(1 month ago)
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The Minister for Social Security and Disability (Sir Stephen Timms)
I beg to move,
That the draft Social Security Benefits Up-rating Order 2025, which was laid before this House on 15 January, be approved.
Madam Deputy Speaker (Ms Nusrat Ghani)
With this it will be convenient to discuss the following motion:
That the draft Guaranteed Minimum Pensions Increase Order 2025, which was laid before this House on 16 January, be approved.
Sir Stephen Timms
In my view, the instruments are compatible with the European convention on human rights.
The draft Social Security Benefits Up-rating Order 2025 will increase relevant state pension rates by 4.1%, in line with the growth in average earnings in the year to May to July 2024. It will increase most other benefit rates by 1.7%, in line with the rise in the consumer prices index in the year to September 2024. The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by whichever is highest out of the growth in earnings, the growth in prices, or 2.5%. That will mean 4.1% for 2025-26. From April this year, the basic state pension will increase from £169.50 per week to £176.45, and the full rate of the new state pension will increase from £221.20 to £230.25.
We are fully committed to maintaining the pension triple lock. There is some confusion about the position of the Conservative party, and I hope that the shadow Minister will clarify the position when he speaks.
Dr Luke Evans (Hinckley and Bosworth) (Con)
On clarification, can the Minister clarify for how much longer the state pension will be taxed? The Conservative Government stood for election on a commitment to the triple lock plus. We lost the election, but we were going to take out that fiscal drag. Can the Minister explain how long that tax will stay in place?
Sir Stephen Timms
My understanding, from what the Leader of the Opposition has said, is that the Conservative party is no longer committed to the triple lock, let alone the triple lock plus. I can tell the hon. Member that we do not have any plans to do what he suggests.
Sir Stephen Timms
I simply point out to the hon. Gentleman that his party appears to no longer be committed to the triple lock. We look forward to clarification on that point from the shadow Minister.
Other components of state pension awards, such as those previously built up under earnings-related state pension schemes, including the additional state pension, will increase by 1.7% in line with prices. The Government are committed to supporting pensioners on the lowest incomes, so the safety net provided by the pension credit standard minimum guarantee will increase by 4.1%. For single pensioners, that means an increase from £218.15 to £227.10 per week; for couples, the increase is from £332.95 to £346.60 per week. We want everybody entitled to that support to receive it, which is why we launched the national pension credit campaign. We received around 150,000 pension credit applications in the 16 weeks after the winter fuel payment announcement.
Dr Evans
I am very grateful. We do indeed want more people to take up pension credit. However, one of the biggest problems is the processing time. The response to a written question that I tabled before Christmas showed that there was a 75% success rate in getting that done within 50 days, which means that that did not happen for one in four. I later re-tabled the same question, and it turned out that the standard had got worse. What work are the Government doing to make sure that applications are processed within 50 days? Especially when it is cold and people have had their winter fuel payment taken away, it is important that those who need that support get it as soon as they can.
Sir Stephen Timms
The hon. Gentleman is quite right; it is important that applications are processed speedily, and I am pleased with the number of applications. I can confirm—I think he knows this—that everybody who applied before 21 December will receive, if they are successful, their winter fuel payment. We have also moved extra staff on to pension credit processing. However, the hon. Gentleman is quite right to raise that point.
Universal credit and the legacy means-tested benefits that it replaces provide support for people of working age. We have committed in our manifesto to reviewing universal credit, so that it makes work pay and tackles poverty, and we will set out shortly how we plan to fulfil that commitment. For those below state pension age, the order increases the personal and standard allowances of working-age benefits, including universal credit, by 1.7%, in line with the increase in prices in the year to September 2024. In the Budget last November, the Chancellor announced that the maximum repayment deduction from universal credit payments will be reduced from April, from 25% of the universal credit standard allowance to 15%—the fair repayment rate—and 1.2 million households are expected to benefit from that change by an average of £420 per year.
In addition, the order increases statutory payments by 1.7%. That includes statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory sick pay. Benefits for those who have additional costs as a result of disability or health impairments will also increase by 1.7%. That includes disability living allowance, attendance allowance and personal independence payment. The order will also increase carer’s allowance by 1.7%. The Chancellor announced in the Budget that, from April, the weekly carer’s allowance earnings threshold will be pegged to the level of 16 hours’ work at the national living wage. That means that, from April, unpaid carers will be able to earn up to £196 per week net earnings and still receive carer’s allowance, compared with £151 now. I am pleased to say that that move has been very widely welcomed, and we expect it to bring an additional 60,000 unpaid carers into eligibility for the benefit, and, crucially, to reduce the likelihood that carers who manage to combine some work with their caring responsibilities will inadvertently fall foul of the earnings limit, because, in future, that threshold will keep up with changes in the national living wage.
On disability and carer’s benefits, we will continue to ensure that carers, and people who face additional costs because of disability or health impairment, get the support that they need, and we will set out proposals for reform of health and disability benefits in a Green Paper in the spring.
John Milne (Horsham) (LD)
In my constituency of Horsham, food bank usage increased by 25% last year, and it has increased by 700% over six years. In the light of that evidence of the pressures, will the Government consider putting a minimum level on universal credit?
Sir Stephen Timms
I have seen representations along those lines. It is not something that we are considering at the moment, but we are, as I have mentioned, committed to reviewing universal credit, and we will do so over the course of this year. I imagine that we will be looking at a very wide variety of representations, and the hon. Gentleman and others will be very welcome to make submissions to us along those lines. Lastly, let me say a word about the draft Guaranteed Minimum Pensions Increase Order 2025.
