State Pension Triple Lock

Paula Barker Excerpts

Tuesday 8th November 2022 Commons Chamber

[Paula Barker (Liverpool, Wavertree) (Lab)]

The Prime Minister recently appeared on the front page of The Times beneath the headline “State can’t fix all your problems”. While that may be true in the absolute sense, I think that the British people are right in making two basic assumptions. First, they rightly assume that the state will not make life harder, and secondly, given that the very essence of politics is priorities, they rightly expect their welfare, financial security and basic dignity to be the prime concerns that govern our actions in this place and the Government’s actions across Whitehall Departments. On both counts this Government have failed miserably, and have done so for 12 long years. In response to today’s motion, they have a golden opportunity to be unequivocal in stating that the triple lock on pensions is here to stay and will be protected.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I have been inundated with emails from pensioners in my constituency expressing a mixture of anger, fear and despair at the removal of the triple lock. A 70-year-old woman has described sitting in her living room with only candles for heat because she cannot afford to pay her energy bills. That is unthinkable. Does the hon. Member agree that the Government must consider the full impact of removing the triple lock on our most vulnerable?

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[Paula Barker]

I entirely concur with what the hon. Lady has said. My inbox, like hers, is full of emails giving examples similar to that of her 70-year-old constituent, from people who are choosing between heating and eating.

Why is it so important for the triple lock to be protected? The answer is quite simple. Our elderly people are suffering under this cost of living crisis, and have been suffering under Tory austerity for much longer. Pensioner poverty has been on the increase since the first half of the last decade: this is not something new. It is now widely reported that the number of pensioners living in poverty has topped the 2 million mark, including an extra 200,000 more poor pensioners in 2021 alone, according to the Centre for Ageing Better. That is a figure that should bear the hallmark of deep shame for any Government, and not least for a Prime Minister who was in No. 11 while the problem was becoming worse. Pensioners are falling into debt for the first time in their lives, with all the anxiety that that brings in later life.

[Anthony Browne]

Is the hon. Member aware of a report on the triple lock that I mentioned earlier, produced by the House of Commons Library? It shows that as a proportion of average earnings, the basic state pension is now higher than it was at any time under the last Labour Government, and that is a result of Conservative policy.

[Paula Barker]

I refer the hon. Member to the response from my right hon. Friend the Member for Leicester South (Jonathan Ashworth) to that very point, which I think was more than eloquent.

It is good, decent, working-class pensioners who are suffering, along with many more who may be asset-rich yet cash-poor. People who have worked for many decades are being denied the basic dignity of living free from fear. In the north-west region alone, nearly half a million pensioners are living in some form of poverty, including too many in my own constituency. Inflation is due to start falling; the Government know that. We already know that it would not be right to scrap the triple lock, nor would it make for sound economics—especially at this moment—to hit pensioners in the pocket with a real-terms cut in their incomes. People need support now, rather than the drawbridge being pulled up. The shift of wealth from working and middle-class households upwards has never been as great, and those inequalities are borne out in the way we treat our older people.

When Ministers hold great offices of state and lecture the British people about tough choices while dishing out billions in failed public sector contracts to their friends, removing the cap on bankers’ bonuses and increasing the cost of mortgages to pay for unfunded tax cuts for the few, it is particularly galling that the Government cannot come out and unequivocally back our pensioners today. If they can prioritise all that in times like covid and during these economic headwinds, the very least they can do is walk through the Lobby with the Opposition today. The last thing that our pensioners need now is uncertainty, and I urge all right hon. and hon. Members to join us in the Lobby this afternoon.

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[Laura Trott]

My hon. Friend, on this as with so many other things, is absolutely right. I will make some progress now on my speech.

At the heart of the 2016 reforms we made to the state pension was a correction of some of the historic unfairness in the previous system, particularly for women, the self-employed and lower-paid workers.

[Paula Barker]

Will the Minister give way?

[Laura Trott]

I am just going to make some progress, I am sorry.

That means women no longer need to rely on the pension contributions of their husbands, and it is more generous to those who spend time looking after their children, as my hon. Friends the Members for Guildford (Angela Richardson) and for Broadland (Jerome Mayhew) pointed out. As a result, more than 3 million women stand to receive an average of £550 more a year by 2030.

[Paula Barker]

Will the Minister give way?

[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.

[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.

[Paula Barker]

Will the Minister give way?

[Laura Trott]

I will make a bit of progress; I have been quite generous on interventions.

We know that the coming months will be tough for everyone, but especially for pensioners. I thank all hon. Members who have raised cases on behalf of their constituents. The Government fully understand the difficulties that pensioners will face this winter and will stand by those in the most need. That is why the Government have made substantial support available for pensioners struggling with the cost of living this winter. As my hon. Friends the Members for Wantage (David Johnston) and for Gloucester (Richard Graham) pointed out, we have not heard much from the Labour Front-Bench team today about what their plan would be for this winter.

We have a plan that includes the £650 cost of living payment for those on pension credit to help with the rising cost of living. There is a £400 reduction on energy bills for all domestic electricity customers over the coming months and the £150 council tax rebate received by 85% of all UK households. Those on state pension will also receive an increased £500 winter fuel payment if they are under 80 or a £600 winter fuel payment if they are 80 or over. In total, that will mean that all pensioners receiving the state pension could receive up to £850 of additional support in the coming months and that pensioners on the lowest income who are claiming means-tested benefits will receive up to £1,500.