Carer’s Allowance

Ed Davey Excerpts

Monday 22nd April 2024 Westminster Hall

[Ed Davey (Kingston and Surbiton) (LD)]

I congratulate the hon. Member for Neath (Christina Rees) on bringing the e-petition to the House and on her excellent speech. I agree with everything she said.

We should begin by looking at the big-picture issues that the carer’s allowance helps us to address—currently very inadequately. The first is the issue of social justice. Carers often work long hours in very difficult, trying circumstances, and they receive the lowest benefit of the lot. They are treated as if they do not matter. That has to change. We must change the value that we place on care in order to end income inequality.

Supporting care properly through the carer’s allowance would make a big difference as part of a proper social justice agenda, but it is about much more than that. It is about the link between care and the NHS. Carers do such a fantastic job. Their work helps the NHS and the taxpayer, saving them billions of pounds. Were it not for unpaid family carers or carers who receive the very limited allowance, the NHS would literally fall over. We must consider this debate about carer’s allowance in the context of social justice and the future of the NHS.

Another issue that I hope the Minister will look at is the link with the economic problems we are facing. We are told that the Department for Work and Pensions is looking at the need to help people to get back into work; well, there are a lot of people who cannot get back into work because they are caring. They would like to work more, but if they work more, they get penalised. This is clearly the issue of the day, and I know that the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), will address it. If the Government are worried about work incentives and making sure there are people to do the jobs we need, they should look at the level of the carer’s allowance and all the conditions and criteria around it. It is way overdue for reform.

I wanted to start by raising those general issues, before getting down into the basics, which the hon. Member for Neath rightly took us through. We need a complete review of the carer’s allowance, including the rate it is paid at, the conditions around it and how it relates to other benefits and issues. Let me give one or two examples.

One issue is age. As the hon. Lady said, people who are in education and are affected by the 21-hour rule cannot receive carer’s allowance. That discriminates against young people. Young carers arguably need support more than any other kind of carer. We need to look at the interaction with education, and I would even consider those below the age of 16, because some young carers are basically doing a full-time job as well as their GCSEs and studies.

We also need to look at carer’s allowance for people who are over the pension age. To give them credit, the Labour Government began to do that, but we need to take that further, because some pensioners work incredibly hard and do really stressful jobs but are ineligible for carer’s allowance. We urgently need a full-scale review of carer’s allowance.

On the overpayment issue, which is really worrying, there are two aspects that we have to address. One is the legacy: all the carer’s allowance that has apparently been overpaid and that the Government are looking to claw back. That is a big legacy issue that we need to look at, and I would like to ask the Minister some questions about it. It is clearly an issue that we all have to face up to and try to tackle.

There is then the issue of trying to stop the overpayments happening in the first place. I have seen a number of reports and parliamentary answers on this issue, but I have never quite nailed it down to satisfaction, so I let me ask the Minister some questions. How much money does the DWP believe has been overpaid in carer’s allowance and is yet to be clawed back from people? What is the figure and what is the debt? We have seen different amounts, but what is the cumulative total, going back however many years that the DWP is worried about? In other words, how big is this problem? Give us the size of it so that we can try to get a feel for it. How much is owed?

By how much were people being overpaid? I have seen figures from Carers UK and some parliamentary answers that suggests the vast bulk relates to people who were overpaid just a little bit—£2 a week—and because of the cliff edge they have to pay back the whole amount. If they have been overpaid by an average of £2 a week for a year, they are having to pay back the whole lot. The cliff-edge problem is creating a total injustice and everyone can see that on all sides. Let us have some more figures and transparency from the Government so that we can understand.

I hope the Minister can go into more detail—for example, in how many cases was the DWP aware that people were being overpaid and still did not alert them? We read in the press that the DWP is sometimes aware and, for whatever reason, does not notify people. There is something really wrong with trying to claim back money from someone who has been overpaid when the DWP was aware and they were not, and that only compounds the errors. We really need to understand some of this information—which I hope the Minister has at her fingertips—if we are to come to a view on dealing with the huge problem of the overpayments legacy. I do not think there is a single Member of this House or the other place who thinks it is right to pursue some of these overpayments with some of these people. It really beggars belief in many cases.

