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14:59 - The House divided: - Ayes: 228 / Noes: 348 - Question accordingly negatived.
Madam Deputy Speaker (Judith Cummins)
Before we start, I inform the House that I will bring in the Secretary of State at the end of the debate. I call the shadow Secretary of State.
1.30 pm
Mel Stride (Central Devon) (Con)
I beg to move,
That an humble Address be presented to His Majesty, praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI, 2024, No. 869), dated 22 August 2024, a copy of which was laid before this House on 22 August, be annulled.
The Labour party—the Government—said in the general election that it would bring in a new style of politics; politics centred on integrity and transparency. So it was that during the election, we held them to account and pressed them on tax, among other matters. We will find out, with the Budget at the end of next month, whether they were telling the truth—I have my suspicions. But we have already discovered one thing right now. We also pressed them on the winter fuel payment, from which millions of pensioners benefit up and down the country. Why? Because the Conservative party stands four-square behind our elderly. We believe that they should have security and dignity in their later years.
We received cast-iron assurances from the Labour party. In fact, the then shadow Chief Secretary to the Treasury, the right hon. Member for Bristol North West (Darren Jones)—[Hon. Members: “Where is he?”] That is a good question. He said when pressed that the Labour party had “no plans” to do anything in respect of the winter fuel payment. Indeed, Labour candidates up and down the country gleefully pointed to their manifesto as having no mention of doing anything on this particular matter. But look at what has happened in a matter of a few short weeks. What happened to integrity? What happened to transparency? They went out of the window—broken promises already. The special contract that Labour sought to have with the British people based on integrity and decency has been smashed into a million pieces.
What is the impact of these measures? To a degree, we do not know—I will come to that—but we do know that nine out of 10 pensioners will lose the winter fuel payment of up to £300 at a most difficult time of year for millions of them, and a time when the energy price cap is going up by 10%. There is a suggestion from Labour Members that somehow only the wealthy—the millionaires—are affected. Far from it: two thirds of pensioners living below the poverty line will have this benefit removed. [Interruption.] Labour Members do not like hearing it. The 880,000 pensioners who we know are eligible for pension credit but are not yet receiving it will also suffer—[Interruption.] Labour Members chunter from sedentary positions, but although they say that they will have wonderful campaigns to get everybody who is entitled on to pension credit, in reality, even if they did so it would cost the Exchequer £3.8 billion, which is over twice the money that they say they will save. It is an absurd policy that their own plans are actively working against.
The haste with which this has been carried out is simply jaw-dropping. We do not have any impact assessments.
Mike Amesbury (Runcorn and Helsby) (Lab)
Will the shadow Secretary of State give way?
Mel Stride
I will in a moment. We do not know what the impact will be across the income distribution. No Member of this House knows what the impact will be within their own constituency. We do not know what the recommendation of the Social Security Advisory Committee will be. Why? Because it will not be given the information until tomorrow, we are told. And of course, the measure does not form part of what it should: a major fiscal event with the Office for Budget Responsibility scoring it and an economic and fiscal outlook accompanying it.
Mel Stride
I will come to the hon. Gentleman.
In fact, the only authority to comment thus far on these measures is the House of Lords Secondary Legislation Scrutiny Committee, which said:
“We are unconvinced by the reasons given for the urgency attached to laying these Regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice.”
That, I think, says it all.
Mel Stride
I will give way to the hon. Gentleman, who has been very patient.
Mike Amesbury
I thank the shadow Secretary of State for finally giving way. Will he clarify which Conservative leadership contender has called for the means-testing of the winter fuel allowance?
Mel Stride
I am left feeling that that intervention was barely worth the wait.
The fact that we even have a debate today is near miraculous given the resistance from the Labour party—we have it thanks to the scrutiny that the Conservative party is providing to the Government. We know that petitions have been railing against the measures: 100,000 people have signed the Silver Voices petition, a third of a million the 38 Degrees petition, and over half a million the Age UK petition. They are calling on the Government to think again. The press, particularly the Express newspaper, is doing a sterling job in bringing these matters to our attention. Even the trade union movement, including Unite, is pointing a finger at the Government and saying that they are picking the pockets of pensioners.
Graham Stuart (Beverley and Holderness) (Con)
There is a sense of disappointment. Yesterday, the Health Secretary was dragged in here because a multimillion-pound-making consultant in the health industry is wandering corridors with access to papers, and today pensioners are being betrayed. Does my right hon. Friend agree that when people voted Labour, they thought that they were getting change and transparency? They were promised higher standards; they are getting the opposite.
Mel Stride
I thank my right hon. Friend for his appropriate intervention. He is right, of course. The only surprising thing is how remarkably quickly this has all fallen apart.
The Government will take responsibility for what has happened. They will blame us, with this fictitious black hole. The Leader of the House has suggested—I invite Labour Members to support her in this assertion—that the measure is necessary in order to avoid a “run on the pound.” It is just as well that Labour is not in charge of the economy, or we might end up in a real mess.
Deirdre Costigan (Ealing Southall) (Lab)
Does the shadow Secretary of State agree that if a local council had run its finances into the ground, in the way that his party did to the country’s finances with a £22 billion black hole, he would have called in the commissioners in the morning and instigated swingeing cuts? Can I ask him—[Interruption.] Given that that is the case, and that he now seems to have decided that his party no longer cares about balancing the books, will he apologise—
Madam Deputy Speaker (Judith Cummins)
Order. I call the shadow Secretary of State.
Mel Stride
Thank you, Madam Deputy Speaker. That slightly lengthy question might be better addressed by way of a rather lengthy letter to the leaders of Birmingham city council.
Of course, all politics is about choices, and what this Government have done is cave in to their trade union paymasters. They have settled way above inflation. Junior doctors—22%. Train drivers—14%. They have stood up for their trade union paymasters on the backs of vulnerable pensioners, and that is not right. If it is not the case that the trade unions are running the Labour party, hands up everybody on the Government Benches who has not received money from the trade unions for their campaigning or their private office. [Hon. Members: “One!”] One person. Therein lies the truth about who is running the Labour party.
Of course, we have seen all of this before. Under the last Labour Government, we had the 75p pension increase, we had Gordon Brown’s stealth tax on private pensions—£118 billion in total—and was it any surprise that we ended up with the fourth highest level of pensioner poverty across the whole of Europe?
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The right hon. Gentleman talks about choices and pensioners. When his party chose to suspend the triple lock in 2021 and give a below-inflation increase to pensioners, costing them £500, what was his concern then? Why did he say nothing?
Mel Stride
The hon. Gentleman is entirely wrong. We went into the election promising the triple lock plus. Unlike his party, under which millions of pensioners are going to be dragged into income tax spend, many of them for the first time, we were prepared to stand up and say that we would not do that.
Jim Shannon
I commend the right hon. Gentleman and his party for bringing forward this issue, which is massive for my constituents and those across the whole United Kingdom. I say this with respect to the Labour party: this policy does not conform to any Labour party policies that I have seen in the past. Pensioners who have contacted me say that they are concerned because the threshold is too low, because pension credit will take nine weeks to process even if it gets to the 28% who are eligible in Northern Ireland, and because the £400 that the Labour Government have approved will not come until spring next year. Those are three reasons why the motion has to be supported.
