Baroness Stedman-Scott

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That the Grand Committee do consider the Social Security (Up-rating of Benefits) Bill before Second Reading.

Relevant document: 25th Report from the Delegated Powers Committee.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)

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My Lords, I take this opportunity to thank all noble Lords for the positive engagement and feedback they have provided thus far. From the conversations I have had with many noble Lords, I believe there is a genuine desire across the House to tackle the matters addressed by the Bill. It is my sincere hope that we can continue to engage in this way as the Bill progresses through the House. Should any noble Lord wish to discuss any part of the Bill between its stages, our doors are always open.

It is unlikely to have escaped noble Lords’ attention that this is a short Bill. While short and technical, it is an important piece of legislation that will avoid a state pension freeze and benefit millions of pensioners by granting the Secretary of State powers to implement an increase in state pension rates in the 2021-22 financial year. It will also allow for increases for the poorest pensioners who are in receipt of pension credit, as well as uprating widows’ and widowers’ benefit under the industrial death benefit scheme.

Each year, the Secretary of State is required by law to conduct a review of most state pension rates and certain other benefit rates to determine whether they have retained their value in relation to the general level of earnings. If there has been an increase in earnings, there is a requirement to uprate these rates at least in line with that increase. However, if there has been no increase in earnings, there are no legal powers to bring forward an uprating order to increase these rates.

Since 2011, the Government have used average weekly earnings growth for the year from May to July as the basis for the review. The figures published by the Office for National Statistics earlier today confirmed that for the year from May to July 2020, earnings fell by 1%. Given this decline in the general level of earnings due to the coronavirus pandemic, the Bill temporarily amends the Social Security Administration Act 1992 to grant discretionary powers to the Secretary of State to increase pension and benefit rates linked to earnings even if there has been no growth in earnings. The provision lasts for one year only.

The Bill must receive Royal Assent by mid-November if it is to have any practical effect. If the Bill does not receive Royal Assent by the time the Secretary of State conducts her review of benefit rates, the existing provisions will apply and state pensions will be frozen. The Secretary of State must complete her review before 27 November, which is a hard deadline for the IT systems across the DWP that implement the increases, to allow them to take effect in April 2021.

The Bill covers the basic state pension, the new state pension, the standard minimum guarantee in pension credit, and widows’ and widowers’ benefits under the industrial death benefit scheme. These are the benefits that are linked in primary legislation to earnings. The Bill does not extend to benefits that are linked to prices. The Secretary of State will review those under the existing powers in the 1992 Act.

This is a technical Bill and, provided that it receives Royal Assent by mid-November, it will ensure that the state pension is not frozen in 2021-22. It will allow the Government to increase the level of the safety net for the poorest pensioners in pension credit and the rates of widows’ and widowers’ benefits under the industrial death benefit scheme. I beg to move.

Lord Blunkett (Lab)

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My Lords, first, I welcome the two newly ennobled Peers to our proceedings in this Room and congratulate them in advance on their maiden speeches. This is a unique occasion for newly ennobled Members of the House to make their maiden speeches in these newly formed proceedings, but it will be something to tell their grandchildren or others who fit into that category.

I am walking on very thin ice, and indeed not just on eggshells but on broken glass in terms of the short contribution I wish to make. Twenty years ago, I was in some conflict with the then Chancellor because I backed the stalwart but ageing battleship that was Barbara Castle and my good friend, the late Rodney Bickerstaffe, then the general secretary of Unison, in publicly advocating the double lock on the state pension, at a time when I know noble Lords will remember the Government were stumbling into a 75 pence a week increase and all the controversy around that. Here we are, some 20 years later with a triple lock, but in very different circumstances. Twenty years ago, pensioner poverty was rife, which is why we are talking about pension credit. It was a really big challenge to ensure that those who had given their lives during the war were not disadvantaged, and major steps were taken to put that right.

However, here we are, on the back of numerous research projects, including by the Resolution Foundation, and the work of the noble Lord, Lord Willetts, who has done so much on this, facing a very different situation. I realise that while we must pass this legislation as quickly as possible—as we would expect to do, because we are only putting right an expectation and implementing what was in fact in the Government’s manifesto—we will have to reassess how we deal with this in the future.

I deferred my retirement pension, but I now take it. For Members who have other ways of supplementing their pensions and are in a comfortable position, if not rich, it is very difficult to address these issues without being accused of hypocrisy. But the situation in relation to the young versus the old in terms of the balance between the generations has changed dramatically. It is difficult to talk about this. I was on the BBC “Politics Live” programme with Professor Karol Sikora at the beginning of September. He made remarks along the lines I have just touched on in respect of what is happening to young people. An avalanche of abuse was poured on his head, but because, thank God, I do not do social media, it took a bit of time for it to reach me. However, people did, some of them not realising that I am in the same age bracket as those who were writing to me.

I understand this because there are people who are still extremely badly off in retirement, but there are real challenges. Today we learn that out of the half a million people who have, we have been notified, lost their jobs through to August, three out of five were between the ages of 16 and 24. Older people have at least been protected to some extent from 10 years of austerity by other benefits, but not younger people. While we must go ahead with this legislation, all major parties—difficult as it is—will have to reassess their policies in relation to fairness between and within the generations. That will have to be done sooner or later, not least because of the enormity of the increase in debt and the investment that have been needed because of Covid.

I know what the politics are; I am not foolish. Older people vote in substantial numbers compared to the young. The answer is that young people need to learn the bitter lesson that, if they do not vote, they pass power to others who do.

Lord Addington (LD)

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My Lords, this is a short Bill: I count 29 lines in it. I have looked through all the other literature provided to brief on it, all of which is considerably longer than the Bill. It is undoubtedly an important piece of legislation and, as a temporary measure, it probably is acceptable to everybody, because we are dealing with unusual circumstances. However, what happens if the temporary measures continue? It is quite possible, if we look in a glass-half-empty way, that the economy could be severely interrupted for a long time. It would be nice to know the Government’s thinking on this. Will we be dependent on something going well in the future or will we have to do this again if something goes badly? It is a technical point. I appreciate that nobody wants that to happen, but it is something that we should hear about at this time.

We could have put into this Bill something that suggested that the norm would come back. It has been tried in the Commons and it might be interesting to look at that again. The 2.5% increase means that many pensioners have an easier time. Pensioners with good incomes are not so vulnerable in other aspects of life, which removes some other costs, usually to the health service and other interventions. I hope that we can have some commitment, not only in this debate but during the passage of the Bill, on how this is going to be raised. There is no long-term benefit in having pensioners reduced to levels of poverty and needing other forms of intervention to maintain their status.

I now come to one of the more pleasant bits and welcome the maiden speakers. I do not envy the noble Baroness, Lady Meacher, having to follow the noble Lord, Lord Field, on this subject. I am sure that the noble Baroness, Lady Stuart, will be able to shake us up a bit as well, but the noble Lord, Lord Field, has something of a reputation here and we wait with bated breath for what he is going to say. However, I am sure that, if anybody can match him, it is the noble Baroness.

I hope that we will be able to get ideas about the ongoing thinking behind this. We also need to bear in mind, if a long-term strategy is agreed, all those who have not been able to put money into pensions during this interruption. This is the backstop. This is the thing that says that you will have some benefit. Most of those who have had the biggest interruption to their savings plans and patterns will be at the lower end of economic reward.

It will be interesting to get the Government’s long-term thinking on this. Are we dealing with this as a one-off blip or could it happen again and again? That possibly is there, even if none of us wants it to be. Having said that, I have no other objections and I hope that the Minister will be able to give us assurances that will make us feel a bit more comfortable about the passage of this unusual Bill.

Baroness Greengross (CB)

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My Lords, I totally support the intention of this Bill, which ensures that the triple lock is maintained for pensioners. It is extremely important that older people who rely on their pensions do not fall into poverty, especially during this crisis which is hitting them so hard. However, older people who continue to work are not really pensioners; they are older workers. According to the May 2018 Office for National Statistics figures for December 2017 to February 2018, just under 1.2 million people over the age of 65 were in work. That is 10.2% of the entire age group.

The Equality Act 2010 includes provisions that ban age discrimination against adults in the provision of services and public functions. The ban came into force on 1 October 2012 and it is now unlawful to discriminate based on age. When someone receives a pension, they pay tax on any income above their tax-free personal allowance. They cease to pay national insurance on reaching the state pension age, regardless of whether they remain in employment.

The triple lock ensures that the state pension increases each year, using three different components—price inflation, earnings growth and 2.5%. The highest of the three, measured the previous September, is used to increase the pension each April. For the current financial year, UK Government borrowing could be anywhere from £263 billion to £391 billion, according to the Office for Budget Responsibility. People who continue to work over the age of eligibility for a state pension do not need their pensions triple-locked. In today’s attitudes and legislation, these people are older workers not pensioners and, in my view, they should be taxed like other workers in our society.

Lord Bourne of Aberystwyth (Con) [V]

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My Lords, it is a pleasure to follow the noble Baroness, Lady Greengross, who has done so much in our House on issues of longevity. I always listen to her with great pleasure. I thank my noble friend the Minister for setting out the Bill with characteristic grace and good humour. It is indeed a very short Bill.

Like others, I look forward immensely to the maiden speeches of the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston. They are two very distinguished parliamentarians, who I know will add massively to the strength of our House. I have known the noble Baroness for a long time. I taught her company law and I recall that on one occasion, before either of us got very involved in politics, she said to me that I was a far better lawyer than a politician. I think that my repost was that she was a far better student than she was a politician. We both find ourselves in the House of Lords and I look forward to her contribution to our House immensely.

I believe that this Bill is necessary. It ensures that state pensions can potentially be uprated, despite the likely fall in earnings. It is matter of pride to me that our country and our Government believe in the pension triple lock—it is something that we should welcome, as indeed I do. I recognise that there is a great issue of intergenerational unfairness at present and I would like to say something about that, too. The Bill is necessary to amend legislation because of earnings falling, albeit by a relatively small amount, and it is necessary that the Bill gets Royal Assent, I understand, by mid-November, which I am sure will happen.

It is right to say, as others have, that many pensioners are well off now—the noble Baroness addressed this point. However, there are still some 2 million pensioners living in poverty—that is according to the Joseph Rowntree Foundation, and the Government’s own figures are only just under that. Despite the financial security that many pensioners enjoy in retirement, there is still a real issue for many others. We should rejoice that pensioners are living longer, but we need to recognise that there are ongoing issues of poverty in retirement for many people.

I want to say a little about intergenerational fairness, which was addressed briefly also by the noble Lord, Lord Blunkett. Many people at the young end of the age spectrum—16 to 24—will be massively disadvantaged through this crisis. They have seen their education missed, disrupted apprenticeships and lost jobs, and they will continue to do so. According to a report this year by the Social Metrics Commission, chaired by my noble friend Lady Stroud, an estimated 8.5 million people of working age are living in families in poverty. Can the Minister say something about that? I know that it is something that the Secretary of State will come to, but can my noble friend say something about the timing and the likely thinking, because there is a much greater issue here than the important points about pensions that we are addressing. Yes, this Bill is important and it is right that we focus on it today, but, for the next 10 years, the issue will be the fairness that we need to apply to the younger generation, who are likely to have to pay the bills of this crisis and who have seen their education and jobs disrupted. I shall certainly support the Bill, but I hope that my noble friend will be able to say something about the broader picture of benefits for those at the other end of the age spectrum.

The Lord Bishop of St Albans [V]

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My Lords, I add my words of welcome to the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston, and look forward to their maiden speeches.

I welcome the Social Security (Up-rating of Benefits) Bill. Pension credits are vital for the welfare of low-income retirees and it is right that measures are taken to support them in this challenging time. However, there is certainly scope for going further. Accusations relating to intergenerational fairness are not entirely unfounded. While I am for uprating the basic state pension, providing a guaranteed rise of 2.5% at a time when millions have lost income due to the pandemic, I realise that it will raise questions over whether this Government represent the entire country or just those who are older.

As other noble Lords have mentioned, the situation is perilous for those on the breadline. The Government’s failure to guarantee the permanence of the April 2020 universal credit uplift will be devastating for those formerly employed and now relying on universal credit. Across the country, arrears are building up, and immediate action will be required to prevent low-income families being burdened with unrealistic debt.

While the pandemic has affected everybody, when it comes to income, it is not retirees but low working-age households that have been most affected, whether through cuts in income or redundancy and rising living costs. I hope that the Government make the right decisions and stay true to their levelling-up agenda by being a national Government who choose to represent all age demographics.

Faith groups have been working hard to raise awareness of the financial difficulties endured across the country. For example, the recent Reset the Debt report by a coalition of four national Christian denominations drew attention to the increasingly unstable position that those made redundant due to Covid-19 now find themselves in, with many through no fault of their own sliding into debt spirals and homelessness. Their call to reset the debt through a Jubilee fund is the sort of innovative policy required so not to condemn generations to imposed poverty. I join my Church of England colleagues, the right reverend Prelates the Bishop of Durham and the Bishop of Portsmouth, and the Joseph Rowntree Foundation in its “keep the lifeline” campaign in urging the Government to make permanent the universal credit uplift that occurred in April this year.

I understand that difficult economic decisions will need to be made. However, given the uncertainty that we face, cutting back on economic support before the crisis is over will only exacerbate the situation and do so quickly. The Treasury has been taking bold decisions and will need to take more that will entail spending additional revenue in the short term to give those chances on the line a chance in the long run.

Lord Field of Birkenhead (CB) (Maiden Speech)

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My Lords, I want first to say a huge thank you. I was told before I came to this place that the welcome would be warm, and it most certainly has been, both from before taking the oath and in the lead-up to today’s debate. People said, “What’s on the tin you’ll find in the box”, and I certainly did—until the last part of taking the oath, when my eye caught the screen. It said, “Motion of Regret”. I hoped that that did not apply to me, but, if it does, I hope that the execution may be delayed a little so that I might make a contribution today.

I want briefly to touch on the three themes that most concern me at the moment and that I know very much affect your Lordships. I thought that I would be standing today, but, sitting here and thinking about my parents and the difference between my life and theirs, which was brought about largely by the great Attlee Government, I cannot but think what a springboard to freedom education was. I say to my noble Peers—I will get under my belt how I refer to everyone shortly; I hope that you are all my noble friends today—that it is really important that we think about education. My noble friend Lord Blunkett has made such a contribution here. We should think about both the foundation years or early years and the possibilities the Government create for apprenticeships. I cannot see the Government being able to fulfil their one-nation policy unless we are much more successful on apprenticeships than we have been up to now. I am looking to my noble friend at the other end of the Room. I know about his interest and I hope that, like me, he will express a particular concern on this issue.

The second issue in a sense relates to the Bill and has been touched on by the right reverend Prelate who spoke before me and others. One of the most important things that the Government did as this terrible plague descended on us was to give people on universal credit a £1,000-a-year uplift. We could argue that that was making good cuts which the scheme suffered in its implementation, but, as two speakers have already said, it has made such a difference to people totally dependent on universal credit. When I was an MP, I saw the effect on breaking the avenue to destitution which many of our fellow citizens faced with that particular cut. My pledge is to work with as many of you here who wish to to defeat any government plan, should that be their aim, not to continue to pay the £1,000-a-year extra in universal credit.

Noble Lords have already commented on the different roles of social security. One is when we are dealing with a class of people who are poor, where one very much needs universal provision. As other speakers have said, a number of us, as pensioners, are now moderately well off, so should any increase above inflation-proofing not go to those groups who have suffered most from social security changes? That means people below retirement age and, strangely, those who do not have children. They are the group who have suffered most.

The third theme, on which a number of noble Lords have been very active, is modern slavery. Hobbes talked about life being “nasty, brutish, and short”. It is certainly nasty and brutal for people sold into slavery, though not always short. Noble Lords will know that your period of slavery comes to an end only when you cannot earn enough and you are thrown out. I hope that, as this House develops its programme over the coming months, we can look very carefully at how we need to strengthen the pioneering Act which the previous Prime Minister, Mrs May, put on to the statute book, to her eternal credit.

I have one last comment to make about modern slavery. People were kind enough to say that they expected some sort of fireworks from me today. Indeed, if this was not my maiden speech, I could have given a speech saying this, that or the other. But I have one last comment to make, if I may, about modern slavery and the brutality and horror of seeing people and knowing of people destroyed in this manner. One amendment that we might make, to give power to justices, is to think about statues for modern slave users in our society. My plea to Black Lives Matter, an incredibly important movement, is that it is very important to bring its campaign up to date, given the slavery that exists in this country here and now.

