Support for the Bereaved

Lord Field of Birkenhead Excerpts

Thursday 2nd March 2017 Westminster Hall

[Frank Field (Birkenhead) (Lab)]

I beg to move,

That this House has considered the Ninth Report of the Work and Pensions Committee of Session 2015-16, Support for the bereaved, HC 551, and the Government response, HC 230.

It is a pleasure to debate under your chairmanship, Mr Stringer, not only because of past campaigns that we have joined in together, but because I know you can put aside partial affections and chair our debate properly, fully and impartially. The debate has been called to take note of the Work and Pensions Committee report on bereavement benefits; to give Members an opportunity, from their experiences in their constituencies, to bring the report up to date; and to invite the Minister to tell us, as I hope he will, how Government thinking has progressed. I know that this is not his brief so I, and I am sure all Members who participate in the debate, will be more than happy to have any detailed replies given to us in correspondence afterwards.

Debates such as this give me the opportunity to thank a number of people who are often not thanked. I only too willingly thank the Select Committee staff, on behalf of all the Committee members, for producing a whole series of reports that have tried to influence—and, indeed, are influencing—Government policy and beyond. I am naturally thankful that we have been able to call this debate, which gives us the opportunity to which I have referred. I stress that our Committee’s topics are all decided democratically by Committee members, so this one was not brought down from on high by the Clerks or—heaven forbid—just by me as Chairman.

Yesterday in this Chamber, we debated the nature of poverty in Merseyside. Today, we are debating how one aspect of that operates across the whole of our country. We are talking about how poverty can stab at the most vulnerable when they are at their most vulnerable. I have had examples in my constituency of families being unable to claim the ashes of a family member because they could not complete the payment of the funeral bill, and of bodies being frozen as families club together to try to get the sums that would satisfy the undertaker that a funeral could take place.

As I do, I asked Ed in my office what cases of this harrowing topic had been in this week. He reported on a constituent who lost her husband last September, having left work to care for him in the final year of his life. She had never claimed benefits until she left work, but a period of depression in her husband’s final few months led her to claim employment and support allowance. All her savings were used in those final months, and she has a mortgage to pay.

After my constituent’s husband died, she arranged for the most basic, low-cost funeral to take place. There was never any question of her thinking of having anything else or planning for anything else. She was not informed at any point about bereavement benefits or other sources of support, such as the social fund funeral payments. Even then, she could not afford the low-cost funeral, so her daughter stepped in to pay what she could, but £1,000 is still owed on the funeral bill. The social fund payments are about £700.

It is almost a year to the day since the Select Committee published our report on bereavement benefits, so this debate is opportune not just because of the constant ticking over of similar horror stories from constituents in all of our constituencies, but because, a year on, the Government have been given a real chance to take measure of the proposals we put to them. We were concerned about bereavement benefits and the reforms the Government are making to them, of which we are supportive, as well as social fund funeral payments, which have remained at £700 since they were last reset in 2003.

Before I put questions to the Minister, which is the basis of my contribution, the latest information we have on pauper funerals—although they have been renamed local authority funerals or public health funerals, everyone locally knows they are pauper funerals—shows that on average our local authorities pay £900 to cover them, yet the Department’s grant is of £700 social fund funeral payments, linked to those 2003 prices.

I welcome the Minister and thank him for stepping in at the last moment to respond to the debate for the Government. My questions to him are as follows. One of our recommendations was that the Government should negotiate a reasonable cost for a simple funeral with funeral directors, with the social fund funeral payment reflecting the cost of that total package. We do not think it an unreasonable request for the Government to spearhead those negotiations with the industry. Therefore, what progress have they made in negotiating to get funeral directors and the funeral industry to be much more open and transparent on a decent, average or simple funeral, or whatever euphemism we wish to use for the very minimum of funerals?

Secondly, we recommended that the Department introduce an eligibility checker for social fund funeral payments so that people would quickly know how to make a claim. The Department has said that that is not a road it wishes to go down, but my constituent—the live case I cited from this week that Ed in my office is dealing with—was given no advice about what might be available from either the social fund or, as importantly, bereavement benefits, which she could have claimed in addition to her ESA payments. Has any progress at all been made in giving legs to the idea of some simple tracker mechanism, so that people can quickly see what they are eligible for?

I stress again the important point—I know I do not have to do this for the Minister or for anyone else in the Chamber—that as soon as the phone is picked up to the funeral director, the clock starts ticking on what will be charged to the family. Often, it is quite a long way down the road before they realise the expenditure to which they are already committed and whether they would have faced that expenditure had they known what help—if any—was available.

A third recommendation was to take a leaf out of the Scottish Government’s book and see what could come from the Government conducting a cross- departmental review of burials, cremations and funerals. What information out there could we use to simplify this complicated world that families have to negotiate at a time when the vast majority of them are at their most vulnerable?

The Select Committee noted the lack of protection in the funeral market for bereaved customers, particularly for poor families in our constituencies. We heard evidence that funeral directors’ fees vary dramatically, and that many funeral directors are reluctant to display their funeral prices without it being shoehorned out of them. It is not good enough to have huge variations in the price of a basic funeral—of 200% or even 300% between providers in different areas and regions—and for there to be no way of getting that information to vulnerable families.

The Committee also made recommendations on bereavement benefits. We welcomed enormously the Government’s changes on that and thought they were absolutely the right moves. We made two recommendations in particular. The Government accepted one, which was that bereavement payments should not cease one year after the death of the person whose death triggered the eligibility, but should go on for at least 18 months. I very much welcome the Government’s decision to adopt that recommendation.

The Government said that they did not intend to make money from the reform, but that the package of reforms will save in the region of £100 million. Why is it then that they have not agreed to our second recommendation on bereavement benefits? Why have the Government not used some of those savings, which they said they never intended to make, to deliver an extension of bereavement benefits to people in similar situations to marriage, such as those in civil partnerships or who are cohabiting? That would make the benefit more broadly and, I would argue, more accurately reflect everyday life in our constituencies. People’s lives are not in old-fashioned, neat little boxes, but come differently. It is a pity that the Government have not used this once-in-a-generation reform of bereavement benefits to bring their eligibility on a par with how people live their lives today.

To conclude, I will again pile the questions on to the Minister. As I said at the beginning, given the circumstances under which he appears before us, we will be happy with written replies if the answers we want cannot be provided now. Do the Government have any plans to extend bereavement benefits to what the rest of us would call “families”, even though they do not fit the legal requirement of being married? What plans do the Government have to update the value of, and access to, social fund funeral payments? Are the Government satisfied that a pauper’s funeral—for people whose family cannot begin to bury them, who have been deserted or who have no one to bury them—now costs more than what the Government offer through social fund funeral payments? Is that acceptable, particularly when the reforms are making money?

After interviewing a range of funeral directors with the Select Committee, I do not underestimate for one moment the difficulty for the Government in trying to get agreement among funeral directors on what a simple or basic funeral could or should consist of, and what to charge for that around the country. I know that is an immensely difficult task. The Committee has powers of compulsion to bring people together. I know that the Government do not have to use such powers, but I do not underrate the difficulty of getting the industry to meet and to be transparent about their costs and about how, sadly, a number of them rip off our most vulnerable constituents when they are least likely to have the mental energy to fight back.

My final point to the Government is that our report made a strong plea for families to be able to know very quickly whether they are eligible for the social fund funeral payment and, equally importantly, what that payment will and will not cover. In those circumstances, every family wants the very best for the loved ones they are burying or cremating, but one cautionary note ought to be made: while families will strive for the best and will club together and do all sorts of things, they ought to be clear very early on what the social fund funeral payment pays for and what it does not.

I am grateful for the opportunity to present our bereavement report; it has given me the opportunity to update the Select Committee’s thinking and present it to the House. I also welcome other hon. Members, who clearly have a passion for what is happening in their constituency, and I welcome the Minister, who will reply and say where the Government’s thinking has got to.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I am delighted to take part in the debate. I would normally have been in the Chamber for the debate on International Women’s Day, but I am here to speak about widowed parent’s allowance on behalf of two of my constituents in particular. They are here today, and their voices need to be heard in debates such as this.

