Wednesday 24th July 2019

(4 years, 8 months ago)

Westminster Hall
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Jack Dromey Portrait Jack Dromey (Birmingham, Erdington) (Lab)
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It is a pleasure to serve under your chairmanship, Ms Buck. The people who built Britain are entitled to expect but the best in retirement. As my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) put it, they paid in throughout their lives in the expectation that they would be supported in the twilight of their years. The sense of grievance was brilliantly brought to life by the outstanding speech given by my hon. Friend the Member for Ogmore (Chris Elmore). I pay tribute to him for securing this debate and for everything that he is doing.

Let us look at the history of pensioner poverty. In 1994-95, 28% of pensioners lived in poverty. That fell to 13% in 2011-12 as a consequence of action taken by a Labour Government: a fall achieved by offering extra help for poorer pensioners. However, that progress has been slammed into reverse, partly because of the chaos over pension credit, but also because of the changes to welfare policy. Pensioner poverty is now rising—back to 16% in 2017—suggesting that the previous progress has indeed been slammed into reverse. The sense of grievance about that was encapsulated by the excellent contribution from my hon. Friend the Member for Newport West (Ruth Jones).

Some 14 million people now live in poverty in the UK—over one in five of the population—and they include 1.9 million pensioners. Reference was made to the excellent work done by Independent Age. I pay tribute to that remarkable organisation, which found that a more than a million pensioner households across Great Britain are forced to live in poverty owing to the Government’s failure to act on pension credit—these are the pensioner households missing out, or PHoMOs. Since the last general election, that has meant that the Government have held on to a staggering £7 billion—£3.5 billion each year—in unclaimed pension credit that should have gone to pensioners, a figure that will increase to a staggering £17 billion by 2022, equating to £10 million every day.

That is why my hon. Friend the Member for Glasgow North East (Mr Sweeney) was absolutely right to point to the sense of anger at the situation. His is an organisation called Alive and Kicking and mine is called Elders with Attitude, but the message is the same. In fact, I have their T-shirt.

Getting pension credit is all the more important now because of what is happening with TV licences, about which I will say more later on. Forgive me if I stress once again that, as an initiative, pension credit was a landmark achievement of the last Labour Government. They cut pensioner poverty consistently, and at the heart of that achievement was the strategy relating to pension credit, but it has been slammed into reverse.

As hon. Members will know, the origin of pension credit was as an income-related benefit specifically designed to lift pensioners out of poverty. Introduced in 2003, it was created to ensure that all older people receive a minimum amount of income and has played a major role over the years in the reduction of pensioner poverty, until now. It is all the more important that pension credit is paid and that the people who deserve it get it.

On the one hand, there is a stereotype that all older people own their own homes, but, sadly, this is against a background of decreasing home ownership and rising rents in the private sector. Independent Age’s research shows that more than half a million older people in England now live in private rented accommodation, and that more than half of the 330,000 pensioners who have moved into poverty since 2013 are either private or social renters. Pension credit is all the more important for them.

On the other hand, pension credit is essential—for example, to pay for transport costs. Particularly in rural areas and for people with health or mobility issues, a car or taxi can be the only way to reach necessary services. Pension credit can also mean that older people are able to take part in social activities, reducing the risk of loneliness.

Pension credit is important for all those reasons and an additional one, which my hon. Friend the Member for Leeds North West (Alex Sobel) mentioned: it is a gateway to accessing other benefits. People missing out on pension credit could also be losing out on up to £7,000 a year in additional help. Pension credit can act as a gateway to housing benefit up to £5,020, to council tax support up to £1,670, to the warm home discount at £140, and to NHS costs, including dental treatment or eye care, up to £296. So it is all the more important that people who are entitled to pension credit get it.

To add insult to injury, it was announced earlier this month that free TV licences for the over-75s will now be means-tested. Several hon. Members have referred to that, and rightly so. The Library’s research shows that more than 3 million people will be affected by that move. It is estimated that 1.3 million poorer over-75s are eligible for pension credit but do not claim it. They will lose their free TV licences due to the proposal to tie licences to pension credit.

