State Pensions: UK Expatriates

Lord Wharton of Yarm Excerpts

Thursday 20th April 2017 Commons Chamber

[Richard Harrington]

The hon. Gentleman rarely makes me speechless, but his plea from a sedentary position to spend the money has done so. Perhaps he thinks that I am already Chancellor of the Exchequer; it is nice of him to imply that.

[The Parliamentary Under-Secretary of State for International Development (James Wharton)]

It is only a matter of time.

[Richard Harrington]

Maybe not in this life.

To return to the serious point, on the face of it, tens of millions of pounds does not seem a lot, but the annual costs of the policy would converge with those of full uprating in the medium to long term. That compounds the situation, because if we changed the policy now to either full or partial uprating, in 25 or 30 years, the vast majority of pensioners—they would be new pensioners—would receive pension payments as if they had been uprated for the whole time. Everyone knows that, whichever Government are in power after the election—I think the hon. Member for Leeds North West suggested that they would be of a certain colour, although I may have misunderstood him—resources are scarce, and Governments have to make judgments about how best to use them. That is what government is about.

Although the proposed spend each year might appear to be small, it would soon add up to a much more significant £500 million extra each year on about 500,000 pensioners. That might look to others as though the Government were disproportionately favouring those who have gone abroad. Much of that spending would not in fact increase the money that a poorer pensioner living abroad would receive. In Australia, for example, the age pension is means-tested, with the Australian Exchequer in some cases keeping up to 50%. New Zealand, too, requires people with overseas pensions to claim them; they are then taken into account, and the New Zealand benefit or pension is reduced by the amount of UK pension. In addition, since most people who move abroad to those countries do so before they have reached pensionable age, most would have been able to build up decent pension provision in the country to which they emigrated, if they went when they are younger.

For most people, the decision to move abroad is voluntary; it remains a personal choice dependent on the individual’s circumstances. The Scottish National party spokesperson, the hon. Member for Rutherglen and Hamilton West, said in her summing up that people may not have been aware that they were moving to a country with different pension arrangements. Others have mentioned the line and short distance between Canada and America. However, people who move abroad find out about so many things, including visas; they have to.

Oral Answers to Questions

Lord Wharton of Yarm Excerpts

Monday 11th March 2013 Commons Chamber

[Robert Halfon (Harlow) (Con)]

11. What assessment he has made of recent trends in unemployment.

[James Wharton (Stockton South) (Con)]

13. What assessment he has made of recent trends in unemployment.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Unemployment has been falling in each of the last 11 months; on the International Labour Organisation measure it is down by 156,000. The unemployment rate is now lower than it was in 2010. This is testament to the strength of the private sector, which has created 1 million net new jobs since May 2010.

--- Later in debate ---

[Mr Hoban]

I can assure my hon. Friend that Jobcentre Plus is working with Tesco and has offered full rapid response team support. Discussions are focusing on redeployment and other opportunities to help the work force to secure new jobs.

[James Wharton]

In Stockton South youth unemployment has fallen from 11.3% to 9.6% January to January. This is a welcome trend, but I would like it to go further. What are the Government doing to ensure that it can continue over the coming year?

[Mr Hoban]

I am delighted to welcome the news of what is happening in Stockton South. That is in contrast to what has happened in Jarrow, but it demonstrates the resilience of the economy in the north-east. The fact that 40,000 extra private sector jobs have been created in the north-east over the past couple of years demonstrates that while there are difficult challenges, the economy is rebalancing, and that should be to the benefit of everyone there.

Welfare Benefits Up-rating Bill

Lord Wharton of Yarm Excerpts

Tuesday 8th January 2013 Commons Chamber

[Mr Jackson]

I will not give way to the hon. Gentleman, even though he is a terribly charming fellow.

Those people in my constituency want to work, but they want the Government to give them a positive message about the future. It is cruel to park people and to forget them.

[James Wharton (Stockton South) (Con)]

I want to back up what my hon. Friend is saying. When I went around my constituency at the last election, the issue of making work pay came up time and again, and the communities in which it came up were the poorest ones. They had seen the damage that long-term welfare dependency could do to a community. The reason that my hon. Friend and I welcome the reforms is that the Government are finally tackling this long-term problem, which hits the poorest in our country the hardest.

