Winter Fuel Payment

Torsten Bell Excerpts

Monday 9th June 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

On 21 May, the Prime Minister told this House that the Government wanted to extend eligibility for winter fuel payments to a wider range of pensioners in England and Wales. Today we are setting out how this will happen for the coming winter and the years ahead. This will provide certainty for pensioners and ensure that payments can be made swiftly and automatically, which is our priority. I hope this statement will also answer many of the questions that hon. Members have raised with me and others in recent weeks.

Let me set out for the House how this system will work. All pensioners with incomes up to and including £35,000 will benefit from support, as will all those on pension credit and other income-related benefits. The payment of £200 per household, or £300 per household where there is someone aged over 80, will be made to all pensioner households in England and Wales. Individual pensioners with taxable income above £35,000 will have any winter fuel payment automatically recovered via His Majesty’s Revenue and Customs without the need for them to take any action. This will be via PAYE for the majority, or in their self-assessment tax return for those who already complete one. No one will be brought into tax or into self-assessment just to repay their winter fuel payment. Those that prefer not to receive a payment can opt out of receiving it. As was previously the case before July 2024, where the household is not getting an income-related benefit and there is more than one pensioner in the household, shared payments split across the recipients will be made.

This Government have had to make tough decisions. It is right to means-test the winter fuel payment—[Interruption.] I thought the Conservative party supported means-testing the winter fuel payment. We will find out in this debate shortly. We have had to make take tough decisions because of the disaster left by the Conservative party. It is right to means-test the winter fuel payment on grounds of fairness and fiscal sustainability. Most people accept that it makes no sense to pay hundreds of pounds to pensioners irrespective of their incomes. Those on the highest incomes do not need it, and there are many other calls on public spending.

The Government have, however, listened to concerns about the level of the means test. We are acting to ensure that all lower-income pensioners receive support. The new individual £35,000 threshold is significantly above the income of pensioners in poverty, and broadly in line with average earnings. It will mean that the vast majority—over three quarters, or 9 million pensioners—will benefit from a winter fuel payment. This change ensures that the means-testing of winter fuel payments has no effect on pensioner poverty.

Means-testing the winter fuel payment in England and Wales like this will save around £450 million a year, subject to certification by the Office for Budget Responsibility, compared with the system of universal payments. It will cost around £1.25 billion in England and Wales, compared with the position last winter. Decisions about the situation in Scotland and Northern Ireland remain for their devolved Administrations in the usual way. As the Prime Minister has previously set out, these are changes that will be fully funded at the next fiscal event, the autumn Budget. That will ensure that final costings and funding decisions come alongside the latest forecast from the OBR. We will ensure that the Government’s non-negotiable fiscal rules are met.

We are setting out these changes before the summer to ensure that more pensioners receive support this winter. Regulations will be laid in the coming months to ensure that the payments are made, and tax changes will be legislated for in the Finance Bill.

I want to spell out clearly today that pensioners do not need to do anything. Winter fuel payments will be paid automatically this winter to all pensioners who receive the state pension, pension credit or anyone who has previously received a winter fuel payment. Similarly, payments will be recovered automatically through the tax system for those with an income of over £35,000.

Pensioners will also continue to receive wider support. Our pension credit take-up campaign has seen almost 60,000 awards made. I thank hon. Members on both sides of this House, local authorities and charities for their work on that campaign. Over 12 million pensioners right across the UK are also benefiting from the triple lock. The full new state pension is set to increase by up to £1,900 a year over this Parliament as a result. I commend that support for pensioners, and this statement, to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

I feel for the Minister, sent here by his bosses to complete what must be the most humiliating climbdown a Government have ever faced in their first year in office. For nearly a year, the Conservatives have campaigned against this cut, and for nearly a year, the Government have tried to hold out. Just four weeks ago, I stood here and asked the Minister how long this tone-deaf final stand could go on for. Loyally, he held the line. He defended the cut one final time. He said their plan for pensioners was right on track. Well, today he has been sent to end that “courageous” last stand, and—unless it is coming next—he has been sent without the one thing that pensioners up and down the country deserve: an apology.

Let us be clear: the Government made a choice to cut the winter fuel payment. It is outrageous to claim that the economy has somehow improved from the day they made the cut, and they know it. In fact, by almost every metric, the opposite is true. Inflation was at the 2% target—now it is 1.5 points higher; 150,000 more people are unemployed; and growth forecasts have been slashed in half by the Office for Budget Responsibility. In the meantime, the Government have gone to town with the country’s credit card. Borrowing is up. Debt is up. Who is the Chancellor trying to fool when she suddenly says she can afford this when before she could not? The fact is that last winter she gave pensioners’ fuel money to the unions. Now she realises how unpopular that was, so she is pretending that everything has changed. Perhaps the most surprising thing is that she thinks anyone is taken in.

According to the Government’s own analysis, 50,000 pensioners were plunged into poverty this year and 100,000 extra pensioners ended up in A&E this winter. Their mistake has hurt people, and it is cowardly not to own up to it. Just like their personal independence payment reforms, there were no consultations or proper assessments—just a self-righteous insistence that what they are doing should not be questioned. There is certainly no thought for those affected or concern for the anxiety that their government by press release is causing. This is what happens when a Government come into office with no plan, no principles, no idea what they want to achieve and no idea how to achieve it. They just bumble from one mistake to another, breaking promise after promise. Did they think they could try out new policies like trying a new mattress—unwrap it, see how it feels, sleep on it for a while, but if it causes a political backache, send it back?

This rushed reversal raises as many questions as it answers. It is clear that when the Prime Minister stood up and made his big U-turn announcement in PMQs, he had no plan and no idea how he was going to pay for it. It is a totally unfunded spending commitment. Where is the £1.25 billion needed to pay for this U-turn coming from? I note that the Minister has kicked that can down the road until the Budget. The Government claim that the change will not permanently add to borrowing, so does that mean it will permanently add to taxation?

On the plan itself, is this really the best system of means-testing that the Government could come up with? Is the Minister sure that they have thought it through, or will this unravel, too? What happens if a pensioner earns over £35,000 a year through non-taxable income? Will they have to register for self-assessment and start filling out a tax return in their 80s or 90s? [Interruption.] You didn’t cover that.

Why should someone earning taxed income be disadvantaged? Is it fair that a millionaire pensioner and their spouse might receive a payment, but two people earning £36,000 will not? What happens if someone dies in the period between receiving the payment and having to pay it back? Will the Government go after the deceased person’s relatives?

I have two final questions. After all this, the savings for the Treasury for this coming year may be as little as £50 million. Does the Minister think it is worth it, and will he apologise?

[Torsten Bell]

I will deal directly with two of the questions raised because it is important to provide reassurance. The right hon. Lady asks what will happen with the estate of someone who is deceased. I want to be clear that His Majesty’s Revenue and Customs will never pursue any estate for the winter fuel payment alone. She also asks about the level of savings. As I set out in my statement, the savings will be £450 million a year in England and Wales. That is very clear, and it is a significant saving.

More broadly, the hon. Lady talks about an apology. She comes here representing the party of Liz Truss and lectures anybody else about apologies; she comes here representing the party of flatlining wages, rising debt and a 200,000 increase in pensioners in poverty, and asks anybody else to apologise. I have never heard such nonsense. We have listened to pensioners. For all her sound and fury—she was at her most furious today—I still cannot tell what the Conservatives’ policy is, 11 months on. For all the rhetoric and shouting, it sounds like she might support the means-testing of winter fuel payments. After all, that was the policy of her party’s leader, who once also supported means-testing the entire state pension in one of her bolder moments.

Conservative Members say that the policy is not much comfort to pensioners, but Age UK says the exact opposite: charity director Caroline Abrahams said that this announcement is

“the right thing to do”.

Martin Lewis says that it is a “big improvement”. [Interruption.] There is a lot of chuntering from the Conservative Front Benchers. Maybe their Back Benchers can work out what the Front-Bench policy is by the time they get to their feet in a few minutes’ time. I have no idea whatsoever what the Conservative party’s policy is.

More widely, when it comes to pensioners, the Government’s priorities are to raise the state pension and rescue the NHS. The triple lock will see state pension spending rise by £31 billion annually over this Parliament. Some £26 billion is being invested into the NHS because we inherited in England a disgraceful situation in which more than one in five pensioners aged over 75 were on waiting lists. There is no excuse for that legacy from the Conservative party. Neither of those forms of progress—raising the state pension and investing in the NHS—would be possible without the difficult decisions that we have had to make on tax. Those are difficult decisions that every Opposition party has opposed. Only this Government can provide that crucial support for pensioners, because we will do what is necessary to turn that support from rhetoric into reality.

[Navendu Mishra (Stockport) (Lab)]

Members on both sides of the House will have had a large volume of correspondence on this matter, so I thank the Minister for his statement. This fair policy change saves our public services £450 million by ensuring that the wealthiest pensioners do not continue to receive the winter fuel payment. Does he agree?

[Torsten Bell]

My hon. Friend sets out the principle case for means-testing the winter fuel payment very well indeed. I do not think that anybody with common sense thinks it right that millionaires receive each year from the Exchequer hundreds of pounds towards their winter fuel payments—people have recognised that for years. The Government are making the tough choice of saying that that we will no longer pay the winter fuel payment in that way.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Steve Darling (Torbay) (LD)]

Our country needs stability. I fear that this policy is from the book on how to botch running the country. Although last year’s decision was wrong and this change is right—the Liberal Democrats had long campaigned against those proposals, and it is important to acknowledge Independent Age, Silver Voices and Age UK, which have all driven the change—a Government who wobble do not give us the stability we need for our economy.

Some 300,000 pensioners in Devon and Cornwall have been worried sick about the proposals, so why did the Government not implement this approach 12 months ago? The Government comms have not been clear on single pensioner households, about which there are grave concerns, so will the Minister provide clarity on that matter? What about households in which there are pensioners on higher and lower rates—how will they be treated? Finally, may I have assurances that the Government will continue to push hard on pension credit? For the poorest pensioners, it can offer a boost of £11,000 a year to their income, which is the real way to tackle pensioner poverty in the UK.

[Torsten Bell]

I thank the hon. Member for his comments and his welcome for this change; he called it the right change. He asked about different treatment of single and couple households; I can explain that in a bit more detail. Single households will receive the entire household’s winter fuel payment to the one individual, whether that is £200 or £300. If the individual’s income is below £35,000, they will keep that in full, and if the individual’s income is above £35,000, that will be recouped by HMRC unless they choose to opt out. With couples, the situation for those not receiving means-tested benefits will be as it was before July 2024, which is split payments, half to each member of the household, and then they will be individually tested against the tax system.

I thank the hon. Member for giving me the chance to clarify that point. I also entirely endorse his statement about pension credit. The reason we want to see higher rates of pension credit take-up is not because of winter fuel payment per se, because that is small relative to the financial gains that come from people who are entitled to a pension credit receiving it. We absolutely must maintain the progress on pension credit take-up in the months and years ahead. As I said in my statement, I welcome the work of MPs in their constituencies, and of local authorities and charities, in driving up those rates.

[Rachael Maskell (York Central) (Lab/Co-op)]

As chair of the all-party parliamentary group for ageing and older people, I really do welcome the reinstatement of the winter fuel payment for 9 million pensioners, but since the announcement to remove it, the energy price cap has gone up £281, so will the Minister take a look at the value of the winter fuel payment and perhaps turn to the industry, which over the last five years has profited by £207 billion? Perhaps it can make a greater contribution to help our poorest pensioners.

[Torsten Bell]

My hon. Friend is right to raise questions about energy prices—an issue for households of all ages that have been living through the cost of living crisis of recent years. The good news is that the energy price cap will be coming down in July, although I think everybody across the House would like to see it fall significantly further. This Government have been taking steps over the last 11 months to make sure that more households are getting support with their energy bills. Members will have seen the consultation on the doubling of eligibility for the warm home discount, the work to significantly increase the spending on warm home insulation—over £3 billion this year—and the extension of the household support fund. Right across the piece, for households of all ages, not just for pensioners, we do need to make sure that this is a country where more people can afford to heat their homes.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

The truth is that the Chancellor made a chilling political choice last July and has now had to make a screeching U-turn following pressure from people across the House and outside this Chamber. Will the Minister take this opportunity to send an apology to all the low-income pensioners in West Worcestershire and elsewhere who had to shiver through last winter?

[Torsten Bell]

As I was saying, we do need to make sure that low-income families right across the board are receiving the support they need. That is why we set out changes to free school meals last week and it is why we will be coming forward with a child poverty strategy in the weeks ahead. I have already explained why the original decision was taken and set out that we have listened. The important thing is that it is right to maintain the principle of means-testing winter fuel payments but to do so with a higher threshold. As I have set out, the changes we are bringing forward today will mean that the vast majority of pensioners—over three quarters—will receive it in future.

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

I welcome my hon. Friend’s announcement, because this news will not only bring more money to Scotland; it also demonstrates that this is a Government who listen. The winter fuel payment is devolved in Scotland, as it was at the time of the original announcement, and the Scottish National party’s current policy robs poorer pensioners to fund payments for millionaires. Does my hon. Friend agree that the SNP must now re-examine its own policy in the light of this game-changing announcement today?

[Torsten Bell]

My hon. Friend is always quite right. I spoke to Ministers in the devolved Administrations today to set out in advance the details of this policy and to spell out, for example, to Ministers in Edinburgh that if they want a fairer system that means-tests the winter fuel payment and the equivalent in Scotland for those on the highest incomes, HMRC is ready to support that, but so far they have chosen not to means-test the system—to have a system that is not fair to poorer pensioners.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

The politics of U-turns are not always bad; this is a welcome U-turn by the Government as people will benefit. It would have been helpful for the Minister to have said, “We made a mistake, but we are going to put it right”, but that is by the by. However, I have had many letters and communications, as I am sure have many other hon. Members from across the House, about a group of people who are still suffering: something like 750,000 pensioners who are eligible for pension credit, and therefore theoretically for the winter fuel payment, applied for the winter fuel payment but have not received a single penny for last winter. Whatever other changes are made, will the Minister commit to putting that situation right, so that those pensioners will receive the money that they should have had during the winter?

[Torsten Bell]

The right hon. Gentleman is right to highlight the issue of low take-up of pension credit and he refers to the figure of more than 700,000 pensioners, which unfortunately was true under the last Government. We have seen unprecedented levels of pension credit applications over the past year because of the campaign by the Government and by hon. Members from all parties. Those applications are very welcome, but I agree that we need to keep up the momentum. In the short-term, we are writing to all new housing benefits claimants who we think could be eligible for pension credit and encouraging them to apply; we are engaging in new research about what has worked in the drive for pension credit take-up, which largely seems to be awareness of the benefit; and we are looking at better data sharing with local authorities and across central Government Departments, including between the Department for Work and Pensions and His Majesty’s Revenue and Customs.

[Frank McNally (Coatbridge and Bellshill) (Lab)]

I welcome today’s announcement. It is right that, despite the horrendous financial situation that this Government inherited from the Conservative party, they are reinstating the winter fuel payment for 75% of pensioners and specifically targeting those in the most need. Following the question from my hon. Friend the Member for Paisley and Renfrewshire South (Johanna Baxter), will the Minister outline what discussions he expects to have with Scottish Ministers about the Scottish Government’s universal approach to winter fuel payments in Scotland? At a time when public services in Scotland are facing significant peril, the SNP’s position is to continue to give winter fuel payments to millionaires at a time of deep hardship for people in Scotland.

[Torsten Bell]

My hon. Friend is right to highlight the targeting. Setting the means test threshold at £35,000 ensures that it is well above the income levels of pensioners in poverty and is around the average earnings level. On policy in Scotland, an important principle of devolution is that those are decisions for the Scottish Government, but they are also decisions for which they will be held accountable.

[John Glen (Salisbury) (Con)]

Over several fiscal events over seven years, the option of removing the winter fuel payment from the wealthiest was resisted by the previous Government because there was not seen to be an effective rationing mechanism and there were considerable presentational challenges. Will the Minister confirm that pensioners with no mortgage and with significant tax-wrapped savings in individual savings accounts or venture capital trusts, but with a monthly pension of £2,500, will still be fully entitled to receive the winter fuel payment?

[Torsten Bell]

I always enjoy discussing technical details with the right hon. Gentleman. I set the position out clearly in my initial statement: means-testing is based on taxable income of £35,000, which answers his question.

[Imran Hussain (Bradford East) (Lab)]

The original decision to cut the winter fuel payment was the wrong decision; today’s decision is the right decision and a much fairer decision. In my constituency, 2,000 more pensioners will, quite rightly, get the winter fuel payment again. It is clear that the Government have listened, so I ask them to listen again to the growing calls in the Chamber and to scrap their planned, devastating cuts to disability support.

--- Later in debate ---

[Torsten Bell]

I thank my hon. Friend for welcoming today’s policy announcement. We will continue to discuss with him all aspects of how his constituents are treated in the social security system. On the wider questions that he raises, I will say that the Government have obviously set out the position—I think the position of most people in the country—that we cannot continue with a position where one in eight young people are out of work or where we see 1,000 people a day flowing on to personal independence payments. We need a better system, focusing on supporting those who can work into work—the Minister for Social Security and Disability is setting out the case on that. I do not think anybody should support the position of leaving the status quo as it is.

[Wendy Morton (Aldridge-Brownhills) (Con)]

No matter how the Minister tries to dress it up, the Chancellor made a monumental political mistake last year. While I welcome the news that the payment is being reinstated, it is cold comfort to those pensioners who missed out last year and faced really difficult choices over the winter. Will the Minister look at this issue again and reinstate the winter fuel payment for all those who missed out?

[Torsten Bell]

This is why I am confused. What is the position of the Conservative party? Is it to support means-testing of the winter fuel payment—yes or no? Are you going to send out the shadow Chancellor to give a speech—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. “Are you going to send?” I do not think the Minister is speaking to the Chair.

[Torsten Bell]

Is the Conservative party going to send out the shadow Chancellor to give a speech in which I cannot tell whether he is apologising for Liz Truss, then come to this House the very next week and call for universal winter fuel payments? If the Conservatives are calling for universal winter fuel payments, they need to set out how that will be funded. This is a Government who have made their choice. It is right to means-test the winter fuel payment, because millionaires should not receive it. If the Conservatives do not know what their policy is on that, they will not know their policy on anything else.

[Blair McDougall (East Renfrewshire) (Lab)]

I have not met anyone—other than John Swinney, perhaps—who thinks that millionaires should get the winter fuel payment. I have met a lot of constituents who felt that the threshold was too low, and the Government have recognised that today. However, the Minister knows better than most that while some pensioners still struggle, pensioner poverty has fallen in recent times, whereas child poverty has gone in the opposite direction. Will he use some of the nearly £500 million saved through this measure and direct it towards the grandchildren, rather than the grandparents, and to where poverty is most acute in our society?

[Torsten Bell]

As always, I thank my hon. Friend for his well-put thoughts. He is absolutely right that pensioner poverty fell significantly, halving under the last Labour Government, before unfortunately rising by 200,000 people under the Conservatives, but we must not be complacent about the headline of falling pensioner poverty, because there are wider problems. [Interruption.] I am glad that the right hon. Member for Beverley and Holderness (Graham Stuart) welcomes it. The point I am coming to is that the stagnating incomes of working-age households under the last Labour Government moved across to stagnant incomes for pensioners and no falls in absolute poverty for pensioners under the Conservatives. There are subsets of pensioners, such as single pensioners, private renters and others, where we see lasting problems. It is important to see this in the round, but my hon. Friend the Member for East Renfrewshire (Blair McDougall) is absolutely right to say that we must move further on child poverty. He will have seen last week’s announcement on free school meals in England, with consequentials for the devolved Administrations, and we will come forward further with a child poverty strategy soon.

[Mr Will Forster (Woking) (LD)]

I welcome this Government’s U-turn. Countless pensioners in Woking suffered last winter, so I am pleased that that will not continue. The Minister stated that £36,000 is the threshold that he and the Government have chosen because it is the average earnings. Will the Government commit to increasing that threshold going forward when average earnings rise?

[Torsten Bell]

That is an important question. There is always a judgment in choosing a threshold for any means-tested benefit, and I want to be completely straight with the House about that. We have chosen a threshold that is well above the income level of pensioners in poverty, and it will ensure that more than three-quarters of pensioners receive the benefit of the winter fuel payment in England and Wales. The hon. Gentleman is right that it is currently in line with average earnings. It is important to have clarity for pensioners—a point that the Liberal Democrat spokesperson, the hon. Member for Torbay (Steve Darling), just made. We will leave the £35,000 at the current level, as all thresholds in the income tax system are frozen for the coming year, so that pensioners know that that is the threshold and there are no surprises. Decisions about future uprating will be for future Budgets.

