Local Housing Allowance and Homelessness

Alex Cunningham Excerpts

Wednesday 24th July 2019 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship this morning, Mr Bailey. I congratulate my hon. Friend the Member for Ealing, Southall (Mr Sharma) on securing this important and timely debate and on spelling out the reality for so many of our people. I also congratulate him on the 12th anniversary of his election to Parliament yesterday, which we were pleased to celebrate last evening.

As my hon. Friend said, we know that rough sleeping in London has hit a record high with an 18% rise on last year, but it is not limited to London. Since 2010, when the Conservative-Lib Dem coalition Government came to power, rough sleeping has more than doubled across England, and there is no one reason for that. There are ways that it could have been prevented, but successive Governments since 2010 seem to have been content to allow the numbers to escalate. Even when they have admitted that there is an issue, the Government have failed to act. Two Prime Ministers have seen the numbers grow on their watch. I wonder what the new one, due to be installed later today, will make of such a terrible legacy and what he will do to sort it out.

Our Governments and Prime Ministers have been too preoccupied with Brexit and internal warring, meaning that people across this country have been let down and forced on to the streets because they simply have no other option. It is not that the Government do not know what is happening to people who are being made homeless. Ministers are quite happy to turn up and spout at events like the recent one hosted by Crisis, but we know that for all their rhetoric and plans, rough sleeping has dropped by less than 2% in the past year. If it is to be eradicated, at that rate it will take 50 years to sort it out, so I am left with no other conclusion than to ask whether they simply do not care enough to act.

Let us look at what the Conservatives have done—the decimation of social housing up and down the country over recent years, a failure to build the social housing needed, and the erosion of the welfare state. Such failures have been major factors in generating a worrying rise in homelessness, and it is across the piece. The hon. Member for Strangford (Jim Shannon) is always in his place speaking up for the people of Northern Ireland. He made it very clear that the crisis here in the UK is reflected in Northern Ireland, too, and it is families that suffer as a result.

There is ultimately one root cause that must be tackled if we are serious about ending homelessness. We need to increase the availability and affordability of housing. Stable and secure homes will give people the best chance of moving on from homelessness, or preventing it altogether. Unfortunately, we are in a position where having housing for every person is seen as an ambitious goal when it should be the standard and the bare minimum. The Government have moved the goalposts of what is seen as reasonable and turned adequate housing for all into the unachievable.

We know that many people live on low incomes. A person could work 40 hours a week on the minimum wage and not be able to afford the cost of renting privately in some places in this country, especially if they have children. We should not have a race to the bottom where only those with higher incomes can afford adequate housing. Those on lower incomes deserve secure, decent living conditions with affordable rents, but that is not the situation in Westminster North, as my hon. Friend the Member for Westminster North (Ms Buck) said. Not a single home is available for low-income families and we have the lamentable situation where former council homes are now out of reach of the poorest people because of rents of as much as £500 a week.

On the need for social housing, the hon. Member for South West Bedfordshire (Andrew Selous) spoke of the need to build more homes more quickly. He talked about energy-efficient and bill-free homes, and he is entirely correct about that—no doubt about that—but the Government have built fewer than 7,000 new homes provided at social rent in England in 2017-2018, when what we need is 90,000 each year for the next 15 years just to tackle the backlog of housing need. People are being forced to turn to private rented housing. Although some positive moves have been made regarding tenant fees, affordability is still a major problem, even if people can find a property in the first place.

My hon. Friend the Member for Stroud (Dr Drew) spoke of private landlords refusing to take people on benefits. What does the Minister have to say about that? Is he surprised that private landlords are not always accommodating and understanding when their tenants are late with their rent payments? The reality is that families are being evicted because they cannot keep up with rent payments, and they enter undesirable living arrangements—sleeping on the floors of other family members, at best, and sleeping in cars and on the streets. We have heard other examples as well. Often it means that families are split up, leading to more pain and suffering.

Research from Crisis—we have heard much about its research—and the Chartered Institute of Housing has shown that cuts to local housing allowance rates mean that in 92% of areas in Great Britain, single people and couples or small families who need local housing allowance to pay their rent will struggle to find somewhere to live that they can actually afford. Until social housing can meet demand, people on low incomes must be able to find secure and stable housing in the private rented sector. Shelter has said that targeted affordability funding is not alleviating the problem. The top-up grant for areas most affected by the freeze in local housing allowance—just a 3% increase—has not worked.