Maybe this is one way of concentrating the minds of employers who know so much about taking dividends but so little, it appears, about the conditions in which their workers earn their fortunes for them. We might put these individuals on a plinth to remind ourselves that, sadly, this evil of modern slavery exists in our society and that one purpose of this place is to put a lot of salt on the tails of those slave owners.

Baroness Meacher (CB)

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My Lords, it is indeed a special privilege to speak after the noble Lord, Lord Field of Birkenhead. It is very difficult to call him that; I have known him for 50 years and now I have to learn his new name. My noble friend is of course well known for his expertise and contribution in the area of poverty, whether in welfare benefits, food banks, education for underprivileged children, housing needs and so forth. He has also made an exceptional contribution to the welfare of the people of Birkenhead on all those issues and many others, as well as being an exceptionally effective parliamentarian over 40 years. The combination of those two contributions is remarkable.

Of course, the noble Lord, Lord Field, has also contributed on a considerable number of other issues over those years. I could probably keep your Lordships here all afternoon going through all the different issues that he has talked about and effected change on over the years, but noble Lords will glad to know that I shall mention just three.

With one or two other people, it was the noble Lord, Lord Field—Frank Field as he then was—who persuaded Mrs Thatcher, as she then was, to enable council tenants to buy their own houses or flats and become homeowners. For these deeply underprivileged people, to own a home was an incredibly important change in their lives and we should never forget it. If people remember, the issue at the time was that the noble Lord wanted these houses sold to the tenants but for the money to be used to invest in new social housing. The sad thing about that whole policy was that Mrs Thatcher agreed to sell the properties to their tenants but not to use the money to invest in social housing. Half the policy was wonderful but had the noble Lord, Lord Field, had his way, there would have been investment in social housing and then it would have been the perfect policy.

On a very different issue, the noble Lord, Lord Field, was one of the masterminds of the Modern Slavery Act. He chaired the committee that developed that policy and then led the charge in driving the Bill through the other place. We know that my noble and learned friend Lady Butler-Sloss and the noble Lord, Lord Randall, were also key players in that reform. It is a radical, major issue, which will last for many decades to come—that is important.

The third, totally different, example, which illustrates the versatility of the noble Lord’s mind, was the adoption by the Queen, for her Jubilee year, of the Queen’s Commonwealth Canopy—it was his idea and rather a wonderful one. We can expect the noble Lord to contribute on all sorts of issues to do with climate change and the planet—you name it and he will be up there. I think he will be an extremely active Member of your Lordships’ House and a formidable challenge to anyone who chooses to disagree with him. I have to confess that that might often—sometimes, anyway—include me.

I turn now to the Social Security (Up-rating of Benefits) Bill, which is what I am supposed to be talking about today. I thank the Minister and her officials for their very helpful briefing the other day. I understand that if wages fall this year, as they are expected to do, without this Bill, the Secretary of State cannot uprate a range of benefits, but I have a few questions for the Minister.

First, I believe that this year and next year should really be taken together. These two years are going to be ravaged by Covid-19, in very different ways. We know that this year average wages are likely to fall by about 1%. Indeed, we know that people on the Government’s employment support scheme will lose some 17% of their wages. I applaud the scheme—I am not being critical of it—but we have to be aware that a lot of working people, including many young people, will lose substantial percentages of their income. Millions of others will lose their incomes altogether. This year is not like any other that we have experienced in our lifetimes.

Next year, however, average wages are likely to increase by about 4%. These shifts in pay make a nonsense of the triple lock. Over the two years, we can expect average wages to increase by, let us say, 3%—a purely illustrative figure. However, if the triple lock is applied, my understanding is that with that sort of wage change this year and next, pensions would increase by 6.5%—more than double the wage increases, if I am right. No doubt the Minister is looking around for some information to prove me wrong. Maybe she will succeed but I stand by my figures for the next while.

Seriously, there is an important issue here, which a number of other Peers have mentioned: the difference between the old—like me; I claim my state pension—and the young. It is crucial that we do not lose sight of that; others have made the point far better than I could.

I understand that there is a dispute between the Prime Minister and the Chancellor. The Prime Minister wants to stand by his manifesto commitment to hold on to the triple lock, which I can understand. But nobody knew about Covid at the time of the election, although we probably should have done. The Chancellor, rightly, wants to ditch the triple lock for the moment and I have to say that I think he is right. I just want to put that on record. We have a Chancellor who really knows about figures and I think he has got it right.

I agree with the flexibility introduced by this Bill but hope that it will be repeated next year. Unfortunately, it is not just one Bill covering the two years. I also hope that it will be used to increase the basic pension in line with average earnings, at most. The basic pension should not increase any more than wages; in the light of the fact that so many pensioners have done rather well in the last decade or so, even to increase pensions in line with wages at least needs thinking about. Also, I very strongly think that pension rates and other benefits for the poor should be increased even more than the increase in average wages. I hope that the Chancellor will treat the basic pension differently from the pension and other benefits for the most deprived, because we have to deal with the most incredible inequalities in our society and that is one way in which to do it.

I turn to a slightly different issue. I hope that we will consider in Committee the problem of the 4% of UK pensioners who currently do not receive the pensions to which they contributed over their entire working lives. This is the 4% who do not live in the EEA or in a country covered by an agreement that requires us to update their pensions. If they are in other countries, their pension is frozen at the level it was when they moved from the UK or first claimed their pension. You could say that that is nothing to do with this Bill, or that this is an opportunity to do something about this rather tragic little group. These are people who may have moved to Canada, or somewhere, to be near their daughter because they are frail and have stayed there. They may still alive 15 years later but have had no increase in their pensions. In conclusion, I welcome the Bill but with one or two provisos, and I look forward to the Minister’s response.

Baroness Drake (Lab) [V]

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My Lords, I congratulate the noble Lord, Lord Field, on his excellent maiden speech. He has made an outstanding contribution to the public debate on social security and pensions. His interrogation of the players on the funding of the BHS pension scheme is the stuff of legend. I am so glad that he is now such an asset to this House. I also look forward to hearing from the noble Baroness, Lady Stuart.

I support this Bill because it allows the Government to increase the rate of particular pension benefits from 2021-22, if average earnings do not increase. References to uprating benefits in the 1992 Act are to prices or earnings, depending on the benefit. The triple lock is a Government manifesto commitment and, therefore, subject wholly to their discretion. But that the Bill is needed is a stark reminder of what is happening to earnings, particularly in the private sector. The Office for Budget Responsibility predicts average earnings will fall by 7% this year, which is not surprising, and that earnings could see an 18% increase next year which, if correct, would put the triple lock under an intense spotlight.

Covid-19 has undoubtedly weakened the economy and Brexit will present further profound changes for business. Yet 10 years after the financial crisis in 2008, median real earnings were still 3% below their 2008 level and there was record low productivity growth. Either way, such outcomes will raise the heat of the debate on the uprating of benefits. Is it now the Government’s view that their commitment to the triple lock and uprating of state pensions in its current form may not hold, year on year, over the next few years?

Recent pension debates have focused on auto-enrolment. I warmly welcome the Chancellor’s commitment to maintaining workplace pension contributions throughout the different job support measures that he has introduced, including in Kickstart, which is targeted on the young unemployed. That shows real commitment. But the reality is that the state pension will remain the dominant source of retirement income for millions of pensioners now and long into the future. It is important that the uprating of the state pensions does not become a political football and that its very long-term strategic role is not lost: that of setting a firm foundation on which ordinary people can rely—I stress ordinary people—when saving from their wages into a workplace pension to build a better retirement income.

DWP statistics revealed that in 2018-19 benefit income, including state pension, was the largest component of the total gross income for pensioners, and that increases considerably as pensioners age. Average incomes of single pensioners were slightly lower in 2018-19 than in 2009-10. Pensions Policy Institute figures reveal that those with below median retirement income receive on average half their income from the state pension alone, excluding other benefits. The new state pension is currently worth 24% of national average earnings, 2% less than the basic state pension peak of 26% in 1979. Those eligible for state pension prior to the 2016 introduction of the new state pension do not benefit from the triple lock applied to their full state retirement.

I give that setting because a cohort of retired people are clearly better off, and that has to be addressed, but it should not affect the perceptions of the financial position of pensioners as a whole. For the top fifth of pensioners, the largest source of income was their occupational pension and they received a larger percentage of their income from earnings. Intergenerational concerns may in many cases be better addressed through the tax regime and the national insurance rules for those working over the state pension age, rather than weakening the state pension as a firm foundation for saving by millions of ordinary workers. That could be regressive, hurting those on lower and moderate incomes the most and having the least impact on those who rely so little on it because they have such a large alternative source of income.

The DWP Secretary of State said that the Bill would allow

“potential increases for the poorest pensioners who are in receipt of pension credit”.—[Official Report, Commons, 1/10/2020; col. 559.]

There are some 1.5 million claiming pension credit; many women do so but many poor pensioners, sadly, do not even claim. Many will be feeling isolated and vulnerable and the winter months are still to come. In my view, the Government should significantly uprate pension credit, which is wholly targeted on the poorest pensioners. There are precedents for applying higher cash increases to the guaranteed pension credit, and I hope that the Government will set another such positive precedent. What are the Government’s thoughts on the uprating of pension credit?

Can the Minister also give some indication of the Government’s timeline and intentions for the annual uprating of other social security benefits, given that people have economic anxieties and there is rising unemployment—we have just heard the figures today—along with falling earnings and hours of work? The Government temporarily boosted universal credit for families during the crisis, but they risk undoing this protection for the poorest families at the time when they need that boost the most. The benefit cap meant that 124,000 families on universal credit did not receive the full £20 per week benefits increase; now thousands will see a fall in their benefit as the grace period runs out. The Resolution Foundation’s forecast is that the poorest families will suffer a huge 7% fall in income if the £20 per week increase is removed in April. The Government simply cannot go on claiming that we are all in this together when retaining the benefit cap in these dire circumstances. A review of taxes for the wealthy was taken off the table but removing the £20 from April was nailed to the floor. That certainly is not “all in this together”, so it would be of value if the Minister could give some indication of the intentions on the uprating of other benefits.

Lord Shipley (LD) [V]

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My Lords, like others I speak in support of the Bill, but first I must say that we are looking forward very much to hearing the maiden speech of the noble Baroness, Lady Stuart of Edgbaston, in a moment? Before I talk about the Bill, I, too, congratulate the noble Lord, Lord Field of Birkenhead, on his excellent maiden speech. He made a number of telling points, including on the importance of education and apprenticeships, on modern slavery and on the need for us to be one nation. We should thank him for all he has contributed to the thinking on poverty, financial fairness and the benefits system over so many years. It is very good indeed to have his experience and expertise in this House.

As the Secretary of State for Work and Pensions has said, this is a technical but important Bill. It is particularly important for pensioners on low incomes and even more so for those in receipt of pension credit. I assume it was an oversight that this situation might arise. The context is a serious one, as we have heard, because many poorer pensioners may have been very dependent upon small amounts of investment income which they have seen reduced to very low levels by declining interest rates. Holding down their state pension as well would not be right.

As we have heard, this is a one-year adjustment. However, there are some implications, a number of which we have heard about already. If earnings bounce back for 2022-23, there would have to be very careful consideration of whether that annual rise should be tracked. One approach would be another one-year adjustment that could then be based on a two-year period with a baseline from before the outbreak of the pandemic. That might eliminate unintended consequences. I would be interested to hear the Minister’s view on that, and to know when the draft order will be laid to increase pension benefit rates by such a percentage

“as the Secretary of State thinks fit.”

I am aware of the timescales for ensuring that the IT system works, but the earlier the percentage is known the better it would be for our consideration. The timing of that decision should bear in mind the need for financial fairness across society in the face of the coronavirus pandemic.

As we heard from the noble Baroness, Lady Drake, a decision is pending on the universal credit uplift, which is due to end in March. A report published recently by Citizens Advice has found that three-quarters of the people it gives advice to on debt problems and who receive universal credit and working tax credits would not be able to cover their costs if the uplift were discontinued. I submit that that would not be fair.

We have heard from a number of speakers about the importance of intergenerational fairness. I subscribe to the opinions expressed by the noble Lords, Lord Blunkett and Lord Bourne, the right reverend Prelate the Bishop of St Albans and others. I say to the Minister that we will need a national debate on how we address the fragility of our benefits system, which has become so exposed by the coronavirus pandemic. The financial well-being of society should be an ambition that demonstrates that it is truly inclusive. The next few months need to be used to review and reform.

One of the things that we now need to consider is universal basic income. I have watched pilot schemes for it and I have sometimes wondered whether it would work effectively in a UK context. It might, but that is part and parcel of what I am saying to the Minister: we cannot move from a decision on pensions and a different decision on universal credit uplift when we now need to look very carefully at the whole structure of our benefits system in a post-coronavirus position.

Baroness Stuart of Edgbaston (Non-Afl) (Maiden Speech)

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My Lords, I am grateful for the warm, albeit socially distanced, welcome that Members of this House have extended to me. It is an honour and a privilege to be here, but there is also a duty associated with our presence here.

It was a joy to have as my supporters the noble Lords, Lord King of Lothbury and Lord Owen. There were loyal friends to my late husband, Derek Scott. It was the closest I could get to him being there and sharing the occasion. I think he would have been proud of the three of us.

It would be amiss of me not to mention some of those who have gone before me. My old constituency of Birmingham Edgbaston has the proud record of having been represented by women for longer than any other constituency in the country. Dame Edith Pitt was elected in 1953 and was succeeded in 1966 by Dame Jill Knight, who entered this House in 1997 as Baroness Knight of Collingtree. She retired in 2016 after 50 years of parliamentary service. When I stepped down in 2017, I was succeeded by Preet Gill, the first woman Sikh Member of Parliament.

The last time I spoke in the other place I referred to Nancy Astor, the first woman to take her seat in Parliament, who, on leaving, reflected that she would miss this place more than the place would miss her. That is true for all of us, but some leave a deeper footprint than others. In 1938, Birmingham Edgbaston was represented by the then Prime Minister, Neville Chamberlain. I have occasionally reflected on what he would have said had he been told that, 60 years later, his constituency would have been represented by a German woman socialist, born near Munich, and that it all came about by peaceful democratic means.

Last but not least, I come to this House after having shared a significant part of my life with my late husband, Derek Scott. He started public life as one of the first of the political special advisers to the late Lord Healey when he was Chancellor of the Exchequer in the Callaghan Government, and served as Prime Minister Tony Blair’s economic adviser during the first term of the 1997 Labour Government. He foresaw many of the economic and political difficulties associated with the creation of the single European currency and the contradictions in the UK’s membership of the EU. He did not live to see the 2016 referendum, but his thinking and reasoning shaped many of the arguments.

I gave my first speech in the other place during a debate on social security. I told the House then that I entered politics in no small part because of my concerns about pension provisions in general and the unfair treatment of women in particular. In those days, it was not clear who owned the surpluses accumulated by occupational pension funds. I was about to write a PhD thesis at Birmingham University about the discretionary investment powers of pension fund trustees. I was ably supported in this endeavour by some excellent law teaching, which the noble Lord, Lord Bourne, reminded us about at the beginning. He was an absolutely brilliant company law teacher.

As I started this work, I met Jeff, now the noble Lord, Lord Rooker. He told me about the fate of pensioners of Lucas Industries. The company had accrued large surpluses, but, rather than increase the benefits paid to its pensioners, it raided the fund. A group of pensioners took the company to court. They not only lost their case but were told that if they appealed against his decision he would award costs against them. One day, I drove up to Fazeley, picked up the court papers and hoped to be at least able to incorporate their story in my PhD. Alas, the PhD was never completed. I became the university’s MP instead. The first committee I served on was on pre-legislative scrutiny of pension splitting on divorce, which the noble Lord, Lord Field of Birkenhead, may well remember, because I seem to recall he was the Pensions Minister at the time. Whenever challenged about my PhD, I say, “Never mind, I put it into law.”

That makes this Bill a very good occasion for me to be allowed to give my maiden speech. The Government are right to uprate certain benefits for the 2121-22 tax year, even if earnings do not increase. As several speakers have said, one year may not be sufficient, and there is a real question about the intergenerational fairness of some of our arrangements. However, I urge the Minister to make sure that whatever mechanisms we set up, people who pay their contributions have a right to know what they can expect and to have a level of certainty about the deal the state enters into with them. We should never forget about the poorest pensioners, but we should also not forget about women. At the time when I first entered politics women were handicapped by not being able to affect their pension entitlement other than through earned income. Some of that has changed but it is not sufficient, as the WASPI women would be the first to tell us.