Mel Stride
The hon. Gentleman is entirely right, as always, and I completely agree with every word that he has just said.
We are the party of the triple lock, and we were the party of the triple lock plus. We are the party that has raised the state pension by £3,700 since 2010, and we are the party that has seen 200,000 fewer pensioners in absolute poverty since we came to office. That is now going to go into reverse.
I will now, rather more gently and rather more quietly, make an impassioned plea to Government Members: look to your conscience. You know in your hearts that these measures are wrong, that the Labour party has broken its promises, and that these measures will lead to untold hardship for millions of elderly and vulnerable people right up and down the country. You now have an opportunity to join with us and put a stop to it.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Before I start, I want to thank the House for putting its confidence in me to chair the Treasury Committee for the term of this Parliament. I am the servant of this House, and I will question without fear or favour those who appear before us. I look forward to engaging with the new Members I have yet to get to know. I also declare an interest: my husband has been in receipt of the winter fuel allowance, but if the vote changes that today, he will no longer receive it. For his own vanity, I should add that it is the lower limit.
The decision that we are being asked to make today is a difficult one, but sadly it will not be the only difficult decision facing the new Labour Government. Before the general election, I had the privilege of chairing the Public Accounts Committee for nine years. In that role, I saw all of the impacts on public finances—current, past and future. When I heard my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves) talk about the challenges ahead and the dire consequences, I would say, “You think it’s that bad; I know it’s a lot worse.” We have heard of the Chuckle Brothers, but I described us as the Misery Sisters, because when she said it was bad, I said it was going to be worse. That is the reality. The chickens are coming home to roost on the spending of the previous Government.
We saw a number of problems, which I laid out in my last annual report as Chair of the Public Accounts Committee—factually accurate information. The NHS capital budget was raided to pay for day-to-day expenses, but the backlog of capital expenditure in the NHS was £10.2 billion in the year ending 2022.
Mr Mark Francois (Rayleigh and Wickford) (Con)
As I served with the hon. Lady on the PAC, I warmly congratulate her on her election as Chair of the Treasury Committee. The House has made a very good choice.
Members of the Rayleigh, Rochford and District Association for Voluntary Service, whom I met last Friday, were genuinely worried about this policy. In a nutshell, their argument was that if people on very modest incomes are now frightened to heat their homes, that could lead to illness for many of those people, who will then present themselves to hospital and increase the winter pressures on A&E. By that method, it would be a false economy. The game is not worth the candle. What does the hon. Lady, whom I respect, say to that?
Dame Meg Hillier
I thank the right hon. Gentleman, with whom I had the pleasure of serving on the Public Accounts Committee. That is an example of how the House works closely together; most people would not think that we would agree on many issues, but on that Committee we produced every report in tandem.
The right hon. Gentleman will know that the pressures on the NHS are legion, and that many of the same people who will be suffering this cut to their income—we will come on to some of the measures to ameliorate it—will be the same people queuing and waiting for a hospital appointment. I know too many pensioners who do not get that hip replacement if they cannot afford it, but many are cashing in their savings, when they have them, to pay for a hip replacement so they can have quality of life. That is not the NHS that the right hon. Gentleman or I want to see in this country, so we need to make choices. One choice that this Government are making is to ensure that we pull the NHS waiting lists back. I could digress into the NHS for a long time, but if he will forgive me, I will move on.
Looking at our schools estate, under the last Government the Department for Education asked the Treasury for capital funding for schools of £5.3 billion in 2020. It was allocated only £3.1 billion, so there is a big backlog there.
In the defence sector there are many examples, but I will pick just a couple. Not a single nuclear submarine that has come out of service has yet been decommissioned in this country. It will cost around £500 million in 2018 prices for a single one, amounting to nearly three quarters of a billion pounds in 2018 prices to complete all of those. It is getting to a critical point. These decisions have been delayed and deferred for too long—in this case, by Governments of all colours, not just the last Government—and there is a gap of at least £17 billion in the defence equipment plan over 10 years.
There is also a lack of transparency about local authority spending because of the crisis in local government audit, which was overseen by the last Government. Not enough was done to deal with it. I could go on: there is a long list of expensive things that this Government now need to put right because of neglect over a period of time.
Several hon. Members rose—
Dame Meg Hillier
Let me continue for a moment. There are budget challenges this year, and many decisions that were made in recent Budgets will hit the public finances in 2025, 2026 or beyond, because there was either huge optimism about the state of economic growth or a deferral of painful cuts. Different Members of the House will have their own views.
Paul Holmes (Hamble Valley) (Con)
I congratulate the hon. Member on the post to which she has been elected. She has just outlined a number of projects for which public money needs to be found. As the shadow Secretary of State outlined, the Government’s decision today will save £1.1 billion, and the replacements they are putting in place will cost £3 billion. How does that make economic sense, and how does it help the case that she is making?
Dame Meg Hillier
I give credit to the hon. Gentleman for his chutzpah in coming to the House today to say that it is this Government who have denuded pensioners of income. As my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) highlighted, the previous Government have a track record in that area, and there are 880,000 pensioners who, on the hon. Gentleman’s watch, deserved pension credit but did not get it. Those pensioners have lost out on £3,900 a year, in some cases for many years, because the last Government fell down on the job. They protected some pensioners, but not all. Where was the urgency then? These are crocodile tears when those people were suffering, but it is right that pensioners should get what they are entitled to, and pension credit is not being abolished by this Government. Rather, it is being promoted to make sure that the very poorest pensioners get that income.
One of the things that is absolutely apparent is that we cannot take this issue in isolation. We have a Budget coming on 30 October, and knowing what I knew a few months ago as Chair of the Public Accounts Committee and what I know today, I am not going to change my tune about the dire state of public finances. However, we face a second challenge: at the same time that our public finances are in that dire state, many of our citizens face the same challenges in their personal finances. This Labour Government are rightly committed to growth, but that will require an approach to taxation that helps ensure growth. We will therefore hear many arguments about the need for a taxation system that will underpin growth.
Alicia Kearns (Rutland and Stamford) (Con)
I thank my honourable friend for giving way. I call her “friend” because we have worked together very closely over the past few years, and I welcome her election—I would have supported her for that role.
The difficulty is that the public are not buying it. The Government cannot claim that they need to take this money from vulnerable pensioners—over 20,000 in my constituency will lose the support they are currently getting—and then reward train drivers who work four days a week on 70 grand a year. That is the difficulty, so how is my hon. Friend explaining that to her constituents? I have not been able to give an answer.
Dame Meg Hillier
I could speak forever about the challenges that the last Government left. I have spoken about the NHS, but let us take the dire state of our train services. The previous Government refused to engage and stop the strikes, which meant that anybody travelling had no certainty about whether they could get to everything from work to a family funeral. Lives were put in havoc, so it is absolutely right that we begin to set right the chaos that the last Government left. Yes, there is a cost to that, so the challenge for my right hon. Friend the Member for Leeds West and Pudsey and this Government is how we address that, making decisions that will build up the future of Britain in the way that we all want to see.