Finally, overpayments are still happening on a regular, systemic basis. Because of the cliff-edge problem that the hon. Member for Neath rightly touched on, it is happening by accident every single day. As the hon. Member mentioned, the Government were warned about this—after a National Audit Office report in 2019, they admitted it was a problem and said they were going to fix it—but here we are, and it has not been fixed and it has got worse. We need to understand how the Government are going to address this issue to ensure that the problem does not just get worse and keep reoccurring. We read that it is a terribly big IT system that will cost millions to fix, but why should carers be penalised because the Government cannot get their systems right? That does not seem right to me. The Government have to sort it out and, in the meantime, treat carers fairly.

I am keen to hear the contributions of others, and hope that we can come together on this issue and realise that carers are getting a raw deal, which is bad for inequality, bad for the NHS and bad for our economy. We urgently need not only a fix to deal with the problems we have at the moment but a long-term fix so that this is sorted out once and for all.

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[The Minister for Disabled People, Health and Work (Mims Davies)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. It is a pleasure to respond to what has been a slightly protracted, wide-ranging e-petition debate. I thank the hon. Member for Neath (Christina Rees) for introducing it with a characteristically thoughtful and wide-ranging speech, and I welcome Alasdair’s raising the issue.

This debate is welcome. It comes at a challenging time for our carers looking after their loved ones: we are post-covid and we face cost of living pressures due to the invasion of Ukraine. It is a challenging time for all of us, but most particularly our carers. I want, like many, to begin by paying tribute to the millions of unpaid carers across this country. Very thoughtful and personal contributions have been made by hon. Members, and I duly note the queries and challenges they have raised. I have much to say in response.

First, I know that people are concerned that the Government do not recognise and value the contributions made by carers every day in providing this significant care and continuity of support to family and friends, including pensioners and those with disabilities, but it is really important to put on record that that is not my perception. That is not how I want people to see this Government. I will do my best to make that clear to those watching.

The 2021 census indicates that around 5 million people in England and Wales may be doing some unpaid care, with many of us taking on that role at some point in our lives. Like other hon. Members, I see much of the work that is done by carers in my postbag, at events in my constituency, at carer’s rights days, or through engaging with my constituents in Mid Sussex. None of us is immune to the challenges of caring. Colleagues will know that this is of particular interest to me as a former carer and as part of a caring family. I pay tribute to all who do this daily. It is a difficult job—one that is the best and the worst in the world, in some ways. You will always be grateful that you have been there. It is precious and hard going in equal measure and I pay tribute to all those doing that.

Carers are fortunate enough to have some wonderful advocates. We have seen that both in the contributions of MPs to this debate and in organisations such as Carers UK, Carers Trust and the Learning and Work Institute, to name but three. Some of those have been mentioned already. I meet Carers UK regularly, and will be doing so again shortly. I was delighted that my officials were able to meet recently with a wonderful delegation of inspirational young carers who were part of Young Carers Action Day in March.

I also pay tribute to the hundreds of DWP staff, largely based in the north-west, who provide financial support to a million unpaid carers through the carer’s allowance, day in and day out. I want to make sure that our approach is one of always being happy to look at to mistakes or other issues and of always treating each case on its merits.

It would be misleading the House if I was not completely clear that this is a policy area that I have been hugely interested in, both as a Back Bencher through the work of the all-party parliamentary group and now as a Minister. I have been acutely interested in these matters, and I can be clear with the House that, since coming to this role, this is a matter that I have been examining. I genuinely welcome this debate.

I want to support those unpaid carers to do some of the paid work that they love, want to do and continue to do, something that they can balance alongside their commitments to their loved ones—the people who they are looking after. We have of course legislated to ensure that employees will be entitled to five days of unpaid care leave per year and will be supported through more flexible working in the workplace. I encourage employers listening to consider job design, have supportive conversations and be part of acknowledging this invaluable role. This is a community, employee and Government partnership.

[Ed Davey]

When the Minister talks about legislating for five days’ leave for carers, will she mention my hon. Friend the Member for North East Fife (Wendy Chamberlain), who piloted that legislation with cross-party support?

[Mims Davies]

Yes, indeed. I was supportive of that myself, attending where possible to support that legislation going through. The Government absolutely welcome the cross-party work the hon. Member for North East Fife (Wendy Chamberlain) did piloting that, and congratulations to her.

On the specific subject of the debate, we are spending record amounts to support unpaid carers. Real-terms expenditure for carer’s allowance is forecast to be £4.1 billion in 2024-25 and by 2028-29 the Government are forecast to spend over £4.5 billion a year on carer’s allowance. We spend another £685 million to support carers receiving universal credit through the carer element.

