Social Security (Up-rating of Benefits) Bill

Baroness Janke Excerpts

Committee stage
Tuesday 26th October 2021 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I begin by apologising to your Lordships for not taking part in Second Reading due to the volume of Bills currently before your Lordships’ House.

I will be very brief. I rise to offer the Green group’s support for the intention of all these amendments. I express my pleasure in following the noble Baroness, Lady Drake, and stress her point that we are not talking about a contest between generations here. There are some very poor people among our older communities, and they deserve not to live in poverty, but that does not mean taking money away from the young. I also stress the point made by the noble Baroness, Lady Wheatcroft, about how pensioner poverty is rising and that we should have a society where no pensioner is living in poverty.

I particularly want to address Amendment 3, which is the one I would most like to have attached my name to, had there been space. It is crucial: pension credit gets so many people to at least a basically decent, not awful, standard of living, but the fact is that that is useful only if you actually get it. I had a conversation—or a debate—with the Minister about a year ago. At that stage, the rate of pension credit take-up was 60%; that meant about a million pensioners were not receiving pension credit who would have been entitled to it. That was money the Government were not paying out—about £3 billion. It was estimated that it was costing the NHS and social care a spend of £4 billion. So not paying pension credit is actually costing the Government money. Can the Minister now—or later in writing, sharing it with other Peers—update me, a year later, on whether those figures still hold? Have the Government planned, as they did not plan a year ago, a programme to promote pension credit to ensure that those who are entitled to it take it up?

[Baroness Janke (LD)]

My Lords, as the noble Baroness, Lady Bennett, says, all these amendments seek to protect pensioners against price increases during a temporary suspension of the triple lock. I very much welcome the proposals made in Amendments 1, 2 and 3, and particularly welcome the proposal to include pension credit in the link with earnings.

I want to speak to Amendment 4 in my name, which seeks to base the uplift on the predicted increase as forecast by the Bank of England for April 2022. My amendment proposes that, as the pension increase will be in April 2022 and the previous pension increase was in April 2021, the best measure would surely be price increases between those two dates.

Circumstances have changed considerably since the Bill completed its passage through the Commons, including rising costs, rising inflation, unreliability of supply chains and the various pressures brought about by those circumstances. While we do not know what inflation will be by next April, there is plenty of reason to think that it will be higher than currently—that is sadly what the Bank of England thinks. For example, the energy cap went up 12% on 1 October, and is expected to go up again next April. I do not think the Government should be happy that these cost rises are not included in the inflation figure that they have used.

We know that pensioners, and older pensioners in particular, tend to spend more time at home and feel the cold more, and so energy bills tend to be a higher share of their household budgets. Given soaring energy costs, pensioner inflation is likely to be higher than average inflation. This is another reason to think that just linking to September’s average figure, when setting the state pension rate, is the answer to the wrong question. I know that some Members will think that using a forecast is not as robust as using an outturn, but this legislation is only for one year, so really we are not setting a precedent. In fact, I am reliably informed that, in the 1980s, the DWP used to use forecast inflation for benefit uprating.

Mention was made in the previous debate of the need to implement the new rates as quickly as possible. This really does not take as long, in this day and age; there are processes in place to make it much easier. Surely it would not take long for the preferred body—the Bank of England or the OBR—to come up with an inflation forecast; presumably the Budget will bring new inflation forecasts in any case.

If the Government are committed to protecting pensioners against rising prices when they set the pension in 2022, they should see that this is a more transparent, easily understood method of ensuring that pensioners are protected against the expected rise in prices, costs and pressures in the year ahead.

--- Later in debate ---

[Lord Davies of Brixton (Lab)]

My Lords, I just want to add that we have a complete lack of information on these proposals. As a matter of law, when the regulations come, they have to be accompanied by a report from the Government Actuary. In effect, we are making the decision now—the regulations are just a carry-on of the Act—and it is really unfortunate that we do not have before us the information that Parliament has decided should be available to us when we deal with these regulations.

