Social Security (Up-rating of Benefits) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 1st October 2020
(4 years, 2 months ago)
Commons ChamberSocial Security (Up-rating of Benefits) Act 2020 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 1 October 2020 (PDF) - (1 Oct 2020)
This text is a record of ministerial contributions to a debate held as part of the Social Security (Up-rating of Benefits) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I beg to move, that the Bill be now read a Second time.
I am pleased to introduce the Social Security (Up-rating of Benefits) Bill. It makes technical changes for one year only that will ensure that state pensions can still potentially be uprated, despite the likely fall in earnings. This will allow the Government to maintain a manifesto commitment to the pensions triple lock policy, providing peace of mind to pensioners about their financial health. It will also allow for potential increases for the poorest pensioners who are in receipt of pension credit, as well as uprating widows’ and widowers’ benefit in industrial death benefit.
As I set out with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), in our letter to all right hon. and hon. Members last week, each year the Secretary of State for Work and Pensions, my good self, is required by law to conduct a review of certain benefit and pension rates to determine whether they have retained their value in relation to the general level of earnings. If there is a rise, then there is a requirement to uprate the state pension and benefits at least in line with that increase.
In accordance with the usual process, I will undertake that review of social security rates shortly and will report to Parliament on the outcome of the review in November. However, if there has been no increase in the general level of earnings, there are currently no legal powers for the Government to bring forward an uprating order. Since 2011, the Government have used average weekly earnings growth from May to July as the basis for the review. The provisional figure for that period, published by the Office for National Statistics on 15 September 2020, shows a decline in earnings of 1% due to the economic impacts of covid-19. Confirmed figures will be published later this month. Owing to the challenging economic circumstances, average weekly earnings are expected, unfortunately, to show no growth this year. Therefore, this Bill will temporarily amend the Social Security Administration Act 1992 for one year only to grant discretionary powers to increase these rates irrespective of the growth or indeed fall in earnings.
The Bill covers the basic state pension, the new state pension, the standard minimum guarantee in pension credit, and widows’ and widowers’ benefits in industrial death benefit. Those benefits are linked in primary legislation to earnings. The Bill does not extend to benefits that are linked to prices. I will review those under the existing powers in the 1992 Act.
The Bill largely covers reserved matters for Great Britain. On the one element that is devolved to Scotland, Scottish Ministers laid a legislative consent motion, which was passed by the Scottish Parliament yesterday. Under the Social Security Administration (Northern Ireland) Act 1992, the Department for Communities has the power to mirror the uprating order made under the Act that applies in Great Britain. The Northern Ireland Executive can make a corresponding order under their existing power, which mirrors the outcome of the Secretary of State’s review without the need for new primary legislation in Northern Ireland.
The Bill must receive Royal Assent by mid-November to allow the review to be completed. If the Bill does not receive Royal Assent ahead of this deadline, the current legislation will apply, and state pensions will almost certainly remain frozen.
Chris Stephens (Glasgow South West) (SNP)
I thank the Secretary of State for giving way; I know that she has other business this afternoon. As well as uprating, many of us in the House have a concern about the lack of uptake of pension credit. Will she tell us what measures her Department will take to ensure that there is a better uptake of that particular benefit?
Dr Coffey
The hon. Gentleman raises an important point. We always want to encourage people to take up benefits to which they are entitled. There was an extensive amount of advertising earlier in the year, which was linked into GP surgeries and other public places, in order to encourage that uptake. The changes that the BBC has made in regard to the TV licence has also encouraged some people to take that up. We will continue to try to encourage people to access the benefits to which they are entitled.
If the Bill does not receive Royal Assent ahead of the deadline, the current legislation will apply and it is almost certain that state pensions will remain frozen. The prompt passage of the Bill is essential, which is why I am grateful to the usual channels and the House for expediting this important legislation. In our discussions with the shadow Front-Bench team, we were able to highlight that there has been similar legislation, with a clause in the Welfare Reform Act 2009, to give similar flexibility to the then Secretary of State in consideration of uplifting benefits.
I have set out that this is a technical but important Bill. The Government have worked hard to protect people of all ages during the pandemic by strengthening the welfare safety net, introducing furlough and income protection schemes, as well as supporting those who have lost their jobs to try to help them get back into work. It is right that we also provide protection to our pensioners. Provided the Bill has passed into law by the time I conduct my annual review next month, those pensions and benefits need not remain frozen next year and we will provide our pensioners with important peace of mind.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I would like to begin by thanking everyone who has spoken in the debate, which has been wide ranging and consensual and has covered a number of topics.
Because this is my first appearance back at the Dispatch Box, Madam Deputy Speaker, I just want to raise a personal matter. This is my first appearance since the demise of my twin boys in late June, and I was genuinely struck by the amazing words of commiseration and support that I received across the House from all colleagues. I am deeply grateful, and I know I speak for my wife on that particular point as well.
Moving on, I was struck by the opening point from the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) on the shadow Front Bench, and it is one I think we should all celebrate in this House: rising longevity is a fantastically good thing, and it is a wonderful problem to have. Clearly, there are policy and fiscal issues that follow it, but it is a genuinely good thing that we are addressing.
