Cost of Living

Baroness Winterton of Doncaster Excerpts

Tuesday 5th July 2022 Commons Chamber

[Wendy Chamberlain]

Yes, I entirely agree. I recommend to anybody who has not read it last Sunday’s article in The Sunday Times about food banks. The journalist took the time to eat a diet of what is provided in the emergency packages. It is not particularly healthy, but it is food, and I am hugely grateful that it is there. I co-chair the all-party parliamentary group on ending the need for food banks, and I am hugely grateful for the work that food banks do, but trying to meet specialist needs and requirements is very difficult for a charity run by volunteers. We should ensure that people have what they need to meet their medical requirements.

I am sure that many Members will refer to this, but the refusal to keep the universal credit uplift has taken away £20 a week from people who were already struggling. No taper, and no additional grants, will make up for that. When the Chancellor introduced the uplift, he said it was to reinforce the safety net. To some extent, that worked. In research by the Trussell Trust, the secretariat for the APPG, 70% of people said the increase in universal credit made it easier for them to afford essentials. Very quickly—this is my last point on the APPG—our call for evidence on the different responses to the need for food closes on 8 July, so if anybody would like to contribute evidence, we would love to hear from them.

The decision to remove the universal credit uplift at the end of lockdown restrictions, when the economy reopened and there was an expectation that people could take on more work, revealed the Government’s true thinking. It was an implicit acknowledgement that it is impossible to live on the current rate of universal credit, and that that would become abundantly clear to voters who started claiming benefits for the first time during the pandemic. The Government’s taking away the uplift clearly shows that they think that poverty payments are acceptable for those who rely on universal credit in the long term, either because they do low-paid but vital work such as caring, or because they cannot work full time for any other reason—there are many other reasons, as we all know from our case loads. I would like to know why the Government think that a reinforced safety net is needed for some people in our society, but not others.

I want to mention, as others have, unpaid carers, who are another left-behind group. Carer’s allowance is £69.70 per week. We do not accept jobs that pay less than £2 per hour, so why do we think it is acceptable to ask unpaid carers to accept that? Earlier, when my hon. Friend the Member for Twickenham (Munira Wilson) spoke in support of her ten-minute rule Bill on kinship care, she talked about the instinct to want to help a family member in need. No matter how much we love our family, anyone who has ever been a carer will tell you that it is work. As a society, we rely on that good will, so we must support our unpaid carers. They are the backbone of our society. Where people can and want to work, they should be supported to do so. Members have mentioned no recourse to public funds, but the other side of the coin is that we do not allow people claiming asylum to work and contribute. We give them neither support nor the opportunity to support themselves.

With its earnings cap of £132, the carer’s allowance policy seems designed to keep carers in poverty. We have been waiting for two years for a report from the Government on the effect that carer’s allowance has on people’s ability to work. I hope the Minister can update the House on when we will receive that report, and will explain how Members are supposed to scrutinise Government policy properly when we do not receive the reports that would enable us to scrutinise them. I am pleased that while we are waiting for the report, there are practical steps we can take to support our unpaid carers with work and into work, and with managing their caring responsibilities. I am delighted to be bringing forward a private Member’s Bill this Session to give unpaid carers the right to take additional leave, which would help them to balance their caring and working commitments. It does not go as far as I would like, but I believe it would be the first stand-alone piece of legislation giving employment rights to carers. It would help millions of people. One thing that the Government have been trumpeting is the current low rates of unemployment, but they are not talking about the increasing numbers of economically inactive people. I argue that some of those will be carers who are unable to combine work with caring responsibilities. I hope that my Bill will give them the opportunity to do that, but—this is a big but—it is only part of the picture of supporting unpaid carers into work. I hope that the DWP will do other things to play its part.

I will briefly turn to two pensions issues, the first of which is a specific constituency matter. My constituent is being denied her full state pension because of a gap in her national insurance record. The gap exists because she worked in intelligence for the armed forces a number of years ago. When she became pregnant, she was immediately discharged from the Army, but she could not return home to Scotland because of the sensitive nature of her work. The gap is purely caused by the pregnancy discrimination that she experienced at the hands of the state. She is being told that, rather than paying her the small extra amount that she would be entitled to each year, the Government would arguably rather give it to lawyers and have us go to court. I really hope that the Government can recognise that she has experienced an injustice. I urge the Minister to meet me so that we can find a way forward for my constituent, who was serving her country.

On a much broader injustice, the WASPI—Women Against State Pension Inequality Campaign—women are still waiting to receive the money that has been denied them. As time ticks by, many will die before they receive what they deserve. Do the Government want that legacy—3.8 million women left to die, with far too many of them in poverty exacerbated by the cost of living? The ombudsman might still be reaching its conclusions on compensation, but it would be a huge comfort for the WASPI women to know that the Government plan to follow its recommendations. Will the Minister join me today in pledging to follow the ombudsman’s recommendations, when they are made, and to provide compensation to women who missed out because of Government error?

We could talk about lots in this estimates debate and Members have referred to other issues that I would want to raise. In conclusion, however, we are feeling the impact of the cost of living crisis more acutely in the UK. It is incumbent on the Government to stand up and help constituents, including those claiming benefits or who interact with the DWP, however they do so.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Scottish National party spokesperson, Kirsty Blackman.

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[Kirsty Blackman]

It is, and it is ironic that the DWP is asking staff to step up and deal with its creaking, unfortunate, flawed computer system. It is asking them to do all this additional work to make that happen while failing to make the investment where it should be making it, in the computer system and in the people. I am also seeing a reduction in DWP office staff in Aberdeen. I very much hope that the Government change their mind about the direction in which they are going.

We have heard from Members across these Benches about the issues affecting people’s quality of life as a result of the DWP’s failures and the failures of the Government’s policies. Loads of people have mentioned the safety net. The whole point of a safety net is that it catches people. The point is not to make the holes as big as possible so that as many people as possible fall through. I would rather have a social security system like the one that we are building in Scotland; a social security system that ensures that everybody is caught by the safety net, so that everybody gets what they are entitled to and people do not accidentally fall through. This Government’s policy seems to be to give social security payments to as few people as they possibly can and to try very hard to set the bar as high as possible so that people cannot meet the requirements.

We have heard about the Scottish social security system and its openness compared with the DWP’s system, where the report on food banks and the equalities impact assessment were buried. Audit Scotland recently audited the Scottish social security system. It said:

“The Scottish Government has continued to successfully deliver new and complex social security benefits in challenging circumstances. This is a significant achievement. There is a conscious focus on the needs of service users, building on the principles of dignity, fairness, and respect. People are positive about their experiences of engaging with Social Security Scotland.”

How different that is from the views that we are hearing down here, from what is in our inboxes, from the absolute intransigence and the issues that people face every day when simply trying to get what they are entitled to.

The social security uprating fails to get anything close to inflationary levels this year. We have seen an increase, but it is nothing close to the level of inflation. In fact, the £650 payment that the Chancellor announced does not even cover the £1,000 that was taken off people last year—never mind going any way to cover the increase in the cost of living. The Chancellor, the Minister and the Secretary of State have repeatedly said, “But people are getting more, with the £650, than they would have if we had uprated benefits”. We are asking them to do both. We are asking them to adequately uprate the benefits and backdate that to April as well as to make the additional payments. Only then can we get to a situation that is close to helping with the cost of living.

