Pensions Guidance and Advice

Alan Brown Excerpts

Tuesday 1st March 2022 Westminster Hall

[Nigel Mills]

The hon. Lady is absolutely right. It is a sad fact that a small proportion of people, but all too many individuals, have not just made a decision that is not optimal but been tricked into something that has cost them the whole or nearly the whole of what they have saved during their working life, because they did not understand that what they were being promised by the snake oil salesman—the conman—was utterly unachievable.

With some kind of briefing or guidance, they would have had a chance to realise that such an outcome was not possible, that there was no way they would get that kind of return and that such an investment strategy was not remotely sensible. We could have saved them in that situation. We must try to get as many people as possible to take up this service, so that we can put such protections in place and people will have a chance to know that such schemes are not real.

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

I agree completely with what the hon. Gentleman says. I know I have probably used words that he maybe would not, but does he share my concern about the Minister’s intervention? The Minister effectively said, “I listened to the hon. Member’s speech. We are doing a stronger nudge—job done; nothing to worry about.” Is that not complacent?

[Nigel Mills]

I would not use that word. It is a little unfair on the Minister, who has put in place some measures that have not yet come into force, to say that he is being complacent. I urge the Government to see those measures as part of the set of solutions we need.

The Government’s role is to set the aspiration for the level of take-up that we need, so we can then judge the success of their policies. It is a slightly strange situation and we had some rather baffling evidence sessions with the regulators during the recent Work and Pensions Committee inquiry. Everybody accepts that the take-up is not high enough and we should do more, but when asked, “What ought take-up to be?” they say that they do not know and do not have a number. So we know that what we have now is not good enough, but we do not know what is good enough, and therefore we cannot tell when we are going to get to good enough.

It is a slightly strange way of running a strategy, an organisation or a service to not know what is good and what you are aiming for, but to start trying to aim for it in the hope that you might get there by luck. We need a direction of travel, and someone to say, “We think the right target is 60%.” That is the number we had in our Select Committee finding and it seems quite reasonable. We are not asking for 100%, which would not be practical or useful, but we could set that kind of guide.

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

It is a pleasure to serve under your chairmanship, Ms Bardell. I congratulate the hon. Member for Amber Valley (Nigel Mills) on bringing this debate forward. I know that he has followed this issue for some time, always with diligence and concern for the outcomes experienced by pension savers. I also thought that he spoke very well in the recent social security benefits up-rating debate.

The hon. Member set out clearly how complex pensions can be and the need, therefore, for people to access impartial advice to get the best outcome from the pensions that they have worked hard to save for over their lives. His final point was that if we do not run a trial of auto-appointments, people will continue to make the wrong decisions and be at risk of being scammed, and there will still be no evidence of the value of auto-appointments.

We also heard good contributions from the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), from the Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms), and from the hon. Member for Grantham and Stamford (Gareth Davies)—and no debate would be complete without the hon. Member for Strangford (Jim Shannon). The hon. Member for Kingston upon Hull West and Hessle and the right hon. Member for East Ham both spoke about the risk of people getting scammed, and we need to remember that. What could be more heart-breaking than working hard all your life, looking forward to a comfortable retirement, and then being scammed out of your lifetime savings? It is awful.

Another thing I would like to draw the Minister’s attention to that needs to be addressed is that there are people who give the wrong advice or scam people, and then set themselves up as a claims management company to advocate for the people who just lost their money. That needs to end. The Government must put regulations in place to stop these people reinventing themselves as claims management companies.

A constituent of mine who is a financial adviser highlighted that her fees as a regulated financial adviser are going through the roof, so people are accessing unregulated advisers who do not pay those fees and can undercut the people providing real advice. That is another subject the Government need to address.

[Chris Stephens]

The Select Committee, of which I am a member, has heard evidence from the Association of British Insurers, the Pensions and Lifetime Savings Association, the Financial Inclusion Commission and Age UK, which all say that there should be an evaluation trial of auto-appointments as a means of increasing take-up of pension guidance. They are correct, are they not?

[Alan Brown]

My hon. Friend is right; I was going to come on to that. When the industry and all those bodies are saying that there should be a trial of auto-appointments, it is not controversial, and is something the Government should embrace. It was a Conservative Government that set up the Pension Wise advice system as a complementary service to the pension freedoms legislation, so it surely makes sense that the Government want to ensure that as many people as possible access impartial advice.

According to the Association of British Insurers, over £42 billion has been flexibly withdrawn since 2015, but just 14% of defined-contribution pension pots are accessed after the use of Pension Wise. We are talking about potentially billions of pounds being accessed with a high risk of it not being utilised properly for maximum gain. As the hon. Member for Amber Valley pointed out, people might make decisions that suddenly mean they are in higher tax bracket for the first time in their lives. Simple advice would remedy that.

Realistically, those figures should make the Minister sit up right away and pledge to take action. As others have highlighted, Financial Conduct Authority data confirms that the use of guidance and advice has actually decreased in recent years. Again, that should be an urgent call to action for the Government.

In March 2020, the chairman of the Money and Pensions Service, Sir Hector Sants, told the Work and Pensions Committee:

“A significant number of the people who contact Pension Wise will come away saying that, after having spoken to our guidance service, they have concluded that they should do something different from what they had in mind in the first place… There is a figure that suggests that 72% of people are saying they have changed their mind about what they will do as a result of talking to our guidance service. In a way, that is a simple statistic that tells you that the vast majority of people, left to their own devices, will probably make a poor decision.”

Again, £42 billion has been accessed since 2015, but 72% of the small number of people who received advice ended up making different decisions following receipt and consideration of that advice. The level of cash that is being accessed, with poor decisions possibly made on the back of that, is frightening—and, of course, some people are being scammed altogether.

The chairman of the Financial Conduct Authority, Charles Randell, made the following observation when asked about the adequacy of regulatory policy when he gave oral evidence to the Treasury Committee in November 2020:

“This issue about people making poor choices when exercising the freedoms and responsibilities that have been put on them in the last 10 years, through a variety of changes in Government policy, is probably the one that I worry about most of all.”

Does the Minister not share these concerns? I am concerned that he does not. I welcome the fact that the right hon. Member for East Ham highlighted comments that the Minister has made previously that he does not seem to be holding true to. Is the Minister blind to these concerns that everybody in the industry is raising?

The other crucial aspect in all this is that, for those who have used Pension Wise, it has been deemed a success. When the Government have a success story that they can relay, why are they not trying to build on it and enhance it? The 2019-20 Pension Wise user evaluation found that 94% of appointment users were very or fairly satisfied with their overall experience of Pension Wise; 88% of appointment users said that Pension Wise helped to improve their understanding of pension options; and 70% of Pension Wise users correctly answered eight true or false statements relating to their pension options, compared with 43% of non-users. That last statistic is proof of the additional knowledge gained by accessing impartial advice.

In contrast to the evidence gathered since 2015, the Government’s approach to non-advised savers seems to inhabit a space somewhere between “fingers crossed it’ll be okay” and “if savers stuff it up, that’s their own fault”. Again, that brings me back to what the hon. Member for Amber Valley outlined about the known risk that affects savers; he put it well.