[Rebecca Long Bailey (Salford) (Lab)]

I very much welcome the Minister’s statement today—it is the right thing to do to lift pensioners out of poverty. I am sure that both he and the Chancellor also agree that it is right to lift children out of poverty, so can he reassure this House that he and the Chancellor are doing all they can to outline plans to lift the two-child cap on universal credit as soon as possible?

[Torsten Bell]

As my hon. Friend knows, we have said clearly that all levers to reduce child poverty are on the table. The child poverty strategy will be published in the autumn, but we are not waiting for that—as I said earlier, we have already seen action on free school meals. It is another reason why we need to see more support for energy bills, and for insulating homes in particular, because it is younger families with children who are struggling most and having to turn off their heating. My hon. Friend is absolutely right to raise this issue, which is one of the core purposes of this Government. We cannot carry on with a situation in which huge percentages of large families are in poverty.

[Simon Hoare (North Dorset) (Con)]

I assume that because the Minister cannot find the word “sorry” in his vocabulary this afternoon, he expects pensioners in North Dorset and elsewhere to be saying thank you to him for this screeching U-turn. However, just a few weeks ago, what he has announced today was predicted to cause financial Armageddon. When should the City of London, mortgage payers and everybody else now expect the run on the pound that was predicted by the Leader of the House of Commons?

[Torsten Bell]

What this Government are doing is sorting out the mess in the public finances left by the Conservative party, and not repeating its irresponsibility. All Opposition parties oppose all of the tax rises set out in the autumn Budget, yet claim that they support the spending on the NHS and on pensioners—they cannot have it both ways. The party of Liz Truss has not learned its lesson.

[Catherine Atkinson (Derby North) (Lab)]

No one I have spoken to in Derby thinks that millionaires should be receiving the winter fuel allowance, but many will welcome the lifting of the threshold so that more people receive it. Does the Minister agree that this shows the Government listening; it shows money being targeted at where it is needed; and it shows what can be done with a stable economy?

[Torsten Bell]

My hon. Friend is completely right. As I say, we have set the threshold at a level that means that the vast majority of pensioners—not just in her constituency, but right across England and Wales—will receive support in the coming winter. Importantly, we are announcing the threshold now, to make sure those payments can be made in time for this winter.

[Brendan O’Hara (Argyll, Bute and South Lochaber) (SNP)]

When the Chancellor slashed the winter fuel allowance last year, she told us that it was necessary, urgent and the responsible thing to do. It turns out that it was not necessary, urgent or the responsible thing to do after all, so is the Minister going to apologise to the millions of pensioners who were put through the wringer so cruelly and unnecessarily? I think he knows that they deserve an apology from this Government. Having performed one U-turn, will the Government now do the same for the country’s poorest families and abolish the two-child cap?

[Torsten Bell]

I thank the hon. Member for his question. I have just referred to the progress that needs to be made on reducing child poverty, not just in England and Wales but in Scotland. We will set out that strategy in the coming months, and he is absolutely right to say that we should all want to see very significant progress on that issue in the years ahead. When it comes to the winter fuel payment in England and Wales, the equivalent benefit is obviously devolved in Scotland, so that is a question for Ministers in Edinburgh.

[Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)]

I welcome the decision today, and I am delighted to hear the announcement from the Minister. Let us be crystal clear: this is a direct result of the progress that this Labour Government are making in turning around our economy. For my constituents, however, the future of the winter fuel payment—or its equivalent—lies in the hands of the Scottish Government. Can the Minister confirm that the Barnett consequentials to Scotland resulting from today’s announcement will exceed what the Scottish Government are already planning to spend on their equivalent of the winter fuel allowance? [Hon. Members: “Will the hon. Lady give way?”] Will he join me in urging the Scottish Government to follow suit and ensure that the additional funds that are provided due to today’s decision will restore the full winter fuel payment to all those who need it in—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Please be seated. I do not need any help with managing the Chamber, but questions need to be short. Minister, let us have a short, sharp answer.

[Torsten Bell]

My short, sharp answer is that wages have grown in the first 10 months of this Government faster than in the first 10 years of the last Conservative Government. Interest rates have been cut four times. My hon. Friend is right to say that progress is being made, and that needs to continue. We need to ensure that more people feel the benefits of that growth in their pockets. The changes we are making to winter fuel payments today are one of those benefits. I can confirm that there will be a block grant adjustment exactly as she sets out.

[Esther McVey (Tatton) (Con)]

I appreciate that this has been a humiliation for the Chancellor and that her credibility is in tatters—no wonder she is not here today to announce her own U-turn—but now that she and the Government have got a taste for climbdowns, may I urge them through the Minister, who unfortunately drew the short straw today, to reverse the equally ridiculous national insurance contribution rises, which are destroying jobs, and the inheritance tax changes, which are destroying farms and family businesses?

[Torsten Bell]

It is usual for a Minister to thank the Member for their question, but I actually mean it in this case, because the right hon. Lady has completely proved my point that the Conservatives have learned no lessons whatever. They think they can come to this Chamber and call for more spending and oppose every tax rise—and they expect to be taken seriously ever again? They will not be.

[Richard Burgon (Leeds East) (Lab)]

As a Labour MP who voted against the winter fuel payment cuts, I welcome this change in position, but I urge the Minister and the Government to learn the lessons. One of them is to listen to Back Benchers. If the Minister and the Government listen to Back Benchers, we can help the Government get it right and help them avoid getting it wrong. We do not want to be here in a year or two’s time with a Minister sent to the Dispatch Box to make another U-turn after not listening to Back Benchers on disability benefit cuts. If they listen now we can help the Government get it right.

[Torsten Bell]

It is important to listen to Back Benchers and to Front Benchers. It is even important to listen to Opposition Members on occasion, particularly when they are digging their own grave with their party’s policies. More seriously, the point that my hon. Friend raises is important: everybody on the Government Benches wants to make sure that this is a fairer country that is growing again—that wages are growing, that poverty is falling, that inequality is coming down. That is what we need to deliver. Sometimes that will involve tough choices, including all the ones that the right hon. Member for Tatton (Esther McVey) opposes. Those choices will need to be made, because we are a party of government not a party of protest, but they are made in the interests of our values and of a fairer country and a fairer Britain.

[Saqib Bhatti (Meriden and Solihull East) (Con)]

The Minister comes to this House almost triumphant, having voted to take away winter fuel payments a minimum number of months before winter, and now says that we should be thanking him for this reinstatement. Anguish, anxiety, uncertainty—that is what my pensioners suffered. Will he apologise?

[Torsten Bell]

The hon. Gentleman is trying to put words in my mouth and he will not succeed. We have been clear. What I said in my statement is that we have come to the House today, before the summer recess, particularly to deal with the issue that he is raising, which is to provide absolute certainty for pensioners in England and Wales that they will be receiving the winter fuel payment this winter if their income is below £35,000. I agree with him that that is an important level of certainty to provide, and that is why I am here today.

[Several hon. Members rose—]

[Mohammad Yasin (Bedford) (Lab)]

I share the deep concerns of my constituents about the loss of the winter fuel payment, which the Minister will know I relayed to the Department. I am glad that the Government have acted on those concerns and reviewed the threshold so that the majority of pensioners will receive the payment this winter. Does the Minister agree that in stabilising the economy we are now in a better position to do what Labour Governments have always done best: protecting the vulnerable in our society?

[Torsten Bell]

That is exactly the point I have just made: what are Labour Governments here for? Building a fairer Britain. What did the last Labour Government do? They brought down child poverty, halved pensioner poverty and raised wages year after year. That is what this Government will do again.

[Alison Bennett (Mid Sussex) (LD)]

I have listened to the Minister’s statement and read the words, too, and nowhere can I see an explanation for why this decision has come now, 11 months after it was first announced. Why has this decision come now? Will we have to wait another 11 months for the Government to rethink their cuts to disability benefits?

[Torsten Bell]

I have just explained why we are making this announcement now: we want to ensure that the payments can be made in time for the winter. I have not hidden from the fact that last year we made the difficult decision to means-test the winter fuel payment, and that was the right choice to make, but we have listened, which is why we have announced a higher means test. I have directly answered the hon. Member’s question.

This is important, but we do need to make some tough decisions. I know that the Liberal Democrats want a universal winter fuel payment, because they think it right to pay hundreds of pounds to millionaires, but I take a different view. I think it is that kind of wishful thinking that created, in 2010, a Liberal Democrat Government who promised to scrap tuition fees and ended up trebling them.

[Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)]

I thank the Minister for his statement, which I know will be greatly welcomed by my constituents. Over 14 years, we became used to a Government who did not listen and did not change course when circumstances changed, so I for one am grateful for a Labour Government who do so.

While there was an uptick in pension credit—

[Kirsteen Sullivan]

Will the Minister commit himself again to working with local government and devolved Administrations to increase the number of people receiving pension credit, so that pensioners on the lowest incomes do not lose out but receive the support that they need?

[Torsten Bell]

That is a very important point. Whatever the views expressed in the House today, I say to all Members that if any of them want to suggest ways in which we can continue to drive up pension credit and ensure that the poorest pensioners receive the support to which they are entitled, I will always be happy to talk to them.

[Julia Lopez (Hornchurch and Upminster) (Con)]

As my hon. Friend the Member for North Dorset (Simon Hoare) ably recalled, the Minister’s superiors told us that there would be a run on the pound unless pensioners took a hit on winter fuel. Given that every economic indicator was worse last year, can the Minister tell us whether the pound is safe with this U-turn, or whether this is just another example of his seniors’ talking utter bilge to justify their terrible decisions?

[Torsten Bell]

It is the hon. Member who is talking bilge. Growth was the highest in the G7 in the first quarter of this year, interest rates have fallen four times, and wages have risen faster in 10 months than they did in 10 years under the Conservatives. What is happening is that we are sorting out their mess and putting Britain on a better track.

[Warinder Juss (Wolverhampton West) (Lab)]

Does the Minister agree that, given that ours is now the fastest growing economy in the G7 and interest rates have been cut four times, now is the time to ensure that our public services will be protected and that pensioners who do not need the winter fuel payment to heat their homes will not receive it, while those who do need it to heat their homes will receive it?

[Torsten Bell]

I should have got out of the way, because my hon. Friend has given a direct rebuttal to what was said by the hon. Member for Hornchurch and Upminster (Julia Lopez). He is entirely correct in every detail of the important points that he has raised. A Labour Government investing in public services and ending austerity: that is what we will be hearing about in the House on Wednesday, and I look forward to hearing Conservative Members explain how they tried to support that spending while opposing every tax rise that was necessary to make it happen.

[Ben Lake (Ceredigion Preseli) (PC)]

I welcome the Minister’s statement, not least because it will offer much support and reassurance to so many of my constituents. As he knows, no system is perfect and mistakes will be made, so may I ask whether there will be an appeals mechanism for those who are entitled to the winter fuel payment but, for whatever reason, do not receive it?

[Torsten Bell]

I thank the hon. Member, my near neighbour, for that question. No bureaucracy is perfect, but in such cases we do not need an appeals mechanism; we just need to ensure that those people receive the payment as soon as possible. As I have said, we have made this decision to ensure that we can automatically make winter fuel payments to people who are receiving all the benefits that I mentioned, and who also received the payments previously. The success rate of that payment mechanism is strong, which is why I have made this announcement today. However, if any Members have any constituents in that position, I ask them to get in touch with me immediately.

[Jacob Collier (Burton and Uttoxeter) (Lab)]

I welcome the Government’s decision, and thank them for listening to Members on both sides of the House. Many of my older constituents live in houses that are not energy-efficient, which results in higher bills, so can the Minister say more about what the Government are doing to increase energy efficiency in homes to keep them warmer and bring down bills?

[Torsten Bell]

That is such an important point! One of the biggest mistakes that we made in previous decades was saying, “We will not see the benefits of work to improve the quality of the housing stock for years, so let us slash it.” That is exactly what happened in 2013, when there was a 90% cut in the level of insulations under the energy company obligation scheme, and we have paid the price for that ever since. This Government are not going to make the same mistake. My right hon. Friend the Secretary of State for Energy Security and Net Zero has been ramping up the warm homes programme, and we need to be out there insulating homes and improving lofts every day until Britain has a housing stock of which it can be proud.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Many of my elderly constituents had an unnecessarily cold and miserable winter, and the uncertainty to which the Minister constantly refers was of his Government’s own making. Will he take this opportunity to apologise to my constituents?

[Torsten Bell]

The right hon. Member is right to highlight that we need to provide support for older people, and for all households, with their energy bills right through the year, which is what this Government have been doing. We have not been waiting. As I said, the warm homes discount is being extended to almost 3 million extra households, we are rolling out the improvements to the insulation programmes that I have just mentioned, and the household support fund has been extended for future years. That is exactly what we need to do, while at the same time improving our energy security and our energy generation to make sure that, in future, we do not see the disaster of the last five years, when global wholesale gas prices sent electricity and gas prices here in the UK through the roof.

[Rachel Taylor (North Warwickshire and Bedworth) (Lab)]

I thank the Minister for his statement, which will be warmly welcomed by constituents, particularly pensioners who were just above the threshold and who lost out last winter. Does he agree that measures such as rolling out free breakfast clubs—I visited one this morning at Goodyers End primary school—are making a real difference by tackling poverty and that that is what this Government are doing across the board in all age groups?

[Torsten Bell]

I could not agree more with my hon. Friend. We need to make sure that we are seeing child poverty fall and seeing extra help for families through free school meals, as well as through the breakfast clubs that she mentions. We also need to see more progress on pensioner poverty. That is why today we are saying that the threshold will be well above the incomes of pensioners who are in poverty. We do not want to see that poverty in the years ahead, which is exactly why we have made this change today.

[Claire Young (Thornbury and Yate) (LD)]

While the Government buried their heads in the sand, countless pensioners suffered, such as my constituent who, despite having a terminal disease, had to cut back on heating and food, and spent the winter “freezing cold”. Can the Minister explain why no impact assessments were conducted last year before winter fuel payments were stripped from millions of pensioners?

[Torsten Bell]

I thank the hon. Lady for her question, but the equalities analysis was done. Unusually, the poverty impact analysis was also published over the last year. I do not agree with the statement that she has just made, but she is right to say that we need to make sure that we are improving things for pensioners. As I said before, this Government’s priority is to keep raising the state pension and to rescue the NHS. As I said, one in five over-75s are currently on an NHS waiting list, and the funding to make that happen is possible only because of the tax rises that I hear the Liberal Democrats oppose week in, week out.

[Chris Webb (Blackpool South) (Lab)]

I welcome the Minister’s announcement and the change in course from the Government. Many of us were uneasy about the low threshold for the winter fuel payment, especially in deprived communities such as mine—I have the most deprived borough in the country. Will the Minister assure my constituents that all pensioners under the threshold will automatically receive the new winter fuel allowance and will not have to do a single thing in the winter to come?

[Torsten Bell]

That is an absolutely crucial point and has been central to the work that we have done to decide on the policy. We want a system of automatic payment, so that pensioners do not need to do anything to claim the payments, and one that is automatic for those who have incomes above £35,000, so that they do not have to take action if they need to have the funding recouped, unless they choose to opt out. My hon. Friend is absolutely right: we need a simple system that supports pensioners.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

The Minister talks about the NHS, and I wonder whether he recognises the number of elderly people who had to use the NHS as a result of having been cold because of his policies. I want to ask him a very specific question. He said:

“All pensioners with incomes up to and including £35,000 will benefit from support”.

He also said:

“Individual pensioners with taxable income above £35,000 will have any winter fuel payment automatically recovered”

through the tax system. Where a household has two individuals over the eligible age, what happens when one earns more than £35,000 and the other earns less? Will they get some, all or half of the winter fuel payment?

[Torsten Bell]

I think I have answered that question, but I am happy to lay it out again, if that is helpful. There is a long-standing principle of individual taxation, which I think is supported by all parties in this House. Where a couple are not receiving a means-tested benefit, they will each receive half of their household’s winter fuel payment. Whether they continue to keep that or it is recouped through the tax system will be based on their individual taxable income. For example, if one has an income above £35,000, their payment will be recouped by HMRC automatically, but if the other has an income level below £35,000, they will retain the winter fuel payment. I hope that clarifies things.

[Ms Polly Billington (East Thanet) (Lab)]

Would my hon. Friend help clear something up? The opposition parties seem to be claiming that they urged us to make this decision, but that is not true, is it? They actually urged us to give winter fuel payments to millionaires at the expense of our public services.

[Torsten Bell]

I can clear that up, in the case of the Liberal Democrats and Reform. They have the same policy—not for the first time, I might add—which is definitely to give winter fuel payments to millionaires. I have no idea what the position of the Conservative party is, and I have been here for an hour and a quarter. Actually, I have been in the House for the last 11 months, and I have still not been able to fathom what the Conservative party’s policy is, but I think it is to not learn any lesson from Liz Truss.

[Greg Smith (Mid Buckinghamshire) (Con)]

During the general election campaign, that well-known political giant, “a Labour spokesman”, said that Labour had no plans to change the winter fuel payment, but within weeks, the Government had cruelly cut it, withdrawing it from millions of pensioners, and 13 months later, the Minister is performing this screeching U-turn. Given the hokey-cokey nature of this policy, can he give an assurance from the Dispatch Box that what he is announcing will apply not just this winter, but every winter in this Parliament?

[Torsten Bell]

The point about certainty for pensioners is important—I think that is the point the hon. Gentleman is making. As I said earlier, we are setting the £35,000 threshold so that people become aware of it in the coming months. It is a round number, and we do not intend to change it in the years ahead, although further in the future, yes, there will be questions about uprating, which will be considered in the normal way.

[Nadia Whittome (Nottingham East) (Lab)]

I welcome the fact that the Government are responding to the huge public pressure and are expanding eligibility for winter fuel payments. I am concerned that we are about to make a similar mistake, which, once again, we will come to regret, in cutting disability benefits. Will the Treasury drop those cuts before they cause harm to our constituents, instead of reversing them after the fact? I have listened carefully to what my hon. Friend has said. To be clear, I am not asking him to keep the status quo, or to not support people into work; I am simply asking him not to cut disabled people’s benefits.

[Torsten Bell]

I thank my hon. Friend for her question, and we always have interesting conversations. The Minister for Social Security and Disability will have heard the point she made. I gently say that the number of people receiving personal independence payments is forecast to continue to grow in every single one of the years ahead. That is after changes were set out by this Government. That important point sometimes gets lost in this debate.

[Ellie Chowns (North Herefordshire) (Green)]

I welcome the fact that the Government are finally listening to the public and doing a U-turn on winter fuel payments, which is long overdue. However, in a truly strategic approach to tackling fuel poverty, we would make sure that every home could be heated affordably and was well insulated. Will the Government commit to investing in the national asset that is our housing stock, and to properly funding the warm homes programme, so that no pensioner, no child—nobody—is condemned to fuel poverty in a cold home?

[Torsten Bell]

Yes, that is exactly what we are doing, and we are funding that, because this Government know that we need to make difficult decisions, and will make them, so that we can deliver priorities such as investment in better housing stock.

[Peter Swallow (Bracknell) (Lab)]

I welcome this news, which will mean that more pensioners in Bracknell Forest receive this important benefit, and the Government’s recommitment to the triple lock. Does the Minister agree that a Conservative party that cannot decide whether it supports giving winter fuel payments to millionaires, whether it backs the triple lock, or even whether Liz Truss is a member is in no position to govern this country every again?

[Torsten Bell]

Obviously, I agree with my hon. Friend in lots of ways, but it is really important to dwell on the point that he made at the beginning of his question. Through these changes, the vast majority of pensioners— over three quarters—will receive winter fuel payments this winter. We can give them the necessary reassurance that they do not need to do anything for that to happen, even if they are on a higher income.

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

The Minister is at pains to say that pensioners do not have to do anything to get this payment, but of course they had to do something—they had to write to, email and call Labour MPs, and tell them that this cut was wrong. At the time, the justification Labour MPs gave for the cut was the economic circumstances. Given that inflation and unemployment are higher, and growth is lower than it was going to be, was not the time for Labour MPs to listen before the cut, not after it?

[Torsten Bell]

No, because this Government were formed on the back of disastrous public finances. The Conservative party had announced public spending commitments without having a penny to pay for them. We will not apologise for doing the right thing to put this country back on an even keel.

[Sam Rushworth (Bishop Auckland) (Lab)]

On 3 September, I said in this House that I represent England’s coldest and snowiest constituency, where even people on a living wage can be in fuel poverty, as can children and pensioners. That is why, as the Minister knows, I pressed the Government not only for the changes that he has announced today, but to widen the eligibility criteria for the warm home discount scheme, which is the smartest mechanism we have for tackling genuine fuel poverty. He has only gone and done both those things, so can I thank him for listening not to me, but to the people I represent? What assessment has been made of the impact of these changes on lifting children out of fuel poverty?

