Women’s State Pension Age: Ombudsman Report

Eleanor Laing Excerpts

Thursday 16th May 2024 Commons Chamber

[Jim Shannon]

I thank the hon. Lady for that intervention. The occupational pension is another factor; it is incorporated in the plan that these people have made for their future. It is wonderful how you make a plan for the future and then the Government scupper it on you! All of a sudden, these ladies have found themselves in difficult circumstances, so I believe it is necessary to have a compensation scheme in place to help all of those ladies.

I will conclude with one more comment, ever mindful of the time limit that we all indicated we would keep to. I understand the magnitude of such a scheme, but we were able to get support quickly to households across the UK for cost of living and energy payments—something that I commend the Government on. That can be done on many occasions; we just need the commitment to make it happen. I know that the Government have the ability and the capacity to roll out all these schemes, so along with almost every other colleague in this House today, I sincerely ask that we prioritise finding a compensation formula and rolling it out. These women, our constituents—brave, courageous women—deserve no less, and we must ensure that we give them no less.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the SNP spokesman.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to follow the hon. Member for Strangford (Jim Shannon). Like everybody else, I commend my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) for securing this debate, and for all the work she has done in speaking up for 3.8 million affected women for all these years. I also commend all the other Members who have spoken in today’s debate; there have been powerful speeches, and powerful but harrowing stories of how various constituents have been affected by the increases in the state pension age for women.

There is a Back-Bench consensus today that the Government have dragged their heels, that a response is now long overdue, and that compensation is due. We have also disproved the nonsense that women should have known about the increases in their state pension age. Financial advisers and lawyers did not even know: as my hon. Friend the Member for Livingston (Hannah Bardell) said, divorces were granted on the basis of women accessing their pensions at the age of 60.

Some Labour Back Benchers today have rightly criticised the Government for their lack of action and for their policies elsewhere, but then somehow bristled at SNP speakers calling out the silence of their own Front Benchers. We are willing to work cross-party, but we also need pressure for action. If we do not call out what we think is wrongdoing, we are not doing the right thing for the WASPI women who we are all here to represent today.

We would not be in this Chamber today, debating this issue as parliamentarians, if not for fantastic campaigners such as Ayrshire WASPI Group, Cunninghame WASPI Group, WASPI in my constituency, WASPI Scotland, and of course the wider WASPI organisation. I pay tribute to my constituent Ann Hammell, who brought the issue to my attention in my early period as an MP in 2015. Again, it was heartening to hear so many MPs commend their own local campaigners.

Turning to the ombudsman’s report, there are a few key aspects: the findings and confirmation of maladministration in the DWP, compensation to be paid, and Government failures. I will explore each in turn. The ombudsman has not only confirmed that it believes that the DWP is guilty of maladministration, but has expressed outright anger at the belligerence of the Department and, by default, this Tory Government. I welcome the robust comments of the ombudsman’s chief executive, Rebecca Hilsenrath, who has stated:

“The UK’s national Ombudsman has made a finding of failings by DWP in this case and has ruled that the women affected are owed compensation. DWP has clearly indicated that it will refuse to comply. This is unacceptable.”

I agree with her.

It beggars belief that, in 2024, the Government are suddenly pretending that this ombudsman’s report is a bolt out of the blue and very complex. It is three years since the ombudsman found that the DWP was guilty of maladministration because of its lack of communication about increasing the state pension age. It is scandalous that the ombudsman is actually having to ask Parliament to find a way to create a mechanism to provide compensation for those affected. If the ombudsman does not trust the UK Government to do the right thing, I do not trust them either.

Unfortunately, at the moment I also do not trust the official Opposition, who have been too quiet on the report findings to date. That is why I have brought forward my private Member’s Bill, the State Pension Age (Compensation) Bill, which sets out a compensation framework. We need to remember that the Prime Minister was the Chancellor who boasted about setting up the furlough scheme in a couple of weeks for the covid lockdown. Clearly, if there is a Government will, there is a way, so why do the Government not have the will to get on with a compensation scheme for the WASPI women?

In the ombudsman’s report, compensation is unfortunately set at just level 4, which feels wrong. For the majority of the 3.8 million women affected, it feels like a smack in the face. Compensation of between £1,000 and £2,950 is an inadequate maximum payout. The WASPI APPG recommended level 6 for the worst affected, and my private Member’s Bill takes a similar approach. I have suggested a framework that follows the clear logic that those affected by the biggest increase in state pension age, while in effect having the shortest notice period, should receive the most compensation.

As for the 2.5 million women who have had to wait five years or more to access their pension, it would be absurd to award them just level 4 compensation of less than £3,000. In my framework, they would be allocated compensation at PHSO level 6, which is about £10,000. Those who have not had to wait quite as long, but who were still badly affected in some cases, will get levels 4 and 5, with a minority on lower levels. I thank Members from across the House who have signed my private Member’s Bill.

This subject has been debated in Parliament for nine years, and for over nine years these women and their families have been fighting for justice. It is tragic that, as has been repeated many times, the women are dying at a rate of 40,000 a year, or one WASPI woman every 13 minutes, and they are not getting the justice they deserve. This underlines that it is critical that Parliament takes action now.

However, there has not even been a suggestion on the way forward from the official Opposition. They should be putting proposals to the Government, and saying what they would do if they were in government. If their solution was accepted by the Government, they could then claim credit for getting compensation over the line. Instead, we have heard nothing from the Opposition—zip—apart from weasel words about listening. I hope the shadow Minister, the hon. Member for Wirral South (Alison McGovern), will change my mind and offer proposals during her summing up, but there was a bad example last week in the Scottish Parliament, when Labour MPs sat on their hands when it came to voting for compensation for the WASPI women. They had the temerity to get photographs taken with the campaigners, and to tell them that they backed them, but then they went into the Chamber in Holyrood, sat on their hands and actively abstained, which was disgraceful.

As I say, I hope the shadow Minister will bring forward proposals, but I would like her and the Minister responding to the debate to consider the constituents’ stories we have heard today, and a few of mine as well. Lynn was exhausted after working for 34 years in the NHS and agreed to take early retirement at 55, but she found out on her last day of work that it would be 11 years before she got the state pension, not the five years she anticipated. Nancy was widowed at the age of 54, while she was working part time, which was clearly traumatic emotionally and financially. She has suffered umpteen chronic health conditions while caring for her parents, but was forced to take NHS bank work just to survive.

Lesley, who has sometimes worked three jobs to make ends meet, was a carer for her partner when he had cancer, a carer for her dad when he had cancer, and had a period of travelling to Southampton every weekend to visit her aunt—superwoman efforts that would exhaust anybody. It is little wonder that she took early retirement age 56, only to discover later that she had to wait six years longer than she thought to access her pension.

Do not dare tell those women and others like them that they need to wait longer for justice. These are women who did not have maternity rights back in the day. They were paid less than men, and were more likely to work part time, and their private pensions were smaller, if they had them. In reality, pension age equalisation has further disadvantaged those women, especially as they were told that to get a full pension, they had to pay extra NI contributions. It is time that the right thing was done, and that right thing is fair and fast compensation now.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

Pension Schemes

Eleanor Laing Excerpts

Thursday 2nd May 2024 Commons Chamber

[Mr Carmichael]

It pains me to say it, but I think the right hon. Gentleman is absolutely right. What might have started with the oil and gas companies is clearly going much wider.

I should declare an interest, as I hope to be the beneficiary of a defined benefit pension, if I live that long, having been in the House before the move to career average earnings in 2011.

I will not rehearse what I said about the decision of BP, Shell and others not to pay a discretionary increase, which mattered significantly to their pensioners at a time when inflation was running north of 11%. However, it is worth reminding the House that a fundamental point of fairness is at stake here. When one is past retirement age, one no longer has the choices one has when one is of working age. If someone in employment is unhappy with the money they get for the work they do, they can look around and find another job, or they may choose to retrain and do something else more profitable. Once someone is of retirement age, they no longer have that choice and flexibility, which is why it has long been established as a matter of public policy that the beneficiaries of pension schemes require protection. After all, this is simply deferred income, with our being paid later, after we have stopped working, for the service we have done. It is a fundamental aspect of that protection that it should take as its starting point the undertakings that were given.