This is a tale of two Governments. We can see that another country is possible. We can see the failings, with the bedroom tax, the benefit cap and the two-child policy being carried on with. We have heard a lot about no recourse to public funds. When we discussed the Social Security (Additional Payments) Bill last week, I mentioned that children were literally starving and I was scoffed at by Government Members. If we look at reports, we see that junior doctors talk about children presenting with rickets because of the level of malnutrition, because they have no recourse to public funds, because they have been sanctioned, or because they otherwise cannot afford to eat a healthy diet. Comments have been made about the lack of variety and the lack of healthiness in the diets provided by food banks, which try incredibly hard but just cannot meet the requirements. In addition, they cannot provide food for people who cannot afford electricity. If people cannot afford electricity to boil something in a pan, it is difficult for them to cook adequately.

In the main estimates book, the Government talk about providing £5.6 billion—that is the initial spend—under the Social Security (Additional Payments) Bill. However, they mention providing £37 billion for increases in the cost of living. That £37 billion is made up of additional payments, as the Chancellor has stated, but can the Minister confirm that he is including things in it like the freeze on alcohol duty? It cannot be said that the freeze on alcohol duty relates to improving the cost of living for people who cannot afford to eat.

I am pleased to have been able to talk about the DWP estimates today. What is happening is woefully, woefully inadequate. Our constituents are coming to us and we just cannot provide them with the hope that they need and want, because the Conservatives are digging their heels in and refusing to offer adequate support.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

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[David Rutley]

I have set out our approach, which is to ensure that advances are made available to help people in those difficult circumstances to get the money that they need.

Another point that has been raised is about deductions. We have systematically reduced the amount that can be deducted from benefits from 40% to 30% and now to 25%. If claimants have issues, they can go to the debt management service for further advice and support. Others have mentioned the carers allowance. I want to highlight, as I did in the recent Second Reading debate on the Social Security (Additional Payments) Bill, that the carers allowance is not a means-tested benefit. Nearly 60% of working-age people who are carers will get the cost of living payments, as they are means-tested benefits, or disability benefits. Carers allowance is paid on an individual basis to people in households across the income scale, so they may live in a household that is able to receive the £650 payment or the disability payment as well, which will help them to pay the bills in their own households. We also talked about how larger families will be getting the same payment as individuals. This is because we needed to get the payment out fast to as many people as possible. We will be making the means-tested benefit-related cost of living payment from 14 July, and that is absolutely critical. We were not able to develop a system that would account for every single eventuality.

I conclude by saying that this Government have worked incredibly hard over recent years to ensure that we help people to get into work, that we make work pay and that we support people with the cost of essentials. The latest cost of living payments that have been made and the additions to the household support fund demonstrate that we are absolutely committed to providing this help for households. I would like once again to thank hon. and right hon. Members for their contributions to this important debate.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With the leave of the House, I call Sir Stephen Timms to wind up briefly.

Social Security (Additional Payments) Bill

Baroness Winterton of Doncaster Excerpts

2nd reading
Wednesday 22nd June 2022 Commons Chamber

[Dr Coffey]

My hon. Friend is right to point out the additional measures. I do not know exactly how many people in his constituency will be affected, but I rely on his excellent local knowledge as a great constituency MP. Absolutely—I am setting out additional measures to those that he has outlined.

The Bill will deliver one-off additional payments responding to the challenges faced by people in every part of our country over the coming months. I thank the usual channels and the House more broadly for agreeing that it can make its necessary progress today. Its provisions are intentionally straightforward and will enable a straightforward approach for claimants, with no complicated forms, no bureaucracy and nobody having to make an additional claim, as payments will automatically go into people’s bank accounts.

The actions in the Bill will boost the budgets of millions of stretched families in every part of the United Kingdom, helping them through the cost of living challenge. I commend it to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State, Jonathan Ashworth.

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[Jonathan Ashworth]

My hon. Friend is absolutely right. I can assure her that she speaks with an eloquence on these matters that I rarely muster, and I thought she put her points powerfully.

Even though many disabled people have been given an additional £150, for many of them that will not cover the additional cost of inflation when applied to disability-related benefits. For example, for those on universal credit, the supplement for someone unable to work or engage in work-related activity rose by about £240 a year less than if it had been uprated in line with the consumer prices index. In addition, someone receiving the daily living component of PIP is worse off by £185 on the standard rate and by £274 on the enhanced rate as a result of the sub-inflation upratings later this year.

That is one of the reasons why many people out there are particularly concerned that the Secretary of State—I understand that, in legislation, she has to review these matters—and the Government may well resile from their commitment to inflation-increase benefits and pensions this September.

Equally, the hon. Gentleman who sits for a Welsh constituency that I cannot remember, and I am not sure I can pronounce it either—[Interruption.] The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) raised carer’s allowance, and people claiming carer’s allowance will not get any extra support. Carers often have higher energy bills because of their caring responsibilities, yet people in receipt of carer’s allowance—remember that they provide care for at least 35 hours a week and earn less than £132 a week—are likely to be hit hard without additional support. Why were carers left out of this package?

Thirdly, I want to talk about pensioners. We have 2 million pensioners in poverty, and the number is rising. The Prime Minister promised that pensions would keep pace with wages and prices, but, without any thought as to how hard pensioners are finding it to make ends meet, Ministers broke that promise by removing the so-called triple lock. That meant a real-terms cut of about £500 in the basic state pension—the biggest real-terms cut, I believe, for about 50 years. I was pleased to see Ministers commit to honouring the triple lock for next year, but we can see the pressure Ministers are coming under and we hope the Secretary of State does not break that promise for the next financial year.

We also need clarity from Ministers on whether the standard minimum guarantee of pension credit will be uprated in line with the consumer prices index in September. Pensioners on pension credit will receive the £650, as the Secretary of State knows, but pension credit uptake is not what it should be. If we could drive up the uptake of pension credit, Loughborough University estimates than an extra 440,000 retirees could be lifted out of poverty. With approximately 850,000 pensioners not claiming pension credit, a huge number are set to miss out. Failing to do more to increase pension credit uptake could mean that two thirds of the poorest pensioners will not get the extra £650.

I recognise that the Minister for Pensions and Financial Inclusion—the hon. Member for Hexham (Guy Opperman), who is not in his place—has been leading a campaign to drive up the uptake and has even been ballroom dancing with Len Goodman. However, the Bill’s impact assessment, which the Government have published today, shows that 1.4 million pensioners are benefiting, but in the second round it is estimated that 26,000 fewer payments will be made to pension credit recipients. Can the Secretary of State or the Minister responding to the debate—the Under-Secretary of State, the hon. Member for Macclesfield (David Rutley)—explain why that is and what it says about the success, or otherwise, of the Government’s pension credit take-up campaign?

Families with children are poorly served by flat rate payments. Families in the bottom half of the income distribution with two or more children spend twice as much on food, essential household goods and services, clothing, footwear and transport. Families with three or more children are likely to spend an additional £500 on energy, but the support on offer is not adjusted for size of family.

We recognise that the cost of living payment, combined with the £150 council tax rate, will provide £1,200 for working-age households in receipt of means-tested benefits. However, that will not cover the whole increase in energy bills, especially as further large increases in the price cap, perhaps of £1,000, are expected in October. Nor will it provide much mitigation of the wider price food rises.

Let me spell it out. We know that there will be another rise in gas and electricity prices, possibly of £800 to £1,000, for a family who have already faced an increase of £850. That family will therefore need to find at least £1,650. They will get the council tax deduction of £150; they will get the energy bill loan, turned into a grant, of £400; and they will get £650, paid in two instalments, supposedly to cover the year ahead. That is £1,200 in total, which will still leave them £450 worse off because of the energy price rises this year. As that comes on top of last October’s £20-a-week cut in universal credit, that family’s standard of living will be down by £1,450 on last year—£28 a week. That is even before we take into account the food shopping bill, which Kantar has today predicted will go up by at least £380. The Governor of the Bank of England has warned of “apocalyptic” increases in food prices.