Jeremy Corbyn (Islington North) (Ind)
Before the Minister gets on to the pension issue, may I just say that the order requires the Secretary of State to examine the effects of benefit uprating and the effects of the existing payment of benefits? What studies has he done on the effect of the two-child benefit cap? Secondly, last week we passed a welfare spending cap—a cap that, obviously, could be breached in the future. Will the Government revisit the whole idea of the welfare cap, with a view to abolishing it, so that we ensure that the motive force in deciding on benefits is the level of need, rather than an arbitrary figure decided by the Treasury?
Sir Stephen Timms
On the two-child limit, as the right hon. Member knows, we very quickly set up after the general election the child poverty taskforce, which is looking in a very ambitious way at the whole range of levers that the Government have at their disposal for tackling the problem of child poverty. We would very much like to repeat the success of the last Labour Government in reducing child poverty so dramatically in when in office. I say that with particularly strong feeling, having taken the Child Poverty Act 2010 through the House towards the end of that Government’s term. Under consideration certainly will be social security changes—we will look at what changes might be appropriate. We are not able to say whether the two-child limit will be removed, but all those things will be considered carefully during production of the report, which the taskforce will bring forward.
We are not looking, I do not think, at changing the arrangements around the overall welfare cap. Of course, there is always some confusion between the individual benefit cap and the overall welfare cap. As the right hon. Member said, there was a debate last week on the overall cap. There is certainly scope for debate about that and, indeed, the benefit cap as well, but we are not proposing any changes to those arrangements in the short term.
The draft Guaranteed Minimum Pensions Increase Order sets out the yearly amount by which the GMP part of an individual’s contracted-out occupational pension earned between April 1988 and April 1997 must be increased if it is in payment. The increases paid by occupational pension schemes help to provide a measure of inflation protection to people who are in receipt of GMPs earned between those two years. Legislation requires that GMPs earned between those two dates must be increased by the percentage increase in the general level of prices, as measured the previous September, capped at 3%. This year, it means that the order will increase the relevant part of the GMP by the September 2024 consumer prices index figure, which is 1.7%.
The draft Social Security Benefits Up-rating Order, if Parliament approves it this afternoon, commits the Government to increased expenditure of £6.9 billion in 2025-26. The changes will mainly come into effect from 7 April and will apply for the tax year 2025-26. The order maintains the triple lock, benefiting pensioners who are in receipt of the basic and new state pensions; raises the level of the safety net in pension credit beyond the increase in prices; increases the rate of benefits for people in the labour market; and increases the rate of carer’s benefits and support to help with additional costs arising from disability or health impairment.
The draft Guaranteed Minimum Pensions Increase Order requires formerly contracted-out occupational pension schemes to pay an increase of 1.7% on GMPs in payment earned between April 1988 and April 1997, providing people with a measure of protection against inflation, paid for by their scheme. I commend to the House the draft Social Security Benefits Up-rating Order 2025 and the draft Guaranteed Minimum Pensions Increase Order 2025.
Danny Kruger (East Wiltshire) (Con)
Let me state at the outset that the Opposition support the measures to uprate pensions in line with earnings and benefits in line with inflation. I am honoured, personally, to take part in this important annual ritual, which is never well attended but is always a high-quality debate. The traditional star of this debate is, of course, the right hon. Member for East Ham (Sir Stephen Timms), who this year has descended from the clouds of the Work and Pensions Committee to the sweaty arena of ministerial office. No one is more qualified than he to take the office that he now has. No one has more genuine expertise and compassion for the people that we all want to support than he, so I am very pleased that he is in this role. I just note in passing how much the House misses the expertise of departed Members. Paul Maynard, David Linden and Nigel Mills all used to take part in this debate to great value. I welcome my hon. Friend the Member for Hinckley and Bosworth (Dr Evans), who is taking up his position as a new star of this annual debate.
Despite the formality, it is an important debate, because it is an opportunity for us to take stock of the welfare and pensions system as a whole. As pensions and the triple lock were mentioned, I am happy to provide some clarification for the right hon. Gentleman. I think he has misunderstood, or our leader’s position has been misquoted, because we are not looking at cancelling the triple lock. It is his colleague, the new Pensions Minister, who has been very clearly quoted saying that the triple lock is a silly system and indefensible. I look forward to further clarification from Government Members.
Dan Tomlinson
As I understand it, the shadow Chancellor said that the triple lock is unsustainable. Do you agree with him on that point?
Danny Kruger
Clearly, there are questions about the long-term sustainability of our pensions system and our national insurance fund, but I think the shadow Chancellor was talking about the very long term, rather than the immediate situation that we are in. There is no intention, on the Conservative Benches anyway, to review the triple lock at this stage.
Sir Stephen Timms
To clarify the position further, what happened was that the leader of the hon. Gentleman’s party was asked on LBC whether she would look at the triple lock, and her reply was,
“we’re going to look at means testing. Means testing is something which we don’t do properly here.”
What did she mean by that?
Danny Kruger
My right hon. Friend replied, “No”, to the interviewer. We are not looking at means-testing the triple lock. She was talking more generally about the challenge of means-testing in our social security system, which is a legitimate question for us all to consider, as I shall go on to discuss.
I did not want to get too partisan in this debate, but—[Interruption.] Here we go! No, I won’t, genuinely, because the challenge of our welfare system is a shared problem that we face across the House. I will note in passing that our party’s record on welfare is a good one. We introduced universal credit, rationalising the spaghetti web of benefits that we inherited from the right hon. Gentleman when he was last in office. We made work pay and helped people off welfare and into work, and we succeeded in that, with 4 million more people in employment in 2024 than in 2010.