[Ms Buck]

Will my hon. Friend join me in congratulating London Councils, which has been doing some excellent research? It found that, even over the period of targeted affordability funding, single rooms had declined in affordability by more than 10% since 2015.

[Alex Cunningham]

Yes, and what is happening in response? Very little. So much more needs to be done. The housing allowance is not allocated or based on how many areas are in need, just distributed to areas in a ranked order until there is no more money. In Shelter’s words, the affordability funding is

“not even close to plugging the gap.”

My hon. Friend the Member for Ealing, Southall proved that the housing crisis is very real with a series of case studies of real people and families in crisis. They are not just numbers in a table of statistics. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) told us that we need to remember the names of some of the people who never found a home, and spoke of the memorial to Miguel in his constituency. He also spoke of children in his area who are taking their GCSEs while accommodated in the local Travelodge. I understand why he is asking the new Prime Minister to take action on that systematic failure.

I hope that the Minister remains in post, and can do something. As I mentioned, we will get a new Prime Minister today, and there will be a lot of shuffling around, but whether the Minister remains or provides a handover to his successor, I urge him to work to restore local housing allowance rates back to the 30th percentile of the market, as others have called for. We need to address homelessness with immediate effect, and provide a lifeline to people on a low income. We simply cannot afford not to.

I know that it can be easy to sit in opposition and criticise those making the decisions, but Labour has made some bold pledges that we will deliver when we win a general election. We will define affordable housing as linked to local income, and scrap the Conservatives’ so-called affordable rent home price, at up to 80% of market rates. We will stop the sell-off of 50,000 social rented homes a year by suspending the right to buy—I am pleased that the Scottish Government have done that already—ending all conversions to affordable rent, and scrapping the Government’s plans to force councils to sell their best homes.

We will back councils and housing associations with new funding, powers and flexibilities to build at scale. While we work to provide 8,000 homes for rough sleepers, we will provide local authorities with £100 million to deal with winter pressures and ensure that no one sleeps rough. We will also tackle the scandal of empty homes, many of which need upgrading to be habitable, and many more of which investors simply buy and leave empty, believing that the value will go up and they will make a financial killing.

The crisis is leaving families homeless because of the Government’s failure to act. Successive Conservative, and Lib Dem coalition, Governments have failed on housing and failed to end homelessness—no wonder people have no confidence in their housing policies. There is no doubt in my mind that it is time to act on house building and, in the meantime, on the local housing allowance, before even more families are shown the door and thrown out on to the streets.

--- Later in debate ---

[Will Quince]

I thank my hon. Friend for that intervention; I was not aware of that scheme and will certainly look at it—it sounds very interesting. Subject to being in post in 24 or 48 hours, I will certainly commit to looking at that and to coming back to him with my thoughts.

Numerous Members, including the hon. Members for Ealing, Southall, and for Westminster North, my hon. Friend the Member for South West Bedfordshire (Andrew Selous) and the hon. Member for Argyll and Bute (Brendan O'Hara), all raised the issue of housing for social rent. This is also an area that I am hugely passionate about. Local housing allowance rates and debates such as this are only half of the story. We must look at how we can increase the supply of housing that is affordable to people on low incomes to create a more sustainable system over the longer term.

I am keen to continue my work with colleagues in MHCLG to support them in looking at how we can increase the supply of housing for social and affordable rent and what more my Department might be able to do to achieve that. I urge my hon. Friends and hon. Members—not that I am supposed to—to address the issue of housing supply with my counterparts in MHCLG and to lobby accordingly. It is a hugely important issue. I share the thoughts of my hon. Friend the Member for South West Bedfordshire when he says that at the heart of the route for tackling poverty, improving health outcomes and improving educational attainment and employability is a secure and stable home, and that is something that we should prioritise.

[Alex Cunningham]

It is going to take some time to build the houses required. In the meantime, we need the local housing allowance to be properly addressed. The evidence has shown that it is inadequate, yet in some areas there is an underspend. What is the Minister going to do to review that and to transfer the money to where there is a greater need?