[Baroness Janke (LD)]

My Lords, I thank the noble Baroness, Lady Sherlock, for her amendments and for the information she has drawn to our attention. I share her concern at the lack of impact assessments of the proposed uplift on the most affected groups. The increasing pensioner poverty that we are all aware of and the poor take-up of pension credits, which are important as a passport to other benefits, are matters we are all extremely concerned about. I agree that pension increases are fast outstripped by rising costs, and I certainly fear a winter crisis, with increased energy prices and their effect on those who most need heat to keep their homes healthy and warm.

We heard from the noble Baroness, Lady Boycott, about how poor pensioners do not want to claim food —they do not want free food, they would rather starve than do that—and I believe that that is certainly an element in the uptake of pension credit. Again, we all worry that we are going to see more and more food banks and people unable to feed themselves as costs rise. The noble Baroness, Lady Drake, raised the whole issue of regional poverty and inequality. Certainly, when you look at the statistics across the regions, they are quite breath-taking. I believe we need much more information, as the noble Lord, Lord Davies, said, particularly about regional inequality. I wonder why we do not have this information when the Government have such a strong levelling-up agenda. How will they address these issues without adequate information on which to base decisions?

My amendment in this group highlights the unfairness experienced by many women as result of the pension gender gap. I will point out the current situation. The average pension pot for a woman aged 65 is one-fifth of that of a 65 year-old man. Women receive £29,000 less state pension than men over 20 years and this deficit is set to continue, closing by only 3% by 2060. Many women are wholly dependent on the state pension and as a result of this situation, we should take a particular interest in conducting impact assessments on the uprating of pensions on poverty. I support the measures proposed in this group and look forward to the Minister’s response.

[Baroness Stedman-Scott (Con)]

My Lords, I thank the noble Baronesses, Lady Sherlock, Lady Drake, Lady Boycott, Lady Altmann and Lady Janke, for raising important issues through these amendments and I reassure the Committee that we are committed to ensuring economic security at every stage of life, including when one reaches retirement.

On Amendments 5 and 8, tabled by the noble Baronesses, Lady Sherlock and Lady Janke, on publishing a poverty impact assessment, the department collects and publishes a wide range of data on income and poverty which are released annually in the reports in the households below average income series. Noble Lords raised the issue of pension credit take-up. Time does not allow me to go into the detail, but I undertake to have a further pension credit update when we can have more time to discuss and answer the questions that noble Lords wish to have answered.

In the absence of actual data, the only way to provide an assessment in advance of those dates would be to forecast and model how many pensioners might have their income lifted above the various low-income levels under an earnings uprating versus an inflation uprating. Assumptions would need to be made about how each individual pensioner’s income would change in future under each scenario. This would require making assumptions about, for example, how each pensioner might change their behaviour around other sources of income, such as drawdown of income from investments or a change in earnings, when faced with different amounts of state pension, which is virtually impossible to do.

Those projected incomes would then need to be compared with projections of the various income thresholds, which are themselves extremely uncertain. For absolute poverty, the threshold is increased each year by inflation; and for relative poverty, the threshold is determined by changes in median income across the whole population. Given the volatility in the economy and labour market, this is impossible to do accurately. There is a very high risk that any analysis seeking to forecast the number of pensioners moving above or below these projected poverty thresholds would be misleading due to uncertainty about both the economy and pensioners’ behaviour in response to various levels of state pension.

I turn to Amendment 6 and the specific request of the noble Baroness, Lady Sherlock, for a review of the impact of the Bill on mixed-age couples, and point to some practical concerns. Mixed-age couples in receipt of universal credit are a very small group, and data sources are limited. It is therefore not possible to identify these couples and analyse changes in health inequalities and homelessness for this group.

Further, the Government believe it is important for both individuals and wider society that people below state pension age remain in the labour market and continue saving for their own retirement. That is why, where a member of a couple is below state pension age and the couple are on a low income, support is provided through universal credit rather than pension credit. Providing support where it is needed through universal credit ensures that the same incentives to work and save for retirement apply to the younger partner in a mixed-age couple as apply to other people of the same age. Where the younger partner is unable to work because of disability or caring requirements, they may qualify for additional amounts and will not be subject to any work-related conditionality.