At BP and Shell, and I do not doubt ExxonMobil, people were given vigorous encouragement to join pension schemes and invest in them. They were given undertakings at the time that one advantage of a big pension scheme at a company such as that was that they would later in life have an income that was protected against inflation. So a question of good faith is at play here.

I have no doubt that for many of the big corporates, the BPs, Shells, Hewlett-Packards and so on, the possibility of paying money to those who are no longer economically active and contributing to their business is tiresome and inconvenient. I never cease to be amazed by the extent to which those at the top of these big corporates seem to think that somehow the corporates are as big as they are simply because of the role that they have played. They do not seem to understand that they are the inheritors of businesses that were built by others, who are now among those who would be the pension beneficiaries. If one is to stand on the shoulders of others, it is always good to respect the fact that one enjoys the view one has because of the shoulders on which one stands. I am sorry to say that that seems to have been forgotten in the boardrooms of too many of our large corporates.

I have expressed these concerns about BP, in particular, before. I remind the House that I have a large number of BP pensioners in my constituency, because for many years BP operated the oil terminal at Sullom Voe. It was a good employer and we valued its presence in the community for many decades. I am concerned now to see that BP pension fund trustees with a collective 94 years of membership of the fund have been replaced with four with precious little involvement, two of whom are citizens of the United States. Since we last debated this issue, both Shell and BP have again refused any discretionary increase to their beneficiaries—in essence, they are doubling down.

The briefing I have received from the Shell Pensions Group is of particular concern. As it is crafted succinctly and concisely, I shall, with your indulgence, Madam Deputy Speaker, read it into the record. It says:

“Shell has imposed this benefits cut upon its pensioners during a period when:

the Fund was in healthy surplus and well able to afford full cost of living increases without call upon Shell’s sponsor covenant; and

Shell, its shareholders and senior executives benefited hugely from the same energy crisis that was already causing their pensioners extremely high rises in their cost of living.”

The Shell Pensions Group has done considerable and detailed research on that point. From the actuarial reports and the scheme’s accounts, it concludes that

“during the same period, instead of a balanced approach using about 25% of the surplus (as quoted by Shell as necessary for a full cost of living increase) to the immediate benefit of the 93% of members whose pensions are currently deferred or in payment, the Trustee has largely opted to dissipate the surplus by massively accelerating completion of its Low Reliance (upon Shell) investment transition plan. This fifteen year plan was commenced in 2018, but with the acceleration opportunity provided by the surplus arising from increased bond deals, it was almost fully completed in 2022.”

That is where the money that could have funded the pension increases has gone. It has gone into accelerating a programme that was supposed to take 15 years and instead has been concluded in four years.

I am afraid to say to the Minister that the Shell Pensions Group also has strong concerns about the consultation that he launched on 24 February, under the heading “Options for Defined Benefit schemes”. It says:

“We are therefore aghast that…the Pension Minister opened a new consultation…with a view to identifying ways of encouraging and enabling sponsors of DB schemes to claw back surpluses. We feel that the foregoing demonstrates that sponsors require no assistance or encouragement in that and on the contrary, stronger measures are necessary to hold the surplus for the benefit of the beneficiaries, particularly in contributory schemes in which they have invested their own money by way of deferred salary and additional voluntary contributions.”

The Select Committee report has given careful consideration to this matter. Along with most of those to whom I speak, I am well pleased with the recommendations of the report in that regard.

BP also continues to double down. There continues to be no formal engagement with the pensioners’ group—what the previous chief executive officer called “the zero- engagement strategy”. I would have loved to have been at BP’s annual general meeting this year; by all accounts, it sounds to have been a heated affair. The analysis published recently in The Times by its financial editor ties in very well what BP is doing with the concerns we should all have about the future direction of travel. In a recent article, the financial editor wrote:

“Everyone at least pays lip service to the notion that meeting pension promises in full is paramount. No surplus should be touched without a meaty asset buffer being built up. No sponsor should be allowed to extract cash without showing a strong covenant—providing reassurance that it will still be around to pick up the pieces if things go wrong.

But even those safeguards aren’t nearly enough to fully protect members, according to a trenchantly argued submission from a ginger group of BP pension fund members, the BP Pensioners Group. Attempts by employers to evade their promises will be “legion” it says; they will “trim back or remove any benefit possible”; they will “abuse loopholes” in the rules to maximise their clawbacks. They will push hard to minimise what members should “reasonably expect”.

It also warned that the prospect of executive bonuses being fattened up by success in grabbing back surpluses will be far more potent in driving company behaviour than any residual feeling of responsibility to ensure schemes pay every last penny of promised pensions. The message is that it could all end up in an unseemly scramble.”

The article continues:

“The bitter dispute with BP is just “a foretaste” of how relations between many other DB pension fund members and their former employers are going to sour if the surplus-grabbing reforms are pushed through without proper safeguards. The old world is dead.”

That sums up very well the tension between surplus clawback and the need to honour the commitments that were given to beneficiaries. We see so often this mismatch, which affects the ability of the citizen to take on the big corporate, or the big public body. This is just the private sector version of what happened to the sub-postmasters. The Post Office was big enough, strong enough and well enough connected simply to ignore the sub-postmasters, to lie about them, to straight-bat their concerns, and to deny what was obvious to everyone until they could no longer manage to do so.

What is the agenda here, and ultimately who will be the winners and the losers? It is pretty obvious that the pensioners will not be the winners. We should consider the reputational damage that the issue is doing to BP and Shell. Obviously, any oil and gas company these days has to be a fairly thick-skinned corporate entity, but still I ask myself why they simply refuse to engage. Why are they denying the very obvious and clear justice of the case being put forward by their own pensioners groups? I find it difficult to see any explanation other than that the funds are being fattened up before being hived off to insurance companies or others.

The Times—The Thunderer—is not the only news outlet to have reported on BP pensions recently. On 29 March 2024, the PR Newswire reported a case in Houston, Texas, in which the judge told BP that it must reform its pension plan, following an eight-year legal battle over pension losses. Again, we are dealing with big corporates, which have deep pockets and can see off the attention of the small pension beneficiaries. PR Newswire said:

“A group of Standard Oil of Ohio (Sohio) oil workers received a winning decision…after an eight-year legal battle with BP Corporation North America, Inc. (BP), in a huge victory for oil workers, with a federal judge ruling that BP”—

this is worth paying attention to—

“‘committed fraud or similarly inequitable conduct’ in how it announced a pension formula change more than 30 years ago…Federal judge George C. Hanks, Jr., ruled that BP violated the Employee Retirement Income Security Act (ERISA) of 1974 and plaintiffs”—

that is, the workers—

“are entitled to appropriate redress by ‘equitable relief.’ The court ruled plaintiffs demonstrated BP committed multiple violations of ERISA in its communications to its employees…The Sohio retirees maintained, since 1989, BP had insisted the new formula would provide benefits as good as or better than the old formula. The judge agreed and found there is a pension shortfall for many.”

It is worth reflecting exactly what the people who took that case were motivated by: the work that they had done for BP. The article continues:

“Fritz Guenther, lead plaintiff, dedicated his work life to BP often in dangerous conditions on the North Slope of Alaska. He worked two weeks on, two weeks off for years relying on BP’s representations regarding his retirement. While he is still healthy, he says many of his colleagues face health issues, while others still have died within the past eight years. The retirees’ legal fight is taking place against a backdrop of a retirement wave nationwide, with the US Census Bureau estimating that one in five Americans will reach the age 65 or older by 2030.”

That was the nature of the commitment that BP employees in America gave to the company, and it is a measure of the moral bankruptcy that appears to be at the heart of that corporate that it could not see that payback was necessary for these people in their retirement.