Surely more Government action is needed. Ministers will retort that they are helping families to find employment; employment should indeed be the best defence against the rising cost of living, but under this Government, 8 million people in work are in poverty and are picking up food parcels for their families because of low pay and family circumstances. Some 2 million working families are on universal credit and have suffered similar losses to those who are out of work: they have lost the £20 uplift, they faced a real-terms cut in universal credit in April, and their wages are being outpaced by inflation, even after the national living wage increase.

I recognise that the Minister will respond that the Chancellor has reduced the UC taper rate and increased the work allowance, and that those with the highest earnings who qualify for universal credit gain the most from the reduced taper. However, for those with very low earnings, the gains are much less than the losses elsewhere. A lone parent with two children would lose £1,200 if they were not working, but would lose £1,300 if they were working 10 hours, nearly £700 if they were working 20 hours and £400 if they were working 30 hours. These families have already lost substantial amounts, and the package that the Chancellor has announced does not make up for it. Those examples are not exceptional. They will have a familiarity to every Member who speaks to their local food bank or citizens advice bureau. The problem is that the flat payment system takes no account of family size or special needs.

I hope the Minister addresses those points this afternoon, because we need more than quick fixes to protect the living standards of our constituents and tackle the chronic injustices of poverty. We entered the living standards crisis not just on the back of years of underwhelming economic growth, but after years of cutting, freezing and restricting access to social security, which left us with a threadbare system and an explosion in food bank, baby bank, bedding bank and fuel bank usage. The real-terms value of out-of-work benefits is the lowest for years. We have seen the pernicious two-child policy, caps on support, inadequate help with housing and council tax, and real-terms cuts to universal credit—real-terms deductions to the amount that people on universal credit are forced to grapple with.

That is why child poverty is rising on its way to 5 million, with half a million more children destitute and 500,000 children going without a decent bed at night. The outcry from our communities forced the Government to take short-term action, but we need a long-term plan to rebuild social security, grow the economy, raise living standards, and defeat child and pensioner poverty, so that the victims of poverty can participate fully in society. That is what I am determined to build.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I have now to announce the result of today’s deferred Division on the Abortion (Northern Ireland) Regulations 2022. The Ayes were 215 and the Noes were 70.

[The Division list is published at the end of today’s debates.]

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[Lee Anderson]

I will tell the hon. Lady what is generous: a single parent, like my friend and I were all those years ago, getting £24,000 a year for working 16 hours a week. [Interruption.] The hon. Lady can shake her head, but I think that is a pretty generous payment. That person would not be paying any income tax. Come to Ashfield and ask if £24,000 net is a good income. It would be a struggle to find people who are earning that sort of income so, yes, it is a generous income.

As we level up the country, we need to level up the skills of people who are trapped in this life of benefit dependency caused by the Labour party—I will stick to my words. In the meantime, this caring Government realise that families need extra support, which is why we are providing £37 billion to support families. Remember this is taxpayers’ money. There is no magic money tree, so hard-working people are having to pay for this.

This Bill will ensure swift action by providing the power to make two cost of living payments of £650 to 8 million households throughout the UK. This is real, targeted help for real, vulnerable people. The £200 rebate on energy bills has been doubled to £400, and it is now a grant, so it will not be paid back. The living wage is up, the national living wage is up, the universal credit taper rate is up and national insurance has been cut, so 70% of those who pay national insurance will pay less and more than 2 million people will pay no national insurance at all. We are doing all we can to ensure we help to keep people’s head above the water by spending more than £80 billion on universal credit and legacy benefits, which now represent 3.8% of our GDP.

We cannot keep asking the hard-working taxpayer to put their hand in their pocket to pay more and more. We must all do our bit. Although I welcome that the Bill will get immediate support to families, we must all work hard to make sure every single person in this country has the chance to support themselves. The benefits system should be there to help people in their hour of need; it should not be a way of life.

If it were left to Labour, everyone would be sat at home feeling sorry for themselves, but I am different. I want people to have a good job, to earn more money and to enjoy the fruits of their labour.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson, Kirsty Blackman.

British Sign Language Bill

Baroness Winterton of Doncaster Excerpts

3rd reading
Friday 18th March 2022 Commons Chamber

Third Reading

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the hon. Member for West Lancashire (Rosie Cooper) to move the Third Reading of her Bill, I would like to point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.

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[Sir Mike Penning]

My hon. Friend has touched on a very good point. This Bill is not the silver bullet; it is a method of getting somewhere. The hard work will start once the other place gets its finger out. I will, if I may, come back to that story in a second.

We are concentrating on Government Departments, but there is a whole private sector out there, on which the hon. Lady touched, that is missing out on some profits and on people enjoying their services. Clearly, that consultant was not dim, which is what I was described as when I was at school, because I am dyslexic—apparently if you were dyslexic back in the early ‘60s and ’70, you were dim. He was not dim, but he is ignorant—ignorant of what the condition is all about. Clearly, by the sound of it, he was not an ear, nose and throat specialist. I think the House will understand where I am coming from when I say that it is not a lack of intelligence, but a lack of understanding and compassion. “Compassion” sounds like an old-fashioned word, but I thought that was what the health service was supposed to be about. Interestingly, my mother, who was a nurse for some 40 years, would tell me that, in many cases, compassion was the best healer, compared with some of the other methodologies.

As we look at the Bill, we should say to ourselves, “We must draw a line in the sand.” That is quite important and it should have happened years ago. We can talk about the 2003 Act, and about leaving BSL out of the 2010 Act, which I have already done, but, as I have said, we need to draw a line in the sand now. Some of the stars of stage and screen have needed to help us increase public awareness, because, sadly, that is the sort of society in which we live. As everyone here can see, I am an expert in ballroom dancing—I think not! But even I watched “Strictly Come Dancing” towards the end because it sent out such a fantastic message to society that we all have the same dreams and aspirations, which I alluded to earlier.

The hard work starts now—I am sorry, Minister, that I am no longer on the Front Bench; I truly wish that I was sitting there now to support the Bill as it goes through. The Minister and I have had many a conversation about the Bill and, as I have said, this is where the hard work starts. The expectation from the deaf community, which will cheer you to the rafters when you go to the rally later today—sorry, Madam Deputy Speaker, not you, although I am sure they will be cheering you to the rafters. I have only been here for five minutes so you will have to let me off. The deaf community will cheer the Minister to the rafters later, but they will not cheer us if we do not deliver. It does not matter who is in Government; this is a long process. It has taken us this long to get here, but they expect us and the panel to deliver.

Let me touch on the membership of the panel, which is massively important because it will be the voice of the deaf community. I said, I think in Committee or perhaps on Second Reading, that this process should not be completely one-sided. It is absolutely right that the deaf community expect to be on the panel so that we can hear from them, but we have to try to get the balance right so that expectations can be measured and so that we can try to fix this when it goes wrong, although we will not be able to do so there and then. The membership of the panel is very important and should include not just the Minister and members of the different charities and the deaf community.

In conclusion, I am as proud as punch that the Bill will pass through this House today—I am somehow convinced that it will. It has taken a while and the expectation will be high, but let us meet that expectation and allow these people to live their dreams.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

Social Security and Pensions

Baroness Winterton of Doncaster Excerpts

Monday 7th February 2022 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

With the permission of the House, the motions on the draft Social Security Benefits Up-rating Order 2022 and the draft Guaranteed Minimum Pensions Increase Order 2022 will be debated together.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

I beg to move,

That the draft Social Security Benefits Up-rating Order 2022, which was laid before this House on 17 January, be approved.