This approach is based on clear evidence about the importance of employment, particularly where it is full-time, in substantially reducing the risks of poverty and in improving long-term outcomes for families and children. In 2019-20, adults below state pension age in households where all adults were in work were six times less likely to be in absolute poverty, after housing costs, than adults in a household where nobody works.

As our economic recovery gathers pace and with vacancies at record levels, the focus of our expanded multi-billion-pound Plan for Jobs is helping people who can work to move into and to progress in work wherever possible. However, recognising that some people continue to require extra support this winter, we have announced the new household support fund.

On Amendment 7, tabled by the noble Baroness, Lady Sherlock, to publish an assessment of the impact of the Bill on those receiving the state pension, with reference to their ability to pay energy bills, energy prices are one of the factors built into the CPI measure, which is used in the assessment of annual uprating of benefits not covered by this Bill, such as personal independence payments and jobseeker’s allowance. In aggregate, where benefit rates are increased in line with CPI, the increases in those prices are reflected over time in the increases in benefit rates. The energy price cap will continue to protect millions of customers this winter, saving 15 million households up to £100 a year. Additionally, suppliers are prohibited from disconnecting customers of pensionable age between October and March, ensuring that pensioners have continuous supply during the coldest months.

I ask the noble Baroness, taking account of the points I have made, to withdraw her amendment.

--- Later in debate ---

[Baroness Janke (LD)]

My Lords, I support the triple lock and its effect of keeping the value of the state pension, which has been lost over very many years and has not yet recovered. I share the point made by the noble Baroness, Lady Sherlock, that we accept that these are special circumstances. The Minister has assured us that this is just for one year, so we take her at her word and will judge her on future actions next year.

[Baroness Stedman-Scott (Con)]

I assure the noble Baroness, Lady Sherlock, and the whole Committee, that the Government take the issues of living conditions and the standards of pensioners seriously. As I have relayed in previous contributions to this debate, we have done an enormous amount to try to help, but I have no doubt that that will not be enough for some. It is a work in progress, and we will see where that goes.

This clause requires the Secretary of State to review the rates of the basic state pension, the new state pension up to the full rate, the standard minimum guarantee in pension credit, and survivors’ benefits in industrial death benefit, by reference to the general level of prices in Great Britain. Under this clause, if the relevant benefit rates have not kept pace with the increase in prices, then the Secretary of State is required to increase them at least in line with that increase or by 2.5%—whichever is the higher.

This is a two-clause Bill. If the noble Lords, Lord Sikka and Lord Davies, and the noble Baroness, Lady Bennett, successfully oppose Clause 1, the Bill will fall and, as a result, these pension rates will be increased by 8.3%, which is the average weekly earnings index for the year May to July 2021. This means that, if the Bill does not achieve Royal Assent in good time, there will be an increased cost to the Exchequer of between £4 billion and £5 billion.

Taking into account the points raised, I ask the noble Lords to withdraw their opposition to the question that Clause 1 stand part of the Bill.

--- Later in debate ---

[Baroness Janke (LD)]

My Lords, I too will be brief. We have heard from other Members of this House on the impact of the cut to the £20 uplift in universal credit, and the effect it has on people’s lives, particularly children and, as the noble Lord, Lord Shinkwin raised, the disabled. We know that this is causing major misery and despair to many people in this country, among them the most vulnerable.

I too respect the rule of law; the rules of engagement are important. As the noble Baroness, Lady Fookes, and the noble Lord, Lord Porter, have said, if you want to be effective, the rules are important. However, when I first came into this House—I am not a very long-standing Member—there was an occasion when the House took a stand on tax credits. We have no powers, as we know, but we took a powerful stand. Certainly, it upset the then Government, and those tax credit cuts did not go ahead. What I learned from that is that, while I have great respect for the rules of this House, its procedures and its conventions, sometimes there are exceptional circumstances which sometimes demand exceptional action. That is what I believe the noble Baroness, Lady Stroud, and her supporters are taking forward at the moment.