[Mr Jackson]

That was eloquently put by my hon. Friend, who is even younger and better looking than the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). We take a pinch of salt for a party that has no coherent fiscal alternative. Frankly, “Tough on Coco Pops and tough on the causes of Coco Pops” does not make a fiscal policy. The 10p tax rate was a debacle, while re-spending over and over again bankers’ bonuses and pensions credit does not cut the mustard.

Let me give some free advice to Labour Members. We did the same as them in 1998 and 1999 when we said that the downturn was made in Downing street, but it did not help us because we were not seen as credible. I respectfully invite Labour Members, if they are going to vote against Second Reading, to say what they would cut and what they would spend as an alternative. The Bill will save the best part of £2 billion. Politics is about choices, as Aneurin Bevan said 50-odd years ago, and he was right. It is disingenuous to keep repeating the issue of tax cuts to millionaires, when we have taken millions of people out of tax and cut the taxes of many low-paid working people. This Bill is about giving a message—that work pays and that it is better than welfare. We should give people the life they need and deserve—a life of work and a better future.

Jobs and Social Security

Lord Wharton of Yarm Excerpts

Wednesday 28th November 2012 Commons Chamber

[Mr Hoban]

Let me address the right hon. Member for Tottenham, who was critical of apprenticeships in retail. How many of our supermarket bosses started off on the shop floor? We should not close down any route to advancement. He also criticised apprenticeships in administration. For many people, a job in an office is a route out of poverty. He should welcome opportunities to broaden the range of skills that are available to people.

I should tell the hon. Member for Wansbeck (Ian Lavery) that I get fed up with people talking down the north-east. I was born and bred in the north-east, and I went there a couple of weeks ago. Let us look at what has happened there. Employment is up by 40,000. People are talking about the need for more skills. There are big challenges in the north-east, but he does his region no service by talking down its people. While I am at it, let me say that he talked about the work capability assessment. Let me remind him that his Government introduced it. This Government are reforming it to ensure that it is the right policy and that it gets people into work and off a lifetime condemned to inactivity.

[James Wharton (Stockton South) (Con)]

I welcomed the Minister to the north-east recently, and I am delighted to hear him say such positive things about the region. Is it not in places such as the north-east, where welfare dependency can be seen to do the most damage, that these sorts of programmes are so important?

[Mr Hoban]

My hon. Friend is absolutely right. We need to see programmes of reform to get people off benefit and into work. It is about making sure that we equip people with the skills they need in a 21st-century economy. Programmes such as the Work programme enable that to happen.

I was rather disappointed that we did not hear more from the shadow Minister about Labour’s bank bonus tax. This is a big feature of the motion before us today. Yet again, the Opposition trot out the bank payroll tax as the solution. The problem is that it is their solution for everything. How would they pay for a VAT cut? The bank payroll tax. Higher capital expenditure? The bank payroll tax. Reversing changes to child benefit? The bank payroll tax. At the last count, a tax that they think would raise £2 billion has been used 15 times over to fund tax cuts and spending increases.

Incapacity Benefit (North-East)

Lord Wharton of Yarm Excerpts

Tuesday 22nd November 2011 Westminster Hall

[Grahame M. Morris (Easington) (Lab)]

It is a pleasure, Mrs Brooke, to serve under your chairmanship for the first time. There has been tremendous interest in the economic effects in the north-east of changes to incapacity benefit. I was hoping for a much longer debate—a number of right hon. and hon. Members have indicated that they would be interested in participating in such a debate—but I will try to be brief.

I am pleased to have secured this debate, which gives me the opportunity to raise some important issues that affect communities throughout the north-east of England. As the title suggests, I want to focus on the economic effects of one specific coalition policy: the impact of welfare reform and changes to incapacity benefit. I shall refer specifically to a recent research report by Sheffield Hallam university on “Incapacity Benefit Reform: the local, regional and national impact”, and a report from the Institute for Public Policy Research North, the “Northern Economic Summary: October 2011”. I commend the latter report, which is the first of its kind, but IPPR North will produce it quarterly. It will be a useful way of tracking the impact of the Government’s policies on the north-eastern economy.

