Patricia Hollis on ensuring the proposed new pensions legislation works for those who most need it
Today sees the first of two days of Report in the Lords on the Pensions Bill.
Most of the bill is about the new state pension, which rightly brings together the basic state pension, state second pension, and pension credit into one place. A structure which some of us have long campaigned for, it raises the total state pension and gets rid of means-testing for most future pensioners. However, because it is based on National Insurance, you need 35 years of payments or credits into it – and some groups who should get a pension will still remain outside.
We have scored one really worth-while success with the Military Covenant. Myself, former Defence Secretary Des Browne, and others have been able to argue that service spouses who accompany military staff abroad and are therefore unable to build up pensions contributions should be credited in. And the Minister Lord Freud is now introducing a government amendment to do precisely that.
But I also want to press two further issues, the first of which relates to zero hour contracts.
We have one of the most de-regulated labour markets in Europe. Flexible labour is great for the employer but often a lousy deal for workers. People don’t know from one week to the next what hours they may be required to work, what pay they will take home, whether next month they will be called in at all. They are cooks and cleaners, work in call centres and customer service, they are drivers, waiters, hotel and retail staff, and domiciliary care staff (150,000 of them); and most agency workers as well.
At least a million of these workers are on zero hour contracts; and the trade union Unite estimates that once you add in short-hour contracts, you’re talking about 5 million people on or around minimum wage. Half of those aged under 30 are on such contracts, and if over the year they earn less than £5700 (the lower earnings level for NI) they cannot build a state pension. If they do two short-hour jobs, each 15 hours, perhaps earning £11,000 in total, we add their income together for tax but don’t for NI. Many have been on short hour contracts for years so can’t make good their shortfall before they retire. They go into means-testing and poverty.
People worry rightly about job insecurity, holiday entitlement and sick pay. But nobody mentions the lack of pension rights, which for me is one of the most serious problems facing working people.
The second amendment I will press is on widows and bereavement benefit.
The government is introducing a bereavement support payment which lasts for 12 months. But it expects widowed parents (mainly mothers) – numb, grieving and often worn out with caring for their dying spouse, and with needy, distressed children – to begin work interviews after 3 months and start looking for work after 6 months. At just the time their children need them most and are most frightened of losing their surviving parent.
Labour will insist therefore that work conditionality shall not apply while bereavement benefits are paid – in other words, no pressure to return to work for 12 months. It is the least we can do, and even the government agrees it will cost us virtually nothing.
Baroness Patricia Hollis of Heigham is a backbench Labour Peer and a former Pensions Minister
Published 24th February 2014