As mentioned today, patterns of care have changed significantly over the past decade. People are providing vital unpaid care to relatives and friends in a whole range of circumstances that work for all concerned, but I also recognise that none of this is easy. Nearly one million people now receive carer’s allowance, and the weekly rate increased this month to £81.90. That means that since 2010 it has increased from £53.90 to £81.90 a week, providing an additional £1,500 a year to carers through the carer’s allowance compared with 2010. Of course, there are additional amounts for carers in universal credit and other ways forward, and it is important that those watching and those who maybe have not had this conversation are aware of those and come forward to get the support they need. That also can be through the household support fund. We know that unexpected outgoings happen, and people should reach out through their local authority and through Barnett consequentials. I know that that has been an important support mechanism for carers.

The crux of the petition we have been debating is that we should turn carer’s allowance into a carer’s wage. It is important to emphasise that the carer’s allowance is not intended to be a replacement for a wage or a payment for services of caring, hence some of the issues rightly raised today. It is therefore not directly comparable to either the national minimum wage or the national living wage. The principal purpose of the carer’s allowance as it stands, and under successive Governments since 1976, is to provide a measure of financial support and recognition for people who are not able to work full time because of their caring responsibilities. I reiterate that I welcome the debate and the opportunity to review and understand these issues. Successive Governments have supported carers through allowances and benefits, as well as wider cross-Government actions, rather than paying people directly for the tasks they undertake in the way that an employer would.

Budget Resolutions and Economic Situation

Ed Davey Excerpts

Thursday 16th March 2023 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the right hon. Gentleman for that point of order. As he says, there was a statement about this issue earlier. I am afraid that it is, in fact, not a matter for the Chair to rule on this particular aspect of TikTok and anybody’s name on it, but the right hon. Gentleman has obviously put his point on the record. I am sure that if Members sitting on the Treasury Bench feel that there is anything they need to feed back to any particular Department, they will do so. I think that we had probably better leave it at that, frankly.

[Ed Davey (Kingston and Surbiton) (LD)]

On a point of order, Madam Deputy Speaker. At Prime Minister’s questions last week, I raised the case of Jean, after her grieving grandson asked me to raise it in Parliament in order to highlight the tragic impact of long ambulance delays. After speaking with Jean’s grandson last night, I now understand that some of the details provided to me, which I relayed to this House, were not accurate. While the substantive point remains—Jean did call for an ambulance and was told that she would have to wait for at least eight hours—Jean did not pay for her parking, and she did not die within the first hour of arriving at the hospital. I wish to correct the record by withdrawing those particular remarks.

[Madam Deputy Speaker]

I thank the right hon. Gentleman for that point of order about what is obviously a very sad case that he raised at PMQs. I am grateful to him for coming to the House—I presume that this is as soon as he knew that the information had been incorrect. I am sure that the whole House appreciates the fact that he has corrected the record. Thank you.

Pension Funds: Financial and Ethical Investments

Ed Davey Excerpts

Wednesday 22nd May 2019 Westminster Hall

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I beg to move,

That this House has considered financial and ethical risks of investments in fossil fuel companies by pension funds.

I refer Members to my entry in the Register of Members’ Financial Interests, in which I disclose my interest in renewable energy, particularly solar.

Parliament has declared a climate emergency. I welcome that tremendously, but it prompts the question: how do we solve that emergency? The good news is that many of the technologies we need are already here, and they are developing fast. From solar to wind to storage, their price is coming down fast—far faster than many people expected—and their reliability is increasing dramatically. On top of that, massive innovation will propel those technologies further forward, and we will enter a cheap green energy age.

The barriers to dealing with the climate emergency are no longer technological; they are more about policy, leadership and cash. We need politicians to show leadership, but we also need to ensure that investment funds get behind the new technologies at a speed and with an urgency that currently we are not seeing. That is why we, as a country and as the world, need to disinvest from fossil fuels and dirty technologies, and reinvest in clean green technologies. The question is how we propel that as fast as possible.

I believe we need a system-wide approach. We have to decarbonise capitalism at a fundamental level across the whole of the City—the debt markets, the stock exchange, the banks, the Bank of England’s own balance sheet and the pension funds. The Committee on Climate Change has asked for Britain to become carbon net zero by 2050, but we produce only 1% to 1.5% of global greenhouse gas emissions. However, 15% of the world’s greenhouse gas emissions are funded in London, so not only do we have the power to get our own country’s greenhouse gas emissions down to zero, but we can help spread that around the world and be a real leader. We could be the green finance capital of the world and say, “We will no longer finance the climate crisis in our country.” If we did that, we would show dramatic leadership in the world on this emergency. We should start with pensions.

