Labour wins vote to combat 'dark side' of flexible working

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The government has been defeated after Labour led a successful bid to modify plans contained in the Pensions Bill setting out who should qualify for a state pension.

The argument was led by Labour backbencher and former work and pensions minister, Baroness Hollis of Heigham.

She introduced an amendment as the bill began report stage on 24 February 2014, designed to allow people working several "mini-jobs" to aggregate their earnings in order to build up National Insurance contributions that make them eligible for a state pension.

Of people working zero-hours contracts or more than one low-paid job, she said: "Many of those people will not be building a state pension. Our pension structure, both state and private, has not yet caught up - it's 10 or 15 years behind, as the plates shift in the labour market."

The lack of pension provision for those who do not earn enough to contribute to National Insurance represents "the dark side of the flexible labour economy", she warned.

From the Lib Dem benches, Lord German defended the single-tier pension established by the bill, saying it would mean that people with "more varied work histories will be able to build up their National Insurance records to achieve the maximum state pension outcome".

Part of the issue, according to opposition spokesman Lord Browne of Ladyton, was that "none of the estimates that the government has for the scale of this problem are at all reliable" and that "a strategy based on unreliable statistics is an unreliable strategy", which left the government looking "complacent".

Responding for the coalition, Work and Pensions Minister Lord Freud advised that aggregating earnings would have "significant consequences" for employers and require the wholesale operational integration of taxation and insurance.

The amendment, he said, "comes without strong evidence of a problem and the type of action it promotes is piecemeal tinkering; such tinkering could produce perverse outcomes and new unfairnesses".

Lady Hollis was unconvinced and forced a division, in which her proposal was carried by a narrow margin of 215 to 210 votes.

Peers later rejected another amendment from Lady Hollis, on exempting widowed parents from certain work conditionality terms of their pensions, by 237 to 202.

Today's debate on the bill was divided into three parts, of which this is part one. Part two is here and part three is here.

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