16:01 - The House divided: - Ayes: 218 / Noes: 0 - Question accordingly agreed to.
The Secretary of State for Work and Pensions (Mel Stride)
Can I open by saying that it is a pleasure to at last stand opposite the right hon. Member for Leicester South (Jonathan Ashworth) in debate at the Dispatch Box? We have heard a lot of sound and fury from the Opposition Benches, but not much illumination and light. Indeed, the entire speech was predicated on a perceived answer to the question that he has put in the motion—namely, that we will short-change pensioners in some way—and that is far from necessarily the outcome we will see.
The right hon. Gentleman’s speech started pretty well—he read out the motion and so far so good—but it was on the intervention of my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), who claimed him as a close friend, that he started to go down hill and lose his politics bearings. I should just correct my right hon. Friend, who I think was being over-harsh on Gordon Brown by suggesting that, in 1999, Labour put up pensions by 50p. It was, of course, 75p—a full 50% more than he suggested.
Sir John Hayes
I am immensely grateful to my right hon. Friend for correcting the record. I did say we were friends and I was trying to be generous to the right hon. Member for Leicester South, but adding the extra 25p would have come as cold comfort to the pensioners who suffered under Labour. We should remember that the triple lock was a Conservative policy, which is why we must stand by it.
Mel Stride
I thank my right hon. Friend, and given the impact his intervention had on a speech that deteriorated very rapidly thereafter, he will now be my secret weapon in every debate now; he will be there, poised.
Ms Lyn Brown (West Ham) (Lab)
I am actually quite offended by the idea that this is theatre and knockabout because my constituents do not see that way. Can I bring some facts to this debate? The Labour Government took 1 million pensioners out of poverty. This Government have put half a million into poverty. Does the Secretary of State not feel that this is just outrageous, and that he needs to make it clear today that the promises of his manifesto will be fulfilled?
Mel Stride
I will of course come on to the issue of the impact of the Government’s huge commitment to pensioners over the years on issues such as poverty that the hon. Lady has raised. However, may I begin by saying that I am slightly surprised the right hon. Member for Leicester South should have come forward with this motion at all? He was present at departmental questions just a few days ago, when the question about what the Government would do in respect of the triple lock, and indeed the uprating of benefits, was put on many occasions to me and my fellow Ministers, and we gave a very clear, rational and sound response. It is that a fiscal event will take place soon—on the 17th of this month—and, as he will know, it is completely out of order for Ministers under those circumstances to start giving a running commentary on what is expected to be included in that fiscal event. Indeed, in the event that he was in my position, stood up and pre-announced measures that were coming forward in the Budget, he would rightly be required to resign from his position. No doubt that is something that, in my case, would please him no end, but I am afraid I am not going to give him that pleasure.
Angela Richardson (Guildford) (Con)
On the autumn statement coming on 17 November, which is next week, it is accompanied by a full forecast from the Office for Budget Responsibility. Is that not the responsible time to talk about the uprating of pensions and benefits? It is irresponsible of the Opposition to bring this forward ahead of the full OBR forecast.
Mel Stride
My hon. Friend is entirely right. That is precisely the point I am making. It would be entirely irresponsible for any member of the Government to prejudge or give a running commentary on anything that may appear in that statement.
Alan Brown
Can the Secretary of State outline why it would be irresponsible to confirm that the Government are keeping a manifesto commitment and promise?
Mel Stride
As I have set out, we are facing what is being called a Budget. It is a major fiscal event and many decisions will be taken within it. It would not be right for a member of the Government at the Dispatch Box to prejudge what may be included in it.
Sir Stephen Timms (East Ham) (Lab)
I welcome the Secretary of State to his first Department for Work and Pensions debate. Surely he is not suggesting that the current Prime Minister was irresponsible when he said last May that the triple lock would be honoured for next April. Will he confirm that, if the triple lock is not honoured for next April, it will be almost without precedent, going back 50 years or more, for the state pension not to be uprated at least in line with inflation?
Mel Stride
I welcome the question from the Chair of the Work and Pensions Committee. As a former Pensions Minister, he will know that, in the situation we are in at the moment, right hard up against a major fiscal event that is about to set out major tax and spending decisions, it would simply not be right, as I have said on countless occasions, for any member of the Government to prejudge and pre-empt the measures that the Chancellor will be coming forward with.