Theirs are the voices of women who never wanted to be in the position they are in and who never expected to claim widowed parent’s allowance—one is not, which I will come to. Tragedy struck their families in the most cruel and horrific way, and their partners were taken from them. The strength and courage they have shown in campaigning on the issue has inspired me as their MP, so I am proud to be here to talk about their experiences and why they should be heard, instead of taking part in the debate on International Women’s Day. There are so many challenges when it comes to inequality and we must fight them all. What is happening with widowed parent’s allowance feels to me like one of the most basic examples of that and of the unintended consequences of the Minister’s and the Government’s thinking. In reading into the record some of my constituents’ experiences, I hope the Minister will think again about some of the choices the Government have made and the devastating consequences they are likely to have.

I will talk first about Ros. Her husband sadly died in 2014. He had been ill for some time before that, so Ros had given up work to support her children as their father deteriorated. That is an horrific experience for anyone to deal with at a young age. To then have to deal with the financial consequences only compounded her family’s grief. Ros suddenly became a single parent to two children and found that widowed parent’s allowance was, as she described it to me, a lifeline. The work that she did, in the theatre, was not easy to combine with being a full-time carer for her young children, and she was struggling with the grief of losing her husband.

Ros has done the calculations for what the Government’s proposed changes in the scheme would have meant for her and her family. The Minister claims that this is not about making money, but is a fair change in the system. When I look at the figures and how Ros is affected, I do not think that that is the case. I think this is clearly a cut in the budget designed to save the Government money, but it is a short-term saving with a long-term loss.

Ros and her family would, under the new scheme, have lost out on more than £100,000 over the lifetime of her children. That money allows her to look after her children, keep her family and household going, be a mother to two children who are grieving for their father and start to put her family’s life back together again. When she looks at what the new scheme would mean, she points out that the new lump sum would probably have been taken up by the funeral costs straight away. That is not a more welcome situation.

The pressure of not having a consistent income and worrying about what would happen after 18 months would have consumed her. As she says, after six months she was still drowning in paperwork relating to the death of her husband and trying to cope with the impact on her children. Grieving does not stop at 18 months, so why should the support that we offer to families affected by this sort of tragedy?

As Ros points out, these payments are a recognition of the contribution her husband made to the system when he was alive, through his national insurance payments. Indeed, as she points out, that creates quirks; a friend who has four children gets £50 less a week than Ros because her husband was 10 years younger. If we accept the principle that these payments are based on what the partner has paid into the system, surely what matters is whether those payments have been made and whether the partner was part of that relationship.

My right hon. Friend the Member for Birkenhead (Frank Field) supports terminating the support at 18 months. I disagree with him. I do not understand why 18 months is an appropriate cut-off date.

[Frank Field]

Will my hon. Friend give way?

[Stella Creasy]

I am happy to. I was about to say that I do agree with my right hon. Friend on some other things.

[Frank Field]

The Government’s original proposal was to stop the support after a year, and I thought 18 months was better than a year.

[Stella Creasy]

I understand that. I hope to make the case that we should support families who are in grief. We should not ask them to take on poverty and possible debt on top of dealing with grief, and we should not put a time limit on grief in these sorts of cases. We are not talking about hundreds of thousands of families, but we are talking about families facing one of the most horrific, soul-destroying experiences one can have. I agree with my right hon. Friend about the need to update the way in which our welfare system works.

The second case I want to talk about is, I hope, familiar, because I have written to the Minister before about this lady. Joanna has two beautiful young girls. I am lucky enough to see their pictures on Facebook and feel as if I am watching them grow up vicariously. One of her daughters was born, sadly, after her partner suddenly died. Joanna had to fight to get her partner’s name, David, on to the baby’s birth certificate because they were not married. They were clearly in a loving relationship. They had been together for a long period and had chosen not to be married. That should surely be their choice. The state should not use that to penalise Joanna and her family yet, as far as I can see, over the past couple of years we have penalised Joanna in many different ways. She had to pay £1,500 for a DNA test to prove that this gentleman was the father of her daughter and to have his name on the birth certificate. She does not receive a penny in widowed parent’s allowance, despite her partner paying into the system, just as Ros’s partner did. They are no less a family because they do not have a piece of paper.

In 2017, surely we should recognise those children’s need for the support that widowed parent’s allowance would provide to their family. That money would help not only to keep a roof above their head but to remove the pressure of debt, so that Joanna could be a mum to her two lovely daughters and start to put their lives back together following the sudden death of their father. It is those sorts of real issues and real people that our welfare system has to be able to work with. The cuts that the Government are making, particularly when it comes to widowed parent’s allowance, make no sense to me at all because they do not see the people behind these cases.

I have been lucky enough, through the organisation Widowed & Young, to see other examples that are similar to the stories of my two constituents, Ros and Joanna. Their cases are no less compelling. Will the Minister reconsider this 18-month bar and look again at the actual people behind the statistics by meeting them and hearing their stories, to understand the reality of being widowed at a young age and what impact that has on a family? Will the Minister ask again how we can do what we all want the welfare system to do—to support people and be a lifeline at a critical time, to help get these families back on their feet?

The changes that the Government are making, I fear, will not simply not help; they could actually make things worse for these families. They could bring debt, because the fear of what will happen will force people who are still grieving after a mere 18 months to make decisions that may be against the best interests of their family because they are short of cash.

As Ros said, this money has been a lifeline for her. She is one of the lucky ones because she qualified under the old scheme, but none of these people are lucky, because after all, they have lost a loved one. That is what we are trying to get at here. Ros, Joanna and all the women and men involved in this campaign deserve better from us. I hope that the Minister will at least commit today to meet them, to understand better the situation they will be in when these changes are introduced.

--- Later in debate ---

[Graham Stringer (in the Chair)]

Order.

[Frank Field]

Sorry about that.

[Stella Creasy]

He is showing how the telephone system works.

--- Later in debate ---

[Richard Harrington]

I hope it will satisfy the hon. Lady to know that I will. I apologise if I have been going into too much detail about other things, but it is important for hon. Members, and others throughout the country and here today, to understand generally what the Government are doing about these issues, in response to the Select Committee’s report. Please be patient with me; I will do my best to answer her questions. If not, I know that she will question me afterwards, but I hope that that will not be necessary.

The right hon. Member for Birkenhead raised the issue of increasing awareness of the scheme. Information on the eligibility criteria is clearly presented and detailed on the gov.uk website and in the information accompanying a funeral payment application form. The current eligibility criteria ensure that the scheme is administered quickly without additional complex means testing and used solely for funeral expenses payment purposes.

We have received positive feedback from industry representatives on how helpful the bereavement service telephone line is in guiding callers through the application process and their eligibility, and on changes that we are introducing to the application form. We are discussing with third parties such as registrars and funeral directors how we can improve the way in which the Government engage with the bereaved to ensure that information is in the right place and in the right form.

The right hon. Gentleman asked what we were doing to negotiate a reasonable cost for a simple funeral with the funeral industry, as his Committee recommended in its report. We have been engaging with the industry and different lobbies, as I have explained, on how they can make costs more transparent, but we do not believe that the Government should mandate or promote a specific form of funeral provision for benefit claimants. We have encouraged the industry to be more open and transparent about its pricing structure so that individuals can make informed decisions and shop around.

We have engaged with stakeholders to build strong links so that we have the relevant expertise at hand for the first phase of the review, which will visit what parts of the social fund regulations can be amended to help address and tackle funeral poverty issues. We also continue to improve, review and monitor the application process. All that work is being done with the funeral industry and groups that advise bereaved people. In November last year, as I explained, we launched the shorter application form, and we are open to ideas about how we can review the system, in particular the application form for the social fund funeral expenses payment. It has been simplified as much as possible.

On support for child funerals and bereaved parents, I pay tribute to the efforts of the hon. Member for Swansea East (Carolyn Harris), who is not here; I suspect, knowing her, that she is at the debate in the main Chamber. I speak to her regularly, and she put on record her views on the subject in an Adjournment debate, as I recall, on children’s funerals.

[Frank Field]

Just to put it on the record, she very much wanted to speak, but is in the other debate.

--- Later in debate ---

[Frank Field]

I am grateful to have had this debate and thank those who have participated. I am also grateful to those who have not participated, but who are a very real part of the debate.