We also need to address the issue of taxation. The biggest challenge in our taxation system is that those who face the greatest financial challenges often face the biggest challenges of all, because the greatest cliff edges in our taxation and benefits system affect not those who are starting to earn and accumulate wealth, but those who are most financially challenged. For those at the margin, we keep coming across examples—this is not the only one—where the marginal costs of a slight improvement in income can drastically outweigh that improvement, whether that is tax thresholds being frozen or the issues we have seen with child benefit. There are many more examples, and the debate we are having today is one of those. The solution is not to duck or defer the need for tough choices, so, for the record, I will be voting with the Government. Equally for the record, though, I want this Government to commit to tackling those cliff edges, because that is what progressive policy—including taxation policy—looks like.
Like many Members of this House, I know from bitter experience that rushed laws tend to be bad laws, so I do not expect some Houdini-like solution to be announced from the Front Bench by my right hon. Friend the Member for Leicester West (Liz Kendall) in her closing speech. Instead, I expect and trust that she will consider removing those chains of poverty as a key mission for this Government in a thoughtful, carefully planned way; one that is tied up with the next Budget but goes way beyond it.
I also know, as will many Members, that there are technical challenges in making changes. Look at what has happened with child benefit: the limits on income are dragging many people into tax returns, where households of the same income did or did not receive child benefit depending on who was earning the money. That is a lesson in why changes need to be made in a sustainable way and according to a plan. My right hon. Friend on the Front Bench and her colleagues have a plan, but the winter fuel allowance, which we are discussing now, is a prime example of the problems that those cliff edges create. Addressing those problems in isolation, however, will leave in place all the other cliff edges; we need to look at challenging poverty in the round.
I was honoured to be chosen yesterday to be Chair of the Treasury Committee. I do not yet have Committee members—they are yet to be elected, as is the Chair of the Work and Pensions Committee—so I cannot speak for a Committee that does not yet exist on a cross-party basis, but I will be urging the Committee to consider this wider challenge of cliff edges as a matter of urgency. I look forward to working with Ministers to find some practical steps forward.
We have to make tough choices as a Government in-year, because one of the challenges is that the hole in the public finances is not just about the hole today. In previous Budgets, decisions were made to defer spending to later years, so the real challenge is now. Too often I have seen calls for efficiency savings and cuts in-year that end up being deferred. If we look at what happened to the defence equipment plan under the Conservative Government in 2010, we see that there was a desire to balance the books. In doing so, the Ministry of Defence deferred spending—moved it to the right—which left us with aircraft carriers without aircraft and a raft of other problems. Deferring decisions and spending does not solve things, and this Government and this Cabinet are making the tough choices to make those difficult decisions in-year, because that is financially literate and the right thing to do.
Sir Edward Leigh (Gainsborough) (Con)
If I can reach out to the Labour party for a moment, there is a case for having a serious debate about the total package that we give to pensioners. We could have done that in a sensible way—I have raised it myself, having questioned some aspects of the triple lock a couple of years ago. It is a very difficult debate, but I understand that the total package paid to pensioners as a proportion of gross national product must not keep increasing every year, because that is the way ultimately to bankrupt the country. We need to have a social contract between older people like myself and younger people, particularly when it comes to house building. I understand all that. That is the debate we should have been having today, and we could have combined as a House to have that debate and protect the public finances.
However, that is not the debate we are having. We are debating the action of a Government who have not just gone against a manifesto commitment—there was no manifesto commitment to do this—but actually gave a specific promise that they would not do it. This is surely a question of public trust. They gave an absolute guarantee and I think that is why people are so upset.
I know that some people will say, and here I declare an interest: why should somebody like me receive the winter fuel allowance? All right, let us have a serious debate about that. But what about the people—these are the people I feel so strongly about—who have worked hard all their life, have served their country, receive a very small occupational pension, do not receive pension credit and are looking after every penny, and suddenly, because they do not and cannot receive pension credit because they have a very small occupational pension, their winter fuel allowance is taken away? That will make a real difference to them, so we really have to consider them, and have a serious debate about how we are going to protect those people.
May I make one suggestion to the Government? The hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) alluded to the fact that there should have been a serious debate about tapering, or something similar. I will tell the House what this is all about. This is about a punishment beating. The New Labour Government decided they had to make their case that the public finances were in a dire state and that there was this—[Interruption.] Hang on—there was this £22 billion black hole. We spend £1,200 billion every year. The £22 billion so-called black hole is a mere accounting device. The Labour Government are trying to make the political point that the Conservative party ran the country into the ground, so we have to punish the pensioners. It is absolute and complete rubbish.
What those we represent cannot understand—the people who worked hard all of their life, who have done their bit for the country and whose total package is perhaps £13,000 or £14,000 a year—is that this so-called saving of public money is actually going to go to the train drivers, who earn £70,000 a year. So for God’s sake, let us have a serious debate, let us try to unite on this issue and let us not keep taking away benefits from people just above the pension credit limit. Of course, there are many pensioners who are entitled to pension credit who, for all sorts of reasons, will never claim it. They are suffering, so they will be even worse off.
There is another point to be made. The Government will argue that the total package will be worth more after the increase in the triple lock next year, but actually a pensioner who drew their pension before 2016, by the time they have had this cut, will probably be even worse off. The first cut in the state pension for years! This is not acceptable. This is not the right way to go about things. We should unite around a sensible package that rewards pensioners for their hard work, but does not just indulge in a political gesture.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I recognise the serious economic context of the debate today. The Institute for Fiscal Studies, for example, has estimated that 320,000 people are being pushed into poverty because of mortgage interest rate rises triggered by the disastrous autumn 2022 mini-Budget, and of course the then Prime Minister made many unfunded policies.
I recognise that the policy measures in the King’s Speech will go a long way to reduce household costs and increase incomes in the medium term, but those tackling the appalling poverty that we are seeing will not come in time for this winter. I am proud that Labour are continuing with the triple lock on pensions, something that will be worth an extra £460, but that will not happen until next spring. The setting up of a new energy production company, Great British Energy, alongside making homes more efficient, is a fantastic initiative that will contribute to our net zero targets and reduce energy bills for millions, but again that will not be in time to offset the 10% increase in energy bills this winter. I support our focus on growing our economy, but again that will not happen overnight.
The Joseph Rowntree Foundation estimated in its report earlier this year that there are 2 million pensioners living in poverty—about one in six of all pensioners. In areas such as my constituency, poverty rates are much higher. We have one in two children living in poverty. From the figures, we estimate that will be the same for pensioners. We know that four in 10 older people in Oldham East and Saddleworth have a disability, and almost half have a long-term health condition. We also know that, even before the escalation of energy costs, over one in six households were living in fuel poverty. Although pension credit provides extra financial support for the poorest pensioners, and opens up help such as housing benefit and council tax discounts for those who are eligible for it, only 5,500 of the 9,000 households in Oldham are eligible to claim it. Again, I welcome the automatic linking of pension credit to housing benefit to increase the uptake, but this again will not happen in time—in the next few months.