I thank the Committee for listening to me and giving me the opportunity to take part in this debate.

Baroness Altmann (Con)

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My Lords, it is an absolute pleasure to follow the noble Baroness, Lady Stuart of Edgbaston. I am sure noble Lords will join me in congratulating her on her excellent maiden speech. I know that we can look forward to many more thoughtful, powerful and productive contributions from her in the future.

The noble Baroness, Lady Stuart, will leave a footprint in this House—fear not. Her battle for the position of women in politics, business and pensions will continue. The noble Baroness has had such a distinguished career in public service: 20 years as MP for Birmingham Edgbaston, including as Health Minister and on the Joint Intelligence Committee. Now, as chair of Wilton Park, she is dealing with conflict resolution, a skill that I hope will prove particularly valuable in the context of some of the conflicts we encounter in this House—on Brexit, for example. As a non-executive director in the Cabinet Office, she is and will be a real asset to the House. I am delighted to see her here.

It is a pleasure to pay tribute to the noble Baroness, Lady Stuart, whom I met and became friends with through her dear late husband, Derek Scott, with whom I worked on pensions policy in No. 10 when he was the then Prime Minister’s chief economic adviser. Her law degree and her near-PhD on pension issues have definitely stood her in good stead. Like the noble Baroness, Lady Stuart, Derek was personable, intelligent and with a really good sense of humour. All three of us were vehemently opposed to Britain joining the euro. Indeed, his warnings about the dangers of monetary union to European financial stability and the costs of bailing out weaker members such as Greece proved prescient around the time of his tragic death aged just 65 in 2012. I have no doubt that Derek would be so proud of the noble Baroness, Lady Stuart, and all that she has achieved—as, of course, are her sons, Ben and Alastair, and her wider family. I look forward to many more contributions from the noble Baroness, as do all noble Lords, I am sure.

I also pay tribute to the noble Lord, Lord Field of Birkenhead, whose maiden speech we have also heard today. I look forward to many more contributions from the noble Lord, not only on education, apprenticeships, modern slavery and national unity but on today’s subject: pensions and social security. He is, as many others have commented, a legend in his field.

The Bill before us today is vital to protect pensioners. Clearly, using earnings growth for the period May to July 2020 would make it impossible to uprate many important benefits that pensioners rely on. It is right that the Bill gives the Secretary of State discretion to increase the state pensions by an amount considered “appropriate” in light of the economy and other matters. It would be wrong to freeze state pensions in the current environment, especially when so many older people are struggling with the effects of lockdown, restrictions on their daily lives, or having to spend more on care, for example.

The UK state pension is already the lowest in the developed world relative to average earnings. I share the views of the noble Lord, Lord Blunkett, and have called, as he has, for a double lock, increasing by the best of prices or earnings. In fact, as others have said, the triple lock is not just problematic for intergenerational fairness; there is an element of intragenerational unfairness. The triple-lock construct is not entirely suitable for the purpose of preventing poverty in later life. It is more of a political construct than a rational economic policy tool to protect later life. The 2.5% is arbitrary and, in particular, does not apply to pension credit, which has to be increased only in line in with earnings, rather than the triple lock. The triple lock protects only the full basic state pension of £134.25 a week and the full new state pension of £175.20. It does not apply to SERPS or the state second pension. So it benefits the youngest pensioners most, rather than the oldest and poorest. I urge my noble friend the Minister to reassure the Committee that the pension credit will not fall behind the new state pension in any way. I also urge the department to look again at how we protect the oldest and poorest pensioners.

The noble Baroness, Lady Meacher, mentioned the issue of frozen pensions: the 4% of UK pensioners who have no right to an increase in their state pension. I know that this is a difficult issue for the department but it might be one, in the light of the pandemic and of Brexit, that we wish to reconsider.

I also ask my noble friend to look at other benefit upratings which are particularly important. One that I have commented on before is bereavement benefits; in particular, having an allowance for children that lasts longer than 18 months and disregards their parental status.

Finally, I ask my noble friend to consider particularly the position of women, the disabled and the lowest earners; in particular, the older women trying to live on far less than the full pension, even though they are entitled to a share of their former spouse’s pension after either divorce or bereavement. Could my noble friend update the Committee on the work being carried out in the department to identify what has gone wrong with the system which is meant to ensure that women receiving below the minimum have their pensions increased when their spouse reaches his state pension age, and whether remedial measures are about to be put in place?

Baroness Lister of Burtersett (Lab)

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My Lords, I add my congratulations to the noble Baroness, Lady Stuart of Edgbaston, and the noble Lord, Lord Field of Birkenhead, on their excellent maiden speeches. The latter in particular brings years of experience and expertise on social security issues to your Lordships’ House. Moreover, he gave me my first job at the Child Poverty Action Group just short of 50 years ago—I would probably not be here otherwise.

I realise that this is a technical Bill relating to pensions uprating, but given that it is entitled the Social Security (Up-rating of Benefits) Bill I wish to address the uprating of benefits more generally. The Minister ended Second Reading in the Commons with a claim that the Bill provides pensioners

“with financial peace of mind in the face of the … pandemic”.—[Official Report, Commons, 1/10/20; col. 571.].

This is of course welcome, but arguably people of working age, especially those with children, as referred to by the noble Lord, Lord Bourne of Aberystwyth, are in even greater need of such peace of mind. Children are already at greater risk of poverty, including deep poverty; many families face a very uncertain economic future and will be suffering acute insecurity and anxiety. At the very least, they need to be given some peace of mind through assurances about the social security support that will be available to them.

As a former Work and Pensions Secretary, Stephen Crabb observed in a “ConservativeHome” blog—I must admit that is not my usual bedtime reading:

“What was missing from the Chancellor’s”


Winter Statement

“was any mention of the crucial role being played by Universal Credit during this crisis and the bigger role it will inevitably need to play in the months ahead.”

Echoing organisations on the ground, in the early stages a Daily Telegraph article suggested that the social security system could come to play a similarly vital role to the NHS in seeing us through the pandemic.

It is thus essential that the system is adequate to the task, including a level of benefit that, to quote the Lords Economic Affairs Committee,

“provides claimants with dignity and security.”

The committee also warned:

“The significant cuts to the social security system over the last decade mean that a catch-up increase in funding is needed urgently”.


Those cuts included the freeze in most working-age and children’s benefits. Given that the Conservative manifesto proclaimed the ending of the freeze, I hope the Minister will be able to give a firm assurance that, rumours to the contrary notwithstanding, there will be no further freeze of benefit during this Parliament. Any further cuts would mean not just more extensive poverty, but more intensive poverty, as more families are pushed further below the poverty line.

The committee also called on the Government to

“commit to making the increase in the standard allowance permanent”,

given the evidence it had received about the inadequacy of UC. Indeed, the very fact of that welcome uplift was tacit admission that the level of benefit was too low if people who lost work because of the crisis were to cope. Despite the uplift, Joseph Rowntree Foundation calculations showed that the real value of out-of-work support is still well below what it was in 2011-12, especially for those with children. The Minister will be well aware of the widespread support for retaining the £20 uplift, expressed in a letter to the Chancellor from around 50 children’s charities and others, and by a number of noble Lords this afternoon. According to the IFS, its withdrawal could mean 4 million families losing an average 13% of their benefit overnight.

The Resolution Foundation argues that to withdraw the uplift risked undoing the valuable protection it had provided for some of the poorest families when they will need it most, given, it said:

“It is inconceivable that the labour market will be in full health by April”.


It calculates that it would mean support for unemployed people falling to its lowest level ever, relative to average weekly earnings. Research by Save the Children published last week and by Citizens Advice today underlines the vital role it has played and the devastating impact its removal would have on families struggling to stay afloat. Last week the Prime Minister thrice avoided giving a straight answer on this question. I hope that he and the Minister will read a letter sent to him by Davine Forde, written from lived experience and pleading with him to maintain the uplift. It is on the JRF website.

Those pressing for retaining the uplift argue also for its extension to legacy benefits, claimed in particular by sick and disabled people or carers. The original argument that this could not be done because it would take too long to implement is well past its sell-by date. I hope the Government will now listen to the case made by SSAC and the Work and Pensions Committee, among others, for ending what is tantamount to discrimination. As a lone mother on ESA told Save the Children, “Having an extra £20 sounds so little but it means a lot”.

There is growing evidence that low-income families with children are bearing a disproportionate burden of poverty and hardship during the crisis; this shows up in Trussell Trust data on increased food bank use. Studies by Save the Children, CPAG—of which I am honorary president—and the Church of England reveal a significant deterioration in families’ living standards, aggravated in some cases by the benefit cap, referred to by my noble friend Lady Drake, which hurts children disproportionately. Yet last week when I asked the Minister—not for the first time, as she pointed out—why there has been no additional social security support for children, answer came there none. Calls for a real rise in children’s benefits, be it child benefit or means-tested support, are growing. I ask yet again: why are children, the age group at the greatest risk of poverty, being ignored and why is there still no review of the benefit cap?

I have emphasised the social case for protecting families through the social security system, but there is also an economic case, as made by organisations such as CPAG, JRF and the Resolution Foundation. It was expressed well in Stephen Crabb’s blog, which I referred to earlier. He said that

“investing in social security can be an effective stimulus, with those at the bottom end of the income distribution allocating more of their budget to core bills and essentials, and therefore being more likely to spend additional income than wealthier households”.

I would add that they are more likely to spend that income in the local economy. This needs to be understood as part of the levelling-up agenda. Indeed, according to the Resolution Foundation as many as one in three working-age families in so-called red wall constituencies stand to lose if the uplift is withdrawn.

I know that the Minister is sympathetic to this argument and that she listens to what we say on these matters. I therefore urge her to take the message back to her colleagues in the DWP and Treasury that if the Government are genuinely concerned to provide those least well placed to withstand the financial impact of the pandemic with “financial peace of mind”, they must commit now to maintain the £20 uplift, extend it to legacy benefits and improve support for children through a real increase in financial support and the suspension of the cap.

Lord Loomba (CB) [V]

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I congratulate the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston, on their maiden speeches. I am particularly pleased that they both support issues relating to poverty, women, children and modern slavery, as these issues are very close to my heart.

Coming on to the Bill, it is important as it gives support to some of the most vulnerable in our society: those relying on state pensions to survive, with many of them enduring hardship. The Government’s commitment to the triple lock is admirable, ensuring that they stick to their manifesto commitment to an increase in pensions by the rate of wage increases, inflation or 2.5%, whichever is the highest. It is also admirable in helping those in our society who are not able to go out to get a better job or work harder for a pay rise.

Pensioners can often see their income decreasing when costs, prices and basic needs rise faster than their income allows, especially those in receipt of pension credit. We have seen pensioner benefits decrease in all sorts of ways, such as the move to make the BBC responsible for its licence fee, which has now resulted in many pensioners losing their entitlement to it. I support the Bill for those reasons, and—here I declare an interest as chairman, founder and a trustee of the Loomba Foundation—because it ensures an increase in pensions for widows and widowers who have lost a loved one in an industrial incident and are entitled to survivor benefits.

The Bill is needed because the 1992 Act does not allow for the circumstances we are now facing. The Government at the time did not foresee a time when wages might not rise, so the 1992 Act is, in effect, useless in providing for pensioners facing today’s world, as it does not permit an uprating if wages or prices do not increase—an increase that would stop many pensioners falling below the breadline. It demonstrates that the Act is not fit for purpose in the 21st century.

We have had a review of working practices and how the gig economy is driving the way that workers are paid and, in turn, how they pay their taxes. The 1992 Act was introduced when the economy was in a very different place. Now, as we see huge changes in how people work, maybe it is time to consider a review of pensions and to align them better with the way of the world as it is now. In the future, many people might find themselves without recourse to a state pension in their old age, as they will have spent their working lives living on meagre earnings, unable to pay into a pension, with no employer pension, and not entitled to the state pension either.

Viscount Trenchard (Con)

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My Lords, I too offer my congratulations to the noble Lord, Lord Field of Birkenhead, on his excellent and thought-provoking maiden speech. As your Lordships know well, he has made a huge contribution to pensions and benefits matters over the years and comes highly regarded on all sides of the House.

I was particularly struck by what the noble Lord said about the importance of education and apprentices. In an age when statues wobble on their plinths, I thought I would mention to your Lordships that I have been invited to Royal Air Force College Cranwell on Friday to attend the installation ceremony of a statute of my grandfather, about which I am most honoured and proud. One hundred years ago, my grandfather devised the Halton apprentice scheme, which was approved by Winston Churchill. It started in 1920 and provided a technical education to many who joined the Royal Air Force from poorer homes. Many subsequently became air marshals or industrial leaders. Through this and other means, the Royal Air Force became an agent for social mobility throughout the interwar years and later. I am well aware of the huge importance of providing apprentice schemes, especially in technical subjects.

I also congratulate the noble Baroness, Lady Stuart of Edgbaston, on her most impressive and interesting maiden speech. She, too, has had a distinguished political career and has made a great contribution to social security issues. Those of us who supported the decision to leave the European Union are hugely encouraged that there is a highly regarded new noble Baroness and new noble Lord who can help explain to other noble Lords what the upside is for an independent Britain after Brexit and help your Lordships’ House to send out a more optimistic and outward-looking message to the public.

I thank my noble friend the Minister for introducing this very necessary Bill today. The triple lock, a clear and widely publicised manifesto commitment, promised that the state pension and certain other benefits would be uprated by a minimum of 2.5% each year, whatever happened to wages or inflation. The Bill demonstrates the Government’s action in doing what they said they would do, and I welcome it.

The coronavirus has caused untold damage to many sectors of the economy, especially the hospitality and leisure sector. The Government have done much to help those businesses stricken by the pandemic but there remains much more that they must do. In particular, the arbitrary nature of the allocation of grants under the Arts Council’s cultural recovery fund raises questions of fairness and would seem to conflict with the need to maintain a fair, competitive playing field between similar music festival businesses which have lost 100% of their income this year. I declare my interest as a director of such a business. However, that is not a subject for debate today.

I welcome the support given by the Bill to pensioners. It will give this large section of our community peace of mind as we move into winter against the background of an increasing rate of Covid-19 infection. A consequence of rising longevity, which is to be celebrated, is that more pensioners wish to work either full or part time. The more secure financial platform that this measure creates for them will encourage them to engage in economic activity after retirement, and that will assist the recovery of the economy from its current parlous state.

Do the Government intend to introduce a similar Bill next year? Could they not have taken the power to do the same thing next year in the unfortunate event that wages do not bounce back from the current levels and we do not see the creation of new jobs as people change their working patterns and new types of businesses emerge to replace those whose survival is now compromised? Of course, we all hope that wages will bounce back strongly in 2021, and I ask the Minister to tell the Grand Committee what the Government’s plans in relation to the triple lock will be in those circumstances.

Several noble Lords mentioned the problem of the very low take-up of pension benefit. Apparently more than 1 million people are entitled to this benefit but do not take it up, against the background of 2 million living in poverty or on wages lower than the living wage, according to the Joseph Rowntree Foundation. What steps are the Government taking to increase awareness of this benefit and to assist those who should be taking it up but need help in doing so?

Lastly, why have the Government not chosen the Bill as the means of correcting the anomaly that the pension payments of 510,000 pensioners have been frozen simply because they have moved to a country with which the UK does not have a reciprocal agreement requiring an uprating of benefit? It is shocking that Australia and Canada are among those countries, given our historical and kinship ties with them. This is especially regrettable against the background of our anticipated accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which should increase trade and investment involvement with those countries. I commend the activities of the End Frozen Pensions pressure group for bringing this unfortunate anomaly to your Lordships’ attention.

I look forward to the wind-up speeches and the Minister’s reply.

Lord Randall of Uxbridge (Con) [V]

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My Lords, it is a great pleasure to follow my noble friend Lord Trenchard, particularly as he discussed the unveiling of the statue of his grandfather. We in Uxbridge regard ourselves very much as an RAF town, so I wish him well for that event.

When I put my name down to speak in this short and important debate, little did I realise that I would be fortunate enough to be able to listen to two eloquent and informed maiden speeches from esteemed colleagues from the other place. Sometimes it is an advantage to be low down the speakers’ list. Proceedings in our House will be massively enhanced by these two parliamentary greats.

I was always impressed by the contributions of the noble Baroness, Lady Stuart of Edgbaston, and I was not disappointed today. I know that she represented this country in fencing, so I advise noble Lords not to mess with this particular lady.