Even though the House is not well populated today, I am conscious that before me I have a former Pensions Minister from the Department for Work and Pensions—the right hon. Member for East Ham (Stephen Timms), who now chairs the Select Committee. I also think that the hon. Member for Stalybridge and Hyde was a special adviser—
Guy Opperman
He was an adviser—let’s put it that way—to the previous Labour Government, and he is acutely conscious of the issues that we are dealing with today.
Clearly, there is a delightful sense of a cross-party consensus, but I want to address some of the key points that were raised. People clearly wish to make the case on pensioner poverty, and I will address that. One can trade statistics, but material deprivation for pensioners fell from 10% in 2009-10 to 6% in 2018-19. There are 100,000 fewer pensioners in absolute poverty before and after housing costs than in 2009-10. Average pensioner incomes have grown significantly in real terms over the past two decades. Average weekly income in 1994-95 was £165 a week after housing costs; that compared with £320 a week in 2018-19. For 2020-21, we are forecast to spend £126 billion a year on pensioners, including £102 billion on state pension. Colleagues will know that that is a record sum spent by any Government in this House in respect of pensioners.
I will attempt to answer some of the particular points that were fairly made on pension credit. It is again the case, and I should put this on record, that pension credit increased significantly under the coalition and then under this Government, from £132.60 to £173.75 for a single person and from £202.40 to £265.20 for a couple. The take-up of pension credit is something that all would like to see increased. I echo my hon. Friend the Member for Delyn (Rob Roberts) on that; this is the first chance I have had to respond to him in this House, and it is delightful that he is here. He makes the fair point that it is in all our interests that pension credit be increased.
One of my colleagues asked what had been the impact of the BBC decision. There is no totally granular data on that, but I can assist to a degree: the claims for pension credit, which is what we want to see, were dramatically increased as of July 2020 compared with January 2020. There is definitely a massive increase in claims and clearly a filtering through of the acceptance of said claims. I refer hon. Members to the parliamentary question asked by the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), PQ 82024. I will ensure that I put a note of the issue on the record in the Library to answer that particular point and expand upon it.
In respect of pension credit, the Secretary of State was right to identify that we had a significant nationwide campaign in the spring of this year, and that the combination of that and the impact of the BBC decision clearly had an impact on greater take-up. The specific causes of the increase in take-up are hard to assess, but there is no doubt that the take-up has been larger.
In respect of the point raised by various hon. Members about working-age benefits, it is right to say that the Government are proud of the fact that they have provided support during the pandemic for those below state pension age, whether through the plan for jobs, with Kickstart now open for bids across Great Britain and doing very well, increasing the standard allowance in universal credit and working tax credit by £1,040 this year, benefiting 4 million families, investing approximately £9 billion of extra support to protect people’s incomes through the pandemic, removing the seven-day waiting requirement for employment and support allowance claims linked to covid-19, or relaxing the universal credit minimum income floor for self-employed people.
As the Secretary of State said to the right hon. Member for East Ham and the Work and Pensions Committee yesterday, that is a matter that is clearly in her mind and that is to be considered by the Secretary of State. I cannot really add or expand upon the answer that she gave, and it would not be appropriate to comment further, because clearly she has to conduct a review and then return to this House to respond to that review.
Having dealt with the specifics, all colleagues have identified that this is an important piece of legislation, without which the state pension would be frozen for a year from April 2021. It makes technical changes to ensure that state pensions can be uprated, providing peace of mind to pensioners regarding their financial health. It is a one-year Bill, so it is not the case that we are considering the matter beyond the first year. Clearly, this arises out of the covid emergency and its impact on earnings, and it would not be appropriate to address the future at this stage. I believe this Bill is a further demonstration of this Government’s action in support of pensioners, and provides them with financial peace of mind in the face of the coronavirus pandemic. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).
SOCIAL SECURITY (UP-RATING OF BENEFITS) BILL (MONEY)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Social Security (Up-rating of Benefits) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(David T.C. Davies.)
Question agreed to.
Social Security (Up-rating of Benefits) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 1st October 2020
(4 years, 2 months ago)
Commons ChamberSocial Security (Up-rating of Benefits) Act 2020 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 1 October 2020 (PDF) - (1 Oct 2020)
This text is a record of ministerial contributions to a debate held as part of the Social Security (Up-rating of Benefits) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I thank colleagues for their contributions and will respond briefly because I accept that these are probing amendments. I will most definitely not take up the opportunity to refight the 2019 election with the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), because, frankly, that is probably somewhere he does not wish to go.
On the probing amendment on the triple lock, this is a matter, as was rightly highlighted by the hon. Gentleman, that the Secretary of State herself was pretty unequivocal about. I also welcome his analysis and appreciation that the state pension should not be viewed in isolation, because, quite clearly, it is one element of the various supported benefits that are available—whether a national health service, free at the point of delivery, or the support that is now going through with automatic enrolment, a cross-party policy developed by the Labour party and the Turner commission. Various Ministers in the Labour Government had brought that policy forward as part of the coalition, and it was then implemented by the Conservative Government. That has clearly had an impact, as has, obviously, the expansion of pension credit, and it should be seen in the round rather than on its own in that particular context.