Currently, 19 million people are at various stages of their defined-contribution pension journey. Their retirement outcomes depend, first, on the generosity of their employer’s pension offer and, secondly and critically, on the decisions they make at the accumulation and decumulation stages. If a saver has contributed to pensions for over 40 years, surely it is right that the system does all it can to ensure that they take as little time as 40 minutes for a guidance appointment.

The Minister’s response to this issue of low take-up of guidance and advice has not been to address it directly but instead to point to the “stronger nudge”, as he did earlier, or to other pet projects such as mid-life MOTs and pension dashboards. They are measures that I support, but they are not available in the here and now, whereas Pension Wise is. As for the stronger nudge, the FCA and his own Department admit that, on the basis of trials to date, it is unlikely to have a dramatic effect on guidance take-up. Indeed, the trials suggested that there would be an increase of only 8% in the take-up of advice, so that clearly is not the solution.

Once again, I ask the Minister and the Government to commit to a trial of auto-appointments. Two trials could be considered: one with an appointment when a person accesses their pension for the first time, and another—this idea came from the Select Committee—with an appointment at the age of 50, before someone can access their pension savings, which is the kind of mid-life MOT that the Minister supports. Piloting an auto-appointment system for the Pension Wise service is a clear recommendation of the Work and Pensions Committee, and the Association of British Insurers supports it too.

The Committee also recommended that the UK Government should set a goal of at least 60% of people using Pension Wise, the Government guidance service from MaPS, or receiving paid-for advice when they access their pension pots for the first time. Meeting such a target would see billions of pounds being accessed in a way that minimises the risk of poor decision making by people who are not used to assessing such sums of money.

Will the Minister confirm, once and for all, that he supports a trial of auto-appointments, as recommended by the Select Committee and the industry? It is a no-risk option for the Government to implement. Will he confirm the timescale for such a trial? If not, will he say why he is ignoring the advice and why he is willing to allow people unwittingly to continue making bad decisions with their pension pots? If they are accessing that money and using it for the best means possible, it should be able to support not just them but the wider economy better.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

First and foremost, we all wish you well, Ms Bardell. We gather you were doing your best Franz Klammer impersonation down the slopes; I am certain that you will be back on the football field before too long. You are also the third Chair that we have enjoyed in barely a one-and-a-quarter-hour debate.

Today is an odd day, as we have all struggled through the pension-related tube strikes. We have dealt with many known unknowns, both in life and in the speech of my hon. Friend the Member for Amber Valley (Nigel Mills). In broad terms, I was in glorious agreement with him. The wonderful thing about pensions debates in this House is that effectively we are all singing from the same hymn sheet, and trying to get the same outcomes. However, there might be differences in how we reach those outcomes and, in the nine minutes that I have, I will try and address the 35 to 40 points that have been put to me that require urgent answers.

I will defer some of the questions asked by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) because, to my great delight—I was told only last week—I am going to the Treasury Committee tomorrow specifically to answer on financial inclusion. That issue was also raised by the hon. Member for Strangford (Jim Shannon). The hon. Member for Kingston upon Hull West and Hessle raised a couple of points that I want to refer to briefly. She described the number of pension pots as four to five; we will probably have 10 to 11. It is a much bigger problem, but we are on it with two particular interventions. In the short term there is the pension tracing service, which I strongly urge all colleagues to recommend to their constituents, because they can be tracked down on the present basis. However, it is relatively basic and clunky; the dashboard is clearly a much better thing.

I will address a specific point about the dashboard at the outset. Many parts of my portfolio and job involve herculean heavy lifting—as the right hon. Member for East Ham (Stephen Timms), who has done my job previously, knows. The dashboard involves the most herculean heavy lifting of them all, taking 40,000 pensions schemes, getting all the data together, making them all talk to one another, incorporating the state pension and doing so in a data-friendly safe way.

I want to put on record my support for Chris Curry and the team. I have to say that I am not aware of such criticisms from businesses. That relates to the point made by my hon. Friend the Member for Amber Valley: data is everything here. It really is. The pension schemes have to improve their data, and once they do, a whole host of positive actions can flow. The dashboard is clearly one of them. It will allow an individual to see what they have, in the comfort of their own home or with an independent financial adviser, and do all of the things that we want them to do. The data flows from the dashboard decisions. The industry is concerned that I am pressing them to get its data together in a robust way; I do not shy away from that. Some people want me to go faster than I am. I would like to think that we are actually going quite fast to get the dashboard up and running. It will be live, in some shape or form, very soon.

That brings me to the specific points made in the debate; I obviously look forward to being grilled on all matters of financial inclusion tomorrow. In my experience, automatic enrolment opt-outs are not actually as bad as the hon. Member for Kingston upon Hull West and Hessle described, but I will take her point away and have a look at it. Obviously, they are a relevant factor.

I want briefly to deal with the point about the FCA. Clearly, my hon. Friend the Member for Amber Valley chose to have the Pensions Minister answer today’s debate rather than the Treasury Minister who deals with all matters of advice and the FCA. That makes my life a little difficult, but we are one Government, so I answer for everything, whatever the situation. The 2020 evaluation of the “Financial Advice Market Review” found that the financial advice market was going in the right direction, with more people accessing advice, but also recognised that some remaining challenges in the market needed further work. The Treasury is working with the FCA on the next steps. The hon. Member for Kingston upon Hull West and Hessle raised the FCA’s stronger nudge approach. I believe that the Department for Work and Pensions is actually going way faster. In 93 days, by my count—on 1 June—the stronger nudge policy will come into law. Although I obviously revere and adore the FCA and Treasury, and everything that they do, the DWP is at the front of that particular queue and is driving that policy forward.

Let me try to address the point about the signposting of Pension Wise by pension schemes. Wake-up packs are provided on an ongoing basis, but we also believe very strongly that impartial guidance from the Money and Pensions Service is a very good thing. MAPS is a very young institution. Parliament decided, following Select Committee reports, to legislate to create it and it melded all the previous operations together. It is a young institution—not even four years old. We are gently trying to nudge it into a greater take-up of all of its services, and it is part of the dashboard delivery service, for example. Although Pension Wise provides guidance about the options for accessing defined-contribution savings, it is primarily designed for those aged 50 and above who are making decisions about how to access such savings.

However, we are ignoring the MoneyHelper pensions service, formerly the Pensions Advisory Service. No one has mentioned it in any way whatsoever. The stats show that there were 113,000 Pension Wise appointments in 2020-21, and that MoneyHelper supported 220,000 people during that time. We are very focused. I understand why, in discussing Pension Wise, we have not discussed in any way all of the great work that the Money and Pensions Service is doing with MoneyHelper on pensions. The number of people using the service went up by 8% in 2019-20.

Separately, a report by the Social Market Foundation, which is a lovely organisation—I revere the fact that any think-tank is doing any work on pensions, and I agree with my hon. Friend the Member for Grantham and Stamford (Gareth Davies) that the more we talk about them, the better—made the point that we need a greater online service. The number of people using MoneyHelper’s digital pension tools has grown by 47%, from 170,000 users in the first quarter of 2020-21 compared with Q1 of the following year. There is much greater usage of MoneyHelper and other online services.