The noble Lord, Lord Field of Birkenhead, is one of those people who always makes me feel completely inadequate whenever he speaks, but he also puts into action his words and his incredible thinking. It has been mentioned that the Queen’s Commonwealth Canopy was one of his ideas, and that is just an example of his versatility. I am looking forward to working with him on many common interests, but not least on modern slavery. To be a member of his triumvirate of inquiry into modern slavery, albeit a rather junior one, together with the noble and learned Baroness, Lady Butler-Sloss, was a seminal moment for me.

This Bill is to be welcomed. Ensuring that those who have paid all their lives for a pension should be given a fair basic income is something that I hope we can all subscribe to, and that is certainly what I have heard so far today. I am pleased to support this measure.

Today is one of those occasions when I very much regret that I am not speaking to your Lordships in person. The reason for that is that it is difficult to convey while seated in my home my passion for a cause that I feel strongly about, and an injustice against our fellow citizens that can be righted within this simple measure. The Minister may well know what is coming, as I wrote to the Pensions Minister, Guy Opperman, last week, outlining my intention to raise this issue, and hopefully to table an amendment in Committee. The noble Baroness, Lady Meacher, has already raised it, as have my noble friends Lady Altmann and Lord Trenchard, but I make no apology for continuing the theme. This is the issue of frozen pensions for nearly half a million UK pensioners living abroad. Across the world, hundreds of thousands of our fellow citizens, British state pensioners, are being discriminated against simply because they chose to retire to the “wrong” country.

There are 120 countries throughout the world where UK pensioners receive only the amount that was the pension at the time of their leaving the country. Eighteen of those countries have 1,000 or more affected pensioners. This is not a new issue, and it has been rattling around Governments of all persuasions for many years. A whole series of Pensions Ministers, perhaps even the noble Lord, Lord Field of Birkenhead, when he held the position, have had the same brief from the department. I am sure that whenever the Minister’s civil servants hear of anyone raising this, they simply go to the file marked “usual issues”, blow off some dust, and pull out the identical brief. I know the arguments behind the answers to this injustice; I have heard them many times. Many Members of the other place and your Lordships’ House have raised this issue over the years. Notably, in a passionate and eloquent speech, the noble Baroness, Lady Benjamin, raised it recently in a debate about the Commonwealth.

We will not cease raising the issue until this wrong is righted, but just in case it is needed, let me repeat the situation. All British pensioners who have made national insurance contributions during their working lives are entitled to a British state pension, regardless of where they choose to live. Crucially, however, 4% of those recipients are denied their full pension because of an illogical government policy which prevents their pensions being uprated in line with inflation. The UK state pension is payable overseas but is uprated only if the pensioner resides in the European Economic Area or a country with which the UK has a reciprocal agreement which legally requires uprating. Otherwise, the state pension is frozen at the level it was on the date the pensioner left the UK or first drew their pension. Falling in real value year on year, this plunges hundreds of thousands of pensioners into poverty, including thousands of UK veterans. They include people such as 95 year-old World War II veteran Anne Puckridge, who served in all three Armed Forces and who receives a meagre £72.50 per week of the £134.25-per-week state pension she should rightfully have. This is all because she moved to Canada—a Commonwealth country—at the age of 76, to be closer to her family. It also includes another wonderful lady, whose case I have raised before in your Lordships’ House, Monica Phillips, who emigrated to the UK in 1959 as part of the Windrush generation. She worked in the UK for 37 years and was a devoted public servant. In 1996, Monica returned to Antigua to look after her ailing mother, and as a result her pension was frozen at £74.11 per week. The arbitrary nature of this policy is illustrated by the fact that Monica’s sister, who remained in Leicester, receives a full uprated pension.

Perhaps there is a popular misconception that those retiring overseas are all wealthy, but the fact is that there are many who are suffering pensioner poverty. The Government will trot out that they now make people aware that their pensions will be frozen when they leave, but many who retired years ago maintain that this was never mentioned. Of course, many feel that they still have no option but to go abroad regardless because of their family commitments. So why do I hope that the time to rectify this blot on the good name of the UK is now? In the withdrawal agreement Act, passed in January 2020, the Government rightly committed to continuing to uprate the pensions of UK pensioners who moved to the EU before 2021 in line with inflation. Surely it is time to treat all our pensioners equally, regardless of where they reside. If the concept of reciprocity is still so much an idée fixe in our Government’s mindset, then perhaps we should now broach this in every trade deal we are striving to conclude, especially with our Commonwealth partners. That is also true of our oversea territories, as it is only Bermuda and Gibraltar which receive uprating.

We have heard about the situation which the pandemic has created. Let me remind the Government that this is worldwide. If it is about cost, I will not mention how we have managed to find billions when we need to. There is, however, a matter of raw politics: in February 2018, the Government restated their commitment to ending the current 15-year time limit for British expats registering as overseas electors. Perhaps that, combined with other factors, means that UK citizens will be eligible to receive their proper pension, as we want.

I pay tribute to those who have worked tirelessly to raise this issue, and particularly to the International Consortium of British Pensioners and stalwart campaigners such as John Duffy and Jim Tilley. The latter was a good Uxbridge man before he left for Australia. I am not expecting anything to happen today, but I can assure those many UK pensioners living around the world who contributed to this country that I and others will continue to fight for justice and restore the country’s reputation for fair play.

Lord Foulkes of Cumnock (Lab Co-op)

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My Lords, it is good to follow such an eloquent and powerful plea by my good friend the noble Lord, Lord Randall of Uxbridge. He has in fact invited me to go to Uxbridge since I recently pointed out some of the failings of its eateries. I also thank the Minister for her eloquent and helpful introduction, and join in the congratulations to the maiden speakers, the noble Baroness, Lady Stuart—with whom I fenced on occasions on the issue of Europe, but I am glad now that it was not real fencing—and the noble Lord, Lord Field, who like me is a ’79er, having entered the House of Commons in 1979. It is great to see him now here in the Lords. Both made excellent maiden speeches. I also declare an interest, not on this occasion as a former chair of Age Scotland but as a recipient of the retirement pension—I think others here might have a similar interest in that as well.

For once, I wholeheartedly support what the Government are doing. Some people have been a bit equivocal about it, but I am not in any way. In fact, I was very disappointed that the House of Lords Committee on Intergenerational Fairness recommended getting rid of the triple lock. I think it was a terrible mistake, and I have expressed my concern to the four Labour members of the committee, and indeed to the noble Baroness, Lady Greengross—who like me used to work for Age Concern—for making that recommendation. I do not know about the noble Baroness, but I actually declare my pension in my income tax return, along with my occupational pension, and pay tax on it, so there is a clawback on that. But basic pensioners, who rely on the state pension, are those we are concerned about.

When one looks at the situation for the United Kingdom, one finds that we are the worst of the developed countries in the OECD. The OECD average pension is 63% of average earnings; in the European Union, it is 71%; in the Netherlands, it is 101% of average earnings, but in the United Kingdom, it is 29%. The triple lock has edged it up over a period, but it is still very low as far as the European comparisons are concerned.

I understand that people are concerned about children in poverty; I have heard that from my noble friend Lady Lister and others. Of course there is a huge problem there, but is it not wrong to penalise the already poor by taking money away from them, only to give it to those who are even poorer? The poor will get poorer. I do not disagree with all the requests to consider uprating other benefits, so what do we do? How do we pay for it?

During the pandemic, the poor have been getting poorer, while UK billionaires have seen their personal wealth rise by £25 billion. Hedge funds have done well; Jacob Rees-Mogg will tell you that. Some shares have gone up; people have made a killing there. The personal wealth of the UK’s top earner, Jim Ratcliffe of Ineos, is between £18 billion to £20 billion, but what has he done? He has moved to Monaco so that he can avoid paying tax. These billionaires have a responsibility, and it is about time that we pinpoint that and say it even more loudly.

Philip Green and his wife Tina have a yacht in Monaco. Again, they are avoiding tax. Their company is registered in the tax haven of Jersey so they can avoid paying a fair share of tax. They have a £100 million yacht on which they can sip champagne with Jim Ratcliffe, because he has gone out there now as well. Jim Ratcliffe can admire the birthday present that Tina bought Philip: a pure-gold Monopoly set. On that Monopoly set are the premises that Philip Green owns. This is conspicuous consumption gone absolutely mad.

Let us think about that. Let us think about taxing people who can afford to pay tax, and not take away from the little bit more that pensioners are getting, slowly but surely taking them towards the European average.

Finally, I have a few questions for the Minister about the Bill, which, as I say, I support unequivocally. The briefing says that the pension will be “potentially increased”. Can she make it absolutely clear that that potential will become a reality? I assume that it will, because otherwise why put it into the Bill? However, it would be nice just to have that confirmed.

The triple lock, as others have said, is based on the rate of inflation, the rate of earnings, or 2.5%—whichever is the highest. Can we assume that the increase will therefore be at least 2.5%? Again, some people have assumed that in their speeches, and it would be helpful if the Minister confirmed that.

I am really pleased that the Conservative Government have done this. The Labour Government did it in the early 2000s, with the economic problems that we had then. I hope that we will do a lot more in relation to the take-up of pension credit. I was going to raise that point again, as others have raised it. However, as the Minister knows, I have a Parliamentary Question coming up specifically on the take-up of pension credit, so I will leave that for now and ask her a few questions on that occasion. Meanwhile, I give her my unequivocal support on this rare occasion.

Baroness Janke (LD) [V]

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My Lords, I, too, welcome the two new Peers and congratulate them on their excellent maiden speeches. The reference made by the noble Lord, Lord Field, to the poorest—those on the avenue to destitution—resonates particularly at this time. The noble Baroness, Lady Stuart, clearly has huge experience and knowledge, not least about pensions and social security, so I am sure they will both make very important contributions to the work of the House.

I support the Bill and the Government’s commitment to retaining the triple lock. It is good to hear today just how many noble Lords support the principle of the triple lock. There has been quite a bit of discussion, and quite a lot written, about intergenerational unfairness, with calls to abolish the triple lock, including by this House’s Select Committee on Intergenerational Fairness, so for many there is a feeling that this might be under threat.

The triple lock introduced in 2010 was, as I understand it, to address the 30 years of decline in the state pension value. As my former colleague Steve Webb said recently, that job is not yet done, and other noble Lords have testified to the fact that the state pension in this country falls well below what is considered to be a minimum income.

There are many reasons to support the triple lock, most particularly for the oldest and the poorest pensioners. The noble Baroness, Lady Altmann, makes a good point when she says that it may not be the ideal way to help the oldest pensioners, but if it were to be abolished the oldest and the poorest pensioners would suffer and, according to the Pensions Policy Institute report for Age Concern, the number of pensioners in poverty would rise by 700,000.

The triple lock is also particularly important for women. Two-thirds of pensioners in poverty are women, and the retirement income of low-paid women would drop by 7% if the triple lock were to be abolished. Many retired women did not have the opportunity to build up their own pension as a result of caring responsibilities, and many retired divorced women did not get a share of their husband’s pension as part of their divorce settlement. I therefore also make the point that if the triple lock were to go, younger people would have to find something like £540 a year to avoid poverty in old age.

It would benefit none of us to see the triple lock abandoned and the loss of value to the state pension institutionalised again, as it was in the 30 years running up to 2010. As others have said, it would be a race to the bottom. Some of the reasons given for reviewing the triple lock include the whole argument about intergenerational fairness, which a number of noble Lords have discussed today. Raising the income of pensioners, many of whom are well off, may be seen by younger people to be very unfair, and it is true that many pensioners are well off, provided for by generous private pension schemes and having profited from property prices soaring since they bought their first house.

It is certainly true that circumstances have been much more favourable for those pensioners than for many young people today, but if this is seen as intergenerational fairness there are progressive ways that can deliver the principle of fairness. Several noble Lords have talked about tax, and pensioners with high income can be taxed in the same way as high earners so that people pay according to their means. So perhaps we should look at a fair tax system rather than cutting benefits to pensioners, regardless of whether they are rich or poor.

Another argument I have heard is that everybody should be seen to pay equally for the cost of the pandemic. Of course they should, yet if the triple lock were to be abandoned, the poorest pensioners would suffer disproportionately. Low earners would also suffer if the triple lock were removed. Today’s low-earning young people will have to raise their own income for old age if the state pension has lost so much value that it offers no security to future generations.

Another argument I hear is that the country cannot afford it. We have heard from the noble Lord, Lord Foulkes, and others about the UK pension scheme being one of the least generous in the developed world. I understand that, in the UK, we spend 5.9% of GDP on pensions. According to the Office for Budget Responsibility, with the triple lock this will rise to 8% by 2057-58, whereas Germany currently devotes 10% of its GDP to pensions.

It would also be a pity if this debate were to become a culture war, one that pits older against younger people, because that really does not help anyone. Today’s young will be tomorrow’s old and they will be in a similar position of valuing the triple lock for their old age. How we provide income in retirement should be considered to be a policy issue, and the idea that a decent state pension is unaffordable has been demonstrated to be a false one, as other countries have shown.

There is no doubt that many of those suffering from the loss of jobs in the pandemic are young people, and it seems that we are going to have to support them, as we should, but this should not be done at the expense of the many poor and impoverished pensioners. As the noble Baroness, Lady Drake, said, the state pension is the dominant source of income for millions of pensioners, while other noble Lords have pointed out that the uprating of other benefits is also long overdue. I hope that the Minister will address this in her summing up.

It is hard to see who would benefit from scrapping the triple lock other than pension fund managers, as people make their own provision for retirement. The losers are very clear: the poorest pensioners, oldest pensioners, women pensioners and today’s low-paid workers, who will be tomorrow’s pensioners in poverty if the value of the state pension is allowed to fall in future years. I support the Bill.

Baroness Sherlock (Lab) [V]

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My Lords, this has been an interesting debate and it is a real pleasure to have had two maiden speakers with us today. My noble friend Lord Blunkett is quite right when he says that they will certainly have a tale to tell those who come after them, if only that they made their maiden speeches in a Perspex cubicle; no one could accuse them of being in this for the glamour.

The noble Lord, Lord Field of Birkenhead, spoke movingly about modern slavery as well on the issues for which he is best known. He has a track record that goes back many decades in the field of social security and poverty, subjects that are dear to my own heart, and I look forward to joining him in future debates on those topics. Having heard of the range of issues and debates that have motivated the noble Baroness, Lady Stuart of Edgbaston, I look forward to hearing more from her, too, in the years ahead. Like her, I abandoned my PhD when I came into this House, and I never really got over it either. As mine was in theology, how that is relevant to a Bill about social security uprating is less immediately obvious than it is with hers. I look forward to getting to know both noble Lords in person at some point.

It is a sign of how bad things are that we have this Bill at all. It is needed only because earnings are falling. That simple fact speaks to a wave of anxiety crashing across the UK, as families face falling incomes as a result of being furloughed or having their hours cut, and that is on top of the growing number of those who are losing their jobs, as today’s employment figures show. But the Bill is necessary, as the Minister has explained since, when earnings are negative, there is otherwise no legal power to increase the state pension or the other benefits listed. The last Labour Government had a similar problem following the global financial crisis and brought forward similar legislation, so we on these Benches support this move.

However, some important questions have been raised that need to be answered. First, the Bill is permissive rather than prescriptive. The Explanatory Notes to the Bill say that it will

“allow the Government to meet its commitment to the Triple Lock.”

First, can the Minister tell the House if the Government do indeed intend to increase the state pension under the triple lock? Secondly, are they still committed to the triple lock for the rest of this Parliament, an issue raised by my noble friends Lady Drake and Lord Foulkes? There have been rumours and briefings to the contrary, so it would be good to know. Since the Conservatives sought election on the promise of the triple lock, it is not unreasonable for the public to want to know if they intend to stand by that manifesto promise or not.

Thirdly, the Bill gives the Secretary of State uprating discretion for just one year, a point flagged by the noble Baroness, Lady Stuart, the noble Viscount, Lord Trenchard, and others. The pandemic may continue to create challenges in how we calculate upratings because of earnings volatility. At one stage, the Government were sure that wages would bounce back from the fall caused by furlough and short hours and that we would see a significant one-off jump in earnings in 2021, as suggested by the noble Baroness, Lady Meacher, and the noble Lord, Lord Shipley. The latest growth figures from the Bank of England are rather less optimistic, but the fact is that we do not know. Can the Minister tell the Committee: did Ministers consider some sort of smoothing process such as applying the principles of the lock over two years instead of one, or will we find ourselves back here at the same time next year? It would be good to know that the Government are doing some longer-term thinking on this issue.

