Universal Credit

Debate between Esther McVey and Debbie Abrahams

Monday 5th November 2018 Commons Chamber

[Ms McVey]

My hon. Friend is right. This benefit is about empowering people. It is about helping them to take on work, or extra work. Under the legacy systems, people were locked out of work even if they wanted to do it. We know that there are about 113 million extra hours of work out there. We also know that there is a record number of vacancies in the economy. We can help people, get them a career, get them on the jobs ladder, and get them doing what they want to do in this world.

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

Analysis of the universal credit measures in the Budget shows that more than 3 million households will still be worse off, especially disabled people and the self-employed. Following the High Court judgment compelling the Secretary of State to provide transitional protections for disabled people migrating on to universal credit, what is her response to the comment on page 76 of the Social Security Advisory Committee’s report that her proposals leave disabled people worse off and need “further consideration”?

[Ms McVey]

I hope that the hon. Lady will be voting for the changes that may give 1 million more disabled people an extra £100 a month, and the extra protection for the severe disability premium for 500,000 people, which is key. As I have always said, should we need to give any more support for vulnerable groups, we will work—and I will work with the Chancellor—to ensure that that happens. However, I commend to the hon. Lady the managed migration regulations, which, as she will see, provide for significantly more support.

Oral Answers to Questions

Debate between Esther McVey and Debbie Abrahams

Monday 15th October 2018 Commons Chamber

[Ms McVey]

Of course we have to understand the underlying issues and problems and support people as best we can. I met the Trussell Trust and various poverty groups and we have talked about how we best support families. We believe that the best way to support a family out of poverty is by getting them into work—hence why I pointed out that, under the previous Labour Government, the number of households where no one ever worked doubled. This Government believe that work is the best way out of poverty and we will continue helping people.

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

One million householders, 750,000 disabled people, 600,000 working single parents, 600,000 self-employed people and 300,000 families with three or more children will all be worse off under universal credit. Will the Secretary of State finally admit that, for these people, austerity is far from over?

[Ms McVey]

I have said that, under this benefit, what we sought to do was get more people into work, because that is the best way out of poverty, and that is what we have done. We are helping 1,000 people each and every day into work. We also said that we would make this benefit fair to the taxpayers, who are paying for it, and fair to those claimants, and that is what we are doing.

Universal Credit and Welfare Changes

Debate between Esther McVey and Debbie Abrahams

Thursday 21st June 2018 Commons Chamber

[Ms McVey]

My hon. Friend has spent considerable time investigating what we do, and providing solutions and support. He is right that this is a test-and-learn process. Indeed, I ensured that that would be the focus, and it is what we will do for people, whether they are self-employed or disabled. Let me quote various charity groups that have agreed with exactly what we have done. When I made the decision—along with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North West Hampshire (Kit Malthouse)—to offer the housing element of universal credit to 18 to 21-year-olds, Shelter said that it was “thrilled”. The chief executive of Citizens Advice, Gillian Guy, said that the Budget changes would

“make a significant difference to the millions of people who will be claiming Universal Credit”.

If only the NAO had read her words and produced its document accordingly.

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

I cannot believe what I am hearing from the Government. They are in absolute denial, and not just about this report. In the past six months, there have been not one, not two, but three High Court decisions or tribunal rulings saying that the Government’s actions with regard to PIP and, most recently, with regard to severely disabled people transitioning on to UC, are discriminatory and unlawful—they have been made to change. But yesterday, the Minister for Disabled People said in a Westminster Hall debate that there was nothing unlawful or discriminatory about the Government’s actions. Does this not reflect what the UN called a “disconnect” between the “lived experience” of disabled people and this Government’s policies? What is the Secretary of State doing to ensure that the implementation of all her policies recognises these judgments?