[Torsten Bell]

I obviously thank my hon. Friend for his question, but I have to disagree. I do not deserve any credit for doubling eligibility for the warm home discount; the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), who is here on the Government Front Bench, deserves it. On fuel poverty estimates, over 5 million households should benefit from the warm home discount next year. That will make a real difference to households right across the country.

[Jim Allister (North Antrim) (TUV)]

I greatly welcome this overdue U-turn, but if £35,000 is the correct cap, why did the Government impose misery on millions of pensioners last winter? Is not a basic part of getting something wrong saying sorry? It is not enough to say, “Look at all the things the Conservative party did.” That is not the point. The point is that this Government think they are better than everyone else. Why will they not say sorry?

[Torsten Bell]

Over the past year, this Government have been getting on with providing more support for pensioners, raising the state pension, ensuring the triple lock, extending the household support fund and investing in the NHS, the state of which is the single biggest betrayal of pensioners in England. We believe in and support the principle of means-testing the winter fuel payment, but have listened, and have looked again at the threshold. That is what I have set out today.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

I very much welcome raising the threshold for the winter fuel allowance. As I am sure the Minister knows, the threshold was at the heart of my concern about means testing, although the principle of means-testing is absolutely correct. Morecambe and Lunesdale has an older than average population. Can the Minister assure me that my pensioners will not have to do anything special—make any application—to get their winter fuel allowance?

[Torsten Bell]

I can absolutely give my hon. Friend that assurance. We want to make sure that the vast majority of pensioners can receive winter fuel payments. We want to make that as easy as possible, which means making receipt automatic.

[Graham Stuart (Beverley and Holderness) (Con)]

The Minister seems unable to say sorry, but does he at least regret that more than 90,000 more elderly people went to A&E last winter than did the year before, in the last winter under the Conservative Government?

[Torsten Bell]

Over the last few years, since 2020, energy bills have risen for all households, and far too many people have been struggling. That is absolutely right, and the Government are focusing on addressing it through the warm home discount and the warm homes scheme, which provides the insulation that the hon. Member for North Herefordshire (Ellie Chowns) mentioned. We need to do that right across the board, including, in the long run, by fixing our broken energy system.

[Louise Jones (North East Derbyshire) (Lab)]

I have spoken to many people in North East Derbyshire who, although they acknowledged that we should not give this payment to millionaires, were deeply concerned that the threshold was too low. Can the Minister reassure my constituents that those who are eligible for the payment will not have to apply for it?

[Torsten Bell]

I absolutely can. As I said, we need to provide the reassurance that the vast majority of pensioners will receive this support, and will not have to do anything to get the payment in their bank account.

[Mike Martin (Tunbridge Wells) (LD)]

The cut to winter fuel allowance and the subsequent U-turn have caused much anguish, distress and misery to the parliamentary Labour party. Judging by the questions from the Minister’s Back Benchers, it seems that we will have two further U-turns, on PIP and on the two-child benefit cap. To save his colleagues the anguish, will he let us know now when those U-turns are coming?

[Torsten Bell]

What Labour MPs want is a Labour Government who bring down child poverty, and that is what we will do. They want a Government who take responsible decisions, including difficult ones on tax and on means-testing the winter fuel payment, so that we can invest in public services and turn around the disgrace that there has been in Britain’s public realm for far too long.

[Alison Hume (Scarborough and Whitby) (Lab)]

I welcome this announcement, as will the 26,000 pensioners in my constituency, where we have particularly cold and harsh winters. Will the Minister reassure my constituents that automatic payments will be reinstated, and will there be any change to the date on which payments will be made?

[Torsten Bell]

I will not adjudicate on which Member has the coldest constituency in England, as my hon. Friend invites me to. She raises an important point that has not yet been made, so I should spell this out: we will bring forward the regulations on the payment of the winter fuel allowance over the summer, and they will set the qualifying week as that of 15 September, as it has been in past years. That means that payments will be made in November and December, as in past years.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

A shocking 75% of Scottish pensioners said that they were left cold in their home last winter. Does the Minister agree that the Scottish Government must use the additional funding from today’s announcement to ensure that pensioners in Scotland receive the same amount of winter fuel payment as they did under the previous UK Conservative Government?

[Torsten Bell]

As I am sure the hon. Gentleman is aware, those are decisions for the Scottish Government. However, as I said, I have spoken to the relevant Ministers in the Scottish Government today. There will be a block grant adjustment to reflect this higher spending in England and Wales.

[Gill German (Clwyd North) (Lab)]

I thank the Minister for his statement, and for the extensive time he spent with the Work and Pensions Committee last week. Our inquiry on pensioner poverty has found that this issue is multifaceted and complex. Can the Minister assure me that he will work cross-Government on a policy that will ensure that pensioner poverty is a thing of the past?

[Torsten Bell]

My hon. Friend raises the important issue of the complexity of pensioner poverty. I will just give one example, which does not get mentioned in these discussions often enough. The growth rate—the value people are getting; the returns on every pound saved into a private pension—absolutely needs to be as strong as possible. Private pensions support the living standards of our pensioners. We need a pension industry that is focused on driving the best possible value for savers.

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

There appears to be universal support for this damascene conversion by the Government. Last year, they told pensioners that the right course of action was to scrap the winter fuel payment for millions, but they are now telling them that a means-tested system is right, so how can pensioners possibly believe anything that the Government say?

[Torsten Bell]

Did we actually get a Conservative party policy there? Is the hon. Member saying that the Conservatives support today’s announcement? [Interruption.] That is a no. We do not have an answer yet, after an hour and 10 minutes, on what the Conservative party’s policy is. I can give him the answer that he would like: yes, we will provide certainty that this is the policy of this Government.

--- Later in debate ---

[Jessica Toale (Bournemouth West) (Lab)]

I have worked hard with Citizens Advice Bournemouth, Christchurch and Poole in my constituency to get pensioners on to pension credit. However, on the doorstep, I have met far too many people, especially single women, who are £10—or even £1—over the threshold for pension credit. I welcome the statement, and thank the Minister for listening to my constituents’ concerns about the threshold. Does he agree that this policy shows the difference between this Government and the previous one? This Government are doing what is necessary to get stability in our economy, what is fair to get money back into our public services, and what is right to protect the vulnerable in our society.

[Torsten Bell]

I thank my hon. Friend for her question and, in particular, for her hard work to drive take-up of pension credit. Forget winter fuel payments—pension credit is a really important lifeline for low-income pensioners. It is worth an average of £4,000 to those receiving it, and far too many are missing out. I thank my hon. Friend for her work, and I hope that it continues.

[Robbie Moore (Keighley and Ilkley) (Con)]

Today’s U-turn is an astonishing victory against the Government, whose support has dried up after less than a year in office. When the Government announced their cruel cut to the winter fuel payment, costing 64,000 Bradford district pensioners vital support, experts across the country warned that up to 4,000 lives could be at risk as people were forced to choose between heating and eating. Now that the majority of the winter fuel payment has been restored, do the Government dare to produce a figure for how many pensioners may have lost their life as a result of the Government’s choice to remove the winter fuel allowance?

[Torsten Bell]

That is a serious matter. There are poorer households, with people of all ages, that have been struggling with energy bills in recent years. I am sure that all of us across this House want to see those problems addressed. We have also seen increases in food prices over the last few years that are higher than we would like, and it is lower-income households that spend a higher proportion of their budget on essentials such as food, energy and housing. It is the policy of this Government to ensure that we are dealing with all those issues.

[Paul Waugh (Rochdale) (Lab/Co-op)]

The median average income of a pensioner in Rochdale is £15,000, which is way below the amount we expect people to live on with the national living wage, so I thank the Minister for today’s announcement. Does he agree that it proves that the Government have listened not only to Opposition MPs, but to MPs in the Labour party who have pushed for this for so long and, more importantly, to the pensioners we represent?

[Torsten Bell]

My hon. Friend is right that we had to make difficult decisions last year, and I understand that Labour Members have raised those with the Government. It is why we looked again at the threshold and are sticking to the principle of means-testing while setting a higher threshold so that the vast majority of pensioners—over three quarters—will now receive winter fuel payments.

[Richard Foord (Honiton and Sidmouth) (LD)]

I welcome the partial reinstatement of the winter fuel payment. When we met, the Minister and I discussed the cliff edge that existed last winter, which meant that people in receipt of pension credit could in some cases leapfrog the income of people in receipt of a small private pension. Can the Minister indicate whether the new means test will remove that eligibility cliff edge?

[Torsten Bell]

I remember discussing exactly that with the hon. Member. All means tests have pros and cons, but by having a much higher threshold—in particular a higher threshold relative to the level of payment, with £100 or £200 being received by individuals—the large unfairness he talks about, where small differences in income led to large differences in outcome, is far reduced.

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

I used to work for Age Scotland, so may I say how welcome it is that the Government have listened to older people’s charities and made today’s announcement? I understand it will mean some £100 million additional funding for the payments in Scotland. Does my hon. Friend agree that SNP Ministers should now rethink their plans and instead endorse Scottish Labour’s plans, which were first proposed last November and would mean more generous payments for the pensioners who need them most?

[Torsten Bell]

I am glad to hear about my hon. Friend’s previous role, and it is encouraging to see what charities representing older people have put out over the last few hours. As I said earlier, Age UK has said that this is the right thing to do and that it will bring much-needed reassurance for older people and their families.

[Lincoln Jopp (Spelthorne) (Con)]

I appreciate that the Minister did not get a chance to spend long on the Back Benches—such has been his accelerated rise up the ministerial pole—but would he like to spare a thought for his former Back-Bench colleagues and join me in thanking and congratulating the small band of Labour Back Benchers who went public, broke cover and opposed this dreadful policy?

[Torsten Bell]

I agree that we should welcome all Labour Back Benchers, because they are the people going through the Lobbies every day to keep in place a Labour Government who are saving public services, taking tough but fair decisions on tax—decisions that are opposed by all the Opposition parties—rescuing our public services and driving down poverty. That is what a Labour Government is about, and that is what everyone on the Labour Benches agrees on.

[Neil Duncan-Jordan (Poole) (Lab)]

I welcome today’s statement. As one of the MPs who spoke against the decision to means-test the winter fuel payment last year, I pay tribute to all the campaigners who have lobbied hard for a change in policy. Does the Minister agree that means-testing has once again failed and that effectively what we are seeing today is the return of Labour’s commitment to universalism and to using the taxation system to get money back from those who are better-off?

--- Later in debate ---

[Torsten Bell]

I think I agree with my hon. Friend, in the sense that the tax system is a progressive tax system. That is the purpose for which it is being used in this case—to drive fairer outcomes for pensioners, and so that millionaires do not receive the benefit of a winter fuel payment but all lower and middle-income pensioners do.

[Robin Swann (South Antrim) (UUP)]

The Northern Ireland Executive is to receive a consequential budget adjustment. May I ask the Minister when it will receive that adjustment, so that we can ensure that our Northern Ireland pensioners get a winter fuel payment in the coming winter?

[Torsten Bell]

I absolutely recognise the hon. Member’s question, and I spoke to the Northern Ireland Executive earlier today. We will ensure that the Executive receive the budget adjustments in year in order to provide the same support, in line with the principle of parity under which the social security system in Northern Ireland operates. The answer is yes, that support and funding will be there.

[Shaun Davies (Telford) (Lab)]

Away from the knockabout of Westminster politics, I and people in Telford welcome this change. The principle of means-testing was right, but the level was too low. Does my hon. Friend agree that millionaires, MPs who happen to be of pensionable age and those who are living abroad should not receive this payment?

[Torsten Bell]

I almost always agree with my hon. Friend, so the answer is yes. He also provides me with an opportunity to clarify a point that has not been covered in the last hour or so: the payment will continue not to be exportable for those not resident in the UK.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Does the Minister agree that those pensioners who missed out on their payment in the winter of 2024 and will qualify under these rules should be reimbursed for the money they lost?

[Torsten Bell]

My view is that all pensioners are being supported by our higher level of the basic state pension and the new state pension, supported by the difficult decisions that the Government have been able to take. All pensioners will be supported by a functioning NHS, which is what we are putting in place after the disgrace of the last 14 years. To answer the hon. Member’s question directly, we are setting out the system for future years and not for the past.

[Douglas McAllister (West Dunbartonshire) (Lab)]

This is welcome news that will bring even more money to Scotland on top of the record funding settlement that our Chancellor delivered in the Budget. Does the Minister agree that my constituents fear the Scottish Government and John Swinney’s plans to pay out just £100 in Scotland? Those who need it most will now get more in England and Wales than the SNP will pay out to pensioners in Scotland—double, in fact—because the Scottish Government seem determined to pay out to the very wealthiest millionaires in Scotland. Should they rethink that?

--- Later in debate ---

[Torsten Bell]

I cannot compete with my hon. Friend in making a powerful case that the SNP Government in Edinburgh do need to think again.

[Monica Harding (Esher and Walton) (LD)]

In my constituency, over 15,500 pensioners lost the winter fuel allowance, of whom 5,000 were over 80. Would the Minister like to apologise to the gentleman who wrote to me who had cancer and could not keep his heating on for the winter of worry he was put through?

[Torsten Bell]

I thank the hon. Member for raising that point. It is important that those in need of healthcare, in particular, receive support. It is not that we see higher levels of challenge in keeping the heating on among older generations; it is about the consequences of that, particularly in cases such as the one she raises. That is exactly why we need to ensure that we are turning around the NHS, which all the constituents of hon. Members in England are relying on. We are seeing improvements to waiting times in Wales as well.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I thank the Minister for his leadership on this issue. If he is looking for examples of how to increase the uptake of pension credit, he is welcome to visit my constituency to see the work that the Community Help and Advice Initiative is doing with Gate55 to maximise benefits. If he comes along to one of those sessions with the Dove Centre, he can also get a warm meal and a game of bingo. But the £35,000 threshold is much more generous than I, as a tight-fisted Scotsman, would have expected, so will he explain how he reached that value?

[Torsten Bell]

It is a fair question. All means-test thresholds do involve judgments—I have been completely honest with the House about that—and the judgment we have come to is that we want to see the vast majority of pensioners receiving the winter fuel payment. We want to be absolutely sure that no lower-income pensioners will miss out. That is what brought us to a £35,000 threshold. It also means that those on higher incomes—the richest 20% or 25% of pensioners—will not receive it.

[James Wild (North West Norfolk) (Con)]

The Minister may be in denial, but this U-turn is a humiliation for the Chancellor, who claimed that economic stability demanded taking money from vulnerable pensioners, and for all the Labour MPs who voted for it. Why did the Government not listen sooner to those who campaigned against these cruel cuts? Will he now apologise to my constituents and those across the country who were cold last winter?

[Torsten Bell]

This is a Chancellor who has brought stability and growth back to the economy and got wages growing once again; one who is driving investment in our public services, which will rescue them; one who has driven up public investment, which is crucial to showing that, once again, we are a country that can do the basics like building houses, filling potholes and the rest.

[Mr Jonathan Brash (Hartlepool) (Lab)]

When the policy was originally announced, I, hon. Members across the House and constituents of mine all shared the same basic view that means-testing is fair but the threshold was far too low. I therefore welcome the Government’s decision today and the fact that they are listening. Over the last winter, working with the citizens advice bureau in Hartlepool, we secured nearly £1 million of additional annual income for Hartlepool pensioners. Does that not show the work that needs to be done on all those unclaimed benefits not going to the pensioners who need them?

[Torsten Bell]

I congratulate my hon. Friend on the work that he and others have been involved in in Hartlepool. Driving up the take-up of all benefits so that people get the support to which they are entitled is important for ensuring that more poor households are able to eat, to heat their homes and to live a decent life.

[Pete Wishart (Perth and Kinross-shire) (SNP)]

I do not know where Scottish Labour MPs have been for the past six months, but the Scottish Government have already made it abundantly clear that we will reintroduce a winter fuel payment—and we would have done that with or without this embarrassing, screeching U-turn. Here is another place where the Minister can follow the Scottish Government: the two-child benefit cap. We vowed to ensure that it will disappear in Scotland. Will he now make the same pledge across the UK?

[Torsten Bell]

The hon. Gentleman asks where Scottish Labour MPs have been, so I will tell him: campaigning in Hamilton, making sure there is a Labour MSP and that in a year’s time there will be a Labour Government in Edinburgh once again.

[Noah Law (St Austell and Newquay) (Lab)]

Away from some of the consternation of this place, a glance at His Majesty’s Treasury distributional analysis will reveal that the original decision to protect the most vulnerable, the Budget that followed, the spring statement and—I hope—the spending review have been some of the most progressive fiscal decisions we have seen in recent years. Will the Minister join me and the many wealthier pensioners in my constituency who agree that means testing is the right decision, the progressive decision and the Labour decision?

[Torsten Bell]

That is absolutely right. I think every Member of this House will have heard from people on higher incomes who think it makes no sense at all that they receive hundreds of pounds from the Government each year. With the sensible decision to means-test—yes, to the higher threshold—we have brought that to an end.

[Liz Jarvis (Eastleigh) (LD)]

The Government’s cuts to the winter fuel payment was estimated to have impacted 16,766 pensioners in my constituency, so I welcome today’s U-turn. Those affected include my constituent Chrissy, who was just above the threshold and now has the added fear that she will lose her personal independence payments. Does the Minister understand why Chrissy is so angry and afraid?

[Torsten Bell]

I have already discussed with the hon. Member for Honiton and Sidmouth (Richard Foord) the question of people just over the pension credit threshold. I recognise that issue and I have spoken to pensioners in that situation. As I say, we have listened, and that is why we have put in place a much higher threshold, which means that Chrissy, if she is near to the pension credit threshold, will be receiving winter fuel payments this year.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister for his statement, which pensioners in Harlow will welcome. The fastest growth in the G7, three trade deals and four interest rate cuts—is that the context in which the Minister feels we are able to provide more pensioners in Harlow with the winter fuel allowance?

[Torsten Bell]

My hon. Friend always does a good job of not only representing Harlow, but remembering the economic progress that is being made. If anyone did not hear what he just said, he talked about rising growth, rising wages, interest rates falling and a country back on the path to success.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Almost £85,000 was paid out by Dorset Community Foundation through its “Surviving Winter” campaign, including to many in my constituency. The foundation has noticed that many more people are relying on oil and liquefied gas, especially those in park homes and rural areas. What is the Minister doing with Cabinet colleagues to push down the price of power for those who do not have a choice?

[Torsten Bell]

The hon. Lady’s question gives me the opportunity to praise the work done by all kinds of charities—in some cases through supporting pension credit uptake and, in the case of better funded foundations, providing direct support to pensioners. That is all very welcome. She is right to raise the wider question about sources of energy, but of course the winter fuel payment is a cash benefit that can be used for all kinds of energy.

[Chris McDonald (Stockton North) (Lab)]

The decision to restore the winter fuel payment to those earning under £35,000 a year is the right decision. I thank the Minister and his predecessor for their constructive engagement with representations from my constituents in Stockton, Billingham and Norton on the threshold issue, but does he agree with my constituent who wrote to me to say that, although welcome, the winter fuel payment is not a silver bullet, and this Government’s commitment to the triple lock stands in stark contrast to the previous Conservative Government’s breaking of that triple lock in 2022, which is still costing my constituents hundreds of pounds a year?

[Torsten Bell]

I absolutely agree with my hon. Friend, and he is right to say that we should focus on the big changes we are making to support pensioners, which in England are rescuing the NHS and raising the basic and the new state pension.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his statement. I very much welcome the decision to give the winter fuel payment back to pensioners. Raising the threshold to £35,000 means that many will now qualify, and I thank him for that. On behalf of all of those pensioners who have struggled for the last 10 months, will they receive back pay from the Government to pay off the credit cards or the loans they have had to take out in order to make it through the last winter, bearing in mind that the cold weather over the last few weeks has meant people are still having to turn their heating on and racking up even more costs?

[Torsten Bell]

We have been making sure that there has been support over the course of the last winter, and the hon. Gentleman will have seen the increase in the state pension at the beginning of April, including for many of his constituents. The question for the Northern Ireland Executive is how they wish to handle this, but on the principle of parity, we would say that the same change should take place in Northern Ireland so that his constituents receive the winter fuel payment this winter.

[Fred Thomas (Plymouth Moor View) (Lab)]

I represent over 20,000 pensioners in Plymouth—more than a quarter of my constituents. I have had hundreds of conversations over the past year, and I know that people understand that the winter fuel payment should not be given out to everyone in society. The richest in society do not need it, and I warmly welcome the policy announced by the Minister today. What economic measures have this Government taken to allow us to make this change now?