Let me point out that we had another mess to sort out in the public finances. When we took office, the Government were running a deficit of 9% and the Treasury was spending way more than it was earning. By the time the pandemic struck, the deficit was down to less than 1%. We were living within our means and were able to afford the generous uplifts made to benefits and pensions in the last Parliament, as well as the huge package of support that we provided during the pandemic.
I want to be fair and admit that, as the Minister suggested, the welfare system is not working properly at the moment. Too many people are being consigned to a life of inactivity and dependency, especially via the categories of sickness benefit. It is bad for those people, their communities and the country as a whole, including the taxpayer, who spends £65 billion a year on incapacity and disability benefits, rising to £100 billion a year unless reforms are made by the end of this Parliament.
So what is going on? Those terrible figures reflect the fact that we have bad rates of physical ill health, including obesity and, as is strongly evidenced in the statistics, bad backs because we simply do not move around enough in the day. The figures also reflect a rise in mental ill health, which we see in alarming rates in schools and among young people. We have to do more on those issues through all sorts of interventions that lie more with the Department for Education and the Department of Health and Social Care than with the Department for Work and Pensions. However, as the Lords Economic Affairs Committee reported last week, the rise in welfare claims cannot be attributed to worsening health or longer NHS waiting lists; the problem is growing far faster than that.
Perhaps the problem is low wages that do not attract people into employment, and that is certainly a reality. Low wages have driven demand for the immigration that we have seen get so out of control in recent years. Profound changes are under way in the world of work, away from secure employment towards a more precarious jobs market. Labour is destroying jobs, taxing employment and discouraging new hires with its new Employment Rights Bill. However, the fact is that wages have risen sharply above inflation in recent years, which is why pensions are going up by earnings this year. Employers are offering good wages but are not filling vacancies.
The issue is not health, although we have problems in health; the issue is not work, although we have big problems there—the issue is welfare. People are not being incentivised to take jobs because the offer from the welfare system is better. When I say welfare, I do not mean unemployment support. Thanks to universal credit and the last Government’s reforms, we saw record numbers of people move off unemployment benefit and into work. That is because we offered support to people to find work and imposed strict conditions that meant people had to actively look for a job. If they did not, they lost the benefit. That worked for a lot of people, but we found—here is the issue—that for a lot of other people, the incentives made them go the other way, further away from work into the sickness category, because that is where the good money is. In some cases, the money is double what they can get on unemployment benefit, and sometimes £3,000 more than the minimum wage. People almost certainly get it because the approval rates are high at over 90% for the limited capacity for work category.
This is big and unconditional money. There is no expectation to do anything about the health conditions that mean someone is signed off sick. There is no expectation of being reassessed any time soon or, indeed, ever. That is the challenge, and I hope the Government will rise to it in the same way that we rose to the crisis in unemployment benefit in the last decade.
Dr Luke Evans (Hinckley and Bosworth) (Con)
One of the ways the last Government helped to deal with this issue was by dealing with the taper. It was at 63% and it went down to 55%, so people who were working got more of their own money back. Does my hon. Friend believe that this is one way we could incentivise people to step back into the workplace—by having more of their money as they earn it?
Danny Kruger
My hon. Friend is absolutely right. That was a key part of the reforms brought in towards the last part of the last decade, enabled by universal credit—a much simpler system. I am glad to say that we managed to reduce that taper significantly and to incentivise work.
Dan Tomlinson
Madam Deputy Speaker, I will try not to say “you” this time—I am sorry.
I would be genuinely interested to know what the Opposition’s position is on reform of the incapacity benefit system. It is a knotty problem. I know that when Opposition Members were in government, it was considered, but I am not clear what their position is at the moment. I know the Government are coming forward with proposals soon, so I would be genuinely interested to hear.
Danny Kruger
I am grateful for the opportunity. We had a whole series of plans that were sadly interrupted by the general election result, and I will come on in a moment to some of the suggestions I have for where the Government might go.
Steve Darling (Torbay) (LD)
The hon. Gentleman was talking about incentivising people into work. In my surgeries in Torbay, I find that an awful lot of people are off sick with hip problems or mental health challenges, and the challenge people have in getting back into work is the broken health system that was left by the previous Conservative Government. I hope the new Government will drive harder on fixing the system, because many people on benefits are keen to get back into work; they are just unfit for work.
Danny Kruger
The hon. Gentleman reflects the experience that many of us have had in our surgeries. Nevertheless, I do not think that health reform on its own will do the job. As I mentioned, the House of Lords Economic Affairs Committee has looked into the matter and reported last week, pointing out that the increase in welfare claims cannot be attributed to longer waiting lists or, indeed, to worsening health conditions. The welfare problem is outstripping the problems we see in the nation’s health, so we have to do more in the DWP. We wait with bated breath to see some movement on that front.
In fact, it was in this debate last year when we were uprating benefits that the hon. Member for Birkenhead (Alison McGovern), now a ministerial colleague of the right hon. Member for East Ham, said that, “Labour has a plan”. That was a year ago. Seven months ago, Labour won the election. She did not say that the plan was oven-ready, but she implied it. I know the Minister says that the delay is because of a court case that happened two weeks ago, but I do not quite understand how that explains the delay that has been going on for seven months.
Here we are approving a measure that will increase expenditure by nearly £7 billion, as the right hon. Gentleman said, and we have no idea how the bill will be brought down over time. But after much head scratching in the DWP—and, we are told, people pulling their hair out in No. 10—we are getting closer to the big reveal. We hear exciting hints in the media that the Government might scrap the limited capacity for work category altogether, scrap the work capability assessment, merge employment and support allowance into the personal independence payment system, or require people on sickness benefits to engage with work coaches. I am encouraged by all that pitch-rolling.