[Madam Deputy Speaker]

With this it will be convenient to consider the following motion:

That the draft Guaranteed Minimum Pensions Increase Order 2022, which was laid before this House on 17 January, be approved.

[David Rutley]

The Social Security Benefits Up-rating Order reflects the Government’s continuing commitment to support working families and pensioners across the nation. The order will increase state pensions, benefits and statutory payments by 3.1%, in line with the consumer prices index in September 2021. With support from the House, when the order is passed, the new rates will come into force from April this year. With the approval of this order, in 2022-23 the total Government expenditure on benefits for pensioners in real terms will be £131.1 billion and the total expenditure on benefits for people below state pension age will be £108.7 billion. The pandemic has been a very difficult time for many. Our welfare system, particularly universal credit, has proved agile.

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[David Linden]

On a point of order, Madam Deputy Speaker. The Minister may have inadvertently misled the House in saying that that sum was for the Scottish Government, rather than the devolved Administrations. I am sure he will want to correct that at the Dispatch Box.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Let me deal with the point of order. I do not really like points of order in the middle of debates, because the hon. Gentleman would have had the chance to respond. However, the Minister has heard what he has said, and I am sure that if there is anything further he wants to add, he will do so.

[David Rutley]

I thank you, Madam Deputy Speaker. I will lean into the point that the hon. Member has made. To be clear, the devolved Administrations are receiving £715 million in funding through the Barnett formula as usual, so I think we are all clear, and I will proceed. I was just moving on to the state pension age.

For people who are in work and who are parents, or who are below the state pension age and are looking for work or unable to work, this order increases the personal standard allowances—jobseeker’s allowance, employment support allowance, income support and universal credit—by 3.1%. Certain elements linked to tax credits and child benefit will be increased in line with those payments. The order also increases statutory payments by 3.1%: these include statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory sick pay. The monthly amounts of universal credit work allowances will increase in April to £344 and £573.

As we begin our recovery and the global economy rebounds, consumer demand is surging at the same time as global supply chains are being disrupted. We recognise and understand the pressures that those rising costs are putting on household finances. Our long-term ambition is to support economic recovery across the UK, including through our multi-billion-pound plan for jobs, which has been expanded by £500 million and will help people across the UK find work and boost their wages and prospects, particularly at a time of record vacancies, which now stand at around 1.25 million. To help that effort, we have introduced the Way to Work, which is a concerted drive across the UK to help half a million people who are currently out of work into jobs over the next five months by engaging with employers and with claimants. This will help reduce the time that claimants spend out of work, thus preventing them from moving further away from the labour market, a factor that makes it increasingly difficult to get a job. To help working people further, as well as raising the national living wage to £9.50 from April—a pay rise for the lowest earners—we have reduced the universal credit taper from 63% to 55% and increased work allowances, with the result that nearly 2 million households will, on average, keep around an extra £1,000 on an annual basis.

The Government recognise the vital role that unpaid carers play each day and the additional challenges they have faced during the pandemic. From April, carer’s allowance will increase to £69.70 a week. Unpaid carers also have access to support through universal credit, pension credit and housing benefit, all of which include additional amounts for carers. For a single person, the carer’s element in universal credit will increase to £168.81 a month from April, and the carer’s amount in pension credit and housing benefit will increase to £38.85 a week. These amounts recognise the additional contribution and responsibilities associated with caring for those on lower incomes. Benefits for those who have additional costs as a result of disability or health conditions will also increase by 3.1%. These include disability living allowance, attendance allowance, incapacity benefit, personal independent payment and other means-tested benefits, the employment support allowance support group component and the limited capability for work and work-related activity element of universal credit.

Since the start of the pandemic, this Government have introduced measures to support the most vulnerable when needed. For example, since last November we have provided a £500 million support fund to help eligible households with essentials. The household support fund provides £421 million to help people in England with the cost of food, utilities and wider essentials, and we will continue to keep policies under review this year, basing interventions on the latest economic picture.

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[Nigel Mills]

The hon. Gentleman is absolutely right: we cannot expect somebody to move hundreds of miles in that situation. Equally, anybody who can work should work, and should be supported and given the training to do that when it is in their best interests. I do not meet many people who can work but do not want to; I think most people who can work with the right support are very keen to.

I will vote for the draft orders tonight. I think our choice is a 3% rise or nothing, so it seems slightly self-defeating to vote against them, but I ask the Government not to take the House’s approval as a sign that it agrees with the position we are in. The Government could use their discretion and make the increase higher than inflation if they wanted to, just as they have chosen many times to make it lower than inflation. We knew that this problem was coming; it has not turned up in the last fortnight and got us chasing around.

I am not even asking for something that would be a long-term cost. All we would be doing is bringing forward to this year the rise we would give people next year, so that they have it in time to pay their higher bills, rather than six months after getting them. That is the impact of the calculation that we do, and if we do not get it right, we will be putting people in an impossible situation.

The idea of having a welfare system that we can control so we can give people transparency and up-front certainty is that it is there to give them the support they need. We cannot keep filling holes with discretionary, complicated schemes that people may or may not find about, that are done differently by councils all around the country, and that may or may not exist in the long term. The whole idea of a universal credit system was that it would be a benefit that rolls everything into one and gives people the support they need. By doing all these occasional one-off top-up schemes, we are admitting that the main benefit is not in the right place.

I urge the Government to take a step back, to remember our core purpose of giving people enough to live on—not luxuriously or hugely generously, but with a decent standard of living—and to be absolutely sure that they have achieved that and are still achieving it. If they have any doubts, they must do the work to publish it and prove it, and if we need to fix it, let us get on with fixing it.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Select Committee on Work and Pensions.

British Sign Language Bill

Baroness Winterton of Doncaster Excerpts

Friday 28th January 2022 Commons Chamber

[Rosie Cooper]

Is it not fantastic that the Chamber has spoken with one voice today? It has been absolutely brilliant. I have enjoyed working with the Minister and her team. Look what a difference we have made by working together across the House. We have made a difference and we will make a difference.

On the behalf of the deaf community, I thank each and every Member for their support for the Bill. My dad would have loved to have been here today, as would all those campaigners who have gone before and upon whose shoulders we stand on this momentous day. Thank you, all. [Hon. Members: “Hear, hear!”] [In British Sign Language: “Thank you, all.”]

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

[Madam Deputy Speaker (Dame Rosie Winterton)]

I congratulate the hon. Member for West Lancashire (Rosie Cooper), the Minister and everybody involved in making the Bill happen. It has been a good day’s work.

Social Security (Up-rating of Benefits) Bill

Baroness Winterton of Doncaster Excerpts

Consideration of Lords amendments
Monday 15th November 2021 Commons Chamber

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

rose—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. This debate has to finish at 6.51 pm and I intend to bring the Minister in at about 6.46, so I ask the two remaining speakers to take about six minutes each.

[Wendy Chamberlain]

When we first debated the changes to the triple lock in September, the Secretary of State suggested we take advice from my friend the former Pensions Minister, Steve Webb—with whom I speak from time to time, the Secretary of State, who is now in her place, and the Minister will be happy to know. We usually do so when he is highlighting cases of people having lost out on entitlements due to failures in DWP systems.

As well as holding the DWP portfolio for my party, I am here to serve the interests of my constituents and I can tell Members that I have not received a single email or letter supporting the suspension of the triple lock. I have, however, received email after email asking me to fight to maintain it and pointing out that our state pension is already the lowest in Europe, with people worrying how they are going to make ends meet this coming winter.