I will touch briefly on the Work and Pensions Committee report to which I have repaired. I apologise for doing something that I was always told not to do as a law student: I will read from the rubric, rather than the substance of the report. I welcome what the Committee said about scheme surplus and governance. In particular, the executive summary says:

“Many schemes are much closer than they expected to being able to enter a buy-out arrangement with an insurer to secure scheme benefits.”

I touched on that earlier. The Committee was also right to talk about the various reasons why the flexibility would be advantageous to wider interests. There is a balance to be struck between the company, the beneficiary, and the national interest, in relation to the money being available for investment. That balance has to be properly struck, and it will inevitably slew towards the interests of Government and corporate interests, unless the necessary protections are put in place.

The Committee also observed:

“We note the current consultation on the level of funding a scheme would need to have for surplus extraction to be an option. However, strong governance will also be essential. We recommend that DWP should conduct an assessment of the regulatory and governance framework that would be needed to ensure member benefits are safe and take steps to mitigate the risks before proceeding.”

In this brave new world for defined benefit pensions, that is a warning that the Minister and the Government would do well to take onboard. If they do not, I am afraid that the losers at the end of the day will be our constituents, the beneficiaries of such pension schemes. We will look back in years to come, and we will see that the cases of BP, Shell, ExxonMobil, Hewlett-Packard and others are simply the canaries in the coalmine.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Work and Pensions Committee.

Budget Resolutions

Eleanor Laing Excerpts

Thursday 7th March 2024 Commons Chamber

[Grahame Morris (Easington) (Lab)]

The hon. Lady is never a turn off for me. She is making some excellent points, not least in respect of SEND children and kinship carers. The needs of those individuals and groups should be addressed.

On local government finance, my local authority is a coalition of Conservatives, independents and Lib Dems. Heaven knows I have criticised it an awful lot, quite justifiably, but we should recognise that all local authorities, including mine and Thurrock, have had to deal with huge cuts over the past 10 or 14 years. My local authority has had to cut £260 million from its revenue spend. I was looking at some figures, and would it not be more sensible to change council tax—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We have quite a lot of time this afternoon, but that is an incredibly long intervention. I am looking forward to the hon. Gentleman’s speech in due course.

[Dame Jackie Doyle-Price]

I acknowledge that there have been cuts to local authority budgets, but the root of this is that so much local authority funding comes from the centre. Where is the accountability? As far as local electors are concerned, the council can spend only what it is given. Given the cuts, it is incumbent on councils to make sensible decisions. They cannot have their cake and eat it. They have to live within their means.

Given the rainbow coalition that the hon. Member for Easington (Grahame Morris) has just described, I suspect that there is an awful lot of playing to the gallery. We expect our councillors to be more mature.

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[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Before we proceed, I hope that we can manage the rest of the day without having a formal time limit, but approximately 90 minutes is left for Back-Bench contributions, so I hope that Members will take about nine minutes each. That is quite a long time—it is not curtailing debate to take nine minutes or so each—and if we can do that, we will not need a formal time limit. If we cannot achieve that by simple courtesy and arithmetical calculation, I will impose a formal time limit.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Eleanor Laing)]

We will try an eight-minute formal time limit, which does not prevent Members from taking interventions.

Autumn Statement Resolutions

Eleanor Laing Excerpts

Monday 27th November 2023 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

Before we resume the debate, I remind hon. Members that, as Mr Speaker said last week, in addition to being present at the start of the debate, after a Member has spoken in the debate, they must, as an absolute minimum, remain in the Chamber for at least the next two speeches, and preferably for the majority of the debate. It is unfortunate that I am having to repeat this, but we have had some difficulties in recent weeks where Members think they can come in, make a speech and go away again. Taking part in a debate means being here for the whole of that debate. Of course, the occupant of the Chair will allow a Member to go out for a short while, but not for hours and hours.

It is also essential that every Member who has spoken in a debate should return to hear the winding-up speeches from both the Opposition spokespersons and the Minister. I remind hon. Members that that sometimes includes the spokesperson for the Scottish National party. If, for any reason, hon. Members are unable to return to the Chamber for the wind-ups in today’s debate, for which approximately 46 people have indicated that they wish to catch my eye, they should please let me know now and I will withdraw their request to speak. I remind Members that records are kept when Members speak and fail to return, and that is taken into account when deciding whether to call Members in subsequent debates.

It should not be necessary to say this, but I have to say it: both the Minister and the Opposition spokespersons responding to the debate are expected to remain in the Chamber for the majority of the debate, so that they are able to respond effectively to points raised by other hon. Members.

I should draw the House’s attention to a minor correction that has been made to resolution 21. A revised version of the resolutions paper is available in the Vote Office and online. It includes a note setting out the correction that has been made.

Rates of Tobacco Products Duty

Debate resumed (Order, 23 November).

Question again proposed,

That—

(1) In Schedule 1 to the Tobacco Products Duty Act 1979 (table of rates of tobacco products duty), for the Table substitute—

“TABLE

Department for Work and Pensions

Eleanor Laing Excerpts

Tuesday 4th July 2023 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Work and Pensions Committee to open the debate.

[Sir Stephen Timms (East Ham) (Lab)]

I am very grateful to have been granted today’s debate about DWP spending.

I will focus in particular on universal credit, whose roll-out started 10 years ago in 2013. The DWP is forecast to have, by some considerable margin, the highest expenditure of any Government Department, at £279.3 billion in this financial year, followed by the Department of Health and Social Care, at £201 billion. DWP spending is the largest by a considerable distance.

Of course, the DWP forecast is uncertain. Almost all its funding counts as annually managed expenditure; it is hard to forecast demand-led spending. DWP’s admin spending—departmental expenditure limits—is 27% lower in real terms this year than in 2010-11. Universal credit spending is forecast to be £50.8 billion this financial year, which is £8.8 billion higher than forecast in these estimates last year, reflecting the recent much-needed uprating and a higher case load. In February, 4.5 million households were receiving universal credit payments.

A key argument in the business case for universal credit was the prospect of reducing fraud and error. Nearly a quarter of the £34 billion net present value gain expected over 10 years from introducing universal credit was due to come from lower fraud and error. In fact, fraud and error have been much worse than they were for legacy benefits. The Department’s statistics show that the universal credit overpayment rate decreased, but from an astronomical 14.7% in May 2021 to 12.8% last year. I know that the Department is setting out to address that problem, and that it has obtained resources from the Treasury to do so. Underpayments were at their highest-ever recorded rate last year, at 1.6%. I hope the Minister will be able to tell us about plans for tackling those problems.

An additional reason that it is so important to get decisions right at the moment is that universal credit is a passport to cost of living support payments. There was a strong case for merging the various benefits into universal credit, and the success of the system in getting urgently needed support out effectively during the pandemic was very important and very impressive. However, there are some big problems—above all, the problem of the five-week wait between applying for the benefit and receiving the first payment. With legacy benefits, the first payment would usually arrive a week and a half or so after applying. With universal credit, having spent hundreds of millions of pounds on what we were always assured was agile technology, the same thing now takes five weeks. That is a fundamental and unnecessary flaw; the security is absent from social security.

In January 2021, the Government rejected the Select Committee’s recommendations to eliminate the wait and instead pay all first-time claimants of universal credit a starter payment equivalent to three weeks of the standard allowance, just to tide people over. The Government response pointed out that claimants can access advances, but of course, those are loans. Repayments reduce the already low monthly awards, and repaying advances is a major driver of the explosive growth in food bank demand that we have seen. Our colleagues in the other place, those on the Lords Economic Affairs Committee—with its Conservative Chair—succinctly highlighted the consequences of the five-week wait in July last year:

“the five-week wait for the first payment…drives many people into rent arrears, reliance on foodbanks and debt.”

As such, I ask the Minister once again whether the Government will reconsider our recommendations, or whether we have to wait for a different Government for that fundamental flaw to be addressed.

I am very pleased to say that one area in which the Government have listened to the Committee is reimbursement of childcare costs for people claiming universal credit. I warmly welcome the lifting of the cap and up-front payments for childcare announced in the Budget, and I hope that our future reports will have comparable levels of success. Those changes will support people to be in work in future.

