Social Security

Debbie Abrahams Excerpts

Monday 5th February 2018 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I will focus initially on the draft Social Security Benefits Up-rating Order and then move on to the draft Guaranteed Minimum Pensions Increase Order.

The uprating order provides for the annual uprating of social security entitlements excluded from the Government’s freeze to levels of social security enacted in the Welfare Reform and Work Act 2016. As we have heard, that includes attendance allowance, carer’s allowance, disability living allowance, personal independence payment, industrial injuries disablement benefit, bereavement benefits, incapacity benefit and severe disablement allowance. This year, the Secretary of State proposes to uprate those limited social security entitlements by inflation under the consumer prices index measure, which currently stands at 3%, together with the new state pension in accordance with the triple lock, and pension credit.

We will not delay the measures to increase the new state pension and the adequacy of the social security provision provided by the uprating of payments in the order. However, although I welcome the upratings contained in the order, this needs to be seen in the context of the support that is not being provided or has not been uprated, as well as the Government’s wider approach to social security. The uprating order does not include child benefit, jobseeker’s allowance, employment and support allowance, income support, housing benefit, local housing allowance rates, child tax credit, working tax credit and the majority of comparable elements of universal credit.

The Government’s decision to limit the cap on uprating to 1% between 2013 and 2015 and the subsequent freeze on the vast majority of social security payments has seen low-income households suffer a significant deterioration in the adequacy of social security support. The freeze to payments and support is having an extremely detrimental impact upon millions of people on low incomes across the UK. Over the last year, inflation has more than doubled, hitting a five-year high of 3.1% in December 2017. It currently stands at 3%.

The payments subject to uprating were uprated by just 1% last year, with the vast majority of social security payments remaining frozen. To put that into context, research by the Joseph Rowntree Foundation shows that the price of essentials has risen three times faster than wages over the past 10 years. Food prices have increased by 4.1%, transport by 4.5% and clothing and footwear by 3%. People are suffering a continued increase in the cost of living, and that is being exacerbated by wage stagnation and the rise in insecure work caused by the Government’s inadequate economic policies. Last year, in-work families on the national living wage saw minimum costs rise faster than their net income because in-work payments were frozen and any rises in pay were clawed back by tax credit reductions. While millions of families are seeing their incomes fall in real terms, the wealth of the richest few continues to soar, with FTSE 250 bosses seeing their pay rise by 11% in the last two years alone.

Despite promises to tackle these burning injustices, the income gap between the richest and poorest in our society has almost doubled. Britain’s top bosses are paid, on average, 165 times more than a nurse, 140 times more than a teacher and 312 times more than a careworker. Research from the Resolution Foundation shows that the poorest families will see their incomes drop by an average of 2% by 2021, while the richest fifth of households will see their wealth increase by 5%. It is clear that the Government’s cuts to social security support are pushing more and more people into poverty. The Joseph Rowntree Foundation has called on the Government to end the freeze to social security payments, as has the Child Poverty Action Group, which states that

“the failure to uprate benefits in line with inflation is the single biggest driver behind child poverty”.

Following the 2015 summer Budget, the Government’s flagship universal credit programme saw cuts to the work allowance. That was on top of the scrapping of severe disability premiums, the imposition of the minimum income floor for the self-employed and the limiting of child tax credit support to the first two children. As a result of those cuts and the freeze, not only is universal credit failing to make work pay, but instead of reducing poverty it is actually exacerbating it.

[Kate Green]

My hon. Friend may also be aware of the difficulties people are having claiming the childcare element of universal credit—the bureaucratic burdens which are compounding the freezes and cuts she is talking about and which mean that families cannot get the childcare support they used to be able to fund relatively easily under the tax credit system.

[Debbie Abrahams]

My hon. Friend makes an excellent point. There are many different aspects to the Government’s still inadequate response on how they will fix universal credit. She has highlighted one, and we heard earlier in oral questions about the debacle of free school meals and how more children will be deprived of free school meals.

What is the Minister’s assessment of the impact of the social security uprating cap on poverty levels? Does he accept the Child Poverty Action Group’s analysis that 1 million more children will be pushed into poverty as a direct result of the cuts to universal credit? Does he accept the Equality and Human Rights Commission’s report on the cumulative impact on disabled people, which estimates that a disabled adult will have lost on average £2,500 a year since 2010?

Despite announcing a small amount of additional investment in the autumn Budget to prop up universal credit, in reality, the Chancellor has only reintroduced £1 for every £10 cut by his predecessor. Why are the Government choosing not to uprate social security payments in a way that reflects the economic reality for those in most need? I remind hon. Members that the Child Poverty Action Group estimates that cuts to universal credit will force 1 million additional children into poverty by 2020. The social security system should prevent people from getting into debt and poverty, not make things worse.

By continuing the freeze on social security payments not included in this order, the Government are subjecting 10.5 million households to an average cut of £450 a year up to 2020. The order was a chance for the Government to recognise the desperate reality for many of the poorest and most vulnerable people in our society, but they have failed to do so. As charities across the sector have been asking, will the Minister ensure the end of the freeze on other social security payments in next month’s Budget statement?

The order allows for discretionary upratings to be made by the Minister where he deems it necessary and appropriate. I want to be clear that we welcome the Minister’s decision to include a 3% uprating to the work allowance element of universal credit in the list of discretionary upratings in these measures, but the reality of people’s lives demands more. This again raises questions about the consistency of the Government’s argument to uprate some social security payments and not others. If he believes that the work allowance element of universal credit should be uprated, as the Opposition do, will he explain why tax credits are not also being uprated by the same amount? Why the disparity?

The Government cut the work allowance element of universal credit in 2015, yet subsequently have recognised the need to uprate it through the discretionary element in the order—although not to a level that reflects the reality of the rising costs of living and previous cuts. Is that an admission that they were wrong to cut work allowances in 2015?

Moving on to the pensions element of this uprating, I welcome the uprating of the state pension via the triple lock. I am glad to see that has survived, given the Government’s indifference to it last year, but I want to put on the record concerns about the public’s levels of understanding of the new single-tier pension and the paucity of information the Government have made available. As we know, there are both winners and losers as a result of the Government’s changes and most new pensioners will not receive the full single-tier pension. Before its introduction, it was estimated that only around 22% of women and half of men reaching state pension age would be entitled to the full single-tier pension. Will the Minister update the House on that?

In addition to the numerous social security payments subject to the Government’s benefits freeze and not uprated in this order, there are some very significant further omissions. Although the state pension is being uprated, people who have frozen pensions are excluded from the uprating and will not see an increase in their state pension in line with inflation. Pensioners living abroad face very different circumstances depending on whether their country of residence has a reciprocal agreement with the UK for the uprating of state pensions. Pensioners in countries without this arrangement see their pensions frozen at their initial retirement level, which means that the value of their pension falls in real terms every single year.

More than half a million people currently have their pensions frozen, mostly in Commonwealth countries such as India, Australia, Canada, parts of the Caribbean and New Zealand, and in countries with strong family and historical links to the UK such as Pakistan and parts of Africa. The Opposition believe that their pensions should be protected in the same way that the pensions of other UK citizens living abroad are in the future, yet the Government are choosing to withhold the pension uprating in this order from 550,000 recipients living outside the UK. This is a chance for the Government to make an historic change to our pension system and support our policy to end future arbitrary discrimination against some British pensioners living overseas by uprating in line with inflation from this point. Will the Minister look again at that issue and take action to address that inequality?

Not only have the Government failed to support pensioners living abroad; they have failed to address the current injustice faced by many millions of women born in the 1950s. It is important that the Government not only recognise the real injustice that women born in the 1950s have been dealt as a result of Government changes to pensions policy, but take action to remedy this injustice.

[Mr Jim Cunningham (Coventry South) (Lab)]

I agree totally with my hon. Friend. Millions of people living in this country have suffered discrimination because of the Government’s policies, particularly the women born in the early 1950s. The Government could do something about it and I can say this to them: as long as they refuse to do something about it, we will keep raising it.

[Debbie Abrahams]

My hon. Friend speaks strongly on behalf of his constituents and women born in the 1950s, given what they are going through, and long may he continue to do so.

There can be no doubt that women have borne the brunt of the Government’s cuts over the past seven years, but that applies particularly to women born in the 1950s, who have been dealt a real injustice through the accelerated increase in their state pension age. The Government have no excuse not to bring forward retirement for women born in the 1950s and early drawdown of their pension, as it is entirely cost-neutral. Alongside our proposals for the extension of pension credit, these additional measures would mean that people affected by the Government’s chaotic mismanagement of state pension equalisation would have the option to retire earlier, and would allow for much-needed financial support. The Government are in a position to implement proposals for early drawdown immediately, but they refuse to do so. I should be grateful if the Minister could explain exactly why that is.

Let me make it clear that the proposals are a “starter”. They do not in any way preclude further action, or even compensation, for this group of women. Will the Minister commit himself to reviewing the Government’s approach to pensions provision for women born in the 1950s, and will he release the original legal opinion contained in the “pink files”?

In the context that I have set out, a 3% uprating of some social security entitlements is unlikely to do much for those who are “just about managing”. As a matter of principle, the uprating should apply to all entitlements, not just the ones that the Government have cherry-picked. In the meantime, although we regret the limit on the groups who will benefit from the uprating, we must support the order, because otherwise those identified will lose out.

Let me now turn to the draft Guaranteed Minimum Pensions Increase Order 2018. We support the uprating of the guaranteed minimum pension in line with inflation, but we believe that some of the issues that were raised last year about the new state pension arrangements that came into effect in April 2016 remain unresolved.