David Linden (Glasgow East) (SNP)
The Secretary of State talks about prejudging, pre-empting and following due process, but he knows that, if the Department was intending to suspend the triple lock, his officials would already be preparing the relevant legislation, as was brought forward by then Pensions Minister, the hon. Member for Hexham (Guy Opperman), when the triple lock was last suspended. In the interests of being transparent and following process, can the Secretary of State see whether those officials have been instructed to draft that legislation?
Mel Stride
That is simply an ingenious way—I congratulate the hon. Member—of asking precisely the same question. I have noticed that Members do that in this House from time to time, sometimes quite effectively.
The process is extremely clear. I have a duty under legislation to assess the triple lock and the uprating of benefits and, taking into account the September CPI figures and the average wage increases in the preceding period, and in conjunction with the Chancellor—because these decisions have a major impact on the Department’s annual managed expenditure—to come to a decision. That process is ongoing and will be concluded by the 17th, when the hon. Member will have the answers to all the questions he asks.
Let me focus on part of the central charge from the shadow Secretary of State regarding what this Government have or have not done for pensioners over a long period. As has been pointed out by Conservative Members, the triple lock was brought in under a Conservative-led Government in 2011. As to what has happened to the pension in that intervening period, the basic state pension has increased by £2,300, outperforming inflation by £720. We spend £110 billion a year supporting pensioners through the pension and £134 billion if we take wider measures into account. That is more than 5% of the entire output of the economy dedicated to supporting our pensioners.
Gary Sambrook
Talking of wider measures, pension credit can be worth up to £3,300 for individual pensioners, and it can open the door to many other benefits such as free NHS dental treatment and other cost of living measures. There are 800,000 people in the UK, many of whom will be in Birmingham, Northfield, who could claim pension credit but do not. Will the Secretary of State take this opportunity to encourage as many people as possible to claim pension credit?
Mel Stride
That is a truly constructive intervention because, as my hon. Friend points out, not everybody who would be qualified for that benefit has applied. About 70% of those who we believe are eligible receive pension credit, but 30% do not. My hon. Friend the Minister for Employment did an extraordinarily good job in June in encouraging people to sign up to pension credit, through the campaign that the Department launched, and I believe there was an increase in take-up of 275% due to his efforts. My hon. Friend the Member for Birmingham, Northfield (Gary Sambrook) is right: this is important not just for the benefits that we think of, and the credit itself, worth £3,300, but in terms of recent measures that the Government have announced, the £650 of support, which is available to pensioners only if it is unlocked by access to pension credit. It is an important credit to apply for.
Anne McLaughlin (Glasgow North East) (SNP)
The £650 cost of living grant to those on pension credit is great, and would have been a great incentive to get that other 30% to 40% to sign up for pension credit. We know that some people feel that they should not do it, and we need to persuade them. Unfortunately, however, unless someone applied successfully by 19 August, they can no longer get that £650. My campaign to extend that deadline to 31 March has been running for a couple of months, and I have had some positive responses. Will the Minister consider meeting me to talk about the possibility of extending the deadline to the official end of winter, so that we can convince people to take it?
Mel Stride
I thank the hon. Lady for that intervention and I recognise the solid and important work that she has done in this area. I can correct her, and hopefully please her, by saying that the deadline is 18 December, because pensions credit can be applied for three months retrospectively, which would bring it into the reference period for the £650 payment.
Anne McLaughlin
The 19 December deadline only allows people to get £324. I will be getting my constituents to sign up for that on the basis of the £324, but I am asking whether somebody who applies until the end of March can get the whole amount of £650, which is a bigger incentive than £324.
Mel Stride
I thank the hon. Lady for that clarification and I accept the point she makes. I would be happy for the Minister for Pensions to meet her to discuss the issue she has raised.
Richard Graham (Gloucester) (Con)
The key point my right hon. Friend is stressing is that a huge amount has been done consistently by this Government to help pensioners since 2011—innovations that the Opposition opposed at the time or certainly did not come up with, including benefits for women who can claim pension years when they were bringing up children, and auto-enrolment with 20 million new people. I hope that the one-off payment my right hon. Friend just alluded to will be valid for a bit longer, and there is the increase of £3,200 per pensioner on the state pension alone. Does my right hon. Friend agree that today’s debate is largely designed for the Opposition, and about the shadow Minister who was behind the 1999 75p increase—[Interruption.]—trying to park his tanks—
Mel Stride
Thank you, Mr Speaker. The points raised by my hon. Friend the Member for Gloucester (Richard Graham) are well made. This Government have done a huge amount over many years to do what we can.