[Ms McVey]

Again, I ask the hon. Lady to read the Court judgment. I had already made the decision on the disability premium. The Court did not ask the Government to alter the severe disability premium—we won on that point of law—so I ask the hon. Lady to digest the judgment properly. We have put in an extra £9 billion of health and disability funding to support people. In the last couple of years, we have got an extra 600,000 disabled people into work. That is what this is about—supporting the most vulnerable and helping more people into work. We have seen 3.2 million people move into work, including 600,000 disabled people. The hon. Lady should stop scaremongering. Should people have difficulties, I ask her to assist them so that they can get the best support for what they need. That is what Government Members are doing, and the figures reflect that.

--- Later in debate ---

[Ms McVey]

We have said that the NAO report sadly was out of date and therefore has not taken into account all the changes that have been made. That is unfortunate, because it means that the report is not a true reflection of what is happening. It is unfortunate that the hon. Gentleman was not here for the statement, but if he reads it in Hansard tomorrow, he will have his answers on how well the system is working.

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

On a point of order, Mr Deputy Speaker.

--- Later in debate ---

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

I would. If the hon. Lady read and were, supposedly, at the judgment—[Interruption.] I am giving her a get-out clause. On many of the points, the Government won. They were questioned on how moving area had impacted on people with the severe disability premium. It was not about the fundamental change that I have made to help half a million disabled people by giving transitional protection to people with the severe disability premium, which is different.

[Debbie Abrahams]

Further to that point of order, Mr Deputy Speaker. There were two judgments. The one that I just referenced, about severely disabled people transitioning on to universal credit, was upheld, and the Secretary of State needs to recognise that.

Personal Independence Payments

Debate between Esther McVey and Debbie Abrahams

Monday 4th June 2018 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the withdrawal of her appeals in relation to personal independence payment claimants with chronic conditions, and what further action she will be taking.

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

I am absolutely committed to ensuring that disabled people and people with health conditions get the right support they need. PIP is a modern, personalised benefit that assesses claimants on needs, not conditions. It continues to be a better benefit than its predecessor, disability living allowance, for claimants with chronic conditions. Under DLA, only 16% of claimants with diabetes received the top rate, whereas under PIP 29% receive the top rate.

I carefully considered these historical cases and decided no longer to continue with the appeals in order to provide certainty to the claimants. Since withdrawing the appeals, I have provided instructions to operational colleagues to put these claims in payment urgently. These claimants will receive any backdated moneys owed, and should receive their first payment within the coming days.

These cases were decided prior to the March 2017 amending regulations—the Social Security (Personal Independence Payment) (Amendment) Regulations 2017—in which the Government clarified our policy for managing therapy under PIP daily living activity 3. These regulations are not affected by our decision to withdraw these appeals.

[Debbie Abrahams]

Thank you for granting this urgent question, Mr Speaker.

The announcement during the recess that, for the second time this year, the Secretary of State has withdrawn appeals, this time on daily living activity 3 of the PIP assessment—the component on managing therapy or monitoring health conditions—raises serious questions. I would therefore be grateful to the Secretary of State if she told me now how many people she estimates have been incorrectly assessed on the PIP daily living activity 3 descriptor who have either been denied support or have had reduced support.

Will the Department be undertaking a review of past claims relating to this descriptor to identify other claimants who may have been underpaid or denied support? If so, when will the process start and be completed? I am grateful to the Secretary of State for her reassurance that it will take days. Will additional staff be recruited to undertake this process? What assessment has the Department made of the average award to which claimants will be entitled, and when will the payments be backdated to? Will there be an appeal process for PIP claimants who are not contacted by the Department who believe that they should receive back payments? What assessment has she made of the administrative and legal costs to her Department and the public purse?

Given the Secretary of State’s concession in these test cases, does she accept that the changes made in the March 2017 PIP regulations regarding activity 3 are illegal? Given also that there is a review of 1.6 million PIP cases to identify the estimated 220,000 people who have been underpaid with regard to the mobility activity component, will the Secretary of State tell the House how many of the 1.6 million PIP claims have been reviewed to date and when the exercise will be completed? How many of the estimated 220,000 people affected have received back payments to date?

