14:59 - The House divided: - Ayes: 228 / Noes: 348 - Question accordingly negatived.
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.