I leave the Minister with one thought. Despite his abilities and his charms, the Government are struggling with this brief. It is simply not good enough for him to say that the promise that the reform would be cost-neutral was made by a previous Government—it was made by a Conservative-dominated coalition Government.

When he reports back to his colleague at a departmental meeting, I plead with him to say that this brief is in some ways easier than others that the Government have. We all assumed that the Government were committed to introducing this reform at nil cost. We have heard about how it does not meet needs. I ask the Minister to say that the Government do not wish to present this harsh face to the public; that they have up to £100 million to spend in this area; and that they did not wish to make these changes to save money, but to bring the benefit up to date. I ask that he and his colleagues at some date soon report how that £100 million will be spent, so that the needs of the two heroines that my hon. Friend the Member for Walthamstow (Stella Creasy) raised can be met. We are not asking the Minister to conjure up new money or to take money away from somewhere else. We are just saying that we agree. By all means, let us modernise this benefit, but let us do it in a way that spends the full budget and in a way that meets need most.

Question put and agreed to.

Resolved,

That this House has considered the Ninth Report of the Work and Pensions Committee of Session 2015-16, Support for the bereaved, HC 551, and the Government response, HC 230.

Liverpool City Region (Poverty)

Lord Field of Birkenhead Excerpts

Wednesday 1st March 2017 Westminster Hall

[Frank Field (Birkenhead) (Lab)]

I hope to finish long before then, Mr Howarth. It is a pleasure to serve under your chairmanship—a sign of Merseyside’s ingenuity at keeping topics within the family. I am also immensely grateful that my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) managed to secure the debate.

I want to report two facts from the frontline of people in my constituency fighting against hunger, then I will address four brief questions to the Minister about actions that the Government could begin today to abate that hunger. If I had reported the things that I am about to say when I first joined the House in 1979, most people would have thought I was heralding the post-truth era of politics, but they are ordinary, plain, shocking facts.

Feeding Birkenhead is a wonderful coalition of organisations that feed children in the school holidays, as well as feeding many families. It gave me some information for the debate, including the example of a little girl who arrived at one of the school feeding projects, which was full up. The projects insist that just because children are poor it does not mean they should not have fun in their holidays, and be fed as well; the little girl said, “Could I come in if I miss the fun? But I want the food, because I am so hungry.”

The other example was, rather appropriately, from around Christmas. A mother was lowering her child into one of the waste bins of one of our great supermarkets, to scavenge for food and then be brought out. That mother is suffering from cancer. Feeding Birkenhead now feeds her, but the awful indictment is not only that a child was put in danger, risking all sorts of injury from pulling things around in the bottom of a waste bin; it is the fact that the mother now reports that the food she gets, which would otherwise have gone to waste, is providing her with the best diet she has ever had.

My four questions for the Minister are about ways in which we in Merseyside could immediately be helped to fight back against the extent of hunger, particularly among schoolchildren. First, given that the Digital Economy Bill is going through the House, will the Minister require the three Merseyside boroughs that do not use housing benefit data automatically to register children as eligible for free school meals, and therefore the pupil premium, to do so? That approach was pioneered by Liverpool and taken up by Wirral and Knowsley. In my constituency it resulted in £725,000 a year extra coming into Wirral both to feed the children who had not been getting free school dinners and in pupil premium.

Secondly, in what ways will the Government consider helping all six boroughs to run school holiday meal and fun programmes similar to those in your constituency, Mr Howarth, and in Birkenhead? Thirdly, will the Minister choose Merseyside to be one of the first pilot areas for the revolutionary new set of indicators measuring children’s school-readiness, devised by Wirral teachers and the University of Cambridge? We would like that to be part of the roll-out of the Government’s programme on increasing life chances. We would measure whether life chances were equalised before children came to school, during those crucial first years.

Lastly, will the Minister give us the small resources that we need so that all our six boroughs can follow the example of Greenwich, which has managed to set up job creation schemes—not training schemes—so that all families hit by the benefit cap can gain work and therefore get the cap lifted? That makes a huge difference to their income, their wellbeing and the incidence of children being hungry. Those would be four real advances for Merseyside.

I wanted to try to sit down by 3.30 pm, and I will do so now.

--- Later in debate ---

[Damian Hinds]

There are, of course, public consultations being run for both Edge Hill and Wavertree. As I was saying, even with the effect of these changes, there will still be a significant concentration of jobcentres in Liverpool compared with other major cities.

[Frank Field]

As the Minister is turning his notes over, might he give way?

[Damian Hinds]

I am short of time, but of course.

[Frank Field]

Given that I sprung my questions on the Minister, might he write to us so that he does not have to turn so many pages over?

[Damian Hinds]

I will be delighted to write to the right hon. Gentleman.

Looking at our benefit reforms alone fails to appreciate the wider work on support for those on low incomes. I mentioned the increases that we have recently seen in pay. I do not have time to list all the other advances, but they include the national living wage, the changes in the personal tax allowance and the triple lock on pensions—the hon. Member for Liverpool, Walton brought up the link with pensions, but it was in 2010 that the triple lock came in. We have frozen fuel duty, helped to keep mortgage rates low and are cutting stamp duty—all of those are things to help people with their incomes.

Like many other areas, as the hon. Gentleman knows, Liverpool is benefiting from radical devolution. The city region devolution deal involves £900 million going to the city region, and that is just part of the picture. The regional growth deals involve £333 million from the local growth fund from 2015-21, bringing forward at least £249 million of additional investment from local partners and the private sector. We do think that devolution has an important role to play in helping to promote and push forward economic prosperity.

Since 2010, we have seen income inequality and the proportion of people on relative low-incomes falling to nearly their lowest levels since the 1980s. Official statistics show that, in Liverpool, the rate of relative low-income has fallen since 2010, and there has been a similar reduction nationally.

I want to turn quickly to some of the points raised in the debate. The rate of sanctions in Liverpool is down by 50% in the year to 2016. We are looking at the results from the Scottish pilot that the hon. Member for Wirral West (Margaret Greenwood) referred to. We have taken on the recommendations of the Oakley review and, indeed, a number of recommendations from the Work and Pensions Committee. Debt was mentioned a number of times. I am proud of this Government’s commitment to the credit union sector, the action that has been taken on payday loans, the introduction of the help to save programme and that budgeting support is at the heart of universal credit.

The hon. Gentleman asked, “Why not more devolution?” He talked about schools. I would argue that free schools and the academies programme are the ultimate in devolution, giving power and accountability right down to individual schools. In terms of all these matters, we are always open to further proposals. The Government will of course be keen to work with whoever is elected as Mayor of Liverpool on employability and other things. The hon. Gentleman asked specifically about work in community locations. Edge Hill jobcentre—somewhere I visited recently—does exactly that, for example in its programme with refugees. Mr Howarth, I am out of time and I know that the hon. Gentleman would like to speak.

Intergenerational Fairness

Lord Field of Birkenhead Excerpts

1st reading: House of Commons
Tuesday 28th February 2017 Commons Chamber

[Frank Field (Birkenhead) (Lab)]

In some ways, it could not be better that this debate is following the previous one, because, as was rather graciously referred to by the leader of the previous debate, the Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Hartlepool (Mr Wright), we have had an announcement today from Sir Philip Green about part of a settlement to bring justice to BHS workers and pensioners. The inquiry on BHS showed how two Select Committees working together can be more powerful than the sum parts of each Committee. I continue to emphasise, as my hon. Friend did, that the announcement represents the first piece of the puzzle on pensions being put in place. We have not had a chance to read the small print, but one hopes it is good as the headline.

A number of reports are still outstanding, including from the Inland Revenue, which has arrested Dominic Chappell—the person who, wisely or foolishly, bought BHS for £1. There are outstanding reports from the liquidators, the Serious Fraud Office and the Insolvency Service. The Prime Minister has made it plain that she will make no move on making a recommendation to the Honours Forfeiture Committee that it should begin work on considering whether Sir Philip should keep his knighthood until she has access to all those reports. That is immensely sensible, as one would expect from somebody who is as careful as she is before taking such decisions. All I would add is that although we know that seeing justice as a result of the reports from the Revenue, the Serious Fraud Office, the liquidators and the Insolvency Service is much more important in the longer run than any knighthood, some in the country will look for sacramental changes that show that the Government have really taken on board how horrendous the BHS chaos was.