The statistics on MoneyHelper show how much the service helps, but I want to address the stronger nudge. It comes into force on 1 June, which, off the top of my head, is in 93 days. It requires schemes to go beyond signposting to guidance, as they currently do. They will be required to take an active role by offering to book a Pension Wise appointment on behalf of the member when they seek to access their defined contribution savings. That will be presented as a normal part of the process for accessing a pension.

Schemes will also be unable to proceed with any application to access savings until members have either received or explicitly and clearly opted out of guidance. For occupational schemes, the opt-out must be given in a separate communication from the member. We believe that that will ensure that all members are required to make an active, informed choice on guidance before they are able to access their savings. I believe that that strikes the right balance and is the right way forward. Although we all want to do more, Parliament has decided and has legislated for the Money and Pensions Service, Pension Wise and the Department for Work and Pensions to drive forward the stronger nudge as the way forward. I urge colleagues to get behind that in the short term.

In the short time I have left, I want to address fraud. Obviously, we believe that the stronger nudge will help. The Pension Schemes Act 2021 sets out four red flags to address those specific problems, and I pay tribute to the Pension Scams Industry Group and the other organisations with which I have worked. I hope that the draft Online Safety Bill will continue the good work that pre-legislative scrutiny has shown we are doing on pensions and investment scams. I have personally raised that with Google, Facebook, Instagram and LinkedIn. All those companies, particularly Google, need to be acutely aware that it is utterly unacceptable that there are 47 fake versions of Aviva at the top of the online search list, and that that needs to stop. To be fair, those companies can do that themselves without Government action.

[Alan Brown]

Will the Minister give way?

[Guy Opperman]

I do not have time, as I have only 30 seconds left. Those companies do not need Government action. They can stop all of that by simply vetting their advertisers. It is long overdue that Google and others took such action. I sincerely hope that they do so on an ongoing basis, rather than our having to force them to do so at the threat of penalties.

I have totally run out of time, but I thank all colleagues. I genuinely believe we are all on the same pathway and journey, but just nudging each other in slightly different ways.

Benefit Cap

Alan Brown Excerpts

Tuesday 1st March 2022 Commons Chamber

[David Linden]

Absolutely. That is an issue I will perhaps touch on a little later in my speech. My hon. Friend is absolutely right to challenge the Government on that point, because I sometimes wonder how a policy like this could have got through the Government’s so-called family test. I am sure she will not hesitate in challenging her constituency MSP, the Conservative MSP Jackson Carlaw, to stand up for his constituents, many of whom have larger families.

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

On that point, is it not key that we are talking about families and children? Whatever the Tories’ ideological views on people having too many children, the reality is that the benefit cap is affecting children who have no say in the matter, and it is evil.

[David Linden]

Absolutely; my hon. Friend makes that point eloquently. The issue is that the Government are making policy in their ivory towers in Whitehall without any understanding of the real-life impact that it has on many families, including in Kilmarnock.

Some nine out of 10 single parents with children are women, which adds another layer of discrimination to an already incredibly cruel policy. We have heard testimonies from women who have left relationships due to domestic abuse only to find their benefits capped and the threat of financial hardship looming. That is the reality of the policy. Every effort should be made to ensure that those women, who are often fleeing desperate situations, are supported. Instead, the heartless British Government have capped the benefits that they can receive.

On top of that clear discrimination against single parents, specifically single mothers, a 2018 report by the excellent charities One Parent Families Scotland and CPAG in Scotland revealed that most families whose benefits had been capped were unable to seek or undertake work. The report highlighted that almost four in five lone parent households affected by the cap were claiming income support because they had young children and were not expected to seek work. Some one in six were claiming employment and support allowance, which suggests that they had been assessed as not fit for work. Families across Scotland are being pushed into financial hardship when they are not expected, and indeed are not deemed fit, to find work.

The Joseph Rowntree Foundation found that the benefit cap also disproportionately affects minority ethnic households. In England, eight in 20 households affected by the cap are minority ethnic, while minority ethnic households represent only three in 20 of the total. The Poverty Alliance has shown that the benefit cap discriminates against larger families as well, as my hon. Friend the Member for East Renfrewshire (Kirsten Oswald) said. In Scotland, 96% of capped households have children and of that number, 75% have three or more children.

According to a recent Resolution Foundation report, the low level of core social security benefits, which were affected by the various real-terms cuts to benefit levels in the 2010s, has been exacerbated in the past decade by policy changes such as the benefit cap and the two-child limit and associated rape clause that have undermined the idea that those with extra needs should be supported. That has resulted in rising poverty, particularly among families with three or more children.

The SNP has put forward clear policies to tackle poverty across Scotland. For example, my colleagues, SNP Ministers in Holyrood, have doubled the game-changing Scottish child payment, rolled out 11 new benefits and extended free school meals, and are working to actively reduce poverty and inequality. All the while, this place—Westminster—undermines those efforts.

With limited tax-raising powers, no serious borrowing powers and 85% of welfare spending still controlled in London, however, those policies can only go so far. They are being continually undermined by a Tory Government that Scotland did not elect; indeed, we have not elected a Tory Government since the 1950s. The benefit cap is just another cruel policy implemented by the Tories that leads to the extreme austerity and poverty that blight the lives of far too many of our constituents.

In addition to the benefit cap, the British Government must also scrap other poverty-inducing Tory policies such as the two-child limit and the bedroom tax. We face a perverse situation where the Scottish Government have to use between £60 million and £80 million of their budget every year to mitigate the bedroom tax. Again, devolution is almost being used as a sticking plaster for bad social security policy. Quite simply, I am sick and tired of standing up in this Chamber and making endless pleas to intransigent Tory Ministers while trying to demonstrate how my constituents in Wellhouse, Easthall and Cranhill are suffering from their cruel social security squeeze.

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[David Rutley]

As the Chancellor spelled out clearly during the pandemic, this was a response to the worst parts of the pandemic and the shock it would provide to people. The hard-working staff in the Department for Work and Pensions, including thousands of work coaches, worked tirelessly to ensure that the benefits system did its job.

Since the start of the pandemic, we have spent more than £400 billion protecting people’s lives and livelihoods, and supporting businesses and public services. As well as providing support where it is needed, the Government have a responsibility to taxpayers. We must ensure that we use our resources in the most effective and efficient way possible, and the benefit cap is a vital part of that.

The hon. Gentleman and I probably disagree on this, but let me set it out and we will see how it takes the debate further forward.

[Alan Brown]

It is a few years since the National Audit Office said that there was no system in place to measure the outcomes associated with universal credit. For years the Government have continued to say that UC helps people into work. So what changes in the assessment process for measuring outcomes have the Government made since that NAO report?