On Second Reading, the Secretary of State told us this suspension was to deal with a one-off anomaly caused by the pandemic. I wonder whether she or the Minister actually engaged with the Prime Minister on this in advance of Second Reading, because his comments on the subject do not align with that argument. The Prime Minister has told a very different story, where quickly rising wages are not just desirable but an intended outcome of Brexit. So I have to ask: whose explanation should Parliament believe on these wage increases? Do the Minister and the Secretary of State align with the Prime Minister on this now and if so why are the Government intent on leaving pensioners behind, far too many of whom are already on or below the poverty line?

I am happy to support the Bill as it has returned to us from the other place, which has worked admirably across the Benches to find this compromise. The Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms), reminded us in his considered contribution that this is not just about pensioners now; it is about the young, people who cannot get on to the housing ladder and whose wages have been suppressed. We in this place need to ensure that the decisions we make about pensions now give people the reassurance in future that there will be a sustainable state pension for them to live on. The Bill in its current form acknowledges the distortions to the labour market caused by the pandemic, but also acknowledges that inflation is rising. Under that Bill, pensioners will be able to keep the heat on and afford their weekly shop.

I acknowledge that the hon. Member for North Norfolk (Duncan Baker) at least tried to justify the Government’s position this evening, but I note that no other Conservative Back Bencher has had the appetite to do so. There is a simple choice before the House today. I cannot support the Government’s amendments, which will cause such harm to so many.

Universal Credit and Working Tax Credits

Baroness Winterton of Doncaster Excerpts

Wednesday 15th September 2021 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am going to make every effort, and I am determined to get everybody in. That may mean that at some point in the very near future I have to reduce the time limit to two minutes, but if we help each other and take less time we might be in with a better chance.

--- Later in debate ---

[Helen Hayes (Dulwich and West Norwood) (Lab)]

I rise to speak against the cut to universal credit, which is cruel, illogical and unnecessary. It is cruel because £20 a week makes all the difference to those on the lowest incomes, many of whom are already working all the hours they can but simply cannot make ends meet. Norwood and Brixton food bank, which serves many of my constituents every week with love and care, has been warning for many months that if local people on universal credit are subjected to this cut, the need for emergency food support will increase, placing even more pressure on its staff and volunteers. Our welfare state was established to provide a security safety net for people who cannot make ends meet, yet this Government are taking us back to Victorian Britain, where people forced into appalling hardship by the Government’s failures are reliant on the good will of our communities in ever-increasing numbers.

This cut will cause unspeakable hardship. Parents will go without food so that their children can eat. People will suffer in cold, damp homes because they will not be able to afford the heating. Debt will increase and physical and mental health will deteriorate. This cut is illogical, because at a time of fragile economic recovery, when high streets up and down the country are struggling and shops are closing, it makes no sense to be taking millions of pounds of expenditure out of every single constituency in the country. And this cut is unnecessary, because it is a political choice.

There are many ways in which the Government could lift people out of poverty. They could raise the minimum wage to the real living wage, make housing more affordable, make childcare more affordable and ban zero-hours contracts, but they have failed those on the lowest pay for more than a decade and now they are punishing the same low-paid workers. These are the same people who have been at the frontline of the coronavirus pandemic: social care workers, shop workers, childcare workers, delivery drivers, hospital porters, bus drivers and others. This is no way to treat those who have seen us through the greatest crisis since the second world war.

It does not take a degree in engineering to know that if the screws are too tight, the pressure will buckle and break even the strongest of materials. Make no mistake, this cut will break people who have already faced so much pressure from the cruel policies of this Tory Government bearing down on them. Government Members have a choice: they can live with this cruellest of cuts or they can join us in the Lobby and vote against it, because it is wrong and unacceptable.

[Madam Deputy Speaker (Dame Rosie Winterton)]

After the next speaker, I will reduce the time limit to two minutes, but that is because I want to get everybody in. I call Zarah Sultana.

--- Later in debate ---

[Kim Johnson (Liverpool, Riverside) (Lab)]

This cut to universal credit is perhaps one of the most callous and cruel policies this Government have proposed, and we have a long list to choose from. After more than a decade of brutal austerity measures and chronic Tory mismanagement, absolute poverty and child poverty were soaring even before the devastating impact of the pandemic. In my Liverpool, Riverside constituency, where child poverty, relative poverty and absolute poverty already soar above the national average, it amounts to more than 3,200 families and nearly 6,000 children.

This draconian Tory Government are dangerously out of touch with the reality of millions. They have no comprehension of the reality of poverty, of missing meals and going cold. They claim that the need for fiscal responsibility overrides the need for just and fair policies, as if the two are mutually exclusive and as if economic prosperity cannot exist without inequality and poverty. The cut of £1,000 from the pockets of those most in need is the ugly face of that ideology of class warfare—let us call it what it is.

As a black, working-class woman born and raised in Liverpool, I know full well the impact of this class warfare. Thatcher’s policies of managed decline in the 1980s threaten to pale by comparison with the cruelty of this Tory Government. The bare, honest truth is that this cut is not fiscally competent. Hitting workers’ spending power with cuts to universal credit, a rise in national insurance contributions, a public sector pay freeze and a personal income tax freeze is not the economic competence that the Tories claim. It is the opposite.

Instead of taking money out of the pockets of those most in need, the Government must wake up to the reality facing millions of families who will be pushed into Dickensian levels of poverty and misery. I call on Members on both sides of the House to cancel this cut.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Front Benchers, I should say that they have agreed to cut down their contributions to allow everybody to get in.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

Further to that point of order, Madam Deputy Speaker. The House has expressed itself very clearly in saying that there are concerns about the £20 of universal credit being taken away from the people who need it most. That being the case, how can we ensure, legislatively, that we turn that into a victory for the people we represent in this House and for those who want that universal credit money to continue for at least a period of time?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Lady and the hon. Gentleman for their points of order. How the Government choose to vote is not a point of order for the Chair, but it might be helpful if I remind the House that on 26 October 2017 the former Leader of the House, the right hon. Member for South Northamptonshire (Dame Andrea Leadsom), set out the following:

“Where a motion tabled by an Opposition party has been approved by the House, the relevant Minister will respond to the resolution of the House by making a statement no more than 12 weeks after the debate.”

I am sure that those on the Treasury Bench will have heard that. To address the hon. Gentleman’s point directly, the resolution on an Opposition motion is not a binding resolution, hence my drawing attention to the fact that we assume that a Minister will come to the House within 12 weeks to respond.

[David Linden (Glasgow East) (SNP)]

On a point of order, Madam Deputy Speaker. You will be aware that if the Government do not take action on the universal credit cut, in 12 weeks that £20 a week will be gone from the constituents who we all represent. On a broader point of consistency, the Government have clearly abstained on the vote on the first motion of this Opposition day. The subsequent motion is essentially a motion about House business and would instruct Mr Speaker to set up a Committee. How can the Government claim to have consistency when they abstain in the vote on the first motion and will almost certainly vote against the second motion this evening?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am afraid I am not really answerable for whether there is consistency in the choices that are made. Every Member has the right to decide whether they want to vote or not vote. I assume that these issues could well be addressed later in the debate, to which we now come.

Pensions Update

Baroness Winterton of Doncaster Excerpts

Tuesday 7th September 2021 Commons Chamber

[Dr Coffey]

It would probably not be wise for me to go down that route, because we are still trying to estimate the likely uplifts in the different metrics. We will not actually use the figures until later in the year, but because of how the machinery of benefit upratings works, we need to be in a position to trigger it in November. Given my hon. Friend’s position on the Work and Pensions Committee, he may wish to ask that question a little later once we have some more detailed analysis in that regard, if that is okay.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Select Committee.