[Will Quince]

I made it clear at the beginning that this is an area that I am looking at very closely. We are committed to providing a strong safety net for those who need it and that is why we continue to spend more than £95 billion a year on welfare benefits for people of working age. There are no current plans to extend or maintain the benefits freeze after March 2020. As I said at the beginning, specific decisions on how to uprate the local housing allowance rates from April 2020 will form part of the discussions in support of fiscal events later this year.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 11th February 2019 Commons Chamber

[Sarah Newton]

Universal credit provides tailor-made support for all people, including those with disabilities. Once somebody meets their work coach, they will have a personalised journey to support them into work and to make progress into work, and that can happen even before the work capability assessment is taken.

[Alex Cunningham (Stockton North) (Lab)]

15. What plans the Government have to include debts owed to her Department in its new Breathing Space scheme.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I helped to introduce Breathing Space as part of the Financial Guidance and Claims Act 2018. The Department for Work and Pensions is fully supportive of the Breathing Space policy. We also recognise the importance of ensuring that people can access advice in identifying solutions to their debt problems, and we have set up the Single Financial Guidance Body.

[Alex Cunningham]

That is very good to hear, but both the Treasury Committee and the Work and Pensions Committee have said that Departments take a disproportionate and often aggressive approach to the recovery of debt. A single person over 25 claiming universal credit could have £127 deducted from their benefits each month to pay existing debts. If the Government are determined, as the Minister says, to help people manage their debts, why is his own Department making deductions that push claimants further into poverty?

[Guy Opperman]

The hon. Gentleman will be aware that, in relation to Breathing Space, the Government are considering the responses to our recent consultation and will respond in due course, and that the standard deduction rate for the repayment of a non-fraud overpayment of universal credit is 15%.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 19th November 2018 Commons Chamber

[Amber Rudd]

I thank my hon. Friend for his comments, and he is absolutely right: I am well aware of the need to ensure that people have access to those cash benefits as soon as possible. We have already made some adjustments to that, and I will do all I can to ensure that we do better.

[Alex Cunningham (Stockton North) (Lab)]

T5. My constituent Natalie Tingle works hard in her job and as a student, but is £400 a month worse off after switching to universal credit and losing child tax credit. She now gets just £12 a month, as her student loan is counted as income, and she is getting into debt. Will the Minister investigate her circumstances and find a way to help?

[The Minister for Employment (Alok Sharma)]

I am very happy to meet the hon. Gentleman and discuss that particular case.

Universal Credit

Alex Cunningham Excerpts

Tuesday 16th October 2018 Commons Chamber

[Alok Sharma]

As I said, I am in the process of meeting stakeholders, and I have indeed met Mind, as have other colleagues. We will of course ensure that we do everything that we can to take care of the vulnerable.

[Alex Cunningham (Stockton North) (Lab)]

Yesterday, I raised an issue affecting a constituent who lost her regular universal credit payment because two months’ wages, paid on the last day of consecutive months, were taken into account, but the Under-Secretary of State for Work and Pensions, the hon. Member for North Swindon (Justin Tomlinson), dismissed my question. Will Ministers now investigate that anomaly, which is affecting countless people, and put the matter right?

[Alok Sharma]

The hon. Gentleman can write to me, or I am happy to discuss that particular case.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 15th October 2018 Commons Chamber

[Alok Sharma]

As I said, when I go to jobcentres, it is very clear to me that they are working extremely hard in engaging and in letting claimants know things ahead of time, and indeed in engaging with local Members of Parliament. I hope the hon. Lady has had a chance to visit her jobcentre. If she wants to have a detailed discussion about this, I am very happy to have a discussion with her after these oral questions.

[Alex Cunningham (Stockton North) (Lab)]

8. What assessment her Department has made of recent trends in the average level of household debt for people in receipt of universal credit.

[The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)]

rose—

[Justin Tomlinson]

A truly memorable day.

Alongside the personalised and tailored support of universal credit, claimants have access to extended childcare support, increases in the personal tax allowance and the introduction of the national living wage. For those transferring from legacy benefits, there is an additional two weeks of housing benefit support.

[Alex Cunningham]

It is all too easy for people to fall into debt with universal credit failures. My constituent Kayley Aithwaite gets paid on the last working day of each month, meaning she had two lots of wages considered in the last calculation period, and was denied her usual universal credit. How common is this particular problem and what is the Minister going to do about it?