Mel Stride
The hon. Lady asks from a sedentary position why poverty is going up, and I will come to poverty in a moment. There is no doubt that my hon. Friend the Member for Gloucester is right: for a long time the Government have stood up for the interest of pensioners as one of our prime priorities, and we know why. Many pensioners are particularly vulnerable. When economic conditions are difficult—as they are at the moment—it is hard for them to adjust their economic circumstances, to re-engage with the workforce and so on, so it is important that we have that duty.
I turn to poverty. Since 2009-10, 400,000 fewer pensioners are in absolute poverty—before or after housing costs—and the proportion of pensioners in material deprivation has fallen from 10% in 2009-10 to 6% in 2019-20. Over the much longer sweep since 1990, relative poverty has halved, but there is still more to be done.
Alan Brown
Does the Secretary of State accept that poverty analysis figures lag real time and that poverty figures are going up? We only have to look at how an estimated 6.7 million households are in fuel poverty. Will he remember that when he stands at the Dispatch Box and talks about figures coming down?
Mel Stride
Those figures are simple facts about what has happened to absolute poverty across the period that I quoted.
I turn to an important issue: the economic circumstances in which the country finds itself.
Margaret Greenwood (Wirral West) (Lab)
Will the Secretary of State give way?
Mel Stride
In a moment. That is a difficult situation, largely visited upon us through a major pandemic that shut down a substantial proportion of the economy, followed by a war between Ukraine and Russia. That, of course, has had a huge impact in terms of inflation, the cost of energy and people’s bills. It is only right that we are honest with the public and honest in the House about the ramifications of that situation. On 17 November, we will see some difficult choices brought forward by the Chancellor of the Exchequer on both tax and spending. We have to understand why that is. They will be brought forward because the country must demonstrate that it will live within its means and act fiscally responsibly. As a consequence, we see bond yields and interest rates softening, which will be good for mortgage holders, good for businesses who are borrowing and good for the servicing costs of the Government and their national debt.
Those hard choices must be made, but within them the Government have a core mission to look after the most vulnerable. Those who say that we do not do that are simply wrong. The evidence bears out my statement. The £650 cost of living payment that we have discussed is there for pensioners through pension credit and is there more widely for 8 million low-income households up and down the country. There is the £300 payment to all pensioner households. There is the £400 reduction in fuel bills, which comes through the bills themselves. There is a £150 reduction for those living in houses in council tax bands A to D—many of them will be pensioners—and a £150 payment to those who are disabled. That is on top of the household support fund administered by local authorities, who perhaps have a better grip of local need than those at the centre, which was recently expanded by £500 million to over £1 billion. Of course, there is also the energy price guarantee holding average fuel bills for the average family at £2,500, saving £700 across the winter. All those measures and more are clearly indicative that the Government care about those who have the least and are there to protect them at every turn.
David Linden
Going back to what the Secretary of State said earlier, one would think that before covid and the war in Ukraine everything was hunky-dory and there were no problems at all. The reality is that the cost of living crisis is not recent but a result of 12 years of Conservative austerity. [Interruption.] If only Conservative Members got so outraged about pensioner poverty. When he talks about the hard fiscal decisions that will have to be made on 17 November, does he understand that my pensioners in Belvidere are shocked that the Government are not doing enough while lifting the cap on bankers’ bonuses?
Mel Stride
I am surprised by the hon. Gentleman’s intervention. When a pandemic comes along and contracts the economy by a greater level than at any time since about 1709—the year of the great frost—and a war breaks out that has a huge impact on energy costs in electricity, oil and gas, very few of our constituents up and down the country would not accept that those have been major contributors to the inflation and other challenges that we face. Only yesterday, the International Monetary Fund stated that about a third of economies in the world will be going into recession. We are not an outlier; we are right in the middle of the pack of nations who are suffering the consequences of the events that I described.
Margaret Greenwood
The Secretary of State has been telling us that the Government are committed to protecting the most vulnerable and looking after pensioners, but that will ring hollow to pensioners in my constituency who are devastated at the squeeze on public services. They see libraries closing—places they rely on as social hubs where they can go and interact with people—and the local authority having problems providing the social care that they need. Those issues really affect them. I know that they do not come under his Department, but will he commit to speaking to the Cabinet about them?