[Torsten Bell]

I thank my hon. Friend for his question. We have gone from competing over temperatures to competing over volume of pensioners, but both are important. The point he makes will echo with lots of Members around the House who have had similar conversations with pensioner constituents who are on a higher income and who do not think it makes sense for them to be receiving hundreds of pounds from the Government every year. In future, they will not be, but the vast majority of pensioners—over three quarters—will be receiving support this winter because of today’s decision.

[John Slinger (Rugby) (Lab)]

Does the Minister agree that it is the strong economic foundations that this Government have been building that have enabled us to provide this extra support to pensioners and working people, and that as the economy continues to grow, we must focus ever more political attention and resources on the younger generation, particularly people starting their careers, so that perhaps one day they may have a triple lock?

[Torsten Bell]

My hon. Friend raises an important point, which is that as economic growth returns, as it has over recent months, what matters is that it feeds through to rising living standards, particularly for poorer middle-income households. We need to be honest about this: the reason why wages did not grow under the last Government was that growth was not there. That is exactly what we need to make sure never happens again.

[Linsey Farnsworth (Amber Valley) (Lab)]

My constituents are people of common sense, and they tell me that they do not think millionaires should get the winter fuel allowance, but they did feel that the threshold was too low, so they will no doubt welcome today’s announcement. However, after 14 years of being let down by the Conservatives, they are wary of Government announcements, so can the Minister reassure my constituents that support for pensioners by way of the triple lock, pension credit and NHS investment will remain?

[Torsten Bell]

My hon. Friend is absolutely right to say that faith in the system has been strained by the failure of the last 14 years—economic failure, public service failure and a failure of basic behaviour in politics—and that is what we need to turn around. She can tell her constituents that wages are growing, pensions are rising, waiting lists are falling and Britain is back.

Pensions: Expatriates

Torsten Bell Excerpts

Tuesday 20th May 2025 Westminster Hall

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for opening today’s debate, which was granted by Backbench Business Committee, and for setting the scene so well, in a way that others then followed.

I thank all hon. Members who made the time to speak and set out their cases. They covered issues that are important to many state pension recipients living abroad. I recognise that those who are affected, who obviously cannot speak today, feel strongly about this issue; many of us, in their shoes, would feel the same. On that basis alone, it is right to debate this subject and to hear from hon. Members about their constituents, including my hon. Friend the Member for West Dunbartonshire (Douglas McAllister), the hon. Member for Aberdeen North (Kirsty Blackman) and others who are not in Scotland.

Late last year, my predecessor, now the Economic Secretary to the Treasury, met Anne Puckridge and others from the End Frozen Pensions campaign to discuss the policy’s impact. We have listened, and I read case studies every week, either from hon. Members who have written in about them or in letters directly from pensioners themselves. We are all aware that there are many countries where high inflation has posed particular challenges in recent years, so I recognise the salience of today’s subject matter.

We all recognise the importance of the state pension, as the UK’s foundation of support for older people. In 2025-26, the Government will spend over £174 billion on benefits for pensioners. That represents 5.8% of the UK’s GDP and includes £145 billion spent on the UK state pension, including for those living abroad. I raise those facts because they are important; they sit behind the debates that we often have here or in the main Chamber about the size of the state and the level of taxation.

As hon. Members are very aware, the state pension is uprated abroad only when there is a legal basis for doing so, which is why we are here today.

[Kirsty Blackman]

On that, the state pension is uprated abroad only when there is a legal requirement to do so. There is no legal bar to the UK uprating those pensions in countries where there is not a reciprocal agreement in place.

[Torsten Bell]

There must be a legal basis for making payments. However, the hon. Member is right to say that under the specific policy I am setting out, payments are made only when there is a legal requirement to do so. As the hon. Member for Farnham and Bordon set out right at the beginning, that is a long-standing policy that has lasted for 70 years. For many years, the priority for successive Governments of all parties has been to prioritise those living in the UK when making difficult spending decisions on pensioner benefits. That was true of the coalition Government, when a Lib Dem Pensions Minister chose for five years not to make any progress on this issue. He did that under a Conservative Government and a Conservative Prime Minister all the way through.

The hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick)—my constituency neighbour—mentioned Lloyd George, who introduced a state pension with no uprating whatever. The first uprating of the contributory state pension in 1946, under the Attlee Government—again, I am making a point about the cross-party basis of some of these decisions—was not paid to pensioners living abroad. So since the beginning, policy on pension uprating has been consistent.

As we have discussed, people move abroad for many reasons—to be with their family, as the hon. Member for Strangford (Jim Shannon) set out, enjoy a particular climate or return to their country of birth. It is for individuals, not the Government, to make those decisions, but when they make them, they will of course consider the impact on their finances, alongside a wide range of other factors. As the hon. Member for South West Devon (Rebecca Smith) set out, our duty is to ensure that information regarding the effect of living abroad on the state pension entitlement is available. These days, that is on gov.uk, and includes information on where the uprating does and does not occur.

Pensioners who have retired to other countries will obviously take into account the UK state pension position, but they will also look at the wider provision for pensioners in those countries. Many countries will have a means-tested provision that is similar to the UK pension credit. It is true that the real-terms value of some people’s state pension will fall over time, but in most cases, particularly in the countries that have been mentioned today, that will be compensated for by higher means-tested payments when they are living abroad.

It is also important that further advice can be obtained from the International Pension Centre or the Pension Service. The hon. Member for South West Devon asked whether there is more we can do, and I want to be clear that I am always open to new ideas about what more we can do to communicate what happens to the state pension if people choose to retire abroad. More generally, I am happy to meet with any hon. Members who have suggestions in that area.

[Jim Shannon]

I gave the example—others will have similar examples—of a constituent who had moved to Canada. She phoned the DWP to ascertain her pension obligations and responsibilities, and was assured that her pension would follow her, but quite clearly it did not. The Minister outlined a system whereby it should be able to follow her, but that lady went a stage further—she actually phoned the Department, which told her that it would not matter and she would still receive her pension—and quite clearly it did not.

[Torsten Bell]

I thank the hon. Member for sharing that story. I have not heard of specific cases like that, and he might like to write to me about it. The position with respect to Canada is clear: somebody can take their state pension with them, but the uprating will not be paid once they are living in Canada. That is what the gov.uk website spells out. However, I am open to talking about individual cases and to hearing suggestions about what more we can do to communicate clearly, because this is an important issue.

Of the 1.1 million state pension recipients overseas, 652,000 live in countries where pensions are uprated. However, I do not want to hide from what that means, because that is why we are here today; as my hon. Friend the Member for Poole (Neil Duncan-Jordan) said, it means there are more than 400,000 pensioners living in countries where uprating is not paid. By volume, those are in the countries that have been mentioned most today: Australia, Canada and New Zealand. Many hon. Members have spoken eloquently of the impact of living in a country where that uprating is not paid, and I have heard about it myself in correspondence from those affected, as I have said.

That does not mean that we can wish away the real trade-offs that are involved. There would be significant additional costs to be borne by current taxpayers if uprating were extended to everybody living overseas, as the hon. Member for Aberdeen North calls for. The cost of increasing all state pensions in payment to current UK levels would be approximately £0.9 billion a year, as has been mentioned. If there were any above-inflation uprating, it would then increase gradually over time.

[Jim Shannon]

Will the Minister give way?

[Torsten Bell]

Let me get through the discussion of the costs, and then I will take any interventions on that issue.

I recognise that many campaigners are asking for indexation in future, not for retrospective indexation, although there are obviously disagreements among campaigners about the exact ask to prioritise. However, arguing that we can simply put in place indexation going forward does not escape the need to recognise the real trade-offs involved. The long-term impact would be the same, as the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale) explained. In the end, moving to forward-looking indexation would take us to the same increase in spending levels as would immediately lifting people up to the current level of the basic and new state pension. It is the same effect in the long-run, and we owe it to everyone to make financial decisions based on the long-run effects of the policies that we call for.

There are wider considerations about the net financial effects of these decisions. The hon. Member for Strangford and others raised the issue of health expenditure. To get to a wider understanding of the net effects, we have also to take into account where income is taxed and where it is spent. That does not get us away from the underlying point, which is that, focusing narrowly on the question of uprating, the costs are as I have set out.

[Sarah Olney]

Does the Minister not agree that under a reciprocal arrangement, not only would we uprate the pensions of our citizens who are living in a partner country, but that partner country will then be required to uprate the pensions of their citizens living here, and that would obviously be a benefit to this country, because they will have a greater income that they can spend here? Can the Minister assure me that that particular effect is included in the estimates?

[Torsten Bell]

I recognise the point that the hon. Member is making. I offer a few reflections on that. Some countries already do provide uprating for their pensioners based in the UK, so some of that is already in place, although it does vary across countries. It is, obviously, always for countries to set in place their own social security system. That is why the Australian system, for example, provides means-testing of the state pension, or elements of means-testing of their state pension. I suspect most people—with the possible exception of the Leader of the Opposition on occasion—do not support means-testing of the state pension.

I come on to the other point made by the hon. Member in the debate, which was to call for new reciprocal arrangements to put in place more widespread uprating. As I have explained, that would require significant tax rises. There is no way around that. The issue she raised would not negate that effect.

It is worth putting ourselves in other’s shoes. Why did the Liberal Democrat Pensions Minister for five years not change the policy on this issue? It was because he recognised the costs involved, and that it would involve tax rises. It is worth us reflecting on why the situation is not as some people would like.

[Sir Roger Gale]

Does the Minister consider that it is morally acceptable for Canada to uprate the pensions of its citizens in this country and to also bear the cost of this country not uprating its pensions for UK expats in Canada when Canada has formally offered to enter into a reciprocal arrangement? Why is that offer not being accepted?

[Torsten Bell]

Canada is a close ally of this country. We talk about that a lot in the current climate, for a whole host of reasons, and that is not going to change.

The right hon. Member is correct that Canada has made requests for a formal reciprocal arrangement, but the UK Government’s position—and that, again, of all parties—is that we are not in the business of new reciprocal arrangements with any countries. The only recent agreements have been the roll-over agreements with the EU and the EEA by the previous Conservative Government, but that was to maintain the existing social security arrangements, not to put in place any new reciprocal arrangements over that time.

I fully recognise the case that many hon. and right hon. Members have made today. I see the ongoing campaigning that those Members have put in place and that of many pensioners who are affected, but as I have said, the policy on uprating pensions is a long-standing one. More importantly, changing it involves real costs and trade-offs.

I gently note—very gently, so that I get out of this room safely—that many of the people calling for pensions to be uprated are also calling for reverses to the winter fuel payment policy and compensation for WASPI women, but are not calling for less investment in the NHS or higher taxes. In the current financial climate, there are real choices, and there have been no suggestions in this debate about how any of these policies would be funded.

I fully recognise the issues raised by Members today. I hope that I have explained why that recognition sits alongside the long-standing policy in this area, and I look forward to hearing the closing remarks from the hon. Member for Farnham and Bordon.

Mansion House Accord

Torsten Bell Excerpts

Tuesday 13th May 2025 Commons Chamber

[Sir Mel Stride (Central Devon) (Con)]

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the Mansion House accord.

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

Mr Speaker, I would like to associate myself with your tribute and those of other Members to Sir Roy Stone, who was a true public servant, and a servant of this House.

Pensions matter. They underpin not just the retirement that we all look forward to, but the investment on which our future prosperity depends. This morning, 17 workplace pension scheme providers, between them managing about 90% of active savers’ defined contribution pensions, signed the Mansion House accord. The accord was proposed and developed by the industry, specifically by the Lord Mayor, the Pensions and Lifetime Savings Association and the Association of British Insurers, and builds on the work of the former Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), who is in his place.

Signatories to the accord have pledged to invest 10% of their main default funds in private assets by 2030. These are productive assets that boost the economy, such as infrastructure. At least 5% will be for UK assets. This investment could support better outcomes for savers and deliver growth finance to Britain’s world-leading science and technology businesses. It could also support clean energy developments across the country, delivering greater energy security and jobs.

The shift towards greater investment in private assets is a journey that the sector is already on, because everyone recognises that UK defined contribution schemes stand out relative to their international peers for how little they invest in those areas. This is right for savers because it is in their interests for pension funds to hold a diverse range of assets, and it is in Britain’s interests. This Government want to see higher investment levels in the UK. We cannot continue with the lowest business investment in the G7, as we managed under the previous Administration. Supply of capital is part of that—and today’s agreement is expected to release £25 billion of additional investment into the UK economy by 2030—but so is the supply of projects to invest in: the pipeline. Our job as a Government is to support the depth and visibility of that pipeline, and that is why we are getting this country building once again.

The accord is an industry-led agreement—nevertheless, I hugely welcome it. The pensions industry’s decision to invest in more productive assets, from growing companies to infrastructure, will support better outcomes for savers and faster growth for Britain. In the coming weeks, the Government will publish the conclusions of the pensions investment review to support the move to bigger and better pension schemes. We will implement the review’s reforms, and others to improve returns for savers, in the forthcoming pension schemes Bill, which I look forward to presenting to the House.

[Sir Mel Stride]

May I start by associating myself with the very fine tributes made to Sir Roy Stone? My condolences go to his family.

No response from the Chancellor, we see, but I thank the Minister for his statement. The retirement incomes of millions of UK savers rely on the careful management of pension funds. Those pension providers have a fiduciary duty to act in the best financial interests of their members. We on the Conservative Benches support efforts to ensure pension funds are investing in assets that can both increase UK productivity and growth, and deliver stronger, stable returns for investors and savers. Indeed, that was the purpose of the first Mansion House compact, which was brokered by the last Conservative Government.

As we well know, Labour Ministers have a habit of thinking they know best what to do with other people’s money, but it should ultimately be the responsibility of the providers, which have been entrusted by savers with their money, to make investment decisions. Reports that the Government intend to take new powers to mandate pension funds to allocate minimum amounts to specific classes of assets should be a matter of great concern to this House. Can the Minister confirm whether the Government intend to take such legislative powers in the pensions Bill later this year? If he cannot rule out making such a move, can he explain what it would mean for the existing fiduciary duties set out in legislation?

Major players in the industry, including Scottish Widows, have reportedly refused to take part in the latest iteration of the Mansion House compact. Can the hon. Gentleman explain to the House why that is, what discussions he and other Ministers have had with Scottish Widows and others that have chosen not to take part, and what concerns they have raised?

Let me be clear: we on the Conservative Benches want a pensions industry that is investing in growing UK businesses, infrastructure, housing and all those elements that drive a healthier economy, but it also has to be for the benefit of savers. Of course, the risks in this case would be borne entirely by private sector workers, while public sector workers would be protected. Finally, we are clear that pension savings should never be there to dig a Chancellor out of the economic hole that she has made.

[Torsten Bell]

I will directly address two questions and then come to the overall tone of the shadow Chancellor’s remarks. There has been a debate across this House and in the wider industry about mandation, including on UK equities. It has been led by Conservative peers in the House of Lords—Baroness Altmann has called for exactly that—and by some Members in this House, including the right hon. Member for Salisbury (John Glen) on the Conservative Benches. What we are setting out a voluntary agreement led by the industry. On the industry consensus behind the accord, 90% of the defined contribution industry, by active savers, have signed up this morning—and all providers, including those that did not sign up today, are committed to the idea of more investment in private assets.

More generally, the shadow Chancellor’s tone is disappointing. The truth is that he is a lonely figure. There is a wide consensus about the direction of travel to invest more in private assets, as Canadian and Australian pension funds do, and today’s accord is industry led; it sets benchmarks agreed by the industry, and in fact many industry players want to go further. There should be cross-party consensus. At the event this morning, the Chancellor spelt out that this work builds on the work of her predecessor in supporting the 2023 Mansion House compact. The shadow Chancellor will remember that compact because it was signed under a Conservative Government when he was the Work and Pensions Secretary—he was in the press release, championing it. He was right then, and he is letting himself down now.

I have some news: a response to the accord has just come in from Guy Opperman. Hon. Members will remember him, because he was the Conservative former Member for Hexham and the only Pensions Minister in the last Government to last more than five minutes; he was in post for five years. What did he say about this morning’s accord? He said that it is a “good thing” and “should be welcomed”—he is not wrong.

[Mr Speaker]

I call the Chair of the Select Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I draw attention to my entry in the Register of Members’ Financial Interests as a trustee of the parliamentary contributory pension fund. The points about fiduciary duty have been made. Given that fund managers will need time to pool together funds that reflect the Government’s wishes and the voluntary accord, when does the Minister expect it to kick in? At that point, might he consider mandation?

[Torsten Bell]

The decision by the industry, reflecting the question that the Chair of the Select Committee raises about pace of change, is that the targets for asset allocation are for 2030.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Steve Darling (Torbay) (LD)]

Liberal Democrats cautiously welcome the response from the Minister. Clearly, ensuring that people have a good return on their investments is essential, but we welcome this step change where we are looking at investment within the United Kingdom within the appropriate parameters. Would the Minister unpick for us what core lessons he has learned from Australia and Canada, which have already embarked on this path? Also, it has long been a long-term investment opportunity for many in the pensions industry to invest in rental opportunities. How can we drive the opportunities in the social rented sector through the accord?

Finally, the Minister rightly talks about a pipeline of opportunity. Our fear is that these might only be large opportunities, such as the redevelopment of an airport, when many of our communities are worried by the collapse of our town centres; there could be buckets of opportunity highlighted there, which could be driven by appropriate investment through sources like this.

[Torsten Bell]

It is characteristically bold of the Liberal Democrats to cautiously welcome these measures. However, the hon. Member is right to raise the question of Australia and Canada. We look across at places with similar pension schemes to those in the UK, and the levels of private asset allocation in those schemes is far higher than we see here in the UK, so he is absolutely right on that front.

On the two specific points the hon. Member raises, I agree on investment in the social rented sector. Many of our pension funds are already doing that, and I know that other major ones will be making announcements in that area in the months ahead. He also raises the breadth of investment opportunity. He is absolutely right that there are large, national-level projects, but there are also many more local projects. Where those are financed by the private sector, pension schemes may want to look at them as well.

[Mr Richard Quigley (Isle of Wight West) (Lab)]

Will the Minister spell out how this deal provides real change for constituents across the country, and what it means for infrastructure projects, especially housing?

[Torsten Bell]

My hon. Friend is absolutely right. There is no way that Britain can return to growth unless it starts investing in its future again, rather than living in its past, which is, if we are honest, what we have been doing in recent years. This is part of a much wider story. I hope that there is cross-party consensus—there is certainly consensus across the pensions industry, and among most economists who look at the UK economy—that we need to move to a higher investment level. The finance for that is one thing; some comes from abroad and some comes in domestically, but it also needs to come from our pension schemes.

Obviously, it is for the public sector to play its part, but we should be careful in distinguishing this. The Government are doing our bit on public investment levels, with £113 billion extra of public investment compared with the plans inherited from the Conservative Government. That is doing a lot of the work to move us to the higher investment equilibrium, but there are lots of projects, and in the end most investment happens in the private sector. That is where I welcome the progress made by the pensions industry today.

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

I thank the Minister for building on the work of the Mansion House reforms that I introduced two years ago. Westminster works best when Governments do not automatically tear up the work of their predecessors. Who knows, with this constructive attitude, we may see some tax cuts in the autumn Budget.

Does the Minister agree that there is a circularity in the argument that the reason pension funds do not invest in the UK is because returns are lower here? In Australia and America, the stock markets can depend on more than 40% of pension fund assets investing domestically to create bigger returns, compared with just 4% in the UK. Does he agree that if we are really to make these reforms fly, we will need to involve the 28,000 defined benefit schemes as well as the 4,000 defined contribution schemes?

[Torsten Bell]

That is more like it! That is what we want to hear from the Conservatives. The right hon. Gentleman rightly says that progress was made under the previous Administration. I have made that clear, and the Chancellor made that very clear this morning, as I said. I have discussed with many leading members of the pensions industry the fact that we are explicitly building on the progress that the right hon. Gentleman made, rather than throwing any babies out with the bathwater—even after they have had their nappies changed by the previous Lib Dem Chief Whip, the right hon. Member for Orkney and Shetland (Mr Carmichael).

I very grateful to the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) for the tone of his question. He is also right to highlight the lack of UK bias in some of our pension schemes. We see that right across asset classes, and it is not in the interests of the country in the longer term. As he knows, the focus today is on private assets, but we do need to think more broadly. What are we all after? We are after well-functioning capital markets, both public and private, and these reforms will make a big difference in that regard. I am not saying that there is not more to be done; I am sure that there is, and that he will continue to play an active part in those debates.