The old state pension had two main components: a basic state pension; and a state earnings-related pension. People who made national insurance contributions at the full rate built up a basic state pension, but an option created in 1978 enabled people to contract out into another pension scheme, either voluntarily or via their employer on their behalf, on the basis that the other scheme met certain criteria. Between 1978 and 1997, schemes that took on such new members were required to provide a “guaranteed minimum pension”. The guaranteed minimum pension system was discontinued by the then Government in 1997.

In 2016, the Government’s introduction of the new state pension ended contracting out by replacing the additional state pension with a single tier. Working-age people now have their existing state pension entitlement adjusted for previous periods of contracting out and transferred to the new state pension scheme. For people who have guaranteed minimum pensions rights under an old pension scheme but who reached retirement age after April 2016, the Government no longer take account of inflation increases in guaranteed minimum pensions when uprating people’s new state pensions. The changes mean that any guaranteed minimum pensions accrued between 1978 and 1988 will not be uprated, and the scheme provider will uprate guaranteed minimum pensions built up between 1988 and 1997 only to a maximum of 3% each year.

When the National Audit Office investigated the impact of the changes, it concluded that there would be some winners and some losers under the new arrangements, depending on the time for which people were contracted into a scheme. Those whose state pensions have been pushed back because of the rise in state pension age will lose out on guaranteed minimum pensions inflation-linked increases that would have been received under the old rules. However, those who lose under the new rules may be able to build up additional entitlement to the state pension. The issue here is a lack of clear information, as is too often the case with the Government.

The NAO report stated:

“Some people are likely to lose out and they have not been able to find the information they need.”

Why did the Government fail to provide information that would enable people to make informed decisions? The NAO also said that it was

“concerned that the Department has limited information about who is affected by the impact of pension reforms on Guaranteed Minimum Pensions.”

Will the Minister provide a much-needed update on the number of people who have been affected since the relevant legislation came into effect? What support is available to help people to understand the changes?

I hope that the Minister will address all the issues that I have raised in respect of both orders.

--- Later in debate ---

[Kit Malthouse]

This has been a lively debate—certainly more lively than it has been in the past. Doubtless many of the arguments made—not least as much of the debate was about what is not in the order rather than what is in it—were exactly the same as those made last year. Therefore, I do not propose to detain the House for too long. A number of Members raised a series of detailed points, which I will try to address in writing, if I may, should I fail to address them in my speech.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) raised a couple of issues I want to address. First, she asked when the Government will produce a cumulative impact assessment of all welfare reforms. The Treasury published a cumulative distributional analysis alongside the Budget, in November last year, showing the impacts on household income of tax, welfare and expenditure, so I would point her to that. She also asked about the new state pension communications, as did a number of other hon. Members. She will be pleased to know that, following the National Audit Office report last year, from which she quoted, the Department for Work and Pensions launched an online “Check your State Pension” service.

[Debbie Abrahams]

rose—

[Kit Malthouse]

I will carry on. The service has had 7 million views since February 2016. Notwithstanding that, there is obviously more work to do on communications.

The hon. Member for Airdrie and Shotts (Neil Gray) asked why bereavement support payments have not been uprated. A bereavement support payment is not a cost-of-living benefit and is paid in addition to means-tested benefits to protect the least well off, so it is not necessary to uprate it in line with the cost of living. Unlike bereavement allowance and widowed parent’s allowance, bereavement support payment is paid in addition to other benefits to which the recipient is entitled, helping those on the lowest incomes the most. The hon. Gentleman will know that the up-front payment for those with children has been increased from £2,000 to £3,500.

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 5th February 2018 Commons Chamber

[Ms McVey]

I can indeed reassure my hon. Friend that what it is doing, and the avenues it is pursuing, are correct and thorough. I met the regulator last week. It is making sure that it investigates these key matters and provides the necessary pension support. Where we need to strengthen in future, we will do so. Equally, I would like to make Members aware of what the pension regulator has done in the past. With regards to the British Home Stores fiasco, which is totally different from this situation, it employed an anti-avoidance measure and got Philip Green to pay his pensioners £363 million. Further prosecutions are coming forward for Chappell, who bought that company for a pound. That is the kind of good work the pension regulator is doing.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

As the Government have responsibility for the pensions regulatory framework, how would the Secretary of State describe a regulatory framework that allows the administrator of a pensions scheme to help to bring about the downfall of the company and the employees it represents, and to profit from that downfall?

[Ms McVey]

When I hear some of the hon. Lady’s comments, particularly those that are out of context, I think about the letter that she has received in the past two days from the UK Statistics Authority, which states that many things she has said are not accurate. The letter said that her remarks—whether about children waking up in poverty at Christmas or linking universal credit with poverty—were not supported, that they were not true statistics and that the sources could not be relied upon. If you will allow me to ask this, Mr Speaker, will the hon. Lady make a statement straightaway about the letter from the UK Statistics Authority?

[Mr Speaker]

I understand the rhetorical significance of the Secretary of State’s point, but I must exhort the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) to stick to her last. That is to say, this is not the occasion upon which she is invited to expatiate on the matter. She may find other opportunities if she is so inclined, but she should stick to the line of questioning that is relevant to the questioning of a Government Minister.

[Debbie Abrahams]

I will indeed do just that, Mr Speaker, especially as there was absolutely no answer to my original question. Hundreds of thousands of ordinary working people including my constituent, Philip Wild, have lost half their retirement income because of the Government’s failure to tackle pensions governance—from Carillion to Capita, and BHS to the British Steel Pension Scheme. How many more pensions scandals does the Secretary of State need to see before she introduces the robust regulatory oversight needed to protect people’s pensions for the future?

[Ms McVey]

Obviously, in the light of the letter from the chair of the UK Statistics Authority to the hon. Lady, it needs to be put on the record that the vast majority of defined-benefit pension schemes are working very well indeed. When we do see instances of abuse or illegal goings-on, they are investigated and the people responsible are brought to account. We have a strong Pension Protection Fund, supported by other businesses that are looking after pensioners across the country.

--- Later in debate ---

[Mr Speaker]

Order. I am advised that we have had 23 topical questions, and we must now move on. I am sorry to disappoint colleagues who have waited. I try to extend the envelope a bit, but the time comes when we must move on.

[Debbie Abrahams]

On a point of order, Mr Speaker.

[Mr Speaker]

I hope it is a genuine point of order, as opposed to a point of irascibility.

[Debbie Abrahams]

Further to the comments made by the Secretary of State during oral questions, Mr Speaker, I seek your guidance on how I can place my response on the record. I agree it is important for everyone to use data responsibly and to provide the sources and contexts of those data, but I will take no lessons from this Secretary of State or her cohort, who accuse us of scaremongering as a way to distract from the reality of their Government’s cuts. We know what happened last time they accused Opposition Members of scare- mongering about the impact of cuts and universal credit: the Government introduced £1.5 billion of measures. Our concerns were accurate and well founded, and the Child Poverty Action Group found that cuts to universal credit will force 1 million more children into poverty.

[Mr Speaker]

The shadow Secretary of State has found her own salvation. She asks me, I think rhetorically, how she can put her thoughts on the record, and she knows perfectly well that she has just done so through the device of a purported—I use the term advisedly—point of order. One day somebody will do an academic analysis. I have not done so myself, but, in my experience in the House, at least 90% of points of order are bogus. The hon. Lady has made her point.

Personal Independence Payment

Debbie Abrahams Excerpts

Tuesday 23rd January 2018 Commons Chamber

[Ms McVey]

I thank my right hon. Friend. He spent many years working on social issues and cases, and established the Centre for Social Justice. The change that he brought about was not just about changing the benefits, but about reaching out to people who are sometimes left alone. Some of those people did want to be helped to get back into work. They did want to talk about their hopes and aspirations. There are now over 600,000 more disabled people in work, because they chose that path towards self-determination and the fulfilment of their ambitions and hopes.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Thank you for granting the urgent question, Mr Speaker, and I congratulate the hon. Member for Glenrothes (Peter Grant).

Any disabled person who listened to what was said by the Secretary of State will have been gobsmacked by the suggestion that there is a commitment to disabled people. The United Nations Committee on the Rights of Persons with Disabilities has described the Government’s action as a “human catastrophe”. The cuts that they have wrought on disabled people are an absolute disgrace.

As my hon. Friend the Member for Battersea (Marsha De Cordova) said when she raised a point of order yesterday, the Government sneaked out a written statement late on Friday, announcing that they would not appeal against the High Court judgment of 21 December, in effect reversing the emergency PIP regulations that they had introduced in February last year. Those regulations were introduced without a vote or a debate, despite two urgent questions and an emergency debate, and despite widespread concern about their impact. The Government’s own Social Security Advisory Committee was not consulted. I warned at the time:

“The move to undermine and subvert independent tribunal judgments is unprecedented, and ... marks very troubling behaviour by the Government on cases they lose that could weaken such social security tribunal judgments’ reach, influence and effectiveness in making independent decisions.”—[Official Report, 28 March 2017; Vol. 624, c. 145.]

I am pleased that the Secretary of State and her Department have finally seen sense, but there are a number of questions that the Secretary of State must answer—questions that have already been put by my hon. Friend the Member for Battersea. How many people does her Department estimate have been affected? How quickly will her Department be able to identify affected claimants, and by what process? Given the issues relating to letters from that Department, it is a little worrying if that is the only means.

