State Pension Triple Lock

Margaret Greenwood Excerpts

Tuesday 8th November 2022 Commons Chamber

[Mel Stride]

Those figures are simple facts about what has happened to absolute poverty across the period that I quoted.

I turn to an important issue: the economic circumstances in which the country finds itself.

[Margaret Greenwood (Wirral West) (Lab)]

Will the Secretary of State give way?

[Mel Stride]

In a moment. That is a difficult situation, largely visited upon us through a major pandemic that shut down a substantial proportion of the economy, followed by a war between Ukraine and Russia. That, of course, has had a huge impact in terms of inflation, the cost of energy and people’s bills. It is only right that we are honest with the public and honest in the House about the ramifications of that situation. On 17 November, we will see some difficult choices brought forward by the Chancellor of the Exchequer on both tax and spending. We have to understand why that is. They will be brought forward because the country must demonstrate that it will live within its means and act fiscally responsibly. As a consequence, we see bond yields and interest rates softening, which will be good for mortgage holders, good for businesses who are borrowing and good for the servicing costs of the Government and their national debt.

Those hard choices must be made, but within them the Government have a core mission to look after the most vulnerable. Those who say that we do not do that are simply wrong. The evidence bears out my statement. The £650 cost of living payment that we have discussed is there for pensioners through pension credit and is there more widely for 8 million low-income households up and down the country. There is the £300 payment to all pensioner households. There is the £400 reduction in fuel bills, which comes through the bills themselves. There is a £150 reduction for those living in houses in council tax bands A to D—many of them will be pensioners—and a £150 payment to those who are disabled. That is on top of the household support fund administered by local authorities, who perhaps have a better grip of local need than those at the centre, which was recently expanded by £500 million to over £1 billion. Of course, there is also the energy price guarantee holding average fuel bills for the average family at £2,500, saving £700 across the winter. All those measures and more are clearly indicative that the Government care about those who have the least and are there to protect them at every turn.

[Mel Stride]

I am surprised by the hon. Gentleman’s intervention. When a pandemic comes along and contracts the economy by a greater level than at any time since about 1709—the year of the great frost—and a war breaks out that has a huge impact on energy costs in electricity, oil and gas, very few of our constituents up and down the country would not accept that those have been major contributors to the inflation and other challenges that we face. Only yesterday, the International Monetary Fund stated that about a third of economies in the world will be going into recession. We are not an outlier; we are right in the middle of the pack of nations who are suffering the consequences of the events that I described.

[Margaret Greenwood]

The Secretary of State has been telling us that the Government are committed to protecting the most vulnerable and looking after pensioners, but that will ring hollow to pensioners in my constituency who are devastated at the squeeze on public services. They see libraries closing—places they rely on as social hubs where they can go and interact with people—and the local authority having problems providing the social care that they need. Those issues really affect them. I know that they do not come under his Department, but will he commit to speaking to the Cabinet about them?

[Mel Stride]

The hon. Lady raises a perfectly legitimate concern. We are all concerned about public services, and certainly those of us on the Government side care deeply about public services, but we must be honest with the British public in saying that times are extremely difficult and there will be some tough decisions.

[Margaret Greenwood]

indicated dissent.

[Mel Stride]

The hon. Lady shakes her head, but economically there are really three choices: we can either raise taxes, cut spending or borrow more money. The Labour way, we know, is to borrow, borrow, borrow. Unfortunately, we all know where that leads. [Interruption.] The shadow Secretary of State needs to calm down. He is getting a bit excited. What we need—

--- Later in debate ---

[Margaret Greenwood (Wirral West) (Lab)]

Many residents in Wirral West have written to me and spoken to me about their extreme anxiety about the cost of living crisis and what they see as the Government’s lack of commitment to maintaining the state pension triple lock for the next financial year. They are desperate for certainty and they need help.