I am obviously not going to talk any more about that subject, Madam Deputy Speaker, because you have been kind in letting me make a follow-up statement on this of all days, when we are following a debate on a Business, Energy and Industrial Strategy Committee report with one on a Work and Pensions Committee report. Those Committees joined forces to look carefully at the beginnings of a longer-term solution for the pensioners and workers, and what these things mean for public companies, as well as a whole host of other issues. The two Committees began that work together, and I am pleased that our two debates have, with providential luck, somehow been joined together.

We are using the privilege of occupying the Chamber of the House of Commons to debate the Work and Pensions Committee report on intergenerational fairness. I am pleased that a number of members of the Committee and others are here to make a contribution. If I keep disappearing, Madam Deputy Speaker, to make some comments on Sir Philip Green, I hope I will be allowed some leniency; normally I would stay in the Chamber for the whole three hours.

By way of introduction, I would stress two points. First, intergenerational fairness is a huge, huge topic. The problem for any Select Committee—or for Select Committees that have joined together—is where to begin in order to make sense of a topic. The Committee has looked at, and made recommendations to the House on, the triple lock, and that will be the main subject of my speech. I agree that we could have started with other topics and looked at other aspects of intergenerational fairness, but the triple lock was where we began our inquiry. As my speech unfolds, I hope that Members will see that while there were immediate pressures that pushed us to look at that area rather than other aspects of intergenerational fairness, those other aspects need to be considered.

[Peter Kyle (Hove) (Lab)]

Does not my right hon. Friend agree that the fundamental core of this issue is that there are people in our society who will succeed because they have assets? However, someone who is talent-rich but asset-poor is unlikely to succeed in life, in terms of getting into the school they need to go to, educational attainment, and health and economic outcomes. The core challenge for our generation is to make sure that everybody has access to the best our economy can deliver, whether they are born into a family with assets or otherwise.

[Frank Field]

I could not agree more, but I hope that my hon. Friend will forgive me if I do not follow that up, because one of our colleagues wants to talk about how aspects of education affect intergenerational fairness.

The Committee decided democratically that it would look at the triple lock. However, I was also struck by the difference between my life chances and those of people who are the age that I was when I set out to earn a living after university. When I graduated, I was one of 3%. People might say, “Well, we can see which cohort you belonged to,” and it was a very privileged cohort. I went to university, but I did not pay fees—we expected county scholarships to see us through university, and we did not come away with debt. When we graduated, we interviewed big firms to see whether we wished to work for them, and now graduates are scrambling for jobs, so it is a very different world. I expected to get a job, I expected at least to own a house—if not more than one house—I expected to have savings and I expected to have a pension. One need only look at how privileged my life has been compared with that of people in their 20s who are graduating today to realise, as my hon. Friend the Member for Hove (Peter Kyle) said, that the wheel of fortune has turned. Whatever one wants to say about the golden oldies, we are in a very privileged position, and that has been reinforced by the Government. I shall return to that in a moment.

The Committee wanted to test whether the triple lock was viable for the next Parliament and beyond. If it was not, we wondered whether we could marshal a report on which all of us agreed, and behind which political parties could slowly move before deciding what policy they would stand on in the election, perhaps in 2020. We now see our role as a Select Committee as taking on controversial topics and letting the Government and Opposition judge for themselves what nuclear warfare should be employed against us. Then, if we are still standing to tell the tale, perhaps the Government can be a little more brave than they would otherwise have been.

I am not saying—the whole Committee was united on this—that there are not a number of very poor pensioners in all our constituencies, but the position of pensioner poverty has been transformed over the past 10 to 15 years through Gordon Brown’s pension credits and the coalition Government’s triple lock. If we were having this debate 10 years ago and talking about not making moves to benefit the vast majority of pensioners, we would be laughed out of court, but now the debate has significantly changed. Despite that, I do not want anybody to think that we do not have to rack our brains to think how we can sensitively, but equally effectively, ensure that we continue to deal with poor pensioners. One does not have to be a very bright Member of Parliament to know that we all have some very poor pensioners in our constituencies. However, we also now have a growing number of rich pensioners, thank God.

It was against that background that we considered the whole business of the triple lock. There are four ways in which the Government could deal with this issue. First, they could just ignore it and allow the public finances to let rip, depending on the international money markets to shovel us loans at very low rates of interest forever so that we can continue, right into the sunset, to live beyond our means. I do not think for a minute that the historically low interest rates that we have at the moment will last for very long, let alone that we would have a Government who would commit the next Parliament to the triple lock. I cannot see that our public finances will be secure unless the Government take a deep breath and think very carefully about our report.

I also make a plea to Labour Front Benchers. People are now saying that it is impossible to envisage another Labour Government in anybody’s lifetime, but funny things have happened this year—funnier things than the election of a Labour Government. I therefore would not bank on Labour being unelectable and our party therefore not having to consider how fiscally responsible we have to be as we approach an election.

The second approach to the triple lock would be to say, “We’re going to increase taxation.” If we were to go down that route, we would need to raise the same amount of money that we would otherwise have to borrow, so we would be talking about raising an additional £40 billion in today’s money. That is half the sum that we raise from income tax, so it would mean saying to the country, “We expect to be continuously elected on the basis of putting up your income tax by 50%.” I do not think we would be able to hold that position for very long. If we look at the marginal tax rates paid not by the rich, but by the working poor who draw benefit and then lose it as they work harder, we will see that the idea of putting 10p on the standard rate of tax seems so absurd that there is hardly any point in suggesting it, but that is the second way in which we could square the circle of keeping the triple lock.

The third approach is to continue the policy of not just this Government but previous Governments of favouring pensioners and reducing the living standards of the working population. I do not believe that that is tenable now, but it is what will happen until the end of this Parliament. It is certainly not tenable beyond that point, however, because we are taking resources from the working population and giving them to many pensioners who are well off. People sometimes hear what they want to hear rather than what is being said, so I want to emphasise again that I am not denying that there are not too many poor pensioners. However, the standard of living of the vast majority of pensioners is of a kind that the pensioner population has never experienced before. Thank God for that, but cuts in the living standards of the working poor are already starting to result in people of working age being reduced to destitution.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

It is heart-breaking that 73% of working parents already go without a meal during the school holidays in order to feed their children. Is not that an indictment of exactly where we are going wrong as a country and society?

[Frank Field]

It is, and my hon. Friend’s intervention could not be better timed. Members who followed closely the Archbishop of Canterbury’s Christmas message will know of an example from Feeding Birkenhead. A family would lower their child into a supermarket waste bin to scavenge for food before rescuing them and seeing what food they had. The mother is suffering from cancer. She is now fed by Feeding Birkenhead with food that would otherwise go to the tip, but she says that she has never been better fed. Is this House prepared to continue policies that put so much pressure on working-age families that that example will no longer be exceptional? More and more of us will be troubled by examples of our constituents nobly not feeding themselves, as my hon. Friend says, and it will happen more regularly. Destitution is an issue.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I agree with the argument that the right hon. Gentleman is developing, but what he is suggesting would be politically unpalatable. Given that the majority of healthcare costs that we generate in our lifetimes come at the extremes of life, does he agree that one way of selling this to the population, and especially those pensioners who are principally in the frame, would be to say that the £2.2 billion per annum that the 2.5% element of the triple lock will probably generate by the end of this decade might be hypothecated into the national health service? In that way, we might gain some level of acceptance from pensioners.

[Frank Field]

Again, I could not agree more. I did not want to fan out the debate—I wanted to keep it as tight as possible so that we might get some agreement—but these are proper options that have to be considered. There is no way, sadly, that we as pensioners can get all the goodies and expect other people to pay for them. The issue of how we integrate care into the NHS will grow in importance as each month of this Parliament passes.

The fourth and last way in which we could keep the triple lock would be to raise the retirement age continually. Again, I make a plea to Front-Bench and Back-Bench colleagues, because such a policy would adversely affect our constituents almost more than any other. The Select Committee has published the names of the constituencies where the average life expectancy for males is such that they simply will not reach retirement age if we say that we will square the books by increasing the retirement age from 68, which is the figure that it is expected to rise to, to 70 or 71.