Debbie Abrahams
I am not going to give way. I thank the right hon. Member, but I cannot because I am under strict guidance from the Deputy Speaker.
One in three pensioners living in poverty are in the private rented sector, so what are we going to do about that? Even if everyone eligible for pension credit were claiming it, according to Age UK, there would still be another 2 million pensioners slightly less badly off who will not be eligible for pension credit and now the winter fuel payment. The cut-off threshold for pension credit is just under £12,000 a year for a single person. These are not wealthy pensioners. Poverty is poverty whoever experiences it, and we know that we have 8 million working people living in poverty, as well as 4.5 million disabled people, 4 million children and 2 million pensioners. As we did in previous Labour Administrations, I know we will tackle this, but again it will not happen overnight.
Could I point out what we know about the health effects of the cold? The Lancet published a very good paper reviewing data from the last 20 years, and it showed the extra deaths—the excess deaths—as a result of cold. I could mention dozens and dozens of cases from my constituents who have written to me and who, again, are just clinging on following the last 14 years. Is my right hon. Friend the Secretary of State able to say not just what other options she may have considered for offsetting the loss of the £300, but what alternative ways there are of raising the £1.4 billion we will get from means-testing the winter fuel payment? I know how complex and difficult our economic situation is, but, please, we must protect our most vulnerable citizens.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Wendy Chamberlain (North East Fife) (LD)
Recent weeks have seen my inbox inundated with correspondence from pensioners in North East Fife, because it gets quite cold up there, who are deeply worried. I am sure—in fact, I know—that that is far from a unique experience across this House. Since the Chancellor’s announcement in late July, we have all heard the concerns of our elderly constituents. We know that the winter fuel payment provides vital support during the coldest months of the year. It is not a luxury, and the Chancellor’s decision will leave as many as 2 million people extremely worried about how they will afford their energy bills this winter.
We on the Liberal Democrat Benches accept that the new Government have been left with an unenviable task of rebuilding our economy after the mess left by the previous Government. No one is disputing that years of Conservative mismanagement have left the public finances in crisis, but this cut is simply wrong. It is wrong to strip support from many of the poorest pensioners just as energy bills are set to rise again, it is wrong to force vulnerable elderly people to make that choice between heating and eating this winter and it is the wrong answer to the challenges we face.
The way we treat the vulnerable members of our communities reflects who we are as a society. What sort of signal does it send to be turning our backs on millions of pensioners? In addition, I have campaigned consistently for unpaid carers since my election, as has my party and our leader, my right hon. Friend the Member for Kingston and Surbiton (Ed Davey). Census figures, with the proviso that Scottish census data is still awaited, suggest that almost 1.4 million people across the UK aged over 65 are providing unpaid care. Although Carers UK awaits data on how many will lose the winter fuel allowance, we know that those carers, and those they care for, are some of the most vulnerable in our society.
Steff Aquarone (North Norfolk) (LD)
On the disproportionate effects on certain groups, I am sure my hon. Friend is aware that North Norfolk is home to 28,000 pensioners and has the title of being the oldest constituency in the country. Many of them already face higher energy costs due to the huge number of North Norfolk homes that are off the gas grid. Does she agree that these cuts will have a disproportionate impact on older rural constituencies such as North Norfolk, and that the Government must go back to the drawing board with these misguided proposals?
Wendy Chamberlain
That is one thing often lost in relation to the energy price increases that we have seen in recent years: the price cap and guarantee does not support those who are using other forms of fuel. Those issues have been raised in the House before and I look forward to hearing what the Government are going to do to support those individuals.
A new Parliament represents an opportunity to move on from the chaos and misery of recent years, but this cut would be far from a fresh start. It would be a disappointing and shameful abandonment of poor and vulnerable pensioners. Age UK has strongly condemned the cut. It points out that it has been introduced with
“virtually no notice and no compensatory measures”.
I note from the debate this morning, when the Minister for Pensions was talking about compensatory measures, that there is real complexity around what will additionally be available to support people. We know the questionnaires that are needed for pension credit. We know that the household support fund has been extended, but we do not know what that will mean. We know that the £150 grant may be available for some, but after listening to the debate this morning, we are left in the position where the Government have made a decision to make the cut, but they have not properly thought through the consequences or the measures that will be available to support those most in need.
Rebecca Harris (Castle Point) (Con)
Does the hon. Lady agree that in 2010, when the coalition Government came in, we inherited a really serious economic crisis and a genuine black hole, and we had to make some very tough decisions as a coalition Government, but we never considered—and never did—this?
Wendy Chamberlain
Obviously, difficult decisions were made during the coalition. The Government are saying today that one of the things they are doing is continuing the triple lock. One reason why the Liberal Democrats supported and brought that move in during the coalition Government, and one reason why we continue to support it, is that still not enough has been done to best support our vulnerable pensioners.
Pete Wishart (Perth and Kinross-shire) (SNP)
I am sure the hon. Lady will acknowledge that Scotland has the coldest climate in the whole United Kingdom. We will be disproportionately hit. It is absurd that that will happen in energy-rich Scotland. Will she appeal to all Scottish Members to ensure their support tonight? Constituents right across Scotland will be watching carefully how Scottish Members of Parliament vote tonight, so will she encourage them to vote with us this evening?
Wendy Chamberlain
We all know that geographical disparities exist. There are differences in how cold parts of the country are. Different communities face differing energy costs and rates and have different means of fuel. We will be supporting the official Opposition’s motion tonight and I hope other MPs across the House do so.
Age UK has drawn attention to low take-up rates for pension credit. Around 1 million pensioners would be eligible for pension credit but do not claim it, often due to a lack of awareness. Since the Chancellor’s announcement, we have seen lots from the Government about how they are going to increase the uptake. Reports do suggest an increase in applications, but also that the wait times for that are increasing. If people are applying for pension credit and get it confirmed only after the date on which the winter fuel payment is made, will those people be caught up with?
An awareness drive is all well and good. The DWP has stated that its calculations assume an increase in the uptake of pension credit. That will still leave more than 700,000 eligible pensioners not getting pension credit, and therefore not getting winter fuel payments. Those of us in the last Parliament will remember numerous drop-ins and “dear colleagues” to outline the steps that the then Government were taking to encourage the uptake of pension credit, and what MPs could do. I remember writing regularly in my local newspaper column to outline how people could apply, but in reality the number of people taking up pension credit is stubbornly stuck at a ceiling of 70%. I would be interested to know what the Government are going to do that will be radically different in order to increase that figure.
The Government’s rationale is that an estimated £1.4 billion will be saved by means-testing the winter fuel payment, but have they made an assessment of what that saving would be if they fulfil that other stated aim of ensuring that all those eligible for pension credit claim it? Is there not a fundamental contradiction at the heart of this measure? How can the Government aim to boost pension credit on the one hand, while aiming to maximise the fiscal savings they are making through this cut? What will it cost to increase the take-up rate, and can the Secretary of State give an assurance that the Treasury will give its full support to any measures aimed at boosting the uptake of pension credit?