How soon after identification will the Department make back payments? Will there be an appeal process for PIP claimants who are not contacted by the Department and who believe they should receive such payments? Will the Department compensate claimants who have fallen into debt and accrued interest charges? Will applicants be entitled to a reassessment if they were given the standard rate of the PIP mobility component after the February 2017 changes to PIP regulations, when the cause of the claim was “psychological distress”?

Finally, just how much public money has been spent by the Department on lawyers and legal advice seeking to defend the indefensible in the initial tribunal and the more recent court case?

This sorry debacle should serve as a warning to the Government of the dangers of seeking to undermine and subvert the decisions of our independent judiciary and the House of Commons.

Financial Guidance and Claims Bill [Lords]

Debbie Abrahams Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

How lovely it is to see you in your place, Mr Deputy Speaker; I extend my good wishes to you.

It was remiss of me not to welcome the Secretary of State to her place during the earlier urgent question. I congratulate her and look forward to working with her, possibly not always in the same tone as today. I think this will be a constructive debate, but there is a lot for us to discuss in the Work and Pensions portfolio.

I thank the Secretary of State for outlining the content of the Bill. I take this opportunity to thank Members of the other place who have spent many months scrutinising it. Although concessions have been made, we believe that several more are still needed. However, we recognise the importance of the Bill’s stated aims: principally, to increase the levels of financial capacity, reduce the levels of problem debt and to improve public understanding of occupational and personal pensions. As such, we will not oppose it.

As has been explained—I will rush through this bit—the Bill is in two parts. The first establishes a new arm’s length entity to provide money and pensions guidance and debt advice. This body will replace three existing publicly funded consumer bodies: the Money Advice Service, the Pensions Advisory Service and the Department for Work and Pensions’ Pension Wise service. The new single financial guidance body will also have responsibility for the strategic function of supporting and co-ordinating the development of a national strategy. To ensure that the Bill’s stated aims are met, we want the new body to be a highly visible and properly resourced organisation able to identify and support the many people who need help.

The second part of the Bill introduces a tougher and welcome regulation regime to tackle conduct issues in the claims management market. We can also support that provision.

[Gareth Thomas]

Is not one problem that risks inhibiting the success of the new single financial guidance body the fact that we do not know where the highest levels of problem debt are in this country? Might it not be sensible to take the opportunity in Committee or on Report to consider the example of an American piece of legislation, the Community Reinvestment Act, which requires all lenders to publish anonymised details of the debts taken out with them so that community organisations and debt advice bodies can know where to target their expertise and help?

[Debbie Abrahams]

My hon. Friend makes a valuable point. I am not familiar with that particular piece of American legislation, but I will look at it and see what we can do in terms of tabling amendments in Committee.

As we have heard, the FCA will regulate claims management company activity as a regulated activity, taking over responsibility from the Ministry of Justice. The Bill is a high-level framework Bill that, thanks to our colleagues in the other place, is now in much better shape. We particularly welcome the Government’s assurances that the SFGB will work closely with the FCA and the Treasury on issues of financial inclusion. Given, however, that the Work and Pensions Committee, of which I was a member at the time, raised concerns nearly three years ago about the inadequacy of Government measures to protect pension savers, and given also the difficulties that have arisen since, I am bound to ask why it has taken so long to recognise these failings.

I am also concerned that there are no specifics on delivery channels, especially given the very large number of people currently failing to access services. It is vital that the SFGB has the autonomy and resources to make itself truly visible to the public. Given the failings in other parts of the Secretary of State’s Department, and given the complex needs and limited resources of the people who will most need its services, “digital by default” is not a mantra we want to hear from the SFGB or its sponsoring Department.

[Stephen Kinnock (Aberavon) (Lab)]

The transfer of the British Steel pension scheme into a new scheme was announced in early 2017 and was very public. When it all blew up and became fertile territory for unscrupulous pensions advisers, the FCA seemed surprised it was happening. Why did it not see that coming? What steps should the Bill take to improve the early-warning system so that regulators can see these things coming down the track and be far more proactive in getting out there? After all, prevention is better than cure.

[Debbie Abrahams]

My hon. Friend makes a very valuable point that I will come to later. This is what we are seeing: we saw it with the BSPS and are now seeing it with Carillion and the pension savers there.

Last year’s statistics from the FCA make shocking reading. Of those over 55 planning to retire in the next two years, only 10% had used the Pensions Advisory Service, and only 7% had used Pension Wise. The new SFGB will have to do much better than that. Eight million people in the UK are over-indebted, according to a Money Advice Service report from last March, and less than one in five of these individuals currently seeks advice. Many are among the most vulnerable: over half the clients seen by MAS-funded debt advice projects have had a diagnosed mental health condition. It is vital that those people continue to be supported during the transition period, and that the SFGB develops strategies to identify and reach people who do not currently use any services. The impact assessment talks about “long-term…savings” once the SFGB has been established. It is difficult to see how such savings will be made if the new body is to fulfil all its objectives, particularly its objective of ensuring that information, guidance and advice are available to those who most need them. Have the Government considered what resources the SFGB will need to identify and support those who do not currently access advice or guidance? Has the Minister considered what arrangements will be put in place to ensure that people can continue to access existing services during the transition period?

The five areas on which the SFGB is expected to concentrate include provision of debt advice, and provision of information and guidance relating to occupational and personal pensions, accessing defined contribution pots and retirement planning. We welcome the Government’s decision, at the urging of our colleagues in the other place, to make it explicit in the Bill that the information, guidance and advice will be impartial, and that it will continue to be provided free to members of the public.

The SFGB will also help consumers to avoid financial fraud and scams; give information on wider money matters, and co-ordinate and influence efforts to improve financial capability; and co-ordinate non-governmental financial education programmes for children and young people. It also has a strategic function: to support and co-ordinate a national strategy. Given the appointment of a Minister with responsibility for financial inclusion, that needs to be strengthened to a “develop and deliver” function.

We welcome the focus on the provision of financial education for children and young people, but we think that the Government should be bolder, as recommended by the House of Lords Financial Exclusion Committee report “Tackling financial inclusion”. The new body will have to cope against a backdrop of rising prices and stagnant wage growth, a fall in real incomes and saving levels that have crashed. Evidence provided to the Lords Select Committee referred to fears expressed by debt agencies about the rise in queries concerning rent arrears, energy and water bills, telephone bills and council tax.

Then there is the impact of universal credit. As I have mentioned on numerous occasions inside and outside the House, we support UC’s aims of simplifying the benefit system, making transitions into work easier and, fundamentally, reducing child poverty. However, the Citizens Advice report “Universal Credit and Debt” showed that some aspects of UC risk causing or exacerbating personal debt problems. UC clients are more likely to have debt problems than those on legacy benefits. A quarter of the people that Citizens Advice helped with UC needed help with debt. UC clients are also struggling to pay off their debts. More than two in five debt clients on UC have no spare income to pay creditors.

Citizens Advice makes a number of recommendations, which are particularly pertinent in the context of the Bill. They include the need for more funding for free, impartial debt advice to meet existing increases in demand resulting from UC. In addition, Citizens Advice wants the Financial Conduct Authority actively to monitor the roll-out of UC. Has the Minister considered the impact of UC on personal debt, and its implications for the resourcing of the new SFGB? Taking up the Citizens Advice recommendations would alleviate some of the problems caused by UC. Fundamentally, as I have said, the Government must stop the roll-out of the programme and reverse the cuts to UC, which mean that it is failing to make work pay and failing the very people it is meant to help.

The SFGB will have to cope with an increasingly complex pensions sector. The growth of auto-enrolment brings more and more people within the scope of occupational pensions. The other major change has been the introduction of pension freedoms. In that context, we welcome the Government’s commitment in the other place to the delivery of the pensions dashboards. However, given the increasing issues that pension scheme members face—including those of British Steel, and now Carillion —in addition to a much tougher pension regulation framework, I want the Government to tackle the appalling abuse perpetrated by opportunistic financial scammers, who have targeted BSPS and Carillion pension members. I will say more on that later.

[Mr Leslie]

Does my hon. Friend agree that it would be useful to have a connection between the new financial guidance body and the Financial Conduct Authority? I slightly regret the fact that we are moving away from Treasury involvement in this whole issue. My hon. Friend may know that some of the products that people are investing in with asset managers and insurers, having got their pensions freedoms, are known as PRIIPs—packaged retail and insurance-based investment products. New regulations came out this month, but there is a risk of these products opening a whole new mis-selling scandal, because they are creating all sorts of wild projections about the amounts that could be earned. Does my hon. Friend agree that the guidance body needs to keep on top of this with the FCA?

[Debbie Abrahams]

My hon. Friend has made an absolutely key point. To go back to my urgent question, things are slipping through the net, and those links need to be tightened up. Again, this is something we need to explore in Committee.

As it stands, the SFGB will provide advice to the self-employed on their personal finances and debts only, and not on their business finances or debts. The Money Advice Trust, which helped more than 38,000 people last year, says that, for many self-employed people, there is simply no distinction between their personal and business finances. To exclude business finances and debts from the SFGB’s remit is a missed opportunity, particularly given the significant growth we have seen in self-employment in recent years. The self-employed as a group have also seen falling incomes since the recession. Will the Minister consider extending the SFGB’s remit to cover business finances and debts?

On the changes regarding claims management companies, we agree that the current arrangements regulating the industry are unsatisfactory. The current situation has been characterised by poor value for money, information imbalances, nuisance calls and texts, and the progression of speculative and fraudulent claims. We accept the proposition that there is a public interest in having an effective claims management market operating in the interest of consumers, as that can provide access to justice for those who are unwilling or unable to bring a claim for compensation.