The issue of pensioner poverty has been mentioned by various noble Lords, including the noble Lords, Lord Addington, Lord Bourne, and others, along with the position of women, spoken to by the noble Baroness, Lady Janke. The number of poor pensioners had fallen significantly, largely due to the introduction of pension credit, but this is now a fresh cause for concern. Government figures show that 1.9 million pensioners are living in relative poverty. Are the Government as committed to pension credit as they are to the state pension, a point flagged up by my noble friend Lady Drake? If the answer is yes, are they therefore committing to an increase in the standard minimum guarantee in pension credit under the triple lock as well? If they do not, the benefit of the increase in the state pension could be enjoyed in full by many Members of this House, but not by the poorest pensioners in the land who face having it clawed back from pension credit.

The issue of take-up was raised by the noble Viscount, Lord Trenchard, and others. Pension credit is a vital safety net for poorer pensioners, and it is a passport to other benefits like housing benefit, council tax benefit and now free television licences for those aged over 75. But the last published figures show that only six in 10 of those eligible are claiming it and only 70% of the total amount of pension credit that could be taken having been claimed. A senior DWP official told the Select Committee in the other place

“In the UK, 16 per cent of pensioners are in poverty … if all those pensioners claimed pension credit, housing benefit and the council tax reduction, especially the council tax reduction, that would reduce the 16 per cent to almost zero.”


What do the Government plan to do to increase the take-up of pension credit and those benefits to which it is a gateway?

Just as the case for pensioners was made passionately by my noble friend Lord Foulkes, the noble Baroness, Lady Greengross, and others, so too the value of working age and children’s benefits has been pressed by many noble Lords. I do not want to get into the middle of an intergenerational war because there are a lot of issues at play here: poverty, fairness within and between generations, the interaction of public provision and private savings, the respective roles of tax and benefits and, I would add, the importance of not doing anything to undermine the contributory nature of our social security system. But the underlying problem is that, because of years of cuts, our system was creaking when this pandemic hit, as my noble friend Lady Lister demonstrated very clearly. Many people claiming benefits for the first time have been shocked to find out how low they are. I have had people who have lost their jobs ask me how they are meant to live on £95 a week universal credit. I sympathise, but then I have to tell them that if they were getting income support or ESA, they would be getting just £74 a week and that if the Chancellor goes ahead and scraps the universal credit top-up, and if they have not found a job by next April, their benefit will be cut by £20 a week, which will have a huge effect, as noted by the right reverend Prelate the Bishop of St Albans, the noble Lord, Lord Field, and others. I am grateful to my noble friend Lady Drake for highlighting the fact that, thanks to the benefit cap, 124,000 families on universal credit are not getting the full £20 a week increase and thousands more will see their benefits fall as the grace period runs out.

The Secretary of State has discretion on uprating most working-age benefits. After years of freezes and below-inflation rises, last year they were uprated by CPI, except of course for the bereavement support payment, a payment flagged up by the noble Baroness, Lady Altmann. Along with her, I have regularly urged the Minister to look afresh at the Government’s reforms to bereavement support. We are awaiting the September figure for CPI, and that will be the usual measure, but the August 12-month CPI rate was 0.2%, down from 1% in July. The largest contribution to that fall came from recreation, culture and falling prices in restaurants and cafes arising from “Eat out to help out”, followed by air fares and clothing prices. These are irrelevant to benefit claimants. They cannot afford to eat out even with Rishi’s help, and they are certainly not flying anywhere. If the CPI is zero, would Ministers really freeze benefits once again? If the CPI is as low as 0.2%, will the Secretary of State use her discretion to support those of working age in the way she is using it to support pensioners? However, I accept that those are matters for another day, and I hope that the Minister can tell us when that day will come.

For today, I welcome this Bill. It is important to ensure that the Government can fulfil their promise to pensioners. For them to do that, the Bill is necessary and we are pleased to support it. I look forward to the Minister’s reply.

Baroness Stedman-Scott (Con)

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My Lords, I start by thanking all noble Lords who have taken part in the debate today. This House has a great deal of experience in pensions and social security, which has been well demonstrated today. I join noble Lords in congratulating the noble Lord, Lord Field, and the noble Baroness, Lady Stuart, on their excellent maiden speeches. There is no concept of regretting having them in this House. The House is further enriched by their experience, wisdom and integrity, which I can say is bombproof. The noble Lord and the noble Baroness bring with them their expertise and involvement in DWP matters, though not exclusively. That is widely respected and acknowledged. I look forward to working with them both, although I accept that that will be very challenging.

The debate today has covered a wide range of subjects, and I will try to do justice to as many points as possible. If I do not answer all questions, be assured that it is not because I do not want to; it will be because I have run out of time. My officials and I will go through those questions that I have not answered and write to each noble Lord.

The noble Lord, Lord Blunkett, kicked us off with the intergenerational fairness point, which is understandable, and nearly all noble Lords have referred to it. We have recently seen rises in the living standards of pensioners, but we must remember that not all pensioners are in the same position. Over 1 million current pensioners rely solely on the state for their income. While the majority of pensioners have a fixed income, particularly those who rely on the state pension, people of working age are able over time to improve their incomes through work. The noble Baroness, Lady Janke, reminded us that today’s working-age people are tomorrow’s pensioners, and future generations of pensioners will also benefit from the way in which the state pension is uprated today.

The noble Lord, Lord Blunkett and Lord Shipley, and the noble Baroness, Lady Lister, asked why working-age benefits are not increased by the same levels as pensions. As required by law, the Secretary of State will review working-age benefit levels as part of an uprating review in November and assess whether they have retained their value in relation to prices.

The noble Lord, Lord Addington, and other noble Lords, including the noble Viscount, Lord Trenchard, mentioned the triple lock. For 2021-22, the Bill makes technical changes, which will ensure that state pensions can be uprated, even though there has been no growth in earnings. This will allow the Government to maintain their manifesto commitment to the triple lock. All noble Lords asked why we should not do that for two years. Let me be clear: for 2022-23, we are dealing with a huge amount of uncertainty. No one can predict with confidence what earning trends will be over the course of next year, which will be the relevant index for uprating decisions for the following April. Of course, we hope that earnings will increase as the economy recovers, and the Secretary of State will look at this issue when she conducts a statutory annual review of earnings, prices and benefit rates in 2020-21. That will also be the process by which annual uprating decisions will be made in future years, and any decisions will be taken in the context of the wider public finances.

I turn to the contribution by the noble Baroness, Lady Greengross. She asked whether workers aged over 65 should pay national insurance and tax. This is now a matter for the Treasury rather than for the DWP, but I reassure the noble Baroness that we are very much in favour of people working for as long as they can, because it is good for their health and well-being. As my noble friend Lady Altmann knows well, that is why we have the strategy on fuller working lives. I pay tribute to the noble Baroness, Lady Greengross, for the way she champions more mature workers—I must not say “older” because I would probably get in trouble. I thank her for all she has done in that field.

My noble friend Lord Bourne of Aberystwyth mentioned the Social Metrics Commission. Work to develop the experimental statistics has been suspended in the current circumstances, and the DWP’s focus is on activity that supports making payments and critical service lines. In the current uncertain climate, we are unable to predict when our work looking at poverty measures will resume.

The noble Baronesses, Lady Lister and Lady Drake, and my noble friend Lord Bourne of Aberystwyth asked what we were doing in relation to working-age benefits. As I have said, and I say it again to confirm, as required by law, the Secretary of State will review working-age benefit levels as part of her uprating review in November. However, we have done a lot in government to support people at this difficult time, including the plan for jobs, increasing the universal credit rate, investing over £9 billion of extra support to protect people’s incomes, removing the seven-day waiting period and relaxing the universal credit minimum income floor. The Government are committed to doing all that they can.

The right reverend Prelate the Bishop of St Albans mentioned the deep poverty issue that came out in various reports. This Government are helping those who need support the most. I do not want to repeat myself, but I say again: we are putting £9 billion into the welfare system.

I refer to the letter that 50 charities wrote to the Chancellor asking for the £20 uplift to be made permanent and extended to legacy benefits. Many people have championed retaining the £20 extra, and we are not a bit surprised by that. DWP Ministers have worked closely with our Treasury counterparts throughout the pandemic response and will continue to do so.

I pay tribute to faith groups, which do the most amazing work with the most vulnerable, especially in this difficult time.

The point that the noble Lord, Lord Field, made about modern day slavery is outside the scope of the Bill, but it is a major priority for society and this Government. His points are well made, as are those of the noble Baroness, Lady Meacher.

The noble Baroness raised the point about the standard minimum guarantee, and the noble Baroness, Lady Sherlock—she is my friend—raised it, too. It is right that we protect the incomes of the poorest pensioner households receiving the standard minimum guarantee. That is why in previous years, when the triple lock has applied to the state pension, we have increased the standard minimum guarantee by more than the percentage increase in average earnings to ensure that they see the benefit of the cash in the increase in the state pension.

The noble Baroness, Lady Meacher, challenged us by asking what we would do next year if there was a spike in earnings. We are dealing with a huge amount of uncertainty, so no one can predict with confidence what earning trends will be over the course of next year. Of course, we hope that earnings will increase as the economy recovers.

My noble friend Lord Randall, the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Meacher, raised the issue of uprating pensions overseas, and I have to say that they made their points very well. The policy on this issue is a long-standing one of successive Governments. The current policy has been in place for around 70 years and, while noble Lords will be disappointed, there are no plans to change this.

The noble Baroness, Lady Drake, raised the issue of pensioner poverty rising and asked why we had not done more to support the poorest pensioners. The Government are committed to action to alleviate levels of pensioner poverty. For current pensioners, that includes the contribution of the triple lock, the new state pension and pension credit.

Noble Lords asked how we intend to uprate pension credit. Without this Bill, the core component of the pension credit standard minimum guarantee will be frozen in 2021-22. The decision on how to uprate the standard minimum guarantee will be made during the Secretary of State’s uprating review, which I have already referred to. Noble Lords will understand that it is not right to pre-empt the outcome of the review. I can also tell noble Lords that the department and the Minister for Pensions are doing as much as they can to raise awareness of pension credit. If any noble Lords have ideas for how we can improve that, we are very open to receiving them.

The noble Baroness, Lady Drake, asked for a comment on the report from the Resolution Foundation. We have provided an extra £9.3 billion in welfare support to help those most in need, as I have said. We have already taken steps to ease the burden of universal credit debt payments, including reducing the maximum deduction from 40% to 30% of a standard allowance, and from October 2021 we will reduce this further to 25%. We will also double the time available to repay advances to 24 months.

The noble Lord, Lord Shipley, referred to an uprating order introduced in the Commons in January. The figures will be announced to Parliament in late November after the Secretary of State’s review of benefit rates. The noble Lord raised the much-debated subject of universal basic income. This Government do not believe that a universal basic income would provide the right sort of support. Universal credit targets those in the greatest financial need. I confirm yet again that there is no intention to introduce universal basic income.

The noble Baroness, Lady Stuart of Edgbaston, raised the issue of the gender gap in pensions. Reforms to the state pension have put measures in place to improve state pension outcomes for most women. More than 3 million women stand to receive an average of £550 more per year by 2030 as a result of the recent reforms.

My noble friend Lady Altmann questioned whether it was fair that a higher rate is protected by the triple lock under the new state pension. She talked about the difference in uprating treatment between those under the new state pension and those under the old one. It is not possible to make direct comparisons between the two systems in this way. The new system has been designed so that no more money is being spent than under the previous system. Care has been taken to ensure fairness to both groups while delivering a sustainable system for the future. Although some people may get a larger amount uprated by the triple lock, they will not have access to other elements of the previous system; for example, a lower state pension age and the ability to build a higher state pension through the additional state pension.

My noble friend also raised the issue of state pension underpayments. We are aware of a number of cases where individuals have been underpaid a category B or basic state pension. We corrected our records and reimbursed those affected as soon as the underpayments were identified. We are checking for further cases and, if any are found, awards will also be reviewed and any arrears paid in accordance with the law. I urge anybody who believes they are being underpaid their state pension to contact the DWP.

The noble Baroness, Lady Lister, asked what the Government’s child poverty strategy is. Supporting people financially through these difficult times is currently our main focus. Our long-term ambition remains to build an economy that supports employment and ensures opportunities such as the apprenticeship scheme that the noble Lords, Lord Blunkett and Lord Field, referred to. We want people to be able to enter into work and to progress where possible, with welfare system support in their time of need. We are actively reviewing all measures at our disposal to identify how best to support people in the economic recovery. As we move to the next phase, we will continue to review our priorities. We will monitor the evolving economic and labour market situation to identify the most effective way to help people stay in or close to work, both now and in the future.

The noble Baroness, Lady Lister, and others talked about the benefit freeze. The Secretary of State will review all benefit levels as part of the uprating in November. The noble Baroness has been tenacious and has shown great energy in talking to us about the benefit cap. We had an all-Peer session yesterday on this. We made it very clear that both the Minister for Employment and the Minister for Welfare Delivery stand ready to engage further. To clarify the Government’s position, we believe that, where possible, it is in the best interest of children to be in working households. The benefit cap provides a clear incentive for parents to move into work, and a child living in a household where every adult is working is about five times less likely to be in relative poverty than a child in a household where nobody works.

The noble Baroness, Lady Lister, asked about the assessment the Government have made about the call from the Joseph Rowntree Foundation, the Trussell Trust and Save the Children to increase the child component of universal credit and tax credit. The Government have implemented an unprecedented support package, including the job retention and self-employment income protection schemes, to help families cope with the financial impact of Covid-19. We will continue to monitor the evolving economic and labour market situation to identify the most effective way to help people stay in work or close to work, both now and in the future.

I thank the noble Lord, Lord Loomba, for raising the issue of television licences for those aged over 75 during the pandemic. The Government are deeply disappointed that the BBC has chosen to restrict the over-75 licence fee concession to those in receipt of pension credit. We recognise the value of free TV licences to the over-75s and believe that they should be funded by the BBC.

The noble Viscount, Lord Trenchard, asked why the pattern of countries where the uprated pension is paid is not consistent. Despite appearing random—with some uprated and non-uprated countries in close proximity, for example—the uprating policy is determined by the differing social security arrangements for the countries concerned. For example, Canada has a bilateral agreement with the UK that does not cover uprating. The UK sought a reciprocal agreement, including uprating, with Canada but this was rejected as legislation prevented Canada paying its pensions overseas.

On pension credit take-up, my noble friend Lord Trenchard raised the point that it is all very well increasing rates of pension credit, but asked what we are doing to ensure that more pensioners are in receipt of it. This is why, in February, we launched a nationwide campaign to raise awareness of pension credit.

I thank the noble Lord, Lord Foulkes, for his unlimited support for the Bill. I am sorry that I am unable to confirm about the 2.5%, as he would like me to. I hope he will forgive me for that on this occasion.

My noble friend Lord Trenchard asked what support we are providing to older workers. We have taken legislative steps to support older workers to remain and be retained in the labour market by abolishing the default retirement age. We have strengthened things through the Fuller Working Lives partnership and appointed Andy Briggs, CEO of the Phoenix Group, as business champion for older workers. We are providing new targeted support to help people who are unemployed and have not reached the state pension age.

On the state pension being the lowest in the EU, I say to the noble Lord, Lord Foulkes, that fullfact.org investigated that claim and concluded that

“differences between their pension systems means it’s not a fair comparison.”

That makes it difficult to make meaningful comparisons between pension schemes in different countries, because there are so many fundamental differences in how they are run.

I have two points to make to the noble Baroness, Lady Sherlock, about the state pension. Again, we are dealing with a huge amount of uncertainty. We are unable to predict with confidence what earning trends will be and therefore what changes might be made. She raised the valid point that if every pensioner claimed the benefits they were entitled to, this would reduce pension poverty rates. Yes, and we encourage everyone to claim what they are entitled to, including their council tax reductions.

The Bill reflects the Government’s commitment to maintaining pensioners’ incomes in these difficult times. Provided it achieves Royal Assent by mid-November, it will ensure that state pensions are not frozen in 2021-22. It will also allow for the uprating of the safety net in pension credit and widows’ benefits in industrial death benefit. I thank noble Lords for their contributions. I commend the Bill to the Committee and ask that it be given a Second Reading.

The Deputy Chairman of Committees (Lord Lexden) (Con)

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My Lords, if I might be permitted a personal comment, I add my congratulations to those made in this debate to my friends of long standing, the noble Lord, Lord Field, and the noble Baroness, Lady Stuart, on their maiden speeches in this House.