If the Government are softening up their Back Benchers for serious reform, I applaud them for it, but I will believe it when I see it, because Labour opposed every step towards tougher conditions, more assessments and more incentives to work. They opposed reforms that we were introducing to the fit note system. In fact, I see from a written answer to a question in the other place that the Government say they have no plans to reform the fit note system, which I regret. I wonder whether the Minister could help clarify if that is the case.
On universal credit, it appears that the sinner repenteth, or sort of repenteth. The Government are on some kind of journey. In the last Parliament, they said they would scrap universal credit, then they said they would replace it, and now, as we have heard, they are reviewing it. I am glad to hear that, although the right hon. Gentleman just said that they are reviewing it over the course of this year, so that seems to be unrelated to the Green Paper process, which we are expecting in the spring. I would like to understand how those two processes are aligned.
Rather than scrapping, replacing or reviewing universal credit, I invite the Government simply to use it. It is a flexible system, as we saw during the pandemic, and it works; it just needs to be adapted to the new challenge. In conclusion, let me make a few suggestions for the right hon. Gentleman to consider as he prepares his Green Paper and his universal credit review.
The back to work plan that we announced before the general election would have got 1.1 million people into work, using more support and tougher conditions—“more support” meaning more of the WorkWell pilots that my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) introduced. I was glad to hear the Secretary of State praising those pilots yesterday, although sadly without attribution. In our view, the work capability assessment should be face to face, and it should be asset-based, not deficit-based; it should be asking what a claimant can do, not what they cannot do. The claimant should begin the journey of recovery—the journey back towards work—then and there. Rather than budgeting for ever higher welfare, as we are doing today, we should be investing in a universal support system to run alongside universal credit.
We also need tougher conditions. We simply cannot have people with a bad back or anxiety being signed off sick for the rest of their lives; they need to know that we believe in them, and that believing in them means having high expectations of them. In exchange for benefits paid for by working people, claimants should take active steps, when they can, to address their physical and mental health needs, and they should work meaningfully on their own health and wellbeing. That will not look the same for everyone and it must not be a tick-box exercise. That is why we need the help of civil society, not just coaches and therapists, providing the human touch and the range of help and opportunities that people need.
Most of all, we need a clear message to go out from the Government that unless a person is so severely disabled or ill that they genuinely can never work at all, they will not have a life on benefits. That clear message, enacted through reform that the right hon. Gentleman’s Department must bring forward urgently, is the only way to get our exorbitant welfare bills under control, and to get our workforce and our economy moving again.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Work and Pensions Committee.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I will start by commenting on the contribution made by the shadow Minister, the hon. Member for East Wiltshire (Danny Kruger). First, it is really important that in this place we use evidence, to help ensure that we have effective, evidence-based policy. When we are using policy-based evidence, that is quite dangerous. I am referring to his remarks about conditionality. I refer him to the evidence, such as the two-year study undertaken by the University of York, which showed that there was no evidence to support tough sanctions. People have lost their lives because of sanctions, and that study showed that there was no evidence to support stopping somebody’s social security support—their money that they use to live—for up to two years, because that was the period that the Government of the day said benefits could be stopped for. That has real-life consequences.
I can also refer the shadow Minister to his own Cabinet Office reports, which showed that sanctions were not effective in getting people into work. We all need to be very responsible in what we say.
Debbie Abrahams
No, I am sorry but I am not going to give way.
As a former public health consultant, I can also say that the key drivers of ill health are socioeconomic determinants. There is so much evidence for that, going back decades, and I wonder why Conservative Members are not familiar with it—whether it is just not palatable to them, or it is inconvenient. Much more recently, the covid inquiry that we debated a couple of weeks ago showed very clearly that one of the reasons why we had such a poor experience, both in terms of morbidity and mortality—more than any other country in Europe—was our ill health. It does a real disservice to the people who have lost their lives or are enduring long covid at the moment, to their families and their memories, to suggest that it is something else, let alone to the people who are—
Debbie Abrahams
No, I am not going to give way. [Interruption.] I am not going to give way.
I welcome the social security order and, in particular, what my right hon. Friend the Minister has said about it. It was an absolute pleasure to serve on the Select Committee when he was its Chair, and in this respect I agree with the shadow Minister: my right hon. Friend’s transfer from the Select Committee to his ministerial position is very welcome. We all appreciate his gravitas and experience, but also his common decency in the role.
I want to talk about the context of this uprating order and the importance of our social security system in providing, at the very least, a safety net for people when they need it, and from cradle to grave, like the NHS. Unfortunately, though, over the past 14 to 15 years, the adequacy of support for people on low incomes has been dramatically eroded, particularly for people of working age—again, contrary to what the shadow Minister has said. Between 2010 and 2012, the uprating was about 1.5%; between 2012 and 2016, it was 1%; and between 2016 and 2020, it was zero. The average annual consumer prices index increase for each of those years was about 3%.
There has been a steady and consistent erosion in the value of social security support, which has affected the value of universal credit, jobseeker’s allowance, employment and support allowance, income support, housing benefit, child tax credit, working tax credit and child benefit. The Resolution Foundation has estimated that this erosion was equivalent to a cut of £20 billion a year from social security support for working-age people. That is clearly not well understood by the Conservative party.
Something else that is not well understood is that these are predominantly people in low-paid work. The vast majority of people in receipt of working-age social security support are, or have been, working people—that is something for us all to consider. Only a tiny proportion of DWP spending is spent on jobseeker’s allowance, for example—it is 0.001% of the current budget. As is evidenced in the Work and Pensions Committee’s report from last year, which I invite shadow Ministers to read, out-of-work support is at the lowest level in real terms since 1912. This is not a generous system; according to OECD comparisons, we are not supporting people in the way that a civilised society as well off as we are should do.