There is a commonality between the constituents of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who leads for the Opposition on these matters, and my constituents. We do not say that no male in our constituencies will on average receive a pension if we raise the retirement age to 70 or 71, thank God, but we know that swathes of our poorer, older and frailer constituents will not actually reach the retirement line—the point at which they pick up the state retirement pension—at the age of 70 or 71, because they will simply have died.

[Mr Stewart Jackson (Peterborough) (Con)]

As usual, the right hon. Gentleman is making an excellent and well considered speech. Notwithstanding what he says, given that average life expectancy has increased from 71 in 1960 to 81.5 now, and that 9.9 million people over 50 are working, people surely want to work longer—I know that the situation is different for those who work in heavy industry, which has killed a lot of people shortly after their retirement—and to be able to exercise their choice to do so.

[Frank Field]

I would not for a moment—look at me—say that people over the state retirement age should not be allowed to work; far from it. However, there is a difference when people have had jobs such as those in factories—I have not had such a job—and are simply worn out by the cost of such jobs, meaning that they will not make it to the finishing line if we keep extending that line. I am therefore making a plea that we do not go down the route of keeping the triple lock by just continuing to raise the retirement age, saying, “With fewer of you drawing the state retirement pension, we will balance the books.”

That approach was one of the alternatives, and I will go through the others again. One was just to continue putting all the cost on people of working age, and I have made a plea about why we should not do so. Another is to think we can just tax and tax again, but I simply do not think that Governments can get elected on that basis. They cannot put up income tax by 50% over a number of Parliaments and expect to be elected—and thanked in the process. Finally, I do not think that any party that wishes to be elected can let borrowing rip to the extent that would be needed to balance the books while keeping the triple lock.

I therefore make a plea to both the Government and the Opposition that they look carefully at the Select Committee’s proposal for a double lock-plus. Pension credit and the coalition Government’s triple lock have already—this will continue—raised the value of the state retirement pension compared with average earnings to a historical high. The Select Committee report says that by 2020, we should peg the state pension against earnings at the level at that time. The double lock-plus would ensure that the state pension would never from that day forward fall relative to average earnings. As there will be—perhaps in the very short term—periods during which price inflation exceeds earnings, we should honour the prices link at those times, albeit coming back to the earnings link as soon as possible. In that way, we would not actually have to face many of the terrible scenarios I have painted.

As my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) said, the cost of the existing policy has been borne by people of working age. We should not pursue a policy of continuing to take money from that group, especially those who already find it difficult to put food on the table for their children for every meal in the way that our parents fed us when we were growing up.

This is not about begging both sides. If people came here with a script saying that they were going to reject the Select Committee’s report, I ask them not to read that passage, but perhaps instead to enter into discussions more widely with the House of Commons about how we can guarantee standards of living against pensioners’ earnings in 2020. We must ensure that they are never eroded, but we must also ensure that this policy of making increases at the expense of the working population ceases. We should all put such a programme to the electorate when the general election comes.

--- Later in debate ---

[Mr Speaker]

As far as I can see, there are four more would-be Back-Bench contributors. I should have thought that we will need to start the Front-Bench wind-ups no later than 6.30 pm. The right hon. Member for Birkenhead (Frank Field) might want to make a two-minute wind-up.

[Frank Field]

indicated dissent.

[Mr Speaker]

No—well, the wind-ups should certainly start no later than 6.30 pm.

Oral Answers to Questions

Lord Field of Birkenhead Excerpts

Monday 20th February 2017 Commons Chamber

[Damian Green]

I can only refer the hon. Gentleman to the answer I gave the hon. Member for Linlithgow and East Falkirk (Martyn Day), because it is for the Scottish Government to take these decisions. They have the power to give benefits, increase benefits and make supplementary payments beyond the benefits available throughout the UK. It is noteworthy that they fail to exercise those powers and Scottish National party Members come to this House to complain about benefits in Scotland, despite having the power to do something about it themselves.

[Frank Field (Birkenhead) (Lab)]

I support the Government’s strategy in this area, but does the Secretary of State accept that those who support it have concerns about what might be happening, certainly in the short run, to families so affected? What research is he carrying out to make sure that those who can move into work do so and that those who cannot do so are looked at sympathetically?

[Damian Green]

The right hon. Gentleman makes a characteristically reasonable point, to which I make two responses. The first is that those who are put into hardship have available to them discretionary housing payments, which have been extensively used by local authorities throughout the country precisely to avoid the problem that he suggests. Secondly, on the other point he makes, some of the research we have done shows that households that have been capped are 41% more likely to go into work than similar, uncapped households. So the policy is very successful in encouraging people to get back to work, which of course is the best thing for them in the long run.

Pension Schemes Bill [Lords]

Lord Field of Birkenhead Excerpts

2nd reading: House of Commons
Monday 30th January 2017 Commons Chamber

[The Secretary of State for Work and Pensions (Damian Green)]

I beg to move, That the Bill be now read a Second time.

Let me start by placing the Bill in the context of the Government’s overall record on pensions. This Government have delivered radical and much-needed changes to our pensions system to make savings easier, fairer and safer for all. Since 2010 the pensions landscape has seen a revolution not only in state support, but in the ways in which people can save and access their pension savings.

We have removed the default retirement age, helping people to live fuller working lives. That is good for people’s wellbeing and their retirement income, and it benefits individuals, employers and the economy. We have made it easier for them to understand their state pension, and by setting the full amount at £155.65 a week we will lift more pensioners out of means-testing in the future. Together with the reviews of the state pension age, those changes are creating a sustainable system as a foundation for people’s private retirement saving.

We have increased private long-term savings by introducing automatic enrolment. More than 7 million people have already been automatically enrolled into a workplace pension, and more than 370,000 employers have declared that they have met their automatic enrolment duties. This is the cornerstone of our private pension reforms and it reverses the decade-long decline in pension savings prior to its introduction. It is a programme that works and it helps people achieve a more financially secure later life.

I am grateful to the many independent observers who have commented on the success of the policy. The Work and Pensions Committee has recognised that automatic enrolment has been a “tremendous success”. The National Audit Office, reporting on automatic enrolment in November 2016, found that the

“programme is also on track to deliver value for money in improving retirement incomes in the longer term”.

Findings of a report by the Institute for Fiscal Studies, which was also published in November 2016, suggest that automatic enrolment is having a huge relative impact on those with the lowest participation rates in workplace pensions before its introduction, in particular those aged between 22 and 29—a group that has seen a 52.1 percentage point increase in pensions saving—and those in the lowest incomes quartile, who have seen a 53.9 percentage points increase. Moreover, the institute found that automatic enrolment is having an effect well beyond our target eligible group, in particular those earning under the £10,000 threshold, and that some employers are paying above minimum contribution rates.

Women are benefiting, too. In 2011, only 39% of eligible women employed in the private sector were in a workplace pension; by 2015, the figure had increased to 70%. By 2018, we estimate that 10 million workers will be newly saving or saving more into a workplace pension as a result of this change, generating about £17 billion in additional pension saving each year by 2019-20.

The Government’s introduction of pension freedoms in April 2015 allows those aged 55 and over to access their pension savings with more flexibility. People with defined contribution pension schemes can now choose to use those funds in the way that is most suited to their circumstances, whether by drawing down the income, taking out an annuity, taking a lump sum or using some combination of those options. Since the introduction of pension freedoms, more than 1.5 million payments have been made, with £9.2 billion withdrawn flexibly in the first 21 months.

That is the landscape; let me turn to the Bill. Our focus now is to make sure that the regulatory landscape continues to be effective in protecting members so that everyone can have confidence in their pension scheme. Automatic enrolment requires employers, small and large, to provide pensions for their workers, in many cases for the first time. Automatic enrolment is helping to ensure that tomorrow’s pensioners have greater security and an asset base in later life. Many employers have selected master trust pension schemes because they can offer scale, good governance and value for members.

[Frank Field (Birkenhead) (Lab)]

I am grateful to the Secretary of State for giving way and for his earlier comments. Although we may have differences on the adequacy of the Department’s responses to some of the Select Committee’s reports, its response to our report on this issue is immensely encouraging. I think that some Members of the Committee will want to endorse the Secretary of State’s proposals, which implement some of our recommendations to defend the hard-earned savings that many people are making, sometimes for the first time, by auto-enrolment. We do not want the cowboys to get hold of those funds.

