Access to Pension Credit

Chris Elmore Excerpts

Wednesday 24th July 2019 Westminster Hall

[Chris Elmore (Ogmore) (Lab)]

I beg to move,

That this House has considered access to pension credit.

It is a pleasure to serve under your chairmanship, Ms Buck. I am grateful that this important issue has been selected for debate before the parliamentary recess, and pleased to see so many hon. Members present from many political parties to discuss this crucial issue. Their presence, along with the large number of colleagues who have voiced real concern about the problem in recent weeks, clearly illustrates that it is by no means constituency-specific; it affects people in every constituency in the UK and in all parts of the communities that we represent. My argument is a simple one, but the solutions to the problem are far from straightforward.

Pension credit is failing. It is failing the ballooning number of pensioners who are living in poverty across our communities, and the Government’s broken promise on free TV licences could be about to make things much, much worse. It is perhaps fitting that on the day the Prime Minister leaves office, we are here discussing just one of the numerous “burning injustices” that she failed to tackle—and that actually got worse on her watch. More of the same will not cut it. We must end this moral emergency.

The backdrop to our debate is simple but shocking. After nearly a decade of Tory austerity, almost 2 million pensioners are now living in poverty—a statistic that should not only shock us, but utterly shame us. In the now sixth-richest economy in the world, I am truly saddened and alarmed that the UK Government have allowed pensioner poverty to soar to such an extent. Indeed, I now believe that the situation is a moral emergency. To any Government Member who seeks to counter that claim, I simply ask: how can it be right that by this time tomorrow another 226 older people will have fallen into poverty? That is more than 80,000 pensioners per year—more than the number of people in most of our constituencies.

The frankly staggering rises that we are seeing will be difficult to reverse, but the Government’s continuing paralysis over Brexit must not mean that the issue is allowed to slip further down the new Prime Minister’s in-tray. If we do not address this moral emergency—if we allow this deeply damaging trend to continue—we have to ask ourselves what we got into politics for.

The issue does not affect just older people. The decisions that we take today to support older generations will have a real and marked impact on the future of young people across our country and on people of working age. If the Government continue to turn a blind eye to pensioner poverty, they will be sending one message, and one message only: “You can work hard all your life, pay into the system and try your best to get on and do well. But even if you do, there will still be a real risk that you will not be able to enjoy a dignified and comfortable retirement.”

No responsible Government should allow the situation to continue. One thing we could do to address it over the summer recess is take real steps, rather than just speaking warm words, towards making people properly aware of their pension credit entitlement. The Government’s appalling decision to break their 2017 manifesto commitment to protect pensioner benefits has, rightly, caused hon. Members across the country to shine a light on the low uptake of pension credit across the UK.

Under the new BBC licence fee rules, as hon. Members will be aware, only households with someone over the age of 75 who is in receipt of pension credit will be eligible to continue having their licence fee waived.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

In Scotland, £300 million goes unclaimed in pension credits, including £7 million in my constituency. Surely that £7 million would help with those TV licence fees.

[Chris Elmore]

I thank my hon. Friend for his intervention. My point is that if all our constituents claimed the pension credit they are entitled to, it would cost more than providing free TV licences, so surely a good option would be to get better take-up of pension credit and to continue with free TV licences.

The new approach, when packaged in a Government press release, might at first look to some like a logical step to take, but when we unpack it and look at how many people are not accessing the financial support to which they are entitled, we see how utterly disgraceful the policy is and how much of a backward step it is. Put simply, the Government need to stop outsourcing their welfare policy to the BBC.

Of course, the Government provide a range of measures to protect the most hard-pressed pensioners, many of which are welcome and needed, yet their flagship policy to lift pensioners out of poverty—pension credit—is failing.

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate my hon. Friend on securing this debate. Does he agree that the Government need to launch a major awareness-raising campaign about pension credit? There are more than 2,000 households in Blaenau Gwent that could be missing out on a total of £5.6 million every year. They have the right to this money, so let us make sure that they get it.

[Chris Elmore]

I am grateful to my hon. Friend for his intervention, and I completely agree with him that the Government need to do a lot more to encourage pensioners to claim pension credit and make them understand that there is no stigma in their gaining pension credit. However, even in my constituency of Ogmore there is more than £5.1 million that is not being claimed by pensioners, so I completely agree with him, and I hope that the Minister will respond to some of these points at the end of the debate.

[Stephanie Peacock (Barnsley East) (Lab)]

Further to that point, does my hon. Friend agree that it is quite concerning that the figure nationally for those entitled to pension credit but not claiming it is 40%? Meanwhile, in my own constituency of Barnsley East, more than 4,000 pensioners are due to lose their free TV licences. The combination of these two factors is really concerning. Does he agree?