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

The Science, Innovation and Technology Committee inquiry into the innovation and growth of the regions has repeatedly heard evidence that the lack of access to investment, particularly outside London and the south-east, is a barrier to scaling up our fantastic science and tech start-ups, so I welcome the commitments to put more of our pensions and savings into the productive economy—and I am rather surprised by the response of the shadow Chancellor. Will the Minister say a little more about how these commitments will support growth through innovation?

[Torsten Bell]

My hon. Friend is absolutely right. She has long talked about both the issues that she raises: the regional balance of investment and the ability of growing firms to get hold of growth finance. The latter is a long-standing problem in the UK economy, and today’s accord will help to address it. Although we talk about private assets and investment helping with infrastructure, it is also about providing growth capital to a wider range of firms. Obviously, the onus is on us and private asset managers to provide ways for pension funds to direct capital. Those are often small-ticket items, and pension funds will need them to be aggregated up to a higher level. That is exactly the work of the British Business Bank, which I know she has engaged with through the Select Committee. On both points, she is 100% right.

[John Glen (Salisbury) (Con)]

Undoubtedly, the City of London is not in the best possible place when it comes to where it is investing and the amount invested in UK equities. When I was a Minister, we had the Hill review, the Kent review, the Austin review and the capital markets review. Everything was done to seek to open up the City to more initial public offerings and more momentum. This systemic undervaluing of UK equities, and therefore the lack of investment in them, needs to be set alongside the fact that billions of pounds of taxpayers’ money is used to enrich the size of pension schemes through tax reliefs. I urge the Minister to continue engaging with the City. I welcome the voluntary commitments given, but we must come to the point where the risk-aversion of DB schemes is called out, considering the amount of taxpayers’ money that is effectively going into them. Will the Minister continue to look carefully at the options available, given that the previous Government sought—and his Government will no doubt continue to seek—to meet them wherever possible?

[Torsten Bell]

I always enjoy discussing these things with the right hon. Member, as we have done over recent months. He offers a recognition of the challenge facing the country, and in focusing on what we can do to start changing things, he takes a much better position than that adopted by his Front Benchers.

I recognise the right hon. Member’s point about risk-aversion. There is a need for more innovation in our pension landscape more generally—that is one of the areas in which I am glad to see progress. I take a slightly more positive view than he does on the consensus that things need to change. We are seeing that in the pensions industry more generally, partly in relation to investing in a wider range of assets, as well as in embracing the agenda that we are setting out for a smaller number of bigger pension funds that are able to take different kinds of risks.

The right hon. Member asks specifically about public equities. My view is that the accord from the industry today will support that by funding a pipeline of companies that can grow to the level at which they can list publicly. Also, private assets will include private shares, including the alternative investment market and others. I think the picture is slightly more positive than the one he paints, but I am not hiding from the wider question he raises about capital markets. The UK Government, the Chancellor and my colleague the City Minister are focused on that—he will have heard their words on ISA reform and the rest of it. I look forward to further conversations on that.

[Shaun Davies (Telford) (Lab)]

How will my hon. Friend bring together UK pension schemes and local and regional governments in order to invest in local infrastructure projects, given that European and global pension schemes invest when UK pensions schemes too often do not?

[Torsten Bell]

My hon. Friend asks a great and important question. We will have more to say on this in the months ahead as we come forward with the final report of the pensions investment review and the pension schemes Bill. Some local government pension schemes have a track record of investing locally, but we need to see that at scale, and we need to see it crowding in private investment, including perhaps from private pension funds. That is exactly what our package of reforms, combined with the industry’s work with the accord today, will help us to deliver. He is absolutely right to push us on that, as I am sure he will continue to do in the months ahead given his record in previous roles. We want higher investment levels, not just in some parts but in all parts of the country.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Over the past 10 years, the Dow Jones has grown by 133%, the German DAX by 115% and the Nikkei by 87%, while the FTSE 100 has grown by 23%. It is against that backdrop that there is concern about investment in the United Kingdom. As other Members have said, given the fiduciary duty on asset managers, would they not be investing in the UK anyway if they thought that they were going to get the best return for their policyholders? If they were not already doing so, what has changed to ensure that that fiduciary duty is upheld as asset managers are coerced by the Chancellor to invest in markets that they would not otherwise have invested in?

[Torsten Bell]

Clearly, the hon. Member has not even read the accord. It talks about private assets. [Interruption.] No, the accord is about private assets while he mentions public assets. He also adopts the very market fundamentalist view that there is no role for Government at all, which is odd given what I hear him talk about in the Chamber day in, day out. Lastly, he also adopts extreme pessimism about the future of the country. I am much more positive about Britain than he is; that is not surprising, because his job is to pull it apart.

[Katie White (Leeds North West) (Lab)]

In its first six months, the National Wealth Fund, based in Leeds, has fuelled almost 10,000 jobs and unlocked £1.8 billion of private investment. Can the Minister confirm that this deal will equal more investment in British businesses?

[Torsten Bell]

My hon. Friend is a powerful advocate for Leeds and for Britain every single week in this Chamber, and everything she said is completely right. The job of the National Wealth Fund and the British Business Bank is to work with our nations and regions to ensure that projects can be de-risked and supported and that a wide range of private investors can come in behind that and make sure change actually happens, so that this becomes a country that invests in its future once again.

[Sir Julian Lewis (New Forest East) (Con)]

At a time when we have been commemorating a significant anniversary of VE Day, does the Minister share my concern that certain large pension firms are refusing to invest in profitable defence industries on spurious ethical grounds? Is that something that his pensions investment review might care to investigate?

[Torsten Bell]

I hear the point the right hon. Gentleman raises, and we have had those debates in this Chamber in recent months. The UK Government are doing what they need to do to invest in our security and defence and to support our defence industry more generally. We have made it very clear that private investment in those sectors is the right thing to do for our national security and our national economic growth. So far today, there have been calls for mandation and calls to oppose any mandation. There are choices available within pension funds for savers. The vast majority of funds—I think it is 99% within the National Employment Savings Trust, for example—invest in the broad defaults and do invest in the likes of defence companies.

[Andrew Pakes (Peterborough) (Lab)]

I warmly welcome the statement. One of the most woeful things about our national story has been the lack of investment in infrastructure, but that story is not just about GDP and productivity at a national level; it is also about places. In Peterborough, the lack of investment over the last decade has been woeful. I know that the public sector cannot do it all itself. While I put on record my thanks to the Department for Transport for this week announcing business case approval and funding for our station regeneration project, can the Minister explain how this policy will help investment in places like mine? Does it truly meet the definition of “further and faster”?

[Torsten Bell]

I am sure that Ministers in the Department for Transport will have heard my hon. Friend’s words and that his buttering up will have the desired effect over the years to come. He is right to highlight the synergies between public and private investment. We need to see higher levels of public investment, which is why this Government are putting in place £113 billion over these five years. That is being done because it will deliver real, tangible progress that people can see in their streets. Why do people think Britain went backward over the last 15 years? There are lots of reasons, but high up the list is visible potholes on every single road in Britain. We are turning that around as we speak. That wider investment also gives confidence to the private sector, and we see that across the piece—wherever we are delivering regeneration projects with public sector investment supporting them, it crowds in private investment in exactly the way my hon. Friend sets out.

[Lisa Smart (Hazel Grove) (LD)]

Before I was elected to this place, I was a trustee of one of the large public pension funds, and a lot of the correspondence I received was from retired social workers who were quite grumpy about their funds being invested in extractive industry companies listed in London. We know that more young people will opt in to invest if they are comfortable with what their pension fund is investing in. What more can the Government do to engage with the industry but also with young savers to ensure there are pension options that reflect their investment preferences?

[Torsten Bell]

The hon. Lady is right to say that we see higher engagement levels among young people today in investing more broadly. Whenever I go into a school sixth form, a surprising volume of the questions are not, unfortunately for me, on what the Government are doing and how we will bring inequality down and get growth up, but are instead, “How do we make a lot of money quite quickly?” We should support that level of engagement and active investment.

On the hon. Lady’s specific point, schemes are required to set out their policy and approach, and many pension schemes provide members with options for how they wish their funds to be invested. Nothing that has been set out today on the accord gets in the way of those approaches that are already in place.

[Matt Rodda (Reading Central) (Lab)]

I warmly welcome the Mansion House accord and the Minister’s statement. During the last Parliament, I had the pleasure of taking part in a cross-party visit with the then hon. Member for Hexham to see a solar farm that was funded by pension investment. It is a wonderful scheme close to the M4 and my constituency. Could the Minister say a little more about how this announcement will support much broader investment in the green transition, both in the south of England and across the country?

[Torsten Bell]

I have benefited from conversations with my hon. Friend about this topic, given his previous experience. He is completely right to set out that one of the large reasons—although not the only one—why we need to move to being a higher investment country is that our energy infrastructure has to be upgraded, and fast, if we are going to give this country the energy security it needs. He mentioned solar. This Government signed off in a matter of days and weeks a string of solar farms that needed to be invested in and that had been sitting on Ministers’ desks for year after year. More broadly, when the Leader of the Opposition stands up and says, “We don’t want to see this progress on net zero,” what she is really doing is putting up a sign across Britain saying, “Closed for business.”

[Lincoln Jopp (Spelthorne) (Con)]

Some 5,500 defined-benefit schemes have £1.6 trillion-worth of assets. The trouble is that the regulatory environment is skewed toward buying an insurance policy at the end of that journey. In order to change the way in which trustees and fund managers invest, the Minister has to change the end state. What discussions has he had with the Pensions Regulator and the Association of British Insurers about changing that particular game?

[Torsten Bell]

We have discussed some of these issues in the past, and I look forward to the conversations that I am sure we will have in future, not least around the pension schemes Bill. It is true that for many in the industry, buy-out of their defined-benefit scheme is the end point they are looking to reach, and the number that can reach that point has risen significantly in the recent past as more schemes have moved into surplus. Our job is to provide a range of options for those DB schemes. We have discussed the superfund regime that we will bring forward regulations on through the pension schemes Bill. We have also talked in the last few months about the role of surplus release, which can benefit both employers who want to make investments but also scheme members. The hon. Gentleman is right to highlight that there are a range of options available to schemes, and they can take the one that is in the best interests of their members.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

The Mansion House accord is clearly a welcome step in aligning the UK’s pool of domestic pension capital with long-term growth, greater economic sovereignty and financial security in retirement. For this to succeed, we need greater clarity in who is stepping up, so can the Minister update the House on what discussions he is having with the industry about how firms intend to report progress under the accord in a clear and transparent way?

[Torsten Bell]

My hon. Friend is completely right, but I would use a slightly more optimistic tone. It is now the settled consensus of the entire defined-contribution industry that this is the direction we need to move in. Almost every single scheme is moving to thinking about how they will invest in a wider range of private assets. Many of them are looking to go further than the benchmark set out in the accord today. They want to do that because it is in their savers’ interests. It diversifies their assets and, over the longer term, leads to higher returns on average. The exact amount of those returns will obviously depend, but studies show that it ranges from 2% to 12% higher returns. It is absolutely in savers’ interests, and I think there is a broad consensus about doing that.

My hon. Friend is also right to say that we need to make sure that change happens. We will come forward in the pension schemes Bill with more details about how these developments will be monitored to make sure that change is delivered, because in the end, what the British people want to see is less talking about this and more actual investment.

[Richard Tice (Boston and Skegness) (Reform)]

Pension funds are, by definition, long-term capital and are therefore particularly well suited to being invested in long-term infrastructure. British pension funds investing in British infrastructure should be welcomed by us all, but I would caution against any specific mandating within sectors, which I fear may lead to lower performance. The thing about private markets is that they have almost no transparency in terms of valuation and liquidity. I urge the Government to encourage the pension funds voluntarily to be more open about how they value these private investments, to ensure greater confidence.

[Torsten Bell]

I thank the hon. Member for what I think is his support for the accord—

[Richard Tice]

indicated assent.

[Torsten Bell]

He is nodding, so I will take that as support. He will worry that he sounds dangerously like a Liberal Democrat when he sits on the fence as much as he just did. At least the shadow Chancellor has the guts to say he opposes it, because he thinks that that is simple politics to get him through the day. I am glad to see that the hon. Member has not learned enough, and I hope he enjoys the fence sitting while it lasts.

The hon. Member is right to say that schemes will want to be transparent about their asset allocation, partly so that savers can see what is going on, but also, to refer back to the question from my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson), so that the country as a whole can see that progress is being made.

[Alan Gemmell (Central Ayrshire) (Lab)]

It was a disappointing but unsurprising response from the Conservative Front Bench, and similarly from the SNP, to talk our country down. I congratulate those in the City on this announcement, which will mean new funding for companies across the UK, driving growth. Will the Minister set out what this means for constituents such as mine in Central Ayrshire and across Scotland?

[Torsten Bell]

That was a characteristically punchy and accurate contribution by my hon. Friend, and that is the difference between this Government and some of the Opposition parties: we want to see Britain succeed. We are investing in Britain’s success, and in the long run it will be higher investment, higher growth and higher wages that will turn round the long 15 years of stagnation.

[John Cooper (Dumfries and Galloway) (Con)]

The Daily Mail has said in its coverage of the accord today that industry leaders have warned that the Government must deliver a pipeline of investment opportunities to meet the new targets. What faith can savers have that this Government can deliver on that given that they touted GB Energy as a fantastic investment vehicle when in fact it is a damp squib?

[Torsten Bell]

Savers can have lots of confidence, because the pipeline is already being delivered: solar farms approved; onshore wind happening after being banned for years under the Conservatives; the national grid actually being built out for once; homes being built right across this country, and being opposed by Conservative MPs right across this country. The pipeline is happening, because this country is building once again.

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

I welcome the agreement that has been reached today. Does the Minister agree that the pension funds are able to make those ambitious commitments only because of the improved investment environment that this Labour Government are nurturing through economic stability—economic stability that is vital to protect working people, including those in Paisley and Renfrewshire South?

[Torsten Bell]

Exactly; that is what is going on. I speak to pension funds every week who say they are looking to increase their allocation of UK assets because political stability has been delivered—because Liz Truss has been exited from this building. I speak to Australian and Canadian pension funds as well who are saying that they want to open an office in the UK because political and economic stability has arrived.

[Sir Ashley Fox (Bridgwater) (Con)]

Increased investment in the United Kingdom is always welcome. Will the Minister confirm that this Government will never interfere in the fiduciary duty of pension trustees to get the best return for their members?

[Torsten Bell]

The job of pension trustees is absolutely to deliver for their savers and the accord today is delivering exactly that, making sure that we have diversity of asset allocations in our pension schemes. So the answer to the hon. Member’s question is yes.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

The shadow Chancellor spoke about public sector workers benefiting from this kind of investment. Before I came to the House, I was the chair of the Cornwall local government pension scheme, which very successfully invested 7.5% in local and social impact investments—in local renewables and local affordable housing. Will the Minister ensure that more of that happens in the future?

[Torsten Bell]

I thank my hon. Friend for her question. We should focus on the accord today, but the LGPS is a very important part of our pensions landscape; there are £400 billion-worth of assets under management, rising to £1 trillion-worth over the next two decades. It is right that we build on the LGPS track record of local investment to make sure that we get the absolute best value for that investment both for taxpayers in local areas and for local communities. That is exactly what our reforms will do—we will be coming forward with the final details in the pension investment review final report in the coming weeks—to make sure that we have bigger, professional, well-governed and locally investing pension pools.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his positive answers to the questions that have been posed from all parts of the Chamber today. While it is encouraging to see 17 workplace pension providers investing 10% in private assets, it is disappointing that Scottish Widows, for example, is refusing to sign up. What further can be done to ensure that investment will be focused not simply on London firms, as others have referred to, but throughout the United Kingdom, including the tremendous potential in Northern Ireland?

[Torsten Bell]

Some 90% of the industry, by active saver numbers, have signed up to the accord today, and the small number of large providers who have not signed up are supportive of the move towards greater private investment. There is a very broad consensus across the industry that this is the right way to go. Unrelated to that, but much more importantly, the hon. Gentleman is absolutely right that we need to see that investment right across the country, including in Northern Ireland and in his own constituency.

[Jim Dickson (Dartford) (Lab)]

I welcome the accord and the Minister’s words. People in Dartford are awaiting further news of a funding package for the lower Thames crossing, which the Government consented recently and is incredibly welcome to residents there. Does the Minister agree that this is just the sort of shovel-ready infrastructure project which pension funds could invest in both for the benefit of their savers and to drive economic growth for constituents including my residents?

[Torsten Bell]

My hon. Friend is absolutely right. The lower Thames crossing has been consented, and it is another example of this Government getting on with getting the country building again, and when we come to the spending review—[Interruption.] If I were in the Conservative party, I would not be talking about the lower Thames crossing; I really would not be. The regime for planning that the Conservatives put in place meant that hundreds of millions of pounds have been taken to build precisely diddly squat. This Government have given consent, and we will be setting out in the coming months the provision for that scheme to go ahead.

[David Pinto-Duschinsky (Hendon) (Lab)]

I congratulate my hon. Friend and Treasury colleagues on helping to deliver such an important agreement. The accord will unlock up to £25 billion of additional capital. It is a huge vote of confidence in the Government’s demand-side reform agenda to get Britain building and in our economic strategy, providing stability. What steps will the Government take to help make sure that investment is ramped up as quickly as possible, and to ensure that regulators help encourage investment of pension funds directly in real economic assets, for instance by looking at changes to the matching adjustment?

[Torsten Bell]

I thank my hon. Friend for his comments. It is nice to hear the positivity coming from him and other Members in this House who believe that Britain can do better than the last 15 absolutely terrible years. The investments we will be making, delivering on the supply of capital with the likes of the reforms today, while allowing building for housing, transport projects and the rest, are exactly what will make the difference in the longer term.

[Gregor Poynton (Livingston) (Lab)]

Innovation is one of Britain’s great strengths, with fast-growing firms driving over £1 trillion into the UK economy and supporting 3.2 million jobs. However, many of those firms, many of which are based in my constituency, still face stubborn barriers to scaling up, particularly around accessing long-term finance. How will the Mansion House accord help channel greater investment from pension funds into those scale-ups to help them grow?

--- Later in debate ---

[Torsten Bell]

Innovation is one of the ways in which we drive higher productivity, which is the only lasting way, alongside higher levels of investment, that we will see higher wages for all of our constituents, which is what everyone on both sides of this House wants. My hon. Friend is absolutely right to say that there is a long-lasting barrier to scaling up for our innovative companies right across sectors. That point was raised earlier by the Chair of the Select Committee, my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier). Specifically, we need our pension funds to invest in a wider range of private assets, and that will include through venture capital, which is how we make sure that we provide that growth financing that we all need to see. That is for the private sector to do, as has been mentioned, but it is our job to support that, and that is what the British Business Bank, drawing on some of the work put in place by the previous Government but now being scaled up, is seeking to do.

Oral Answers to Questions

Torsten Bell Excerpts

Monday 12th May 2025 Commons Chamber

[Blake Stephenson (Mid Bedfordshire) (Con)]

9. What steps she plans to take to encourage young people to increase their private pension pots.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

This is an important question, and one where we have seen some good news on the back of cross-party working over the last 15 years. Automatic enrolment has succeeded in transforming participation rates in workplace pensions, particularly for young people. Participation among all eligible 22 to 29-year-olds has increased from 35% to 86%, but there is much more to do. That is why the second phase of our pension review will look at further steps to improve pension outcomes for everyone, including those lucky enough to be young.

[Blake Stephenson]

I thank the Minister for that response. Thanks to the introduction of auto-enrolment, millions of young people are now saving for their retirement, but I have heard worrying reports in Mid Bedfordshire that increases in employers’ national insurance, which have resulted in pay freezes, are now causing people to decide to opt out of pension savings. Does the Minister recognise that risk to pensions adequacy? If so, what is he doing to address it?

[Torsten Bell]

Less than 1% of savers actively opt out of saving each month, but the hon. Gentleman is completely right to say that we need to remain vigilant and ensure that opt-out rates do not rise in the years ahead. There was some more volatility in opt-out rates during the pandemic, for reasons that I am sure he will understand, but, as I say, we have been seeing those come down recently. I am happy to keep talking to him about that in the years ahead.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

If we want young people, including those in my constituency, to believe in the value of long-term investing, they need to see that their pensions are helping to build the country that they live in and are not just distant markets. Will the Minister set out what steps he is taking to ensure that the Government’s pensions reforms encourage funds to invest more in UK infrastructure and hybrid companies?

