Have you got questions for the Labour spokesperson on pensions?

crumblygranny

Hi Rachel

Bit off topic here, but I'd like to hear more from Labour on bread and butter issues. Hooray for keeping the press in check (although I wonder for how long), but what about the economy? I'm ok pension wise, but while all the prices in the shops keep rising, it does get tougher (and don't get me started on fuel costs)

Hi crumblygranny,

Fingers crossed all the stuff about phone hacking will lead to change into what the media can do and change the relationship between politicians and the media.

On bread and butter issues, I think you're absolutely right. I know that in the constituency I represent (Leeds West), it is the prices charged in shops, the cost of filling up your car, and heating your home, along with the huge squeeze in incomes that families are experiencing are what really matters. In Leeds West, average incomes are just £18,000 a year. For many people it's a real struggle to make ends meet. Today, growth numbers for the economy in the second quarter of this year came out and they showed that the economy grew by a feeble 0.2%. That's not enough to get people back to work and ensure that incomes keep pace with price rises. That's why Labour are calling on the Government to come up with a Plan B, a proper plan for jobs and growth, which will help some of the 1 million young people who are out of work, help small businesses keep going and help families and pensioners who are struggling to make ends meet.

I think that plan means reducing the budget deficit but not at the speed and scale that this Government are trying to do. Other economies including France, Germany and the US are growing again, and unemployment is falling, but in the UK, we're stagnating.

So, I fully agree with you and I will do my best to ensure that Labour makes it the number one issue that I know it is for most people.

eggmayo

The government's proposals for auto-enrolment are a good idea, aren't they? I am very pleased there's no exemption for small firms, because it's very difficult these days to get any help with pension contributions - none of my children have any pensions whatsoever and they are all in their 30s and 40s.

Dear eggmayo,

I am extremely proud of the auto-enrolment system (that was brought forward by the last government) which will roll out in 2012. It will mean that around 7m workers, mostly low paid and the majority women, will be automatically enrolled into saving for their retirement. Not only that, but employers will be required to offer workplace pensions to all their staff and to pay minimum of three per cent of an employee's salary into their pension. Yes, you're right, all businesses, including small businesses will have to comply.

This is a massive change in ideas about saving for the future, which we need. 20% of people don’t save for their retirement – and the percentage of people saving decreases as earnings get lower. Auto-enrolment will change this and prevent people having to rely on the state to support them in retirement, but most of all it should reduce the level of pensioner poverty that still persists.

PierreMaurice

How much is it going to cost the Government to contribute to the new NEST system? If the government put that money into the state pension to which we are already paying towards our stste pensions, how much better would the state pension be with that money added?

Secondly, why are some pensioners living overseas traeted better than other who live in mainly Commonwealth countries? I have heard Rachel say it is because of reciprocal agreements but there are reciprocal agreements with Canada, new Zealand, Japan and previously with Australia, but pensioners living there are not uprated.

For the second part of your question, Pierre, see my answer to Joan.

As for the first part, just to reassure you that the main contributions are from the employer, and employee, not the Government. Under Automatic Enrolment, the employee will pay in 4%, the employer 3% and tax relief will provide another 1%. At the moment, tax relief on pensions costs the Government around £20bn a year but two thirds of the benefit goes to people paying top-rate tax.

I think it's fantastic that automatic enrolment will mean that those on modest and middle incomes will be encouraged to save with support from their employers, and also through tax relief. But in the scheme of Government spending on pension tax relief, this is not a huge cost.

NanaTee

I have worked while raising a family & paid a "reduced stamp" a married women's stamp since 1974. Friends who have paid a full stamp for a short while & then given up work have claimed credits for their years of childcare & now earn a full Pension in their own right. This does not seem fair. I have offered to pay a top up but this is not allowed. I understand that there are about 300,000 Women who may be similarly affected. How will this be dealt with under the new Pension arrangements?

Hi Nanatee,

I firmly believe that the pension system needs to do more to support women like you, who have done such fantastic work in bringing up a family, and I’m really sorry to hear about your situation.

There is a lot of complexity in the system and that is one reason I support in principle the moves to a flat rate pension which I have already discussed.

There was an unfairness in the system with the number of years needed to contribute to NI – set at 44 years for men and 39 years for women – and this was changed so that it was 30 years for everyone - which means that many women (and men) who took time out to bring up a family were not unfairly penalised when it came to pensions.

I recognise that doesn't help everybody, but on top of that, the minimum income guarantee ensures that no pensioner should be living on less than £135 a week, up from less than £70 when Labour came to power in 1997.

Barrow

I have to say I agree with beolivia to some extent. Those of us who have been responsible and tried to make provision for our old age are being penalised whilst those who spent every penny they had as and when they got it can sit back whilst the state looks after them. I know there will be many disagreeing with these thoughts, but as I have mentioned before my biggest expenditure is Council Tax which I have no control over and with which I can get no help because I have savings over a certain amount, yet those who have not saved and who receive pension credits and other benefits can have a higher weekly income that I do and still get help with Council Tax. Yes I know some people didn't earn enough to save for their retirement and I have no problem with them receiving all the help they can get but we all know people who are happy to sit back and let the state pay for everything. I am sorely tempted to book a cruise and spend all my money so the state can then look after me!!!!