[Chris Elmore]

I do agree with my hon. Friend. Her intervention re-emphasises the point that this issue affects pensioners right across the United Kingdom, and the Government need to deal with it, starting by better advertising what is available and making sure that pensioners are able to access the money that they need and that is rightly theirs.

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

Does the hon. Gentleman share my shock and disbelief that pensioners tell me that when they phone up the helpline or claim-line for pension credit, they find that it is not properly staffed? Indeed, some of my constituents have been left on hold on the phone for up to an hour, even though there is no option to apply for pension credit using an application form. Barriers are being put in the way of pensioners claiming this money, which might explain the lack of take-up.

[Chris Elmore]

I am grateful to the hon. Lady for that intervention. As I will set out later in my speech, the parliamentary service here has been able to have some interaction with constituents from across the UK, and I have some examples that will almost confirm her view that the Department for Work and Pensions is being deliberately unhelpful when it comes to allowing pensioners to claim pension credit. I will refer to those examples later.

The Government’s flagship policy to lift pensioners out of poverty—pension credit—is failing, and it has been for some time. Pension credit is not working for up to 1.3 million pensioner households that are eligible for this vital support, which could be the catalyst they need to lift them out of poverty, but they do not receive it. In my constituency, I find it completely staggering that there is £5.1 million of pension credit going unclaimed each year, and I know that there are many, many constituencies across the UK where the situation is even bleaker.

By the time the new TV licence rules come into force in 2020, pensioners across the UK will have endured 10 long years of Tory austerity—10 long years of austerity that none of them caused; 10 long years of austerity that many of these pensioners did not vote for. Indeed, 10 long years of austerity have had a devastating impact on the living standards and quality of life of hundreds of thousands of pensioners across the United Kingdom.

In 2003, pension credit was introduced under the new Labour Government. It was created to ensure that all older people received a minimum amount of income and has played a major role in previous reductions in poverty. Indeed, the last Labour Government lifted 2 million pensioners out of poverty as a result of policies such as pension credit.

What have we seen since? Over 400,000 more pensioners have been plunged into poverty, and two in five of the pensioner households that are entitled to pension credit currently do not claim it. That shows that it is not that the policy itself is not working; instead, it is that people who might need this money are not accessing it. The Government have to change that.

Parliament’s brilliant digital engagement team asked people on social media and on the MoneySavingExpert.com forum over the weekend about their experiences with pension credit. It was clear from that research that although many respondents were aware of pension credit, there was much more confusion about what the benefit actually was, who is eligible to it and how it can be accessed. Several of the respondents criticised the way that the DWP promotes pension credit to those who are eligible for it. For example, Joanne Stannard said that

“there are some over-75s who don’t even own a computer…make their lives easier”.

Susan Brady said:

“I worked for the DWP for over 30 years in operational delivery, so I am well aware how unfair our welfare system is. We seem to despise our older people in the UK. It’s wrong, totally wrong.”

I could go on, but what was clear from the responses is that the system is not fit for purpose. People do not know whether they are eligible for pension credit and many are struggling to get by, despite working hard throughout their lives.

I thank everyone who responded to the questions posted online or shared their views about them, and I pay tribute to the digital engagement team for again helping us to have as informed a debate as possible.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend is making a great speech, with lots of very salient points. Recently, when it was announced that over-75s would get their TV licence free only if they are on pension credit, I wrote to all the over-75s in my constituency, so I will just add a response that I received to those that he has cited. One constituent said that he not only received his pension credit but now also gets

“council tax credit, help with…glasses and dental, and a premium on…carer’s allowance.”

He was forced into poverty because of a lack of information that only I, as his representative, could correct. Is that not something that the Government should do?

[Chris Elmore]

I completely agree with my hon. Friend. The point that I will make later in my speech is that there seems to be this assumption that increasing publicity does not necessarily work or that trying to get cross-benefits, for example around housing benefit, would not solve the problem. However, his intervention shows that where Members of Parliament are proactive—arguably, the Government could be proactive instead—they can gain more support for their constituents. I pay tribute to him for doing that already; perhaps the Government could follow his lead.

Over the last few weeks, I have been working closely with the older people’s charity Independent Age, which has put forward some sensible recommendations that could help us to improve this situation. Indeed, its “Credit Where It’s Due” campaign has already made waves across the country, and I am proud to support it in its entirety.

Working with sector stakeholders and with all levels of Government, it is essential that the Government act to ensure that everyone who is entitled to pension credit receives it. To achieve this, I impress upon the Minister the need for him to make three clear commitments today. The first is to ensure that at least 75% of eligible people receive pension credit by the end of 2020. The second is to ensure that that figure is at least 95% by the end of 2022. The third is to ensure that it is 100% by 2025.