[Dr David Drew (Stroud) (Lab/Co-op)]

The right hon. Gentleman is making a cogent argument. Can he assure me that the parliamentary pension fund, which has long been looking at this issue, is now clear of fossil fuels? We should ensure that that is completely the case.

[Sir Edward Davey]

I believe that is not the case. We need to ensure that the parliamentary pension fund becomes zero-carbon. We as Parliament need to say, “Divest Parliament.” That would show leadership both to public schemes, particularly in local authorities, and to the wider sector. Let us remember that we have already discovered four to five times the fossil fuels the world would need to exceed a climate change budget. We already have too many fossil fuels. We should not invest in more. We should disinvest now.

[Wera Hobhouse (Bath) (LD)]

The previous Government target to cut carbon emissions by 80% by 2050 is no longer relevant because we have to cut our emissions to net zero, so fracking, which is a source of carbon fuel, is no longer an option for this country. Should not the Government reflect that new reality and issue new planning guidance for local authorities or give them new powers? Such leadership would have an immediate consequence: investment in fracking as a source of fossil fuel would no longer be an option or attractive to investors.

[Sir Edward Davey]

I totally agree with my hon. Friend. In government, we placed tough regulations on that sector, which were based strongly on environmental considerations. It has not been able to grow to meet them. It has nowhere to go.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

I congratulate the right hon. Gentleman on securing this important debate. I agree entirely that Parliament should take the lead in not investing in fossil fuels. Yesterday, BP’s investors decided that it should adopt a totally different strategy on carbon fuels so it fits in with the Paris agreement on climate change. Does he agree that other companies should take that way forward?

[Sir Edward Davey]

I saw what happened at the BP annual general meeting yesterday, and I welcome it, although a second motion, which was a bit stricter, did not carry. I would have liked that motion to carry.

That brings me to my argument. Not only is there a moral imperative for us to divest, given the threat climate change poses to our planet; there is also a financial risk for pension funds and their beneficiaries. We need to explore that. We need to make it clear to pension fund managers and trustees that pulling out of fossil fuels is the right thing to do in financial terms. The real issue is often called the carbon bubble. We are investing in more fossil fuels than we could possibly need if we were going to stay climate change compliant. At some stage, that bubble of investment in carbon that we do not need will burst, leaving pension funds and the wider economy in a serious mess. Those assets would be worthless; they would be stranded assets, which would cause huge disruption in our financial sector.

[Tommy Sheppard (Edinburgh East) (SNP)]

I agree completely with what the right hon. Gentleman is saying. I think he is coming to the heart of the matter. I, like many other people, have a private pension fund, and I instruct my broker to ensure that it is directed into ethical investments. Of course, the broker has always said, “You’re not going to get as much of a return as you might get if you invested in other things.” The time has come for that paradigm to be reversed. We have to explain to investors that, over the next 10 to 15 years, increasing governmental action against fossil fuels and dirty technology will make their returns worse. Now is the time to jump ship and to disinvest from dirty technology.

--- Later in debate ---

[Sir Edward Davey]

I totally agree. Indeed, analysis by the Grantham Institute shows that if someone had not held fossil fuels in their portfolio for the last 50 years, their overall returns would not have been any different. The idea that we have to invest in fossil fuels to have a return was not true in the past, and it is not going to be true in the future.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I am grateful to the right hon. Gentleman for giving way. I thought I would intervene at this stage to try to frame the debate, because I think some colleagues will not be aware of the Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018, which the House passed in September last year. Those regulations require environmental, social and governance matters to be taken into consideration as part of the statement of investment principles, and require individual pension fund trustees to take into account ESG factors when considering their strategic process to invest. I suggest that is one of the reasons why BP, the parliamentary scheme and others are beginning to change their approach. Those regulations will come into force in October.

[Sir Edward Davey]

I am grateful to the Minister for his intervention. Those new ESG guidelines are helpful, but I am afraid I do not think they are quite up to the scale of the task we face. I will come to that in a second.

We have this carbon bubble; the question is how we are going to deflate it. How will we move from where we are now, with this big risk to our economy, to the low-carbon economy we need? One option is to say, “Well, it will sort itself out. We don’t need to worry now. We can delay it all and it will be all right. We can allow the fossil fuel companies to keep investing in exploring and getting even more fossil fuels, and inflate that bubble even more.” How risky would that be? That is one scenario that some people seem to think is possible. I reject it entirely.