Last week, the Child Poverty Action Group published a fascinating report called “You reap what you code”, highlighting areas where the universal credit computer system does not deliver what it should. It gave the example that legislation and guidance allow some groups to submit a universal credit claim up to a month in advance, but the system does not allow that, nor is there an adequate workaround outside the digital system. As such, some care leavers and prisoners expecting release can miss out on an entitlement that they are due. For all its success in the pandemic—I am unstinting in my recognition of that success—the rigidity of the digital system is a problem. Can the Minister tell us whether a fix is planned for that problem of early claims, which the Child Poverty Action Group highlighted last week?

Does the level of benefits meet need in the way it is supposed to? Do benefits represent value for the taxpayer? The Committee is conducting an important inquiry into benefit levels in the UK, and will report in the first half of next year. Benefit levels are very low. The Joseph Rowntree Foundation and the Trussell Trust told the Committee that

“the basic rate of Universal Credit—its standard allowance (or equivalents in previous systems)—is now at its lowest level in real terms in almost 40 years (CPI-adjusted) and its lowest ever level as a proportion of average earnings.”

They estimate from pretty careful research that a single adult needs £120 per week to cover essentials: food, utilities, vital household items and travel. That is excluding rent and council tax. Universal credit’s standard allowance is £85 per week for a single adult over 25. That is a shortfall of at least £35 per week, and deductions—for advance payments, for example—often pull actual support well below the headline rate.

The Joseph Rowntree Foundation and the Trussell Trust call for an essentials guarantee. They make the point—which has been suggested this week in the press—that we might get a below-inflation uprating of benefits next year, making those problems even worse. I would be grateful if the Minister gave an assurance on that front, because that would be very bad news indeed.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is a pleasure to follow the hon. Member for North East Fife (Wendy Chamberlain). I find myself resonating with her comments on carers and the lack of support that exists in so many different ways, but particularly through the social security system, and the billions—multiple billions—that are provided in equivalent support to this country that we sadly do not adequately recognise.

I also pay tribute to the Chair of the Work and Pensions Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms), for all that he does in the plethora of different inquiries that the Committee has held over the past few years. I am particularly pleased about the work that we are doing on the adequacy, or inadequacy, of the social security system, and the important things that will reveal when it is published early next year.

This debate is about DWP spending. Associated with that is what it means for the priorities of the Department and, in particular, the Government’s priorities for social security as a whole. I will focus my remarks on the fall in support for working-age adults. We need to recognise that particular group and the impact that fall is having on so many different families across the country.

We have had two major welfare reform Acts, in 2012 and 2016. I will refer to the latter in a moment, but the cumulative impact of those up to the pandemic was the equivalent of a 17% reduction in working-age support, which in cash terms is about £33 billion. That was only slightly offset by the temporary increase in universal credit during the pandemic. Although I welcome the uprating last year, and I support what my right hon. Friend the Member for East Ham said about that, it does not at all make up for the last 10 or 11 years of significant cuts. That has had an impact on relative poverty across the UK.

Just under one in three children in the UK are growing up in poverty, and in my constituency the figure is nearly one in two. We also know that just under two thirds of children growing up in poverty live in families where at least one adult is working. The implications of these cuts for those children are not insignificant. We now have the highest ever level of in-work poverty. What on earth does that say about this country? It is shocking.

Many people who know me will know how strongly I feel about the impact of these cuts on disabled people. One in three disabled people are living in poverty, which is twice the rate for non-disabled people. It is totally unacceptable. These are the most vulnerable people in our society, and we are failing to recognise their needs and support them.

I know that the Minister will come back and say, “Actually, poverty has reduced.” The Joseph Rowntree Foundation reflected that in its annual report, which came out at the beginning of the year. Yes, poverty levels have gone down, but that reflected the fact that during the pandemic we saw reductions in overall incomes, and with relative poverty that is the position. Importantly, the Joseph Rowntree Foundation said that it was also about different choices that the Government made at the time. As much as we are talking about now, we must recognise that that £20 a week of additional support made a difference to those poverty levels. Poverty is not inevitable; it is about political choices. Again, I hope we can reflect on that.

When I speak to my constituents in Oldham East and Saddleworth, and indeed people across the country, they tell me that they feel our current system no longer provides the safety net that it was set up to provide in the post-war settlement with the British people, and they are right; it is inadequate. Following on from their first-hand experience during the pandemic, polling shows that two thirds of Britons think that universal credit is too low.

Not only has the adequacy of the UK’s social security system diminished over time—in terms of average weekly incomes, it is approximately half of what was provided after world war two—but it is also lower than most of our European neighbours, with data from 2018 showing that our social security spending as a percentage of GDP was below EU27 and OECD averages.

We must never forget that the post-war Labour Government created the NHS and the welfare state. As we mark the remarkable achievement of our NHS with its 75th anniversary tomorrow, we must reflect on the principles of universality and access for all, which I would like to see reflected in our social security system, too. Like our NHS, our social security system should be there for all of us in our time of need, whether that is a result of illness or disability, of being unable to work anymore because we have reached retirement age, or for any other reason. It should provide basic financial support and should be valued for the safety net it provides. That is not the case now, and that is why I am advocating for a new social contract that defines the future of our social security system. A good starting point would be the essentials guarantee that my right hon. Friend talked about. That has been proposed by the Trussell Trust and the Joseph Rowntree Foundation, but a wide coalition of charities have advocated for it. They found that 90% of low-income households on universal credit are going without essentials such as food, electricity and clothes.

That inadequacy is the main driver of food bank need, with almost 1.3 million food parcels distributed between April and September 2022. That is just unacceptable in the fifth richest country in the world. An essentials guarantee would ensure that the universal credit standard allowance met a level that provided basic security for a family’s need. The charities calculated that at £120 a week for a single person and £200 a week for a couple. The guarantee would bring us in line with our European neighbours and provide a safety net in the same vein as our NHS. It would also reduce the poverty that too many are experiencing and which has a lifelong impact on children.

Some Members will know that I chair the all-party parliamentary group on health in all policies and have done so for a number of years. In 2020, just before the pandemic, we commissioned a review of the Welfare Reform and Work Act 2016 to analyse the impacts it was having on children and disabled people. Anybody watching or listening is welcome to have a look at that on my website. One of the biggest and most worrying figures that we found was that:

“Each 1% increase in child poverty was significantly associated with an extra 5.8 infant deaths per 100 000 live births…about a third of the increases in infant mortality between 2014 and 2017 can be attributed to rising child poverty”.

That was published in one of the peer-reviewed medical journals. Understanding the impact that that has had on so many families is devastating. It is yet further evidence that far more needs to be done to provide an essentials guarantee.

The flipside of that is that we have one of the highest tax burdens in 40 years, but I was heartened to see members of Patriotic Millionaires—they are all multi-millionaires—come out and say, “We recognise the impact that not having a wealth tax on us is having on the fabric of our society. We do not want our children growing up in a society where there is not the fairness that we grew up with in our country.” It has come up with the proposal of a wealth tax that would fund the essentials guarantee. For me, that group espouses what we as a nation can be.

In contrast—this takes me back to what other hon. Members have said—there has been a rather nasty element in the media. When we look at DWP spending, we must remember that half of it, rightly, goes on the state pension; that is the biggest slice of the spending. The next biggest is on housing benefit. We need to recognise that. Nobody would criticise DWP spending on our pensioners. I urge responsible journalists to recognise that we should not criticise social security spending on people who are disabled or not able to work because of illness. We must be better than that.

As I conclude, Madam Deputy Speaker, because I did promise that I would be very brief, I repeat that poverty—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. For clarification, I am not putting the hon. Lady under any pressure. As far as I am concerned, she has all the time in the world.

[Debbie Abrahams]

Well, that is an offer that I definitely will refuse this time. As I said, poverty and inequality are not inevitable—they are political choices—and I believe that, like our NHS, our social security system should be there for all of us in our time of need.

[Madam Deputy Speaker]

I call the SNP spokesman.