[Torsten Bell]

My hon. Friend raises an important point. Although we celebrate the success of auto-enrolment, as the hon. Member for Mid Bedfordshire (Blake Stephenson) has just done, we must complete the job. We need bigger and better pension funds that are better able to deliver returns for their members, support our economy and invest in infrastructure and private assets in the months and years ahead.

[John Milne (Horsham) (LD)]

10. What estimate her Department has made of the potential impact of changes to the eligibility criteria for personal independence payment on the number of people receiving that payment who will move into employment.

--- Later in debate ---

[Wendy Morton (Aldridge-Brownhills) (Con)]

12. What assessment she has made of the potential impact of means-testing the winter fuel payment on levels of pensioner poverty.

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

I refer the right hon. Member to the Secretary of State’s letter of 19 November to the Work and Pensions Committee. As well as means-testing the winter fuel payment, this Government launched the biggest ever pension credit take-up campaign, because we want all pensioners to receive the support to which they are entitled. The result has been almost 50,000 more awards than were received during the same period in the preceding year.

[Wendy Morton]

The Government did indeed launch a campaign to increase the number of pension credit applications, but sadly there was also a surge—an increase of 133%—in the number of claims that were not allowed, and more than 100,000 awards were not made. For many pensioners, including a number in my constituency, the winter fuel payment was a lifeline—indeed, many need their heating to be turned on throughout the year, not just during the winter—but just because of an arbitrary threshold they now receive nothing at all, and they are losing out. Will the Government look at this again, given the impact and the risk of pushing more pensioners into poverty?

[Torsten Bell]

I can tell the right hon. Member about pensioner poverty. It halved under the last Labour Government and it rose on the Conservatives’ watch, by 200,000. Yes, we have had to make some difficult choices, but it is because of those difficult choices that we can afford a £31 billion annual increase in the state pension over the current Parliament and an extra £26 billion a year for the NHS. None of those choices would the Conservatives back, which is why the NHS and the state pension would be endangered on their watch.

[Cat Smith (Lancaster and Wyre) (Lab)]

In my 10 years as a Member of Parliament, I have run consistent campaigns throughout my constituency to raise awareness of pension credit and encourage hundreds of people to sign up to it, but I know that many of my constituents are just above the threshold and by no means well off. What assessment will the Government make of those who are not eligible for pension credit but will still face fuel poverty next winter?

[Torsten Bell]

I am grateful for the work that has been done by councils and third sector organisations throughout the United Kingdom to drive uptake of pension credit. That work has led to the 50,000 extra awards that I mentioned earlier. The choices we have made mean that we can protect pensioners across the board, and the 4.1% increase in the state pension in April was possible exactly because of the tough choices that we have had to make.

[Mr Tom Morrison (Cheadle) (LD)]

Stockport council was one of the first local authorities to roll out the warm spaces programme that was used by third sector groups to support people in need during the winter months. Will the Government commit themselves to helping authorities roll such programmes out earlier, in the face of the winter fuel cuts and rising energy prices?

[Torsten Bell]

I am grateful for the work of local authorities, including mine in Swansea, to provide places for pensioners and, in fact, members of all age groups to go to if they are in need during the winter. The most important action we can take is tackling directly the cause of the issues that the hon. Gentleman has raised by bringing down energy bills in the years ahead, moving away from the system that the Conservatives left us—which is dependent on the price of gas driven by the action of dictators such as Putin—and continuing to raise the state pension faster than inflation over the current Parliament, which is why the new state pension is set to increase by £1,900 by the end of this Parliament.

[Damien Egan (Bristol North East) (Lab)]

This morning, the Work and Pensions Committee was at the Welsh Assembly, where we heard from Wales’s Older People’s Commissioner as part of our pensioner poverty review. I was impressed that Wales has a role with real legal clout. From what we heard, it is making a difference for older people in Wales. Do Ministers agree that we should at least look at extending that to England and Scotland?

[Torsten Bell]

We should always learn lessons from Wales. In fact, this Government are already doing that. The roll-out of free breakfast clubs, which is happening across England at the moment, was pioneered in Wales. Children are receiving a free breakfast because of the work done in Wales. I praise my hon. Friend and the entire Work and Pensions Committee for the work that it is doing as part of its inquiry into pensioner poverty. I will be coming to give evidence to the Committee shortly, and I know that its members have been listening not just in Wales but more widely, with events in Glasgow and Manchester as well.

[Mr Speaker]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

I suspect that the hon. Members on the Government Front Bench are now surrounded: I suspect that they are the only people left in this Chamber who are prepared to defend the cutting of the winter fuel payment. Dozens of their own MPs have now joined a long list of people telling the Government that they have got it wrong, including the Welsh First Minister—talking about learning lessons from Wales—the money-saving expert Martin Lewis, and voters up and down this country. The Conservatives have led this campaign from the start, but if the Government will not listen to us, will they now listen to everyone else and think again?

[Torsten Bell]

We have set out our policy, but here we are 10 months on and I have no idea what the Conservatives’ policy is. I am not even sure that they know what their policy is. For all the shouting, there is no promise to reinstate a universal winter fuel payment. There is one policy from the Leader of the Opposition, the very woman who called for the winter fuel payment to be means-tested in 2022: now, she wants to means-test the entire state pension. Apparently, that is “exactly the sort of thing we will look at”. She thinks that is bold policymaking. It is not—it is bonkers.

[Mr Speaker]

The good news is that the Minister has no responsibility for the Opposition.

[Helen Whately]

That is not something that the Leader of the Opposition said. To the point in hand—the winter fuel payment—I wonder for how much longer this tone-deaf final stand will go on. Every time the Government talk about winter fuel payments, they make out that they had no choice, but that is simply not true. To govern is to choose. At best, this policy was only ever going to save £1 billion or so, but they are spending £8 billion on setting up an energy company, and the cost of asylum hotels will rise to £15 billion under Labour. This has always been a choice, and it is the wrong one. Can the Minister guarantee that next winter, every single one of the 750,000 poorest pensioners who missed out on the winter fuel payment this year will receive it?

[Torsten Bell]

I can guarantee that this Government are going to deliver on our priorities for pensioners by raising the state pension, with a £470-a-year increase this April, and saving the NHS, with a £26 billion increase every single year. What will the Conservatives be doing? None of that, because they oppose every single measure required to fund it. We know what the Tory plan is, because we have just lived through it: pensioner poverty rising and the NHS collapsing.

[Ann Davies (Caerfyrddin) (PC)]

13. What steps she is taking through the social security system to tackle poverty in Wales.

--- Later in debate ---

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

More than 9 million people in the UK are not actively seeking work, with long-term illness cited as the single largest reason. Does the Minister agree that rather than penalising those who are sick or disabled, the Government should introduce a wealth tax to fund a genuine transformation of our public services, enabling us to face the future with a healthier, happier and more productive workforce?

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

I refer my hon. Friend to the fair, tough choices in the 2024 autumn Budget: there are increases in inheritance tax, capital gains tax and dividends tax, and there are fair taxes on private jets and private schools. For what purpose? To fund investment in our public services, with £50 billion extra every year by the end of this Parliament. This is bringing an end to an era of austerity. Those are the fair choices that this Government have made and will continue to make.

[Christine Jardine (Edinburgh West) (LD)]

A number of constituents of mine in Edinburgh West—former police officers, and former and current NHS staff—have come to me with concerns about the way the McCloud judgment on public sector pensions is being implemented, and worries that they will be negatively impacted at great cost. How will the Government ensure that there is no negative impact?

[Torsten Bell]

The implementation of the McCloud judgment—unfortunately, one of the sad consequences of botched reform under the Liberal Democrat and Conservative coalition Government before 2015—is important, and we need to take it seriously. If there are specific cases, please do write to me about them. I am aware of the issue about making sure that scheme members get the details from the NHS pension scheme, and we are working together closely to make sure members get those letters as soon as possible.

[Mr Speaker]

I call Perran Moon.

Pension Funds

Torsten Bell Excerpts

Wednesday 23rd April 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

Everyone deserves a secure retirement. For many, their occupational pension is an essential part of that. Having spent years paying into a pension scheme, it matters to all of us that they get a decent pension out. It must be decent in the sense of being adequate for their needs and decent in terms of providing the benefits that they were promised.

I am pleased that the hon. Member for Stratford-on-Avon (Manuela Perteghella) has secured this debate and spoken so well during it on a topic deeply relevant to all our constituents—after all, we are all either a pensioner or planning on becoming one at some point. I thank her and everyone else who has spoken. We have heard about a wide range of issues, relevant to different pension schemes and different pensioners. I will not comment in great detail on specific pension schemes, although I am sure that specific employers will have heard hon. Members’ points this evening.

I will respond in more general terms to the points that the hon. Member for Stratford-on-Avon and others have raised. She raised the issue of integrated pension schemes, which are sometimes called clawback schemes. I appreciate that that type of scheme can be controversial, thanks to the change in the private pension income involved. All of us sympathise with anyone who expected a straightforward income increase when their state pension kicked in, only to find that things were much more complicated than that. I have read and listened to representations on this issue myself.

As with all defined benefit schemes, integrated schemes are required to pay out the full value of the promised pensions to each member, as set out in their scheme rules. That provides certainty, security and a base on which savers can build their retirement plans. Integrating an occupational pension scheme with the state pension was a core design of some schemes, and that has pros and cons. It used to be a common feature of final salary schemes, covering almost half of schemes, according to one survey from the early 2000s, although it is far less common today, partly for some of the reasons that the hon. Lady set out.

The original aim was to provide a smooth level of pension income throughout retirement that started before the state pension age was reached, with a higher amount of occupational pension paid before state pension age, followed by a reduction in the occupational pension when the member received their state pension. The amount of the reduction is required to be set out in the pension scheme rules, and it is therefore very important that the rules are clearly communicated to those involved, as my hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher) made clear.

While the aims of integrated pensions are clear, it would, of course, be a big shock to anyone to see their occupational pension reduced upon receiving the state pension if they had not expected it. It is therefore important for employees to understand the pension benefits they can get from their scheme, and the Government place great weight on the importance of that clear communication, without which no one can plan properly for the future.

All schemes are required by law to provide every member with basic information about the scheme, either before they join or very shortly afterwards. That includes an explanation of the contributions in the case of some of the schemes mentioned today, which were on the employer side only, but also how benefits were calculated— exactly the integrated clawback mechanisms we are talking about this evening. If savers have not received clear communication in the form required by law, they must have avenues of redress. They can bring a complaint to their scheme’s internal dispute procedure, but if that does not resolve the issue, the Pensions Ombudsman is there to act.

There have been some calls tonight for the Government to compel the withdrawal of integration arrangements—those calls have been common for some time, and I have heard them. I recognise some of the arguments being made, but I owe it to this House to be clear that we cannot retrospectively change the benefits schemes offered to their members. Any legislative change would affect all integrated schemes, risking the future of some that are less well funded. However, I do want to engage with the question of pension fairness, which so many Members from across the House have raised this evening. While the law is very clear that men and women must be treated equally within any scheme, I understand the points that have been raised about the effects of those scheme rules, which are felt very unequally indeed.

The inequality of pensions more broadly is a big issue for society, particularly for women and lower earners over the years. I want to celebrate some progress that has been made, but also recognise how much more there is to do. On progress, the new state pension introduced after 2016 by the previous Government has made a significant difference in closing the gap between the average amounts received weekly by men and by women, to equalise those amounts in practice. The hon. Member for Strangford (Jim Shannon) mentioned the importance of the state pension—it is the bedrock of all of our pension savings—so that is progress that has been made. We have also seen significant progress on automatic enrolment, with 89% of eligible women now saving into a pension. That is a big change from the 2000s, when as few as 40% of women were saving into a pension pot.

However, there is much more to do. The gender pension gap, for which the Department for Work and Pensions now publishes figures the first time, is very large indeed. Some of that reflects some of the historical issues we have been discussing, but it also reflects our labour market. Women have lower employment rates, are much more likely to do part-time work, and are much more likely to be lower earners—for example, 3.9% of women work in low-paid work as opposed to 2.8% of men. Those underlying structural inequalities then manifest as pension inequality, which is one of the reasons why it is so important that reform of the state pension has moved towards a more equal treatment of women and men.

As for what the Government are doing about pension inequality, we will shortly set out a timeline for phase 2 of our pensions review, focusing on adequacy and, in particular, addressing some of these very important questions. Although people talk about pension adequacy on average across the whole population, it is very different for different groups, which is exactly why the pensions review will need to reflect on the questions raised. However, it also highlights the importance of some of the changes being brought through in the labour market by this Government, including through the Employment Rights Bill. That Bill will disproportionately benefit women, who are more often lower earners.

Turning to the question of indexation, some schemes do provide indexation above the legal minimum on a discretionary basis. Like the hon. Member for Surrey Heath (Dr Pinkerton), I sympathise with those members who had understood that they would receive ongoing discretionary increases, only to be let down. We take their concerns seriously; I have now met several groups of MPs on exactly this issue, and have asked the Department to work with the Pensions Regulator to understand why schemes are not making discretionary payments and to monitor trends.

Both trustees and employers need to think carefully about the effect of inflation on members’ benefits—that is especially true on the back of the exceptional inflation in recent years. Pension scheme trustees, after all, have a fiduciary duty to scheme members—a duty they should apply when considering discretionary increases. That is directly relevant to recently announced reforms on the use of surpluses in defined benefit schemes, as several Members have raised. Those reforms will make it easier for individual schemes to make decisions that improve outcomes for sponsoring employers and members. That could include discretionary benefit increases, where trustees can consider the situation of those members who would benefit from such rises and whether the scheme has a history of making such payments. Trustees will, in negotiation with the employer, be responsible for determining how members may benefit from any release of surplus.

I thank Members who have contributed this evening, in particular the hon. Member for Stratford-on-Avon. We all benefit from the opportunity to address this important topic. As the Minister for Pensions, it is my priority to ensure that people who work hard can enjoy the retirement they are owed. That is what this Government will always do.

[Richard Foord (Honiton and Sidmouth) (LD)]

My hon. Friend the Member for Hazel Grove (Lisa Smart) asked whether pensioners might be given more control over where their pension funds are invested. That issue has also arisen recently in terms of whether pension funds can be invested in defence companies in the UK. Will the Minister comment on that?

[Torsten Bell]

I thank the hon. Member for the reminder to respond to that point. He will know that trustees already have a responsibility to invest in the interests of their members and that the law requires trustees of significant schemes—with more than 100 members—to set out a clear statement of their investment principles. The hon. Member for Hazel Grove (Lisa Smart) mentioned some of the issues they will want to consider in that. That is how trustees provide clarity to their savers. There is also then scope for individuals, particularly in larger pension schemes on the defined contribution side, to make choices about where they invest their funds. We see that, for example, with the National Employment Savings Trust, the Government-backed pension scheme, where individuals make different choices on the grounds of ethical issues across the board, including defence, as mentioned by the hon. Member for Honiton and Sidmouth (Richard Foord). I thank him for his intervention and for reminding me to come back on that point before concluding.

It is important that we offer people secure retirements. That is the job of this Government, it is my job as the Pensions Minister, and it is what our pensions review is focusing on doing. It is what this Government will always do.

Question put and agreed to.

Green Book Review

Torsten Bell Excerpts

Wednesday 2nd April 2025 Westminster Hall

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to have you overseeing us today, Mr Pritchard. Like everybody else, I congratulate my hon. Friend the Member for Congleton (Mrs Russell) on securing the debate. I also thank all Members for setting out their views, which are in themselves important contributions to the Green Book review that His Majesty’s Treasury is undertaking, and which is our focus this afternoon. Before I respond to the specific points raised, I will spell out what the Green Book is and what it is for.

The Green Book is a technical guidance on how to assess the costs and benefits, and the opportunities and risks, of different options to achieve Government objectives. It is not a decision-making algorithm or a test that must be passed. It is a framework for identifying and assessing different options. It is an important framework but, as lots of Members have rightly pointed out, it should be just one input into decision making. It is ultimately for Government, both national and regional—who are held to account by this place, in our case—to decide on policy objectives and spending choices. We must not evade our responsibilities behind technical frameworks.

This Government have listened to the concerns raised about that framework, such as concerns from our mayors, including my friend Steve Rotheram, and Members present today. That is exactly why the Chancellor announced a review in January: to ensure that all regions get a fair hearing when it comes to the allocation of public funds. The review is looking at potential problems with the guidance itself, as well as how that guidance is being applied by the Treasury, and how it is being applied by other Departments or public bodies. Since January, the Treasury has been in conversations with a whole range of organisations and individuals, regional and national, and this debate offers us the opportunity to hear the well-considered views and perspectives of Members. I assure all Members that what they have said today will have been heard in the Treasury, and will influence that review as it is finalised ahead of the spending review in June.

The frustration that many people feel on this subject is entirely understandable. It is rooted ultimately not in technical questions about cost-benefit analyses, but in unacceptable outcomes, not least flatlining wages for the UK as a whole over the past decade and a half—and, for some areas, abandoned during the 1980s and sidelined during 2010s, for far, far longer.

The frustration is understandable, when low investment manages to combine being both the cause of this economic decline and a visible sign that it is taking place, not least when our roads are riddled with potholes, our trains—whether they are Pacers or not—are unreliable and our housing stock is deeply inadequate. Public, not to mention private, investment has simply been far too low for far too long. It has too often not reached every part of the country, as my hon. Friend the Member for Warrington South (Sarah Hall) set out and as any rail user in Wales—particularly in Swansea, since the electrification does not reach our great city—will say.

For this Government, growth in every part of the country is the goal, because Britain is scarred by deep regional inequalities, as my hon. Friend the Member for Crewe and Nantwich (Connor Naismith) set out eloquently. Our shared growth is the goal, and higher investment is a necessary, if not sufficient, condition for it. That is why we have ended the public investment boom-and-bust cycle, with £113 billion higher investment this Parliament, sustaining public investment at levels not seen since the 1970s. We will work side by side with our mayors, local leaders and devolved Governments to support all regions to achieve their potential, investing for the long term in the infrastructure, transport and housing needed to ensure that all parts of the UK benefit from growth.

We are supporting empowered local leadership with the publication of the English devolution Bill, which my hon. Friend the Member for Congleton mentioned, and we are moving away from the short-termist, competitive approach to local funding so that we can instead support local leaders to drive growth in their areas. That includes implementing this month the first integrated settlements for Greater Manchester and the West Midlands combined authorities, ahead of the roll-out to other mayoral areas.

We are investing in economic infrastructure across the country: we are committed to the trans-Pennine upgrade—the largest investment in northern rail for decades, with a further £415 million announced last week; we are backing West Yorkshire mass transit; and £4.8 billion for the strategic road network will deliver critical road schemes across the country. We are working with Doncaster council and the Mayor of South Yorkshire on their plans to reopen the south Yorkshire airport. There are places outside the north-west that will also classify themselves as being in the north and feel left out by this discussion, so I am getting some of them in too; we will set out further details of our plans for infrastructure across the whole UK in the 10-year infrastructure strategy, which is to be published in June.

My hon. Friend the Member for Leigh and Atherton (Jo Platt) and the hon. Member for Hazel Grove (Lisa Smart) both rightly noted that we must care about a wider range of social factors, including deprivation, when making investment decisions. They are both right.

My hon. Friend the Member for Congleton raised the issue of consultants—an issue that is emerging again in the review that is under way. Of course, while there are times when the use of consultants is value for money, more needs to be done to improve the capacity of local government in this area, and by national Government to ensure that their asks in that regard are proportionate and sensible.

Other Members, including my hon. Friend the Member for Cramlington and Killingworth (Emma Foody), have made a powerful case for specific projects, particularly transport projects. I am sure that they will continue to bend the ears of each and every Department for Transport Minister, or, in some cases, the Mayor of Greater Manchester, where they are the appropriate decision maker, and I was glad to hear that everybody recognised that that should happen within important public spending constraints.

[Andrew Cooper]

Does the Minister agree that in recent years we have seen such a reduction in local government funding that local governments have lost the capacity to develop long-term transport projects and a pipeline of projects, so when the Department for Transport comes along and says, “We’ve got 20 million quid burning a hole in our pocket—what can you spend it on?” many authorities are not in a position to be able to do that? Is that something he thinks needs to be rectified as part of the comprehensive spending review in the 10-year transport plan?

[Torsten Bell]

My hon. Friend is completely right about both points. We need to address that, partly by providing decent funding for local government. Members will have seen that being laid out over the last few months since the autumn Budget, but it needs to continue. We need to make sure that, instead of setting out short notice, competitive pots between areas, we empower local leaders to decide the right answers for their areas—and that is exactly the approach we are taking.

