why I’m saying very clearly today that I want to see the best private pensions system, working for people who do the right thing and save for the long term.
Right now, a worst case scenario could see a pensions saver lose up to half of their pension thanks to hidden costs and charges. That’s wrong and it shouldn’t be allowed.
We all know we need to save more for the future. That means we need a system that builds your pensions pot, not eats your pension pot.
We’ve got some great pensions companies in Britain. But with an extra 10 million about to be brought into private pensions we’re determined to make sure savers are served by every pensions company playing to the standards of the best.”
Gregg McClymont MP, Labour’s shadow Pension’s Minister added:
“We’ve set out where we think the current system does not work for pension savers. The government should deal with these issues as a matter of urgency. In the coming months we’ll be talking to people up and down the country to see how we can get this right, because with the introduction of auto-enrolment just round the corner, we’ve got to get this right.”
The Policy Review document;
∙ Spells out the costs and charges savers can face, and the problems in the system – hidden charges, rip-offs in the annuities market, and penalty charges for people who change jobs and exit charges for savers switching schemes.
∙ Looks to the Australian system where the implementation of the Cooper Review is set to create a simpler and more cost effective system from 2013 by opening up the scheme to new levels of transparency
∙ Addresses the root causes of the problem from – lack of simplicity, transparency, accountability, scale and restrictions placed on the low cost high quality national not for profit Trust – NEST
∙ Includes comments from across the industry including representatives of; The Pensions Specialist, The True and Fair Campaign, The Saga Group, First Actuarial and Hargreaves Lansdown PLC, as well as Lord McFall, the former Chair of the Workplace Retirement Income Commission.
Notes to Editors
Attached below is the document “Pensions people can trust.”
Selected Comments from the document:
“If the pension is to re-engage the trust of consumers then transparency of costs, charges and restrictions is an absolute requirement. This transparency must cover all costs and charges, not only those directly paid by each individual member but any charges which will reduce the return on their investments. As an industry these charges are known as they contribute greatly to the profitability of pension providers and fund managers and their shareholders. This information should be freely available as it clearly is in the public interest. A pension plan is a long term commitment for both parties and long term relationships must be based on trust and honesty.”
Douglas R.G. Baillie, Senior Partner of The Pension Specialist
“It is vital that customer interest is looked after better by the annuity market. Currently, most people are at risk of buying the wrong kind of annuity and obtaining a poor rate, with nobody obliged to advise them of what they need to consider before buying this irreversible, once-in-a-lifetime product. Anyone in poor health, or who has a partner, or who wants inflation protection may not realise that they need a special type of annuity until it is too late. Commission is dedicated from the pension fund to cover advice, even if no advice is given. This is not in the customer’s interest.”
Dr Ros Altman, Director-General of the Saga Group.
“ Hargreaves Lansdown believes that the pensions industry should always look to the best interests of investors. The special restrictions imposed on NEST simply make pensions more complicated and for this reason we support the proposal that the restrictions should be lifted. NEST will serve a useful purpose as an underpin for auto-enrolment, and any commercial company that fears its own offering is not competitive should look to the quality of their own product or service, not seek to restrict NEST”.
Ian Gorham, Chief Executive of Hargreaves Lansdown PLC.
The Comments provided by stakeholders in the attached document illustrate their view on a particular policy issue. Their Comments do not necessarily imply that they support all the views expressed in this document and they do not imply that they support the Labour Party.