With a record of 69% of PIP decisions being overturned on appeal, it is clear that the assessment process is not fit for purpose. The recent report by the Select Committee on Work and Pensions on the process said that the assessments caused unnecessary stress and anxiety for thousands of people who have been denied support unfairly, as well as wasting public money by sending many decisions back to the courts. When will the Secretary of State get a grip on PIP, and will she immediately stop the reassessment of disabled people with progressive conditions?

[Ms McVey]

Today’s urgent question was specifically about the cases of AN and JM, on which I have given a decision. For the purposes of clarity, it was not to continue with the court case. Any other issues that the hon. Lady raised are separate, and the question of whether we move on and do other things is not for discussion today. There is a further case under way, and I am sure Mr Speaker would agree that it would be incorrect for me to discuss an ongoing legal case, so I cannot do so. However, for the claimants on whose claims this urgent question was granted, I have, for the sake of clarity, withdrawn the appeal.

We are talking separately about the mobility issue, on which I have given regular updates to the House. We have been working with stakeholders to create new guidance, and we have consulted claimants and stakeholders. We seem to be on schedule for the first payment to go out to them at the start of the summer.

Oral Answers to Questions

Debate between Esther McVey and Debbie Abrahams

Monday 5th February 2018 Commons Chamber

[Ms McVey]

I can indeed reassure my hon. Friend that what it is doing, and the avenues it is pursuing, are correct and thorough. I met the regulator last week. It is making sure that it investigates these key matters and provides the necessary pension support. Where we need to strengthen in future, we will do so. Equally, I would like to make Members aware of what the pension regulator has done in the past. With regards to the British Home Stores fiasco, which is totally different from this situation, it employed an anti-avoidance measure and got Philip Green to pay his pensioners £363 million. Further prosecutions are coming forward for Chappell, who bought that company for a pound. That is the kind of good work the pension regulator is doing.

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

As the Government have responsibility for the pensions regulatory framework, how would the Secretary of State describe a regulatory framework that allows the administrator of a pensions scheme to help to bring about the downfall of the company and the employees it represents, and to profit from that downfall?

[Ms McVey]

When I hear some of the hon. Lady’s comments, particularly those that are out of context, I think about the letter that she has received in the past two days from the UK Statistics Authority, which states that many things she has said are not accurate. The letter said that her remarks—whether about children waking up in poverty at Christmas or linking universal credit with poverty—were not supported, that they were not true statistics and that the sources could not be relied upon. If you will allow me to ask this, Mr Speaker, will the hon. Lady make a statement straightaway about the letter from the UK Statistics Authority?

--- Later in debate ---

[Debbie Abrahams]

I will indeed do just that, Mr Speaker, especially as there was absolutely no answer to my original question. Hundreds of thousands of ordinary working people including my constituent, Philip Wild, have lost half their retirement income because of the Government’s failure to tackle pensions governance—from Carillion to Capita, and BHS to the British Steel Pension Scheme. How many more pensions scandals does the Secretary of State need to see before she introduces the robust regulatory oversight needed to protect people’s pensions for the future?

[Ms McVey]

Obviously, in the light of the letter from the chair of the UK Statistics Authority to the hon. Lady, it needs to be put on the record that the vast majority of defined-benefit pension schemes are working very well indeed. When we do see instances of abuse or illegal goings-on, they are investigated and the people responsible are brought to account. We have a strong Pension Protection Fund, supported by other businesses that are looking after pensioners across the country.

Personal Independence Payment

Debate between Esther McVey and Debbie Abrahams

Tuesday 23rd January 2018 Commons Chamber

[Ms McVey]

I thank my right hon. Friend. He spent many years working on social issues and cases, and established the Centre for Social Justice. The change that he brought about was not just about changing the benefits, but about reaching out to people who are sometimes left alone. Some of those people did want to be helped to get back into work. They did want to talk about their hopes and aspirations. There are now over 600,000 more disabled people in work, because they chose that path towards self-determination and the fulfilment of their ambitions and hopes.