The consequences of inadequate social security are clear. Last week’s Joseph Rowntree Foundation poverty report made for bleak reading—again, I invite people to read it. Over one in five people in the UK are in poverty; that is 21%, or 14.3 million people. Of those, 8.1 million are working-age adults. Some 4.3 million children are in poverty—three in 10 among the population as a whole, while in my constituency the figure is one in two—and 1.9 million of those in poverty are pensioners.
Disabled people are at greater risk of poverty, partly by virtue of the additional costs that they face due to their disability and ill health, and partly due to the barriers to work that disabled people face. Disability employment has flatlined; when it comes to being in work, the gap between people who are not disabled and those who are has been about 30% for the past 14 years or so. It went down by about 1%. Some 16 million people in the UK are disabled—nearly one in four—and almost four in 10 families have at least one person who is disabled. The poverty rate for disabled people, which is 30%, is 10 percentage points higher than it is for non-disabled people. The rate is even higher—50%—for those living with a long-term, limiting mental health condition, compared with 29% for people with a physical disability or another type of disability.
Other groups of people are also disproportionately more likely to live in poverty, including former carers, people from ethnic minority communities and lone parents, but given the media speculation there has been about the future of disability support, I want to focus on that. Last year’s Select Committee report on benefit levels set out a wide range of evidence suggesting that benefit levels are too low and that claimants are often unable to afford daily living costs and extra costs associated with having a health condition or disability. Although the Select Committee supports the Government’s ambition to get Britain working and a social security system that supports work, these ambitions are not achievable within a few months. Meanwhile, people are barely clinging on.
The DWP does not have an expressed objective for how it will support claimants with daily essential living costs. In the Select Committee’s report we recommended building a cross-party consensus to take this forward, and for the Government to outline and benchmark objectives linked to living costs to measure the effectiveness of benefit levels, and to make changes alongside annual uprating. I would welcome my right hon. Friend the Minister revisiting this Select Committee report, particularly our recommendations.
I would like to set out the consequences of our currently inadequate social security system. From peer-reviewed articles, we know that for every 1% increase in child poverty, six babies per 100,000 live births fail to reach their first birthday. That is the consequence of living in poverty for children. The hon. Member for Hinckley and Bosworth (Dr Evans), because of his medical training, will know much of this, but a rewiring of the brain of children living in poverty affects them for the rest of their lives.
In another peer-reviewed piece published in 2016 in a BMJ journal, entitled “First, do no harm”, a metadata analysis of the impacts of the changes to and reassessment of the work capability assessment between 2010 and 2013 in 149 local authority areas in England found that, for each additional 10,000 people who were reassessed, there were an additional six suicides, 2,700 additional cases of mental health problems and over 7,000 more antidepressant scripts. This is evidence.
Many Members will know of my previous campaigns, and I want to refer to the deaths we have seen of social security claimants whose benefits have been stopped. I mention again Errol Graham, a 52-year-old Nottingham man with a severe mental health condition, who basically starved to death after his social security support was stopped. There are so many others I could mention, and I pay tribute to the families who have campaigned on their behalf for justice, because it is quite horrific.
Talking about people surviving our social security system, there is the case of TP—I will use his initials—also a 52-year-old man, who had worked all his life. He was diagnosed with non-Hodgkin lymphoma and, sadly, his diagnosis was terminal. He was trying to be migrated from his particular incapacity support to universal credit, and he lost all his disability premiums. He was one of the litigants in a case about transitional protections when migrating from ESA and disability premiums to universal credit. This is an example of somebody who has worked all their life, and four out of five disabilities and health conditions are acquired—it could happen to any one of us, and I would just like us to consider that.
In another case, AB was born with congenital cerebral palsy and worked for 25 years, but then could not go on. If I read out the whole story, we would all be in tears, because it is just heartrending, describing the indignity of having to rely on such low-level support.
I will leave it there, but I know my right hon. Friend the Minister takes this very seriously, and I hope all of us here will work towards making the social security system more adequate for those people.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrats spokesperson.
Steve Darling (Torbay) (LD)
I would like to acknowledge the very sobering and comprehensive speech given by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). This is disturbing, and one would hope that our DWP, and our Government as a whole, would take a trauma-informed approach to dealing with our communities, as I believe that would stand us in good stead.
I broadly welcome the upratings in the proposals before us for both benefits and pensions, but I will focus first on pensions. Sadly, the Labour Government inherited a system under which, for the last 10 years, we have seen an increase in pensioner poverty. Two million pensioners remain in poverty, and 1 million are on the edge of poverty, and one would have hoped that a Labour Government wanting to cut the number in half and promoting social justice would have driven such an agenda harder in their first seven months in power. The cut to the winter fuel allowance has exacerbated this situation. The hon. Member for East Wiltshire (Danny Kruger) highlighted the backlogs and rightly said that they are totally unacceptable. The reality is that we are seeing pensioner poverty.
Again, we know that women are more likely to be victims of poverty, yet the WASPI women have in effect been victims of a decision of this Government. It was really pleasing that the Secretary of State for Work and Pensions welcomed the report, acknowledged it and apologised, but, sadly, she did not actually action the report. That gives me great displeasure, as well as many other people across the United Kingdom.