A separate but related issue is that of the cliff edge. Analysis by Policy in Practice shows that around 130,000 elderly people miss out on pension credit, as they are just £500 over the income threshold to claim the benefit. We know that those vulnerable elderly people will now be cut off from winter fuel payments with just a few months’ notice. That leaves me feeling that there is cruelty at the heart of this cut. Those vulnerable pensioners, who have spent years struggling under a Conservative cost of living crisis, are now faced with a double hit: an increase in the energy price cap from 1 October, alongside being stripped of those winter fuel payments.
It is important that we do not forget that energy costs are much increased from a few years ago, so arguably a winter fuel payment is needed more than ever. This House has an opportunity today to do the right thing and protect those vulnerable members of our society. The Liberal Democrats will support the official Opposition motion and oppose the move to strip pensioners of that support. I hope other Members will do the same.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. Members will have seen that there is a lot of interest in this debate, so I will impose a clear three-minute time limit from now on.
Anna Dixon (Shipley) (Lab)
I am pleased to have the opportunity to speak in this debate on changes to the winter fuel allowance. Like many of my colleagues, I have been contacted by constituents who are worried about the impact of these changes. I bring to this debate 25 years of experience of working in public health and with older people, latterly as chief executive of a national ageing charity. During that time I came to understand the impact of cold and damp homes on the health and wellbeing of older people, and the challenges of addressing pensioner poverty.
Let us be clear with those pensioners up and down the country who will be losing their winter fuel payments about where ultimate responsibility for today’s decision lies. It is not with my right hon. Friend the Chancellor, but with the right hon. Member for Godalming and Ash (Jeremy Hunt) and his party. It turns out that the Conservatives were pursuing a scorched earth policy: the NHS running on empty; the cost of housing asylum seekers spiralling; and hollow promises on capital projects across the country, including in my constituency. I know that the Chancellor and her colleagues have not taken the decision to means-test the winter fuel payment lightly; hard choices have to be made to put the country’s finances back in order.
We know that many pensioners will miss out, and I worry that they will be left in the cold. In my constituency 1,160 people are eligible for pension credit but not receiving it. I spoke to a resident in a sheltered housing scheme in Cottingley at the weekend. He did not know whether he was eligible, and was not sufficiently mobile to attend a local community centre. Will the Secretary of State work with colleagues in the Ministry of Housing, Communities and Local Government to urge housing associations and local authorities to support their residents to apply for pension credit and other benefits to which they may be entitled?
The other group who risk being left in the cold this winter are those with disabilities or health conditions, or those who live in cold and damp accommodation. Cold homes can cause and worsen respiratory conditions, cardiovascular disease, poor mental health, dementia and hypothermia. In 2019, the NHS spent at least £2.5 billion per year treating illnesses that were directly linked to cold, damp and dangerous homes.
Pensioners are more likely to be living in poorly insulated homes, leading to a higher risk of fuel poverty. I am worried about pensioners such as Barbara in my constituency—she is a full-time carer and her husband has dementia—having to spend more money because her and her husband are at home and he is ill.
Given the crisis that the NHS faces, as a direct result of the 14 years of funding pressure and cuts from the Conservatives, I urge colleagues to work with colleagues in the Department of Health and Social Care to ensure that winter planning guidance means that the NHS tackles fuel poverty.
Esther McVey (Tatton) (Con)
Who would have thought that a Prime Minister not even in office for 10 weeks would be so out of touch with the public? Yet here we are, and yes this Prime Minister is so out of touch, along with the Chancellor and the whole of the Cabinet who are going along with and supporting this cruel policy. The Chancellor should be under no illusion: the public know that this decision to rob millions of pensioners of their winter fuel allowance, for which the Government have no mandate, has nothing to do with economics and everything to do with cynical political calculation.
The haste with which the change is being made is breathtaking. All benefits regulations are required by law to be considered by the independent Social Security Advisory Committee. That is generally done in advance of the legislation being laid. In this case, however, the Labour Government has opted for the urgency provision, which allows SSAC consideration to be retrospective. Some say that is bypassing SSAC scrutiny. As well as evading that scrutiny, where is the Government’s impact assessment on removing winter fuel payment from these pensioners, particularly in the light of the latest information that bills will be rising by £150 this year?
Neil O'Brien (Harborough, Oadby and Wigston) (Con)
There are 18,900 people losing winter fuel payments in my constituency, and many of them are among the 800,000 people who are not eligible for pension credit, but are below the Government’s own poverty line. What are they supposed to do?
Esther McVey
Well said. What is worse, that this Labour Government are so out of touch so early on in their government, the unnecessary haste that this change is being brought in with, the lack scrutiny of this policy, or Labour’s breathtaking hypocrisy? Back in 2017, when the Conservative manifesto stated that we would means-test benefits, the Labour party’s reaction was one of horror, saying that this could not be done and publishing research showing that up to 4,000 pensioners’ lives would be at risk and that pensioners would struggle to heat their homes. The Conservatives did not do it.
What are we seeing here? We are seeing that a Labour party in office ditches its beliefs and its research. This Government have been telling pensioners that they did not want to do this, but that tough financial decisions must be made. We all know, however, that that is poppycock, as it was not the Government’s message to the already highly paid train drivers. When they met them, money was no object. They said, “Have as much as you want.”
The public are not as stupid as this Government think they are. This is good old-fashioned pork barrel politics, taking money away from the people who the Chancellor thinks do not vote Labour, such as pensioners, to hand to people who she thinks do vote Labour, such as train drivers and public sector workers. Millions of pensioners, many struggling to make ends meet, are being sacrificed in this political strategic game.
By announcing the scrapping of the forthcoming and long-awaited cap on care costs, as well as laying the ground to remove the council tax allowance for single people, Labour has basically declared war on pensioners, which will be neither forgotten nor forgiven. Our pensioners deserve better than this. It is time that Labour reversed this decision and restored the winter fuel allowance to all pensioners.
Andy MacNae (Rossendale and Darwen) (Lab)
In the interests of brevity, I associate myself with some of the remarks made by my colleagues on the Government Benches on the desperate financial legacy we have been left and the nature of cliff edges within the benefits system. We should do better than have cliff edges in the future.
Let us remind ourselves that the subject of this debate is the Opposition motion not to means-test winter fuel payments. Let us face it: that means maintaining payments to millions of people, including some Opposition Members, who are happy to admit that they do not need it. Given the dire legacy, the fragility of the economy and the immediate need for in-year savings, this is an emergency measure. With all the other calls on public spending, I cannot see how such payments are the best use of £1 billion or more.
At the same time, I know that many of my constituents on state benefits, with small private pensions, simply do not have the income to meet their everyday needs. They fear not just the winter cold, but every bill. Many have written to me with heartbreaking stories of everyday struggles just to maintain the basic qualities of life. We have heard some mitigations, and we will hear about more. Let us remind ourselves that that includes the fact that the poorest pensioners will retain their winter fuel payments. Let us remind ourselves that people just above the threshold can apply for household funding support through their councils. My office in Rossendale and Darwen is already working hard with residents to make sure that everyone in need gets the support they need. We have already helped a number of pensioners to get the benefits they deserve and need.