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

Thank you for granting the urgent question, Mr Speaker, and I congratulate the hon. Member for Glenrothes (Peter Grant).

Any disabled person who listened to what was said by the Secretary of State will have been gobsmacked by the suggestion that there is a commitment to disabled people. The United Nations Committee on the Rights of Persons with Disabilities has described the Government’s action as a “human catastrophe”. The cuts that they have wrought on disabled people are an absolute disgrace.

As my hon. Friend the Member for Battersea (Marsha De Cordova) said when she raised a point of order yesterday, the Government sneaked out a written statement late on Friday, announcing that they would not appeal against the High Court judgment of 21 December, in effect reversing the emergency PIP regulations that they had introduced in February last year. Those regulations were introduced without a vote or a debate, despite two urgent questions and an emergency debate, and despite widespread concern about their impact. The Government’s own Social Security Advisory Committee was not consulted. I warned at the time:

“The move to undermine and subvert independent tribunal judgments is unprecedented, and ... marks very troubling behaviour by the Government on cases they lose that could weaken such social security tribunal judgments’ reach, influence and effectiveness in making independent decisions.”—[Official Report, 28 March 2017; Vol. 624, c. 145.]

I am pleased that the Secretary of State and her Department have finally seen sense, but there are a number of questions that the Secretary of State must answer—questions that have already been put by my hon. Friend the Member for Battersea. How many people does her Department estimate have been affected? How quickly will her Department be able to identify affected claimants, and by what process? Given the issues relating to letters from that Department, it is a little worrying if that is the only means.

How soon after identification will the Department make back payments? Will there be an appeal process for PIP claimants who are not contacted by the Department and who believe they should receive such payments? Will the Department compensate claimants who have fallen into debt and accrued interest charges? Will applicants be entitled to a reassessment if they were given the standard rate of the PIP mobility component after the February 2017 changes to PIP regulations, when the cause of the claim was “psychological distress”?

Finally, just how much public money has been spent by the Department on lawyers and legal advice seeking to defend the indefensible in the initial tribunal and the more recent court case?

This sorry debacle should serve as a warning to the Government of the dangers of seeking to undermine and subvert the decisions of our independent judiciary and the House of Commons.

Private Sector Pensions

Debate between Esther McVey and Debbie Abrahams

Monday 22nd January 2018 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the Government’s plans to stop private sector pension abuse.

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

The vast majority of employers do the right thing by their pension schemes, and members can expect to receive the pension benefits they have paid for throughout their working lives. The Pensions Regulator and the Pension Protection Fund were set up in 2004 to provide pension scheme members with a safety net to ensure pension benefits receive some protection when things go wrong—it is a fact that some businesses will fail. The PPF approach has been supported on a cross-party basis since 2004.

To prevent irresponsible employers from off-loading pension liabilities on to the PPF, the regulator was given a range of powers, including the ability to recover significant assets where employers failed to take account of the scheme. There are about 6,000 defined benefit schemes, however, and such cases are very few and far between. It is the responsibility of the regulator to strike a balance between protecting members and PPF levy payers, and minimising any adverse effects on the sustainability of employers and businesses when it comes to the regulation of defined benefit funding.

The regulator does not have the power to stop businesses paying out bonuses to executives or dividends to shareholders, but if it believes that a scheme is not being treated fairly, it will investigate to see whether the use of its powers is appropriate. The Government are clear, however, that where sponsoring employers can meet their pension promises, they should and must do so. That is why we have suggested ways of strengthening the current scheme to enable the regulator to be more proactive. In fact last February we published our Green Paper, “Security and Sustainability in Defined Benefit Pension Schemes”, which included suggested measures that could strengthen the powers of the Pensions Regulator by introducing punitive fines for actions that harm a pension scheme. We also set out powers to enhance the regulator’s ability to demand information to ensure effective governance and spot issues before damage is done.