[Damian Green]

I am extremely grateful to the right hon. Gentleman for his words. Throughout his intervention, I was expecting “but” to appear at any moment, and it did not. We can be as one on the matter, and I will seek to improve our responses to future reports of the Committee that he chairs.

--- Later in debate ---

[Debbie Abrahams]

I am grateful to you for reminding me, Madam Deputy Speaker. It was a debating point in the House of Lords. As I said, it is not likely that there will be another pensions Bill in this Parliament, so I hope you will give me some latitude.

[Frank Field]

There was a hope among some of us on either side of the House that the Bill might be blocked tonight, temporarily, until we got justice for the WASPI women. Unfortunately, as I understand it, Labour was not willing to do that and the Scottish National party in particular was not willing to do that, as they are pleased with the Bill and want it to go through. May I make a plea to my hon. Friend that, should the next pensions Bill come, as it assuredly will, and before all the WASPI women are taken up to the new state retirement age, Labour thinks tactically about trying to get them justice, rather than merely talking about it, as I have to?

[Debbie Abrahams]

I am grateful to my right hon. Friend for his remarks. We recognise the importance of the Bill in tightening the regulation—or lack of it—on master trusts and the vulnerability that that lack places on the millions of people who are being auto-enrolled. It is therefore important that the Bill goes through. My point is that if it is the only pensions Bill in this Parliament, it has serious omissions. Those omissions should be on the record, as should our objection to the fact them. If I could just have a few moments to mention—

--- Later in debate ---

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

It is a pleasure to follow the hon. Member for Amber Valley (Nigel Mills), who has made some good points about the importance of advice and about the decumulation phase. I hope that we will have an opportunity to come back to those matters at a later stage.

I welcome the Government’s initiative in bringing forward the Bill. A desire to create trust in pensions savings should unite us across the House. We want all workers to be able to attain a standard of living that will be consistent in allowing them to save while in work in order to have dignity in retirement, secure in the knowledge that a regular income from a state pension and a workplace pension will allow them to enjoy their retirement without financial worry and without living in pensioner poverty. In our view, pensions savings are the best way for most workers to achieve that dignity in retirement. We need to deliver the appropriate level of protection for savers, and the Bill is an important step forward in that regard, albeit one that could be enhanced through constructive amendments in Committee.

Given the growth in master trusts and the desire to ensure that we protect savers’ interests, the Bill is overdue in some regards. Auto-enrolment has led to a significant increase in the use of master trusts. The impact assessment published this month informs us that some 200,000 savers were in master trusts in 2010, increasing to 4 million by 2015. According to estimates from the Pensions Regulator, that may now have risen to 4.3 million savers with around £8.1 billion of assets in master trusts. When we take into account the Government estimate that 10 million workers will be in auto-enrolment schemes by 2018 and that they will be saving as much as £17 billion by 2019-20, with the vast bulk of them in master trusts, the need for robust, effective protection is clear.

The master trust market has grown rapidly, with as many as 84 such trusts in operation today. While there are a small number of larger trusts, it is clearly a fragmented market, with risk of failure in certain cases. Indeed, the Work and Pensions Committee called for stronger regulation in March 2016 when it concluded that:

“Gaps in pension law and regulation have allowed potentially unstable trusts onto the market. Should one of these trusts collapse, there is a real danger that ordinary scheme members could lose retirement savings. There is a risk that faith in auto-enrolment as a whole will be undermined.”

That is a stark warning and underscores the requirement to take this Bill forward. We need to regulate to remove the prospect of inadequately resourced schemes collapsing and to offer protection against scammers entering the marketplace. The warning signs are already there. Two small schemes have already collapsed, affecting 7,500 members. It is currently extremely easy for anyone to set up a master trust and accept savers’ funds, and there is no established mechanism for responding to the collapse of a master trust.

The rules of many schemes currently allow the use of members’ funds to wind up a scheme should it collapse. That is simply not acceptable. As a consequence of the Bill, there will be a requirement for master trusts to be approved, requiring minimum standards of trustees and obliging schemes to prove access to capital that can be used in case of wind-up. There has been widespread support for the need for such a Bill. The Pensions Regulator welcomed the announcement of new powers to regulate master trusts and said:

“We have been calling for a significantly higher bar regarding authorisation and supervision, and we are pleased that today’s announcement proposes to give us the power to implement these safeguards.”

The ABI has said:

“We have previously called for tighter regulation of Master Trusts, and are supportive of the proposed direction set out in the Bill.”

The Pension and Lifetime Savings Association welcomed the Bill as

“essential to protect savers and ensure that only good Master Trusts operate in the market.”

I concur with all those remarks.

Some of the Bill’s requirements may have unintended consequences and require further attention. As the Bill represents a significant change in the role of the Pensions Regulator, the Government must ensure that the regulator is adequately resourced to deliver accordingly. Addressing some of the following concerns could go some way to getting the Bill watertight and satisfying the concerns of many stakeholders. My first point relates to clause 8. If a scheme funder is an FCA and PRA-authorised insurer, the ABI contends that it will already have to comply with solvency II and therefore the regulations under clause 8 should not apply as they would be onerous and costly. The Government should clarify whether they have assessed that potential impact and whether the additional regulation adds a further safeguard, making the provision necessary.

Clause 9 requires the Pensions Regulator to be satisfied that a master trust has sufficient financial resources to meet the costs of setting up and running the scheme and to protect members in the event of wind up. A master trust must therefore hold capital equivalent to six to 24 months’ worth of running costs. However, it is argued that there is little clarity over how that provision would be applied. The TUC argues that there is an assumption that other master trusts would have an appetite to absorb a collapsed rival’s book of business, but that may not always be the case, particularly if costs are involved. Some savers are more attractive to providers than others. In the absence of greater clarity over the robustness of the proposed capital regime, the TUC contends that clause 9 should be retained. It was accepted in the Lords and provides that the Secretary of State can

“make provision for a funder of last resort, to manage any cases where the Master Trust has insufficient resources to meet the cost of complying with subsection (3)(b)”

after a triggering event. I would support that as a principle.

On clause 10, concerns have been expressed about the additional costs that master trusts could face, such as those offered by insurers due to duplicated regulation enforced by the Pensions Regulator. The ABI has said that that would be to the detriment of existing scheme members, as these schemes already operate under stringent FCA and PRA regulation.

The key issue raised by the ABI is the definition of a “scheme funder” in clause 10. Concerns centre on the fact that the Government state that the clause is intended better to enable the Pensions Regulator to assess the financial sustainability of the scheme by increasing transparency on the assets, liabilities, costs and income of the master trust. The ABI is concerned that the clause does not meet the policy intent of providing transparency because, as a separate legal entity, master trusts can still transfer risk to other entities.

That issue was raised in the Lords, and the ABI continues to ask that, in order to protect the benefits to scheme members and minimise costs, the requirements under clause 10 should not apply where the scheme funder is an FCA and PRA-authorised insurer. There is also a need for greater transparency on fee charging, which needs to encompass transaction costs as well as any ongoing administration fees.

It is welcome that the Government are placing a 1% cap on exit fees for current members and no exit fee for new members. We know that large fees have been charged on exit in the past, and it is clear that we need to protect savers, although if new members are to be excluded from exit fees why should it be permissible for exit fees to remain in place for existing plan holders?

Under clause 12, at least one third of trustees of single-employer workplace pension schemes have to be member-nominated. There is no such obligation on master trusts. The Bill presents an opportunity to explore member involvement, and I hope we can pick up that topic in Committee.

Clause 32 creates a new power enabling the Pensions Regulator to make a pause order requiring certain activities to be paused once a master trust has experienced a triggering event. That includes accepting new members, making payments, accepting contributions and discharging benefits. There is concern about the impact of a pause order on a member’s savings, as there are no mechanisms in place to allow ongoing contributions to be collected and held on behalf of a saver. It is unacceptable that a member should be penalised and, in effect, lose wages in the form of employer contributions due to events out of their control. The Government should clarify whether they intend to take action to protect savers in that area.

We look forward to clarification from the Government on those issues, and we will work in the next stages, where necessary, to improve the Bill. This is therefore a pressing matter and, on behalf of the Scottish National party, I signal our intent to work with the Government to deliver a Bill of which we can all be proud.

