Pensions and Benefits Uprating

Debate between Anne Begg and Gregg McClymont

Tuesday 25th February 2014 Commons Chamber

[Gregg McClymont]

My hon. Friend makes an important point. The level at which the Minister appears set to place the new flat-rate state pension is just above pension credit. It is that framework, which was set for the poorest pensioners to ensure they would no longer live in poverty, that is so important. My argument is not that the hon. Member for Argyll and Bute is entirely wrong; it is that he must take account of the difference that pension credit made to the poorest pensioners in his constituency, my constituency and around the country.

That brings me to the question that I wanted to ask the Minister, which is about pension credit. Of course it is welcome that the basic state pension is rising by £2.95, and he was very clear that pension credit will also rise by £2.95, but of course as a percentage rise, the rise for pension credit is less. The danger is that those on pension credit will fall behind relative to those on the basic state pension.

The term that the Minister used was over-indexation. A little alarm goes off in my head when Ministers resort to using such terms. A more straightforward way to put things is to say that pension credit, which the poorest pensioners rely on, is not being uprated by the same percentage as the basic state pension. There may be an excellent reason for that, but I would like to hear it.

There is also a more fundamental point about the new pension system that the Minister and the Government are introducing, which relates to the point that my hon. Friend the Member for Edinburgh East (Sheila Gilmore) made. It is that, as the Pensions Bill proceeds, the new flat-rate state pension—as I understand it—is being set just above pension credit. If pension credit loses its value relative to the basic state pension in the run-up to the introduction of the new system, there is a danger that the flat-rate state pension will be pegged at a lower rate than would otherwise be the case. We must be clear not only about the implications for the poorest pensioners of a lag in the uprating of pension credit, but about the implications for the flat-rate state pension system for which the hon. Member for Argyll and Bute is such an enthusiast. We must ask these legitimate questions. If we are to have a reasonable debate, we need to recognise the progress that was made over the past decade—certainly until 2010—and consider how that will interact with the flat-rate state pension system that the Minister is so keen on creating.

[Dame Anne Begg (Aberdeen South) (Lab)]

Following its pre-legislative scrutiny of the draft Pensions Bill, my Work and Pensions Committee thought that there should be a larger gap between the flat-rate state pension and pension credit to ensure that there would be a cut in means-testing, which the Government claim will be the effect of the flat-rate pension’s introduction. However, that will not happen if the two are kept together, or if one is lower than the other.

[Gregg McClymont]

My hon. Friend is widely acknowledged as an expert in this area, and questions arise when pension credit is not uprated by the same percentage as the basic state pension. As I said, I start to get worried when I hear the phrase “over-indexation” because the Minister is actually saying, “We have decided that pension credit will be uprated by earnings unless we decide otherwise, and we have decided otherwise, so it will be uprated by the cash equivalent of the uprating to the basic state pension.” However, that represents a smaller percentage increase, so we need to be aware of the wider implications of that.

I made it clear that I would not detain the House for too long. My right hon. Friend the Member for East Ham (Stephen Timms) asked the Minister a number of important questions, to which I shall add my own. First, does the Minister agree that pension credit made a real difference to millions of poor pensioners in this country? Secondly, does he agree that it provides the basis on which the flat-rate state pension will be pegged under his new system? If that is the case, it is important that we debate the lesser uprating of pension credit, and I hope that the Minister accepts that I ask my questions in the spirit of co-operation and inquiry.

Pensions Bill [Lords]

Debate between Anne Begg and Gregg McClymont

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

No, I will not give way.

[Dame Anne Begg (Aberdeen South) (Lab)]

Will my hon. Friend give way?

[Gregg McClymont]

I would be delighted to give way to my hon. Friend.

[Dame Anne Begg]

I, too, welcome my hon. Friend to his first outing at the Dispatch Box. Perhaps this exchange has just illustrated all too clearly why women are deserting the Tories in huge numbers—it is because they do not feel that they should be the ones who have to bear the burden of the debt that exists. It is that balance that the Government have failed to understand.

[Gregg McClymont]

My hon. Friend, with her usual sagacity, gets to the heart of the matter. Given that we are talking about a small amount of money in the scheme of things—[Interruption.] The two tests that we have set are: do the Government’s plans give fair and due notice to the women concerned, and do those plans bear proportionately on all women affected? The answer is no and no. The Bill continues to place the longevity burden disproportionately heavily on women in their later 50s.

Housing Benefit (Scotland)

Debate between Anne Begg and Gregg McClymont

Tuesday 8th February 2011 Westminster Hall

[Gregg McClymont]

I thank my hon. Friend for her intervention. She raises a very good point about Glasgow in particular, although I should say that I do consider myself a Glaswegian. Cumbernauld is not very far away. However, although I may consider myself a Glaswegian, Glaswegians may have a different view.

Every week, my local YMCA deals with young people who are out of a home and out of a job. Those are the most vulnerable young people. Many are unable even to provide the right documentation to make an initial claim for housing benefit within the narrow window open to them. Those are often young people with psychological and dependency problems, coming from difficult family backgrounds. Things that we find easy are sometimes difficult for people in a vulnerable situation.

The YMCA and other local charities tell me that the cut to housing benefits for JSA claimants will leave the young unemployed at greater risk of falling into rent arrears if they do find a place to live. I know that Ministers say that they want to encourage the unemployed to move to different areas to find work, but the Government underestimate perhaps the social, cultural and psychological challenges that are sometimes involved in that process.

[Dame Anne Begg (Aberdeen South) (Lab)]

Has my hon. Friend considered that the issue is not just that young people find it difficult to move? Very often, the areas where jobs are available are the areas where there is the biggest pressure on housing, so even if young people move and find a job, they might not be able to find somewhere to live.

[Gregg McClymont]

My hon. Friend makes a good point. I was just going to suggest that Ministers will also be aware that there is a relationship between the number of jobs available and the cost of accommodation in an area. That is an extra problem facing those dealing with this aspect of policy.

Cuts to local housing allowances will make the private rented sector less affordable in more prosperous areas where work might be found. As I observed, the extension of the shared-room rate will make it harder for young people to find affordable accommodation once they leave home. Existing claimants in Glasgow will lose £7 a week on average as a result of that single change. That £7 could render a tenancy unaffordable for somebody moving in search of work. Research conducted by the Joseph Rowntree Foundation shows that there is already a shortage of private rented accommodation that meets the shared-room rate criteria.

Meanwhile, restricting payments to the 30th percentile of market rents, rather than the median, as was previously the case, will put many properties in major cities further out of reach. In north Lanarkshire, that single change will reduce the support available for a single room by £5 a week and that available for a one-bedroom flat by £7 a week. Switching uprating to the consumer prices index will, over time, compound the problem.