[Justin Tomlinson]

I thank the hon. Gentleman. Universal credit is designed to mirror the world of work, with monthly payments. It is far better that, through the personalised and tailored support of their individual work coach, claimants are able to be given the support to navigate that now and not on the first day of entering work.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 18th December 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Since 2012, 7,000 employees in Ochil and South Perthshire have benefited from a workplace pension through automatic enrolment. Our thanks are also due to the 820 local employers. State pension has risen by £1,250 since 2010, but we want to do more. We are extending auto-enrolment to 18 to 21-year-olds in his area, where we also have targeted interventions for the self-employed that I believe will be of assistance.

[Alex Cunningham (Stockton North) (Lab)]

The Secretary of State will be aware of the crisis engulfing members of the British Steel pension scheme, with advisers cashing in by persuading them to sink their pensions into all manner of dodgy, high-cost schemes, and he will be aware of the Financial Conduct Authority’s apparent failure to deal with the situation effectively. He will know that today the negotiations on the future of the universities superannuation scheme are coming to a head, with the threat of industrial action—something that should be interesting the Government. I am surprised that he is simply sitting back and leaving these matters to those who are directly involved. Surely, he can tell us today how he is going to get involved and take action to protect members of both schemes.

[Guy Opperman]

The position in relation to both matters is that they are worked through with the Pensions Regulator and the Pension Protection Fund, particularly in relation to British Steel, to ensure that members get information on the effect on their pension rights of staying with BSPS or moving to BSPS II. That includes newsletters, a website and bespoke option packs. The Financial Conduct Authority has also stepped in and banned a variety of organisations, and it is providing proper advice.

Universal Credit Project Assessment Reviews

Alex Cunningham Excerpts

Tuesday 5th December 2017 Commons Chamber

[Mr Gauke]

My hon. Friend puts it very well. We are determined to deliver this policy successfully and to ensure that it helps more people to have better opportunities. That is what universal credit is about. That is why we have allocated £8 million over four years to conduct a number of tests and trials to support the development of evidence about what works to help people progress in work—this is about not just getting into work, but progressing in work.

This comprehensive package responds to concerns raised inside and outside the House. Our clear objective is to ensure that as many people as possible get the opportunity to work and to maximise their potential to better their circumstances. This is Labour Members’ last Opposition day of the year, and what have they achieved?

[Alex Cunningham (Stockton North) (Lab)]

We got what we asked for—the report published.

[Mr Gauke]

We are not publishing reports, but we have been able to highlight the inaccurate scaremongering by the Labour party. We have underlined the benefits of the policies announced in the Budget. We have underlined the wholehearted support for universal credit among Conservative Members, and we have further confirmed Labour’s position as a roadblock to welfare reform—seeking not to pause and fix, but to scrap and rewind.

As the evidence builds that universal credit is positively transforming lives, it will become clearer and clearer that Labour Front Benchers are on the wrong side of the argument. So I say this to whomever had the idea for the debate: thank you, because I welcome the chance to argue the case for universal credit—a reform that puts work at the heart of our welfare system; a reform that increases opportunity; and a reform that will positively transform the lives of millions of our fellow citizens.

State Pension Age: Women

Alex Cunningham Excerpts

Wednesday 29th November 2017 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I despair, because having stood at this Dispatch Box, led for the Opposition in Westminster Hall debates and worked on the Pension Schemes Bill, with the matter before us taking centre stage, I have spoken about this issue, like a lot of other Members, many times. However, it is not the Scottish National party that I blame for that, nor is it members of the Labour party, and it is definitely not the ’50s-born women who have been energetic, consistent and strong in pushing this issue.

The Conservative party is the reason we are debating this topic yet again, but we know that many Conservative MPs pledged their support for these women by making speeches, by taking up photo opportunities, and by becoming members of the all-party group. A few months ago, I stood here and highlighted the fact that there were no fewer than 37 of them. Among them are the hon. Members for Bury St Edmunds (Jo Churchill), for Eastleigh (Mims Davies), for Chippenham (Michelle Donelan), for Salisbury (John Glen), for North Devon (Peter Heaton-Jones), for Spelthorne (Kwasi Kwarteng), for North Cornwall (Scott Mann), for Colchester (Will Quince) and for Berwick-upon-Tweed (Mrs Trevelyan)—that is just nine of them.