Another approach is to say, “Let’s reduce, and ultimately stop, exploration for further fossil fuels. Let’s not inflate that bubble any more. Let’s gradually deflate it, so we can have an orderly transition for our economy, our energy sector and all the communities, towns, cities and people who depend on it.” That is the solution, and that is why I have concluded that we must disinvest and reinvest in a thoughtful, careful way. If we do that, we can tackle the climate emergency and avoid a financial and economic catastrophe.

That brings me to the Minister’s point. There are three possible approaches to disinvestment and investment. One is what I would call the gentle, market-led approach, which says, “If you have a bit more transparency and disclosure and a few ESG guidelines, it will all take care of itself.” I am in favour of all that stuff, but it is nowhere near up to the task. It is not urgent enough. We have people talking about voluntary disclosure. No, we need mandatory disclosure now, regulated by this House. I applaud the ESG guidelines, but they are a little woolly and poorly defined. They are little nudges when we need more than a nudge, because this is an emergency.

There is a second, state-led approach advocated by at least one Front-Bench team, involving wholesale nationalisation and dismantling capitalism. That would be the wrong approach, because it would delay action and not enable us to take the power of capitalism, with market forces, innovation and competition, to help us solve the problem.

We need to make capitalism our servant, not our master, and that comes from laws and regulations in this House. I propose a five-point plan systematically to decarbonise capitalism and tackle the disinvestment and investment challenge of the pension funds. First, there should be mandatory disclosure from all fossil fuel companies on how much carbon their business plans would see emitted and how much carbon is in their reserves. That should be coupled with a legal requirement to show how they will become compliant with the Paris treaty, with timed targets, so that fossil fuels can unwind the pollution they cause.

Secondly, there should be new climate accountancy rules for accountants and auditors on fossil fuels and pension funds, which would require accountants and auditors to produce Paris-compliant accounts, where assets and activities not aligned with the Paris treaty are written down to zero by 2050 at the latest. I think that would change the valuation of a number of companies. We would see a lot more transparency, really know what was going on, and be able to take better decisions.

Thirdly, there should be new, mandatory requirements on all pension fund managers and trustees to report on whether their portfolios of investments are aligned with Paris or not—really strong transparency and disclosure. Fourthly, there should be new powers for pension regulators, and the Bank of England if required, to challenge funds and other investment operations on their climate risk management. Where that is found wanting, the regulators should be able to take action to ensure proper alignment.

Fifthly, we need to develop a register—probably Government-led—of all the low carbon, green and zero carbon investment opportunities for the capital to go to. We cannot just say disinvest; we must show where investments and that capital should go. The good news is that there are a huge number of very attractive low carbon and zero carbon investment opportunities in this country and around the world, so we can ensure that our pensioners of the future get the pensions that they need and that those pensions are far less risky because they will be based on climate-friendly assets.

[David Duguid (Banff and Buchan) (Con)]

The right hon. Gentleman seems to be advocating a reduction of investment in energy companies. Does he recognise—I am sure he does from his time as Energy Minister—that many such companies, and particularly the larger international oil companies, are investing in new technologies, cleaner technologies and research and development in renewable energy?

[Sir Edward Davey]

I am not trying to get rid of energy companies; I am trying to get them to switch. We have a couple of examples of big energy companies switching out of fossil fuels and into green technology. Some have done that around the world successfully. Unfortunately, most of the majors to which the hon. Gentleman refers have not done so on any serious level at all. I did some calculations that showed on average their capital expenditure on green technology in the last decade or so is just 1.3% of their total spend. That is just not serious. I hear what he says, but we must get those energy companies to take this far more seriously. Some are beginning to shift, but we need to show that they must step up to the plate.

We have a climate emergency, and it is great that we are seeing people—young people in particular—coming out and protesting. I celebrate what they have done. There is a thirst for Governments to take action. The question is: are our actions up to it? The only response to what people are arguing for and what the science says is a quite dramatic systemic change. In the disinvest and reinvest approach and the policies I have outlined, I want to argue for something very radical but practical.

Those who go to the City and talk to pension funds such as Legal & General, Allianz and Axa will find that a number of them are doing what I am talking about. Those who talk to the Governor of the Bank of England, Mark Carney, as I did four weeks ago, will find that he is absolutely on to this case. There is a coalition of willing people in the City who want to go this way; it is just that this Government and Parliament are behind the City and the regulators. We must get in front of them, because they want us to show true leadership. Let us today give that leadership.