Further, as the Carol Brady review asserts, a well-functioning CMC market can act as a check and balance on the conduct and the complaints-handling processes of individual businesses. We note that the Brady review considered that a move to the FCA would represent a step change. That seems the right decision, especially as 99% of turnover relates to financial services—PPI, packaged bank accounts or insurance.

Let me turn now to the content of the Bill. While we generally support the Bill, there are several aspects that we will look to strengthen, particularly in relation to clauses 4, 5, 25 and 28.

[Gareth Thomas]

I thank my hon. Friend for giving way again. I am fortunate enough to chair the Co-operative party, and one thing we are keen to encourage is the take-up of the services offered by financial co-operatives, such as credit unions. Would she be sympathetic to an amendment on Report from Co-op MPs urging the single financial guidance body actively to promote credit union services across the country?

[Debbie Abrahams]

Again, my hon. Friend makes a very interesting point, and I would look to work with him on the details of that to understand exactly what he wants to achieve.

I also want to talk about the need for a duty of care on financial service providers and a breathing space for those trying to manage their debt problems.

On clause 4, we welcome the Government’s commitment to ban cold calling, which is the leading driver of pension scams. The scope of the clause is still too narrow, and the clause is not nearly urgent enough. Every day that passes without a ban, people are being avoidably conned out of their life savings.

However, there are also scams that work against businesses. In the last four years, the Association of British Travel Agents has recorded a 520% increase in gastric illness complaints. As a result, hoteliers in the markets affected are now threatening significant price increases, and some are even considering withdrawing the all-inclusive product from UK holidaymakers entirely. ABTA has recently released shocking statistics showing that one in five people have been contacted about making a compensation claim for holiday sickness, with cold calling being the most common method of approach.

On clause 5(2), within 24 hours of the collapse of Carillion last week, adverts started to appear online encouraging people to cash in their pension pots. That reflects the experience of BSPS members. The Minister will have noted the evidence to the Work and Pensions Committee, before which the extent of pensions scamming was revealed. That involved some advisers travelling hundreds of miles in the hope of capturing high fees for each pension pot they succeeded in transferring. The Select Committee described retirement savings sharks reportedly circling around the British Steel pension scheme members, providing a “honeypot for scammers”. One steelworker is reported to have missed out on £200,000 of his pension transfer value after being advised, and as I have said, we are already seeing a similar targeting of Carillion pension members.

The law does not currently prohibit firms from acting as introducers, provided that they do not stray into providing services for which they require FCA authorisation. That applies to any non-regulated firm. Last year, the FCA received 8,612 reports of potential unauthorised activity in the United Kingdom. If the firms and/or individuals reported are within the remit of the FCA, it can investigate and take action, which ranges from publishing unauthorised firms’ and individuals’ warnings and taking down websites, to taking civil court action to stop activity and freeze assets, insolvency proceedings, and, in the most serious cases, criminal prosecution. Last year, the number of enforcement cases taken was 69. Given the current climate, it is clear that enforcement action needs to increase, but most of the funds that the FCA collects from penalties on financial services firms go directly to the Treasury. What consideration has the Minister given to removing the exemption of introducers from the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and allowing the FCA to keep the financial penalties that it receives so that it can expand its enforcement work?

Free and impartial Pension Wise guidance is essential at times like this, and it is greatly valued by those who use it, but take-up is nowhere near high enough. Far too many people are currently making vital decisions in the dark, which puts them at greater risk of suffering irrevocable financial detriment through scams or choices that are contrary to their interests, such as transferring pensions to savings accounts. Those problems will only grow as people become more reliant on income from direct contribution pensions in retirement. The existing Pension Wise promotion regime of signposting by pension providers—who have no business interest in promoting the service—and advertising has proved insufficient.

We welcome the Government’s acceptance that people should be given more encouragement to take guidance, but we believe that there should be a stronger nudge. Although clause 5(2) is welcome, we think that it can be improved through exemptions to avoid unnecessary burdens and stronger core requirements to make taking guidance a true default option. While individuals could choose not to take free and impartial guidance before accessing their pension pots, that would no longer be the consequence of passivity: as with the highly successful automatic enrolment policy, people would have to actively opt out. Default guidance would promote shopping around, better-informed decision making and protection against scams. Combined with a ban on cold calling, it would represent a step forward in consumer protection in an era of pension freedoms. Will the Minister agree to introduce new provisions in Committee to impose an immediate ban on cold calling and to introduce default guidance to assist people accessing or seeking to transfer their pension assets, with strong penalties for advisers who wilfully and detrimentally scam pension members?

Clause 25 gives the FCA the power to impose a cap on the fees that claims management companies can charge for their services, and a duty to exercise that power in respect of financial services firms. The Government have also introduced an interim cap on the fees that CMCs can charge consumers in relation to payment protection insurance claims. However, that does not go far enough to protect consumers from paying disproportionately high fees for what is often very little work. The Ministry of Justice estimates that the average amount of commission charged to consumers by CMCs is 28%, plus VAT. The FCA estimates that the average payout for PPI mis-selling is around £1,700, which means that a CMC would, on average, charge a successful claimant £476 plus VAT. Although the proposed fee cap would reduce the amount that consumers must pay CMCs, it would still mean an average charge of £340 with VAT on top. If the Government want to take meaningful action to protect consumers from high fees, they should propose a solution that would allow them to keep 100% of PPI compensation.

The Government should require firms to pay CMC costs for PPI claims, capped at 20% plus VAT, when they are at fault and when the consumer has used a CMC rather than claimed directly. This measure would apply only for the interim period until the new FCA regulations came into force or until August 2019, the deadline for making PPI claims, whichever was the sooner. This would incentivise firms still paying compensation to proactively reach out and encourage consumers to make claims directly to them, and to allow that to be done easily. It would also protect consumers from paying high charges to CMCs.

We support the strengthening of the regulation of CMCs, but we look forward to a regulatory regime that better protects consumers from high charges, poor value for money and unacceptable behaviour on the part of far too many CMCs. We also welcome the improvements made during consideration of part 2 in the other place, notably clause 28, which introduces an interim cap on the fees that CMCs and law firms can charge for claims in respect of PPI. This is an important protection for consumers in the run-up to the FCA’s claims deadline of August 2019. Customers can claim directly from their PPI provider for free, but those who choose to enlist support should not have to face the fees currently being charged by some CMCs.

However, the clauses introduced by the Government at the urging of Baroness Meacher apply only to PPI claims, even though the Ministry of Justice’s original consultation considered other bulk claims by CMCs, notably in respect of packaged bank accounts. In the vast majority of cases, the pursuit of such claims does not require a significant amount of work, but in its response to the consultation, the MOJ merely asserted that

“analysis of the evidence received”

suggested that

“PBA claims should be grouped with other financial-services claims due to additional work needed on these types of claims.”

It is far from clear that CMCs undertake significant work or add significant value in submitting PBA claims on behalf of consumers. If the CMCs’ approach to PBA claims truly differs little, if at all, from their approach to PPI claims, the Bill should cap their charges in exactly the same way. If the Government cannot provide justification or act to protect customers from millions of pounds of excess charges for PBA claims before the FCA introduces its own rules a year or more from now, we will table amendments in Committee to achieve that. We ask the Government for a better justification of their decision not to apply the interim fee cap to PBA claims.

I shall move on to the breathing space scheme. An estimated 2.4 million children live in families in problem debt in England and Wales, and the FCA estimates that half the UK population is financially vulnerable. It is shocking that an estimated 600,000 families in England and Wales are spending more on overdue bills than they spend on food. A measure that would protect such families is a breathing space scheme. Such a proposal would introduce a legal freeze on interest and charges, collections and enforcement action to give people time and space to stabilise their finances and put in place an affordable and repayment-sustainable plan. Such a scheme, which has been championed by the Children’s Society, StepChange Debt Charity and many others, was included in our manifesto and that of the Conservatives, and I am delighted to see that, following pressure in the other place, a commitment is now on the face of the Bill. Yet again, however, the timescales for implementation are too slow.

I appreciate that the consultation on the breathing space scheme has now closed, but I want it to have certain fundamental tenets. First, it should include a legal freeze on interest and charges, collections and enforcement action. Secondly, as many debts as possible need to be included, especially debts to public bodies. Thirdly, there should be no gaps in protection between the initial breathing space period and the transition to a statutory debt management plan. Finally, the breathing space scheme needs to be implemented as quickly as possible. Again, I would be grateful for the Minister’s response to those points, either at the end of the debate or in writing to me.

I would now like to focus on an idea that received a great deal of support in the other place and that has been raised by Members here today—namely, a duty of care on financial service providers. That is not currently in the Bill, but we now have an important opportunity to discuss the support that banks provide to their vulnerable customers. Research from Macmillan Cancer Support, which was mentioned earlier, shows that four out of five people with cancer are affected financially by increased costs and loss of income following their diagnosis. As the Bill recognises, ensuring that people have access to the right help and advice is essential to stopping financial problems.

[Justin Tomlinson (North Swindon) (Con)]

On that point, will the hon. Lady join me in congratulating Nationwide Building Society, which has led the way by working with Macmillan to ensure that appropriate support is made available as soon as there is a diagnosis?

[Debbie Abrahams]

I congratulate Nationwide and all organisations that recognise that they have a duty of care to their customers. We need to put that duty of care on the face of the Bill, particularly for those who find themselves in vulnerable circumstances.