Social Security and Pensions

Alan Brown Excerpts

Monday 7th February 2022 Commons Chamber

[David Rutley]

As I have been setting out in my opening remarks, we are taking forward this step in combination with a raft of other measures to help residents in this country face the challenges ahead. In fact, as part of the three-point plan, we have a £200 discount on energy bills this autumn for domestic electricity customers in Great Britain that will be repaid automatically over the next five years. There is a £150 non-repayable rebate on council tax bills for households in bands A to D in England; that is 80% of households. Of course, there is £144 million of discretionary funding for local authorities to support households who need support but are not eligible for the council tax rebate.

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

Will the Minister give way?

[David Rutley]

I have given way enough for now—[Interruption.] I am about to make a point. The devolved Administrations are receiving around £715 million in funding through the Barnett formula in the usual way. That support is on top of an existing package of measures. The winter fuel payments will be made to 11 million pensioners this winter, ensuring that older people have the security and dignity that they deserve. Cold weather payments of £25 a week help people in receipt of certain income related benefits to meet the additional costs of heating during periods of unseasonable severe cold weather, and we plan to extend the warm home discount until 2026 and, from 2022-23 onwards, expand that scheme, increasing the value of the rebates from £140 to £150 to help an extra 780,000 pensioners and low-income families with their energy bills.

[Alan Brown]

The Minister has spoken about the Barnett consequentials. Is it correct that the Scottish Government are getting only £220 million in Barnett consequentials from the new measures announced—the £150 rebate—which does not compare very well with the £3 billion in additional oil and gas revenues that this Government are getting over this year and next year, or the £6 billion over the lifetime of the Parliament? Surely, much more could be done to help people right across the UK with the increased money the Treasury is bringing in.

[David Rutley]

As I have said, I think that a sum of the order of £715 million will be given to the Scottish Government in this particular measure.

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[David Rutley]

My hon. Friend is a doughty champion on this front, but all we are doing on these particular pensions is following a well-worn line in Government policy over many years.

[Alan Brown]

Will the Minister give way?

[David Rutley]

No, I have given away enough on these points, and I want to get on to pensioners more generally, if the hon. Gentleman does not mind.

The UK Government increased funding for the devolved Administrations on the household support elements accordingly, with an extra £41 million for the Scottish Government, £25 million for the Welsh Government and £14 million for the Northern Ireland Executive.

The state pension is the foundation of support for older people. With this order, the basic state pension will rise to £141.85 per week for a single person. This means that the full yearly basic state pension will increase to £2,300 a year higher in cash terms than in April 2010. The full rate of the new state pension will increase to £185.15 a week. Additional state pensions, as well as protected payments in the new state pension, will rise by 3.1%. This increase means that over the two years of the pandemic the basic and new state pensions will have increased by 5.6%, while CPI, in the two years to September 2021, was 3.6%. Finally, the pension credit standard minimum guarantee for a single pensioner will increase to £182.60 a week, and the rate for a couple will rise to £278.70 a week.

The Government are committed to ensuring that people have security and dignity in retirement. In 2020, when average earnings declined, the new and basic state pensions would have frozen, had the Government not introduced the Social Security (Up-rating of Benefits) Act 2020. Instead, those pensions increased by 2.5%, despite CPI being 0.5%. This provided extra financial stability for pensioners during a difficult time. After two unique years of troughs and peaks in earnings growth due to the pandemic, the Government took action to protect pensioners and taxpayers by smoothing the increases to these pensions. The Government remain committed to implementing the triple lock in the usual way for the remainder of the Parliament.

The Guaranteed Minimum Pensions Increase Order is an annual provision that affords a degree of inflation protection for the guaranteed minimum pension part of the occupational pension that was built up between 1988 and 1997. The guaranteed minimum pension that is in payment must be increased in line with the general level of prices or 3%, whichever is less. The relevant comparator is the consumer prices index for the year to September 2021, which was 3.1%. This order therefore specifies that the rate of guaranteed minimum pensions is to be increased by 3%, in line with primary legislation. These orders provide protection for pensioners and people in receipt of state benefits, and I commend them to the House.

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[Nigel Mills]

I absolutely agree that asking people to live without enough money to heat their houses and to eat creates all manner of knock-on consequences that will inevitably end up costing the taxpayer money in the long run. It should not be a big challenge or a contentious point of debate to want to ensure that the benefits we are giving the poorest in society are enough for them to live on, so I cannot see why we would not publish periodic analysis just to check that everything is in working order.

We should remember that many millions of people cannot go and get a different job or work a few extra hours to make up the difference. They cannot work, they are retired or they are not in work—they have no chance to earn an income, so what we give them is what they get, and we need to make sure that it is sufficient.

[Alan Brown]

The hon. Gentleman is making an excellent speech and a very good point. Ministers sometimes concentrate too much on the number of job vacancies across the country, as if somehow they can all magically be filled, but the point is that not everybody can fill those jobs. There are demographics and geography at play—it is not as if people can just uproot themselves and move to get another low-paid job somewhere else. The Government really need a better understanding of where the vacancies are, with skills and training programmes targeted at filling vacancies in the long term.

[Nigel Mills]

The hon. Gentleman is absolutely right: we cannot expect somebody to move hundreds of miles in that situation. Equally, anybody who can work should work, and should be supported and given the training to do that when it is in their best interests. I do not meet many people who can work but do not want to; I think most people who can work with the right support are very keen to.

I will vote for the draft orders tonight. I think our choice is a 3% rise or nothing, so it seems slightly self-defeating to vote against them, but I ask the Government not to take the House’s approval as a sign that it agrees with the position we are in. The Government could use their discretion and make the increase higher than inflation if they wanted to, just as they have chosen many times to make it lower than inflation. We knew that this problem was coming; it has not turned up in the last fortnight and got us chasing around.

I am not even asking for something that would be a long-term cost. All we would be doing is bringing forward to this year the rise we would give people next year, so that they have it in time to pay their higher bills, rather than six months after getting them. That is the impact of the calculation that we do, and if we do not get it right, we will be putting people in an impossible situation.

The idea of having a welfare system that we can control so we can give people transparency and up-front certainty is that it is there to give them the support they need. We cannot keep filling holes with discretionary, complicated schemes that people may or may not find about, that are done differently by councils all around the country, and that may or may not exist in the long term. The whole idea of a universal credit system was that it would be a benefit that rolls everything into one and gives people the support they need. By doing all these occasional one-off top-up schemes, we are admitting that the main benefit is not in the right place.

I urge the Government to take a step back, to remember our core purpose of giving people enough to live on—not luxuriously or hugely generously, but with a decent standard of living—and to be absolutely sure that they have achieved that and are still achieving it. If they have any doubts, they must do the work to publish it and prove it, and if we need to fix it, let us get on with fixing it.

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

It is a pleasure to follow the hon. Member for Strangford (Jim Shannon). Like all hon. Members, he highlighted the fact that the Government need to do more to deal with the cost of living crisis. It was characteristically optimistic of him to look forward to the Minister’s response; I have a funny feeling that we will not get much out of the Minister in that regard.