At the same time, we need to recognise that none of these steps, including the winter fuel payment itself, addresses the fundamental issues of pensioner poverty. We have to ask how this country can be spending more than £150 billion a year on pensioner payments when millions of Britons—people who have done the right thing all their lives, worked hard and paid in—are still living in deep poverty and unable to afford the most basic comforts. That is not something we should simply accept; such deep pensioner poverty should be a national embarrassment.
Successive Governments have ducked the issue. Winter fuel payments are one example of the sticking-plaster politics that has sought to kick the can down the road, responding to a problem but never fully addressing it. The benefit is poorly targeted, and for those who need it most, it is not nearly enough to make the difference. To truly address pensioner poverty, we need a fresh approach and to be willing to challenge the assumptions of the past, with ambitious policies that target the causes of poverty, not just the symptoms. Home insulation and lower energy prices with GB Energy are just two examples, but we can and must do so much more. We can only deliver real change with an economy that is fixed and stabilised. That is what this Government are utterly committed to.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Today, hon. and right hon. Members will make a choice: whether to take vital winter fuel payments from millions of vulnerable pensioners, including 20,000 pensioners in my constituency. It is important, when Members vote today, that they understand the consequences of their choice. It is important that they understand that when they take winter fuel payments away from vulnerable people, some elderly people will die. Vulnerable elderly people on relatively low incomes will be unable to heat their homes adequately, and as a direct result, because they are cold, they will die. Why? They will die because cold is bad for people. A number of reports that Members may read demonstrate that.
When cold, people’s platelets get higher, they vasoconstrict and their blood pressure goes up, putting them at risk of stroke or heart attack. Their lungs become inflamed, which puts them at risk of pneumonia or chest infection. It makes people with chronic pulmonary obstructive disease more likely to suffer exacerbations and ill health. Studies have shown that physical performance and muscle strength—taking caps off things or walking about—are worse in people who are cold, particularly elderly people. That reduces their ability to complete the activities of daily living independently, and it makes them more likely to fall. Studies have also shown that elderly people who are cold in their home are more likely to need to get up at night to go to the toilet or to wake through the night. That again puts them at more risk of falls and therefore hospitalisation. Sleep disruption puts them at risk from a whole range of different illnesses.
We also know that as the home temperature falls further, the risks increase. It is a proportional dose-response relationship. The House does not need to take my word for it; there is a lot of medical evidence to this end.
The chief medical officer said in his annual report last year:
“Cold homes and fuel poverty are directly linked to excess winter deaths.”
Andrew Griffith (Arundel and South Downs) (Con)
My hon. Friend is making a powerful, emotive speech and quite rightly talking about some of the impacts on pensioners. Does she agree that those are exactly the impacts that should be captured in an impact assessment and brought before the House so that we can make an informed decision and that my 25,000 constituents in Arundel and South Downs, who may face a loss if the motion is not agreed to, are increasingly talking about the right hon. Member for Leeds West and Pudsey (Rachel Reeves) as “Reckless Rachel” in proceeding with this measure?
Dr Johnson
I thank my hon. Friend for that intervention. He is absolutely right. Why is there no impact assessment? I have my suspicions, and my terrified constituents know why there is no impact assessment—it is because they know what the impact will be. I am sure, Madam Deputy Speaker, that your terrified constituents know what the impact of the policy will be. Right hon. and hon. Members all know, too. As right hon. and hon. Members vote, they should be in no doubt that the Government’s first job is to keep people safe, and they are going to fail miserably.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Sleaford and North Hykeham (Dr Johnson). We sat together on the Health and Social Care Committee and heard the evidence from Sir Chris Whitty. We know what Professor Sir Michael Marmot has been saying for decades, and the public health evidence is clear.
Our inheritance was 2.1 million pensioners living in poverty; we have to protect them every single day. They make the hardest budgetary decisions—harder than those made in the Treasury, where there are choices. They have no choice. They have to put a roof over their heads, they have to pay for their food, and they have to pay for their heating. We know that those sums are not adding up—we are getting letters coming in— and we look at the figures that our constituents have to look at every single day. They are scared, and they are telling us that. They will not switch the switch, because they know that if they do, they will have bills that they cannot pay. We need to protect those very vulnerable people.
I commend my right hon. Friend the Secretary of State for driving forward the ambition to get 880,000 pensioners signed up to pension credit. I really hope that people will test the system. There are 243 questions on the questionnaire, and then of course there is a nine-week wait for it to be processed, but we must drive that forward. The last Government failed in that endeavour.
We must also protect those that who do not apply. Many may not for a reason; we know that. They may have dementia, and the application is complex and stressful. Perhaps there is pride involved as well. We are talking about men and women who worked hard all their lives—they might have put a little bit aside or they might not—and ultimately we need to help them.
Then there are the million people who are above the threshold. They too need support, because they are fuel-poor and will struggle this winter. As the hon. Member for Sleaford and North Hykeham said, the cold puts greater demands on a person’s body. The body fights back but, sadly, as it does, people are at risk of heart attacks, strokes and worse. Of course, respiratory diseases prey on the most frail and vulnerable. When we look at where those people will go, we see that they will be queuing up at the GP and looking to the NHS. Sadly, many will not be with us.
It is with my conscience that I cannot vote for these measures, but I am determined to work with the Government to find mitigation, which is absolutely crucial. Age UK and many other charities are saying that it is too late to find alternatives; they say delay. I say, let us delay. Let us get this right—we cannot afford not to.
Kirsty Blackman (Aberdeen North) (SNP)
Some 860,000 pensioners in Scotland are set to lose this benefit. The Prime Minister and the Chancellor have chosen to cut the pensioner cost of living payment. They have chosen to cut the winter fuel allowance. They have made the political choice to scrap those payments.
The UK Labour Government are desperate to meet their self-imposed fiscal targets, but make no mistake: this is a political choice. They are trying to meet those targets by balancing the books on the backs of pensioners. Who out there in the real world voted for that?
This is a key test for Anas Sarwar and Labour MPs from Scotland. Anas Sarwar said:
“Read my lips: no austerity under Labour.”
If that is what he believes, the platform he put to the people of Scotland and what Scottish Labour MPs were voted in on, how can they possibly back the Government today? Who is the master of Scottish Labour MPs? Is it the Prime Minister, is it the Labour party, or is it the people who elected them—the people who put them here—who will go cold this winter because of their Government’s decisions?
This is not the change that people voted for. The UK Government are trailing broken promises behind them. They are refusing to scrap the two-child cap. They are refusing to allow pensioners the money to heat their homes this winter. That is not what people in Scotland voted for, and they will be devastated if their Scottish Labour MPs support the Government today.
Neil Duncan-Jordan (Poole) (Lab)
Thank you, Madam Deputy Speaker, for the chance to speak in this important debate. I felt compelled to do so because for nearly 20 years I was an active campaigner in the pensioner movement. I want to make it clear that the financial mess inherited by the Government is a result of 14 years of austerity and financial mismanagement, and I reject any suggestion that public sector workers are benefiting at the expense of pensioners. That is well known to be a crude attempt to divide working people, and we should reject it as such.