In evidence to the Work and Pensions Committee, the ombudsman suggested that there is usually a bit of a conversation between the ombudsman and the Government about what an acceptable system or approach to compensation would be. Sadly, however, that never happened as far as the WASPI women are concerned, which is disturbing, and I want to understand why. Why was there the breakdown in communication between the ombudsman and the previous Conservative Government? I am looking to explore that with the ombudsman in another way.
On pensions, I would also like to highlight the housing issues. I served my community for 30 years as a councillor, and I am therefore very alive to some of the challenges people face. Housing is a massive issue, and it is disturbing that, when reflecting on pensions, the cost of housing is rarely taken into account. In 1979, 35% of our housing stock was social rented housing. That figure is now down to 17% across the United Kingdom, and in my constituency of Torbay it is as low as 7%. This means that people, whether pensioners or those on other benefits, in constituencies such as mine where there is a lack of social rented housing are particularly hard-hit by that lack of support; they will have to take money away from putting food on the table in order to pay the rent. It is therefore disappointing that the local housing allowance has not been enhanced in this round. Almost 1 million children across the United Kingdom will be living in households that have this gap between their benefits and the cost of their accommodation and they will be driven even further into poverty.
On universal credit, colleagues have already mentioned the recent Joseph Rowntree Foundation report which highlighted that couples face a £55 a week gap between covering the basics and what they actually receive. That is a little over £2,800 a year, so people are being driven even deeper into poverty just around the basics on their universal credit offer.
Finally, on the carer’s allowance scandal, while we Liberal Democrats welcome the Government’s engagement and the review that is taking place, unanswered questions remain. We need to make sure this is addressed at pace to support people, because 136,000 people—the equivalent of the population of West Bromwich—are affected, owing £250 million. They fell foul of a system where people only need to earn £1 more a week and they do not then owe £52, they owe £4,200—tapers need to be implemented.
One of the real challenges we face is that the DWP service is, sadly, broken. It is not fit for purpose and needs redesigning. I have nothing but utter respect for the Secretary of State on this issue, and instead of driving new agendas we need to lift the bonnet and redesign the system, get it for purpose and, most importantly, co-design it with people who are disabled or benefit users, so that it can actually support them.
Mr Lee Dillon (Newbury) (LD)
My hon. Friend is making a powerful speech about those most in need of benefits and the difference they can make. He spoke about the WASPI women and about children in poverty, but does he agree that veterans could also be helped out more by the DWP, such as by the Government backing the Royal British Legion “Credit their Service” campaign to change legislation so that military compensation is not classed as income when calculating means-tested benefits? Does my hon. Gentleman agree that that group would benefit from such a change?
Steve Darling
My hon. Friend is right to highlight that. My hon. Friend the Member for Eastbourne (Josh Babarinde) and I are awaiting a meeting with the Minister to explore that very issue and the RBL’s campaign.
To conclude, I lived through a world of broken children’s services in Torbay, but we rolled our sleeves up, sorted it out and moved from failing to good within two years by getting the right people in place, making sure systems were sorted out and driving culture change. We need that co-design with people who use the system so we can get the DWP sorted as well.
Dan Tomlinson (Chipping Barnet) (Lab)
First, I echo the comments of others in praising the Minister for his work on this issue over decades in this place. I saw it before becoming a Member of Parliament during my time working in the charity sector at the Resolution Foundation and most recently at the Joseph Rowntree Foundation. I was working on these issues, and I always knew then that we had a friend in Parliament who cared deeply about the welfare system and about the needs of people receiving benefits and support from the state, and who also, like me, wants to see more people being supported to move into employment. Even though I am not going to focus on that topic today as I want to talk about pensions, I do want to put on record my thanks for his service, and I am glad to see him as a Minister.
I want to start by talking about an institution that is not often discussed in this place but that is crucial to all of our lives and shapes a lot of politics even though we do not remark on it too much: the family. That is the institution that almost all of us are closest to and that shapes so much of the way we see the world. It is important that we as policymakers—as people sitting here in the House of Commons—do not just think of individuals as people on their own who are separate from one another and that we instead remember that we all exist in families. If we look at someone’s biography online, it might say they are a father and a husband, because our families are a big part of our identities. We would do well to remember that.
Sometimes our politics and our media might want to push us into discussing pensions in a way that promotes the salience of a war between the generations, but nothing could be further from the truth.
Mr Dillon
The hon. Gentleman talks about the importance of family and I could not agree more, but does he also agree that a family is a unit designed by that family and an arbitrary limit of a two-child benefit cap does nothing to protect that family unit if they have more than two children?
Dan Tomlinson
I grew up in poverty. We had no money and lived in social housing. I had free school meals throughout my childhood, and the three of us were in emergency and temporary accommodation as well. And I know the benefit system was there for my mum and for us, and I have confidence that this Government will make the decisions that we need to make to ensure that our welfare system is there for families like the one I grew up in. I know a review is looking at universal credit and the welfare system, and I look forward to it reporting in the months ahead. This is a really important issue, and I thank the hon. Gentleman for raising it.
On families and the state pension, often people want to pit the young and the old against one another, but the evidence shows that young people are one of the most supportive groups for the increase in state pension. That is in part because we—I still call myself young now, in my early 30s—know and have seen throughout our lives how much people who are retired, such as our grandparents or older people we know in the community, have contributed to our lives and our families and also the lives of our communities. Also, to put on my economist’s hat, increases in the state pension and support for the triple lock, which we on this side of the House steadfastly support, will benefit young people the most because an extra few pence on the state pension today means an extra few pounds—or tens of pounds or, depending on which generation we are talking about, hundreds of pounds—in the future because of the way these things compound over time. It is really important we continue to support the state pension and the triple lock.