This weak Government continue to stick their head in the sand and hope that the issue will go away. I do not know how many more times I or anyone else has to say this to the Minister: the issue is not going away.

I am frustrated and impatient that we are yet again debating this topic when the Government could do something to fix the problem right now. I do not understand the politics of why the Government refuse to address it. They angered the older generation during the general election, and look what happened: their huge predicted majority failed to materialise, and now they are hanging on by the skin of their teeth.

[Helen Goodman]

My hon. Friend is making a very good case. As a 1950s woman, I am extremely sympathetic to the 4,000 WASPI women in my constituency. Does my hon. Friend agree that what the Government have failed to understand is that some of these women have been working since they were 15?

[Alex Cunningham]

That is most certainly the case, and the Government need to understand that. My wife herself has been working since that young age.

For some reason, the Government persist in pushing huge numbers of ’50s-born women into financial difficulty and distress. It is time for the Government to put their pride aside and do what is right.

[Mrs Madeleine Moon (Bridgend) (Lab)]

I thank my hon. Friend for acknowledging the financial plight of many of these women. Women in my constituency have been forced to sell or remortgage their homes, and to spend the money they had set aside for retirement now so that they can exist, which will increase the poverty they experience in retirement. That has not been acknowledged at all by the Government.

[Alex Cunningham]

Indeed it has not, and I am sure we will hear many such examples in the debate.

I have heard stories from numerous women affected by the changes of their desperation and fear—and it is fear—about how they will cope in poverty as they wait even longer for their state pension. Does the Minister understand how difficult it is for a woman in her 60s to retrain and gain employment? The job market and the skills needed in today’s workplace are very different from what they were 40 years ago.

[Grahame Morris]

My hon. Friend is making powerful points. Does he agree that the Government have an opportunity to act while the ball is in their court and before the collective action for maladministration compels them to act?

[Alex Cunningham]

That is the case, and I will refer to that matter later in my speech.

We have a system that does not help older people to retrain and get back into meaningful employment. The welfare system has been torn to pieces, disabled people have been humiliated through repeated assessments, and the state pension is becoming increasingly difficult to access.

The Labour party has laid out the approach that we would take to reduce the strain on vulnerable and struggling women. We would extend pension credit to those who were due to retire before the increase in the pension age. That would alleviate the toughest circumstances, and restore the faith and dignity that many people feel they have lost. It would provide support worth up to £155 a week to half a million of the most vulnerable women affected by the increase in the state pension age. We have also proposed allowing those who have been affected to receive their state pension up to two years early at a reduced rate, to give women the choice over what works best for them.

[Philip Davies (Shipley) (Con)]

I have a great deal of sympathy for the women concerned, but the issue is how we pay for this—I know that is not something the Labour party tends to concern itself with a great deal. I would support taking money from the overseas aid budget to provide transitional arrangements for these women. Will the shadow Minister show his concern for these women by agreeing to that, or does he put overseas aid ahead of the WASPI women?

[Alex Cunningham]

We know fine and well that as GDP goes down, the amount of money spent overseas also reduces. The poor overseas also need support. If we need to find this money, we can start by looking within British budgets.

Why do the Government not look at our proposals? Why do they not give these women some hope? We heard from the Minister that the Government’s position is that they will not make further concessions, but I urge him to go back to the Secretary of State after the debate and persuade him to think again.

Earlier this year, the Secretary of State said that he and the Department for Work and Pensions would look into individual cases of hardship. We know from a freedom of information request that the DWP has concluded just a handful of complaint investigations relating to the ’50s-born women campaign, although more than 4,500 complaints were received. Will the Minister update the House about the progress on those complaints?

[Chris Stephens (Glasgow South West) (SNP)]

Is not the real problem demonstrated by my constituent who wrote to me a fortnight ago? She was born in 1954, has been in insecure, low-paid work, and has no access to an occupational pension or savings. The Government must address this issue.

[Alex Cunningham]

I said a few minutes ago that we would hear many examples of the plight faced by ’50s-born women, and that is yet another one.

Although I agree that this mess was created by the Government, I want to touch on the Scottish Government’s social security powers. I know that there have been some heated exchanges on this subject already. The SNP says that it cannot act to resolve the issue in Scotland because pension provision is reserved to the UK Government. Although that is true, the Scotland Act 2016 gave the SNP Government powers to top up social security or to create new social security policies. The right hon. Member for Ross, Skye and Lochaber (Ian Blackford) denied that they have the power to introduce new benefits based on age, so will the Minister commit this afternoon to publishing a clear paper outlining exactly what the Government believe the Scottish Government can and cannot do with their powers. Perhaps that would make the matter clear once and for all.