In the short time that I have, I want to make the case for universalism as the cornerstone of our welfare state. We know from the latest figures that 880,000 older people are eligible for pension credit but do not claim it. Means-testing is supposed to target help at those who need it most, but those people do not claim it. For decades, successive Governments have talked about needing to improve take-up, but even in the best year the take-up rate was 67%. Of course, some people do not claim it because they are unaware of what they are entitled to, but most are wary about having to answer more than 230 questions about their circumstances, and many charities such as Citizens Advice in my constituency do not have the capacity to help people fill the forms in because of cuts to funding over the years of austerity. We should also recognise that there is still a stigma attached to having to declare that you are struggling, and concepts around the deserving poor are as old as this building. I thought that in the 21st century we would be hoping for something better.
The key question with any means-tested-system is: where do we draw the line? By its very nature, the biggest losers will be those just above the cut-off point. In my constituency, around 19,000 people will miss out. The UK has long-standing problems such as poor housing that is difficult to keep warm, one of the lowest pensions in Europe, rising energy costs, and annual cold-related winter deaths among older people—I could go on, but I am running out of time. I urge the Government to think seriously about delaying this proposal and, in its place, putting forward a pensioner taskforce to look at how we can tackle pensioner poverty in the UK.
Saqib Bhatti (Meriden and Solihull East) (Con)
I stand to speak on behalf of my 18,500 pensioners who will be affected by this measure. Before I do so, I commend the hon. Member for York Central (Rachael Maskell) on a really impassioned speech. I know it is not easy to stand against one’s own party, but today’s decision is a choice between right and wrong. Members are defending the choice by the Government and the Chancellor to make this decision on the backs of pensioners, who have the sheer brass neck to go out and defend it, alleging a black hole when they have paid billions to unions without any savings in return. There is GB Energy—a shell company for £8 billion—and climate promises of more than £11 billion, and then they say that there is no money and they are going to get £1.1 billion on the back of pensioners.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
Will the hon. Member give way?
Saqib Bhatti
I will not, because I am sure the hon. Lady can participate later. The Government might be fooling themselves, but they are not fooling the British public or my pensioners. If they want to do the right thing, they should follow the example of the hon. Member for York Central. If there are issues, I am sure that even the Opposition will look into them in depth and we will do the right thing, but the Government are using our pensioners as some sort of political tool to make an ideological point. The Chancellor stood up and found this alleged black hole to try to justify that. It is a horrible situation—
Saqib Bhatti
I will not give way, as I will make some progress in the limited time I have. Many Opposition Members are absolutely enraged that this is happening. The Labour party talked about transparency, yet there has been no full impact assessment of the measure. Where is it? If the Government have nothing to be afraid of, where is the impact assessment? Why did they not wait until the Budget—the big fiscal moment?
Saqib Bhatti
I have already said that I will not give way. There could have been adequate scrutiny so that the House could analyse it and see the impact. Some 4,000 people are at risk of death—that is not my number; that is what the Labour party said in 2017. That is what Labour Members are voting for if they allow this measure to pass. They must do the right thing, and not use our pensioners as a political weapon for their own ideology. This is a horrible situation to put them in. The anxiety that Members are causing is outrageous. The Government really must step up their game if they are to convince the British public that this is the right thing to do.
John McDonnell (Hayes and Harlington) (Ind)
When an issue such as this has been so heavily whipped, it is very difficult. I have not the eloquence to persuade people to vote another way, to be honest. I just want to make this as a personal statement, so that my constituents know why I am voting the way that I will today.
I agree with the Government on so many points on this issue. First, this is the most toxic inheritance that any Government have ever had. I did a report last September that said that between 2010 and now we have lost £80 billion, not £20 billion. On the £20 billion black hole, we sat here and listened to a Government making commitments that they knew they would never have to fulfil, because they knew they were going out of power. I agree with the Prime Minister and the Chancellor of the Exchequer that we must ensure financial stability and that our income matches our expenditure. I agree with the Prime Minister on the principle, and always have, that any burden should be placed on those with the broadest shoulders. This is where I disagree: the heaviest burden is not being placed on those with the broadest shoulders but on some of the poorest.
Large numbers of my constituents do not claim pension credit, and I will be out there like everyone else trying to persuade them to apply, but a lot of my voluntary organisations have been savaged by a Tory council. We do not even have the advice mechanisms left. I think that, at best, we can get to 70% or maybe 75%, but one in four will not be able to claim that benefit. I have large numbers of people who, for example, worked at the airport and got a little pension at the end, and they will be tipped into not qualifying. They are living in accommodation that those on the Opposition Benches provided, which is squalor, to be frank—they are living in not insulated, freezing accommodation. They are the ones at risk, as the hon. Member for Sleaford and North Hykeham (Dr Johnson) said, of going to hospital and not even surviving.
We are in an unnecessary position, because there is so much else we could do. We do not need to put the burden on the poorest. We need to make sure that those who can afford it pay. That means redistributive tax measures, equalising capital gains tax, tackling the corporate tax relief issues that we must confront, and making sure that the City pays its way in financial transactions. We do not have to be here. I hope that people learn the lesson as we move towards this Budget not to put us on this position again, where we take a decision based on, I believe, misjudgment. It certainly flies against everything I believe in as a Labour MP about tackling inequality and poverty in our society. I was not elected to impoverish my constituents and put them in this hardship. I regret voting for a motion put forward by these characters in the Opposition, but I will have to because there is no other mechanism. I want to look at my people back in Hayes in the face and say that I did the right thing.
The Secretary of State for Work and Pensions (Liz Kendall)
This has been a really important debate about a serious issue, with many heartfelt contributions. My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), the new Chair of the Treasury Committee, forensically set out the delayed and deferred decisions by the former Government that have put such pressure on the public finances. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) rightly spoke about pensioners, children and disabled people in poverty, and the need to do much more to support them. The hon. Member for North East Fife (Wendy Chamberlain) talked about the crucial issue of pension credit uptake and what we will do differently. I will say more about that later, but I reassure her that the Treasury is fully behind the action that we are taking.
My hon. Friend the Member for Shipley (Anna Dixon), who has huge experience in health and social care, talked about the need to work with those in supported accommodation, housing associations and the NHS to ensure that pensioners get the help that they are entitled to. I will spell out some of that action. My hon. Friend the Member for Rossendale and Darwen (Andy MacNae) made a strong case for targeting help to the poorest pensioners and the need to tackle the root causes of poverty, including insulating homes and bringing down energy costs. My hon. Friend the Member for Poole (Neil Duncan-Jordan) mentioned, among many things, the very long and complicated pension credit form, which I have asked the Department to reduce to make it as simple as possible.
I would like to start by setting out why we have taken the difficult decision to means-test winter fuel payments so that they are no longer available to all pensioners whatever their income, but are focused on those in the greatest need. Put simply, it is because we must fix the foundations of our economy as the first step to rebuilding Britain and making the changes that our country desperately needs, and because when money is tight, our priority must be to target resources at those who need them the most.