Of the two draft orders, I will concentrate first on the Guaranteed Minimum Pensions Increase Order. It is relatively straightforward, on one level; it will ensure that those on contracted-out pensions get an uplift in their contributions made between 1988 and 1997. Effectively, that seems to be a formality that happens every year. The percentage increase is capped at 3%, which makes me think that we have to consider whether that 3% rate is valid now. What happens if inflation remains rampant? That needs to be considered.

In preparing for the debate, I was concerned to read that as part of the transition to the single-tier pension in 2016, the DWP estimated that 50,000 people would lose out with guaranteed minimum pensions. In 2019, the Parliamentary and Health Service Ombudsman published a report stating that the DWP had not provided clear and accurate information that some pension holders could face negative long-term impacts on their pensions and their income. The Government responded in 2021 and developed a new factsheet. In developing that factsheet, how much discussion did they have with the PHSO and third-sector organisations? When will we see the review into its usage? As the right hon. Member for East Ham (Stephen Timms) pointed out, people are having difficulty accessing the factsheet. How many people have suffered negative consequences and what are the Government doing to assess that?

It is clear from the failings on the guaranteed minimum pension and the communications around that, the WASPI women and the botched communications with them, the pensions underpayments and the late payment of pensions once people reach state pension age that the pensions system has a long way to go before it is remotely close to being fit for purpose.

With those observations, I will turn to pensions in general, in terms of the social security uprating. I know that the Minister will probably dismiss most contributions from the Opposition, but as others have said, he would do well to listen to the excellent contributions from the hon. Members for Waveney (Peter Aldous) and for Amber Valley (Nigel Mills). They should be a warning to the Government that more needs to be done.

UK pensions are the least generous in north-west Europe when compared with the average wage. That was confirmed by analysis undertaken by the House of Commons Library last year. When that is the case and when we have a cost of living crisis, it defies logic that the Tories think this is the time to break the triple lock guarantee on pensions and to break it in terms of the link with earnings.

As other Members have said, the CPI figure being applied is outdated, but I suspect it was also understated, considering the work done by Jack Monroe and the fact that the Office for National Statistics is saying that it will revise how it calculates CPI and inflation with regard to food. The 3.1% was probably an understatement at the time, and it has since been superseded.

[Sammy Wilson (East Antrim) (DUP)]

One of the original arguments the Government put forward for not linking pensions to the increase in wages was that wages had increased unusually because of the pandemic, when people were out of work and then went back into work. We now know that it is not just wages that have gone up; prices have gone up as well. That is having a real impact on pensioners and people on low incomes.

[Alan Brown]

Absolutely; food prices have gone up and the energy price cap is now circa £2,000. The Government are not doing enough to mitigate the effect of that price cap. The reality is that earnings are not reflecting the cost of living demands. That is the whole point of earnings increasing. It therefore makes no sense to break that link.

What we have from the Tory Government is a Budget that is based on taking money from the pockets of pensioners, and this week they have not done enough to address the energy cost crisis. They are doing very little. A £200 loan to people is insufficient. It is just another burden for bill payers to pay back. Even if people get the £150 council tax rebate on top of the £200 loan, the energy cap is going up by £700. That is a long way short of meeting people’s requirements. Even when the rebates are taken off the price cap, people will be paying a net cost of £1,600 on their energy bills. That is a 40% increase. For those who have to pay the full cap, it is a 70% increase in energy prices in the last few months.

Pensioners are already struggling to make ends meet, and now they face this further erosion of their pension, while everything else is going up. As other Members have said, inflation is at its highest rate for 30 years and could go as high as 7%. Why oh why, in that context, do the Government think it is right to break their manifesto commitment on pensions? The Pensions Minister argues that pensions are increasing compared with this year, but the Red Book for the October Budget clearly states that breaking the triple lock is costing pensioners £520 a year. The Treasury will save £5.4 billion in financial year 2022-23 and a total of more than £30 billion in this Parliament. So the Chancellor is clearly balancing the books on the backs of pensioners. The concern is: is this a precedent? If the Government do not like any part of the triple lock, will they say, “We’ll ditch that bit of the triple lock, but we’ll return to it in the future. Don’t worry—it’s just a one-off”? A precedent has been set. The reality is, the triple lock is crucial in ensuring that the state pension continues to rise to reflect the increasing cost of living. Removing it deprives pensioners of vital income to ensure dignity and fairness in retirement. Research by the House of Commons Library shows that nearly 1 million pensioners in Scotland will be directly impacted by the cut.

The Government’s own statistics on households below average income show that, under Tory rule, UK pensioner poverty has risen to a 15-year high, with 2.1 million UK pensioners now classed as living in poverty once housing costs are allowed for. That is an increase of 200,000 on 2018-19, yet today the Pensions Minister had the brass neck to stand at the Dispatch Box and say that pension poverty has gone down under their watch. It is the exact opposite. These figures are based on the here and now—before the increase in the energy price cap kicks in—so it is clear that, unfortunately, the 2.1 million figure will dramatically increase. National Energy Action estimates that the increase in the price cap to £2,000 will result in between 5.5 million and 6.5 million households across the UK being fuel-poor.

One way in which the Government can help alleviate pensioner poverty is by ensuring that those eligible for pension credit are receiving it. We know that only about six in 10 of those who are entitled to it actually claim it, so the Government save £4 billion a year in unclaimed pension credit. If we look at the savings they are making through breaking the triple lock and what they hold back in pension credit, that is £10 billion this coming financial year alone, which could easily be in pensioners’ pockets. As my hon. Friend the Member for Glasgow East (David Linden) said, when pensioners have that money in their pockets, it gets recirculated in local businesses because they need to spend that money on household essentials.

Research commissioned by Independent Age estimated that full take-up of pension credit could lift 440,000 older people out of poverty. When will the Government tackle that? I am less concerned about debating the 3.1% uplift in pension credit aspect—it is more important that people who are due pension credit actually get it. The Government must do everything they can to ensure that that happens. They speak about information campaigns, but, if they are serious about increasing pension credit uptake, how much money have they set aside for campaigning, information and working with third-sector organisations to ensure that people access pension credit? How much money have the Government set aside in the Budget as regards the hoped for increase, because they will clearly need to make more money available to pay that out?

Another cohort of pensioners is living in poverty: those who live abroad and are hampered by frozen pensions overseas. Many of them are veterans. It seems absurd that, when the Tories argued for giving lifetime votes to expats living abroad, they always used the brave veteran who fought for the UK and gave service in the armed forces as an example of someone who deserves a vote for life, yet they will not reward those veterans with a pension that allows them to live in dignity.

[David Linden]

The Government are not just giving overseas pensioners the right to vote but changing legislation to allow overseas pensioners the right to donate to election campaigns. So the Government are quite happy to take those pensioners’ money, but they are not happy to give those pensioners the money that they paid in.

[Alan Brown]

That is a valid point that highlights the Government’s complete hypocrisy. We can only hope that enough overseas pensioners use their vote the right way and send the Government a message. It is kind of absurd. Not only is it demeaning when people living abroad do not have enough money to live on, potentially after giving service in the armed forces, but some are forced to sell their homes and move back to the UK. The irony is that that brings increased health costs. If the Government are being purely financial about it, not giving people the standard of living that they are due does not even save them the money they think it does.