Labour has made a commitment to extend pension credit and provide early access to a state pension, but we cannot deliver that because we are not in government. Therefore, there has to be a challenge to our SNP colleagues: use your powers to help women north of the border and, if they are insufficient, chat to the Government, because they believe you do have the powers.

[Mhairi Black]

I do not think that anyone on the SNP Benches feels the need for any clarification, because it is already there. We all remember vividly how it was the Conservatives and—it is unfortunate I have to say this, because I am not trying to make a party point—the Labour party that made sure that we did not have power over pensions.

[Alex Cunningham]

Nobody suggested that the Scottish Government had pension powers; we are saying that they could use social security policy. I suggest again that the Scottish Government chats to the UK Government. I think they just need to get their heads together and talk rationally, but I would rather the UK Government published a paper spelling out the position.

I do not want to keep having to stand here debating this issue. I do not want us to give false hope to the ’50s-born women who are fighting, because it is their livelihoods we are talking about. I want the Minister to do something—to reach out across the Chamber and work for a real solution—to demonstrate that the House is listening to the residents of this country.

[Dr Whitford]

Will the hon. Gentleman give way?

[Alex Cunningham]

I am nearly finished. Before I conclude, I would like to ask the Minister what the Department is doing in relation to the legal challenge from the WASPI campaigners, which was mentioned by my hon. Friend the Member for Easington (Grahame Morris). Has the Minister made contingencies for the day when the courts rule against the Government, as they may well do, and order that ’50s-born women be compensated? What is happening in relation to that?

Although we support the motion, I think that the House needs to be able to vote on a motion that will be binding on the Government.

[Guy Opperman]

I will answer two of the hon. Gentleman’s points. First, the Government do not believe that there has been maladministration by the Department for Work and Pensions in relation to the legal claim by Bindmans, and that includes in the 13 years when the Labour party was in power. Secondly, with regard to his assertions about the Scottish Government, the situation is as I said when I cited the letter of 22 June from Jeane Freeman, my opposite number in the Scottish Government.

[Alex Cunningham]

I am grateful to the Minister for that intervention, but he knows as well as I do that the decisions of successive Governments are overturned in the courts time and time again, and the then Government end up having to pay for it.

I want to see before the House a motion that actually means something, and that is binding on the Government to deliver some of the relief that these women desperately need. We will continue to look for that opportunity, and then we will call on the supporters of ’50s-born women, from both sides of the House, to vote for that relief and make something happen.

Draft Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) (Amendment No. 2) Regulations 2017

Alex Cunningham Excerpts

Wednesday 29th November 2017 General Committees

[Alex Cunningham (Stockton North) (Lab)]

Good morning, Mr Stringer; it is a pleasure to serve under your chairmanship.

We agree that the regulations are designed to help people, and we will not oppose them. I have a number of comments and questions, but I do not expect or intend to detain the Committee very long. As the Minister said, the regulations have been introduced to provide protections for people at a time of real financial difficulty for millions of people in our country. Wages are down in real terms, millions are using food banks and thousands of families with children will be homeless this Christmas. The average household budget had unsecured debts amounting to £13,200 at the end of 2016, just below the £13,300 level at the end of 2008, on the eve of the financial crisis.

Analysts at the Trades Union Congress expect that figure to rise to £13,900 by the end of this year and as high as £15,400 by the end of 2021. Nobody should be surprised at people choosing to take lump sums of tax-free money from their pensions because they simply do not have the luxury of being able to plan ahead and look to the future. Their worries are very much in the present. While I recognise that it is important that people with even small benefits with guaranteed annuity rates should receive advice, I cannot say that I do not understand why some people are choosing the option to have their money now.

Pension freedoms are a success to some extent, but people are seduced by the temptation of easy cash for a number of reasons related to their personal circumstances. Here lies the contradiction and unintended consequence of pension freedoms: it is incentivising jam today and may end up leaving little for retirement. One of my biggest questions and concerns is why that was not considered when the 2015 Act was passed. Why is it only now, after two years, when numerous people have taken out lump sums, that the Government have decided it needs to be addressed?