As providers of mortgages and other key financial commitments, banks and building societies have a huge influence—good or bad—on the financial wellbeing of many households. When the right support is put in place, that can lead to improved outcomes for customers, as we have just heard. However, that Macmillan research shows that problems still exist and that there is a lack of consistency in the support offered to people when they seek help.

With that in mind, will the Government support a revision of legislation to incorporate the recommendation made by the Lords Financial Exclusion Committee regarding a duty of care? The Committee concluded that the Government should amend the Financial Services and Markets Act 2000 to introduce a requirement for the FCA to make rules setting out a reasonable duty of care for financial services providers. I appreciate that any change as significant as that must be subject to proper consideration, and it is therefore welcome that the FCA has committed to publishing a discussion paper. However, the Government and the FCA have said this must wait until

“after the UK’s withdrawal from the EU”

becomes clear, but I do not think that we can wait, because people cannot wait. I therefore urge the Minister to look carefully at the issue and to bring forward suitable proposals in Committee.

In conclusion, we by and large support the Bill, but a number of areas can be strengthened significantly—for instance, the duty of care needs to be addressed on the face of the Bill—so I urge the Minister to act on those areas, and I look forward to his response.

[Several hon. Members rose—]

Private Sector Pensions

Debbie Abrahams Excerpts

Monday 22nd January 2018 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the Government’s plans to stop private sector pension abuse.

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

The vast majority of employers do the right thing by their pension schemes, and members can expect to receive the pension benefits they have paid for throughout their working lives. The Pensions Regulator and the Pension Protection Fund were set up in 2004 to provide pension scheme members with a safety net to ensure pension benefits receive some protection when things go wrong—it is a fact that some businesses will fail. The PPF approach has been supported on a cross-party basis since 2004.

To prevent irresponsible employers from off-loading pension liabilities on to the PPF, the regulator was given a range of powers, including the ability to recover significant assets where employers failed to take account of the scheme. There are about 6,000 defined benefit schemes, however, and such cases are very few and far between. It is the responsibility of the regulator to strike a balance between protecting members and PPF levy payers, and minimising any adverse effects on the sustainability of employers and businesses when it comes to the regulation of defined benefit funding.

The regulator does not have the power to stop businesses paying out bonuses to executives or dividends to shareholders, but if it believes that a scheme is not being treated fairly, it will investigate to see whether the use of its powers is appropriate. The Government are clear, however, that where sponsoring employers can meet their pension promises, they should and must do so. That is why we have suggested ways of strengthening the current scheme to enable the regulator to be more proactive. In fact last February we published our Green Paper, “Security and Sustainability in Defined Benefit Pension Schemes”, which included suggested measures that could strengthen the powers of the Pensions Regulator by introducing punitive fines for actions that harm a pension scheme. We also set out powers to enhance the regulator’s ability to demand information to ensure effective governance and spot issues before damage is done.

Our manifesto in June 2017 reaffirmed this intent by proposing to give the regulator the power to impose punitive fines alongside contribution notices so that pension scheme members are fully protected. The details of the fine would be worked through with all the relevant stakeholders, but it would represent a significant strengthening of the deterrent. We also intend to make certain corporate transactions subject to mandatory clearance by the Pensions Regulator, but we must take care to ensure that these measures do not have an adverse effect on legitimate business activity and the wider economy.

I should tell colleagues that we have received 800 responses to the Green Paper, and they are being reviewed by the Department. The White Paper is in progress and will be published in the spring. Effective regulation is dependent on a prompt flow of information between the parties concerned, and on compliance with rules and processes. Following the publication of the White Paper, we will introduce new regulation to ensure that the regulator gets the information it requires to conduct investigations and casework effectively and efficiently. It remains the case that the Government support free markets, enterprise and businesses, but this has to be conducted responsibly.

[Debbie Abrahams]

Yesterday, the Prime Minister chose to announce via the media, in part in response to the collapse of Carillion, that the Government planned to introduce tough new rules to stop private sector pension abuse. Carillion had 13 defined benefit schemes in the UK, with 28,500 members and a combined pensions deficit of £587 million. Between the end of 2015 and last year’s interim results, the difference between Carillion’s assets and liabilities almost doubled, from £317 million to £587 million. We know that profit warnings started to be issued in the summer of 2017. Given the severity of the financial problems facing Carillion, why did the Government not act then, rather than attempting to close the stable door after the horse had bolted?

We have argued for years that the Government should take better action to protect people’s pensions. The Government had the opportunity to act in 2013 and again in 2015, by supporting Labour’s amendments to pensions governance in legislation. More recently, the Work and Pensions Committee warned the Government of the need for protections and for more powers for the regulator. Although we welcome the Green Paper, the urgency has just not been there. Why did the Minister choose to ignore those warnings?

The Committee made a number of recommendations, including that the Pensions Regulator should have mandatory clearance powers for corporate activities that put pension schemes at risk, and that it should have new powers to impose fines at a level that would genuinely deter such dangerous and irresponsible behaviour. Why did the Government refuse to implement those recommendations at the time? Are the Government now ready to commit to implementing them fully? If the Government had taken action, Carillion’s massive debt accrual might have been arrested.

Given the scale of the liabilities and the concerns for other defined benefit schemes, what does this mean for the adequacy of the Pension Protection Fund? The collapse of Carillion has already led to a rise in pension scammers targeting those with pension pots. What about the defined contribution schemes that are not covered by the Pension Protection Fund? Will the Secretary of State investigate the apparent conflict involved in BlackRock being responsible for those schemes while simultaneously betting against their employer? Finally, can she advise the House what measures will be proposed in the White Paper, and when, exactly, they will be brought to the House?

[Ms McVey]

As Members on both sides of the House know, the regulator is an independent, arm’s length body. It was set up in 2004 after much discussion about how it should work and how it could best support pensioners when they needed its help. What it never did was to interfere with the running of a business; that was what was decided. We said that we needed to make sure that we could go further if we had to. That is why we have set about introducing a Green Paper—as I said, we have had 800 consultation responses—looking at where it is best to intervene, to make sure that we get the balance right. We do not want to tip the edge and unnecessarily cause harm to a business.

Profit warnings mean that a company will not get the profit that it expected—no more than that. We have to make sure that the Government do not precipitate anything that could be seen as negative from business. That is why we are looking at all these 800 responses, looking carefully and considering how to protect companies’ employees, protect pensions and move forward in the most conducive and careful manner. The new White Paper will be coming forward later this year.

Pension Equality for Women

Debbie Abrahams Excerpts

Thursday 14th December 2017 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this important debate, and I am absolutely delighted to be able to speak in support of his motion. We have had an excellent and passionate debate with some fantastic contributions, and I would like to thank each and every one of them. On the whole, it has been completely cross-party, recognising the real injustice that women born in the 1950s have been dealt. There can be no doubt that women have borne the brunt of this Government’s cuts over the past seven years, but that applies particularly to women born in the 1950s, who have been dealt a real injustice with the accelerated increase in their state pension age.

[Lilian Greenwood]

Does my hon. Friend agree that it is absolutely no surprise that 1950s women such as my constituents Jane Yates and Glenys Daly feel robbed? They have worked hard for 45 years and they say that their bodies are giving up, yet they cannot get the pensions that they have paid for.

[Debbie Abrahams]

There are so many cases like theirs, and I shall touch on a couple of them, if I may.

Women born in the 1950s have had their state pension age quietly pushed back, many without receiving any notice. They expected to retire at 60, only to find that they had three or more years to wait. In spite of some appalling stories of the dire circumstances that some of these women are facing, the Government have still refused to provide any transitional support. During our national pensions tour, which my hon. Friend the Member for Stockton North (Alex Cunningham) and I started this summer, we have heard from many women who are not only struggling but facing destitution. I shall mention a couple of cases, all anonymous of course. The first woman states:

“I’ve been paying national insurance for 43 years, but have no private pension or anything else for that matter. I’ve supported 2 children on my own salary as a divorced, single parent. I had no notification of the 1995 Act but in Feb 2012 I was told that my retirement date was May 2019. I’ll be 65 and 4 months. I’ve worked, got extra qualifications, had good jobs, but at 63 I am unemployed and am claiming JSA which finishes soon. I’ve little savings. Have applied for over 40 jobs since Sept. I’m at my wits end”.

The second woman states:

“I don’t remember ever getting a letter saying my pension age had changed. I’m disabled and have had a lot of stressful things going on in the last few years. Incapacity Benefit changing to ESA and worrying about that, then the bedroom tax and having to downsize, then news that DLA is changing. The change in State Pension Age just sort of crept in there and came to my attention when WASPI highlighted it. I kept hearing the words that no one will wait longer than 18 months! Then I realised not only would I not get a state pension when I was 60 but also the winter fuel allowance and bus pass would be affected. I’m tired of not mattering.”

Those women deserve more than this.

As we have heard, many of these women have had to rely on the wider social security system beyond the state pension to survive. This means that if they are claiming jobseeker’s allowance or universal credit, they will be expected to undertake 35 hours a week of job search activity, or be sanctioned. I would be grateful if the Minister commented on the recommendation in the final report of John Cridland’s review of the state pension age, which suggests that older jobseekers should be required to find only part-time work. Do the Government support that recommendation?

When the plight of women born in the 1950s was first raised by Women Against State Pension Inequality and various other groups two years ago, they stated that 3.8 million women were affected by the lack of notice of the changes in the Pensions Acts of 1995 and 2011. The change in the 2011 Act affected 2.7 million women, of whom only 150,000 have reached their revised state pension age to date. By 2026, they will all have retired. Those women feel palpable and justifiable anger. As they have said, they have done the right thing. They have worked all their lives, paid into the system for decades, cared for their children and cared for their parents, only for the goalposts to be moved. Many are seeking legal redress against the Government. They need action now, not in 10 or 20 years’ time.