The Bill, however, is a missed opportunity to undertake much-needed major reform of the pensions system, rather than patchwork attempts to plug holes in the system. We need a fundamental overhaul of the pensions system, and the UK Government need to introduce more ambitious plans on pension reform. We are disappointed not to have a Bill that looks at the issues with the state pension, particularly the need to address state pension age inequality for the WASPI women.

Madam Deputy Speaker, I take your comments about the WASPI women but, given that the SNP was traduced by the Chair of the Select Committee on Work and Pensions, I make the point that the SNP has raised the issue of the WASPI women at least 44 times in this House and has commissioned independent research. It is completely disingenuous for anyone to suggest that the SNP has refused to support the campaign. A reasoned amendment to kill the Bill was suggested. However, that would help no one and would only remove the Bill’s helpful regulation provisions relating to master trusts.

[Frank Field]

I am grateful to the hon. Gentleman for giving way. The plan was not to kill the Bill but just to hold it up for a bit so that we could hopefully highlight the position of WASPI pensioners, for soon they will all be retired and the horror will have been completed. We have no other weapon against the Government, because they have made it plain that they are going to sit out this issue. The Scottish nationalists were not prepared to form an alliance with those of us who want to block the Bill in order to actually raise this issue and perhaps implement the recommendation of a previous Select Committee report.

[Madam Deputy Speaker (Natascha Engel)]

Order. I appreciate that the right hon. Gentleman is Chair of the Work and Pensions Committee—

[Frank Field]

I am not going to be speaking tonight.

[Madam Deputy Speaker]

I also appreciate that he is not going to be speaking in tonight’s debate, but I just want to say that it is a very narrow Bill about something very specific and this is not the forum for discussing all that. People might be very disappointed that we are not debating transport policy, but we are not; we are debating master trusts, so I ask the hon. Member for Ross, Skye and Lochaber (Ian Blackford) to keep just to that. I know he is trying to skim over things, but if he could skim away from other issues and get back to the main point, we would all be very grateful to him.

Welfare

Lord Field of Birkenhead Excerpts

Monday 21st March 2016 Commons Chamber

[Stephen Crabb]

I thank my hon. Friend for her question and for her warm and generous remarks. Her point is absolutely right. The term disability covers an immensely varied range of issues and people with different challenges in their life. The changes that we have been making to focus the most resources on those who most need the care of the state and the most vulnerable are absolutely right. Increasing the resources from £60 million to £100 million as part of the employment and support allowance changes will help more disabled people to achieve their aspiration of moving into the workplace.

[Frank Field (Birkenhead) (Lab)]

I congratulate and welcome the Secretary of State to the Dispatch Box today. Did his officials brief him over the weekend on what has been happening to his Department’s budget? Being large, it has of course been singled out for cuts. Within those cuts, however, the pensioner budget not only has been protected, but has risen by 11%. All the cuts have fallen on those of working age. As he is now unsackable—it would be sheer farce if anybody moved against him—I urge him to reconsider seriously any further cuts affecting ESA claimants not only because justice demands it, but because he might face difficulties in getting them past the Back Benchers behind him.

[Stephen Crabb]

I thank the right hon. Gentleman, the Chair of the Select Committee on Work and Pensions, for his kind remarks and for the message he sent me at the weekend. I look forward to some constructive discussions with him in the weeks and months ahead. I made it clear in the statement that we are not pursuing further welfare savings and not looking to make alternative off-setting savings to replace the changes to PIP that we were going to bring forward. I hope that that makes it clear for the right hon. Gentleman.

Oral Answers to Questions

Lord Field of Birkenhead Excerpts

Monday 14th March 2016 Commons Chamber

[Mr Duncan Smith]

I certainly will. I myself have been in the House on a ten-minute rule Bill to try to improve access to legal means to prosecute those who drive people to suicide, and I still believe this is something that could be done. I congratulate my hon. Friend and her remarkable charity. The Government have backed that work up, because we have now trebled the amount of money going to these organisations. I would be very happy, at some point, to meet them to congratulate them myself.

[Frank Field (Birkenhead) (Lab)]

Would the Secretary of State like to confirm that if we look at the current poverty data, we see that there are almost no poor children in households where there is a parent in work and one parent is available for part-time work? What lesson does he draw from that?

[Mr Duncan Smith]

I simply draw the lesson that we want more people to get back into work, because a household with work is a household that is more likely to be out of poverty. As usual, I pay tribute to the right hon. Gentleman, because he has done a huge amount of work on this issue. That lesson has been the drive behind everything that we have done—universal credit, our attempt to make sure that people get into work, and increased childcare to improve the possibility for more women to be in work to boost household income. However, universal credit also ensures that the first person into work is better off, and that therefore improves the likelihood of a household having more income and less chance of being in poverty.

Welfare Reform and Work Bill

Lord Field of Birkenhead Excerpts

Wednesday 2nd March 2016 Commons Chamber

[Priti Patel]

My hon. Friend highlights the fundamental purpose of the changes that we are making. We are focusing on the root causes: life chances, and key aspects such as worklessness and educational attainment.

[Frank Field (Birkenhead) (Lab)]

I have two very quick points to make. First, no Government over the next 10 years will have the resources that previous Governments had to drive their counter-poverty programme by increasing cash transfers. We might wish that it were different, but we need to grow up. Secondly, may I push the Minister further on whether the Government are open to looking at birth readiness, toddlerhood and school readiness as additional key indicators if we are, within existing resources, to make a real difference to the life chances of the poorest children?

[Priti Patel]

The right hon. Gentleman makes my point for me and, importantly, highlights the significance of the Government’s work on life chances. That will cover the whole range of ages, because it is of fundamental importance that the Government provide the right measures to support people throughout their lives.

I turn to the employment and support allowance work-related activity component, and the universal credit limited capability for work element measures. I remind the House why the changes are being made. As we stated when we last debated the measures, the change is urgently needed to ensure that the right incentives—and, importantly, support—are available to help more people with disabilities and health conditions to move closer to, and into, employment. We have experienced record employment levels and strong jobs growth over the past few years, but the benefits have bypassed the majority of those who are stuck on ESA. Only one in 100 ESA claimants in the WRAG moves off benefits each month, compared with one in five jobseeker’s allowance claimants. That cannot be right, and the Government believe that people with health conditions and disabilities deserve better.

Welfare Reform and Work Bill

Lord Field of Birkenhead Excerpts

Tuesday 23rd February 2016 Commons Chamber

[Heidi Allen (South Cambridgeshire) (Con)]

I rise to speak to Lords amendments 8 and 9. Reforming our welfare state was one of the greatest challenges facing the previous coalition Government and it continues to be one of the greatest challenges facing this Government. We are making phenomenal progress, with record levels of employment, and the Welfare Reform and Work Bill is unquestionably at the heart of this transformation.

Welfare needed to change. I saw the restrictions it placed on the aspirational potential of so many capable people. In my business, I had bright employees shackled to the state by the impenetrable barrier of the 16 hours of employment. I know some doubt the power of universal credit to transform lives, but as a member of the Work and Pensions Committee I have seen it operate. I am in absolutely no doubt that it marks the beginning of a new age, in which the individual and the state are partners in the future opportunities of the individual and their family.

Yet I feel an uncomfortable sense of déjà vu. Change needs to happen—but in a way for which those affected can prepare. We are debating whether we should cut the ESA WRAG allowance, which is typically provided to about 500,000 people recovering from significant illness as they transition from ill health to being fit to work. The Department for Work and Pensions talks about a White Paper that will set out its strategy of offering a different kind of support to help such people return to work, and some £100 million will apparently be made available by 2020-21. I listened intently to the Minister for reassurance about how that money will be spent. I acknowledge that she mentioned that a taskforce drawn from the Department and charities will be set up, but that should have happened before decisions were made to reduce financial support. I am uncomfortable about agreeing to the cuts until I know what the new world will look like for such people.