Nevertheless, the decision is still welcome. Advice should be given, and it should be good-quality advice at the lowest possible cost. We must have financial advisers who consider the future of their clients, and provide a real picture of what they can expect. There seems to be an attitude that small safeguarded benefits do not matter as much, when I would argue that they are in fact just as important as any others, if not more so. Any guarantee of a future steady income outweighs the high risk involved in managing one’s own pension pot.

People with less than £30,000 may be poorer, facing increased financial difficulty and looking for a way to resolve their problems quickly. They may insist on having their tax-free 25% quickly, but I wonder about the quality of advice that they are getting. They need to know that their guaranteed annuity rates are worth more than cashing in. That is why I welcome any initiative that would require them to receive advice before making any transfers. I look forward to making many similar points when the Financial Guidance and Claims Bill comes to the Commons; I assume that that will be in 2018. I would also argue that the people who have benefits under £30,000 are the people who most need the advice.

That said, while I appreciate that there are concerns about the cost of the advice from Financial Conduct Authority-regulated providers, I do not believe that should be a barrier, nor just an entitlement for the wealthier. As I have said, the change is welcome, but would the Minister agree that for many people the horse has already bolted? They have had their cash, they have spent it and many of them face financial hardship simply because nobody warned them of the risk they were taking. The freedom agenda has been littered with bad advice. Not everyone is being reasonably and accurately informed about their options, and they are missing the key point that taking the cash would not be as valuable as keeping their pension benefits.

I note that the Government have received representations from schemes and consumer bodies that the current approach is confusing for members, which does not surprise me at all. The Minister has addressed that. I have spoken on the issue of transparency a number of times, and will continue to do so until I am satisfied that there is a real and meaningful clarity provided to those who have occupational and private pensions. Any confusion faced by consumers simply proves my point. We cannot just provide information that is difficult to understand: it needs to be in language that is easily comprehended.

I note that a voluntary approach has been considered but discounted on the grounds that providers would not always comply with a requirement to notify individuals about their guaranteed annuity rates, as it would be a cost to the provider. It is right that there is a requirement for providers to give personalised risk warnings to all members with guaranteed annuity rates, and that they seek advice. I hope that this is another a step forward to cleaning up and making this area more transparent and worth while for consumers.

We all know that when it comes to the financial services industry, at times there are those who do not always act in the client’s best interest. The Financial Conduct Authority is looking into claims that rogue pension advisers are aggressively targeting steelworkers at Tata’s UK plant in Port Talbot. It is a real concern for everybody that advisers have swooped on the steelworkers, in many cases seeking to persuade them to transfer their money to alternative arrangements. While these transfers may enable the steelworkers to access their savings more easily, they invariably carry high costs and almost always involve schemes that carry much greater levels of risk. Despite Government assurances, rogue advisers are reportedly presenting a transfer as the best option for almost all those affected, despite regulators repeatedly warning that most people with defined benefit pension benefits would be better off keeping them.

What will the Government do through the regulator to ensure that we do not see the same thing happen to people who have guaranteed annuity rates savings? I have mentioned the cost of advice. How will the regulator ensure that advisers do not charge excessive fees for advice, which is something that could dig deep into small pots? Likewise, how will they make sure that the rogues in the system do not make a financial killing as a result of these regulations and the new body of people seeking advice?

State Pension Age

Alex Cunningham Excerpts

Tuesday 21st November 2017 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

Mr Hollobone, it is a pleasure to serve under your chairmanship, which has seen more than a dozen people take part in this short debate. I congratulate my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) on securing his first of many Westminster Hall debates. I very much believe that he is loud and proud. I love that voice, which reminds me so much of home, although I left the area when he was just three years old. He made an excellent speech; it was a trip right through the social security system and how it is failing so many of our people.

We could talk about many things today, from the plight of the ’50s-born women whom the Government are continuing to ignore, to the ill-advised increase in the state pension age that was brought in by the Tory Government and which hits the poorest and most vulnerable people hardest. Several Members have addressed the WASPI issue and the Minister will probably be pleased to hear that I will not dwell on the ’50s-born women. However, as I said in the House last week, this issue will not go away and the Government need to act, starting with an extension to pension credit, giving women the option to claim their state pension two years earlier at a slightly reduced rate. That is not a complete solution, but it would provide something for that very wronged group.