I too hope that the Chancellor will put something in his Statement tomorrow—we will, of course, wait to hear it—but I pay tribute to the courage of Members of this House who have put their money where their mouth is. They have put themselves on the line. They believe it is so important to ask the other place to think again that they are prepared to risk a lot in order to do so. We in this House should back them.

Child Poverty: Nuffield Foundation Review

Baroness Janke Excerpts

Tuesday 19th October 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

Yes, they have: they have had to take difficult decisions to stabilise the economy and build a welfare system that works for those who use it as well as those who pay for it. I can say only that I will meet the right reverend Prelate, and I am happy for the noble Baroness to join us. We will see what comes from that conversation.

[Baroness Janke (LD)]

My Lords, the children’s commissioners of Wales, Scotland and Northern Ireland state that the two-child limit is a clear breach of children’s human rights. Will the Government act on this, or continue to sweep aside widespread evidence that this vicious policy is increasing poverty and damaging children?

[Baroness Stedman-Scott (Con)]

I can add nothing to the answers I have already given. The Government have no plans to change the policy.

Social Security (Up-rating of Benefits) Bill

Baroness Janke Excerpts

2nd reading
Wednesday 13th October 2021 Lords Chamber

[Baroness Janke (LD)]

My Lords, it is always a great pleasure to follow the noble Baroness, Lady Stroud, with all her knowledge and experience in this field. I very much support her arguments and hope that we can, through the Bill, create an opportunity for the Government to think again. I also pay tribute to all other noble Lords who have argued for the reinstatement of the £20 uplift: the noble Lords, Lord Freud, Lord Desai and Lord Shinkwin, the noble Baroness, Lady Lister, and, of course, the right reverend Prelate the Bishop of Durham, who has long campaigned for changes to benefits. All have eloquently stated the case, and we on this side will give our full support to them in seeking to restore this.

I first thank the Minister for her engagement with us all in preparation for the Bill. As others have said, it seeks to amend the triple lock for the second time, albeit temporarily, for another year. As my noble friend Lady Smith said, the triple lock was a key Lib Dem achievement during the coalition. It is an essential tool to protect pensioners from the effects of the devaluation of the state pension, which has occurred since the loss of the link with earnings in 1979. As the noble Baroness, Lady Drake, and the noble Lord, Lord Davies, said, it has improved things, although it has been slow. I would not agree that it needs to be reviewed; it needs to stay because it still has to do its job.

I also welcome the Government’s declared commitment to the triple lock and, like others here today, I would very much welcome an assurance from the Minister that the Bill is no more than a temporary measure. The noble Baroness, Lady Drake, was particularly keen to have that assurance, while the noble Baroness, Lady Stowell, made a strong case for older pensioners, who are usually poorer, and the need for their confidence in messages from the Government when looking to the futures of their children and grandchildren. I would certainly support her request for a review of the taper of universal credit. My noble friend Lady Smith would like an assurance that this is not just another “temporary measure” being brought in under the curtain of the need to do things differently as a result of the pandemic.

In supporting the triple lock, I would say there are usually three main reasons given for abandoning it. The first is the idea that pensioners are now so well off that they do not need it; secondly, that young people are losing out compared with the elderly; and, thirdly, that the country cannot afford it. As others have said, there are 2.1 million pensioners in poverty who depend on the state pension and very many others who are far from being well off. Allowing the state pension to devalue will severely impoverish them further. If many pensioners are rather too well off, surely progressive taxation is the way to ensure that they are not gaining excess advantage at the taxpayer’s expense.

As far as young people are concerned, many will not have the benefit of private pensions and will depend upon a state pension. They will benefit only from a state pension that keeps its value and will suffer enormously if the state pension is allowed to devalue, as it did before 2010.