I do not believe mentoring and support alone will heat the home of someone recovering from chemotherapy or help the man with Parkinson’s who needs a little bit of extra help. I remain unconvinced that these people do not also have financial needs. The DWP states that many people stay stuck in the WRAG for too long—up to two years—but I would question its conclusion that they are financially incentivised to stay in that group. For me, the fact that they are stuck in that group says more about the failure of DWP processes than about claimants’ active choices. People in that group do not have an easy time of it. They must demonstrate an appetite to transition towards work, and they can be sanctioned if they do not do so. Anyone who has beaten cancer must surely burst with the desire to return to a normal life and be unlikely to want to be labelled as a cancer sufferer for any longer than is absolutely necessary.

From 2017, about 270 disabled people in my constituency of South Cambridgeshire alone stand to lose £30, or 29%, of their weekly income, if we accept the Bill in its original form and ignore the Lords. For them, I need to see more detail of the contents of the White Paper and to hear more about the financial support that will be made available before I can fully support the Government. If we do not get this right, we will damage not just the employment prospects and wellbeing of these vulnerable claimants, but our reputation and trust among the electorate. To secure my trust, I need to believe in the White Paper and that the £100 million will go some way to help those people. That is my warning shot to the Government. Today, I will not support them. I may abstain, but only for today. Let us get the detail right. Let us be a Government of sweeping strategic change, but let us also be one with the compassion and dexterity to look after the little man too.

[Frank Field (Birkenhead) (Lab)]

One of the big changes in this Parliament compared with previous ones is that when we debate welfare reform there are now too many speakers, whereas in previous Parliaments the Whips had the key job of pushing colleagues in to speak. I will try to speak briefly.

I am immensely pleased to follow the hon. Member for South Cambridgeshire (Heidi Allen) not only because of the role she plays in the House, but because of the particular role she plays on the Work and Pensions Committee, of which I am also a member. Like her, I will speak in favour of Lords amendments 8 and 9, but I question whether the Lords are right in amendment 1.

I do so not because I think in any way that it is not necessary for us to consider more regularly whether people who are out of work in our society have an adequate level of income. Most of us would find it near impossible to live on the scale rates, as they are cruelly called, that we give to people who are out of work. The fact that millions do so is a credit to their budgeting skills, which most of us do not possess. However, this debate is about more than what the minimum income is. It is about a strategy to prevent us forever and a day debating in the House of Commons the number of people who are poor in this country.

I do not know, but it may be that the report that the Prime Minister asked me to write, “The Foundation Years: preventing poor children becoming poor adults”, will play a small part in the Government’s strategy on life chances. I argued that although income is important, merely measuring income is inadequate if we are successfully to counter the extent of poverty in our country. We ought to look at the drivers of poverty.

As soon as I embarked on that analysis, I was struck by the information that was volunteered by the reception teachers I visited in different parts of the country. They could predict within a very short space of time—within the first half term of school—where children would end up. They could say quite confidently who would be head girl, who would find it easy to fly in this world, who would struggle and who would fail. That got me thinking about whether we needed to move beyond merely measuring income as the great driver of poverty and to look at life chances.

[Dr Blackman-Woods]

Does my right hon. Friend accept that all Lords amendment 1 does is to require that income-based measures of poverty be reported alongside and on a level footing with other life chances indicators? They would not be reported instead of, but in addition to, those other indicators.

[Frank Field]

The report that I issued made that very point. It said that we should continue to publish the poverty data and that, alongside them, we should have the life chances data.

Of course, there is much more to this debate than what is on the record. Historically, there has been a big divide between those who see money as the only agent to counter poverty—it clearly makes it easier for people if they have more money—and those who ask whether money actually transforms life chances in the way we wish. That is the question that I posed. Specifically, we wanted to know, while taking account of the importance of income and class in determining life chances, whether there were drivers of poverty more powerful even than income and class. The report lists the most powerful factors when income and class are held constant—those factors that enable us to make progress even if we are not making the progress that we would like to see on a fairer distribution of income.

Again, I make a plea to the House. Although we ought to debate the adequacy of the minimum levels of income, Opposition Members and the many Government Members who are disturbed by the growing and gross inequalities in our society must not think that we will deal with those through benefit changes, important though they are. Throughout the western world, there are clearly great engine drivers of inequality that serve up to the rich—particularly to the very, very rich—rewards that are grotesque when compared with the average, let alone with those who earn the least in our communities. There is no debate about that. The debate is about where, at any given point in time, we should put taxpayers’ money. Up to now, everybody has been talking about this as though the Government have money. Governments have to tax our constituents to get money to redistribute it, and we must win people’s support for that.

The House is beginning slowly to accept that it is dangerous to have a welfare system that is more generous to those out of work than to those in work, which is why I particularly welcome the Chancellor’s strategy of moving towards a living wage and implementing that over the life of the Parliament. It is only a beginning, but it is very important. If we are successful in moving to that living wage without big unemployment consequences—I believe that we will be—that will give us more freedom to manoeuvre on where benefit levels should be set.

My plea is that we should not think that this is either one thing or the other. The Government will publish the data, and I am sure that if we had a chat to them they could do so alongside the life chances data. That is not really what the debate is about; the debate is about those who believe that the only agent of change is on the income front, and I do not wish to concede ground to anyone in emphasising the importance of income, especially for those at the bottom of the pile who are working or who are not working. We have the report on the foundation years, and if we are serious about trying to prevent poor children from becoming poor adults, we need a different strategy from the one we adopted until that point. It was all about cash transfers—important as they are—and I thought it was inadequate.

Reception teachers said that by the time children come to school they already know who is going to succeed and who will not. I also started asking other people such as health visitors whether they could tell us which children entering toddlerhood would be successful in later life. Midwives have clear views when mothers turn up for their first scan about who has drawn the short straw and who has not. If we are serious about this strategy—I make this plea to the Government because we will need powers to add these measurements once we have agreed on them—we must measure whether we are increasing life chances by having more parents who are ready for the birth of their child, whether the interventions that we make after that will be successful and see more children successfully enter toddlerhood, and above all whether more children are entering school ready to benefit from the powers of education.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Is measuring at key stage 4 when a young person is 16 so utterly after the horse has bolted that it will not make any impact? Teachers report a year’s difference in a child’s ability to communicate and learn by the time they are five, and we need to change that. No Opposition Members are talking about money or life chances; most of us are arguing for both.

[Frank Field]

The genuineness of the hon. Lady in making that point shows how the debate is changing—it was not always about that issue and I am grateful for her intervention. Let me re-emphasise her point. I was staggered when the Secretary of State said that one of children’s key life chances is at age 16, given that he has done more than anybody in the House to teach us about how crucial life chances are before age five, if we are really to change people’s opportunities and allow them to develop their best selves. I hope that when we conclude the debate, the Minister will say more about how important it is to weight those life chances before age five. By all means we should measure children at 16 and all sorts of other ages if we wish, but if we are serious about changing the life chances of the very poorest children in our constituencies, we must consider a series of life chances long before they reach school. Every reception teacher I met would say that life chances have been decided by the time that children come into school.

I welcome how the debate has developed in the past 10 years, and I hope I have stated clearly why I think the Lords are mistaken with Lords amendment 1, and how much I agree with the case put by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), and by the hon. Member for South Cambridgeshire (Heidi Allen) who stated her support for Lords amendments 8 and 9.

[Several hon. Members rose—]

Oral Answers to Questions

Lord Field of Birkenhead Excerpts

Monday 1st February 2016 Commons Chamber

[Mr Duncan Smith]

I fully agree with my hon. Friend. In the last Parliament, the Department did a huge amount to get better advice and support for those who are thinking about breaking up. We invested over £30 million in relationship support over the last Parliament, which meant that about 160,000 people had access to preventive support. As the Prime Minister announced recently, we are doubling the funding available over the next five years to £70 million. The life chances strategy includes the important aim of strengthening and stabilising family life.

[Frank Field (Birkenhead) (Lab)]

I welcome the Secretary of State’s approach on this issue. Given that he has taught the House the fundamental point that life chances for most children are determined before they are five, will he bring forward a debate in Government time on how the policy of life chances is developing so that the views of Members can be taken into account before the Government publish the White Paper in the spring or summer?

[Mr Duncan Smith]

I will certainly look at that request. The door is open to the Chairman of the Select Committee on Work and Pensions. He has had a huge part to play. One of his recommendations, which is quite legitimate, is that we look at how we incorporate early years into the life chances measures. We are looking at that and would be happy to discuss it further with him.