Labour has presented two options that the Government could take forward now. The first, which was included in our manifesto, is the extension of pension credit to those most badly affected by the accelerated increase in the state pension age, enabling them to get additional support based on the 1995 state pension age timetable. That would provide approximately half a million women on the lowest incomes with up to £159 a week. We have repeatedly called on the Government to implement those costed measures—about £800 million, as my hon. Friend the Member for Easington mentioned—but they have sadly refused to act.

Our manifesto commitment said that we would consider other options as well, and I set out an additional option at conference that would give women the opportunity to retire up to two years early, rather than as expected under the Government’s plans. Given that the Government have so far refused to set aside additional expenditure, we felt that it was imperative to present cost-neutral proposals, so that there was no excuse to rule it out. Under the second option, women born in the 1950s would see a small reduction of 6% in their weekly state pension entitlement for each year that they retired early. Based on the state pension today, a woman retiring a year early would receive £149.98 a week instead of £159.55. That option would be available to all those waiting to retire—around 2.6 million women. However, as I said then and want to reiterate now, that proposal is a starter. It is to complement additional action on transitional protections. These women need action now, and the Government could introduce these options now, which also do not preclude compensation. We want to continue working with women to right the wrong that they have been done.

Labour’s options were developed after listening to women and men as part of the national state pension tour to discuss the future of our state pension system. We also met the various 1950s women lobby groups, and something that struck us profoundly was the urgency for many women. They need something now and cannot wait six months, let alone three, four or five years. As we all know, most 1950s-born women will retire in the next few years, so something needs to happen now, but this Government have ignored their pleas for help and have ignored the tangible measures that could be taken. Their approach is not only morally bankrupt and shows that they have no commitment to tackling burning injustices, but, given the prospect of a lengthy and costly court battle as women seek compensation for the years that they have lost, it is also extremely foolhardy.

Last week, my hon. Friend the Member for Stockton North challenged the Government on their contingency planning in the event of the courts awarding compensation to the affected women. The Minister said the Government believed that they were on firm ground, but history is littered with court and other decisions when injustice has been proved and Governments have had to pay up. It is clear that this Government have even less support in the House for their position on 1950s women than they do for a meaningful vote on the negotiated settlement with the EU, so I ask the Minister to work with us and with these women on a comprehensive set of bridging arrangements now.

--- Later in debate ---

[Guy Opperman]

The hon. Gentleman and I both voted for the 2011 Act to increase the state pension age, with the circumstances that apply, after much consideration of the variety of options that had been proposed. He and I, and certainly the Scottish National party and the Scottish Government, have differing views on taxation, such as on whether it should support Trident, but, with respect, the tax reduction he proposes would reduce the job-creating power of the businesses upon which we rely for the jobs and public services we all wish to support.

[Debbie Abrahams]

Will the Minister acknowledge that, two days before John Cridland’s report was released, data showed that life expectancy at 60 is actually going down and life expectancy at birth is flat-lining? This is the only developed country where that is happening.

[Guy Opperman]

I am grateful to the hon. Lady for raising that specific point, because I genuinely believe she is scaremongering—[Interruption.] Oh, yes. On the issue of life expectancy, there are two fundamental sources. The first is the ONS, which has repeatedly made it clear that life expectancy is rising across the board. We cannot get away from the fact that the ONS reported only this month that life expectancy continues to rise.

The Labour party manifesto sought an independent review of all aspects of the state pension age. Well, the Government did that with the Cridland report, which makes it critically clear that life expectancy has increased. Life expectancy at birth in 2016, for example, was 91 years for females and 89 years for males. In 50 years’ time, by 2066, life expectancy at birth in the UK is projected to rise to 98 years.

Healthy life expectancy has also been increasing in recent decades. Healthy life expectancy at 65, as a proportion of total life expectancy, has been relatively stable since 2000. Healthy life expectancy at 65, according to the latest ONS statistics, has been increasing in Scotland in recent years, as has disability-free life expectancy.

Universal Credit Project Assessment Reviews

Debbie Abrahams Excerpts

Tuesday 5th December 2017 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I beg to move,

That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that the five project assessment reviews, carried out into universal credit between 2012 and 2015 by the Government’s Major Projects Authority now known as the Infrastructure and Projects Authority, and any subsequent project assessment reviews carried out into universal credit by the Infrastructure and Projects Authority between 1 January 2016 and 30 November 2017 that have been provided to Her Majesty’s Ministers at the Department for Work and Pensions, be provided by the Secretary of State for Work and Pensions to the Work and Pensions Committee.

The purpose of today’s debate on universal credit, the fourth in nearly eight weeks, is to seek the release of the project assessment review reports on universal credit to enable this House to scrutinise the Government’s flagship social security programme.

[Lucy Frazer (South East Cambridgeshire) (Con)]

The hon. Lady has just said that this is the fourth debate in eight weeks. Can she clarify whether she asked for the documents in any of those four debates, or indeed on any other occasion in this House? [Interruption.]

[Debbie Abrahams]

As some of my colleagues are saying, we are asking for the documents now. We are pleased the Government finally acknowledged that their universal credit programme is not fit for purpose, and now we need to understand the extent to which it is not fit for purpose through the publication of these reports.

I wish to start by giving some context to today’s debate and then set out why it is so important that we have access to these project assessment reviews. For many months now, Labour has been calling on the Government to pause and fix universal credit. This is a direct response to the mounting evidence that the full service programme is driving hardship in the areas where it has been rolled out. I am sure hon. Members from across the House will now be aware of the figures, but the realities of the misery being caused by this programme bear repeating: half of those in rent arrears under UC report that their arrears started after they made their claim; 79% of those in debt are recognised as having priority debts by Citizens Advice, putting them at higher risk of bailiffs and evictions; and two in five have no money to pay creditors at the end of the month.

[Ms Karen Buck (Westminster North) (Lab)]

Is my hon. Friend aware of research published today by the Residential Landlords Association on this point, which found that 73% of landlords remain reluctant to let properties to people on UC? That is vital context. We need to understand what the Government know about the pressure on landlords in the context of UC.

[Debbie Abrahams]

Absolutely. My hon. Friend makes such a pertinent point. I was going on to say that demand for emergency food parcels in areas where UC has been rolled out is up 30%. Disabled people, single parents and families with children have been particularly affected. Initially, the Government’s impact assessments said that UC would reduce child poverty by 350,000, but then it was to be by 150,000. Now, the Child Poverty Action Group has estimated that by 2022 an additional 1 million children will have been pushed into poverty by as a direct result of cuts to UC. We have identified three drivers for these widespread problems: policy design issues; implementation flaws; and funding cuts.

As I have mentioned, at the recent Budget the Chancellor was forced to respond to Labour’s concerns about UC, as well as concerns from across the House—I acknowledge everybody’s work on this. As I said in my response to the Secretary of State’s statement on this, the measures in the Budget are welcome, not least in finally acknowledging that UC was not fit for purpose. But they are not nearly urgent enough, as they do not come into effect until next year; they do not address key issues, such as the assessment and payment periods or the single household payment; and fundamentally they do not redress the cuts and restore work incentives. Only £1 in every £10 that has been cut has been restored. Though he refused to pause the programme, as we had demanded, the roll-out of UC has been slowed considerably, meaning that the roll-out to all jobcentres will now not be completed until December 2018.

That brings us to the project assessment review reports and today’s motion. Five reviews on UC were carried out by the then Major Projects Authority between 2012 and 2015. As Members know, such reviews are independent ones that provide assurance to major projects. They contain in-depth analysis of the implementation of the project, including detailed assessment of the risks faced and the progress that has been achieved against the Government’s objective: to deliver their flagship social security programme, universal credit. Although these review reports have never been made public, the National Audit Office’s report on UC in 2013 stated that

“the Major Projects Authority’s project assessment review expressed serious concerns about the Department having no detailed ‘blueprint’ and transition plan for Universal Credit. In response to these concerns, the head of the Major Projects Authority was asked to conduct a 13-week ‘reset’ between February and May 2013”

In other words, it was clear that all was not well even then. The announcement of a “reset” was buried in the MPA annual report of that year, accompanied by a single sentence of explanation. This is how UC has limped on ever since.

To try to uncover the extent of the issues, freedom of information requests were submitted to the Government to access these project assessment reviews; but they were refused. The doughty campaigners appealed to the Information Commissioner, and on 30 August this year, the Information Commissioner’s Office ruled that this information must be disclosed by the Department in full, with the exception of the names of the civil servants named in the reports. The ICO’s judgment is important and worth reflecting on here.

[Jo Platt (Leigh) (Lab/Co-op)]

My local authority, Wigan Council, was part of the pilot for UC, which subsequently caused rent arrears, payment delays and increasing financial pressures on the local authority. Does my hon. Friend agree that if these project assessment reviews had been released when the Information Commissioner ruled, the Government could have paused the flawed UC system, thus preventing undue hardship for my constituents?

[Debbie Abrahams]

Absolutely. My hon. Friend makes such as a good point. This is what we have been calling for all along. We need to have an in-depth understanding of what the real issues are. We have outlined a number of those, but it is clear that the programme contains deep flaws. If we are serious about resolving these problems—I believe the Secretary of State is genuine in his offer to do so—we must understand exactly what the extent of the problems are.