One other aspect of that, in terms of reciprocal agreements on overseas pensions, is that the Canadian Government have offered to work with the UK Government to get a reciprocal agreement to resolve that issue in Canada. So why are the Government not moving forward on that and working with the Canadian Government?

There is one other key policy that the SNP has long been campaigning for. It is calling on the UK Government to establish an independent savings and pensions commission to ensure that pension policies are fit for purpose and reflect the demographic needs of different parts of the UK. One aspect of pensions that raised its head over the weekend was the Better Together rehash of 2014, and how the UK will not honour its commitments to pensioners in an independent Scotland. It seems extraordinary to me that we are in a so-called Union of equals, yet threats are being made about pensions. It is shameful that Scottish Labour once again want to be all over this. It seems that the UK Government want to argue that they can ignore all those contributions from Scotland in terms of income tax and national insurance, and will withhold pension obligations, yet they expect an independent Scotland to take on a share of the debt that the UK Government have built up—that has never been built up by any Scottish Government. That is a complete paradox and it makes no sense.

[Douglas Ross (Moray) (Con)]

Will the hon. Gentleman give way?

[Alan Brown]

I am not giving way to someone who came two hours late into a three-hour debate. [Interruption.] As one of my colleagues says, if a person came in that late to the jobcentre, they would be sanctioned. For me, the examples I have given say it all about the so-called most successful political Union: one where after 315 years, we still hear the mantra about needing to level up. Surely that Union is broken if there is an argument for levelling up.

I will now turn to policies, and the question of where the money to implement paying a much higher pension, for example, could come from. Comparing the November Budget with the March Budget, the Red Book showed that oil and gas revenues are going to bring in £6 billion extra over this Parliament. It is predicted that VAT receipts could increase by £40 billion, and we know that the Treasury is continuing to get extra VAT from energy bills and from petrol, from extra fuel duties, so it is raking in money compared with where it thought it would be. It is high time that it reinvested that money to provide support for people in this cost of living crisis, instead of just continuing to take, take, take. That is why, for me, the reality is that only with the full powers of independence can we protect Scotland’s pensioners, eradicate poverty and finally begin to build a more progressive nation.

Oral Answers to Questions

Alan Brown Excerpts

Monday 7th February 2022 Commons Chamber

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

Despite what the Minister said at the Dispatch Box earlier, his Government’s statistics show that even before the effects of the £700 energy cap kick in, pensioner poverty is at a 15-year high, with 2.1 million pensioners classed as living in poverty. The Red Book also shows that the removal of the pension triple lock is going to take £30 billion out of the pockets of pensioners over the lifetime of this Parliament. What impact assessment have the Government undertaken on the removal of the triple lock, and how many more pensioners are going to be plunged into poverty?

[Guy Opperman]

The hon. Gentleman will know that there are 200,000 fewer pensioners in absolute poverty than in 2009-10. Through the triple lock and the work that the coalition Government did and this Conservative Government have done, we have never paid pensioners more. There are also the three matters set out by the Chancellor previously. I spent some of the weekend reading “Scotland’s Future” and I see that the SNP has now abandoned its previous position on the state pension—a question that SNP Members did not want to raise today, I conclude.

Automatic Pension Enrolment

Alan Brown Excerpts

Wednesday 26th January 2022 Westminster Hall

[Gareth Davies]

My hon. Friend makes an important point. For the purposes of my remarks I want to focus on young people because, as I said, that will have the most material impact, but I know that others will speak about the points he raises.

Today, over four out of five 18 to 21-year-olds are missing out on the benefit of compound interest, despite belonging to the very group for whom the potential for exponentially increasing savings is the greatest.

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

I agree with the principle of extending automatic enrolment to young people, and I realise that the 2017 review of automatic enrolment recommended extending it to 18-year-olds. What does the hon. Gentleman think about the merits of extending it further, to 16-year-olds, who might well have left school and be in full-time work? If we are talking about the benefits of compound interest, an extra two years could make a huge difference.

[Gareth Davies]

The hon. Gentleman makes a good point: the earlier one starts saving, the greater the impact of compound interest. However, for me, balancing all the factors—particularly the impact on businesses—I think we should start where we can, with 18 to 21-year-olds. But it is not the case that we should not discuss his point at a later stage.

Is it any wonder that we find ourselves in this situation, given the general lack of savings culture in this United Kingdom? We have a culture, developed over decades, of relying on quick cash, quick results and tangible output. Although many talk about the aspiration to own a home, few talk about securing their retirement through a pension. Auto-enrolment will help with this, but we must also look at other ways to ensure that the option of saving for the future is more apparent.

Preparing for today, I was shocked to find a study by the National Association of Pension Funds that found that just 12% of job adverts mention the employment pension scheme that is offered. That compares to 71% of ads that mention the salary—even though the pension contributions can amount to about a third of total take-home pay. We need to look at this more broadly.

There is so much potential for our pension system to effect change, whether addressing the need for long-term savings, as I have discussed today, the need to tackle the fact that 10 million people have less than £100 in short-term savings or the fact that so many young people today never even get close to building a deposit for their first home. I believe that our pension fund market could provide the answers to those challenges. As such, given that it is now nearly 17 years since the Turner commission, I would like us all to agree cross-party that whoever is in government in 2024, we will look to launch a new pension commission, looking specifically at the long-term challenges I have discussed and the opportunities the UK pension fund market can provide to citizens across this country.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Dowd. Like everybody else, I congratulate the hon. Member for Grantham and Stamford (Gareth Davies) on securing the debate. There have been a number of Tory Back-Bench contributions; I was worried that I would end up agreeing with all of them, but I have managed to find a couple of aspects to disagree with—I am pleased about that.

I agree completely that auto-enrolment has been a success. The hon. Member for Grantham and Stamford set out well its history and success. I agree, too, with the principle of creating larger pots for investment in infrastructure. That is an age-old argument, but we never seem to get there; I agree that that needs to change. I am slightly concerned about the talk about pension savings funding housing deposits. I know that people want access to the housing market. However, I worry that, depending on how deposits are funded, that will not take the heat out of the housing market, but will actually increase it, because more people will be chasing a smaller pot of houses. We need more affordable houses as much as new ways to get people deposits.

The hon. Member for Grantham and Stamford made the interesting point that only 12% of job adverts advertise pension contributions. If we are talking about advice and people understanding the benefits of pension contributions, we need to look at that. The hon. Member for Strangford (Jim Shannon), who would have been surprised to have been called so early, further set out the success of the scheme, and talked about his personal experience and, importantly, education—that is clearly important for everybody. It was brave of the Minister, in the current climate, to intervene on the hon. Member for Strangford to talk about cake—fair play.

We heard from the hon. Members for Darlington (Peter Gibson), and for North Norfolk (Duncan Baker). It was very good to hear the employer’s and the director’s points of view. Both Members admitted that they had concerns, but they were pleased to see how successful automatic enrolment is. It is good to have that buy-in.