[Several hon. Members rose—]

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on obtaining this debate, which is relevant, timely and of key interest to many Members across the House, not least those who are members of the parliamentary pension scheme. I draw attention to my entry in the Register of Members’ Financial Interests and highlight that I used to run the pensions business for a significant UK asset manager before coming to the House and that, along with my hon. Friend the Member for North East Hampshire (Mr Jayawardena) and the hon. Member for Sheffield South East (Mr Betts), I am one of the three current Members of the scheme’s board of trustees.

I have three points to highlight. First, this is a challenge for all pension funds not just in the UK but across the world. The rules and regulations by which pension funds are governed have changed significantly, not least under this Conservative Government. The Law Commission reports of 2014 and 2017 are relevant: 2014 was the first time that pension funds had in effect an obligation to take ethical or environmental issues into account. The 2017 changes allowed for some social investment. The parliamentary guidance to which my hon. Friend the Pensions Minister referred, which came in last autumn, made a significant change in requiring trustees to report, as part of the statement of investment principles, on the portfolio’s effect on climate change and what trustees intended to do about that. That is the background.

The parliamentary pension fund is conscious of its obligations under the 2018 regulations. We have had several meetings and discussions with different advisers to consider how we might best tackle the challenges and how to amend our statement of investment principles. The three existing Members who are trustees—me, my hon. Friend the Member for North East Hampshire and the hon. Member for Sheffield South East—had a separate meeting, and we also met one of the world’s leading green asset managers to look at what sort of investment vehicles are available to schemes that want to take a greener approach.

That leads to my second point. In trying to make a pension scheme greener, we have to be honest about the scale of the ambition that the right hon. Member for Kingston and Surbiton set out. I think I heard him correctly when he said that pension schemes should invest in new technologies to try to be carbon free. I challenge that gently, because I do not believe there is a company in the world that is completely carbon free and has never used a single vehicle, train or aeroplane that uses fossil fuels or any form of heater or boiler that runs on gas. It is virtually impossible, at this stage, to measure the complete carbon footprint of any business of significant scale.

As an illustration of the proof of that pudding, which shows the challenge for individuals, the chairman of Ecotricity—whose headquarters is in the constituency of my neighbour, the hon. Member for Stroud (Dr Drew)—is an outspoken champion of everything green, but he clocks up a huge number of air miles every year as a global ambassador for sport, for some United Nations subsidiary. My guess is that he does not travel economy class. There are challenges at an individual and at a corporate level.

[Sir Edward Davey]

To clarify, I was focusing on ensuring that companies were compliant with the Paris treaty. That does not mean that they need to be zero carbon now—that would be impossible—but they need to be on a pathway that is Paris compliant, and that is the case for many companies already. We just need fossil fuel companies and others to catch up.

[Richard Graham]

I am grateful for the clarification. I think the right hon. Gentleman understands that, from a personal investor or a pension fund investment point of view, finding an entirely fossil fuel-free investment would be very challenging.

My third point is that there is a challenge not just for pension funds, but for the wider financial sector. The most innovative green energy projects in the UK, particularly those looking at how we can mobilise some of the most powerful tidal streams in the world—including wave technology in the north of Scotland and cases being worked on in Cornwall, Hampshire and the west coast of Wales—are not easily accessible investment vehicles and are not at the scale that a significant pension fund could easily invest in. It would be useful to look at challenges around some investment regulations, including how major investors, such as large insurance companies that manage huge pension assets, could be allowed to invest more money almost in creating businesses to invest in new technologies.

I am conscious that time is running out, so let me move to my final point.

--- Later in debate ---

[Sir Edward Davey]

I thank everyone who has contributed to this debate, which has been really good. There is some degree of consensus emerging. I agree with what the Minister said on carbon capture and storage. I was disappointed that the former Conservative Chancellor, George Osborne, got rid of the CCS projects that I had been developing as Secretary of State for Energy and Climate Change, particularly the gas CCS which was a world-leader. I regret that, because I think it was an extraordinarily bad decision for the gas industry.

I want to return to the issue of consensus. We need to act. I set out a five-point plan today. There were other ideas. I hope the Government will listen to those ideas. While the ESG guidelines are helpful—I know some of the work that the Minister for Energy and Clean Growth is putting forward on green finance—I think we have to be bolder and go further. The Minister has heard that today.