I note the Secretary of State’s remarks about the forthcoming fiscal event, but surely he or the Minister can give some comfort to retired people who are anxious about this issue. They need that reassurance because there has been so much turmoil in the Conservative party—turmoil that has been accompanied by numerous policy U-turns. It is vital that the Government retain the triple lock, as it was a Conservative party manifesto commitment and must be honoured.

As we know, last year the Conservatives broke that commitment. At the time, the Government said that they

“can and will apply the triple lock as usual from next year for the remainder of this Parliament, in line with our manifesto commitment.” —[Official Report, 7 September 2021; Vol. 700, c. 185.]

It is therefore vital that they keep their word. People are struggling with the cost of living crisis, which has been made far worse by the chaos that the Conservative Government of just a few weeks ago brought to the financial markets with their mini-Budget. Through sheer recklessness, their policy choices sent mortgage rates soaring, brought the pensions industry to the brink of collapse and crashed the economy.

Despite the comments that we have heard from the Government today, pensioner poverty is an extremely serious and live issue. This year’s “State of Ageing” report by the Centre for Ageing Better found that almost one in five people over the age of 65 were living in poverty in the 2019-20 period. That is 2 million people. Age UK has said that malnutrition is a growing risk for older people, and that if the UK Government fail to raise the state pension and benefits in line with inflation, they will plunge many people into a genuinely desperate situation. Pensioners are struggling with soaring food prices and increased energy costs.

I would like to share with the House some of my constituents’ experiences and fears, because they have asked me to represent their concerns. One woman who is in her early 80s has written to me to say that she suffers from a number of health issues, including rheumatoid arthritis. It is vital for her to keep warm, and even though she is cutting back on using the heating, her energy bills keep rising alarmingly. She says:

“It’s hard to imagine where it will all end.”

Another constituent told me that she and her husband are currently struggling with a huge increase in the cost of living and out-of-control heating bills. They sit at night with blankets wrapped around themselves, as they cannot afford to put on the central heating. Their fuel bills have increased to more than £270 a month, and they are worried that they will go up again next April. Another constituent whose partner has a number of long-term health conditions has said that she is

“petrified to put the heating on and the hot water is only put on once a day for a short period.”

She is really concerned that her partner’s health will get worse because they cannot heat their home. One woman in her mid-70s told me that she worries every day about heating and food. She asked for the triple lock to be protected simply so that she and other pensioners can afford to live.

It is clear that the triple lock on the state pension must be maintained for my constituents and for people across the country. It is about dignity and security for older people and about protecting them from poverty. I also ask the Minister to set out what action her Government will take to encourage greater take-up of pension credit. The Government must do the right thing and come forward today with a commitment to protect the triple lock.

--- Later in debate ---

[Laura Trott]

I am sorry, but as I said, I will make some progress.

Under the state pension, outcomes are projected to equalise for men and women by the early 2040s, more than a decade earlier than they would have done under the old system.

The other important pillar of the 2016 state pension reforms was automatic enrolment. That was raised by my hon. Friends the Members for South West Hertfordshire (Mr Mohindra), for Rother Valley (Alexander Stafford), for Broadland and for Heywood and Middleton. Automatic enrolment into workplace pensions has had a transformative effect on pension-saving participation. As my hon. Friend the Member for Broadland pointed out, private savings for pensions went down under Labour.

Over 10.7 million people have been automatically enrolled into a pension by more than 2 million employers in every sector of the economy, seeing an additional £33 billion saved into workplace pensions each year compared with 2012. Automatic enrolment has helped many previously under-represented groups to begin pension savings, such as low earners, young people and women.

[Margaret Greenwood]

The Minister is being generous in giving way. It is good to see her being so keen on auto-enrolment. Will she be clear with the House that that policy was designed by the Labour party?

[Laura Trott]

But it was not implemented under the Labour Government.

In 2012, 40% of eligible women working in the private sector participated in a workplace pension. As of 2021, that had increased to 87%—higher than for eligible men.