Opposition Members do not want to be reminded of their record and the state they left the country in, but their economic failure and reckless decisions left a £22 billion hole in the public finances this year, with a £6.4 billion overspend on the asylum system, a £2.9 billion overspend on the transport budget, and new roads, hospitals and train stations announced but not budgeted for. There was one unfunded commitment after another, and the reserves were spent three times over—spending like there is no tomorrow, with no thought for the consequences today. That is before we even begin to deal with the challenges we already knew about: NHS waiting lists at 7.6 million, more than 1 million waiting for a council home, a totally broken prison system and more than 4 million children growing up poor. Opposition Members want to deny that is the case, but the Office for Budget Responsibility is crystal clear: it was made aware of the true extent of the pressures on the public finances only after we were elected—pressures it says constitute one of the largest overspends outside the pandemic. Faced with that reality and the need to get the public finances on track this year, we took the difficult decision to focus winter fuel payments on those in greatest need.
Lucy Rigby (Northampton North) (Lab)
I am grateful to the Secretary of State for giving way. Pension credit uptake is clearly critically important. From discussions I have had in my constituency, I know there are some myths around pension credit eligibility. Will the Secretary of State please confirm the efforts she is making on pension credit uptake, and does she agree with me that it is vital we ensure everyone who is eligible for pension credit receives it?
Liz Kendall
My hon. Friend is absolutely right. I would make that point in response to the faux outrage of Conservative Members, who left 880,000 pensioners, the very poorest, not getting the pension credit they are entitled to. I urge all hon. Members to work with us that their local councils to ensure pensioners get the money to which they are entitled.
As my right hon. Friends the Chancellor and the Prime Minister have said, this is not a decision we wanted or expected to make, but when we promised we would be responsible with taxpayers’ money we meant it, because we know what happens when Conservative Members play fast and loose with the public finances: working people and pensioners on fixed incomes pay the price with soaring interest rates, mortgages and inflation.
Dame Harriett Baldwin
I thank the Secretary of State. Will she confirm from the Dispatch Box that if every pensioner who is eligible for pension credit takes it up, the cost to the Exchequer will actually be substantially more than the savings from axing the winter fuel payment?
Liz Kendall
Is that the reason why Conservative Members never took the action needed to increase pension credit uptake? We take a different approach. All the savings the Chancellor has announced take into account the increased uptake that we want and intend to achieve. When money is so tight, it cannot be right that all pensioners, including some of the wealthiest pensioners, receive a payment worth £200 to £300 a year regardless of their income.
Gavin Robinson (Belfast East) (DUP)
I thank the right hon. Lady for giving way and allowing me the opportunity, at this late stage of the debate, to speak on behalf of the people of Northern Ireland.
Not in our name, Secretary of State. This is a political choice, irrespective of the debate back and forth between the Labour Government and the Conservative Opposition. It is not for us, it is not right and this measure is a measure of shame.
Liz Kendall
I know the right hon. Gentleman will care about the increase in uptake in pension credit that we need, and that he will also care about those just above the threshold, which I will turn to later on. That is a really important issue and I will address it head on, but first I want to spell out the principle underlying the approach we have taken, which is the most help going to those who need it most and significant support for all pensioners through the pension triple lock, backed by extra help available for those on low incomes.
Pension credit goes to 1.4 million of the poorest pensioners and is worth on average £3,900 a year.
Liz Kendall
I will not.
But the truth we had to confront coming into office was that up to 880,000 of the very poorest pensioners are not even claiming the pension credit that they are entitled to. That is a national scandal, and we are determined to make that change. The previous Government did nothing to tackle this issue properly. Indeed, in 2012 they promised to merge housing benefit and pension credit, which we know would significantly increase uptake, yet when I arrived in the Department I learned it would not happen until 2028—a decision that was taken on their watch. That is completely unacceptable and, unlike the Conservatives, we will change it.
Mike Amesbury
I thank the Secretary of State for giving way and welcome the increased measures to target the 880,000 who, because of the actions of Conservative Members when they were in government for 14 years, have not received pensioner credit. There are people who have legitimate concerns about the low level of the threshold—hard-working people who have tiny pension pots. What mitigating measures will the Secretary of State put in place?
Liz Kendall
I will come on to extra help for those just above the threshold in a moment, but I want to spell out what we are doing on pension credit.
We have done more to increase pension credit uptake in the last two months than Conservative Members did in 14 years. We have written to all local authorities to ask them to identify eligible pensioners, including by sharing data. We are joining forces with Age UK and Citizens Advice to ensure pensioners check and apply. We launched a major awareness campaign, to continue right up to the deadline to apply on 21 December—and yes, pension credit will be backdated by three months—backed by 450 extra staff to ensure claims are processed as quickly as possible.
The Deputy Prime Minister, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), is working with housing associations and supported accommodation providers so that their residents know what they are entitled to. I am working with the Secretary of State for Health and Social Care, my right hon. Friend the Member for Ilford North (Wes Streeting), to ensure that frontline NHS staff can signpost older patients who may be housebound because of disabilities and chronic conditions. For the very first time, we are writing to all pensioners on housing benefit who are potentially eligible to encourage them to claim, something the Conservatives never did. In the longer term, because the only way to guarantee uptake is to make the whole process more automated, we will bring forward the merger of housing benefit and pension credit, which Conservative Members never did.
That is the extra help for the poorest that we are determined to deliver, but it is built on a bedrock of support for all pensioners through our commitment to the pension triple lock, which has seen the new state pension increase by £900 this year and £970 the year before. Our continued commitment to the triple lock means that the new state pension is forecast to increase by a further £1,700 over the course of this Parliament, including, if today’s Office for National Statistics figures are confirmed next month, an extra £460 from next April.
Paul Waugh (Rochdale) (Lab/Co-op)
When Gordon Brown introduced pension credit and lifted 1 million pensioners out of poverty, in the teeth of the opposition of the Conservative party—let us remind them Conservative Members opposed pension credit—he also introduced savings credit. Savings credit was specifically targeted at pensioners who saved for old age with a small savings pot and a second pension. What happened in 2016? The Conservative party scrapped it. Does my right hon. Friend not agree with me that we should not listen to the crocodile tears of those in the Conservative party?
Liz Kendall
I could not have put it better myself: there is faux outrage from Conservative Members about those just above the pension credit threshold, when it was their former Tory Chancellor, George Osborne, who took a red pen to it, meaning its value decreased, creating some of the problems we are now having to deal with.
There is much more we are doing to help low-income pensioners, including those just above pension credit: the £150 warm home discount; the household support fund, which we have just extended, with £500 million of additional funding that councils can use to help low-income pensioners; our warm homes plan to tackle the root causes of fuel poverty; and the fact that, because the only way to really control energy bills is through cheap home-grown energy, we have already legislated for Great British Energy. That is the difference a Labour Government make: fixing the foundations, taking the long-term decisions our country needs, prioritising help for those who need it most, helping all pensioners with the pension triple lock, and providing more help for low-income pensioners too.
We will not shy away from our responsibilities, as Members now on the Opposition Benches did. We were elected on a platform to deliver economic stability, rebuild the country and make the changes that our country needs; making it better and giving it its future back. Pensioners deserve better than the faux outrage of Opposition Members.
Question put.