[Stephen Timms (East Ham) (Lab)]

Is it still the Secretary of State’s view that it is important that the level of the basic state pension keeps track with earnings over time, as the coalition pension reforms assumed? If so, will it not require some further adjustment after these two exceptional years? Given that pensioner poverty was starting to increase before the pandemic, after a long period in which, as she said, that did not happen, what will her Department do to increase the currently very low take-up of pension credit?

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

Baroness Winterton of Doncaster Excerpts

2nd reading
Tuesday 8th June 2021 Commons Chamber

Second Reading

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I ask the Minister to move Second Reading, I will introduce a three-minute time limit on Back-Bench speeches. As colleagues will know, this is a very short debate, but I will try to get in as many Members as I can.

--- Later in debate ---

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

Talking about the cost to the taxpayer, I wonder if my right hon. Friend continues to be shocked by the fact that a Member of this House, the hon. Member for Plymouth, Moor View (Johnny Mercer), received over £85,000 from subsidiaries that were mis-selling, like a company in my constituency that defrauded my constituents. That money has never been paid back, but that Member received money from the taxpayer, and actually we should be looking at ourselves—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.

[Mr McFadden]

I am grateful to my hon. Friend, and I do think it ill behoves any Member, given the scale of the losses and given the necessity of the Government to bring in this Bill to compensate people for their losses, to profit from this either directly or indirectly. I think that should be clear to all of us.

The Government are legislating on this because of the litany of regulatory failures set out in the report on this issue carried out by Dame Elizabeth Gloster. These failures included failures to respond to repeated warnings from investors and potential investors, LCF repeatedly running promotions implying its products were regulated by the FCA, and failures of communication between different parts of the FCA, all in the end leading to this collapse and financial loss. Had the FCA acted earlier, far fewer people would have invested through this firm, losses would have been lower and the taxpayer would not be faced with the £120 million we are talking about today.

--- Later in debate ---

[Mr McFadden]

Many investors did invest because they thought that these mini-bonds were authorised by the FCA, and they were not. A big part of the problem here is having a regulated firm marketing unregulated products. If I am right, the hon. Member’s constituents may be eligible for the compensation authorised by the Bill.

Dame Elizabeth’s report makes it clear how badly the investors were let down by the regulator, and both the Government and the FCA have said that they accept the findings. I have a number of questions that I want to put to the Minister for his wind-up at the end of the debate. First, why is the level of compensation he has chosen 80% of the FSCS level? On what basis was that decision made? Secondly, how will this work practically? I understand that the Government want to avoid the involvement of claims management companies, and that is something I think we would all endorse. How will the Government do that and avoid repeated rounds of claims?

The Bill also gives rise to some important broader questions about policy. The failings identified were serious and substantial, and have to be addressed. The first of those broader questions is: when should compensation paid for by the taxpayer be paid and when not? The Minister quite rightly said that the taxpayer cannot stand behind every investment policy. It would be unfair on taxpayers to expect them to do so, and it would produce perverse incentives. After all, we all know that the value of investments can go down as well as up.

In the case of LCF, it was bonds that were being sold, and the advertising implied a guaranteed pay-out when such pay-outs could not, in practice, be guaranteed. Regulation is not aimed at enabling people to make reasonably informed choices and to understand the risks they are taking. Having made the decision to offer taxpayer-funded compensation in this case, when does the Minister believe it justifiable that the taxpayer should be asked to do that, and when does he not? What was the discussion in the Treasury about how to ring-fence this failure and this company from broader claims for financial compensation? There are calls for compensation quite regularly when investment failures happen. How confident is the Minister that the Treasury will not be subject to legal action from victims of other investment failings?

How confident is the Minister that the FCA can actually make the changes necessary to avoid a repeat of the findings set out in Dame Elizabeth’s report? Callers were phoning the FCA for three years before the company’s collapse. Appendix 6 of Dame Elizabeth’s report states that the FCA received 611 queries from consumers regarding LCF. That is not a random phone call at five o’clock on a Friday that can be missed; it is a pattern of people trying repeatedly to raise red flags and getting nowhere

Individual A said on 15 July 2016:

“This company is doing exactly what the pyramid scams are doing. What they’re doing is they’re paying the money out, the interest out from money which people are paying on the bond… In other words, it’s just a pyramid scam… they’re saying they’ve got charges on their property, security on them, assets on their property, of course they don’t have any assets. It’s all horrendous really, the whole thing”.

There was call after call like that, and they were not acted on. They were not passed up the line, partly because the mini bonds were not regulated. In fact, one caller was told by the FCA call handler that it was not a scam.

There was also the letter from individual financial adviser Neil Liversidge in 2015, three full years before the collapse of the company. He warned that LCF had one customer who was worth—bear with me on the language, Madam Deputy Speaker; I am quoting—

“the square root of bugger all”

and he tried to raise warnings about the practices and health of the company. It appears that that letter was lost.

One of the more damning findings in Dame Elizabeth’s report is that, even if the letter had not been lost,

“It is unlikely that it would have resulted in any, or any substantive, action or re-action by the FCA.”

So little faith did she have in the processes that she appears to have argued that it did not matter that that warning letter had been lost because it would not have been acted on. Imagine if the FCA had acted, in 2015 or 2016, when those reports were received, rather than only at the end of 2018. Another question for the Minister is this: what will the FCA do to improve its handling of reports like this?

Then, there is the so-called halo effect of regulated companies selling unregulated products. Being regulated by the FCA featured heavily in LCF promotions. The financial promotions team at the FCA did warn LCF to dial back on the advertising, but the pattern went on and on, and no one drew the conclusion that this was not just an advertising problem, but a problem with the content of what it was actually selling. Dame Elizabeth states in her report:

“A substantial proportion of the Bondholders said that they would not have invested in LCF had it not been for the fact that it was regulated by the FCA.”

How will the FCA avoid the difference between unregulated activity and regulated companies from being exploited in the future?

The Gloster report was also the subject of a well-publicised disagreement between Andrew Bailey, the Governor of the Bank of England, and Dame Elizabeth, about the nature of responsibility and accountability. Where do the Government stand on this issue? It was all played out before the Treasury Committee in several hearings. Is it the Treasury’s view that senior officials in leading regulatory bodies are responsible for the failing that happen on their watch, or should responsibility apply only to the organisation collectively?

Does the Minister agree with the statement in the report that

“It is difficult to see why an individuals’ willingness to take on challenging tasks in public bodies should absolve them from accountability”?

Or does the Treasury accept the statement from the Parliamentary Commission on Banking Standards quoted in the report that

“A buck that does not stop with an individual...stops nowhere”?

These broader questions matter, because with ever more complex financial markets, the regulators have to be equipped to do the job—equipped through their leadership and their systems, but also through the resources at their disposal. Part of the backdrop to this is the FCA taking on responsibility for tens of thousands more firms after it took on the responsibilities of the Office of Fair Trading back in 2014. Is the Minister confident that it has the resources after the LCF collapse?

Let me turn to clause 2 and the fraud compensation fund. The Bill authorises a loan to be made as a consequence of greater than expected claims on that fund arising from the Dalriada case. It is estimated that the judgment in that case could result in claims of over £300 million. The loan will be funded by a levy on the pensions industry, to be paid back over the next 10 to 15 years. That comes on top of the levy to pay for the Financial Services Compensation Scheme rising sharply since the introduction of the Government’s pension freedom legislation in 2015. Back then, the levy was £300 million; this year, it will be over £1 billion pounds. That is a 48% increase on the previous year and more than triple the level of five years ago. Why does the Minister think the FSCS levy has had to increase so much since the pension freedoms legislation was introduced in 2015? Now we have a new fraud levy to boot.