The Deputy Chairman of Committees (Lord Lexden) (Con)

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My Lords, that completes the business before the Grand Committee this afternoon. I remind Members to wipe their desks and chairs before leaving the Room. The Committee is adjourned.

Lord Addington (LD)

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My Lords, this is nothing more than a probing amendment to clarify the Government’s thinking. There is a commitment that the Government will uprate pensions and other benefits in line with practice. However, the economic situation may not trigger that increase via the triple lock and so we do not know what will happen. Without it being stated that that will automatically be in place through the triple lock, we do not know quite what the Government’s intentions are for this year. And what happens next year? What is going on? Some information on the Government’s ongoing intentions would help here.

In the middle of the coronavirus crisis, we sometimes forget that there will probably be a world afterwards. I am not sure whether this is being glass-half-full on this occasion, but are we committed to the triple-lock or something like it? We should look at this issue, or at least pay half an eye to it, because of generational fairness, which is the idea floating at the back of this debate. This Government, and others, I hope, must ask: are we going to continue to make sure that the basic pension is enough to live on and will be a little more than it is now in the future? That might encourage people to buy in.

I look forward to the Minister’s reply and thank her for pointing out before I rose to my feet, with her devastating and scything charm, the slight change to my explanatory statement, in which I originally got the wrong year. I seek the Government’s thinking on this. It is an opportunity for the Minister to provide clarity on the process that will apply if the economic situation does not respond in line with the legislation. I beg to move.

Baroness Altmann (Con)

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My Lords, I thank the noble Lord, Lord Addington, for his explanation of the amendment and echo his request for some clarity from my noble friend the Minister. Is she able to give us an idea of the Government’s thinking on the future uprating of pensions?

Clause 1, before proposed subsection (2A), relates to the basic pension and the standard minimum guarantee. At the moment, the triple lock does not apply to the standard minimum guarantee and pension credit. Were the amendment to be inserted, it would ensure that the poorest pensioners, who are normally those we might wish to protect the most, would get the benefit of the full triple lock. The overall issue on which I should like clarification from my noble friend is whether she can give us an idea of the Government’s thinking on the 2.5% element of the triple lock. Is that likely to continue in the light of what is happening in the rest of the economy? If so, is there any thinking within the department on ensuring that the pension credit is also uprated by the full 2.5%?

I congratulate my noble friend on pointing out what I was going to mention about the relevant 2021-22 tax year. The thrust of this probing amendment is of interest to the Committee and I look forward to her response.

Baroness Janke (LD) [V]

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My Lords, I too welcome the amendment of my noble friend Lord Addington. We are all interested to hear the Government’s thinking, particularly on the future of the triple lock. I am sure that we all welcome their commitment to the undertakings in their manifesto and are pleased to see the Bill. However, in recent months, a lot of doubt have been shared regarding the triple lock’s future. Some people have said to me that there seems to be an almost systematic picking at the seams of the triple lock. With the Chancellor under pressure due to the economic implications of the pandemic, we would like some reassurance from the Minister that the Government are committed to ensuring that the pension keeps its value.

The state pension is particularly important to give the poorest pensioners confidence. Everyone is suffering under the pandemic but there is no doubt that the poorest are suffering worst. We would like to know the Government’s thinking for the future. Will there be a commitment in the Bill to keep the 2.5%, as well as transparency and clarity to reassure those pensioners who are particularly dependent on the state pension? I look forward to the Minister’s reply.

Baroness Sherlock (Lab) [V]

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My Lords, I am grateful to the noble Lord, Lord Addington, for explaining what his amendment would do, and to other noble Lords who have spoken in pursuit of clarity. The noble Baroness, Lady Altmann, raised the issue of the uprating of pension credit and the standard minimum guarantee in particular. I will return to that in more detail when I move my Amendment 3 shortly.

The Bill is permissive rather than prescriptive. The Explanatory Notes say that it will

“allow the Government to meet its commitment to the Triple Lock.”

At Second Reading, the Minister was invited by many noble Lords to tell the House if it was indeed the Government’s intention to increase the state pension in line with the triple lock, but she simply repeated the formula that the Bill

“will allow the Government to maintain their manifesto commitment to the triple lock.”—[Official Report, 13/10/20; col. GC 309.]

Had she been able to go further, she might have obviated the need for much of the debate we are having at the moment.

The Minister was also asked at Second Reading whether the Government intended to stand by the manifesto commitment to the triple lock for the rest of this Parliament. As the noble Baroness, Lady Janke, pointed out, there have been various rumours and briefings swirling around that have cast some doubt on the future of the triple lock. But answer came there none.

I realise that the Minister is in a difficult position. She probably thinks it unreasonable of us to ask her to answer these questions because the decisions are not hers, but she speaks for the Government in this House. We are being asked to fast-track this Bill to enable the governing party to fulfil a manifesto commitment, although the Government will not tell us whether they are going to fulfil it. It does not seem unreasonable to ask for a bit more clarity. I look forward to her reply.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)

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My Lords, I thank the noble Lord, Lord Addington, for the first amendment and for clarifying the date to which he referred. His charm clearly works better than mine.

The purpose of the Bill is to allow the Secretary of State to increase the specified pensions and benefits for 2021-22. This then allows the Government to deliver their triple lock commitment. However, the actual rates of increase for each of these pensions and benefits are subject to the Secretary of State’s annual statutory uprating review. In presenting this urgent Bill, the Government have sought to replicate the powers given to the Secretary of State in the founding legislation, as was also the case in 2009.

This amendment would also apply the triple-lock formula to the pension credit standard minimum guarantee and to widows’ and widowers’ industrial death benefit for 2021-22. The triple-lock commitment does not apply to those benefits. By convention, the relevant widows’ and widowers’ benefits keep pace with the basic state pension.

In previous years the Government have sought to match the basic state pension cash increase in the pension credit standard minimum guarantee, where this increase has been higher than an amount generated by the increase in average earnings; that is the statutory minimum for uprating the standard minimum guarantee. As a result, the standard minimum guarantee for a single person is now nearly £10 a week higher than it would otherwise have been. For a couple, it is nearly £15 a week higher. The decision on how to uprate the standard minimum guarantee next April will be made during the Secretary of State’s uprating review and will be announced in November. These rates too will be subject to the Secretary of State’s statutory review in November.

The noble Baronesses, Lady Altmann and Lady Janke, asked whether the Government are going to honour their commitment to the triple lock and introduce the 2.5% element. As I have said, the Bill makes technical changes for 2020-21 which will ensure that state pensions can be uprated even though there has been no growth in earnings. This will allow the Government to maintain their manifesto commitment to the triple lock, including the 2.5% element.

The noble Baroness, Lady Janke, asked by how much the state pension will be increased this year. The Bill enables the Secretary of State to uprate state pensions in 2021-22. Every autumn, the rate of state pension increase is subject to the Secretary of State’s uprating review to which I have already referred. It would not be right to pre-empt the outcome of this review. The triple lock is a manifesto commitment under which the rate of the state pension will increase by the highest of the growth in earnings and prices, or 2.5%.

The noble Baronesses, Lady Altmann and Lady Sherlock, raised the uprating of pension credit. Without this Bill, the core component of pension credit—the standard minimum guarantee—will be frozen in 2021-22. The decision on how to uprate the standard minimum guarantee will be made during the Secretary of State’s uprating review. Your Lordships will have the opportunity to debate the uprating of the state pension, pension credit and other benefits when the draft order implementing the Secretary of State’s decision is brought before Parliament for approval in the normal way. I therefore ask the noble Lord to withdraw the amendment.

Lord Addington (LD)

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I thank the Minister for her reply. I take it that the intention is to continue as we are for the moment. We will hold the Government to this. It is also quite clear from this short debate that changes to benefits should be brought in at the same time, as they work together under the current system.

It might have been a little optimistic to expect some sort of long-term vision from the Minister in this House at this point, but we must bear this in mind in our discussions. We have not really covered the generational fairness point. Unless we get young people to buy in because they think they have something to look forward to, there will be trouble. The stroppy youth of today is the deciding voter in a few years’ time. I hope that we can draw more of this out in the debate on this Bill. I beg leave to withdraw the amendment.

The Deputy Chairman of Committees (Baroness Barker) (LD)

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We now come to Amendment 2. I remind noble Lords again that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment to a Division should make that clear in the debate.

Amendment 2

Lord Randall of Uxbridge (Con) [V]

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My Lords, I make no apology for returning to the subject which I raised at Second Reading: the injustice of frozen UK pensions overseas. First, I thank my noble friend the Minister for kindly arranging a meeting with me and some of her officials. I am grateful to her for listening so intently. I understand that she is unlikely to be able to accede to my request in this debate.

This amendment is not the one I should like to have tabled, but the ever-helpful Table Office pointed out that the amendment I wanted to table would not be within the scope of the Bill. I should like to have used the amendment tabled in the other place by the Scottish National Party:

“(2C) No power may be exercised under this or any other Act so as to exempt persons not ordinarily resident in Great Britain from entitlement to up-rating increases granted by an order made by virtue of section (2A) of this Act.”


In his reply, my honourable friend Guy Opperman, the Pensions Minister, rejected the amendment, saying that

“this is a long-standing policy pursued by successive post-war Governments, who have taken the view that priority should be given to those living in the United Kingdom in drawing up expenditure plans for pensioner benefits. There are no plans to change that policy. The up-rating of the state pension is intended to provide support for pensioners who live in the UK.”—[Official Report, Commons, Social Security (Up-rating of Benefits) Bill, 1/10/2020; col. 578.]

His statement was factually incorrect, as we know that uprating exists for those who live outside the UK but only in countries where there is a reciprocal agreement. My amendment seeks to clarify this. I trust that my noble friend can do so this afternoon.

At Second Reading, I followed my noble friend Lord Trenchard. He mentioned the unfair situation with regard to those who have served this country in the Armed Forces. I spoke of my home town of Uxbridge, with its strong RAF connections. Among the several case studies I shall mention this afternoon, I want to recall that of Wing Commander Harry Penny. He was the commanding officer of RAF Uxbridge in his last years in the UK before he emigrated to Australia. Interestingly, when he arrived in Australia, he was encouraged to continue making national insurance voluntary contributions to boost his national insurance record, and so ended up with a full UK pension when he reached 65 in the 1980s. He was never advised that it would be frozen.

As we approach Remembrance Sunday, I am sure that all noble Lords will be aware of the Battle of Kohima, and the deeply moving words from the Kohima memorial will be uttered around the world. Patricia Coulthard was present at the Battle of Kohima, and she is now fighting for veterans who retired abroad and have had their state pensions frozen. Ms Coulthard, who moved to Australia to be near her two children, told our Prime Minister earlier this year that she receives just £46 a week. That payment contrasts with the full state pension in the UK today of £175.20 per week. This amazing 99 year-old lady is just one of the more than 60,000 veterans who also suffer from frozen pensions. Ms Coulthard cared for soldiers who were injured at Dunkirk, before being sent to India, where she served in a jungle field hospital during the Battle of Kohima, in which around 4,000 of the British and Indian forces lost their lives. She suffered malaria, dysentery, fever and pleurisy, but she remembers her comrades and experiences with pride.

Roger Edwards risked his life for his country in the Falklands War, taking part in some of the conflict’s most hazardous operations, including the SAS raids on Pebble Island and Goose Green and the retaking of South Georgia. Roger is 70 now, and if he lives to a ripe old age, he could potentially end up being out of pocket by as much as £7,000 a year. Mr Edwards, who was born in Wiltshire, did not lose his full pension entitlement because he moved to a foreign country with no connection with the UK. No, he lives in the very place he risked his life for: the Falkland Islands. Yes, it is a UK overseas territory. This means he has full British citizenship. Yet that has not stopped the UK Government freezing his basic state pension. Mr Edwards is not alone. There are 42 people living on those islands with a frozen UK pension, about half of whom are military veterans.

Elsewhere in our overseas territories, our fellow citizens living in places as diverse as Montserrat and the Caribbean and the South Atlantic island of St Helena also have to make do with frozen pensions. Bizarrely, however, this policy does not apply to all 14 overseas territories. For example, those living in Bermuda, 5,800 miles north of the Falklands, and one of the world’s wealthiest places, enjoy the triple lock pension increases that their counterparts in the UK receive. All told, there are around 680 UK pensioners living in UK overseas territories with frozen pensions, even though they have made the same national insurance contributions as their UK peers.

That we have pensioners and military veterans such as Patricia Coulthard living on as little as £46 a week is utterly shameful and must serve as a wake-up call to end this callous, cruel and immoral policy without delay. However, it is not just our veterans who suffer this injustice. I have mentioned before that there is deep concern that members of the Windrush generation who spent their working lives in the UK but retired abroad are also losing out through frozen pensions.

I could continue with lots of cases of individuals. Around half a million are so affected. However, I contend that it is only right that every pensioner is more than a number on a spreadsheet in Westminster—or Whitehall, to be more correct—and it is high time that the Government held up their end of the bargain and gave all pensioners the pensions to which they are entitled. Many pensioners said they did not know the situation when they left the country. Today, there is information on GOV.UK about what the effect of going abroad will be on their entitlement. A government spokesperson said:

“The government continues to uprate state pensions overseas where there is a legal requirement to do so—for example in countries where there is a reciprocal agreement that allows for uprating.”


However, it appears that that information has not always been available for those leaving our shores. It is time we changed our policy, as the time-honoured reason given for this shameful state of affairs has been nothing but a blister on this country’s good name for fairness.

I know that appealing to successive Governments to do the right thing has simply not worked. There have sometimes been warm words at best, but certainly no action. I want to suggest to the Government something they could and should do to be more positive about it. How about proactively trying to get reciprocal agreements? Having left the EU seems to be the perfect time to think about it. Apparently, the last time an agreement was signed was in 1992, with Barbados. In 1992, I was still a slim young man selling furniture in Uxbridge, and although, luckily, through the miracle of Zoom your Lordships cannot see my current frame, I am sure you will realise that that was a long time ago. I have changed somewhat, but the Governments of the day still resolutely refuse even to try to rectify this situation. I would say to the Government that I would be happy to be part of any team to get these agreements signed and sealed, and with a substantial number of new ones, perhaps they will concede that all UK pensions abroad should be treated equally and fairly. However, I fear that the will is not there.

I have seen a communication from a Canadian MP, who states:

“I am told that the UK has continually declined overtures to open this issue and that it will not consider the indexation of UK pensions paid into Canada. I understand that a number of Members of Parliament have raised this issue in recent months. Canada first opened the door to this possibility with the UK when the Conservatives were in government in 2013, and the UK declined our offer to enter into negotiations about this.”


I cannot say whether that is the case. Perhaps we can have some clarification on that and, indeed, on whether any other overtures by other countries have been rejected similarly.

In the Second Reading debate it was a great pleasure to hear the maiden speech of the noble Lord, Lord Field of Birkenhead, who, among many of his achievements in the other place, chaired the Select Committee on Social Security. In one of its reports on this issue, under his chairmanship, it was stated that it is a political question, which includes, but is not distinct from, a moral question. As always, the noble Lord put his experienced finger on the button.

I feel I have detained the House long enough on this, but I would like to ask whether Civil Service pensions are similarly frozen. Indeed, are those of Members of Parliament frozen? I wonder whether if any of my former colleagues decided to emigrate for whatever reason—I know that one or two of them threaten to do it periodically—they would be so pleased if they knew that their pensions would be frozen. Are service pensions the same? Perhaps my noble friend can find the answer to that and see whether it is just the state pension that discriminates in this way.

I add that if a UK pensioner returns to the UK for a holiday or some other reason, for the period that they are here, the pension will be paid at the updated sum—assuming, of course, that they contact the pension centre. Again, this discriminates against those who are too elderly to travel and those who cannot afford it, the very people we should be fully supporting.

This issue has been around for far too long, and it is about time that we as a Parliament and a nation decided that it should be resolved and that discrimination in our pension system should be abolished for all time.

Baroness Janke (LD) [V]

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I thank the noble Lord for his interesting and eloquent speech. I remember that at Second Reading he was equally impassioned, and it is very good that he has put this amendment down. On the face of it, the policy seems extremely unjust, unfair, inconsistent and totally unjustifiable. Can the Minister give us more of an explanation of how it happened? It seems like some kind of anomaly. How many pensioners are affected in total? What is the future outlook? What would be the implications if this amendment were to be agreed to? I, too, looked at the debate in the other place, and I found the Minister’s response dismissive and completely uninformative, so it would be very good if we could have a bit more information about this current situation.