The UK has one of the lowest pensions in Europe, as the noble Lord, Lord Flight, mentioned. In the UK, spending on it is 5.9% of GDP; the Office for Budget Responsibility suggests that will increase to just under 8% in 2057-58. In many European countries, investment in pensions is much higher. In Germany, for instance, it is 10% of GDP. The noble Lord also made the point that other countries do things slightly differently, but I point out to him that they also make similar benefits available to their pensioners, as we do in this country.

The measures in today’s Bill need a second look by the Government. Since the Bill was debated in the House of Commons, some circumstances have changed. A key development is the surge in price inflation. The new chief economist at the Bank of England has warned of higher inflation being around for longer than previously thought. Current predictions from the Bank of England put inflation at 4% for the last quarter of 2021 and at over 4% for the first two quarters of 2022.

The September inflation figure will not capture any of the following: increases in energy prices which happen between September 2021 and April 2022, when the pension increase is paid; the April 2022 council tax increase, when councils are already talking about extra increases next year because of social care cost pressures and the expectation that local government is unlikely to receive a particularly generous settlement, despite council services having been cut severely over recent years; and other inflationary pressures, perhaps arising directly from the energy price hikes as the supply chain becomes more expensive, which will feed through into food and other prices. Given that food, energy and council tax are likely to account for a lot of the spending of pensioners, and older pensioners in particular, inflation by next April is bound to be higher than this September, as the Bank of England predicts. As a result, if the Bill is not amended it will condemn pensioners to a cut in their real standard of living. They cannot just work an extra two hours, as the Secretary of State famously recommended to people affected by the universal credit cut.

I support the noble Baroness, Lady Altmann, in her request for a comprehensive review of pensions and would examine her suggestion of looking at the adjusted earnings figure. I certainly do not believe that what is contained in the Bill is fair to pensioners, as the noble Baroness, Lady Noakes, does. I will just touch on the point made by the noble Lord, Lord Hendy, about the importance of people having money in their pockets if they are to make any contribution to any economic recovery following the pandemic.

We have heard the reservations of many Members about these measures and, in the changed circumstances we now face, the Government need to take the necessary time to revisit these proposals. I hope that during Committee we will agree amendments that will not impoverish the poorest pensioners, who may be facing unprecedented external financial pressures, and arrive at a realistic increase that will ensure the newly emerging pressures are fully taken into account.

--- Later in debate ---

[Baroness Janke (LD)]

I have a question. First, the Minister mentioned Sir Steve Webb, a former Minister. He too has pointed out that, since the Commons discussed this issue, the circumstances have changed and the indicators are that price rises will be much higher—something that the Minister did not address when she replied on that part of the Bill. Secondly, could the Minister write to me and tell me why exactly this Bill must have its Third Reading by November?

[Baroness Stedman-Scott (Con)]

I thank the noble Baroness for pointing out the clarification on her previous colleague, Steve Webb. I will certainly write to her and, later, I will come on to the issue of gaining Royal Assent by November.

Let me turn to my noble friends Lord Freud and Lady Stroud. I thank my noble friend Lord Freud for the passion and knowledge with which he speaks. I pay tribute to his achievements as Minister for Welfare Reform. I must, however, reiterate that the Bill does not concern benefits linked to prices, such as universal credit—but thank God we had universal credit when the pandemic came. We will be for ever in the noble Lord’s debt for making that happen. If I may say so, we will also be for ever in the debt of Baroness Hollis for the challenge that she provided in that; we all miss her.

In answer to my noble friend’s question, making the uplift payment permanent would cost £6 billion; this is the equivalent of adding 1p to the basic rate of income tax, in addition to an increase of 3p in fuel duty.

I have been really pleased to engage with my noble friend Lady Stroud. We have worked together on many projects, and I have found our conversations really useful and helpful. I know that she has strong views on the universal credit uplift, and that dialogue will continue. As I said, the Bill is very short and not concerned with benefits—I do not say that to annoy people—so the Government would not encourage her to try to draw a false link between the two separate matters. Again, the universal credit uplift was always intended to be temporary.