Mel Stride
The hon. Lady raises a perfectly legitimate concern. We are all concerned about public services, and certainly those of us on the Government side care deeply about public services, but we must be honest with the British public in saying that times are extremely difficult and there will be some tough decisions.
Mel Stride
The hon. Lady shakes her head, but economically there are really three choices: we can either raise taxes, cut spending or borrow more money. The Labour way, we know, is to borrow, borrow, borrow. Unfortunately, we all know where that leads. [Interruption.] The shadow Secretary of State needs to calm down. He is getting a bit excited. What we need—
Mr Speaker
Order. Mr Ashworth, you need to calm down. [Interruption.] No, no. I will make the decision on who needs to be calm, and it is you who is going to be calm.
Mel Stride
Mr Speaker, you are a man after my own heart. We are on the same page and I could not agree with you more. Thank you very much indeed for that timely intervention.
That brings me to my closing remarks.
Mel Stride
I will not.
I respect the fact that the right hon. Member for Leicester South brought forward the motion and, to the extent that it underlines the absolute importance of standing up for our pensioners, I welcome it. Government Members will always be there to support pensioners. We always have been in the past, we are now and we always will be.
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I thank all hon. Members for their valuable contributions to the debate.
Since 2010, pensioner incomes have gone up, absolute pensioner poverty has gone down and we have corrected the historic inequalities towards women in the state pension. That is a record that we on the Government Benches can be proud of. The decision on how to uprate state pension for this year is taken by the Secretary of State at the same time as the uprating decision on all benefits for those of working age and over state pension age.
Alan Brown
The Minister is repeating what the Secretary of State said earlier about pensioner poverty going down. The reality is that it is down only on old statistics. Pensioner poverty is increasing. Fuel poverty is increasing. So will the Government update the House on what the true figures on poverty are in the UK?
Laura Trott
We absolutely recognise that this is a very difficult time for pensioners. That is why we put a substantial package of support in place, which I will come on to later.
The Secretary of State set out, when opening the debate, that the results of his uprating review will be announced alongside the autumn statement on 17 November. To nobody’s surprise, I will not be pre-empting the outcome of that review today. However, reflecting the debate this afternoon, it is important to highlight how pensioners have been supported since 2010.
The yearly amount of the basic state pension has risen by over £2,300 in cash terms, rightly highlighted during the debate by my hon. Friends the Members for South Cambridgeshire (Anthony Browne), for Torbay (Kevin Foster) and for Heywood and Middleton (Chris Clarkson). Average weekly pensioner incomes have increased by 12% in real terms and as a result absolute pensioner poverty has fallen by 400,000 since 2010.
We are forecast to spend over £134 billion on benefits for pensioners in 2022-23. That amounts to 5.4% of GDP.
Karin Smyth (Bristol South) (Lab)
If everything has been so good since 2010, why did the Government stand on a manifesto commitment in 2019 to protect the triple lock? What was the point of that?
Laura Trott
We have been absolutely clear about our record since 2010. I have been clear that I cannot pre-empt the decisions of the Secretary of State. The point is that we on the Government Benches have put plans in place to help pensioners this winter. We are not waiting until next April.
Mr Mohindra
I welcome the Minister to her place. Can the Minister confirm to the House again that, if we wait nine days, we will be given all the information this House seeks on the financial statement, which is due next week?
Laura Trott
My hon. Friend, on this as with so many other things, is absolutely right. I will make some progress now on my speech.
At the heart of the 2016 reforms we made to the state pension was a correction of some of the historic unfairness in the previous system, particularly for women, the self-employed and lower-paid workers.
Laura Trott
I am just going to make some progress, I am sorry.
That means women no longer need to rely on the pension contributions of their husbands, and it is more generous to those who spend time looking after their children, as my hon. Friends the Members for Guildford (Angela Richardson) and for Broadland (Jerome Mayhew) pointed out. As a result, more than 3 million women stand to receive an average of £550 more a year by 2030.
Laura Trott
I am sorry, but as I said, I will make some progress.
Under the state pension, outcomes are projected to equalise for men and women by the early 2040s, more than a decade earlier than they would have done under the old system.
The other important pillar of the 2016 state pension reforms was automatic enrolment. That was raised by my hon. Friends the Members for South West Hertfordshire (Mr Mohindra), for Rother Valley (Alexander Stafford), for Broadland and for Heywood and Middleton. Automatic enrolment into workplace pensions has had a transformative effect on pension-saving participation. As my hon. Friend the Member for Broadland pointed out, private savings for pensions went down under Labour.