It is also estimated that 1.6 million pensioners living alone will lose their free TV licences in a means-tested system. That is absolutely wrong. In my experience, television can indeed be a friend to a lonely pensioner. The Tories’ idea to increase take-up of pension credit is, as is often mentioned, an “online toolkit”, but the problem is that its track record of achievement is lamentable. Pension credit is an online toolkit, but that has shown drastically declining usage since 2014. More than half of over-75s in the UK say that they have not used the internet in the past three months, and the amount of people accessing the toolkit fell by 84% between 2014 and 2018, with only 2,078 people using it last year. The fact that more than 1 million households in the UK are not claiming the pension credit to which they are entitled shows that the Government’s efforts simply are not working. It was therefore right that my hon. Friend the Member for Ogmore secured this debate to focus on that.

I will refer to one other outrage, to be frank: the changes to pension credit slipped through on the same night as the first Brexit meaningful vote: from 15 May, new pensioners whose partners are younger than the state retirement age of 65 may no longer claim a means-tested top-up called pension credit. Instead, they will be forced to claim the much less generous universal credit alongside their younger partner. The couple rate of universal credit is £114.81 a week, compared with £255.25 a week for a couple on pension credit. That amounts to a potential loss of £7,320 a year—an absolute outrage.

The crucial question is what the Government will now do about that. I strongly support my hon. Friend’s recommendations on targets and his call to hear the Government’s action plan to right an undoubted wrong. As my hon. Friend the Member for Cardiff North (Anna McMorrin) said, the aims set out by Independent Age are eminently achievable over a five-year period, with targets being incrementally increased to get us to a position where 100% of those entitled to pension credit actually get it.

I will close with the point that I started with. We have a sacred duty to those who built this country. They endured so much not only in the world of work, but in conflict defending this country. The scale of the problems they had to overcome throughout their lives is sometimes unimaginable. They paid in throughout their lives. In retirement, they expected to be looked after for the rest of their years. It is absolutely wrong that pension credit is not working and, as a consequence, hundreds of thousands if not millions of pensioners are not getting that to which they are entitled. I say to the Government in all earnestness: Ministers should be ashamed of that.

--- Later in debate ---
Guy Opperman Portrait Guy Opperman
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I will not give way again, because I have a lot of points to cover.

I want to deal with the point that the hon. Lady and other Members made about the state pension age increase. The hon. Member for Birmingham, Erdington (Jack Dromey) is married to a former Minister, now Mother of House, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who was in favour of the state pension age in the dim distant past in 1997, when she was Secretary of State for Work and Pensions. Hon. Members will understand that I am the latest in a long line of Ministers who have continued the policy of successive Governments to increase the state pension age by reason of equality legislation and the increase in life expectancy, which is light years away from the three score years and ten of our grandparents.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) raised the situation of the Scottish Government in answer to my hon. Friend the Member for Cheltenham; I refer the House to the letter of 22 June 2017 from my opposite number Jeane Freeman to my hon. Friend the Member for Watford (Richard Harrington), in which she explains the section 26, 28 and 24 powers under the Scotland Act 1998, which provide opportunities for the Scottish Government to intervene should they so choose, particularly in respect of the section 26 discretionary payments.

I now turn to the issue of the BBC. Its decision to limit free TV licences only to those aged 75 and over and in receipt of pension credit is disappointing. We expected it to continue the concession, and we want it to look at other options to help more elderly people who rely on TV to stay connected to the world. The BBC has indicated that it will write to all existing TV licence holders, advising them of how the new policy will work and when they need to act.

The Government look forward to hearing more from the BBC about its detailed plans for communicating and implementing that change. That is clearly a matter for the Department for Digital, Culture, Media and Sport; Government officials continue to engage with the BBC, but it would be wrong not to point out that in 2015, when the decision was made, the director-general at the time stated:

“I think we have a deal here which is a strong deal for the BBC. It gives us financial stability...The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC…I think being in control of our income…is a very grown-up response for the BBC and a grown-up response for any organisation”.

The House can draw its own conclusions from what Lord Hall said in 2015 and the consequent decision that it has made. I hope that the BBC will think again once it has reflected on the comments that it made in 2015 and the nature of the pushback that there has been.

Jack Dromey Portrait Jack Dromey
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Is the Minister seriously suggesting that the Government bear no responsibility whatsoever for the BBC’s decision? Does that not sound like the Government are washing their hands of responsibility?