--- Later in debate ---

[David Linden]

I am proud that the Scottish Government invest in things such as the best start grant, the baby box and free school meals, to ensure that young people get the best possible start in life. My local authority in Glasgow is spending millions of pounds on holiday hunger programmes, to ensure that children who receive free school meals during school term time are still being fed. It is a damning indictment on the state that we have to spend money from local authority budgets feeding children because their parents do not have enough money. That is the situation we are in, in the fifth richest economy in the world.

Remarkably, as I am sure we will hear when the Minister responds to the debate, Ministers are still forcing more people into the sanctions regime, which further demonstrates the fundamental issue with the British Government’s attitude to those on low incomes: preventing vulnerable families from receiving the social security they are entitled to and, most importantly, when they need it the most.

Before I draw my remarks to a close, I want to turn to the local housing allowance. The freeze of LHA rates for three consecutive years is placing additional and needless pressure on tenants and housing associations, and is likely to increase poverty and inequality. That is why Ministers should protect household incomes and support renters by restoring LHA rates to the 30th percentile as a minimum. The SNP has long called for the British Government to fix those fundamental flaws in our social security system but, as is so often the case, it falls on deaf ears each and every time, to the extent that every time I take part in one of these debates, it feels like groundhog day.

The blunt truth is that the Scottish Government cannot change those policies while 85% of welfare expenditure and income replacement benefits remain reserved to this institution here in London. That includes universal credit. By all means, I am happy to take part in debates and make suggestions about how we repair the social security system, but it is difficult to conclude anything other than Westminster—whether the Tories or the pro-Brexit Labour party—has zero appetite to genuinely step in and sew up a system that is failing some of the most vulnerable people in society. For that reason, the only way genuinely to bring about that compassionate, fair and dignified social security system in Scotland is with the full powers of independence. Frankly, that cannot come soon enough.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

--- Later in debate ---

[Guy Opperman]

Because the right hon. Gentleman and I have worked together for many years—and I emphasise “together”—he will know that I have been a humble junior functionary at the Department for Work and Pensions for a very long time, never to rise any higher. Let me also say to the hon. Member for North East Fife (Wendy Chamberlain) that I have had the privilege of serving under three female Secretaries of State before the present Secretary of State. I think I am now on my seventh Secretary of State.

These matters are monumentally above my pay grade, and, as I am sure the right hon. Gentleman knows, having done my job and many other jobs in the Government, they will be decided by the Chancellor and the Prime Minister at some stage over the course of the coming year. [Interruption.] I have much to be modest about, to be honest. As I have said, these matters are above my pay grade and beyond my knowledge, but they will be considered. There will be an autumn statement in November, which will be the obvious time for decisions to be telegraphed, if not made.

The right hon. Gentleman raised a number of points, and I will try to answer some of them in the time that I have. He mentioned prison leavers. The Department recognises the need for prisoners and carers to be able to make advance claims for universal credit, and there is a working process in place to support that. I have met the prisons Minister, my right hon. Friend the Member for East Hampshire (Damian Hinds), who will welcome any questions that will follow during the justice debate, and the social mobility Minister, my hon. Friend the Member for Mid Sussex (Mims Davies), who looks after most aspects of matters relating to prisoners, on several occasions to try to drive forward universal credit take-up. However, it requires the individual to desire to do that, and that is clearly complicated and not easy. It is a work in progress, but it is very much something that we are aware of.

I know that the social mobility Minister is giving evidence to the Select Committee tomorrow, so I will not address in too much detail the issues the right hon. Member for East Ham raised on the Health and Safety Executive, which is one of the few briefs I have not held in the last few years. He rightly raised the issue of transparency, and I would respectfully say that I agree with him. The present Secretary of State has transformed the position in that regard. The right hon. Gentleman knows my strong view that, save where we have to provide data on a monthly basis under labour market statistics, we should have six-monthly provision of the vast plethora of data, linked to the two fiscal events of the year, but that is a work in progress. The Department is definitely reviewing all aspects of those things.

The right hon. Gentleman raised the flexible support fund and particular issues about people taking buses to work. I want to take issue with that, because there is absolutely no doubt that a jobcentre can use the flexible support fund to support bus or other transport fares for agreed work-related activity. If it is for a work-related activity, that support can be provided as it is in other contexts—childcare being the one of which he will be particularly aware. I would certainly very much hope that the individual jobcentre that he referred to would be aware of that.

On fraud and error, the right hon. Gentleman will be aware that huge amounts of effort are being made by the Minister for Disabled People, Health and Work, who takes control of that particular part of the portfolio, and by the Secretary of State in a multitude of different ways. We have a large number of extra staff who have been brought in to address fraud and error. According to the latest national statistics, it has fallen to 3.6% from 4%, and overpayments from fraud are down to 2.7% compared with 3% in 2021-22. Universal credit losses have fallen by nearly 2% over a similar period. Bluntly, we are trying to crack down on those who are exploiting the benefit system, and we want to make it very clear that we are coming after those people. We want to ensure that the maximum amount of support goes to the people who need it.

The targeted support includes support for people on means-tested benefits such as universal credit, with up to three cost of living payments totalling up to £900. We have delivered the first £301 payment to 8.3 million households in support worth £2.5 billion. The two further payments of £300 and £299 will be made in the autumn and next spring. To help with additional costs, we have paid the disability cost of living payment to 6 million people as well as paying the winter fuel support payment. A huge amount is being done in jobcentres, whether that is through the in-work progression offer, the support of extra work coaches, the over-50s support, the administrative earnings threshold support or the 37 new district progression leads who are working with key partners, including local government, employers and skilled providers, to identify and develop local opportunities and to overcome barriers that limit progression.

The hon. Member for North East Fife raised a number of pension matters. Clearly, I continue to defend the actions of the Labour Government and the coalition Government on the rise in state pension age. She referred to both the LEAP exercise and what has happened at HMRC, and they are both works in progress. I do not believe there is any fundamental change to that of which she has been previously advised. On pension credit, she will be aware that there has been an increase in excess of, I think, 170% in applications. There is a slight backlog, but that is coming down dramatically. On the gender pensions gap, she will be aware of the changes to the new state pension, which are massively advantageous to women, and of the fact that successive Governments—starting with the Labour Government and the Turner commission, and then the coalition—have brought in automatic enrolment specifically to address that particular issue.

The hon. Lady raised a final point about those who change jobs in later life. I cannot overstate the importance of the project for which I have been pressing for only five and a half years now, which is the mid-life MOT. I am delighted to say it is now being rolled out across the country, whether that is online, in jobcentres up and down the country or, more particularly, in the three private sector bodies that are trialling particular processes. If she is not yet acquainted with that, I would strongly urge her to become so, particularly because in her area of Scotland in North East Fife there are, I know, providers that are offering that process. I can provide her with the details. Aviva and others are doing very good stuff there.

I am conscious that I have been speaking for some time, but the practical reality is that we believe we are removing the barriers that prevent people from working. We believe that we are reducing the number of people who are economically inactive, with a fifth consecutive month when inactivity has declined. I accept that there is more to do, and I am determined to leave no stone unturned in taking the decisive action needed across Government to see that downward trend continue.

In conclusion, I believe that we are tackling inflation to help manage the cost of living. We are providing extra support. The economic trends, as shown by the labour market statistics, are heading in the right direction and, with the Government’s ongoing significant package of cost of living support, that is worth over £94 billion in excess of the rises to state pension and benefits. We are protecting those most in need from the worst impact of rising prices by putting more pounds in people’s pockets, and I commend these estimates to the House.

[Madam Deputy Speaker (Dame Eleanor Laing)]

To conclude, I call Sir Stephen Timms.

Oral Answers to Questions

Eleanor Laing Excerpts

Monday 24th April 2023 Commons Chamber

[Guy Opperman]

My right hon. Friend makes a number of very good points. He is a former Secretary of State in this Department, and has great wisdom on this issue. The main thing that the Department is doing is providing the in-work progression offer, which assists people who are in work and trying to progress to greater hours and full-time work. We are also fully in support of greater training, whether through sector-based work academies or the skills bootcamps, to allow people to have permanent long-term contracts, and enable them to thrive and survive in a better way.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

[Ms Karen Buck (Westminster North) (Lab)]

The Department’s recently published research on sanctions, including those relating to in-work conditionality, show that sanctions have a negative impact on claimant earnings. How will the Minister take account of those findings in setting future sanctions policy?