Over 10.7 million people have been automatically enrolled into a pension by more than 2 million employers in every sector of the economy, seeing an additional £33 billion saved into workplace pensions each year compared with 2012. Automatic enrolment has helped many previously under-represented groups to begin pension savings, such as low earners, young people and women.
Margaret Greenwood
The Minister is being generous in giving way. It is good to see her being so keen on auto-enrolment. Will she be clear with the House that that policy was designed by the Labour party?
Laura Trott
But it was not implemented under the Labour Government.
In 2012, 40% of eligible women working in the private sector participated in a workplace pension. As of 2021, that had increased to 87%—higher than for eligible men.
Laura Trott
I will make a bit of progress; I have been quite generous on interventions.
We know that the coming months will be tough for everyone, but especially for pensioners. I thank all hon. Members who have raised cases on behalf of their constituents. The Government fully understand the difficulties that pensioners will face this winter and will stand by those in the most need. That is why the Government have made substantial support available for pensioners struggling with the cost of living this winter. As my hon. Friends the Members for Wantage (David Johnston) and for Gloucester (Richard Graham) pointed out, we have not heard much from the Labour Front-Bench team today about what their plan would be for this winter.
We have a plan that includes the £650 cost of living payment for those on pension credit to help with the rising cost of living. There is a £400 reduction on energy bills for all domestic electricity customers over the coming months and the £150 council tax rebate received by 85% of all UK households. Those on state pension will also receive an increased £500 winter fuel payment if they are under 80 or a £600 winter fuel payment if they are 80 or over. In total, that will mean that all pensioners receiving the state pension could receive up to £850 of additional support in the coming months and that pensioners on the lowest income who are claiming means-tested benefits will receive up to £1,500.
Laura Trott
I will make a bit of progress and then come back to the hon. Gentleman.
Pension credit was raised by a number of Members, including the hon. Member for Kilmarnock and Loudoun (Alan Brown), my hon. Friend the Member for Torbay, the right hon. Member for East Ham (Sir Stephen Timms), the hon. Member for Birmingham, Erdington (Mrs Hamilton), my hon. Friend the Member for Rother Valley and the hon. Members for Arfon (Hywel Williams) and for Wirral West (Margaret Greenwood). My predecessor—the Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman)—put in a huge amount of work to increase awareness of pension credit. We have seen a significant increase in the number of claims, peaking at a 275% increase year on year during pension credit awareness week in June. We know, however, that only seven out of 10 people who are eligible to claim it do so. That means that £3,300 of additional support is not being claimed by around 850,000 households. Clearly, it would make a significant difference if even some of that money—totalling £1.7 billion—made its way into the pockets of the poorest pensioners.
The benefit of pension credit is that, as many Members have mentioned, it passports to an array of additional support, even when a person’s entitlement is very small. A pension credit recipient will receive a TV licence if they are over the age of 75 and get access to housing benefit and council tax support. The second half of the Government’s cost of living support—worth £324—will also be paid to all pension credit recipients. However, time is running out for those who have not yet claimed pension credit. The crucial date is 18 December. If someone claims pension credit by then and is eligible for the maximum three-month backdating, they will receive £324 of support to which they are entitled. It is therefore essential that all of us here urge our constituents to visit the pension credit page of gov.uk or to call the number listed to check eligibility of claim.
On automatic enrolment, the right hon. Member for East Ham and my hon. Friend the Member for Torbay raised an interesting idea. From the information that I have, the Government do not have the data to be able to do it, but I will definitely explore further the point about local government and what more we can do with data.
Alan Brown
The Minister spoke about the extra support for pensioners—I think she said it was £850. Does she realise that that does not even cover the increase in the average energy bill, which has gone up from £1,100 to £2,500? More importantly, what does she think energy bills will be when the Government’s support ends come April?
Laura Trott
That does not include the energy price guarantee.
As the Secretary of State set out to the House and as I said at the start of my speech, we cannot pre-empt the fiscal statement, but it is the Conservatives who have increased the state pension, it was the Conservatives who introduced automatic enrolment and it is the Conservatives who have reduced absolute pensioner poverty. This Government have always protected and will always protect the most vulnerable: that has been our track record since 2010, and that is what we will continue to do.
Question put.