Independent Age estimates that if measures are put in place to achieve a 75% take-up target by 2020, half a million pensioners could be lifted out of poverty by putting an additional £1.25 billion into the pockets of our poorest pensioners. To reach those targets, the Government must put in place a comprehensive action plan that is ambitious about the full range of improvements that can be—indeed, need to be—made. Simply continuing previous approaches, such as focusing merely on new awareness-raising campaigns, will not allow us to make the progress on this issue that is desperately needed.

Of course, the voluntary sector plays a vital role in supporting older people to access pension credit, but such support cannot be relied upon to improve uptake across the country if used in isolation.

[Anna McMorrin (Cardiff North) (Lab)]

My hon. Friend is making an excellent speech with some excellent points. In Cardiff North, nearly 1,400 older people are missing out on a combined total of £4 million of pension credits. That has a huge impact on my constituency. I am reaching out to those older people. He has secured this important debate to reach out to the Government to do more, and his points are very salient. Does he agree that the Government need to be far more proactive in this area?

[Chris Elmore]

I completely agree with my hon. Friend. She makes a strong case as to why the Government should do more, because, as I have already said, this issue is clearly affecting every constituency right across the UK.

Previous Government attempts to work with older people’s groups and charities to raise awareness of pension credit have made a positive difference in the short term, but they have not been enough to achieve the longer-term change that we need. For the record, I have no problem at all with the Government engaging with and working with the voluntary sector to support pensioners. There are many reasons why voluntary groups do extraordinary work in supporting pensioners’ groups and older people’s groups to tackle loneliness or offer support. I take nothing away from any of that work, but the Government need to take responsibility for the fact that there are millions of pensioners who are not receiving the pension credit that they should rightly receive.

The four stages of Independent Age’s action plan are a clear and decisive way to turn this around. First, the Government must take responsibility for getting pension credit to older people. Previous research has generally focused on the failure of older people to respond in the way that the system demands. Barriers to claiming pension credit can include confusion about the application process and the stigma associated with claiming benefits. Many people do not apply because they think they are ineligible. At times, there has been more ambitious thinking. In 2012, the Department for Work and Pensions ran a small trial in which pension credit was paid to people without them having to apply. However, that approach has not been fully explored or rolled out. The Government need to use the information and techniques they have at their fingertips to significantly simplify, or even remove altogether, the application process for pension credit.

Secondly, the Government should consider the trigger points affecting pensioners on low incomes and explore cross-referral across agencies. They should look beyond retirement age and explore the role of other services at those trigger points, such as the role of GPs, or ensuring that applicants for disability or carer benefits are notified about pension credit at the point of award. The DWP should explore its role in notifying such individuals about pension credit; for example, Tell Us Once is a service that lets a person report a death to most Government organisations in one go. That could be a route to notifying the bereaved about the support they may be entitled to.

Thirdly, the Government must explore the role of housing benefit. Some 80% of households take up housing benefit, compared with as few as 58% for pension credit. We know that over half of the 330,000 pensioners who have moved into poverty since 2013 are renting. Some of those people will be entitled to, but missing out on, pension credit. Currently, the Department for Work and Pensions passes on the information received for a pension credit assessment to the relevant local authority, so that the applicant is able to claim housing benefit. However, the reverse does not happen. There is therefore an opportunity to ensure that when housing benefit has been awarded, the information used in that assessment is passported from the local authority to the DWP for a pension credit assessment.

Lastly, the Government should explore options for using behavioural insight. The Government should ensure that every element of the action plan is developed in partnership with older people. For example, they should explore co-producing communications with older people to maximise the likelihood of getting a response. This is about focusing less on assumptions and more on actually understanding the needs of older people.

I will briefly highlight some of the fantastic work being done to support pensioners in my constituency of Ogmore, including by the various older people’s groups that I meet with on a regular basis in Cefn Cribwr, Llanharan, Brynna and Maesteg, as well as the men’s sheds in Tondu, Ogmore Vale and the Garw Valley. Those organisations do an extraordinary amount of excellent peer-to-peer work to support older people by trying to tackle issues such as loneliness and secure the support that pensioners are entitled to. Nothing makes me prouder to be the MP for Ogmore than seeing different parts of those communities coming together to support one another. However, it is now time for the Government to step up and support the valiant efforts of those organisations by delivering the changes we need to stop any more pensioners falling into the dangerous cycle of poverty.

We stand at yet another turning point in our politics. Tomorrow we will likely have a radically different Government from the one that is before us today. While he has only been in office a matter of hours, the new Prime Minister’s in-tray must have more issues in it than the number of positions he has had on Europe over the years. However, this issue must not be parked until after we do or do not Brexit. The Government have to start realising that constitutional issues must not trump the real-life impact that their failures are having every day on our communities up and down the UK. Therefore, in all sincerity, I ask the Minister to not come back to us with warm words, but to give pensioners a real action plan that will deliver the poverty reduction that we need.