--- Later in debate ---

[Tom Pursglove]

I am always grateful for the opportunity to hear from the Chairman of the Work and Pensions Committee. It is important to recognise that both the Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman), and I are set to appear before the Committee next week. What I will not do this afternoon is make specific commitments, but I can say—I have said this regularly now, including in the many conversations we have had with disabled people and various stakeholders that we want to work constructively to get the reforms right. This is the biggest set of welfare reforms for over a decade, so I am very willing to consider all views about how we can improve processes. Of course, people are able to make recordings of assessments at the moment, but we should look at that. I am very willing to do that, and to come back to the Committee formally.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

On a recent call with stakeholders in the Department for Work and Pensions, the Department revealed that only 11 individuals had so far been included in the severe disability test group, which, as the Minister knows, is aimed at simplifying the application process for those with the most severe disabilities and health conditions. Worryingly, there also appears to be very little clarity about the definition of severe disability. Despite that, the Department signalled that it was preparing to further roll out the group. Can the Minister confirm today whether that number is correct, provide further information on which individuals qualify, and confirm when the Department will start the roll-out?

--- Later in debate ---

[Virginia Crosbie (Ynys Môn) (Con)]

Does the Minister agree that this Government are committed to supporting over-50s, including those in Ynys Môn, into work? Will he join me in thanking Tony Potter and the brilliant Anglesey DWP team, who are working with me to host a jobs fair for over-50s in Holyhead town hall soon?

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Minister.

[Guy Opperman]

Diolch, Madam Deputy Speaker. My hon. Friend was kind enough to host me in Llangefni only a couple of weeks ago, when I met Mr Potter and all the DWP team working on the island. They are doing a fantastic job. We should be very proud of the work they are doing to address both mainstream employment and older-worker employment. I am sorry I cannot be at the jobs fair for older workers that she is hosting, but I encourage everyone on the island to go along to that.

--- Later in debate ---

[Tom Pursglove]

I certainly think that journey times are an important factor. We want to provide certainty as quickly as possible in relation to people’s claims. Waiting times for PIP claims have come down very considerably, and the PIP journey is certainly shorter than in the pre-pandemic period. As I have said, I genuinely believe that there is a significant opportunity, through the reforms that we are introducing in the White Paper, to focus on quality decision making. Reducing the assessment burden will help us to get decisions right the first time, as will matching people who have particular conditions with assessors with the right expertise.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Secretary of State.

[Jonathan Ashworth (Leicester South) (Lab/Co-op)]

The Minister’s proposal to essentially collapse the work capability assessment into the PIP assessment means that up to 1 million people who have fluctuating health conditions, or who may be recovering from treatment, could lose out on up to £350 a month. That is causing considerable distress, and it will not actually get anyone back to work now. Why does he not adopt instead the policy that we have put forward, which is supported by the Centre for Social Justice: to change the work capability assessment rules and offer an “into work guarantee” for those with no work requirements? Is he content to leave 700,000 sick and disabled people who want to work blocked from journeying into work?

[Tom Pursglove]

No. What this Government are doing is making sure that we support people into work. We are removing the structural impediment to getting into the workplace. We believe that scrapping the work capability assessment is the right thing to do; we have had many debates about the issue in this House over the years, and we think that we are responding properly to the feedback we received on the Green Paper proposals. There was a strong message that people wanted to see that happening, and we will get on and deliver it. We will focus on quality decision making and on making sure that people are transitionally protected. There may, for example, be people not currently claiming the PIP who will be entitled to it; I would always encourage people to access the benefits to which they are entitled.

I must say that it is rather surprising to hear the shadow Secretary of State’s comments today, given what one newspaper has written:

“Disability benefits changes: Labour pledges to scrap reforms but shadow minister holds back details”.

Where are Labour’s plans?

[Madam Deputy Speaker]

I call the SNP spokesman.

[David Linden (Glasgow East) (SNP)]

I can certainly assure the House that SNP Members will not be trumpeting ideas advocated by right-wing think-tanks such as the Centre for Social Justice.

The health and disability White Paper introduces a new universal credit health element, with eligibility through PIP that could be far more restrictive than work capability assessments. Indeed, the Tories’ new in-work progression offer will inevitably mean exposure to sanctions for disabled people. Given that the Department’s own published report, which it tried to keep under wraps for many years, shows what we knew all along—that sanctions do not work—why will the Minister not finally do the right thing and just scrap them?

--- Later in debate ---

[Mims Davies]

Let me draw the hon. Gentleman’s attention to the household support fund, which will provide an additional £50 million to help families in Wales through difficult times. The hon. Gentleman’s constituents who are in need will also be pleased to know that the next stage of the cost of living payments will begin tomorrow, with £301 being paid to households between then and 17 May. The DWP will be issuing further communications about those payments.

We have heard today about social tariffs and other ways in which people can obtain support and reduce their bills. The Help for Households website, which I commend to everyone, provides information about assistance with childcare, travel, energy and household costs, and about income support. It will help the hon. Gentleman’s constituents and, indeed, all our constituents.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Secretary of State.

[Jonathan Ashworth (Leicester South) (Lab/Co-op)]

The Minister has just said that the DWP did not assess the reasons for which people are using food banks. Perhaps she will go back to her private office after this and ask her officials to look into whether people are using them because the Government cut universal credit by £20 a week, and cut it in real terms last year. Perhaps she could ask her officials whether it is because the DWP is taking deductions from universal credit payments every week. Perhaps she could ask the DWP if it is because earnings are worth less than they were in 2007. Perhaps she could ask the DWP whether it is because the Government have raised the taxes on working people. Perhaps she could ask the DWP whether it is because the Government crashed the economy and sent mortgages and rents through the roof. Perhaps she could ask the DWP whether more people are using food banks because that is the price of 13 years of economic failure.

--- Later in debate ---

[Laura Trott]

The Department for Work and Pensions is straining every sinew because this is incredibly important to us, and to me. We need to make sure we are doing all we can to reach those vulnerable customers. We have done a nationwide advertising campaign, which the hon. Gentleman may have seen. We are doing a lot in the build-up to 19 May, and I want to work with everyone in the House to make sure we use Members of Parliament as much as possible to reach out to vulnerable pensioners in our constituencies.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

[Matt Rodda (Reading East) (Lab)]

The price of food is rising by 30%, yet the Government are continuing to fail pensioners at this very difficult time: nearly 200,000 women in their 80s have been underpaid for years because of errors at the DWP; hundreds of thousands of pensioners are missing out on pension credit, as we have heard; and when pensioners do get their pension credit application in, it can take up to three months for officials in the Department to process a claim. When will the Government finally tackle this appalling pattern of failure?

--- Later in debate ---

[The Minister for Employment (Guy Opperman)]

Normally, the Secretary of State would make a statement at this stage, but, on behalf of the whole ministerial team, I will say just two things. First, overall, measures from the Department for Work and Pensions in the Budget represent an investment of £3.5 billion over five years to boost workforce participation. That includes: £2 billion of investment in support for disabled people and people with long-term health conditions on top of the Health and Disability White Paper; £900 million investment in support for parents; £70 million investment in support for the over-50s; and £485 million investment in support for unemployed people and people on universal credit and working fewer than full-time hours.

Secondly, DWP Ministers had the great honour of working with the amazing Len Goodman, who sadly passed away over the weekend. The pension credit video that he filmed with me last summer for the annual Pension Credit Awareness Day in June was the most successful piece of communications that we have ever done on this issue and massively boosted pension credit applications. I can tell the House that, throughout the day’s filming, he was kind, immensely professional, totally polite and a delight to work with, and he still had all the dance moves even at his age. He will be sadly missed by this House and by his many fans around the country. Our thoughts, prayers and condolences go out to his family.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I am sure the whole House will join the Minister and others in remembering with fondness Len Goodman and in sending our good wishes to his family and friends.