Before going into my main argument, I want to set the scene and to provide some context for the debate. The IPPR North report indicates that unemployment in the north-east is accelerating and is being driven by a weak northern economy being pushed into recession by public sector spending cuts, which are threatening to increase the north-south divide. The north-east, with Yorkshire and the Humber region, has faced the worst increases in unemployment in the UK. The figure for the north-east now exceeds 11%. Gross domestic product nationally suggests that the UK economy is avoiding a strictly defined technical recession at the moment, but it can be best described as flat-lining. Labour has a five-point plan to stimulate jobs and growth, but I do not want to go into that because of shortage of time. Perhaps it is a subject for another debate.

The situation for workers and those seeking work in the north-east is much bleaker than in many other regions. The northern economy could already be contracting, as the index of production figures produced by the Office for National Statistics show UK manufacturing contracting by 0.6% in the three months from June to August. Contraction in manufacturing affects the north-east disproportionately. It affects the economy in the whole of the north, but particularly the north-east because, despite the need to rebalance the economy—I am a great supporter of manufacturing—the north-east has a relatively high proportion of employees in manufacturing.

The latest job figures show that the north has lost a large proportion of public sector jobs in the last year. The figures produced by the northern TUC show that we are losing them at a rate of 2,000 a month, with almost no increase in the number of private sector jobs. In the north-east, the number of private sector jobs is declining. It has lost more than 32,000 public sector jobs, but more than 8,000 public sector jobs have been created in London, and 24,000 in the south-east. That is clear evidence of the Government’s failing regional policy.

I want to concentrate on the impact of the Government’s welfare reform policies on the economic situation in the north-east. Sheffield Hallam university’s report, “Incapacity Benefit Reform: the local, regional and national impact”, shows that 60,000 people in the north-east face being moved off incapacity benefits, 35,000 of whom will be pushed out of the benefits system altogether due to the time limits. More than 20,000 will be added to the unemployment figures.

My constituency has the highest rate of working-age adults claiming incapacity benefits in England and will be one of the most affected. In my constituency alone, 4,200 people will be moved off incapacity benefit, of whom 2,000 will lose their benefits altogether. That will have a huge adverse impact on those individuals and households, but I want to focus on what it means for the north-east economy as a whole.

If 35,000 people are taken off incapacity benefit altogether, as the pilot study indicates, that will effectively remove more than £170 million every year from the north-east’s economy.

[James Wharton (Stockton South) (Con)]

Will the hon. Gentleman give way?

[Grahame M. Morris]

I would like to make a little more progress, but I will give way when I have made my point.

That money would be in the hands of the poorest in society and would be spent in local communities, neighbourhood shops and local businesses. The clear economic argument is that unemployment would increase if benefits were cut in the region, owing to a reverse multiplier effect of credit withdrawal, because less money would be spent in the local economy. It is staggering that as the north-east seems to be heading into a regional recession, the Government are set to take another £170 million from our regional economy every year. It is even more staggering that, as employment is falling in the private sector owing to the Government’s lack of a credible policy for jobs and growth, they are simultaneously moving 60,000 people off incapacity benefit and adding more than 20,000 to the unemployment count.

The legacy of incapacity benefit is felt most in older industrial areas. The number of people claiming incapacity benefit is not evenly spread. The communities that I represent are mainly former coal-mining areas where long-term ill health is a consequence of years spent working in damp, cramped and physically arduous conditions underground. A recent review of coalfield areas by the former Member for the then constituency of Barnsley West and Penistone, Mick Clapham, reported two significant problems. He identified that incapacity benefit claims are not confined to the older generation, whose ill health was caused by working conditions. Ill health in the younger generation is due mainly to poor employment opportunities and the low expectations resulting from their marginalisation in the active labour market and has given rise to a lost generation.