Then we have the issue of increasing the state pension age. Age UK said that it is reasonable to look at the state pension age as longevity increases, but it needs to be accompanied by support to enable people to work longer and protection for those who cannot. I share Age UK’s view, but I must stress that longevity is not enough. We need to consider quality of life and health. That said, University College London’s Sir Michael Marmot says that increases in life expectancy have slowed down or halted, but even if we might be living a little longer but not living healthily for any longer, increasing the state pension age is bad news, particularly for the poorest in our country and those with ill health.

The inequalities are not illustrated better anywhere than in my constituency, where a man in the poorest ward can expect to live 16.4 years less on average than a man in the most affluent ward. The man in the poor ward may have started work at 16 and paid national insurance contributions throughout his adult life, and is more likely to have been in a physically demanding job and to have experienced ill health at a younger age. He may even be lucky to get the state pension for a handful of years before dying. Contrast that with a more affluent, professional person, who may not have started work until his 20s, who retired at 60 because he could afford to, and who then picked up his state pension when he was still fit and healthy enough to enjoy it. The manual worker will have worked more years and may have paid contributions for 50 years—perhaps 10 more than the professional. How is that just? How is that fair? We have heard that people die younger, and the illustration from Glasgow of somebody dying aged 63 and never reaching state pension age is very relevant.

The Cridland review, which will effectively cost 7 million people £10,000 each, failed to come up with an answer to this question, but even John Cridland spoke of the need for greater support for people in hard physical jobs that offer them limited chance, if any, of a few years of healthy retirement.

[James Cartlidge (South Suffolk) (Con)]

We have not yet heard anything from the hon. Gentleman about costs. Does he accept that unless we raise the retirement age, the system of paying for the state pension will be financially unsustainable?

[Alex Cunningham]

Cost will always be an issue, but some have made the point that we need to base decisions on fact and new data. The data are changing. People will not necessarily live longer, so the cost might not be higher in the longer run.

We believe that we should have a variable state pension age whereby a person’s work background, health and income are considered, with their retirement age being based on their life expectancy, not just the national average. The proposal to raise the state pension age even further all but wipes out the chances of many of our people enjoying a few years of retirement in good health. The state pension should be flexible and recognise the contribution that people have made to our country, and the system should be designed to work for everyone.

I really worry about the pressure facing older people in our country. The cost of living is going up and their pension is getting further away. At the same time, many are unwell and unable to work, or they may be caring for even more elderly parents or young children, making a very different but relevant contribution.

I wonder whether the Minister is even aware that 1.9 million pensioners now live below the poverty line. That means more struggling older people on social security and extra strain on the NHS when vulnerable people are living in poverty, all within a system that has seen that value of income shrink since 2010. I referred to older people with caring responsibilities. Many will fall short of the 35 years of contributions that are needed to secure a full pension. We need to do things for all those people, for all the different groups in our community, because that would be the fair and right thing to do.

[Mr Philip Hollobone (in the Chair)]

If the Minister can finish his remarks no later than 5.27 pm, Mr Gaffney will have time to sum up.

--- Later in debate ---

[Guy Opperman]

I will make two points about that. The first is that anybody who proposes a situation involving framing new legislation that lacks equality between men and women will have to deal with the Equality Act 2010, because any new transitional provision runs the risk of creating a new inequality between men and women and being subject to challenge.

Further to the proposal made by the hon. Member for Coatbridge, Chryston and Bellshill, the Labour party’s position in its manifesto, as agreed with by the hon. Member for Paisley and Renfrewshire South (Mhairi Black) and presumably the Scottish National party, is to reject any increase in the state pension age above 66. That would involve scrapping the Pensions Act 2007, the work of the Labour Government in the Blair-Brown years. Costs have been mentioned; let me be clear that the costs of capping the rise in state pension age at 66 in 2020 would be £250 billion higher than proceeding according to the timetable set out by John Cridland.

[Alex Cunningham]

The Minister referred to Labour policy, but he edited it to a few words. We actually said that we wanted to freeze the pension age at 66 and set up our own commission to consider longevity and pensions issues and how we could help the more vulnerable in our society.

[Guy Opperman]

I will quote the hon. Gentleman’s party manifesto to him, just so we are utterly clear.