Lastly, I remind noble Lords of the need for Royal Assent by 22 November. This will allow the Secretary of State to conduct a statutory review using the new powers in time for the DWP to meet its hard deadline of 26 November for reprogramming its computer systems, to ensure that the new rates of benefit and pensions are payable from April 2022. Any delay to this Royal Assent deadline will result in the review being completed under existing legislation committing the Government to uprate by at least 8.3%, which would not be fair to the current and future generations of taxpayers.

Cost of Living

Baroness Janke Excerpts

Tuesday 12th October 2021 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, the right reverend Prelate makes the very good point that at the time of Covid, the Government responded very well and made the terms of that response very clear. On the unintended consequences, I think I said in a previous answer that assessment of the universal credit uplift has not been made because it was a temporary change and facility, so we were not required to do that. I know that that answer will not please many people.

[Baroness Janke (LD)]

My Lords, circumstances have changed significantly in the past few months, as others have said. The Bank of England is predicting inflation of 4% for the fourth quarter of this year and above 4% for the first and second quarters of next year. Pressures such as those, the national insurance increase, the public sector pay freeze and rising food prices from energy costs all squeeze the poorest, so, in the light of them, does the Minister agree that the Government are gambling with family finances by ending the £20 uplift? If she does not, will she assure us that they will come forward with a comprehensive package to address those pressures, including reinstatement of the £20 uplift?

[Baroness Stedman-Scott (Con)]

The commitment I can give to the noble Baroness is that on a daily basis, these things are being assessed and discussed—they really are. I cannot give any other commitment, and I certainly cannot give any commitment that the £20 will be reinstated.

Clergy: EU Visas and Residence Permits

Baroness Janke Excerpts

Tuesday 13th April 2021 Lords Chamber

[Baroness Warsi (Con) [V]]

My Lords, the questions that I was going to ask have been answered by the Minister in response to the noble Lords, Lord Collins and Lord Wallace, so I am going to allow the noble Baroness, Lady Janke, to ask her question within the allocated time.

[Baroness Janke (LD) [V]]

My Lords, French Minister Clément Beaune recently said in a parliamentary answer that it could be possible to find an opt-out or more flexibility on the 90-day rule for visa-free travel in Europe but that the British had little appetite for negotiating this point. What does the Minister make of that? What action are the Government taking to get a fair deal for UK citizens on visa-free travel in European countries?

[Lord Ahmad of Wimbledon (Con)]

My Lords, I believe that what we have negotiated is a fair deal. It allows anyone from the UK to travel to the European Union—the Schengen area specifically—for 90 days without the requirement of a visa. This period extends 90 days for a period of up to 180 days on a rolling basis. In essence, 50% of that 180 days can be on a visa-free basis. That is a substantive agreement reached with the European Union. On the question of rights, whether of UK citizens within the EU or otherwise, as Members will be aware, two different systems operate, where in certain instances UK citizens have to declare their intent to reregister, while other instances are provided through the natural law applying to existing UK citizens. On both processes, both streams of work are very efficient and effective, and where we find a challenge there is a joint committee to try to resolve those issues.

Food Waste

Baroness Janke Excerpts

Wednesday 24th March 2021 Lords Chamber

[Lord Goldsmith of Richmond Park (Con) [V]]

The Government have a keen interest in the issue of biodegradable and compostable packaging. The sad truth is that much of the packaging that is advertised as such really is not. We are looking at that in great detail, with a view potentially to creating a standard to avoid any confusion. I hope that we will resolve those issues soon and will be able to establish a clear policy that is both understandable and effective.

[Baroness Janke (LD) [V]]

Does the Minister agree that supermarket promotions such as “three for two” and “buy one, get one free” promote overprovisioning and result in waste? What action is being taken to make supermarkets address the causes of food waste?

[Lord Goldsmith of Richmond Park (Con) [V]]

Much of the focus of the work that the Government are doing is on trying to get the food sector, at all levels, to reduce the amount of food waste generated. Clearly, that involves supermarkets packaging, advertising and presenting their products in a way that helps consumers to make the right choices, with a view to reducing their environmental footprint and food waste.