If austerity really is set to come to an end, it is time that this Government give back to the communities that have felt the brunt of the pain their policies have caused over the past 10 years. The first big but important step towards doing that is to ensure that older people receive the money that they are legally entitled to. Surely that is not too much to ask.

--- Later in debate ---

[Guy Opperman]

I will not necessarily make fresh policy on Government support for charities—

[Chris Elmore]

Go on!

[Guy Opperman]

Much though I am urged to do so by the hon. Gentleman. The hon. Member for Glasgow South West (Chris Stephens) asked if my phone was turned on, but it is most definitely turned off—with respect and due deference to the Chair—and it is not for me to make new tax or incentives policy.

A perfectly legitimate point, however, can be made in two ways in answer to my hon. Friend the Member for Cheltenham (Alex Chalk) and several other speakers. Voluntary organisations do a fantastic job of explaining to our older community—some of whom are digitally challenged and some fully up to speed online—the opportunities to claim and the things out there that the Government will provide, and that applies to any Government down the years. Basically, those organisations should have all our support, and anything that individual Members of Parliament, local authorities and local organisations can do to assist their efforts is entirely right. In my constituency, I have visited the Men’s Shed in Hexham and various support organisations, such as Age Concern in Corbridge. I fully accept that they do a fantastic job, as similar organisations do in Cheltenham and as does my hon. Friend. If we have the ability to use them more, I am happy to take any suggestions on board.

I accept that Government actions are criticised and I understand that it is for us to make our case, but I make a further point that the pension credit toolkit that we reissued in April, with two versions this year, provides copious advice not only to the individual who wishes to claim but to the voluntary organisations out there. I urge any voluntary organisations without access to the pension credit toolkit—which gives guidance, advice, assistance and recommendations of how to disseminate vital information to our constituents—to take it up, because it is of great importance.

All those things having been said, I want to make it clear that part of our case is that we would love pension credit take-up levels to be higher. The benefit is specifically intended to provide support to some of the poorest and most vulnerable pensioners in our community, and there is no question but that we are already committed to ensuring economic security for people at every stage of their life, especially when they reach retirement.

We are forecast to spend more than £120 billion on benefits for pensioners in 2019-20, which includes £99 billion on the state pension. As a result of the triple lock, from April 2019 the full yearly amount of the basic state pension is about £675 higher than if it had been uprated just by earnings since April 2010. That is a rise of more than £1,600 in cash terms.

In respect of pension credit, the value of the standard minimum guarantee this year is the equivalent of more than £1,800 per year higher in cash terms for single people, and more than £2,700 for couples, than it was in 2010. As a Government, we also spend £2 billion a year on winter fuel payments, which are payable to all pensioners, including those on pension credit.

The overall trend in the percentage of pensioners living in poverty has been a dramatic fall over recent decades. Rates of material deprivation for pensioners are at a record low. In fact, between 2009-10 and 2017-18, material deprivation for pensioners has fallen from 10% to 7%, and rates of relative pensioner poverty before housing costs have halved since 1990. We want to maintain that achievement. It is important that hon. Members understand that more than 1.6 million people already claim pension credit. That equates to £5.4 billion of claims. Indeed, as of November 2018, there were 2,450 pension credit claimants in the constituency of the hon. Member for Ogmore, and over 100,000 in Wales as a whole.

Moving on to the point about the BBC—

--- Later in debate ---

[Chris Elmore]

I thank all hon. Members who have taken part in the debate today. There seems to be a bit of a Celtic theme coming from across the Scottish and Welsh nations, but I also thank all those colleagues from across the House who represent seats in England.

I thank the Minister for his response—it would be churlish of me not to—but it is disappointing, because there is a real need not just to rely on the voluntary sector to increase the use of pension credit.

[Guy Opperman]

indicated assent.

[Chris Elmore]

I can see the Minister nodding, and I am sure he would acknowledge that. The reality is that pensioner poverty is increasing. The Government need to do more, not only in advertising; they need a constructive way, through other DWP benefits such as housing benefit, which I mentioned, to try to increase the uptake. They should be talking to Independent Age about how the Government can finally start to increase the access to pension credit.

I do not think it is just a case of the Minister’s saying that he wants to do this; the next Minister or the next Secretary of State, whoever they may be in the rolling hours, needs to take this on as a real task, to ensure that pensioners get the benefits that they are entitled to. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said, those pensioners built this country; they deserve our support and it is crucial that they get the benefits they are entitled to. I am grateful to everyone who made a contribution, and to the Minister and various hon. Members for their congratulations on my recent marriage on Saturday. I can confirm that my wife is a good advocate for marrying an MP; she ensures that I behave myself and everything else.