Pensions, the triple lock and Scottish Independence

Steve Webb has come under a bit of fire for comments that his triple lock, which guarantees a state pension rise by the higher of earnings, inflation or 2.5%. Let's look at what he actually said to the Financial Times.

My view is it should be triple lock; to be absolutely clear, I would want to see that continue. But we, as a party, will have to thrash that one out.

He made clear that this would be something that all parties would have go deal with.

This is pretty much a statement of the obvious. Every policy of a previous government is up for grabs once the next lot come in.

The triple lock, of course, was brought in when the pension was much lower. It was £97.65 per week  in 2010-11. Sustaining it over the longer term with a pension rate of £142 per week which will be brought in by the Pensions Bill currently going through Parliament  is bound to present challenges. We will need to be quite clear about how we would pay for it. Steve clearly thinks that we should and will no doubt argue his case with the Manifesto Working Group which is currently developing the platform for 2015.

I have long said that it is ridiculous that a family with a disabled child get no help with heating costs while my husband, who is still earning a reasonable amount, qualifies for Winter Fuel Allowance that we don't need because he's over 60. I'm very encouraged that Nick Clegg has signalled that any further cuts to welfare must come from those who can most afford it. The money that will save is not sufficient, however.

Our record on improving and widening access to a decent state pension as well as ensuring fair annual increases, is undoubtably one of the best things we've done in Government. It's the sort of reform we have been talking about for as long as I've been in the party. Steve Webb wrote about the new Bill for LDV in January:

 It will treat men and women equally for the first time and will value unpaid caring work just as much as a high-flying city job. That is why the big winners from Single Tier will be women, carers and some low earners who haven’t previously received much in the way of earnings-related state pension. And for the first time ever, we will be bringing the self-employed fully into the state pension system.

You know your polices must be good when they're nicked by your opponents. Scottish Finance Minister John Swinney told the Institute of Chartered Accountants in Scotland that an independent Scotland would, from 2016 provide a single rate pension with a triple lock. Willie Rennie took him to task for promising a Liberal Democrat pensions policy without saying how he would pay for it:

The triple lock is a great policy for pensioners which is why we are delivering it in Government.  It's been possible with the economic base of the United Kingdom.  The SNP promise our policy but have failed to show how they will pay for it. Instead of promising everything and costing nothing they should answer the serious questions posed by ICAS about the security of pensions after independence.

Swinney spoke of a "seamless transition" of pensions after independence. This flies in the face of what ICAS said in a report questioning how the pensions system could operate post independence given that many schemes currently operate across the whole of the UK. The effect of EU rules requiring schemes to be fully funded if they operate over more than one country could cause significant problems, they said:

If Scotland became an independent country there would be significant cross-border issues for schemes which currently operate UK-wide. Under EU law (as interpreted by UK legislation), schemes which operate in more than one country must fund their liabilities in full and any underfunding must be rectified immediately rather than through a staged recovery plan. Dealing with underfunding would have major cost and cash flow implications for employers with underfunded cross-border schemes.

That doesn't sound seamless to me.

Swinney's assertions are consistent with the SNP's "it'll be fine" attitude to everything. If you question them, you are accused of scaremongering. Scottish voters are too canny to just cross their fingers and hope for the best. They will need much more credible details if they are to be persuaded to vote for independence than the SNP has yet been able to provide.

Why, though, should voters choose some sort of  imitation of Steve Webb's scheme when they can have the real thing by staying in the UK?

That awful "hard working families" phrase....

If there was one phrase used by politicians, including Liberal Democrats, I could choose to put in Room 101, it would be "hard working families."

This is partly because it doesn't reflect all those who have been helped by the Liberal Democrats' tax and pension measures. All basic rate taxpayers, whether they have children or not, have been helped by the raising of the tax threshold to the tune of around three or four months' council tax, or a month's rent.

The anxieties of living on a low wage in an insecure job are just as strong if you are single or part of a couple with no children. In fact, it's petrifying if you're single because there's only your income to fall back on. If you're on a low income, you don't have the chance to save much for a rainy day and if your car and washing machine break down at the same time, you're a bit stuffed. Having not enough money is a nightmare whatever your family situation. Life is a perpetual struggle.

The other reason I don't like the phrase is because it has more than a whiff of judgement about it. I don't go for the deserving and undeserving poor thing. It implies that if you're out of work for some reason you are somehow at fault. My husband, with an unblemished employment record, took almost a year to find a job when he was made redundant in 1994. It was horrendous and he had the best support imaginable in terms of getting job applications done - the services of British Coal Enterprise in Mansfield. He went there every day as though he was going to work and completed hundreds of job applications and went for many interviews and for a while ended up coming second all the time.

You can't talk with one hand with understanding at the horrors of long term unemployment and the effect it can have on someone and then rub salt in the wounds by making it sound like hard working families are the only people worth helping.

It was Party President Tim Farron who set me off on this train of thought late last night when I read the email he'd sent out highlighting Nick Clegg's call for an emergency tax for the very wealthy in which he used that phrase. I told him on Twitter that it made me feel like crying and, as he always does, he responded almost immediately and said he'd "try to make sure it doesn't happen again." He might have a hard job ahead of him given that it's one of the MP's bingo card things that they are supposed to say all the time, along with "as a Liberal Democrat", "coalition government", "cleaning up Labour's economic mess" and "doing the right thing."