[Lucy Frazer]

The hon. Lady referred to the decision of the Information Commissioner, rightly saying that there was a limitation in that the names of non-senior officials were not disclosed. However, there were two other things in that decision. First, there was an acceptance that it was reasonable to argue that routine disclosure of PAR reports would reduce their effectiveness. Secondly, and more importantly, it was stated that they were disclosed because six months had passed since the reports had been put together and therefore officials could feel that they had been able to give free and frank advice. But six months has not passed since the date of the reports that the hon. Lady has requested in this motion.

[Debbie Abrahams]

I do not think that gets away from the ultimate ruling, which was that these things should be published. I understand exactly what the hon. and learned Lady is saying, but at the end of the day the ICO ruled that these PAR reports must be published.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I make no apologies for raising this point repeatedly in this place. In a rural and remote constituency such as mine, the lack of ability for people to link up online is surely impeding any roll-out of UC. I am sure the hon. Lady recognises that, and the issue has to be taken on by Her Majesty’s Government. Meanwhile, it is of great concern in my constituency.

[Debbie Abrahams]

The hon. Gentleman makes a fair point. Again, we need to know the extent of the issues. I am sure the information system is one of those concerns. The Information Commissioner described the PARs as giving

“a much greater insight than any information already available about the Universal Credit Programme.”

[James Cartlidge (South Suffolk) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am going to finish this point. The ICO describes the programme as having

“been subject to a number of high-profile failings”.

In its judgment, the ICO weighed the public interest carefully and determined that the balance supports disclosure of these five reports, not least because UC could affect up to 11 million people, by the estimation of the ICO, with nearly 7 million relying on the programme once it is fully rolled out. The commissioner noted that the Department for Work and Pensions had not complied with the law in its handling of the original request for information and gave it 35 days to release this information into the public domain, with a failure to comply resulting in a written certification to the High Court. So we cannot underestimate the importance of this ruling.

[Heidi Allen (South Cambridgeshire) (Con)]

Nobody is more interested than I am in universal credit and in its being a success. Does the hon. Lady acknowledge that even if we do get the reports, because the roll-out has been very slow—I am glad it has—some of them are really old and the system has been significantly improved since then? They might give us a window into the past, but I sense that they will not give the opportunity that she is hoping for to identify flaws in the system, because I think we have fixed a lot of them.

[Debbie Abrahams]

But we do not know, do we? I recognise the hon. Lady’s commitment and drive—

[James Cartlidge]

Will the hon. Lady give way?

[Debbie Abrahams]

May I just finish responding to the intervention?

We need to understand what is in the reports. I absolutely understand the commitment of the hon. Member for South Cambridgeshire (Heidi Allen) on this issue, but we do not know until we have seen them.

[James Cartlidge]

This is all fine, but the key stats are in the public domain. The purpose of universal credit is to help people into work. We have record employment and record low unemployment. Those are the stats that matter. Does the hon. Lady celebrate them?

[Debbie Abrahams]

Well, where to start with that? First, unless the hon. Gentleman has a crystal ball and has been able to read the reports, I do not think he is in a position to say that they will reveal nothing else. Secondly, on the stats he mentioned, I think there is enough on the record to refute those points.

[Stephen Timms (East Ham) (Lab)]

Does my hon. Friend agree that the Government’s insistence on cloaking this project in secrecy, right from the start, has been one reason why it has gone so badly wrong?

[Debbie Abrahams]

My right hon. Friend hits the nail on the head. We must have greater openness and transparency about this and other Government schemes. For universal credit especially, the effect it is having on people now means that we must do the right thing. As I said, the ruling must be complied with.

[Justin Tomlinson (North Swindon) (Con)]

rose—

[Debbie Abrahams]

I shall give way in a moment.

As the ICO ruled, any failure to publish the reports would result in a High Court judgment.

[Wendy Morton (Aldridge-Brownhills) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am going to carry on making these points, if I may.

I understand that, regrettably, the Government have appealed the ruling and are awaiting the outcome of a first tribunal hearing. This is the second time—

[Alex Burghart (Brentwood and Ongar) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am just going to carry on for a moment, if that is all right.

This is the second time in two years that I have brought to the House’s attention Information Commissioner rulings concerning the DWP that the Government have tried to thwart. The first time was when the Government refused to publish data on the number of people who had died after being found fit for work. Those data were shocking and vindicated those who had pushed for their release for several years. They gave cold comfort for the families and friends of those who had died and to those who were still going through the assessment process.

I appreciate that neither universal credit nor the project assessment review reports were initiated under the tenure of the current Secretary of State, but I do urge him to rethink and publish the reports forthwith. Taxpayers’ money must not be used to hide the Government’s embarrassment.

[Ruth George (High Peak) (Lab)]

When the only impact assessment of universal credit we have seen was published five years ago this month, it committed to a post-implementation review within five years and said:

“A comprehensive evaluation programme is being developed for Universal Credit”

to inform and evaluate long-term policy. Are we not now trying to get some crumbs of the evidence the Government committed to providing five years ago and should have provided?

[Debbie Abrahams]

My hon. Friend makes absolutely the right point. I commend her for her work on the Work and Pensions Committee to expose how important it is to get this right.

[Justin Tomlinson]

The hon. Lady is being generous in taking interventions. On the point about transparency, each and every single one of us can at any time visit jobcentres and talk to staff and claimants. I have done that three times and brought a Minister with me to visit, too. The overwhelming response I have had is that universal credit is positive and is making a genuine difference.

[Debbie Abrahams]

I thoroughly agree with the hon. Gentleman that our seeking the publication of these reports does not detract from the valuable work that jobcentre staff are doing under difficult circumstances.

The Information Commissioner’s Office found that

“the withheld information would provide valuable insight into the management of the UCP”—

universal credit programme—

“and allow for greater understanding of what the UCP did to identify and tackle the issues that it encountered.”

It found that the reports we are discussing

“provide a distinct insight into the governance of the UCP and allow for even greater transparency.”

That is in addition to the findings in National Audit Office, Select Committee and Office for Budget Responsibility reports.

The Government’s Budget announcements were a welcome step in the right direction, but not nearly enough. They still need to pause the roll-out of universal credit, not just slow it down, and they need to release the project assessment reviews so that we can fix the multitude of issues that still exist. The reports will help us to understand what needs fixing and how.

[Wendy Morton]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry, but I am going to continue.

If the Government are so sure that a slow-down will suffice, that they can continue to ignore work incentives, that no changes are necessary before Christmas and that a five-week wait is sufficient, why will they not publish their own workings, as the Information Commissioner has instructed? It is a clear matter of public interest that the Government abide by the ruling of the Information Commissioner and publish these five assessment reviews, and any others in the subsequent period. That will allow the House the proper scrutiny it deserves and shine a light on the implementation failures of the universal credit programme, which have caused so much hardship for so many. I call on the Government to abide by that ruling now.

Universal Credit

Debbie Abrahams Excerpts

Thursday 23rd November 2017 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I thank the Secretary of State for giving me early sight of his statement. There was little surprise when the Government announced reforms to their embattled universal credit programme in the Budget yesterday following months of Labour campaigning, a unanimous defeat on the Opposition-day motion and discontent across the whole House about the rising debt, arrears and even evictions that the social security reforms are causing to so many constituents. We of course welcome any steps to improve the programme, not least the small reduction in the so-called long hello, meaning that those on the lowest incomes will now only be expected to wait five weeks for support to arrive, compared with six under the current design.

Before I address the detail of today’s announcement, let us step back and look at the big picture. The Government introduced universal credit with three promises: to reduce child poverty by 350,000; to simplify the social security system; and to ensure that work always pays. As the mounting evidence has shown, universal credit is not living up to those ambitions. Now it is our task see whether the Chancellor’s announcements meet the Government’s own tests. First, the most immediate matter: the reforms announced today will not be introduced until next year and will do nothing for the tens of thousands who are stuck in the six-week waiting period over Christmas. Anyone who has tried to claim universal credit since Tuesday 14 November will not get their first payment until after Christmas day. That will mean tens of thousands of families going without over the festive period.

Secondly, we are concerned that the Government have decided to remove only a single week from the waiting period, taking it down to five weeks. Under existing Department for Work and Pensions guidance on alternative payment arrangements, claimants should be offered the option of being paid every two weeks, reflecting their previous employment patterns. A report published by the Resolution Foundation has found that 58% of those moving on to UC from work were paid more regularly than monthly. Can the Secretary of State tell us whether there is capacity in the system to offer claimants more regular payments if the Government do not change the payment period to fortnightly as opposed to monthly?

There is no change to the monthly assessment period that is particularly affecting the self-employed, and I want to press the Secretary of State on why that is the case when the current arrangements are clearly so punitive. In relation to the advance payment, we have concerns over the details of the extended repayment period. What additional debt does the Secretary of State expect the average claimant to incur? What does his Department predict will be the average monthly repayment amount deducted from a claimant’s income? Our position remains the same: the social security system should prevent people from getting into debt, rather than making matters worse. It is contrary to the ambitions of universal credit that instead of alleviating poverty, it is going to cause it. It is also an insult to ask people who are unable to make ends meet under the Government’s punitive reforms to bear even more risk, stress and concern.

The Government’s housing benefit proposals are not due to be introduced until April next year, nearly six months after the Budget. Support for rent will be available for the first two weeks of the five-week period before claimants receive their first payment. That will leave a three-week gap, which is still too long for many people to cope with. It will lead to arrears and even evictions, as we have said already seen from the programme.