In the context of the role of the UK and the City of London internationally, we need to go further. If we can lead from the City of London, we can decarbonise capitalism not only here, but globally. That will be the biggest contribution that Britain can make to tackling global climate change.

Question put and agreed to.

Resolved,

That this House has considered financial and ethical risks of investments in fossil fuel companies by pension funds.

Child Poverty: London

Ed Davey Excerpts

Thursday 22nd February 2018 Westminster Hall

[Siobhain McDonagh]

I completely agree with my hon. Friend. I commend him for all the work that he does on child poverty. We might not all like targets, but they work.

The fundamental factor explaining London’s disproportionately high child poverty rates is the soaring cost and extreme shortage of housing. Across our capital there is a homelessness crisis, with 54,660 households in temporary accommodation, a figure that makes up 69% of the national total. Some 2,730 of those households are in temporary bed-and-breakfast accommodation, including 500 households with children who have been in B&Bs in London for longer than the six-week legal limit.

In my constituency I discovered a converted warehouse in the heart of one of south London’s busiest industrial estates. Connect House temporarily houses up to 86 homeless families with a car park as a playground and rooms so small that families sleep horizontally to all fit in a bed. Families have been placed there from across London, causing children to fall ill, miss school, and even to be found wandering lost around a working industrial estate at night. That is Dickensian, a disaster waiting to happen, and the reality of 21st-century child poverty in London.

The private rented sector—back to the earlier point made by my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes)—is where children in poverty are most likely to live, with child poverty in private rents tripling in the past decade alone. That is unsurprising considering that the lowest quartile of rents in London are more than 150% higher than elsewhere in England. That means the average tenant in the capital spends a staggering half of their salary on rent. At my most recent advice surgery on Friday I met John, a married man in his 50s who spends 74% of his monthly income to fund the roof over his head: a one-bedroom flat that he shares with his wife and 11-year-old son. Can the Minister tell me how someone like John will ever be able to afford to save to own his own home, or how work provides John with a route out of poverty?

So what can be done about housing? Since 1939 the delivery of more than 200,000 homes a year in England has happened only in years when there have been major public sector house building programmes, and the last time that the Government target of 300,000 homes were built in one year in England was in 1969, when councils and housing associations were also building new homes. We urgently need to grant local authorities the right to build and the right to buy so that housing can be let to families on low incomes at social housing rents.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

The hon. Lady is making a powerful speech. Her point on housing is extremely well made. Does she share my concern that some of the regeneration of estates in London is reducing the amount of social housing and that the opportunity to improve and increase social housing is simply not being taken in estate after estate across London?

[Siobhain McDonagh]

I have a slightly different and perhaps more controversial view of redevelopments. I congratulate councils that try to deal with problems in difficult circumstances and come up with solutions that would not always be their first choice. In life, as the right hon. Gentleman will know, the way to make friends is to do nothing. Sometimes doing something makes you more enemies. I congratulate all the councils of whatever persuasion that are trying to do their best in really difficult circumstances.

A mechanism should be introduced so that any public sector site up for disposal has to be considered for the construction of social or mixed housing, including a substantial proportion that is social. Currently, public bodies tend to sell sites to raise money, not to provide homes. They often hide behind the requirement to obtain best value. For me and many Members here today, best value is the provision of homes for homeless or overcrowded families. How about building on the 19,334 hectares of unbuilt greenbelt land within a 10-minute walk of a London train station? It is not traditional greenbelt land. At no environmental cost, it is enough space for almost 1 million new homes in our capital.

It is not only extortionate housing costs that London faces, but living costs higher than anywhere else in England. In fact, nearly 40% of Londoners have an income below the amount needed to achieve a basic decent standard of living, with children the most likely to live below minimum income standards.

[Siobhain McDonagh]

I am sure that as politicians we often live by our word, and I am extremely offended by the way we now use the word “affordable”. In housing terms, “affordable” means 80% of market rent. I suspect many of us here today could not manage to pay an affordable rent, let alone somebody on a low or median income in the capital. I would be grateful to find a way to ban the word “affordable” in this context.

[Sir Edward Davey]

Again, the hon. Lady makes a powerful point, along with her right hon. Friend the Member for Enfield North (Joan Ryan). My wife is a social housing lawyer and she has a presentation on the meaning of “affordable” in Government policy and law. She has found 11 different definitions of affordability, so not only is it confusing—“affordable” often does not mean affordable—but it is completely absurd and we need to get back to the issue of social housing that the hon. Lady raised.