Bobby Dean (Carshalton and Wallington) (LD)
The hon. Gentleman makes an excellent point about the long-term benefits to the economy from treating the benefits system seriously. Does he agree that that applies to the two-child cap as well because if we were to remove that not only would we lift hundreds of thousands of children out of poverty, which is inherently a good thing, but we would also improve health and education outcomes and ultimately make a more productive population over the long run?
Dan Tomlinson
I thank the hon. Gentleman for his intervention on the same important topic raised by the hon. Member for Newbury (Mr Dillon). I know that the Government are looking at this issue and at how we can reform the welfare system to support people to get the money they need and have the incentives and the right approach to welfare to help more people get into employment. That is the long-term sustainable route to reducing poverty and I hope we can do more to achieve it.
Dan Tomlinson
I am happy to give way, although I perhaps should make some progress.
Dr Luke Evans
The hon. Member makes a fantastic point about the family unit. The last Government were looking at introducing a measure on household income, particularly with child benefit, to try to make sure that we see people not as individuals, but as a group. That could stop such things as the child benefit cliff edge. However, the new Government took that measure away in the Budget. Would he make the argument to his Front Benchers that looking at household units—the family unit—is a positive way of seeing how we can support people?
Dan Tomlinson
That is important in some respects. One of the challenges with the policy that the hon. Member identifies is that we tax people on an individual basis and the benefits he refers to are often linked to the tax system. He raises an important point, and I am sure it is being considered.
I will make some progress and conclude my remarks. I am supportive of the increase in the state pension and of the triple lock. I know we have already had a little ding-dong about it, but it is the case that the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride) said that the triple lock was unsustainable. Perhaps he was referring to the long term, but that still concerns me, not least given what I have said about young people benefiting most from increases in the state pension over time.
I am glad that in April the 20,000 pensioners in my constituency will receive either a £470 uplift if they are on the new state pension or, I believe, a £360 uplift if they are on the basic rate of state pension. That is incredibly important for living standards. I spent many years living with my grandparents part-time. They taught me a lot, and many of my values have come from them. We know how much care older people can provide to family and to their communities, and I see that in Chipping Barnet. At almost every community event, whether that is a local church, an institution or a charity doing good in the community, there are so many retired people giving their time and care, making Barnet—my corner of north London that I have the pleasure of representing—a better place to live. Providing that security in retirement is so very important.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I endorse the warm words of the shadow Minister, the hon. Member for East Wiltshire (Danny Kruger), in paying tribute to the Minister, the right hon. Member for East Ham (Sir Stephen Timms) and the work he has done in previous Parliaments. As a recently elected Member, I was not in the House then, but I was aware of the work being done. Some of the contributions we have had in this debate so far have been extremely powerful. The quality of the debate seems to be in inverse proportion to the number of Members present.
I rise not to oppose these orders but to focus specifically on the Guaranteed Minimum Pensions Increase Order 2025, or GMP. The order gives applicable pension schemes the percentage by which they need to uprate GMP entitlement built up between 1988 and 1997. This year the increase is 1.7%. Wow! That was informed by the CPI figure for the year to September 2024. While that increase and the other increases are welcome, they will not even touch the sides. We must remember that the Government have taken away the winter fuel payment. We have seen numerous increases in energy costs, and we are seeing rising food prices because of policies on national insurance contributions and now the family farm tax.
These matters are reserved, but all those years ago back in 2014, we were promised in the run-up to the referendum that we would receive maximum devolution. That has not happened. People in Scotland may not know this, but we have had to introduce seven different benefits to mitigate the effects of decisions made here in Westminster. Fair pensions are necessary for ensuring dignity in old age, but we must be aware of the unintended consequences when changes are made to the pension system. During the transition to single-tier pensions in 2016, the DWP was found by the Parliamentary and Health Service Ombudsman not to have provided clear and accurate information that some pension holders were worse off under the changes. By the DWP’s own figures, about 50,000 people would lose out. That failure in communication seems emblematic of an outdated approach to social security that saw people unfairly treated when changes were made to their pension provision. We saw that happen again with the WASPI women. The PHSO again found that the DWP had committed maladministration in communicating those pension changes to WASPI women.
Pensions and pension provision are wide-reaching. Last week, I raised the issue of prison officers and changes to their pension scheme that mean some of them will be working until they are 68. I again impress upon the Government the need to consider the unintended consequences of that and all other pension changes. That is perhaps even more pertinent now, as the state pension age is due to rise to 67 for men and women between 2026 and 2028, and to 68 between 2044 and 2046. The DWP failed on previous occasions when it came to communicating these changes to people regarding their pensions. We have a new Government, and if they will not allow the Scottish people to determine their own future in these matters, or they will not devolve these matters to the Scottish Government, all I can ask is that they deliver fairness in pensions, because people need certainty when it comes to their retirement plans.
I agree with the hon. Member for Torbay (Steve Darling) when he mentioned the forthcoming review of the welfare system, and I wholeheartedly endorse the quiet words spoken by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) when she made her powerful intervention talking about the socioeconomic determinants of ill health. That message cannot go unnoticed by the DWP in these matters.
Shockat Adam (Leicester South) (Ind)
It is a real honour to participate in this debate. I may not be as illustrious as previous contributors, but I will try my best to make whatever small impact I can. I start by commenting on a point made by the shadow Minister, the hon. Member for East Wiltshire (Danny Kruger) about believing in people and wanting the best for them. I wholeheartedly agree with that—we want the best for people and for them to be the best that they can—but simply believing is not enough. Simply believing that my children will achieve great grades at school without sending them to school or giving them the facilities and the tools is not enough. My team are in the relegation zone, and simply wanting them not to be relegated by belief will not be enough without investment in that football team. When we have had under-investment, especially in the mental health sector, we need more than just belief to achieve and to alleviate those problems. The semantics that we use specifically around our GPs, when we are sometimes questioning their credibility when they sign people off, are rather damaging.