[James Wharton]

I congratulate the hon. Gentleman on securing this debate. The topic is extremely important to him and to many of his constituents. I am a little concerned that he seems to believe that being on incapacity benefit when able to work is an acceptable end in itself. Does he agree in principle that those who are able to work should be encouraged to do so and should be taken off incapacity benefit and helped back into work? Does he also agree that, although incapacity benefit must be available for those who need it, the Government have a duty to review the system and to address some of the problems that have arisen as the system became out of control in recent years?

[Grahame M. Morris]

I will come to that. My fundamental point in response to the hon. Gentleman is that the big issue for us is not just worklessness; it is joblessness. We want the Government to invest in creating jobs in the private sector and generally to get the local economy moving. There seems to be little point in inflicting penury and misery on large sections of already impoverished communities when there are no jobs for them to go into. The two should go hand in glove, and I have some suggestions for achieving that.

Housing Benefit

Lord Wharton of Yarm Excerpts

Tuesday 9th November 2010 Commons Chamber

[James Wharton (Stockton South) (Con)]

I disagree with much of what the right hon. Member for Greenwich and Woolwich (Mr Raynsford) said, but he made one key observation that many Opposition Members would do well to heed. He referred to the legacy that the previous Labour Government inherited from the Conservatives, and many Labour Members forget the context in which so many of the decisions that the new Government are now taking must be understood—namely, the terrible financial situation that we inherited from Labour. I do not intend to dwell for too long on the national debt that is approaching £1 trillion, the deficit of £150 billion, or on the fact that we are paying more than £40 billion a year in interest, which is £120 million a day. That is more than we are paying for either our police or our universities.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Does the hon. Gentleman acknowledge that, when the Labour Government came to power in 1997, we had to pay more to service the debt based on borrowing to pay for tax rebates than the cost of defence and transport put together?

[James Wharton]

The hon. Gentleman is right to voice his concern about any level of Government debt, and I entirely understand the historic context in which the new Labour Government found themselves, and the one in which we find ourselves today. It is important, however, that we do not spend all our time looking back. We must look forward and consider what the Government are doing to address the challenges that we face, and specifically address the issue of housing benefit, which is just one piece of that much larger jigsaw.

Housing benefit today costs about £21 billion a year, and we have heard about the trend of housing benefit costs in recent years. Between 2000 and 2007, it increased by about 25%, and, in the past five years, it increased by about 50%. The shadow Secretary of State mentioned the difficult times during the worst of the recession when it was increasing at its greatest rate. That was true, and we cannot take those times as typical and project them forward, but we can identify a clear long-term trend of housing benefit costs increasing unsustainably and putting a burden on the Exchequer that cannot be maintained in this day and age. The Government therefore have to make some tough choices.

A word that we frequently hear on both sides of the House, in different contexts, is “fairness”. We are asked what it means to be fair. Opposition Members appear to dwell on outputs, rather than giving consideration, as is correct when considering any matter of fairness, to what people put in—that is, to inputs and outcomes. It is important to look at the proposed changes to housing benefit in the context of the national financial situation, and of the need for real fairness that takes proper account of what the Government can do to help people out of poverty and into work, and to take away the benefit traps that hold people back in poverty and on housing benefit. As my hon. Friend the Member for North East Hertfordshire (Mr Heald) said, housing benefit is one of the very worst benefits when it comes to encouraging people and helping to make work pay, because of the very steep rate at which it is withdrawn.

[Ms Buck]

The hon. Gentleman mentioned the impact of housing benefit during the recession. Does he accept that 250,000 households claimed housing benefit during the period between 2008 and 2010 because their earnings dropped? Does that not show that housing benefit has a critical role to play in sustaining people, both in work and in their homes, during difficult times?

[James Wharton]

The hon. Lady is quite right. That is why nobody on either side of the House would ever propose to do away with it. It is an important part of the welfare state in this country, but that does not mean that spending on housing benefit should be allowed to escalate out of control indefinitely. That is why the Government are introducing measures to bring it under control and to ensure that people are properly incentivised to find work, to earn and to contribute successfully to our economy. The hon. Lady is right to say that housing benefit is important, however; that is why it is being reformed in a way that will secure its sustainable future.

[Mr Chuka Umunna (Streatham) (Lab)]

Will the hon. Gentleman give way?

[James Wharton]

I will not give way again.