[Siobhain McDonagh]

I wish to say this tactfully because I like the right hon. Gentleman a great deal. The problem and the definition of affordability at 80% market value goes back to the 2010 coalition Government. I do not wish to be mean; I simply wish to put that on the record.

--- Later in debate ---

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on winning the debate and on her speech. We have had a degree of consensus on a number of issues that are critical to tackling child poverty, particularly housing. I want to say quite a bit about housing, but first I want to talk about my constituency.

The Royal Borough of Kingston is often seen as a wealthy borough. It is true that it has some very wealthy parts, but over many years representing three quarters of the borough, I have found that that external perception is inaccurate when it comes to the lives of thousands of people in the borough. We have pockets of severe deprivation. In wards such as Norbiton, where we have the Cambridge estate, Cambridge Gardens and the King Henry estate, people are really struggling, daily. There are also estates in central Surbiton, Chessington and Old Malden where levels of poverty equal those anywhere in the capital.

I often worry that the external perception, whether in City Hall, Whitehall or even the Guildhall in Kingston, means that people do not recognise that there are families in real need. As we do not have some of the social infrastructure found in other boroughs, some children in those struggling families get an even worse deal, because there is not that wider network of support. I am not asking the Government to give us the sort of money for social deprivation that other boroughs might get—that argument would be rejected—but I want the Minister to work with his colleagues and realise that in boroughs such as mine, there are vulnerable families. That needs to be recognised more. If he takes nothing else away from my speech, I hope he takes that point.

Housing issues are as severe in Kingston as in many other boroughs in London, and of course the most vulnerable and low-income families are affected most severely, in numerous ways, many of which have been touched on. To give an example of how that can multiply child poverty, when these families are evicted by their private rented sector landlord, they ask the council for support and are given temporary emergency accommodation outside the borough, sometimes miles away from the children’s schools and where the parents work—and the parents are often in work.

The impact of poverty on those children can be severely affected by the dislocation in how our housing support works. Often they cannot go to school, and in that temporary period, which can last for months, they are often in very poor accommodation. As a result, the school is less able to support that family. That is just one example of how housing policy in London is affecting many people day in, day out, and making the experience of children that much worse.

The hon. Member for Mitcham and Morden talked about the importance of social housing; that has been a general theme. I could not agree more. We need to completely change the whole approach to building houses. For decades, under all Governments, we hoped that the private sector would produce the houses, but if we look over five or six decades of house building, we see that we have only ever had serious increases in housing when the state has been directing and building houses. I think it was the hon. Lady who said that 1968 was the last peak year of house building. The idea that the private sector and the free market will deliver the amount and types of homes that we need to go back to those periods is for the birds. It is just not true.

I am fascinated by the quote from the Conservative leader of the Local Government Association. Maybe we are moving toward an understanding, at least in local government, that the state needs to drive house building; otherwise we will never meet demand, particularly in London, but no doubt also in cities elsewhere.

I hope the Minister will address the need to rethink the fundamentals of our approach to house building. We will not take communities with us and build the number of houses necessary unless councils and the state are allowed to be far more proactive, not just in finances, but in how the whole planning system works.

I end by talking about one of the major poverty reduction programmes in recent decades, how it worked and the lessons we should take from it: the Sure Start project. I found the Sure Start programme, brought in during the first term of the Labour Government, very exciting, because it was trying to take an area-based approach, so that there was no stigma in the services being provided, and to take a more holistic approach, bringing different service providers together in a way we had not seen before. To some extent, it worked. In its first years, there were no Sure Start projects in my constituency, and I went to other boroughs in London to visit them, to see how they were working and to learn about them, because I thought it was an important policy innovation.

There is no doubt that some evidence suggests that for some people, Sure Start was effective. However, we should also look at the evidence that showed that there were poor families with children that it did not reach—particularly what are sometimes called the hard-to-reach families. Sure Start often did not manage to reach those. We need to think not just of area-based poverty programmes, although they still have a role, as Sure Start showed. Those projects that innovated by using a whole series of indicators to try to identify the families who were in most need, most under threat and most vulnerable had some promise.

One of the things I regret in recent years is that some of the innovative programmes outside the Sure Start family that tried to help those who are, in many ways, the most vulnerable in our society, were cut. If we are to make a sustained attack on reducing child poverty, we need to think of policy programmes that will meet the needs of those particular families. Otherwise, we are not providing for the children most in need. I hope the Minister will respond on whether the issue is only area-based programmes, or whether there are targeted, innovative programmes that we should look at as well.