Finally, this announcement did nothing to restore the key ambition that work will always pay. The swingeing cuts to UC have not been addressed, condemning more disabled people, children and their families to poverty. Taken together, these announcements equate to putting in £1 for every £10 that the former Chancellor cut. In a further nonsensical approach, he has downgraded planned increases to the national living wage, leaving a full-time worker on the minimum wage £900 a year worse off by 2020. Why have the Government failed to give our workers the pay rise they deserve? The Government seem content to leave us with 17 years of pay stagnation.

In summary, these measures for UC are not enough. They must be brought forward, amended and added to. We stand ready to work with the Government to make the necessary changes. Failing that, they should stand aside and let a Labour Government get on with the job.

[Mr Gauke]

Where to start? Let me begin with the point about people having to wait five weeks. People do not have to wait five weeks; they can get a payment within five days. As for the dismissal of an interest-free advance as immaterial, that is just completely unreasonable and wrong. An advance enables people to have control over when they receive their payments. We are making it more generous and giving people a longer period over which to repay it, but we are also making it more flexible by enabling people to get a larger advance if that is what they want and need.

The hon. Lady suggests that we should move towards paying fortnightly, saying that the system should reflect how people’s previous employment packages worked, but only 3% of people in employment are paid fortnightly. If we are to have a system that has the flexibility to cope with people who are out of work moving into work, a monthly approach is absolutely sensible, but we need flexibility in the first assessment period, so that people can get access to money earlier. That is exactly what we are delivering.

The approach of the Opposition Front-Bench team is not one of constructive engagement. They are a roadblock to welfare reform. They have sought to stand in the way of delivering universal credit—[Interruption.] They have just asked for a pause. I am unsure whether we heard a request for a pause from the hon. Lady today, but I would be fascinated to know what they mean by a pause. Do they mean not rolling universal credit out to any new jobcentres, or do they mean stopping any new claimants going on to universal credit at all? I am not quite sure which it is.

[Debbie Abrahams]

I am happy to talk afterwards.

Universal Credit Roll-out

Debbie Abrahams Excerpts

Thursday 16th November 2017 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate the hon. Member for Banff and Buchan (David Duguid) on his maiden speech. He showed his obvious commitment to his constituency and it was kind of him to praise his predecessor. I, too, extend my good wishes to her.

There have been some outstanding contributions to what has been a fiery debate. I congratulate the Chairman of the Work and Pensions Committee, my right hon. Friend the Member for Birkenhead (Frank Field), on securing the debate and on the Select Committee’s timely report on the six-week wait for universal credit. I also congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on her excellent speech, as well as my hon. Friends the Members for Bishop Auckland (Helen Goodman), for Heywood and Middleton (Liz McInnes), for North West Durham (Laura Pidcock), for High Peak (Ruth George) and for Bermondsey and Old Southwark (Neil Coyle), along with the hon. Members for Glasgow South West (Chris Stephens) and for Lanark and Hamilton East (Angela Crawley). The hon. Member for Stirling (Stephen Kerr) took a sensitive and analytical approach to the report, and described what needs to happen in a measured way. She is not currently in her place, but the hon. Member for South Cambridgeshire (Heidi Allen) of course gave a characteristically bold speech.

This is the third debate on universal credit in the past month. Today, as in the previous two debates, the Government have been called on to reduce the six-week waiting period that applicants face. As we have heard, what some have called the “long hello” is believed to be one of the primary drivers of the rise in debt and arrears that we are now seeing. Some 49% of families who are in arrears under universal credit state that their arrears started after they made their claim and because of the waiting times to receive payments, support being delayed or stopped, or administrative errors.

On Monday the Chairman of the Backbench Business Committee, my hon. Friend the Member for Gateshead (Ian Mearns), told the House that as universal credit is being rolled out, social housing providers across the north of England are finding more and more of their tenants are going into rent arrears. The total debt of 10,500 universal credit claimants is nearly £4.2 million, with an average of just over £400 each. In Greater Manchester, where universal credit was first piloted, the average arrears for UC tenants is now £824 compared, with £451 for non-UC tenants. In London, it is even worse: councils such as Southwark are estimating average arrears of approximately £1,700 per UC tenant.

What about the private rented sector? We have heard some of the serious issues related to pre-emptive strikes in respect of tenancy agreements. A landlord contacted me because he was concerned about three of his tenants who are thousands of pounds in rent arrears. They had never previously been in arrears.

A reduction in the six-week wait would be a good start, so I look forward to hearing the Minister’s response on that. I was disappointed—as, I think, was Mr Speaker —to hear of certain revelations coming out in the media yesterday. I hope that the Minister will enlighten us as to whether the wait is going to be reduced by one or two weeks. Reducing the six-week wait would only be a start, because it will not address the significant design issues that we have seen since the start of universal credit.

Some examples of those design issues are: the monthly payment being made in arrears following a monthly assessment period, when most people in receipt of UC are paid weekly or fortnightly; the payment being made to the main earner of the household, predominantly the man; rent being paid to the claimant rather than to the landlord; self-employed people being subject to the punitive minimum income floor, which fails to reflect the reality of the peaks and troughs in their working hours; the real-time information flaws that my right hon. Friend the Member for East Ham (Stephen Timms) has mentioned previously, and for which there is no time limit to disputes, leading to more delays in payments; and, of course, the in-work conditionality coming down the track, which will mean a million working people visiting jobcentres while much of the Jobcentre Plus estate is being closed, and facing financial sanctions if they fail to work the hours their job coach deems they must.

In addition, reducing the waiting time does not tackle the chronic issues with implementation and functionality. A pregnant woman got in touch with me when a change in circumstances meant that she had to apply for universal credit because her ESA claim was closed. She could not apply online, and was given a number to call, then another one, then another one and finally, she was referred back to the original number. To say that training is needed is an understatement.

My hon. Friend the Member for Batley and Spen (Tracy Brabin) mentioned yesterday at Prime Minister’s questions the ridiculous position of one her constituents who did not have photo ID and had to have their identification verified by their doctor rather than being able to use their verified identification on the legacy benefits that they had previously been receiving. There are also issues with lost claims and so on.

The recent Social Security Advisory Committee report on in-work progression highlights those issues in its section on “Getting Delivery Right”. There is no getting away from the fact that the system is complex and more than struggling to cope, and that is not helped by the simultaneous closure of one Jobcentre Plus in 10. It must be recognised that the objective of simplicity should be for ease of access and navigation of the system by claimants. That is still not happening and must be addressed. I am pleased that the Government acceded to the need for Freephone numbers, but I would like to hear when they will be up and running—it is now three weeks since they were announced. We know that much more help is still needed.

Let me turn now to the cuts that were wielded to universal credit in the 2015 summer Budget. As the Institute for Fiscal Studies said at the time, they mean that the promise that work would always pay—a primary objective of universal credit—has been lost. Let us remind ourselves of those cuts. They include: cuts to work allowances which, for example, mean that a couple with two children claiming housing costs will receive £192 a month, down from £222 a month; cuts to nearly a million families with more than two children; and cuts to disabled people on ESA work-related activity group of £1,500 a year when they transfer on to universal credit’s limited capacity to work. There is also the freeze in the uprating of universal credit to take account of inflation.

Those cuts will see 3 million families worse off by as much as £2,600 a year. For some it is even worse. For example, in real terms, a single parent, who is working as a full-time teacher, with two children will be £3,700 a year worse off. The cumulative effect of these cuts to universal credit will see more working-age people and their children pushed into poverty. The Child Poverty Action Group has estimated that, by 2022, an additional million children will have been pushed into poverty, 300,000 of whom will be under five. They will be accompanied by 900,000 adults.

Although reducing the waiting period is a start, it will not be sufficient to prevent rising debt, arrears, and worse. That is why Labour has called for universal credit to be paused while it is fixed. As I have said before, in addition to reducing the six-week wait, we want all claimants to be able to decide whether they want fortnightly or monthly payments, whether they want payments split in the household and whether they want the housing payment to be paid directly to the landlord. Fundamentally, we want investment in universal credit to ensure that work does always pay and that our children and young people are not being pushed into poverty, left destitute or worse.

With nearly a million people set to move on to universal credit over the winter, the Budget gives the Government an opportunity to deliver on their promise

“to make the country work for everyone”.

I hope that they take it.

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 13th November 2017 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right. This is why we are recruiting work coaches up and down the United Kingdom to provide the personalised support that people need to help them get into work. I come back to my experience of meeting work coaches in jobcentres up and down the country. They believe that they have a system in place that is helping them to do more to transform lives, and that is hugely important.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

One of the original objectives of universal credit was to reduce child poverty. In 2010, the Government said that UC would reduce child poverty by 350,000. That figure was revised to 150,000 in 2013, but last year, Ministers failed to produce a figure in answer to a question from my hon. Friend the Member for West Ham (Lyn Brown). What is the Government’s current estimate of how many children will be lifted out of poverty as a result of universal credit?

[Mr Gauke]

Universal credit gives people a better opportunity to work, and it gives parents, including single parents, greater support with childcare. I come back to the example I gave the House a moment ago. Someone who had previously been on income support and unable to get help with childcare can now get that help and get on to the employment ladder, thanks to universal credit. That is what universal credit is delivering.

[Debbie Abrahams]

That was a really disappointing answer. As we have already heard, the Child Poverty Action Group published data last week predicting that 1 million more children will be pushed into poverty as a result of universal credit cuts, 300,000 of whom will be under the age of five. Another objective of universal credit was always to make work pay. Given that four out of 10 people on UC are in work and will be on average £2,600 a year worse off, when will the Government admit that UC is not fit for purpose or fit to meet the challenges of a new labour market and stop its roll-out?