Surely the right way to tackle this issue is to ask why more and more pensioners are being exposed to fraud and scams in the first place. Why does the Minister think that is happening? Why are more pensioners losing their money? When the previous Chancellor introduced the pension freedoms changes, he said that

“there will be free impartial guidance available to all.”

Six years on, the take-up of that advice is just 3%. Even when the Department for Work and Pensions made a targeted push to increase it, it only got up to 11%, so the vast majority of people using these freedoms are not using that service. Of the small number who take up the option, 72% say they do something different from their first inclination after receiving advice, so it is clear that such advice can help people to make a better decision, yet take-up is nowhere near the promise made at the time.

The promise of pension freedoms being matched with good, trustworthy financial advice has not been kept, and these levies, which will have to be paid by the pension schemes that have been nowhere near fraud and are trying to offer a good service to their members, are being put in place at least in part as a result of the Government’s own pension reforms, which have left more pensioners exposed to fraud and scams. That conclusion was endorsed by the Work and Pensions Committee in its recent report.

What unites both these clauses is people being subject to fraud, often through online advertising. There is a clear need for greater action on this. People are being bombarded on a daily basis with adverts for investments, some of which are scams and attempts at fraud. Financial innovation can be a great thing, but consumers need help in navigating this world, and they are currently being failed by a regulatory system that is lagging behind what is actually happening in the financial markets. There is an online harms Bill coming that, as things stand, does not include plans to crack down on financial crime. I urge the Government to think again on that. To proceed with that Bill without tackling online financial harm would be an enormous lost opportunity to protect consumers against this type of crime.

The answer is not just compensation when people lose money; it is to protect people against financial scams happening before they lose their money, to crack down on the fraudsters while they are peddling their scams and to stop these adverts reaching people in the first place. Not all thieves wear masks. It is possible to rob people of their money through misleading websites and illusory promises of financial gain. It is critical that the laws that we pass in this place keep pace with the innovations in fraud and financial crime that are taking place. For that to happen, it will take a lot more than the two clauses on compensation in this Bill.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now go to the Chair of the Treasury Committee, who has four minutes.

[Mel Stride (Central Devon) (Con) [V]]

This is a very important Bill. It seeks to compensate for some significant wrongs. As part of our ongoing inquiry into London Capital & Finance and the FCA’s response to it, the Treasury Committee has heard many harrowing stories of those who, in many cases, lost life-changing amounts of money as a consequence of what happened.

The Treasury Committee has been involved in the LCF situation for some time. My predecessor, Baroness Morgan, initiated the inquiry by Dame Elizabeth Gloster through approaches by the Committee to the Treasury and the FCA. I take this opportunity to offer my thanks, on behalf of the Committee and of the LCF bond holders, for the very thorough report that she and her team produced, for the witness session she attended as part of our inquiry and for the courtesy and information that she provided to me outside that witness session by way of correspondence and discussions over the telephone.

Dame Elizabeth Gloster carried out some excellent work. As a consequence of her report, the level of the failings on the part of the FCA is very clear. Indeed, the answers to the key questions put by the Government to Dame Elizabeth as part of the directions for her inquiry were clear: the permissions granted to LCF were not appropriate to the business it carried on; the FCA did not adequately supervise LCF’s compliance with the FCA rules and policies; and the FCA’s handling of information from third parties regarding LCF was wholly deficient. The FCA had appropriate rules to regulate the communication of financial promotions by LCF. However, the FCA did not have in place appropriate policies. Numerous red flags were examined by the Committee, but they had been missed over a long period.

There were wider failings within the regulatory system, and we have heard some of those from the shadow Minister, the right hon. Member for Wolverhampton South East (Mr McFadden). The FCA’s approach to the perimeter was limited. It did not take a holistic view of the perimeter and therefore there was inadequate supervision of unregulated activities. The halo effect, which the shadow Minister also raised, was without doubt a wider systemic problem within the FCA.

Our inquiry is ongoing. We have taken evidence from Dame Elizabeth, from senior personnel at the FCA, including Andrew Bailey, who was the chief executive officer of the FCA during the appropriate period, and my hon. Friend the Economic Secretary to the Treasury. We will have much to say in our report, which will be published no later than the end of this month.

Looking ahead, the speakers so far have rightly asked how we make sure that this does not happen again. That lies within the transformation programme that the FCA is now undertaking. The Committee will be showing a close and careful interest in the progress of that transformation programme.

By way of intervention, I note the observation of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) about the importance of those responsible for shortcomings being held accountable. We will no doubt have something to say about that in the report.

The whole issue of compensation leads on to the issue of the general view that there should be personal responsibility for investments, as well as Government backing, and we will need to look at that. I am terribly short of time, so I will leave it there. I welcome the Bill.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now go to the SNP spokesperson, Peter Grant, who I am sure will be acutely aware of the very limited amount of time that we have left for the debate.

--- Later in debate ---

[John Glen]

I thank the hon. Gentleman, as ever, for his representations. He has been a determined campaigner for that sector during my tenure. I have regular conversations, at least every six weeks, with the chief executive of the FCA, and we discuss a whole range of matters. I would be very happy to discuss that matter with him when I next speak to him in the next few weeks.

As Members from across the House have recognised today, the measure concerning a loan to the board of the Pension Protection Fund, set out in clause 2, is vital to ensure that those defrauded of their pensions by scam pension liberation schemes are able to access the compensation that they deserve. The Bill will ensure that those whose pensions have been unjustly targeted by fraudsters receive their pensions. We must continue to provide a safety net for people across the UK, who deserve to have confidence that they will have a pension pot for their retirement. I note that a number of observations were made about the ongoing challenge of dealing with the evolving nature of financial services firms and the sophistication of scams. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham, and I are working across Whitehall to bring an effective resolution to this matter.

I acknowledge that Members from across the House have supported the principles of the Bill, and I welcome the support that it has received. It will offer some relief to the enormous distress and hardship suffered by LCF bondholders and victims of fraudulent pension liberation schemes. It is an important Bill, and I want to move as quickly as possible from Royal Assent to enact it and deliver that compensation. I hope that right hon. and hon. Members will support it this evening.

Question put and agreed to.

Bill accordingly read a Second time.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill:

Committal

The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 17 June.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Alan Mak.)

Question agreed to.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(a) expenditure incurred by the Treasury for, or in connection with, the payment of compensation to customers of London Capital & Finance plc; and

(b) loans by the Secretary of State to the Board of the Pension Protection Fund.—(Alan Mak.)

Question agreed to.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, it is expedient to authorise such levying of charges under section 189 of the Pensions Act 2004 and Article 171 of the Pensions (Northern Ireland) Order 2005 as may arise by virtue of that Act.—(Alan Mak.)

Question agreed to.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I will now suspend the House for two minutes to make the necessary arrangements for the next business.

Income Tax (Charge)

Baroness Winterton of Doncaster Excerpts

Thursday 4th March 2021 Commons Chamber

[Clive Lewis (Norwich South) (Lab) [V]]

As we know, the context of the Budget yesterday was a debilitating global pandemic. It was also the last Budget before the UK hosts the COP26 climate conference. It was therefore arguably the most critical Budget since the second world war. I say “critical” because my friends, my family and my community matter to me, and having a viable future for them and myself matters to me. I saw so many of them struggling before the pandemic because of this Government, and now even more are struggling because of this Government.