My hon. Friends the Members for Loughborough (Dr Sandher) and for Bolton North East (Kirith Entwistle) rightly noted that we need to consider the dynamic effects of investments—a point also powerfully made by Diane Coyle in recent years. I agree. There are questions about whether the implementation of the 2020 review has been followed through in that regard. I can reassure my hon. Friend the Member for Loughborough that the Department for Transport does use the same value for commuter time for all parts of the country. He may think it is not enough or that it is too much, but it is the same pounds and pence in every part of the country for commuter times specifically.

I can reassure the hon. Member for Hazel Grove that the Green Book is not preventing this Government from delivering a step change in green investment. If the hon. Member for North Bedfordshire (Richard Fuller) had had time, I am sure he would have said that we are investing too much in green projects—or at least his party’s leader would.

My hon. Friend the Member for Mid Cheshire (Andrew Cooper) noted that there are real dangers of overreliance on BCRs. He is right: decision-making should always be rooted in strategic objectives, or what he called, “What are we trying to achieve?” Closing regional gaps is exactly what our objective should be, and it is for this Government.

The shadow Minister, the hon. Member for North Bedfordshire, took his life in his hands by listing the investments happening in his part of the south—broadly defined—although he may have saved himself by pointing out that maybe it was excessive. I look forward to his letter.

As we have heard, investment matters, and it matters that all parts of this country get a fair hearing when it comes to infrastructure investment. This Government understand that, which is exactly why we are acting to support growth across all regions. Once again, I congratulate my hon. Friend the Member for Congleton on securing this debate.

Winter Fuel Payment

Torsten Bell Excerpts

Wednesday 19th March 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I listened closely to those remarks but am still none the wiser as to whether the Conservative party is committed to reversing the changes to the winter fuel payment. I am grateful for the opportunity to have this debate. The changes to the winter fuel payment have been much discussed and debated many times by hon. Members in this place. Governments make decisions and, rightly, they are held accountable for them in this place, especially when those decisions affect pensioners, whom we all want to support. This Government have made, and will continue to make, responsible choices in our management of the public finances, but also in ensuring that we deliver on what matters most.

[Wendy Morton (Aldridge-Brownhills) (Con)]

How on earth can the Minister say to a pensioner that he has made a responsible decision, when that pensioner is sitting at home worried about whether they dare turn up the heating when they are cold, because they cannot afford it?

[Torsten Bell]

I was coming to the exact answer to that: responsible choices are how we can ensure that we deliver what matters most to pensioners: a rising state pension and rescuing an NHS that was collapsing on the right hon. Lady’s watch. That means we will make choices that may not always be easy—I recognise the strength of feeling on this issue in this place—but are necessary. Everyone in this House knows the economic and fiscal context.

[Mr Jonathan Brash (Hartlepool) (Lab)]

In Hartlepool we have taken a proactive approach over this issue. Since October I have been working with Hartlepool citizens advice bureau to help pensioners get the support that they deserve. The campaign ends next week, but as of today we have managed to raise £885,900 of additional annual income by ensuring that pensioners get the benefits to which they are entitled. Will the Minister congratulate Hartlepool citizens advice bureau on its extraordinary work?

[Torsten Bell]

I congratulate it and I thank my hon. Friend, and probably hon. Members on both sides of the House, who I am sure have engaged with local charities in supporting their pensioners in the months that have gone by.

[Saqib Bhatti (Meriden and Solihull East) (Con)]

The Minister is being generous in giving way, and I am sure that he will continue to be. He talked about making responsible choices. According to Government analysis, 100,000 pensioners are being pushed into poverty. Is that a responsible choice?

[Torsten Bell]

The poverty assessment, which we provided to the Work and Pensions Committee, does not take into account any increase in pension credit take-up, which I will come to shortly. The shadow Minister, the hon. Member for Faversham and Mid Kent (Helen Whately), talked about absolute pensioner poverty—the kind of poverty that should be falling every year as an economy grows. But relative poverty—a form of poverty that we look at—rose under the last Administration. Opposition Members may not like to hear this, but relative pensioner poverty rose by 300,000 under the last Government. I just gently say that when it comes to pensioner poverty, we have more to do—I take the hon. Gentleman’s point seriously—but the record of recent years is not one of success on that front.

Everyone in this House knows the economic and fiscal context—the economic stagnation of the past decade, visible in flatlining wages, collapsing public services and strained public finances. Every economist and every person in the country knows that Britain has lived through an unprecedented economic failure. In a challenging fiscal environment, difficult choices are unavoidable. The Government have set fiscal rules and we will stick to them. But, as some older Members may remember, prudence is for a purpose: to support a growing economy that benefits everyone. It is the prerequisite for rescuing our public services and rising living standards for workers, but also for pensioners.

[Suella Braverman (Fareham and Waterlooville) (Con)]

In my constituency, even after taking into account pension credit, 20,000 pensioners will lose out from the Government’s cuts. Maggie from Waterlooville wrote to me to say:

“We have cut back on heating, we are both in our seventies and we both feel the cold.”

How on earth does the Minister justify that as a responsible choice? How on earth will forcing pensioners into pneumonia or influenza help the NHS? How on earth can the Minister come here and justify treating hard-working pensioners with such disdain?

[Torsten Bell]

I do not think that anybody in the House is going to be treating pensioners with disdain. That is why the state pension will rise by 4.1% in April, why we have put £26 billion into the NHS and why we intend to learn the lessons of the last Administration’s failure to cut pensioner poverty. [Interruption.] I have already taken quite a few interventions, so I will make some progress.

As hon. Members know, winter fuel payments are now targeted at lower-income pensioners. The benefit is paid to over a million households who are receiving pension credit in England and Wales or on other income-related benefits. Pensioners in receipt of attendance allowance or disability living allowance can also qualify for pension credit. Crucially, those benefits do not reduce the pension credit award and can mean receiving additional support.

I am sure that we all want to see every pensioner get the support they are entitled to, but in recent years far too many pensioners have missed out, with over a third of eligible pensioners not claiming. So since September, we have been running the biggest ever pension credit take-up campaign, building on campaigns run by the previous Government, as the shadow Secretary of State mentioned. The campaign has included adverts on television, radio, social media and advertising screens in GPs’ surgeries. We have engaged with a wide range of stakeholders and partners including local councils, community groups and charities. I have certainly done that in Swansea, as I am sure hon. Members across the House have done in their constituencies.

[Wendy Morton]

The Minister is being generous in giving way. I welcome the fact that the Government have done work to raise awareness of pension credit, just as we did when we were in government, but that does not really reach the group of hard-working pensioners who are too proud to come forward and apply for pension credit; it is just not what they would do. The £300 winter fuel allowance was a lifeline that they have now lost.

--- Later in debate ---

[Torsten Bell]

The right hon. Lady makes a fair point. I will come back to what more work we need to do to understand the barriers to people applying for pension credit. Research shows, though, that awareness is the biggest barrier. We need to keep breaking down those barriers, but I recognise the point she makes.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

Does the Minister agree that it is extraordinary to be lectured about responsible choices by members of the last Cabinet, whose irresponsible financial choices left this Government with a £22 billion black hole? We have to clean that up because of their irresponsible financial management.

[Torsten Bell]

My hon. Friend proves that, while Conservative Members may be disappointed by the quantity of hon. Members behind me, that is definitely made up for in quality.

[James Wild (North West Norfolk) (Con)]

Will the Minister give way?

[Torsten Bell]

I will make some progress, because otherwise we will be here for several days.

I take this opportunity to thank each and every organisation that supported the pension credit take-up campaign, as well as the many friends, neighbours and family members who looked out for pensioners and helped them to claim. A few weeks ago, we released the first data on the impact that the campaign has had. We have seen 235,000 pension credit applications in the 30 weeks since July, which is an 81% increase on the comparable period in 2022-23. On the question about processing rates, with over 500 additional staff allocated directly for that, we have seen a similar rise in the number of claims processed. Most importantly, that has led to almost 50,000 extra awards compared with the same period last year.

[Mr Joshua Reynolds (Maidenhead) (LD)]

What would the Minister say to residents in Maidenhead who have told me that they are not eligible for pension credit? He talks about responsible choices, but the choice those residents now have to make is whether to dip into their savings to pay for their energy bills or to turn off their heating at night. A Labour voter contacted me who had had to make exactly that decision, and she said that she will never vote Labour again. Is that really the change that the Government were elected to introduce?

[Torsten Bell]

No, the change that we were elected to introduce was to save our NHS and to return our economy to growth so that we can raise living standards for pensioners and for workers right across the country. That is the change that we were elected to deliver and that is what we are going to do.

[Dr Murrison]

The Minister is being generous in giving way; congratulations to him on making the best of a bad job. He knows that old people die in cold homes. In 2017, the Labour party did some research on which to attack the Conservatives, which showed that 4,000 old people would probably die in the event that we removed winter fuel allowance; we did not do that. I wonder whether he got his officials to repeat that research and, if so, what it showed.

--- Later in debate ---

[Torsten Bell]

All of us in this place should be slightly careful when talking about what is a highly sensitive subject. There is not robust analysis that can separate out different causes of excess mortality over the winter. [Interruption.] I will come on to answer the right hon. Gentleman’s question. If we look at the excess mortality data for this winter, we see that deaths are actually down. It is hard to separate out the effects of different measures—[Interruption.] No, this is an important point, because some hon. Members have been looser with their language than they might have wanted to be in past debates. We have seen the level of deaths come down this winter. There are lots of things—

[Several hon. Members rose—]

[Torsten Bell]

I will make some progress, and then I will give way further.

[Dr Luke Evans]

Will the Minister give way on the data processing point?

[Torsten Bell]

Go ahead.

[Dr Evans]

I am terribly grateful to the Minister. He made the point about there being 235,000 applications, which was great. In my written question, I asked about that and he came back and said 117,800 claims were awarded, but 114,500 were not. Those were clearly people who felt they were entitled to pension credit but who will now struggle. What support is available for those people, who are clearly right on the cusp and are now not eligible and do not have pension credit?

[Torsten Bell]

The hon. Member makes an important point. We should encourage people to apply, even if a percentage of those will always not qualify. The criteria under which people have been assessed are those put in place by the previous Administration for pension credit. However, he is right; we want as many people as possible to apply, even if some of them are not successful, for exactly the reason raised by the right hon. Member for Aldridge-Brownhills (Wendy Morton)—we need awareness of pension credit to be higher and we need to encourage claims, because a lot of people who are entitled are missing out. It is not always absolutely clear whether someone is entitled, for example if they are in receipt of attendance allowance.

All the progress since September that I have spoken about is a real achievement, but I am the first to say very clearly that it is far from job done. Far too many people are still missing out on pension credit. We are already building on this winter’s campaign, and that includes writing to all pensioners who make a new claim for housing benefit and who appear to be entitled to pension credit. In the longer term, this Government are committed to bringing together the administration of pension credit and housing benefit, making it easier for pensioners to get support. That was also a policy of previous Administrations at different times, even if delivering it was not prioritised.

We will also undertake new research on what helps boost take-up—that goes to the question asked by the right hon. Member for Aldridge-Brownhills. There is a slight misunderstanding about people wanting to apply but being reluctant—the evidence does not support that significantly. The key problem is awareness of the system.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

The Treasury always says to every new Government, “We have this jolly good idea. Just get rid of the winter fuel payment and save yourselves a lot of money.” We looked at that when I was in the Department and eventually rejected it based on two elements of the impact assessment. First, there was the point about those who were right on the cusp of poverty—80% of them, as has been mentioned, will be damaged by the policy. Secondly, there is pension credit take-up. We get hammered either way, because if we push for pensioners to take up pension credit, the savings are lost and we spend more, but if they do not take it up, they end up in poverty. That was why we rejected the idea and, I think, every other Government up until now have too. Will the Minister have another review of that and ask his team at the DWP whether they should reject this policy now, because it will not work?

[Torsten Bell]

On the question of savings, this measure will make savings, even taking into account the increase in take-up; the evidence of that is very clear. I will also just reflect on the right hon. Gentleman’s point that his party’s Government did not take up the opportunity that the Treasury presented to means-test winter fuel payments. The truth is that the last Government and the new Labour regime before that allowed pension credit to be eroded year after year by inflation. Since the period when he considered the measure, there has been over 50% inflation erosion, so the policy of the previous Government was to cut the winter fuel payment year after year. In real terms, I am afraid that is how inflation operates.

We will not just carry out research; we will put the evidence that it provides into practice. I welcome suggestions from right across the House on what more we can do to drive take-up of pension credit.

[Richard Foord (Honiton and Sidmouth) (LD)]

My point relates to the cliff edge. Anne Addis from Cullompton is a 76-year-old widow. Her late husband’s Army pension pushed her just £15 over the pension credit threshold. That means that she is one of 130,000 people who are worse off than those on lower incomes who continue to qualify for pension credit. Will the Minister consider introducing a taper to get rid of that cliff edge?

[Torsten Bell]

We have all met constituents who raise this issue, and the hon. Member is right to say that there are challenges with the cliff edge. It is in the nature of the pension credit regime, because the regime is about a minimum income guarantee. People sometimes think about it as if it had a threshold, but it is about providing minimum guarantee of minimum income, so I do not think that that is an appropriate way forward, but I would be happy to discuss this with him, as it is always useful to discuss these issues.

[Mark Pritchard]

Does the Minister agree with the Resolution Foundation, which I think he knows very well, and its enlightening paper “Public Pivot” from January this year, which talks about big implications for living standards? He may well know that document, although he did not actually write that one, for a change. It mentions the winter fuel allowance and states:

“Tax rises on top of lacklustre economic growth make for a gloomy living standards outlook in 2025.”

Is there not a direct correlation between living standards and this cruel cut to the most vulnerable in our society, whether in Swansea West or in the Wrekin in Shropshire?

--- Later in debate ---

[Torsten Bell]

I thank the right hon. Member, not least for his kind words about a very impressive organisation that goes from strength to strength under far better leadership than it had in the past.

I do not want to get into the details of economic forecasts and living standards forecasts—[Interruption.] “Please do”, Members say. Right—the reason why forecasts of living standards and of growth are often lower than we might like at the moment is that, although we talk about forecasts as forward-looking measures, what they are often actually doing is looking backwards at the disastrous growth this country has seen—[Interruption.] Those are the facts about what is actually going on. The only way we are going to sort this country out is to get growth going once again, and that is what this Government are trying to do—[Interruption.] Well, we actually are. We are currently seeing significantly faster wage growth than we have seen for quite some time.

[Several hon. Members rose—]

[Torsten Bell]

I must make some progress. I have taken lots of interventions, and at some point even your patience may start to run out, Madam Deputy Speaker.

As hon. Members know, wider help is also available for pensioners. The warm home discount provides eligible low-income households across Great Britain with a £150 rebate on their winter energy bill. This winter we expect to find that over 3 million households, including over 1 million pensioners, have benefited. We have also set out plans to expand the scheme to cover a further 2.7 million households. We are providing £742 million in England to extend the household support fund for a further year, supporting all households, not just pensioners, with the cost of essentials. The devolved Governments will receive consequential funding through the Barnett formula.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

Around 40% of properties in Glastonbury and Somerton are not connected to the gas grid. They are more expensive to heat, and people experience more fuel poverty as a result. Off-grid pensioners, who are particularly suffering, are obviously more reliant on their winter fuel payment. Will the Minister commit to developing a rural winter fuel poverty strategy for those pensioners, who are suffering now?

[Torsten Bell]

I have heard from many Members the point the hon. Member makes about the different ways people heat homes, particularly in certain parts of the country, including Northern Ireland. I would be happy to talk to her about that specific suggestion, having asked for suggestions earlier.

As I said earlier, our top priorities are to raise the state pension and to rescue the NHS, which pensioners in particular rely on. It is precisely because the Government have taken some difficult choices that we are committed to delivering on the triple lock throughout this Parliament. It is true that targeting winter fuel payments saves a bit over £1 billion a year, but spending on the state pension is forecast to rise by over £31 billion—

[Sir Iain Duncan Smith]

indicated dissent.

[Torsten Bell]

I have already engaged with the right hon. Member.

Spending on the state pension is forecast to rise by over £31 billion during this Parliament, which puts that into context. What does this mean for individual pensioners? The full new state pension is expected to rise by around £1,900 a year, and the basic state pension by around £1,500, benefiting over 12 million pensioners.

Then there is the health service, the state of which is the biggest betrayal of older generations today. The Conservatives left pensioners far too often not receiving the care and support they deserve and need. We are investing and reforming the English NHS through the 10-year plan by abolishing NHS England so Ministers are accountable for the health service once again. For pensioners who have spent their lives paying into the system, our priority is to ensure a resilient NHS that gives back to them at a time when they need it most.

[James Wild]

During the general election campaign, we on the Conservative side had the triple lock-plus policy to prevent pensioners in receipt of just a state pension from paying income tax. Does the Minister recognise that millions of pensioners in that position will have to start paying income tax, and is he happy with that?

[Torsten Bell]

The vast majority of pensioners started paying income tax under the previous Government because they abolished the age-related allowance for pensioners, so the taxing of pensioners was a decision taken by the previous Government. The majority of pensioners pay income tax because of decisions taken by the previous Government.

This is an Opposition day, so it would be rude not to talk about the Opposition. It is hard to know where to start—maybe with the hypocrisy. It comes in the general form of many Opposition Members claiming that they are in favour of a smaller state, but opposing this targeting of winter fuel payments. Worse, there is the more specific hypocrisy of campaigning against this change, but not being honest about whether they would reverse it.

[Lewis Cocking (Broxbourne) (Con)]

Will the Minister give way?

[Torsten Bell]

I will if the hon. Member will tell me whether he plans to reverse that change in government.

[Lewis Cocking]

Does the Minister not agree that it is the hypocrisy from the Labour party, which did not include this policy in its manifesto at the general election?

[Torsten Bell]

While we are on broken promises, the hon. Member promised to tell me whether the Tory party policy is to reverse the change, and I have heard nothing on that front. I will come on to manifestos shortly.

There is the specific hypocrisy of the Opposition campaigning against the change having called for it in their own 2017 election manifesto. Back then, they attacked the winter fuel payment for being “paid regardless of need”, and that is before we get to the Leader of the Opposition’s bold plans to means-test the state pension—

[Dame Harriett Baldwin]

On a point of order, Madam Deputy Speaker. The Minister has just said that, as it is an Opposition day debate, he will speak exclusively about what the Opposition think and say. Is it your understanding, Madam Deputy Speaker, that it is in order for a Minister at the Dispatch Box not to defend the track record of his own Government?

--- Later in debate ---

[Madam Deputy Speaker (Judith Cummins)]

That is not a point of order.

[Torsten Bell]

I will return to the Conservatives’ policy, because I was just coming to the bold plans set out by the Leader of the Opposition to means-test the state pension. Apparently, she said,

“that’s exactly the sort of thing”

we “will look at.”

[Several hon. Members rose—]

[Torsten Bell]

No. Apparently, means-testing the winter fuel payment is beyond the pale, but means-testing the state pension—the bedrock of pensioners’ incomes—is the future. The Leader of the Opposition’s self-image is of a bold iconoclast, but means-testing the state pension is not bold; it is bonkers. Never mind what the Conservatives say they would do now, what about what they actually did? Let’s talk about pensioner poverty.

[Sir Roger Gale]

Will the Minister give way?

[Torsten Bell]

I will not. Pensioner poverty halved under the last Labour Government, but the Conservatives’ record was higher pensioner poverty—an increase of 300,000 people on their watch. We are not pretending that all the problems facing the country can be solved overnight, but we are honest that unless we tackle the big challenges and take some tough choices, they will not be solved at all. This is a Government raising the state pension, rescuing the NHS and delivering for pensioners every single day.

[Hon. Members]

More!

Women’s Changed State Pension Age: Compensation

Torsten Bell Excerpts

Monday 17th March 2025 Westminster Hall

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under you today, Mr Stringer, and I thank the hon. Member for South Cotswolds (Dr Savage) for leading today’s debate on behalf of the Petitions Committee. I look forward to hearing her closing remarks.

Questions about when each of us can draw our pension are hugely important and so are related questions about how we spend our latter years, including when we can retire. Therefore, it not surprising that this petition has garnered so many signatures, nor that this debate has brought so many spectators and hon. Members to Westminster Hall today. Of course, none of us needs to come here to have those conversations. We have them every week precisely because they matter so much.

I have declared an interest on this issue before: my aunt in Aberystwyth sees herself as a WASPI woman. Just two weeks ago, I met Georgina Kettleborough at Burlais primary school. She has supported children for over three decades in the canteen and throughout the school and is about to retire at the age of 69. I hope we can all join in congratulating her on that milestone, as we join my hon. Friend the Member for Hartlepool (Mr Brash) in congratulating his mother on her birthday.