[Amy Callaghan]

I thank the Minister for his answer. On Thursday, I and my hon. Friend the Member for Glasgow East (David Linden) visited One Parent Families Scotland. The young single parents we met were outraged and upset about the young parent penalty, as they are receiving less universal credit than older parents. Does the Minister care to explain why he feels that younger parents are worth less than those who are over 25?

--- Later in debate ---

[The Minister for Disabled People, Health and Work (Tom Pursglove)]

My hon. Friend is a passionate advocate of the join-up between health and work, and work as a determinant of better health outcomes for people. It is important to note that a number of jobcentres and Health Model Offices have work coaches working with GP surgeries to provide employment support to customers with health conditions. That is a valuable approach, and we are determined that the Work Well partnerships programme that was announced in the Budget will build on this to design an integrated approach to work and health with that proper join-up on the ground reflective and responsive to local needs. I shall take on board his observation as we look to shape that.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

[Alison McGovern (Wirral South) (Lab)]

We on the Labour Benches join you, Madam Deputy Speaker, and the Minister in the tribute to Len Goodman, and we think of all his loved ones today. He was not just a national treasure, but someone who helped to put money in pensioners’ pockets, which is where it belongs.

The local elections are next week, so people will be thinking of the fortunes of their towns or cities. In many places, unemployment is not low, as the Minister has said, but high. In Blackpool, for example, one constituency has unemployment at an excruciating 8%. What about that chronic poor performance should be rewarded at the ballot box next week?

--- Later in debate ---

[Tom Pursglove]

It is fair to say that we have had a good debate this afternoon about the whole host of initiatives that we as a Government are determined to take forward to shift the dial and make meaningful improvements to support more disabled people and people with health conditions into work, and autism is no different. I am delighted that my right hon. and learned Friend has agreed to take on this review on behalf of the Government. I look forward to his bringing forward recommendations, suggested areas for improvement and initiatives that we might want to embark on, focusing on knowledge and responsiveness, seizing the opportunity for workplaces to unlock the talent that undoubtedly exists out there, and helping to improve people’s lives for the better.

[Madam Deputy Speaker (Dame Eleanor Laing)]

For the final topical question, I call Stewart Malcolm McDonald.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I am grateful to you, Madam Deputy Speaker. The use and abuse of unpaid work trials continues to grow, despite the Government’s guidance published a couple of years ago urging employers not to use them. Given that the guidance clearly is not cutting through, will the Minister agree to meet me to discuss what legislation might look like?

[Guy Opperman]

I am not sure I totally accept the premise of the hon. Member’s argument, but if he writes to me with the details of what he is asserting, I will certainly consider it.

[Madam Deputy Speaker (Dame Eleanor Laing)]

That concludes questions, so we now come to the urgent question. I will pause for a moment to allow the turmoil of people leaving to settle down, but I would be grateful if Members left quickly and quietly.

Social Security (Additional Payments) (No. 2) Bill

Eleanor Laing Excerpts

Committee stage
Monday 6th March 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

It is a pleasure to see you chairing the Committee this afternoon, Dame Eleanor.

I thank hon. Members for the useful debate on Second Reading and I welcome this opportunity for a more detailed examination of the Bill in Committee. Clause 1 enables the Government to make three separate cost of living payments of £301, £300 and £299 to individuals or couples with a qualifying entitlement to an income-related social security benefit or tax credit. I have listened carefully to the hon. Member for North East Fife (Wendy Chamberlain). We have looked in the round at what we have done before, and I want to set out strongly to the Committee that we have worked very hard, whether on the household support fund or on this Bill, to support the most vulnerable through the really tough times that she described. I hope to give the Committee answers that will show that.

To be clear, the clause sets out that the qualifying days for each of the cost of living payments will be specified in secondary regulations, which will help to minimise work disincentives and fraud risks. In response to amendments 4, 5 and 6, it might be helpful if I clarify for the hon. Lady that the dates set out in clause 1 are backstop dates, meaning the latest possible qualification dates that could be set out in regulations. Bringing those dates forward could not achieve the amendment’s desired effect, although I understand the sentiment.

In any event, making all cost of living payments by 1 April 2023 would not support our ambition to spread the support through 2023 and into 2024. In fact, we have increased the number of payments from those made in 2022, having listened and engaged with the feedback from MPs across the land. This ensures that as many people as possible will qualify for a payment at some point, including those who become entitled to a qualifying benefit later in the year and those whose earnings fluctuate from month to month. Making all the payments in one lump sum would mean that more people miss out.

I understand the hon. Lady’s point, but I must be robust in saying that we simply cannot do what she suggests, as it runs contrary to what we should be doing in spreading out support for the most vulnerable. It is also the total opposite of the Select Committee’s request for more payments. I hope she understands that and will withdraw her amendment.

[The Chairman of Ways and Means (Dame Eleanor Laing)]

I call the shadow Minister.

[Ms Karen Buck (Westminster North) (Lab)]

I, too, welcome you back to the Chair, Dame Eleanor.

We continue to support the additional payments covered by this Bill because they will deliver much-needed support to households facing the greatest cost of living crisis we have seen for decades, but we also continue to recognise the limitations inherent in any policy of one-off, flat-rate payments and the extra limitations of the approach taken here.

One of the problems that the additional payments are intended to address is the six-month lag between the value of social security benefits and real-world prices, which can lead to long-term impacts on the real value of benefits when inflation is high. That problem became critical in the winter of 2021, when it became obvious that annual inflation would reach over 10% by the time benefits were uprated by only 3.2% in the following April, using inflation data running up to the previous September.

We are still dealing with the consequences of the 2021 uprating decision. As the Institute for Fiscal Studies explains,

“in April 2023, the annual uprating of benefits will merely take them back to around the level they were at a year earlier—the shortfall that opened up between September 2021 and April 2022 will still remain unplugged.”

This means that the real value of benefits will be 6.2% lower in April 2023 than before the pandemic, and astonishingly, based on current forecast inflation, benefits will not return to their pre-pandemic level until 2025.

This problem was completely predictable well over a year ago—a year in which the Government could surely have applied themselves to coming up with a better solution than the one before us today. The approach of one-off, flat-rate payments could just about be justified last year by the international situation and the suddenness of the energy price surge, but that does not apply this year.

We know that one-off payments are a crude substitute for ensuring that social security benefits retain their real value. But even accepting the one-off approach, this Bill, while undoubtedly necessary, will lead to rough justice and, in some cases, poor value for money. It does not even attempt to relate payments to need; it sets qualifying conditions and arbitrary reasons; and it creates an arbitrary cliff edge in support based on whether people are receiving a penny of qualifying benefits.

Some households will be shielded from the impact of inflation—indeed, some will be more than protected—but, as these flat-rate payments take no account of household size and composition, which is one of our most fundamental concerns, there is huge variation in the protection that families in different circumstances will receive.

As the IFS has shown, in general it is those without children who are best protected, and larger families and households with disabled members who lose out most. Forty per cent. of families with three or more children, but only about 3% of those without children, would have been better off with a timely uprating of benefits. Seventeen per cent. of households receiving a disability benefit would have been better off had benefits been uprated in real time.

It is obvious that the flat-rate approach is inherently inequitable and poorly targeted, and it is hard to see how it can be justified given the time the Government have had to devise a better solution. That is further compounded by the qualification conditions, which insist that households must have received a positive award of a qualifying benefit within the month leading up to the qualifying dates. One of the issues that universal credit is supposed to address is fluctuating incomes, but fluctuations in income from month to month, the norm for many lower-income families, are simply ignored by this Bill.

The cliff edge in entitlement is well illustrated by the large number of households, an estimated 850,000, that would be better off by reducing their earnings to qualify for universal credit so that they can benefit from the additional payments. Families on earnings low enough to qualify for universal credit face losing up to £900 if they have a marginal increase in earnings just enough to take them out of receiving UC. It is therefore perfectly reasonable for colleagues to demand a full Government analysis of the distributional and public health impacts of this Bill.