What the people of this country needed from the Chancellor’s Budget yesterday was so much more than simply a reaction to the crisis at hand. What the people of this country needed was a strategy that would support all people and businesses struggling amid the pandemic, tackle the rising epidemic of inequality and debt, initiate a massive programme of decarbonisation, invest in local authorities and public services—the backbone of the successful part of the pandemic response—and rebuild our town and city centres as the vibrant hubs of sustainable communities and community activity. By those measures, the Chancellor’s Budget has failed on every single metric.

What I have seen in the pandemic is the best of the British people and the worst of this Conservative Government. In my constituency of Norwich South, I have seen care and compassion in the face of adversity, and I have seen the power of collective action in public services such as our NHS and schools, which stepped up to carry this country through extreme circumstances. In this Conservative Government, I have seen corruption and cronyism as well as indifference to growing inequality and climate change. That is ingrained in the detail of this Budget, which is going to punish the public and our public services, instead of taking the transformative action needed to support the livelihoods of all people and businesses, not just today but for generations to come.

What we needed from the Budget was a massive green economic stimulus on the scale of that in the United States, if not larger. We did not get it. Instead, we got the decision to freeze fossil fuel duty. What we needed was investment in the very public services that have seen us through this pandemic, such as our NHS, which is delivering a world-leading vaccine roll-out, and our schools, which have set up virtual learning under extreme pressure and with their resources cut to the bone. We did not get it. Instead, the Chancellor buried a £30 billion cut to the health and social care budget while local authorities such as Norwich face a collective £10 billion black hole that will mean yet more cuts to vital jobs and services. What we needed was a remedy to the crisis in our privatised and failing social care system. We did not get it. Instead, we got platitudes about needing a cross-party consensus.

The Conservatives have had 10 years to sort this out. We got nothing on our broken social security system, and nothing on statutory sick pay so low that it has helped to fuel this pandemic. A nothing Budget from a nothing Government with nothing of worth to say about the future of this country. As my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) said in his Budget response:

“That is not levelling up; it is giving up.”—[Official Report, 3 March 2021; Vol. 690, c. 265.]

The Chancellor said he would do “whatever it takes”, so why did he do nothing for those in rent arrears and nothing to deal with the inequality and the 4 million children living in poverty? He paid only lip service to tackling mass youth unemployment. He told the people of this country he was being honest with them, so why did he choose to hide billions of pounds of cuts to our frontline NHS services?

We came into this pandemic with an economy akin to a dilapidated house built on collapsing foundations. Ten years of Conservative austerity have delivered the UK’s worst decade for improvements in living standards in 200 years, and now our house has been hit by an earthquake and turned to rubble with 130,000 dead because the Government failed to invest in resilient foundations. So why on earth does the Chancellor now want to rebuild the same rubbish house on the same shaky foundations? If he wanted to protect the livelihoods of people and businesses in this country and in my city of Norwich, he could and should have made different choices yesterday. It is far better to invest in new design with stronger foundations.

The Chancellor must listen to the public consensus forming on the back of the pandemic, provide support for a universal basic income and universal services and prioritise our health and wellbeing over GDP, with direct intervention to make society fairer. He could have taken the public’s lead yesterday. He could have forgiven the debts of people in rent arrears and students burdened by high interest rates. We got none of that yesterday. Now 130,000 people are dead and the UK has the highest per capita death rate from covid-19 in the world.

This Budget will entrench inequality and it failed to tackle the climate crisis. It will be the job of those of us on this side of the House to remind the public in the years to come that these were the choices of this Government and this Chancellor.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am very keen to ensure that we get everybody in, so after the next speaker I will reduce the time limit to four minutes.

--- Later in debate ---

[Peter Dowd (Bootle) (Lab) [V]]

Yesterday I was fortunate enough to have my first dose of the Oxford vaccine. I had it in a pharmacy that is just yards away from the house where I lived as a child. Davey’s Chemist, one of a number in Merseyside owned by Mary Davey, is at the heart of the community. In fact, I managed to have a quick chat with her after my jab because she happened to be in the pharmacy. The vaccination centre is being run efficiently, effectively, professionally and personably. How she and her staff managed to set it up so quickly and smoothly, I really do not know, but they did. It took hard work, effort, commitment and dedication, and I was impressed but not surprised, because pharmacies get on with it. They were asked to do a job. They said yes and delivered, and despite the stresses and strains on the pharmacy sector, they deliver time after time. So I was disappointed to find that there was not, as far as I can tell, anything in the Budget statement that in any way sent a message of support to the pharmacy sector, let alone any practical or financial support for it. A key sector in the fight against covid through the vaccination programme has been cut adrift, yet the Government still ask a sector that is under strain to pull out all the stops.

As a member of the all-party parliamentary pharmacy group, chaired by the hon. Member for Thurrock (Jackie Doyle-Price), I want to highlight some of the concerns and recommendations identified in the APPG’s report of December 2020 and the themes brought out in it that are affecting the sector. First, the Government should review the response from pharmacies during the pandemic and re-evaluate a clear vision of what we need from these undervalued frontline healthcare workers.

Secondly, the NHS and Government should enable pharmacists to do more by giving this vital sector additional resources for training and support. Thirdly, a reassessment by finance teams in the Department of Health and Social Care and the NHS of the value of pharmacies would be welcome. Fourthly, the Government should write off the advance payments as an immediate way of providing relief. In addition, they should re-evaluate the financial implications of asking pharmacies to pay back the—

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am sorry, but we seem to have lost Peter Dowd, so we will go to Gagan Mohindra.

--- Later in debate ---

[Richard Burgon (Leeds East) (Lab)]

The Budget should be judged on one key issue: whether it improves the living standards of the vast majority of people in this country. On that, I am afraid, it has failed, with a pay freeze for key workers, the poorest families facing universal credit cuts, 1 million lower-paid workers having to now pay income tax, and council tax rises. Living standards have faced an assault over the past decade, and that is set to continue. Average wages will be no higher in 2026 than in 2008: almost two lost decades.

The Government’s disastrous handling of the virus has caused one of the world’s deepest economic collapses, yet they expect the vast majority to pay for it—including through further cuts to public services of £15 billion per year compared with last year’s plans. Despite the need to treat a huge backlog and to fund ongoing vaccine and test and trace schemes, the Government would also cut the national health service budget back to pre-pandemic levels. That will also mean an axe to unprotected areas, such as local government, which is already cut to the bone.

The Government may counter that they are fixing the economy and that a higher tide will lift all boats. That is simply a lie. The Budget will see Britain continuing as a low-growth—just 1.7%—economy once the end-of-lockdown boost wears off. We have low growth, falling living standards and hollowed-out public services. For most people, I am afraid that it will feel very similar to the last decade, but it does not have to be. This should have been the Budget to invest massively in growth, in tackling inequality, in jobs, in tackling the climate crisis, in rebuilding our public services, in social housing and in moving us to a high-skill, high-wage economy.

Instead, public investment will remain pathetically low, and the main stimulus is a £25 billion corporate handout that may bring business investment forward but, as the Government’s figures show, will not increase overall investment levels. Those funds should instead have gone into a huge state investment programme also funded by record low borrowing costs and taxes on the super-rich, starting with a 50% rate on those on over £125,000. That could spur a shift to net-zero with a green new deal, build modern transport and infrastructure fit for the 21st century, lead to a mass house building programme, and renew our public services, all boosting growth, which is the best way to pay off the debt, but also creating decent jobs and helping to rebuild communities left behind for far, far too long.

That should have been the legacy coming out of this crisis, and that is what we on this side of the House will need to fight for.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Jerome Mayhew by video link.

I am afraid I am going to have to stop Jerome Mayhew and come back to him.