The hon. Member for Clwyd South (Simon Baynes) spoke about access to advice; I will come back to that, because I agree with him on that point. The hon. Member for Delyn (Rob Roberts) made a good point about complacency. We need to make sure that people understand that they might need to increase their contributions and pay more. That is very important, and it links to the point about getting proper advice.

Finally, we heard from the hon. Member for North West Durham (Mr Holden). I, too, congratulate him on his efforts in bringing forward his private Member’s Bill. He set out his stall really well on that day, as he did, briefly, today. His key point—that for every 50p somebody contributes, they get £1 in their pension pot—sums it up perfectly; it is a great illustration.

As we have heard, auto-enrolment has clearly been a good thing, and a success in getting way more people to save for their retirement. In fact, it has been so successful that we have to ask why it took so long to bring in such a scheme. The Association of British Insurers states that automatic enrolment has brought a further 10 million people into pension saving. As we have heard, 88% of eligible employees participated in their workplace pension in 2020, which is up from 55% in 2012. That is a fantastic step forward.

However, there are concerns that an estimated 12 million people are still under-saving for retirement, and that needs to be addressed. Given what we have heard today about the success of auto-enrolment, and given that the Government think it is important that people save for retirement and believe that auto-enrolment is a success, the Government should logically ensure that as many people as possible are eligible. That means implementing the recommendations of the 2017 review as soon as possible. During the passage of the Pension Schemes Bill, Labour and the SNP worked together to introduce amendments that would do that, so it was disappointing that the Government voted those down. The Minister did commit to implementing the recommendations of the 2017 review by the mid-2020s, but rejecting the amendments does not give confidence.

We know how unstable UK Governments have been in recent years, and now the Leader of the House is threatening us with another general election, so it seems to me—without being too flippant—that there is a risk, if action is not taken sooner rather than later to get legislation through the House, that matters could slip further. As I said, the hon. Member for North West Durham has his private Member’s Bill, which we would support. I am still concerned, though, that we are looking at the mid-2020s. If we agree that this change is so good, we need to look at bringing it forward and getting things moving much quicker.

[Rob Roberts]

The hon. Gentleman makes an excellent point about bringing forward measures, but if we make these changes, is it not really important to give businesses enough lead-in time to plan properly and budget for them, rather than springing a significant change on businesses?

[Alan Brown]

There is a point there, but we have heard from an employer and a finance director that their concerns were allayed once the scheme came in, so I think that there will be fewer concerns as we go forward. Speaking of giving employers notice, we need only think about national insurance contributions. That rise was introduced in a short space of time, so we should not be too concerned about how we phase this in. If we do not do it, more people will lose out, which defeats the purpose.

Everybody here agrees that we should lower the age threshold for auto-enrolment to below the age of 22. I have said that I would rather have 16 than 18 as the threshold. I would be content with a two-stage process on that; we could review the situation with regard to 18 to 21-year-olds, just to see how successful it was, and to check that they were not opting out, but in the long term we definitely need to move to 16-year-olds, who could be in full-time employment. We also need to look at removing the lower limit of the qualifying earnings band, so that contributions are payable from the first pound earned. As we have heard, its removal would benefit the low-income workers who otherwise would have little prospect of a decent private pension.

To repeat what other hon. Members have said, the issue is particularly acute for women, who are more likely to be lower paid, in part-time work and doing multiple jobs. We have a massive gender pensions gap. In a recent report, the Pensions Policy Institute found the following:

“Men have substantially more private pension wealth than women, with disparities increasing across age groups. For those aged 65-69, median pension wealth for men is just over £212,000 compared to just £35,000 for women…Divorced women’s pensions are much lower than divorced men’s.”

The Association of British Insurers states that the average pension pot for a woman aged 65 is one fifth of that of a 65-year-old man. Women receive £29,000 less in state pension than men over 20 years. The deficit is set to continue unless further action is taken. We also need to look at expanding the contribution rates beyond the 8% statutory minimum, to allow people to maximise their pot. That builds on what the hon. Member for Delyn was saying.

As I have said, further delays are unacceptable. I hope that the Minister will say that the UK Government will set a clear timetable for their plans for expanding automatic enrolment. Morally, they should do that, given that they have made other decisions that are affecting pensioners both in the here and now and in the long term. We have a cost-of-living crisis, and I note that Tory Back Benchers are now using it as a defence for keeping the Prime Minister in his place, even though the cost-of-living crisis happened on his watch. They are arguing that there is a cost-of-living crisis that warrants our attention, but they still voted through the removal of the triple lock in the November Budget, costing pensioners more than £500 this year alone and a cumulative £2,600 over the next five years. That cut comes despite the fact that UK pensions are already the least generous in north-west Europe in comparison with the average wage.

We have just had the report on the shocking state pension underpayments, and there are comments that the system for state pensions is not fit for purpose. We have seen 118,000 people underpaid as regards benefits. We still have the injustice faced by the WASPI women—Women Against State Pension Inequality—and there are very low take-up rates for pension credit, which the UK Government acknowledge is an issue, but have not remedied.

The SNP continues to demand that the UK Government introduce a proper take-up strategy for pension credit, as the Scottish Government have done for devolved benefits. We continue to call on the UK Government to establish an independent savings and pension commission to ensure that pension policies are fit for purpose and reflect the demographic needs of different parts of the UK.

Another aspect of auto-enrolment that needs to be addressed relates to the self-employed. We have heard about the massive increase in employees in defined contribution schemes, but the trajectory for the self-employed has been the polar opposite—for them, the numbers have gone down: 48% of the self-employed contributed to a private pension in 1998, but the figure went down to only 16% in 2018.

Another key point is about professional advice. It makes no sense for people to save for retirement, or for support for when they are older, but to remain at risk when accessing their pension pots. That important matter was covered by the Work and Pensions Committee in its report “Protecting pension savers”, published last week. I support the calls for the Government to set a goal of ensuring that at least 60% of people use the Government’s Pension Wise guidance service or receive paid-for advice. That is a key consideration.

Pension Wise has proven to be a success. We need to make sure that more people access it. There should be a trial of automatic Pension Wise appointments, in order to encourage more people to access advice that will benefit them. The UK Government should initiate two trials: one in which people automatically get an appointment when they access their pension for the first time, and another in which they get an appointment at age 50, before they access their pensions—a mid-life MOT, as it has been called.

Auto-enrolment has been a good measure, but it needs further action to make it even better, so that it can benefit millions more people. Action to implement the 2017 recommendations should be a priority. I hope the Minister will agree, and will say that they will bring legislation forward at the soonest opportunity.

Underpayment of Benefits: Compensation

Alan Brown Excerpts

Thursday 13th January 2022 Commons Chamber

[David Rutley]

Lessons really have been learned from this situation, and if underpayments are made, that can have a real impact on people’s lives. Lessons will be learned from this. While it is not my departmental responsibility, I will take this away and work closely with the Minister for Disabled People, Health and Work and the Secretary of State, who is not able to be here today, to see what further lessons we can learn as a result of this report. As I have said, we must formally reply to the report as well.