In the context of the understanding of fairness, let us look at what the Government are doing. We have heard talk about the cap, and it is abundantly obvious that it is not fair for a family or an individual to be able to claim more in housing benefit than an average family takes home in earnings in any given week, month or year. If we set the cap at £20,000 a year, that will still be a very high level. That is the equivalent of earning just over £26,000 a year, as that is what someone would need to earn to have the income to pay that amount of rent without claiming housing benefit support. That is more than the average wage of my constituents, and more than the average wage in the north-east generally. It is also more than the average wage in many of the constituencies of Members on both sides of the House. We cannot expect people who work hard but do not earn large sums of money to pay tax to subsidise individuals and families who are unable to work, for whatever reason, to live in homes that those taxpayers themselves could not afford.

This is an important issue, but there are many other measures involved. The shadow Secretary of State asked whether it was fair to use the 30th percentile to set the level at which housing benefit would be paid in any given area. The Department’s research has shown that, in any given area, just over 30% of properties would be available within that price band, and I suggest that that makes it abundantly obvious that this is not an unreasonable step. Given the difficult financial situation in which we find ourselves, this is a way of finding some of the necessary savings while ensuring that those who need help will still get it. It will ensure that support will be there for those who will benefit from it most, while not unfairly disadvantaging the people who work hard to pay their taxes to enable this to happen. It is important to look at these points in the round, and in the context of the world in which we live today.

Many Opposition Members are not keen to talk about discretionary housing payments because, for many of those who hit particular hardship, such payments will increase. This will help individuals who are in danger of losing their homes, who fall through the gaps between policies or who find themselves in difficulty through no fault of their own. The Government are increasing the provision to £140 million over five years to ensure that, when people are in particular need or when their circumstances are particularly difficult, help is there to ensure that they can stay in their homes and communities. People should not be made homeless by the steps that are being taken, and the Government are taking steps to ensure that that does not happen.

Another measure that Opposition Members often overlook relates to overnight carers. At the moment, the fact that someone has an overnight carer, because they have a disability or for any other reason, is not accounted for when calculating the amount of housing benefit they receive. The Government will change that, and 15,000 people who currently have overnight carers but are not entitled to have the need to provide accommodation for them taken into account in their housing benefit allowance will be better off as a direct result. Their needs will specifically be catered for in a way that, disgracefully, has not been the case for many years.

Lots of changes are taking place in housing benefit, as well as right across the Department for Work and Pensions and other Departments. Opposition Members are right to raise concerns, when they have them, and to call for a debate when that is appropriate. When I look at the motion today, however, I find it most striking that they have suggested no alternatives. This is not an Opposition who are here to put forward alternative proposals or an alternative plan to deal with some of the problems we face. It is an Opposition who are opposing for opposition’s sake.

[Matthew Hancock]

I compliment my hon. Friend on his extremely fluent speech. In talking about the tone of this debate, does he agree that it is important not to make scaremongering comments that make people ill at ease when the changes being made are very important to get a grip on this particular budget?

[James Wharton]

As ever, my hon. Friend makes an excellent point. The point has been raised a few times already—that the tone of this debate in public and in the media has not necessarily been as it should. When we are talking about people’s homes, people’s allowances and changes that will affect people’s lives, it is incumbent on all of us to ensure that we do so in a careful, measured and sensible way.

[Gavin Williamson (South Staffordshire) (Con)]

I am not sure whether my hon. Friend’s experience has been the same as mine, but many people I talk to in my constituency think that the proposals being put forward are sensible, logical and should have been made an awful long time ago.

[James Wharton]

I thank my hon. Friend for another excellent intervention. He is, of course, right about how right-thinking people look at some of these measures—I single out the cap of £20,000 on the maximum amount of housing benefit that can be claimed. As I said at the beginning of my speech, this is equivalent to earning more than £26,000 a year. These are reasonable steps taken to deal with a very real problem. If Opposition Members wish to continue to oppose what the Government are doing, I urge them to come up with proposals and solutions of their own, so that we can have a properly informed debate—rather than mudslinging, calling names and worrying all the people who rely on Members from all parties to represent them and do the right thing.