Clearly, the key policy has been the increase in the basic state pension and the fact that we are now £1,900 larger than we were in 2010. Clearly, this is a matter that all parties in this House are supporting on an ongoing basis. I submit with respect that it is entirely appropriate that the Secretary of State should be allowed to bring forward this legislation, as the House seems to deem fit, and should conduct the uprating review and then come back to this House, as she is required to do, and debate the matter in this House.
The issue of pensioner poverty leads me into amendment 5 in respect of the women against state pension inequality. It is unquestionably difficult to predict future poverty rates when one is assessing an impact. The Bill is an enabling piece of legislation. It is not a piece of legislation that then implements a particular policy. There is also a danger with trying to accurately predict future poverty rates, when one is looking at an individual policy and an individual part of a Bill. For example, the published predictions of the Resolution Foundation, which were cited by colleagues earlier on, suggested that relative child poverty after housing costs would increase in 2017-18 when they actually fell. The Institute for Fiscal Studies has not published projections of poverty since 2017.
Let me turn now to the other amendments submitted by the hon. Member for Glasgow South West (Chris Stephens). In respect of the assessment in amendment 3, I submit that there is a “be careful what you wish for” approach. The assessment is unnecessary and, in reality, unfeasible. The reality is that the UK state pension is payable worldwide and given that the socioeconomic conditions of each country vary enormously, it is simply unfeasible to produce a meaningful assessment of the uprating policy’s impact on overseas recipients, and—this is the crucial point—notwithstanding issues regarding feasibility, the timetable for laying a draft order for uprating does not allow for an assessment to be made. If there were to be an assessment, and the amendment was successful, the reality is that that assessment would not be made in time—by November 2020—with the consequence that the state pension would be frozen. I most definitely suggest, with great respect, that that assessment would be a negative idea for all the pensioners who are seeking an increase, potentially by reason of this legislation.
On amendment 4, 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.
I turn to the perennial issue that the hon. Gentleman seeks to raise—I do not diminish the fact that he wishes to raise it, as did the hon. Member for Stalybridge and Hyde from the Opposition Front Bench—in respect of the changes to the state pension increase, which were, of course, supported for 13 years by the Labour Government when they were in power and, in fact, were enhanced by the 2007 Act. It is not the Government’s intention to amend the 1995 Act, the 2007 Act or the 2011 Act. Clearly, if the Scottish Government wish to act, sections 24, 26 and 28 of the Scotland Act 2016 give powers to the Scottish Government to intervene in Holyrood if they choose to do so. We would certainly resist any changes in this Parliament.
I take the point made by the hon. Member for Stalybridge and Hyde about the 2019 election and the debate on that matter, but since then, there has been the Court of Appeal’s decision in respect of the court case, which unequivocally found for this Government, the coalition Government, the Labour Government and the Conservative Government, dating back to 1995 on all issues on these grounds, including notice. With respect, I believe that the matter should rest there.
The long and the short of it is that I would resist the amendments, and I invite the hon. Member for Glasgow South West, with due respect, not to press them.
Chris Stephens
I would love to say that I am shocked and stunned that the Government have not accepted any of the amendments, but that would perhaps be an oversell. As the Minister said, they are probing amendments. He will be well aware that we will return to these topics, and I invite Members of the other place perhaps to pick them up when they discuss the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Bill read the Third time and passed.
Social Security (Up-rating of Benefits) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 13th October 2020
(4 years, 2 months ago)
Grand CommitteeSocial Security (Up-rating of Benefits) Act 2020 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 1 October 2020 (PDF) - (1 Oct 2020)
This text is a record of ministerial contributions to a debate held as part of the Social Security (Up-rating of Benefits) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Baroness Stedman-Scott
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)
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.
Baroness Stedman-Scott (Con)
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)
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.
Social Security (Up-rating of Benefits) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 27th October 2020
(4 years, 1 month ago)
Lords ChamberSocial Security (Up-rating of Benefits) Act 2020 Read Hansard Text Amendment Paper: HL Bill 136-I Marshalled list for Committee - (22 Oct 2020)
This text is a record of ministerial contributions to a debate held as part of the Social Security (Up-rating of Benefits) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Baroness Sherlock (Lab) [V]
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)
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.
Baroness Sherlock (Lab) [V]
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)
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)
My Lords, I have had no requests to speak after the Minister.
Baroness Stedman-Scott (Con)
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)
My Lords, I have received no requests to speak after the Minister. I call the noble Baroness, Lady Sherlock.
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
Even in the hybrid House, the Minister can respond to a final set of questions.
Baroness Stedman-Scott (Con)
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]
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.
Social Security (Up-rating of Benefits) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 17th November 2020
(4 years, 1 month ago)
Lords ChamberSocial Security (Up-rating of Benefits) Act 2020 Read Hansard Text Amendment Paper: HL Bill 136-I Marshalled list for Committee - (22 Oct 2020)
This text is a record of ministerial contributions to a debate held as part of the Social Security (Up-rating of Benefits) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)
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]
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 Meacher (CB)
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)
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.