I welcome the increase in pensions announced by the Secretary of State, but at this moment in time, as colleagues have mentioned, 1.9 million pensioners in the UK are living in relative poverty. Pensioners are missing meals, having to shelter in libraries and are depressed due to the Government’s cuts to the winter fuel payment. Research conducted by Unite the union has shown that more than two thirds of its retired members are having to turn down their heating. A third are taking fewer baths and showers, and 16% have cut back on hot meals due to the increased costs of trying to stay warm. Heating or eating is a reality for many people; they are not just words that we utter in this Chamber.
In addition, more than 63% of people have said that they have felt more cold, more often and 17% are reporting that the cut has resulted in their becoming ill or their symptoms becoming worse. That is burdening our NHS, which is already overstretched. We must find a way, if possible, to release the statistics for excessive deaths caused by the cold weather.
Neil Duncan-Jordan (Poole) (Lab)
You are making a very powerful case. Would you agree with me that—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I am sure the hon. Member is not intervening on me, so the word “you” is not appropriate. Interventions should be brief.
Neil Duncan-Jordan
I apologise, Madam Deputy Speaker. Does the hon. Member agree that just as the Government are addressing child poverty by setting up a child poverty taskforce, they should set up a pensioner poverty taskforce for pensioner poverty?
Shockat Adam
I could not agree more; that would be vital for pensioners. Ever since I was elected, emails from pensioners on that issue have been in the top three issues—it is a real issue. If alongside increasing pensions we could reverse the cuts to the winter fuel payment, that would save lives.
Madam Deputy Speaker
That concludes the Back-Bench contributions. I believe that the Minister would like to do a short wind-up.
Sir Stephen Timms
With the leave of the House, I thank everyone who has contributed to the debate. There have been some helpful contributions on important issues. I am grateful for the support expressed for the measures in the orders, and for the kind things said about me, which I will enjoy while they last. Let me thank in particular the shadow Minister, the hon. Member for East Wiltshire (Danny Kruger), for drawing attention to the contributions of others who spoke in such debates in the past. He named Paul Maynard, David Linden and Nigel Mills, and he was absolutely right to do so.
I am particularly grateful to Nigel Mills for his help in the work of the Work and Pensions Committee, and I am delighted that the Committee is now in the good hands of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams). She made an important contribution to the work of the Committee in the last Parliament, and had an important and positive influence over the whole direction of the Committee. She highlighted, as she often does, the position of vulnerable benefit claimants and how they are looked after. I look forward to giving evidence to her in the Committee next week as work resumes on an inquiry of the Committee from the last Parliament.
I am grateful to the hon. Member for Torbay (Steve Darling), who called for a taper in carer’s allowance. As he will have heard, the Chancellor announced in the Budget in November that we would look at the case for a taper. I hope to be able to update the House on that reasonably soon.
I am grateful to my hon. Friend the Member for Chipping Barnet (Dan Tomlinson) for what he said. He was right to draw attention to the high level of support among young people for the triple lock policy, which matters right across the age range.
The hon. Member for Aberdeenshire North and Moray East (Seamus Logan) was right to call for certainty about pensions. People need to know what the position will be when they reach retirement age. The last Labour Government reduced the number of pensioners below the poverty line by a million. Sadly, as we have been reminded in this debate, it has gone up again over the last few years. We want to get back on the better track that we were on before. That was picked up in the remarks of the hon. Member for Leicester South (Shockat Adam).
Seamus Logan
Does the Minister agree that two measures that the Government could take that would make a serious impact on the levels of poverty would be to restore the winter fuel payment and abolish the two-child cap?
Sir Stephen Timms
I have already spoken in the debate about the two-child cap, and we will be coming forward with the report and strategy proposed by the child poverty taskforce. On pensioner poverty, I think that substantial measures will be needed, and we will come forward with those in due course.
Dr Luke Evans
I am grateful to the Minister for taking another intervention. He talked about planning for the future and people understanding what is going on with their pensions. We have the WASPI example where that was not seen to be the case. The new Government are making changes to inheritance tax and where pensions fall, but much of the public do not realise that that will have big implications for them as their pensions will be subject to tax and inheritance tax. Would he consider a campaign to let people know that that change is coming in the next year or so?
Sir Stephen Timms
I am not quite sure what change the hon. Gentleman is referring to, but I certainly agree that people need to be confident about what the arrangements will be in the future so that they can plan accordingly. That is the one of the reasons why the pensions triple lock is important, as it gives people confidence about how things will be in the future.
We are: increasing the basic state pension and the new state pension in line with earnings growth by 4.1%, meeting our commitment to the triple lock; increasing the pension credit standard minimum guarantee in line with earnings growth by 4.1%; increasing benefits to meet additional disability needs and carers’ benefits in line with prices; and increasing working-age benefits in line with prices as well, at 1.7%. This year, GMPs accrued between 1988 and 1997 must by law be increased by 1.7%, which is the increase in the consumer prices index in the year up to September 2024. The GMP is important in giving people assurance about a level below which their scheme pension cannot fall. I commend both orders to the House.
Question put and agreed to.
Resolved,
That the draft Social Security Benefits Up-rating Order 2025, which was laid before this House on 15 January, be approved.
Pensions
Resolved,
That the draft Guaranteed Minimum Pensions Increase Order 2025, which was laid before this House on 16 January, be approved.—(Martin McCluskey.)