Sorry that was a bit of a rant but it is something I feel strongly about.

Dear Barrow,

I am president of a charity in my constituency, called Bramley Elderly Action. And while I know that many people think that the pension credit system is unfair, I also know that many of the pensioners in my area are an awful lot better off because of the targeting of support for some of the poorest pensioners, particularly single women. Overall, more than a million pensioners were lifted out of poverty by the last government and pensioner poverty now stands at its lowest level for 30 years.

I know it is difficult in your situation, and there are always difficult decisions about thresholds. The savings threshold was raised by the last government to try to support pensioner households with modest savings and automatic enrolment means that we must do more to encourage savings, including clawing less back through means testing. But there's always going to be a balance between paying a single pension to everyone regardless of their private means and targeting support on those people where it can make the most difference.

One thing we need to keep an eye on is what happens to council tax benefit. The Government’s localism proposals seem to suggest that council tax benefits will depend on where you live, which I don’t think is right. As I said we need to keep an eye on it, and ensure that pensioners who need support with their council tax get it, wherever they live.

Harry123

I have been a Labour supporter all my life, but I get the impression your opposite number in government is actually quite reasonable. Does this make your job difficult, or easier?!

(you may not agree, of course!)

Hi Harry123,

I think in some areas, Steve Webb does 'get it'. In opposition, he did a huge amount to raise the issue of pensioner poverty and women's pensions. The problem is he is part of a government that wants to cut public spending at an unprecedented rate which means everybody including pensioners is having to take a big hit. So the unfair increases in the state pension age, the cut in Winter Fuel allowance and the hike in VAT (not to mention the shift from RPI to CPI in uprating pensions) are hitting pensioners hard.

So his heart might be in the right place, but like all ministers, he is having to implement George Osborne's cuts, and that's why pensioners are missing out.

putaspellonyou

Did you always want to be a politician? What motivated you to go into politics? And is there anything you don't like about the job?

Little bit of a lighter note

When I was growing up, Thatcher and Major were in power, my school library was turned into a classroom because there wasn't enough space. There weren't enough textbooks to go round, and my sixth form was two prefab huts in the playground. So I joined the Labour Party when I was 17 because I wanted a fairer country. I didn't know then I was going to be a politician, but I did know I was passionate about everyone having a decent education and there being enough jobs for people too.

I honestly love my job. I love the constituency I represent and the opportunity to help people there with problems with housing, antisocial behaviour or getting the pensions they're entitled to. And I love my job as shadow pensions minister, getting stuck into the debate in Parliament and of course, answering fantastic questions like those that have been put to me this afternoon. I'm getting asked by the Gransnet staff to say what I don't like... if I had to say something, it's the hours that Parliament sit. On Mondays and Tuesdays, we go until 10 o clock at night, sometimes later, I don't think that's the best way to make the laws, or to get the best people into politics. It's something that I hope will change.

pensionista

Rachel,

Doe's the Labour Party have any proposals to reduce pension poverty in a realistic time period ?

Pensionista, you've got loads of excellent questions! Let me tackle this one.

As I said before, in my constituency, where poverty amongst pensioners and families is among the highest in the country, is something I care hugely about. When Labour came to power is 1997, a third of pensioners were living in poverty. But since then, over a million pensioners have been lifted out of poverty. In part, due to the pension credit, but also because of Winter Fuel allowance and other support.

I recently launched a campaign in Leeds with Age UK getting pensioners to claim the benefits they're entitled to, and as a constituency MP, that's something I'm very mindful of, because if everyone did claim what they were entitled to, pensioner poverty would fall further and faster. I think the Government have got it wrong on changes to the Winter Fuel allowance because with the sharp increases in energy prices and the coldness of the last couple of winters, the truth is, with less money to pay the fuel bills, more pensioners are going to be cutting back on the basics (food and fuel). Pensioner poverty, frankly, is unacceptable in a country such as the UK.

greatgablegran

Welcome to Gransnet, Rachel, good to have you...it's now nearly a year since Ed Miliband became leader of the Labour Party. When do you think we will have a clear sense of what the Labour Party stands for in the 21st century?

Hi greatgablegran,

It's been really enjoyable being here! We're in the process now of pulling together all the recommendations that have come in as part of Labour's policy review. Some of the questions that have come in today have said that Labour isn't relevant, and the truth is, after the election defeat last year, it is right that Ed Miliband looks again at all our policies and takes a chance to go out, meet with people and really understand their fears, concerns and aspirations. If we do that, I think Labour can be relevant again.

At Labour's party conference in September, you'll be hearing more from us on the policy review, but from my small part on it, I think it's been a fantastic way of reaching out and doing some fresh thinking - and today in a way has been part of that exercise.

Time's up, and I seem to have run over slightly, but really pleased to be able to answer so many questions and to hear your views on State pension age, pensioner poverty, means testing, flat rate pension and pensions abroad.

If you invite me back, I'd be happy to take more questions

In the meantime, have a lovely summer, and thanks again.