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

Under this Tory Government, we have had the Women Against State Pension Inequality Campaign scandal, the universal credit cuts, pensioners now losing £500 a year and a cost-of-living crisis that they are doing nothing about. They really do not care. It is outrageous that it has taken the ombudsman to determine that compensation is due to the 118,000 claimants underpaid for up to seven years. Of course people should be paid compensation for having been forced to live in poverty, so what are the timescales for providing justice to those claimants?

In August 2021, there were still 76,000 cases open for review. What is that number now? What are the Government doing to assess the extra top-ups that were due, such as enhanced disability, severe disability, carer and pension premiums, that have not yet been considered for all the 118,000 underpaid claimants? Scope estimates that at present 42% of families on disability benefits live in poverty. What are the Government’s plans to rectify that? Pension credits are consistently underclaimed; when will they make that an automatic entitlement, and when will there ever be a level playing field between the DWP’s responsibilities and the way it treats claimants?

[David Rutley]

The hon. Gentleman has made a number of points. Arrears have already been paid to the 118,000, but the team are still in place, so when people are deceased and the surviving parties feel, on the basis of the report, that they could be eligible to receive such arrears, they can do so. I have already explained how those who feel they should receive further compensation can find out more about the process of investigating that. I agree with the hon. Gentleman that we need to do more to increase people’s awareness of the pension credits that are available. He also mentioned people with vulnerabilities. We want to help those people, which is why we established the household support fund and made additional funds available in Scotland as well.

Oral Answers to Questions

Alan Brown Excerpts

Monday 13th December 2021 Commons Chamber

[Mims Davies]

I thank the hon. Gentleman for everything he has mentioned, because we are doing that across the UK in 150 brand-new youth hubs. If he will listen to my answer, I hope he will understand that we are linked locally to the economy; we are keen for those job outcomes to come to his constituents and more widely, and this is being done through local interventions and local engagement.

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

The Tory trope is that UC helps people into work, but it has been a few years since the National Audit Office said that there is no way of measuring the outcomes and success of UC. So will the Minister tell me what measures are now in place to measure the outcomes of UC in getting people into work, particularly at the local level?

[Mims Davies]

We absolutely measure the outcomes of all our programmes, particularly the sector-based work academy programmes. Of course, skills are devolved in Scotland. In my recent engagement with the Welsh Government and at the Welsh Affairs Committee, I pointed out that outcomes are not measured in Wales. I think this is a thing we should be doing in all devolved areas.

Universal Credit and Working Tax Credits

Alan Brown Excerpts

Wednesday 15th September 2021 Commons Chamber

[Dr Coffey]

As I will probably say a bit later as well, this was indeed a temporary uplift, recognising the financial impact on people newly unemployed and that the uplift would be somewhat of a cushion for their financial circumstances. However, do bear in mind all the other support that we have given to help families get back on their feet, all the other elements that we have used to help people manage the cost of living, as well as the extra welfare grants that we targeted specifically through local councils. They have all been actions to help people, and we are helping people back into work, and better-paid work.

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

Will the Secretary of State give way?

[Dr Coffey]

I am going to make a little more progress and then I will come to the hon. Gentleman.

Those foundations meant that we had the fiscal firepower and responsive welfare system to take decisive and unprecedented action in the face of the covid emergency. We delivered a package of over £400 billion to support the British people and businesses through the economic shock and injected over £7 billion extra into the welfare system, increasing local housing allowance rental support by nearly £1 billion, as well as over £400 million of targeted grants for local government to directly help the most disadvantaged and vulnerable families in local communities.

[Alan Brown]

If a constituent comes to my surgery saying that they cannot afford to eat and have to go to a food bank because of the removal of the uplift, does the Secretary of State think they will feel any better when I say, “It’s not a cut; it’s just the removal of a temporary uplift”? What does she say to constituents who are on universal credit for the first time? They will have no idea that this cut is coming.

[Dr Coffey]

We have communicated once already with recipients of the universal credit temporary uplift. That has already gone through. The second message is under way, and the third message will be done. I think that we have taken responsible action to make sure that people realise that this change is coming, but of course the hon. Gentleman’s constituent will still be engaging with their work coach about how we can perhaps help them into better-paid work than they had before.

Oral Answers to Questions

Alan Brown Excerpts

Monday 13th September 2021 Commons Chamber

[Mims Davies]

I understand that we are working towards 20 days and a transitional programme, but the Minister for Disabled People, Health and Work is keen to meet the hon. Lady and ensure that she understands that fully. This is a priority for us.

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

For years I have tried to point out that one reason for HGV driver shortages is that people cannot afford the cost of £3,000 to £4,000 to do the training and sit the tests. Is it time for the Government to consider some sort of grant scheme, so that people get their training paid for them, leading to a welfare saving in the long run? It is win-win, so when will the Government step up and do it?

[Mims Davies]

The hon. Gentleman will be pleased to know that the Department has been working on that challenge for some time. On 4 October a new sector-based work academy will commence on that in Truro, in the midlands a pilot scheme has been working directly with Eddie Stobart, and our flexible support fund helps people to go into that sector. Cross-Government work is going on, and we are key to that. We have the people who are keen to be part of this issue, and the programmes to match.

Oral Answers to Questions

Alan Brown Excerpts

Monday 25th January 2021 Commons Chamber

[Will Quince]

We take the issue of poverty, and tackling poverty, incredibly seriously, and as I made clear, active discussions are ongoing with Her Majesty’s Treasury. But I have to say that I fundamentally disagree with the approach of Labour party: simply throwing money at our benefits system—an approach that, under the last Labour Government, left a generation trapped on benefits, trapped in poverty and incentivised not to work by punitive cliff edges in the legacy benefit system. We will not be going back to those dark old days. We know that work is the best route out of poverty and, under universal credit—our modern, dynamic, agile system—work always pays.

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

What recent assessment she has made of trends in the level of poverty.

--- Later in debate ---

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

Tackling poverty and levelling up opportunity will always be a priority for this Government, while using universal credit, which works for the labour market, to encourage people to move into and progress in work. There are several measures of poverty in the annual publication “Households below average income”—which is based on the annual family resources survey—of which absolute poverty before housing costs is the measure on which the Government most focus. Since 2010, 400,000 people have been lifted out of absolute poverty, including 100,000 children, and additionally, the rates of combined material deprivation and low income for children were at their joint lowest, at 11%, in 2018-19.

[Alan Brown [V]]

Child poverty is a disgrace in the UK and it is strongly linked to welfare payments. Quite clearly, more people are going to be pushed into poverty if the Tory Government continue with their planned cut to the £20 uplift in universal credit and the working tax credit. Ministers have ducked this all day, but given that the Government did not vote against the motion last week, they have a duty to honour that motion, so will the Secretary of State confirm what discussions she has had with the Chancellor about retaining the vital £20 uplift?

[Dr Coffey]

I updated the House in November and did say that we would be reviewing this in the new year. That is exactly what we are doing, and I am actively considering with the Chancellor the best way to continue to try to support people who are impacted on strongly by the economic impacts of this pandemic.