Our manifesto in June 2017 reaffirmed this intent by proposing to give the regulator the power to impose punitive fines alongside contribution notices so that pension scheme members are fully protected. The details of the fine would be worked through with all the relevant stakeholders, but it would represent a significant strengthening of the deterrent. We also intend to make certain corporate transactions subject to mandatory clearance by the Pensions Regulator, but we must take care to ensure that these measures do not have an adverse effect on legitimate business activity and the wider economy.

I should tell colleagues that we have received 800 responses to the Green Paper, and they are being reviewed by the Department. The White Paper is in progress and will be published in the spring. Effective regulation is dependent on a prompt flow of information between the parties concerned, and on compliance with rules and processes. Following the publication of the White Paper, we will introduce new regulation to ensure that the regulator gets the information it requires to conduct investigations and casework effectively and efficiently. It remains the case that the Government support free markets, enterprise and businesses, but this has to be conducted responsibly.

[Debbie Abrahams]

Yesterday, the Prime Minister chose to announce via the media, in part in response to the collapse of Carillion, that the Government planned to introduce tough new rules to stop private sector pension abuse. Carillion had 13 defined benefit schemes in the UK, with 28,500 members and a combined pensions deficit of £587 million. Between the end of 2015 and last year’s interim results, the difference between Carillion’s assets and liabilities almost doubled, from £317 million to £587 million. We know that profit warnings started to be issued in the summer of 2017. Given the severity of the financial problems facing Carillion, why did the Government not act then, rather than attempting to close the stable door after the horse had bolted?

We have argued for years that the Government should take better action to protect people’s pensions. The Government had the opportunity to act in 2013 and again in 2015, by supporting Labour’s amendments to pensions governance in legislation. More recently, the Work and Pensions Committee warned the Government of the need for protections and for more powers for the regulator. Although we welcome the Green Paper, the urgency has just not been there. Why did the Minister choose to ignore those warnings?

The Committee made a number of recommendations, including that the Pensions Regulator should have mandatory clearance powers for corporate activities that put pension schemes at risk, and that it should have new powers to impose fines at a level that would genuinely deter such dangerous and irresponsible behaviour. Why did the Government refuse to implement those recommendations at the time? Are the Government now ready to commit to implementing them fully? If the Government had taken action, Carillion’s massive debt accrual might have been arrested.

Given the scale of the liabilities and the concerns for other defined benefit schemes, what does this mean for the adequacy of the Pension Protection Fund? The collapse of Carillion has already led to a rise in pension scammers targeting those with pension pots. What about the defined contribution schemes that are not covered by the Pension Protection Fund? Will the Secretary of State investigate the apparent conflict involved in BlackRock being responsible for those schemes while simultaneously betting against their employer? Finally, can she advise the House what measures will be proposed in the White Paper, and when, exactly, they will be brought to the House?

[Ms McVey]

As Members on both sides of the House know, the regulator is an independent, arm’s length body. It was set up in 2004 after much discussion about how it should work and how it could best support pensioners when they needed its help. What it never did was to interfere with the running of a business; that was what was decided. We said that we needed to make sure that we could go further if we had to. That is why we have set about introducing a Green Paper—as I said, we have had 800 consultation responses—looking at where it is best to intervene, to make sure that we get the balance right. We do not want to tip the edge and unnecessarily cause harm to a business.

Profit warnings mean that a company will not get the profit that it expected—no more than that. We have to make sure that the Government do not precipitate anything that could be seen as negative from business. That is why we are looking at all these 800 responses, looking carefully and considering how to protect companies’ employees, protect pensions and move forward in the most conducive and careful manner. The new White Paper will be coming forward later this year.