The noble Lord mentioned veterans in particular. It again seems completely unjust and completely lacking in any kind of compassion or gratitude for what those people have done for their country. Again, perhaps we could be allowed to know how many of these people are veterans.

The noble Lord mentioned government reciprocal agreements. That is right, but again, you need the political will, and whether that is there seems in doubt.

This certainly is a moral question. Here, I would like to mention the fact that many UK citizens are not allowed to vote, unlike in other countries. For example, France has an MP for citizens living abroad. I feel that if these people were able to exercise their vote, there might be a bit more political will to do justice for them all.

Baroness Sherlock (Lab) [V]

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My Lords, I thank the noble Lord, Lord Randall of Uxbridge, for explaining his amendment to us. He is a strong advocate for this cause and I am very sympathetic to the position in which many pensioners find themselves. However, it is a difficult issue, which successive Governments have struggled to resolve.

Perhaps I may ask the Minister some specific questions. First, we have heard that 500,000 people living in other countries are affected in this way. Can the Minister confirm that figure? How much does she believe that it would now cost to change the rules?

Secondly, the noble Lord, Lord Randall, both today and at Second Reading, highlighted two particularly difficult sets of cases. The first was the position of veterans. Today, he mentioned Harry Penny, Roger Edwards, Patricia Coulthard and others, and I am still thinking about Anne Puckridge, whom he mentioned at Second Reading—the 95 year-old World War II veteran whose pension was frozen when she moved to Canada at the age of 76 to be near her family. It is hard to see the justice in those who fought for this country being denied the pensions that they earned simply because they moved abroad to be with their families in their later years and did not realise what would happen. Do the Government know how many veterans are in this position?

The noble Lord also mentioned at Second Reading the case of Monica Phillips, who emigrated to the UK in 1959 as part of the Windrush generation. After 37 years working here, she returned to Antigua to look after her mum and her pension was then frozen. Again, do the Government know how many of the Windrush generation are affected by this measure? Have they looked into it?

Thirdly, the noble Lord, Lord Randall, also raised today the issue of reciprocal agreements in the wake of Brexit. I have to say to him that I have pursued that issue for some time but have got precisely nowhere. All that Ministers will ever say is that they hope to get a deal, so the position will be as set out in the negotiating documents. However, I will be very interested to see whether he gets any more information than I have been able to obtain.

This issue is so difficult because so many people assume that their pension is determined by what they pay in national insurance contributions rather than where they live when they retire. Therefore, can the Minister assure the Committee that the position is now made abundantly clear to all pensioners, especially as they approach pension age? I look forward to her reply.

Baroness Stedman-Scott (Con)

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My Lords, I turn to the amendment to Clause 1 tabled by my noble friend Lord Randall of Uxbridge. As he is aware, it would in practice have no effect because it simply commits the Government to uprating UK state pensions, as they do now.

However, my noble friend spoke passionately at Second Reading, and again with great passion and commitment today. He eloquently shared with us the case studies of people impacted by the lack of reciprocal arrangements and the freezing of pensions. The long-standing policy of successive Governments for over 70 years has been that UK state pensions are payable worldwide and are uprated in countries overseas where there is a legal requirement to do so—for example, in countries where the UK has a reciprocal agreement that requires uprating. I look forward to the debate on the issue but, first, I would like to make some points about our reciprocal agreements with other countries.

The UK has reciprocal agreements with several countries, and most of these require uprating. There are only two reciprocal agreements which do not allow for uprating: those with Canada and New Zealand. A similar agreement existed with Australia until early 2001, when the Australian Government withdrew from it. Unlike the UK, Canada and New Zealand have residence-based state pensions. The reciprocal agreements with them broadly allow for periods of residence, employment or contributions in one country to be considered as periods of residence, et cetera, in the other for the purposes of entitlement to a state pension.

The systems in New Zealand and Canada are also means-tested to some extent. For example, New Zealand takes overseas pensions fully into account in its superannuation schemes. New Zealand law also requires that notional income is calculated if a pensioner does not claim his or her state pension from an overseas country. This means that any future state pension increases would be taken into account and the moneys would go to the respective Treasuries, so pensioners on the lowest incomes are unlikely to benefit from increases in their UK state pension. It might also mean an increased tax bill for some overseas residents and the loss of their welfare benefits in their chosen country of residence. This Government believe that our responsibility is to pensioners living in this country, rather than effectively making payments to other Treasuries.

The agreements with Canada and New Zealand were negotiated and agreed some time ago. The pattern of the UK’s reciprocal agreements with other countries is historic. It is based in part on Commonwealth ties but also on the political context at the time of concluding the agreement. That gives rise to inconsistencies. For example, we have an agreement with some Caribbean countries, such as Jamaica, but not with others. The agreement with Jamaica requires uprating. It has been suggested by some that uprating could form part of discussions on future free trade agreements—for example, with Australia and Canada. However, state pensions are not in scope of free trade agreements.

There are no plans to change the policy on uprating UK state pensions overseas. The Government have not entered into a new reciprocal social security agreement since 1992, as my noble friend Lord Randall referred to, and have no plans to enter into new agreements.

The noble Baroness, Lady Sherlock, asked about the number of pensioners living in frozen-rate countries. It is approximately 500,000. I regret that I do not have any numbers for veterans.

My noble friend Lord Randall raised, as did other noble Lords, the question of a moral obligation to rectify this anomaly. The policy on this issue is long-standing, as I have already said, and one of successive Governments. It has been in place for some 70 years and, although I know this will disappoint noble Lords, there are no plans to change it.

My noble friend and the noble Baroness, Lady Sherlock, talked about the impacts on the Windrush generation. UK state pensions are payable worldwide to eligible people based on their NI record. I regret to tell the noble Baroness that we do not know the number of people affected among the Windrush community.

My noble friend Lord Randall asked about pensioners who are resident overseas who have paid their NI contributions, so pensions payable abroad should be fully indexed. The rate of contribution paid is never earned entitlement to the indexation of pensions payable abroad. This reflects the fact that the UK scheme is primarily designed for those living in the UK.

My noble friend Lord Randall raised the issue of consistency across countries, and a particular point about Canada. Canada has a bilateral agreement with the UK that does not cover uprating. The UK sought a reciprocal agreement with Canada that included uprating, but this was rejected as legislation prevented Canada paying its pensions overseas.

My noble friend Lord Randall and other noble Lords raised the issue of the Government’s moral duty to uprate state pensions overseas. The decision to move abroad is voluntary and remains a personal choice, dependent on the circumstances of the individual. For a number of years, advice has been provided to the public that the UK state pension is not uprated overseas except where there is a legal requirement to do so.

Given that the amendment states that any uprating order made under the Bill would uprate abroad in cases where there was already a legal requirement to do so, I urge my noble friend to withdraw it because it has no practical effect, given that the Government are already required to do that in law. However, I welcome the opportunity he has presented to debate the broader issue of uprating overseas.

The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)

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My Lords, I have had no requests to speak after the Minister.

Lord Randall of Uxbridge (Con) [V]

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My Lords, I normally find that if I do not have high expectations, I will not be readily disappointed. I thank my noble friend the Minister for her replies. I was not expecting any great change to 70 years of the government policy of all parties, but this is something that we should be looking at. As was said, perhaps the Conservative manifesto commitment to give the vote to people living overseas may be the incentive for us to look again at this issue.

I am disappointed that there seems to be no desire to try to get reciprocal agreements. I take the point that free trade agreements will not include this sort of thing, but diplomacy between countries, even if it is not actually in the agreement, is something that we should be looking at. I urge those countries, particularly the Commonwealth countries, that know we want to do trade with them to consider this; we might just sneak it into the conversation that they might be more willing to be helpful if they had a look at some of these things.

As I said, I was not expecting anything. I am grateful for the other contributions to this debate. This is an issue that I will not let go—although not on Report, I am sure noble Lords will be delighted to know—and I will take it up at any opportunity until it is solved. I beg leave to withdraw the amendment.

The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)

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We now come to the group beginning with Amendment 3. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.

Amendment 3

Baroness Sherlock (Lab) [V]

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My Lords, I made it clear at Second Reading that we support this Bill, and I have no wish to delay its implementation, so Amendment 3 is a probing amendment. I have tabled it to make sure that we get a chance to address the issue of pensioner poverty, which was raised by many noble Lords at Second Reading but did not get a substantive response, no doubt because time was tight. Fortunately, we have all the time in the world in Committee.

The number of poor pensioners had fallen significantly, largely down to the introduction of pension credit, but it is now a cause for concern again. The Government’s own figures show that 1.9 million pensioners are living in relative poverty, so this is something that we should all be concerned about. People who have worked all their lives should not be worrying in old age about how to make ends meet.

There are broader policy concerns too, such as the evidence showing that people on lower incomes have lower life expectancy and fewer years of healthy life after retirement. That is bad for the individual, but it is also bad for the state. Research by the Joseph Rowntree Foundation has shown that these health inequalities have an effect on state spending, leading to higher costs to the NHS and social care services. Has the Minister read the interesting recent report based on research commissioned from Loughborough University by Independent Age which suggests that the underclaiming of pension credit is costing the Government roughly £4 billion a year in increased NHS and social care costs? What does she make of that?

Taking pensioner poverty seriously means that when Ministers talk about their plans for the triple lock for the state pension, they should also be ready to talk about their plans for uprating the standard minimum guarantee in pension credit. That is the reason this amendment suggests that the uprating should be accompanied by a report on the implications for poverty. If pension credit is not uprated by an equivalent amount to the triple lock, the benefit of the increase in the state pension enabled by this Bill will be enjoyed in full, as I have said before, by many Members of this House, but not by the poorest pensioners, who will have it clawed back from pension credit.

Pension credit is key to tackling poverty because as well as topping up weekly income for poor pensioners it can be a passport to other benefits—housing benefit, council tax reduction, the cold weather payment and now the free TV licence for the over-75s. That could be worth up to £7,000 for some pensioners. Do not take my word for it. In giving evidence to the Scottish Social Security Committee on 23 January, a senior DWP official said

“In the UK, 16 per cent of pensioners are in poverty. If all those pensioners claimed pension credit, housing benefit and the council tax reduction—especially the council tax reduction—that would reduce the 16 per cent to almost zero.”

Lord Shipley (LD) [V]

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My Lords, in speaking to Amendment 4, to which my name is attached, I also wish to support Amendment 3, which addresses similar issues. The aim is to understand better the impact of this Act on pensioner poverty.

According to the Joseph Rowntree Foundation, pensioner poverty has been decreasing across the UK. Given the existence of the triple lock, that should not be a surprise. Indeed, it shows the success of the triple-lock policy since 2010 in reducing pensioner poverty generally. That is something of which my party should be proud.

Yet, as we have heard from the noble Baroness, Lady Sherlock, pension credit is still needed by large numbers of individual pensioners, and we know from a Question asked yesterday by the noble Lord, Lord Foulkes, that the campaign to encourage take-up of pension credit this year seems not to have achieved very much.

As we have heard, too many people who would qualify for pension credit still do not claim it. One reason could be clawback. I think a main reason is lack of face-to-face support to assist individuals for whom digital and telephone access is a barrier. I hope the Minister will look carefully at this problem, because if the Government really want to reduce pensioner poverty, they have to will the means of doing that. As the noble Baroness, Lady Sherlock, said, we need a new campaign.

Our Amendment 4 also identifies a considerable pensions gap between men and women and calls for a specific review of the impact of the provisions of the Bill on women. I hope the Minister can agree to that.

We said at Second Reading that the Bill is primarily a technical Bill. But the amendment in my name and that of my noble friend Lady Janke adds an important dimension, which is that any further decisions on pensions uprating should be brought forward by the Government in the light of their findings from the review; in other words, we need the clear, evidence-based decision-making that Amendment 4 would provide.

The Lord Bishop of St Albans [V]

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My Lords, I will speak to Amendment 3, and thank the noble Baroness, Lady Sherlock, for her work on it. I have previously spoken about the importance of the Government fulfilling their promise to deliver the triple lock to pensioners, so I support the general thrust of the Bill. However, it is important that a considered approach to uprating is taken that analyses the benefits of this policy. After all, pensioners, like the rest of the population, represent a very diverse range of income levels.

Covid-19 has shaken the economic standing of much of the working population—a fate that pensioners have largely been shielded from. The taxation of future generations to pay for current pensions must be balanced with assessments that clearly outline the effectiveness of this policy. The reality is we do not have unlimited economic resources at our disposal, and trade-offs are required. I do see dangers in uprating the entire pensions scheme by 2.5%, without the necessary impact assessments, at a time when unemployment and working household debt are rising. Reviewing both the cost and relative success of this policy in determining not only whether it reduces existing levels of pensioner poverty but whether the relationship between pensioner and working household incomes throughout a given period might lend itself, in the future, to a much more targeted approach to uprating.

I expect the report’s assessment of existing levels of pensioner poverty will be reflective in assessing the efficacy of blanket uprating policies and whether considered and targeted increase in social security and relief would better account for uncertainties such as the Covid-19 crisis, which has had a disproportionate economic effect on the working-age population. Of course, pensioners need to be adequately looked after. Until a review on whether the 2.5% minimum uprating delivers intergenerational fairness, it is right that the House approves these measures.

Finally, on intergenerational fairness, which was mentioned at Second Reading, I once again call on the Government to extend April’s universal credit increase and extend this lifeline that so many across the country are relying on.

Lord Addington (LD)

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My Lords, I have only a little to add to what has been said. If you do not know how severe a problem is, you cannot do much about it. Having something that looks into the problems of pension policy is a very sensible idea. The Minister will undoubtedly say, “We are—we are doing X, Y and Z” and give us a list, but the fact is that the non-claiming of benefits is something that bedevils our system. By necessity, it is a bureaucratic system, and even if you make the bureaucracy as manageable as possible, it is still there. People who think, “Well, I should not be asking for something else”—something that the pensioner population seems to get an A grade in—means that we have poverty that leads to other problems.

The reason we have given people these back-ups is because they need them: they make their lives better and mean they are not as big a drain on the National Health Service or emergency care going in to support them. It is actually in the general public’s interest to make sure that people are not living in poverty: it leads to problems, to costs and to knock-ons; it makes our lives less pleasant. So, I hope that when the Minister replies, she will give us some idea of how the Government are trying to find this information, because it is needed. To make the system work well, it is needed across the board. If we do not have enough information about issues, we cannot address them. The idea of having some solid knowledge to base future planning on cannot be a bad thing.

Baroness Janke (LD) [V]

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My Lords, I too support the amendments in this group. I think they have a lot in common. The triple lock has done a great job in restoring value to the state pension, which is hugely important given that so many people are dependent on the state pension and have no other pension at all. The intention behind the amendment in my name is to have a detailed assessment of how effectively the triple lock is tackling poverty.

If we think about older pensioners particularly, and the pension credits debate, those I have been in touch with are very shamed at having to apply for means tests. Applying for benefit has a stigma for them, so I am not completely supportive of the idea of targeting in this respect. I personally believe that there are ways of ensuring that wealthier pensioners pay more, and support those who have less, other than by targeting pensioners in need and putting them through processes that they find distasteful and disturbing and give them great anxiety.

The issue of pension credits has been raised and yesterday’s Oral Question from the noble Lord, Lord Foulkes of Cumnock, certainly contributed to that debate. If a detailed analysis were done before consideration of uprating policies, this could include the inadequacy of any take-up campaign and ensure a proper monitoring process to see what is happening. Also, on the points made about pensioners in poverty, particularly women, this is an area that needs to be looked at separately. Many women—older pensioners in particular—have very little pension entitlement. The new pension has, to some extent, addressed the fact that many women have spent a great deal of time doing the caring within the family. This needs to be looked at more closely, particularly when, with increasing divorce rates, very many divorce settlements do not address the fact that the woman has contributed to her husband’s pension over the years. I would very much welcome the opportunity for a detailed analysis of the impact of the triple lock, with particular reference to poverty and its effects on women. In so saying, I support both these amendments.

Baroness Stedman-Scott (Con)

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My Lords, I thank all noble Lords who have contributed to the discussion on these two amendments. I want the House to understand that I share noble Lords’ concerns about pensioner poverty, and assure the House today that we are committed to ensuring economic security at every stage of their life, including when they reach retirement.

The triple lock improves incomes for current and future pensioners. Auto-enrolment into workplace pensions and action on fuller working lives will also help people towards the income that they aspire to in later life. Pension credit provides an important safety net for pensioners on low incomes. As I mentioned in our earlier debate on the amendment from the noble Lord, Lord Addington, that safety net is currently nearly £10 per week higher for a single pensioner, and nearly £15 per week higher for a pensioner couple, than it would otherwise have been if we had just increased it in line with earnings since 2010. Material deprivation among pensioners is at a record low, and the absolute poverty rate is lower than in 2010.