Georgina’s retirement comes several years after she was entitled to her state pension because working in the school is such a big part of her life. People will not be surprised to know, however, that she would have preferred to receive her pension earlier. Everyone will understand that. Who would not feel that way—especially women from a generation that suffered such significant disadvantage in the labour market and elsewhere, as the hon. Members for Moray West, Nairn and Strathspey (Graham Leadbitter) and for North East Hampshire (Alex Brewer) spelled out?

However, the ombudsman did not investigate the decision of the Conservative Government to increase the state pension age for women in 1995 or that of the Conservative and Liberal Democrat coalition Government to accelerate those increases in 2011. I make that point because several hon. Members, including my hon. Friend the Member for Normanton and Hemsworth (Jon Trickett), have referred to the desirability of those original decisions. That is not to downplay the significance of those decisions —far from it. SPA equalisation was a very large and important change, and the acceleration was opposed by my party for the reasons set out by my hon. Friend the Member for Glasgow West (Patricia Ferguson). But the ombudsman did not investigate the legality or merits of those decisions. Instead—I should note that the WASPI campaign is clear on this point—the sole focus was on how those changes were communicated by the Department for Work and Pensions.

The ombudsman looked at six cases that it said reflected the range of issues and the injustices raised. It concluded that the DWP provided adequate and accurate information on changes to the state pension age between 1995 and 2004. However, it also found that decisions made between 2005 and 2007 led to a 28-month delay in sending out letters to women born in the 1950s. The ombudsman says that those delays were maladministration, as almost every hon. Member who spoke today reiterated.

We respect the work of the ombudsman, its independence and the work it does, a point many hon. Members have raised. In this case, we agree that the letters should have been sent sooner. We have apologised and we will learn the lessons. However, as everyone in this room is well aware, we do not agree with the ombudsman’s approach to injustice or remedy. Many hon. Members have asked whether that invalidates the role of the ombudsman, including my hon. Friend the Member for Salford (Rebecca Long Bailey). My strong view is that it does not. It is, rightly, rare, but not unprecedented, for a Government to take that view.

Two important considerations when making that decision were that the evidence shows that sending people unsolicited letters can be ineffective, which is why it is part of a wider communication campaign on every issue where it is used today, and that the majority of 1950s-born women were aware of the fact that the state pension age was changing, if not of their specific state pension age. The ombudsman assumed that sending letters earlier would have changed what women knew and how they acted.

[Seamus Logan]

Can the Minister explain his assertion that the majority of women were aware of these changes?

[Torsten Bell]

I will come to exactly that point shortly.

The 2014 research was not properly considered by the ombudsman. The same research is now the subject of live litigation, as my hon. Friend the Member for Bradford East (Imran Hussain) noted. In addition, there was considerable awareness that the state pension age was increasing. Research from 2004 used by the ombudsman shows that 73% of people then aged 45 to 54 were aware that the state pension age was going up. Further research from 2006 reinforced that finding and was given to and used by the ombudsman. The hon. Member for Eastleigh (Liz Jarvis) focused on the widely used 43% figure, but that figure refers to all women, including some aged 16 at the time of the survey, not just those who were affected by the state pension age changes.

[Christine Jardine]

I take on board what the Minister says about the research, but the fact that 73% of people knew that there were would be changes to the pension age does not tell us that 73% of women, or any percentage, knew that it would affect them. That is not what the evidence tells us.

[Torsten Bell]

The fact that people were widely aware that the state pension age was rising is indicative that it was not news to most people, even if they had not got the details on their specific circumstances. The 2006 research is now also the subject of live litigation, so I will resist the temptation to dive into the details, beyond directly addressing the point raised by the hon. Member for Aberdeenshire North and Moray East (Seamus Logan) on the sample sized used in that survey. Returning to my old expertise in this area, the confidence intervals provided in that survey are certainly small enough to make it clear that a clear majority were aware that the state pension age was changing, so I do not think it is right to cast aspersions on that survey.

[Rebecca Long Bailey]

One of the datasets that the Government rely on to make their assertions, specifically the 90% figure, actually includes women who were not born in the 1950s. Can the Minister give us an exact figure as to how many women in that 90% category responded to the survey?

[Torsten Bell]

The 90% figure refers to the age group that best overlaps with women born in the 1950s, so that is the best available figure from that survey.

[Rebecca Long Bailey]

Will the Minister give way on that point?

[Torsten Bell]

I will make some progress because I have given the best answer that I can to my hon. Friend’s question.

The ombudsman is clear that redress and compensation should normally reflect individual impact, but it also acknowledges the challenges of assessing the individual circumstances of 3.5 million women, as recognised by the hon. Member for East Wiltshire (Danny Kruger) a few moments ago. It took the ombudsman nearly six years to look at just six cases; doing so for millions would take years and thousands of DWP staff.

In answer my hon. Friend the Member for Bedford (Mohammad Yasin), we considered a range of compensation options for women who lost opportunities as a result of the delay in sending letters. For example, we considered rules-based schemes, such as that which the Work and Pensions Committee suggested, and we also considered the possibility of paying limited compensation to a smaller group of women—for example, those on pension credit, as suggested by the hon. Member for Eastleigh.

However, many of those schemes would mean compensating women who were aware that the state pension age was increasing. Payments would not relate directly to the injustice in question but to benefit entitlement or the timeline for the policy change. Paying a flat rate to all 3.5 million women, regardless of whether they suffered injustice, would be neither fair nor proportionate. It would also not be affordable, as such compensation schemes would cost up to £10.5 billion. To directly address the question of my hon. Friend the Member for Falkirk (Euan Stainbank), the Government’s decision was not driven purely by cost.

[Andy McDonald]

The Minister has listed a whole host of alternatives, but is it fair to ignore the ombudsman’s clear conclusion that compensation ought to be paid? Is it fair to do nothing?

[Torsten Bell]

The Government have not ignored the ombudsman’s report or its judgment. We have just come to a different conclusion for the detailed reasons—[Interruption.] I appreciate that I am not going to persuade many Members in the Chamber for the very reason that they have chosen to come today, but on the direct question asked by my hon. Friend, the Government did not ignore the ombudsman’s report. We have come to a different view for the reasons that I have set out, on the basis of the research that I have mentioned.

I have set out the grounds for the Government’s decision. I appreciate that none of that is likely to change the minds of many Members here, or of the campaigners whose tenacity no one disputes, and to which the hon. Member for Torbay (Steve Darling) paid tribute. I fully recognise the challenges that this cohort of women have faced: working hard in sexist workplaces and often balancing that with raising a family. We have a responsibility to listen to their concerns. That is why my predecessor, my hon. Friend the Member for Wycombe (Emma Reynolds), was the first Minister in eight years to meet the WASPI campaign.

[Steve Darling]

Has the Minister had a conversation with the ombudsman on what a just compensation system would look like?

[Torsten Bell]

My predecessor, who I just mentioned, did meet the ombudsman prior to the decision being announced by the Government. Parliament has been very engaged in this issue, as demonstrated today and in January’s debate led by the right hon. Member for South Holland and The Deepings (Sir John Hayes). The Government have made their decision and it is right that hon. Members hold us accountable for it, as they have done powerfully today.

[Jim Shannon]

The judicial review is pending. It is like the sword of Damocles hanging over the head of the Government. Does the Minister fear the judicial review that will, perhaps, force the Government to give WASPI women the compensation and justice they deserve?

[Torsten Bell]

I thank the hon. Gentleman, but I suspect that was a statement rather than a question. He knows that the Government will not comment on a live litigation. In answer to questions asked by other Members, I will, of course, be happy to meet with the chairs of the APPG, subject to the constraints of that live legal case. As a Department, we must and will learn the lessons from this case.

[Christine Jardine]

The Minister says that the Department will learn the lessons of this case. Does he accept that the whole point of this debate was not, as he said, to change the minds of Members who have spoken or the women who have come to watch the debate, but to change the mind of the Government? That is the lesson we would like him to learn.

[Torsten Bell]

I fully understand the motivation of those who have come here today. Members are not just keeping their constituents happy in making their cases, but I have set out why the Government have come to a different view. That is the nature of a Government making a decision and then rightly being held to account for it. That is what hon. Members have done today and what I have endeavoured to engage in, which I think is the right way forward.

Oral Answers to Questions

Torsten Bell Excerpts

Monday 17th March 2025 Commons Chamber

[Vikki Slade (Mid Dorset and North Poole) (LD)]

8. What steps her Department is taking to help increase uptake of pension credit.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

This Government have been running the biggest ever pension credit take-up campaign. In the latest stage, we are now writing to all pensioners who make a new housing benefit claim and who appear to be entitled to pension credit, directly targeting them and encouraging them to apply.

[Vikki Slade]

The rate of take-up for pension credit has traditionally been between 60% and 65%. If that rate were uplifted, it could take 400,000 people out of income poverty. In Dorset, the number of over-65s has increased by about 20% over the past decade. People say that their biggest concern is the paperwork they have to complete. The applications contain up to 225 questions purely for pension credit, and many pensioners would easily be able to claim for things like the carer addition through a slight tweak in the paperwork. What is the Department doing to simplify and combine those applications to make life easier for pensioners?

[Torsten Bell]

We are already doing a lot to simplify the process; it now takes 16 minutes on average to complete an online form, and 90% of people apply online or over the phone. However, the hon. Lady is completely right to highlight the fact that we must do more, including by simplifying the form. We continue to keep that under review, and I am always interested in ideas about how we can go further.

[Mr Speaker]

I call the shadow Minister.

[Danny Kruger (East Wiltshire) (Con)]

When the Government scrapped universal entitlement to the winter fuel payment, they said that all 880,000 people eligible for it would get it through pension credit. We now know that that did not happen; they have got fewer than 120,000 new pensioners enrolled. More than three quarters of a million of the poorest pensioners have missed out on vital support this winter, so will the Minister tell us whether that was the plan all along—to save money at the expense of the poorest pensioners—or will he admit that he has completely failed in his duty towards the poorest elderly people in our society?

[Torsten Bell]

The lesson I have learned is from the last Government, who put up pensioner poverty year after year—it increased by 300,000 over the course of the last Government. This Government have run a pension credit take-up campaign that has seen an 81% increase in applications since July compared with the same period last year, and 46,000 more awards compared with that period. That is what a Government doing their job looks like.

[Danny Kruger]

That is 45,000 more awards than in the same period last year, but 880,000 people are eligible—that is a pathetic achievement, and the Government have spent millions of pounds on advertising this. We still have thousands of people waiting for their winter fuel payment, and the winter is over, so it is a little late for the Government’s next advertising plan. The fact is that we still do not know who has missed out, what the waiting time for those payments was, and what the effects have been on pensioner poverty or on hospital admissions, which have increased significantly for pensioners. Given the scandalous failure of their pension credit campaign, will the Government release all available data on the impact of the winter fuel payment cut?

[Torsten Bell]

We have already released significant data on that and, as I say, data was released just weeks ago showing the unparalleled success of the campaign to drive up pension credit take-up. Now we are concentrating on increasing support for pensioners right across the board, because the biggest disgrace of the last Government was where they left the health service that our older generations rely on. We are turning that around, day after day.

--- Later in debate ---

[Luke Akehurst (North Durham) (Lab)]

13. What assessment she has made of the impact of the pensions triple-lock on pensioners in North Durham constituency.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

Our commitment to the triple lock throughout this Parliament means that spending on the state pension is set to rise by £31 billion a year. Individuals are set to see increases of up to £1,900 a year, benefiting 21,000 pensioners in North Durham and 12 million people in Britain as a whole.

[Luke Akehurst]

I welcome the fact that the Government are not only protecting the triple lock for every pensioner in the country but tackling the biggest problems for pensioners by uprating pension credit by more than the rate of inflation, encouraging a higher take-up of pension credit and substantially increasing funding for our NHS. Can the Minister tell me how many pensioners in North Durham currently claim pension credit, and how many are entitled to it but do not claim it and could benefit from this increase?

[Torsten Bell]

My hon. Friend is right to draw attention to the importance of the 4.1% increase in pension credit that will take place in just a few weeks’ time, and I can tell him that about 3,000 people are claiming pension credit in North Durham. He is also right to mention the more than £25 billion that the Government are investing in the NHS. The unacceptable state of the health service is the biggest betrayal of older generations by the Conservative party, and we are going to change that.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

14. What steps her Department is taking to help reduce levels of unemployment in Stoke-on-Trent.

--- Later in debate ---

[Dr Simon Opher (Stroud) (Lab)]

T9. Pension credit claims, as we have heard, have increased by 64%, and I commend the Minister and the Department for making that happen, as well as Citizens Advice in Stroud and bureaux throughout the country. However, there are 800,000 people who earn just above that limit and live in poverty. I wonder whether, when a fiscal situation arises, the Government will review the cap, and indeed the gradient of this benefit.

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

My hon. Friend is absolutely right to highlight both the progress that has been made and the hard work of the voluntary sector, including citizens advice bureaux across the country. We must continue recent progress, and we shall certainly do so. I would like to highlight that our support for pensioners goes far wider, including the 4.1% increase to the state pension and to the level of pension credit, as my hon. Friend mentioned, in just a few weeks’ time.

[Julia Lopez (Hornchurch and Upminster) (Con)]

At a constituency meeting last week, I was told that small businesses are starting to ask employees to go self-employed as they cannot otherwise keep roles open because of forthcoming national insurance contribution rises and extra employment laws. Will the Department watch out for this trend in its data, in case it was not the Government’s intention to make workers less secure with these new taxes and more regulations?

--- Later in debate ---

[Sir Desmond Swayne (New Forest West) (Con)]

What is the Minister’s estimate for the number of pensioners who would qualify for pension credit but have not applied in North Durham?

[Torsten Bell]

I thank the right hon. Gentleman for his question. The Department for Work and Pensions does not produce data at a constituency level, but I will tell him the answer to his question at a national level: much lower than it was before this Government came into office.

[Perran Moon (Camborne and Redruth) (Lab)]

Supporting people back into work is not only the right thing to do for the UK economy, but the fair and compassionate thing to do for people stuck in the welfare system. However, over the past few days, a significant number of people have contacted my constituency office with profound concerns about what they have heard and read in the press. Does the Minister agree that by removing the culture of fear and creating a nurturing environment, we can help people back into work and give them the support they need not just to survive but to thrive?

Independent Schools: VAT and Business Rates Relief

Torsten Bell Excerpts

Monday 3rd March 2025 Westminster Hall

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under your chairship, Mrs Lewell-Buck, for this debate secured not by an hon. Member, as is often the case, but by public petitioners, including some who are present in the Public Gallery. The public paying attention to an issue is good grounds for it being debated. I also thank the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for introducing the debate—also, for closing it shortly—and all hon. Members who have spoken during it.

There are lots of things that are not common ground on this issue, as I will come on to, but I will start by noting that we are all motivated by the same determination to support the aspirations of every parent in the UK to get the best education for their children. In that context, we should all congratulate the hon. Member for Twickenham (Munira Wilson) on her good news and agree with my hon. Friend the Member for Ealing Central and Acton (Dr Huq) that we all know people who have made a wide range of decisions about the educational choices for their children and that no one here is judging other parents’ choices.

The best education for children is also what motivates the Government to break down barriers to opportunity to ensure that every child has access to high-quality education—and every child includes the 94% of children who attend state schools. The reforms to VAT and business rates that we are debating will raise about £1.8 billion a year; I will come on to the questions about the costing shortly. That will help to improve state education.

In the autumn Budget, the Government announced a £2.3 billion increase to the core schools budget, and it is to deliver such commitments—not for any other purpose—that we have made the tough but necessary decisions that we are debating today. The hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) called for even larger increases in spending on schools, but it was noteworthy that he did not set out the means by which such increases would be paid for.

I will briefly outline the policy changes that the Government are making, before turning to the important issues that hon. Members have raised during the debate. Since 1 January, education services provided by private schools have been subject to VAT. While private schools are now required to charge VAT, they are also able, as has been discussed, to recover the VAT that they incur when purchasing goods and services. The Government are also legislating to remove the eligibility for charitable rate relief from private schools that are charities in England. This is intended to take effect in England from April; it is already the case in Scotland and is being taken forward in Wales.

As I have said, the goal of those changes is to provide additional funding for the state education sector. However, I fully recognise that they will increase the cost for some parents and carers who have chosen a private education for their children. This change is necessary, but I am not hiding from the reality that any rise in costs is unwelcome for those affected by them.

[Gregory Stafford]

We disagree on whether this change is going to raise any money. However, I want to understand the policy point being made here, namely that to raise the money to fund the state education sector, the Government have decided to raise tax on the independent education sector. Why did they decide to raise money from the education sector rather than from any other sector, or from any other rich individuals?

[Torsten Bell]

I thank the hon. Member for his intervention. I might be a bit more sympathetic to Conservative Members focusing on this change if I saw them supporting any of the revenue measures that we have had to take to start turning around public services and improving the public finances. They oppose this measure, they oppose changes on national insurance, and they oppose cuts to the winter fuel payment and the rest. Now, I will make some progress.

On the timing of implementation, as my hon. Friend the Member for Paisley and Renfrewshire North (Alison Taylor) pointed out, this change was clearly signposted in Labour’s manifesto. Also, His Majesty’s Revenue and Customs is working hard to support schools through this change by providing bespoke support to schools alongside comprehensive guidance on how they can register for VAT. A dedicated mailbox for queries has also been made available to schools and their tax representatives.

Several hon. Members have discussed the impact that the changes will have on pupils and their families, and on state schools and private schools more widely. Many Members have understandably returned to questions that were addressed in the tax information and impact note, or to the Government’s response to the consultation that was conducted between July and September last year.

The issue of costings was raised by the hon. Member for Boston and Skegness (Richard Tice). The underlying methodologies used were certified by the independent Office for Budget Responsibility, and the costings take into account exactly the issues that he raised about behavioural responses.

On the issue of pupils moving schools or sectors, we recognise that there will be some movement of that kind. However, we believe that the number of students who will switch to the state sector represents less than 0.5% of all UK state pupils, so we are confident that the state sector will be able to accommodate any change.

The hon. Member for Farnham and Bordon (Gregory Stafford) raised the issue of school closures. The evidence suggests that around 50 private schools close each year during normal business. Although we would expect some additional closures, we have not seen any evidence to revise our view that the overall number of extra closures will be modest—perhaps something in the order of 100 schools over three years.

We also recognise the concerns that have been raised about the impact on pupils with special educational needs, including by the hon. Member for South West Hertfordshire (Mr Mohindra). That is why we will ensure that those pupils with the most acute additional needs, whose needs can be met only in private schools, will be unaffected. For example, in England, where attendance at a private school is required by a child’s EHCP, that child’s parents or carers will not pay VAT and councils supporting them will be able to reclaim the VAT. In Wales, post-16 provision of this kind is funded by the Welsh Government rather than by councils. They cannot reclaim VAT in the same way, so ringfenced funding will be provided until 2028-29, when responsibility will pass to local authorities.

More broadly, we are committed to transforming the system of supporting children and young people with SEN, because it is badly needed, as the hon. Members for Esher and Walton (Monica Harding) and for Tiverton and Minehead (Rachel Gilmour) clearly set out. The Budget announced a £1 billion uplift to high needs funding in 2025-26, providing additional support for more than 1 million children in the state sector with special educational needs and disabilities.

The hon. Members for Surrey Heath (Dr Pinkerton) and for Windsor (Jack Rankin) raised the issue of service families, but I fear they downplayed the increase of more than 12% in the continuity of education allowance from the Ministry of Defence. The issue of faith schools was also raised. They are an important part of our educational landscape, but the argument that private faith schools should be exempt from these changes is not compelling. An exemption would reduce the revenue available for pupils in state schools, including those of faith, and would be inconsistent with this Government’s strong view that a state education is suitable for children of all faiths and for children of no faith.

[Damian Hinds]

On faith-based education, the Minister is quite right that there are large numbers of faith-based schools in the state sector. However, there are some denominations and particular religious traditions for which there are not large numbers of schools, and whose actually charge fees sometimes considerably below the average cost of a state school place. Does he recognise that there may be a case for an exemption in such cases?

[Torsten Bell]

I recognise the description of the status quo as the right hon. Gentleman describes it, but I reiterate my view and the Government’s view that a state education is suitable for all families of all faiths.

A public petition has decided that we should have today’s debate. On those grounds alone, it is right that we have had it. I recognise many of the points that hon. Members have raised, even if I have attempted to set out why the Government believe that in some cases they are overdone. As we rightly debate the impact of these policies, we must recognise the reason that they have been made: the priority that we must attach to providing extra resources for our state schools—resources that I have not heard a huge number of suggestions for replacing today. These are schools where 94% of our children are educated, and where this Government will deliver an education system fit for all.