This Bill falls short of what might reasonably have been expected from a Government who had plenty of time to come up with a better solution, but we want this money to go into people’s pockets as quickly as possible in what is, for millions, a deepening personal and family financial crisis, which is why we are not seeking to oppose or delay today’s proceedings.

Responding to MPs’ Queries: DWP Performance

Eleanor Laing Excerpts

Tuesday 6th December 2022 Commons Chamber

[Peter Grant]

I believe there would be major repercussions—Parliament would probably go into meltdown—if I declined to take the intervention.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Not from me. [Laughter.]

[Jim Shannon]

I commend the hon. Gentleman for securing the debate. Although it is sometimes frustrating when our queries are not answered, we must appreciate all the highly skilled workers working in Government Departments and external agencies. Does he agree that to deal with delays in correspondence, we must ensure that those employed within Departments are able to deal with all issues presented to them, with the knowledge and ability to prevent delays and get queries answered?

State Pension Triple Lock

Eleanor Laing Excerpts

Tuesday 8th November 2022 Commons Chamber

[Alan Brown]

That is a very good point. I agree with my hon. Friend that that is an ideal way of managing that. I urge the Secretary of State to take heed of that intervention and work with banks and other organisations to try to increase pension credit take-up.

In terms of pension policies, of course I have to refer to the WASPI—Women Against State Pension Inequality Campaign—scandal and the fact that the Government are still not moving forward on fast and fair compensation, given that the Parliamentary and Health Service Ombudsman found there was maladministration. The PHSO made it clear that the Government do not have to wait for the end of its investigation to take action to remedy this injustice.

There is also the frozen pensions scandal, whereby whether your pension gets uprated or not is arbitrary, depending on which country you reside in. It is also scandalous that the UK Government have yet again rejected offers from the Canadian Government to enter into reciprocal arrangements. I urge the Secretary of State to reconsider that and engage in meaningful talks with the Canadian Government.

All those aspects show that the state pension in the UK is not the safety net we are told it is. It shows clearly that the Better Together mantra of staying in the UK to protect pensions in Scotland was a cruelly false premise. Indeed, with private pensions nearly collapsing after the Tory mini-Budget, that claim looks even more ridiculous. It also shows that when Gordon Brown, at a Better Together event, said:

“Our UK welfare state offers better protection for pensioners, disabled and the unemployed”,

he was, frankly, lying.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. It would be better if the hon. Gentleman found other words—perhaps a little gentler—rather than those he has just used.

[Alan Brown]

I take your point, Madam Deputy Speaker, but of course I was not referring to any hon. Member in this place.

[Madam Deputy Speaker]

Order. I fully appreciate that and the hon. Gentleman is technically correct, but I take the view that anyone who has been a right hon. Member, and held a most senior position in this place, should be treated with respect even after they have left. A different form of words would therefore be appreciated.

[Alan Brown]

Thank you, Madam Deputy Speaker. I respectfully say that his comments were misleading because, as I have outlined, the UK pension is not as good as it is made out to be and is one of the poorest in north-west Europe.

Moving on, it is little wonder that the Scottish Government have been publishing papers comparing the UK to comparator countries for an independent Scotland. Scotland has a lower pensioner poverty rate than the rest of the UK at present, but we want to do much better than that. We want to match or better the comparator countries, reduce inequality during working life, and allow a more dignified and enjoyable retirement for all. We no longer want to be left here hoping, yet again, that Westminster will make the right decisions on such measures as the triple lock. We want to do things for the betterment of the citizens of Scotland.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. It will be obvious to the House that a great many Members want to speak this afternoon, but we have limited time. I intend to conclude the debate at about 4.30 pm. I hope that imposing a five-minute limit on Back-Bench speeches—not immediately, but after the next speaker—will give everybody who wishes to speak the opportunity to do so.

I call the Chairman of the Select Committee on Work and Pensions.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We will now have a formal limit of five minutes on Back-Bench speeches.

Social Security (Special Rules for End of Life) Bill [Lords]

Eleanor Laing Excerpts

Committee stage
Thursday 8th September 2022 Commons Chamber

[Dame Eleanor Laing in the Chair]

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Just before we begin proceedings in Committee, may I add to the many statements that have been made this afternoon? The whole House, my constituents in Epping Forest and, indeed, everyone throughout the country is thinking of Her Majesty and the royal family. Our hearts go out to them.

Clause 1

Rules to apply where death expected within 12 months

Question proposed, That the clause stand part of the Bill.

[The Chairman]

With this it will be convenient to discuss the following:

Government amendment 1.

Clause 2 stand part.

New clause 1—Impact and policy review—

“(1) The Secretary of State must conduct a review of the effectiveness of this Act.

(2) Before commencing the review, the Secretary of State must consult the Scottish Ministers, the Welsh Ministers or the Northern Ireland department on the terms of reference for the review and on the appointment of a person to conduct the review.

(3) The review must consider the findings from the evaluation of the special rules for terminal illness process published by the Department for Work and Pensions in July 2021.

(4) The review must in particular take into account the impact of this Act on—

(a) the quality of life and experience of poverty of the recipients of the relevant benefits,

(b) the well-being of carers and dependants of the recipients of the relevant benefits,

(c) the clinical care of the recipients of the relevant benefits, and

(d) the level of take-up of the relevant benefits.

(5) The review may consider and make recommendations for further provision in relation to financial support for people approaching the end of their life (where death can reasonably be expected within the next 12 months), such as bringing forward the date of eligibility for an individual’s state pension to align with the date from when the special rules apply to that individual.

(6) The final report of the review must take account of any contribution made to the review by or on behalf of the Scottish Ministers, the Welsh Ministers or the Northern Ireland department.

(7) The Secretary of State must lay a report of the review carried out under this section before both Houses of Parliament no later than 18 months after the date on which this Act is passed.”

This new clause would require the Government to conduct and lay before Parliament a review of the effectiveness and impact of the Act, with requirements to consult Scottish and Welsh ministers and the Northern Ireland Department.

--- Later in debate ---

[Justin Tomlinson]

To seek to take advantage of the consensus, as part of the review I appeal to the Minister that, as set out in the Green Paper, the next stage is to extend and review the severe conditions criteria, so that those who sadly have terminal degenerative conditions, but would not necessarily be at that 12-month point, find a much simpler and swifter process to enter in to the various elements of support. That would both be good for the claimant and relieve pressure on a system that has a huge amount of demand on it, which would then speed up the process for others so that it could be faster than the current 16 weeks.

Question put and agreed to.

Bill accordingly read the Third time and passed.

House of Commons Commission

Ordered,

That Deidre Brock be appointed to the House of Commons Commission in place of Pete Wishart in pursuance of section 1(2)(d) of the House of Commons (Administration) Act 1978, as amended. —(Mr Peter Bone.)

[Madam Deputy Speaker (Dame Eleanor Laing)]

I am just prevaricating for a moment. A point of order would be very helpful.

[Patrick Grady (Glasgow North) (Ind)]

On a point of order, Madam Deputy Speaker. It is obviously important that hon. Members who have an Adjournment debate, for example, are in the Chamber when they ought to be. However, when business collapses because of the outbreak of consensus that we saw in the House and the determination of hon. Members to ensure that the Social Security (Special Rules for End of Life) Bill [Lords] proceeded as quickly as possible and could get on to the statute book, perhaps it is a little bit surprising. I think we should be grateful to hon. Members that we were able to achieve that consensus. I put on record, as I did not get a chance to, how well the Minister did in responding to my specific amendment, given that she was brand new, and I commend the work of her officials, who have to do that little bit of extra work when amendments come in from Back Benchers. We should be grateful for that consensus, even if it takes a few of us by surprise.

[Madam Deputy Speaker]

The hon. Gentleman has been most eloquent and helpful to the House in his point of order. It is not really a matter for the Chair, but if I were to express an opinion, it would be that the hon. Member for Liverpool, Riverside (Kim Johnson) owes the hon. Gentleman a double Glenmorangie.