In the long term, it is this Government’s reform to the state and private pension systems—including the introduction of the new state pension in 2016—that will improve outcomes for all, and particularly help to reduce gender inequality in retirement income. Over 3 million women stand to receive an average of £550 more per year by 2030 after recent reforms to the state pension alone.

Under the new state pension, outcomes are projected to equalise for men and women by the early 2040s, over a decade earlier than under the old system. For future pensioners, auto-enrolment into workplace pensions has transformed pension saving for millions of workers. Our employer-led strategy on fuller working lives aims to maximise the labour market opportunities for people to earn and save for longer.

Amendment 3 prevents a draft uprating order from being laid before Parliament unless the Secretary of State has laid before Parliament

“a report containing an assessment of the existing levels of pensioner poverty in each of the regions and nations of Great Britain”,

and made

“a statement outlining the expected impact of the draft order on pensioners with the lowest incomes.”

With respect to subsection (a) of her amendment, the noble Baroness, Lady Sherlock, will be aware that my department publishes annual estimates of pensioner poverty at a regional level in the Households Below Average Income series.

I turn to subsection (b) of Amendment 3, and will address Amendment 4 at the same time. Amendment 3(b) would require a statement outlining the expected impact of the draft order on pensioners with the lowest incomes. Amendment 4 would require the Secretary of State to report on the impact of the Bill and of the triple lock on pensioner poverty, with reference to women. The provisions in the Bill can only be used to increase the rates of state pension and certain other pensioner benefits, so its effects on pensioner incomes, and therefore pensioner poverty, can only be positive. However, I am sorry to inform noble Baronesses and noble Lords that we do not believe a report of the sort outlined in these amendments could be made with an acceptable degree of analytical robustness.

To make an assessment relating to how many pensioners might have their income lifted above the various low-income levels, assumptions would need to made about how each individual pensioner’s income will change in future. This would require making assumptions about, for example, how earnings for pensioners will change, or trends in the rate of return and drawdown of income from investments. These projected incomes would then need to be compared to projections of the various income thresholds.

The relative poverty low-income threshold in a particular year is determined by the increase or decrease in median income across all individuals in the UK. Forecasting a relative income threshold requires making assumptions about how the net income of every individual in society will change, not just of those above state pension age. Each individual’s total net income is influenced by how every different source of income, including their earnings, and their costs, such as housing costs, may change in future. Making assumptions about future changes in net income for individuals involves complex interactions between income and outgoings.

For absolute poverty, the threshold is increased each year by inflation during that year. As demonstrated in recent months, inflation is currently extremely volatile and there is a high level of uncertainty about what its level is likely to be over the next few years. In the current circumstances, with a higher level of uncertainty around the economy than usual, it is impossible to forecast individual pensioner incomes or the various low-income poverty thresholds with a reasonable degree of accuracy. Therefore, there is a very high risk that any analysis seeking to forecast the number of pensioners moving above these projected poverty thresholds is highly likely to be misleading.

I note, however, that my department collects and publishes a wide range of data in this policy area, such as national statistics on the number and percentage of pension-age women on low incomes. This is published annually in the report on households below average incomes. The last publication covered data for 2018-19, and trends over time can be identified from this source. These trends are an important element in policy-making in the department, such as that which led to the state and private pension reforms I mentioned earlier.

The noble Baroness, Lady Sherlock, raised pensioner poverty. I am assured that since 2009-10, material deprivation for pensioners has fallen from 10% to 6% and that there are 100,000 fewer pensioners in absolute poverty before and after housing costs. To be clear, in 2021 we are forecast to spend over £126 billion a year on pensioners, including £102 billion on the state pension.

The noble Baroness also raised the Independent Age report. The figures in Independent Age’s latest report are based on assumptions about the relationship between healthcare outcomes and income and rely on survey data. We know that pension credit is often underreported in survey data; unfortunately this makes it inherently difficult to categorise groups based on receipt of pension credit or to identify pensioners who may be entitled to pension credit but who, for whatever reason, are not claiming it.

The noble Lord, Lord Shipley, asked what the Government are doing about women and the gender gap. While the triple lock continues to improve incomes for current and future pensioners, in the long term it is reforms to the pension system that will improve outcomes for women and reduce the gap.

I move to the issue of pension credit, which all noble Lords raised very eloquently and clearly. In response to the question of the noble Lord, Lord Foulkes, yesterday, I agreed to go back to the department and relay the sentiments; while I cannot give your Lordships the information on a campaign you require today, I can give an utter assurance that I will go back to the department to relay the points that have been made.

The right reverend Prelate the Bishop of St Albans asked about an impact assessment. For pensioner incomes, assumptions would need to be made about how each individual pensioner’s income will change in the future, which would require making assumptions, as I have said, about many things, such as earnings for pensioners, change in the rate of return and drawdown of income. This is most difficult.

The noble Lord, Lord Addington, and the right reverend Prelate the Bishop of St Albans quite rightly raised a point about intergenerational fairness and questioned why we should keep the triple lock for pensioners when working-age people are only getting CPI increases. We have recently seen rises in the living standards of pensioners, but we must remember that not all pensioners are in the same position: over a million current pensioners rely solely on their state income. We must not forget that today’s working-age people are tomorrow’s pensioners, and future generations of pensioners will also benefit from the way the state pension is uprated today.

I was asked how we intend to uprate pension credit. Without this Bill, the core component of pension credit—the standard minimum guarantee—will be frozen in 2021. The decision on how to uprate the standard minimum guarantee will be made during the Secretary of State’s uprating review and announced in November. It would not be right to pre-empt the outcome of that review. Taking into account the points raised, I ask the noble Baroness to withdraw her amendment.

The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)

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My Lords, I have received no requests to speak after the Minister. I call the noble Baroness, Lady Sherlock.

Baroness Sherlock (Lab) [V]

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My Lords, I am grateful to all noble Lords who have spoken to these amendments. As the noble Lord, Lord Shipley, said, if the Government will the ending or reducing of pensioner poverty, they must also will the means. I am not sure that we have heard that today—in fact, I am quite confident that we have not.

Other noble Lords made some very good points. The noble Baroness, Lady Janke, made some important points about the need to understand the impact of the triple lock on poverty. I agree very much about the need to look at particular issues faced by women facing poverty in retirement. The noble Lord, Lord Addington, is absolutely right that, if we do not have adequate data, we will not address the right questions. What is not measured is never going to be accurately addressed.

I thank the right reverend Prelate the Bishop of St Albans for his continued advocacy for those on low incomes at all ages. I wholeheartedly endorse his call for the uplift on universal credit to be extended beyond April, and I ask that this also be extended to legacy benefits. Poor workers often become poor pensioners, so all we are doing at the moment is pushing the problem even further back.

The Minister started her response by saying that she shares our concerns about pensioner poverty, although I notice that she cherry-picked her measures, citing material deprivation and absolute poverty but not the standard measure of relative poverty. If I am honest, I found her response very disappointing. She gave us reasons why the Government are doing good things on private pensions and the state reform, but most of my speech and what other noble Lords spoke about was how to address pensioner poverty in the short term by looking at things such as pension credit. She simply did not do that. I asked a number of questions and made a number of suggestions, none of which got a response at all.

I find this very disappointing because I have a lot of respect for the Minister; I believe her when she says that she will take these issues back to the department, but, in the end, as a House, we are not simply here to say things to the Minister and for her then to say them to her colleagues. When does the message come back the other way? We are one of the Houses of Parliament; it is reasonable to expect someone to come to the House, defend the decisions that their department is taking and tell us why they are not going to follow through.

If we were not in a hybrid state, I would be getting up and saying, “Could I ask the Minister to respond on that?” I cannot, and, therefore, I am constrained by the circumstances, and there is no way to pursue this. However, I ask the Minister to think very hard about how she will go about telling this House what the department has to say and how it is going to respond to our questions If not, I will look for other opportunities to do this on a regular basis and will keep on until we hear something that actually answers our questions. However, in the meantime, I beg leave to withdraw Amendment 3.

The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)

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Even in the hybrid House, the Minister can respond to a final set of questions.

Baroness Stedman-Scott (Con)

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I say to the noble Baroness, Lady Sherlock, and all noble Lords, that I have taken on board the ideas that have been put forward about pension credit: the campaign, and the importance of how it can lift people out of poverty and improve their lives. I will go back to the department, then return and answer the questions asked by the noble Baroness. I will always make that undertaking and will never shy away from answering questions, but I would rather get the right answers rather than give a wrong one and create another little tsunami on pension credit. If the noble Baroness can accept that, I will be grateful.

Baroness Sherlock (Lab) [V]

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I am very grateful to the Minister for coming back on this. I will look out for those responses, and for the opportunity to discuss them on the Floor of this House. I thank her for her intervention, for addressing the questions and for her constant willingness to talk to us. These things make our debates much better.

Baroness Stedman-Scott

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That the Bill do now pass.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)

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My Lords, in moving this Motion, I would like to confirm how pleased I am to have introduced the Social Security (Up-rating of Benefits) Bill into this House. I thank all noble Lords for their positive engagement and the feedback that they have provided thus far. I thank in particular the noble Lords, Lord Addington, Lord Randall and Lord Shipley¸ and the noble Baronesses, Lady Sherlock and Lady Janke, for their constructive contributions. I also thank the officials on the Bill team for their tireless work in helping all of us see the Bill proceed in a proper manner and to have the information needed.

The Bill reflects the Government’s commitment to maintaining the income of pensioners in these difficult times. It allows for the uprating of the safety net in pension credit and of widows’ and widowers’ benefits in industrial death benefit. I am grateful, too, to noble Lords for ensuring that the Bill will be passed in time to receive Royal Assent before the Work and Pensions Secretary must conclude her uprating review of benefits and pensions. In doing so, the state pension and pension credit standard minimum guarantee can and will be uprated next year. I beg to move.

Baroness Sherlock (Lab) [V]

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My Lords, I thank the Minister for her remarks. As I made clear at the outset, we support the Bill, while deeply regretting the economic circumstances that have made it necessary. During its brief passage, some important issues have been raised. I hope the Government have taken note of those issues and will apply themselves to them in the near future. During our consideration of the Bill many noble Lords raised the question of support for those of working age. I keep hoping that we will hear some good news on that—especially on universal credit and other working-age benefits—soon.

We have had some really interesting discussions about the difficult and growing issue of pensioner poverty. We now have 1.9 million pensioners living in relative poverty and the Government need to develop and implement a strategy for tackling pensioner poverty. That will require a proactive plan to boost take-up of pension credit. I regret that I was unable to attend the rearranged meeting with the Pensions Minister on this matter but I look forward to hearing what went on there. At the moment, four out of 10 eligible pensioners do not claim it, so they are missing out on that and on other benefits, including, increasingly, free TV licences for the over-75s.

Then there is the fact that the triple lock does not apply to pension credit. The Minister said in her opening remarks that there will be an uprating to the standard minimum guarantee in pension credit but I did not catch whether she said by how much. In Committee she told my noble friend Lady Drake that she would write to her to tell her whether the Government intend to pass through the triple-lock payment to pensioners on pension credit—which is of course crucial, because if they do not, the richest pensioners will get the full benefit of the triple lock but the poorest will not because it will be clawed back from pension credit. Can she clarify the position on that? If she has written to my noble friend Lady Drake, I apologise; I have missed the letter.

I am very glad that we were able to get the Bill through the House in good time. It was a pleasure to welcome two maiden speakers in Committee: the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston. I would like to express my thanks to the Minister and her officials who have met us and answered questions; it is a very co-operative department and I am very grateful. I thank colleagues across the House for their thoughtful contributions; Dan Stevens of our staff team for his support with the Bill; and the House officials and the broadcast team.

Pensioners deserve to spend their retirement in financial security. This Bill will enable the Government to fulfil their manifesto commitment to apply the triple lock to the state pension and we have been pleased to support it.

Baroness Janke (LD) [V]

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My Lords, I, too, thank noble Lords for their contributions to our deliberations on the Bill, and I thank the Minister and her team for providing us with advice and information to help us understand the issues raised by the Bill. We very much welcome the Government’s commitment to the triple lock and hope that it will not be abandoned as a short-term political fix in the face of the economic difficulties that are no doubt ahead of us. I am sure that the Government have listened to the issues raised in the debate, and I hope they will look again at the position of overseas pensioners whose pensions are worth so little despite how much they have contributed over the years. It seems that the Government have committed to consider the numbers of pensioners living in poverty. I draw attention particularly to the plight of many women who have received very unfair treatment and unfair settlements on their pensions.

I welcome the work that is being started on pension credit and I believe that the Government are committed to ensuring that those who need it most are, in fact, able and willing to claim it. I thank the Minister again for the meeting yesterday, which I thought was extremely positive, and I look forward to working with her on that project. I also thank my colleagues for supporting the Bill and Sarah Pughe in the Liberal Democrats office, who supported us so ably. So saying, I give my support to the Bill.

Baroness Meacher (CB)

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My Lords, it is a privilege to have been asked to make the Cross-Bench concluding contribution at the end of our consideration of the Social Security (Up-rating of Benefits) Bill.

In Committee a number of noble Lords raised concerns about the level of pensioner poverty, most notably the noble Baroness, Lady Sherlock, and I very much support their comments; but others of us wanted some reassurance that while working people are experiencing job losses on a massive scale and abject poverty—often facing homelessness—many pensioners, including me I suppose, are in a much more secure position and should not be given disproportionate support. Those sentiments certainly do not apply at all to people on pension credit. I was delighted to hear—the Minister might be able to give us some figures—about the increase in the take-up of pension credit. That is at least a start. Like the noble Baroness, Lady Sherlock, I would certainly like to hear an assurance that pension credit will in fact be protected by the triple lock. I think that these pensioners and other subgroups mentioned by the Minister are in a very particular position and that any support that can be given should be given.

The other issue referred to by a number of noble Lords is the number of pensioners living in what I shall call unprotected countries abroad who have had their pensions frozen, often for many years, and find themselves in 2020 still living off something like £5 a week—serious, abject poverty. I hope the Government will give attention to that issue and also the other issues that noble Lords raised in Committee.

The noble Baroness, Lady Sherlock, as always, made a number of very powerful points. Importantly, she sought reports on current levels of pensioner poverty. I hope we will perhaps have a report on pensioner poverty shortly. She was also looking for an impact assessment of the Government’s policy options. I am not sure whether we have had a commitment on that or not.

In conclusion, there was general acceptance of the thrust of this Bill, and no amendments were pressed to a vote. I want to thank the noble Baroness, Lady Stedman-Scott, for her cheerful and always courteous responses to our pleas and questions, which she always gives with a smile, which is quite disarming at times. Also, a big thank you to the Bill team, which, as always, makes sure our deliberations and debates are meaningful.

Baroness Stedman-Scott (Con)

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First, I thank all noble Lords for their contributions, which were valid and important. On the working-age benefits, as raised by all contributors, as soon as the Secretary of State has completed the review, Parliament will be advised of the outcome. I am glad the noble Baroness, Lady Janke, was with us yesterday for our pension credit meeting and our robust and creative discussion about increasing take-up. It was probably one of the best meetings I have been in since becoming a Minister. I am sorry the noble Baroness, Lady Sherlock, could not be with us, but my office did advise me prior to coming to the Chamber that it is finalising the read-out; I think she will be pleased with the actions we have agreed.

In respect of the letter to the noble Baroness, Lady Drake, I was sure that had been sent, but let me go back to my department, double-check and confirm that to the noble Baroness.

Regarding the potential for uprating the standard minimum guarantee, it is right that we protect the incomes of the poorest pensioner households in receipt of it. A decision on how to uprate it next April will be made in the review the Secretary of State is carrying out. It will be announced this month, and we will wait to see what the outcome is and report it to Parliament, as I have already said.

The Government are committed to action to alleviate levels of pensioner poverty. For current pensioners, this includes the contributions of the triple lock, the new state pension and pension credit.

As I have already said, the Bill reflects the Government’s commitment to maintaining the income of pensioners in these difficult times. I am grateful to noble Lords for ensuring that it will be passed in time to receive Royal Assent before the Work and Pensions Secretary must conclude her uprating review of benefits and pensions. In doing so, the state pension and pension credit standard minimum guarantee can and will be uprated next year.

I commend the Bill to the House.