I was talking to Mark Pack about this last week and, while he doesn't mind "hard working families", he told me that in Australia that the phrase used to describe those struggling with financial adversity is "the battlers." That's a bit more inclusive so maybe we need to find an equivalent - or just nick theirs. Certainly "hard working families" doesn't cover the woman caring for her husband, disabled after a Stroke, or the retired couple struggling to make ends meet, or the redundant factory worker desperate to find another job to keep the wolf from her door.

I am impressed, by the way, that Tim replied so quickly. It's been a feature of his presidency and not something he just turns on and off at election time. Even when the party is fed up with him for some reason, he listens to all the points made to him and replies courteously and promptly. He might not always say what I want to hear, but nobody ever will. He is up for election this year and I will definitely be supporting him for a second term.

Tim used the opportunity within his email, by the way, to invite everyone to Conference. He was a bit tame, though, saying people should go because: "we will now debate real ideas to fix our economy and to make sure we build one based on fairness". We will, but we'll also do shedloads of training, learn so much from the organisations who have fringes or stalls and just catch up with our Lib Dem family. As Party Conference is the most fun you can ever have, naked or clothed, I'd recommend that you take him up on that invitation to Conference if you possibly can. There are cheaper options available if money is an issue - going as a steward for example. Register here for Brighton in just 3 weeks' time.

Pension age rise brings gloom to this house

My poor husband has gone to work with a very long face today.

Not only is he miserable with Hay Fever, but he was born in 1951. That means he was looking forward to picking up his State Pension in 2016.

Not any more.

It looks very much like he's going to have to wait an extra year as the Coalition Government add to a painful week by raising the Pension age.

There is some good, though, as this comes in tandem with a fantastic plan to abolish the default retirement age so that people can choose for themselves when they want to stop working. Some will want to retire at 65 or even 60, but others are keen to continue working and why should they be forced to retire? This potentially is a good move for women whose careers are often broken up by caring responsbilities. I'm in my 40s and I still haven't sorted myself out with a proper career so it potentially presents an opportunity for me to develop one (assuming I can decide what I want to do when I grow up) and not be shown the door in just over 20 years' time. Also it will give women the chance to build up more retirement income.

We'll have to see the details, but I think that this was inevitable. Whenever you make the change, the people who reach the former threshold that year are going to feel pretty fed up. A year from 65-66 is not going to be too difficult, but I don't like the idea of forcing people to wait beyond 70 for their State Pension as is also mooted.

Jenny Willott lives on State Pension for a week

Liberal Democrat MP Jenny Willott has been living on the basic State Pension of £95.25 this week, a huge change from her normal salary of her current gross weekly income as an MP of £1245.50.

She's doing it to highlight how difficult it is to manage to live on such a low income. She's recounting her experiences here on Twitter. It's well worth having a look at some of the basic choices she's having to make. She talked about buying a cheap tin of soup for lunch but then realising there was no tin opener in the office and having to nip out and get one. Most poignantly, she realises how hard it is to buy something as simple as a Remembrance poppy:

"My Remembrance poppy is looking tatty and I need a new one. I appreciate now it's a much bigger sacrifice to buy one as a pensioner."

I guess the other thing to think about is that Jenny is getting the full State Pension whereas many women don't qualify for even that paltry amount because they either worked part time, took time out to have children or look after elderly relatives. Some may have been badly advised decades ago and made decisions that it is now impossible to rectify because nobody will take responsiblity for the mistake.

This week Liberal Democrat Pensions Spokesman Steve Webb wrote in Liberal Democrat News about his fight to obtain justice for women who have been let down by the Pensions system.

He told how he had brought individual cases to the Government's attention and identified that 150,000 wome had missed out on help of around £2000 each because they had not received the Home Responsibilities Protection to which they were entitled from 1978 onwards.

He also identified that some women had not been notified of a special scheme to help those born between 1938 and 1944 boost their pensions in certain circumstances. The government agreed to contact the women concerned and they are likely to receive, between them, millions in a Pensions boost that they were rightfully entitled to.

It's appalling that women have borne the brunt of caring duties, saving the Government a fortune in many cases and then been kicked in the teeth when it comes to receiving even the most basic of State help in their old age. And before anyone reminds me about the Pension Credit, it's not that great and many people who are entitled to it don't claim often because they don't know about it. It's good that we have Steve to fight so tenaciously on their behalf.

Steve Webb secures Government u-turn on MPs' pensions

I've often said that what Steve Webb, Lib Dem MP for Northavon, doesn't know about pensions isn't worth knoowing. It was Steve who spotted that some women may have lost out because the Government didn't inform those who hadn't paid NI contributions for several years at the end of the 90s/beginning of this decade and was able to ensure that they wouldn't be penalised.

Anyway, this isn't my story to tell, so I'll link to his account of how he ensured that taxpayers' contribution to MPs' pensions has been frozen.

He recognises that this is an interim measure as the MPs' pensions are going to have to be much more intensively reviewed and reformed.

LibDig This!

Government backs down on Pensions

At last, the Government has decided to make the pensions system fairer for people, the vast majority of whom are women, who take time out of the workplace to care for children or sick relatives.

This doesn't help the many women pensioners who are living in poverty now, though.

It shouldn't have taken this long to stop penalising those who give up work to take on some sort of caring role.

Read here, though, why Steve Webb reckons why this might not be all it's cracked up to be.

LibDig This!