Oral Answers to Questions

Esther McVey Excerpts

Monday 5th February 2018 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

1. What steps she is taking to ensure support for former Carillion employees whose pensions will not be covered by the Pension Protection Fund.

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

Where all sponsoring employers of a defined-benefit pension scheme have declared insolvency, they will enter a Pension Protection Fund assessment period. The Pension Protection Fund will actively work with the scheme administrator to assess whether it is able to buy out the pensions at a higher level than the PPF benefits. Where a scheme cannot do this, PPF will provide compensation. Defined-contribution schemes do not need PPF help, because they do not promise a level of pension—the member keeps the pot they have built up.

[Mrs Ellman]

The Government have presided over a regulatory scheme where a deficit of about £1 billion has been allowed to build up in the pension fund at the same time as shareholders were receiving dividends. Can the Secretary of State guarantee that all former Carillion employees will receive in full their due pension?

[Ms McVey]

What the Government did successfully back in 2004 was set up the Pension Protection Fund, which is there to compensate people should their businesses become insolvent. This is what the fund will be doing: affording protection at 100% for those who have a pension. Those not yet on a pension will be getting 90%. The Government are ensuring that businesses are responsible to their employees and their pensions. We will be bringing in stronger corporate governance rules to make sure that boards, trustees, shareholders and stakeholders hold company executives to account.

[Mr Philip Hollobone (Kettering) (Con)]

Financial directors must not cause detriment to any private sector pension scheme. Will my right hon. Friend ensure that the rules and regulations regarding the investigation of this sort of practice are toughened up, because we cannot allow this to happen in future?

[Ms McVey]

My hon. Friend is absolutely right. The Government are seeking to ensure that the regulator will—our new Bill will come out later in the year—have more rights to fine, follow criminal procedures and look into mandatory clearance. Those of us who have studied corporate governance realise that the rules changed in 1991—the Cadbury report and the OECD corporate governance rules—and were strengthened in 2002. I believe that now, under this Conservative Government, we will be strengthening the corporate governance rules again.[Official Report, 8 February 2018, Vol. 635, c. 8MC.]

[Nick Thomas-Symonds (Torfaen) (Lab)]

My constituents who have paid into pension funds deserve to have those moneys protected. Will the Secretary of State be a bit more specific? What specific changes to corporate governance does she want to see to ensure that high risk behaviour towards pension funds does not happen again?

[Ms McVey]

We are getting feedback from various businesses on how they think we can best enable and support them. Any knee-jerk reaction might result in unintended consequences. Shining a spotlight on one area could close down loopholes, only for others to open up. This has to be looked at in the round, but, as I said, stakeholders, shareholders and the executive team should be held to account. We will make sure that that happens.

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

Can my right hon. Friend reassure my constituents that the UK’s pension protection system has responded effectively to the Carillion situation?

[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?

[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.

[Gillian Keegan (Chichester) (Con)]

2. What steps the Government are taking to promote the delivery of effective consumer financial advice and assistance.

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[Colin Clark (Gordon) (Con)]

6. What assessment she has made of the effectiveness of universal credit in helping people into work.

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

Universal credit has had a positive impact since its start, as shown through published research and analysis. Independent research shows us that people are spending more time looking for work, applying for more jobs and even doing jobs they would not have considered doing before.

[Colin Clark]

Constituents in Gordon will face longer waiting times for payments due to the Scottish Government’s policy of fortnightly payment. What support can my right hon. Friend offer the devolved Administration in Edinburgh to help reduce those times?

[Ms McVey]

The advice would be to take the approach of England and Wales. As my hon. Friend says, the Scottish approach delays payment at the end of the assessment period, with 75% rather than 100% of money on time, due to the fortnightly payment.

[Ian Austin (Dudley North) (Lab)]

The introduction of universal credit is not helping to keep 250 highly skilled HMRC staff working on tax credits in Dudley in work. They were told they would be transferring to the Secretary of State’s Department to work on universal credit. Last week, they were told that her Department has cancelled that, their office will close and they will be made redundant. Will she ensure that the transfer goes ahead as originally planned, so that my constituents can keep their jobs, and will she meet me to discuss it?

[Ms McVey]

I will indeed meet the hon. Gentleman to discuss that. Back in 2016, HMRC announced that move and transfer of jobs. It now seems that as many jobs were not needed for UC. I know that it wants to retain the staff and their skills and knowledge, but I will meet him to discuss the best way forward.

[Luke Hall (Thornbury and Yate) (Con)]

Does the Secretary of State agree that universal credit is helping all those people who are stuck in a situation where they are only paid to work 16 hours a week and that it is fairer to those employees, the other employees in those businesses and taxpayers, who end up supporting the bill?

[Ms McVey]

My hon. Friend makes a very good point. The reason we are making this significant change from the legacy system is to ensure that every hour of work counts. We will not have a situation where people are stuck not working or paying punitive rates of income tax of 90% and above if they take work after 16 hours. This is cutting-edge technology. The UK is leading the way on flexible benefits that accompany flexible working, which nowhere else has.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

May I welcome the Secretary of State to her position? Perhaps she might think to show a little more humility when answering some of these difficult questions on universal credit. Has she considered some of the other benefits that are not included in universal credit, such as free school meals, free uniforms, free bus passes and so on? Many low-paid working families will lose out on those benefits under universal credit, which will make them worse off in work than if they were still on benefits.

[Ms McVey]

These are precisely the things that have been considered in bringing forward universal credit. What support are we giving? The extra childcare support. What is the extra support? Tailor-made career advice and support. We all need humility, but, equally, we all need to hand out and deliver the correct facts to people, not embellish them, resort to sound and fury or drama, or provide obviously incorrect information, as the UK Statistics Authority has levelled against the Labour party.

[Martin Vickers (Cleethorpes) (Con)]

Last month, I visited Grimsby jobcentre, which serves my constituency, and it is very clear that the staff are handling the changeover to universal credit very efficiently. Will the Secretary of State join me in complimenting the staff, including the work they do in motivating claimants and improving their self-confidence so that they can seek employment?

[Ms McVey]

My hon. Friend makes a very good point, and I have actually met the tremendous work coaches in his constituency. I go out to speak to work coaches all the time, and they are saying to me that the change we are delivering through universal credit is the best thing they have ever delivered. The support they can give—[Interruption.] Rather than Opposition Members laughing, they would be well advised to come and join me or others in meeting work coaches. I will tell them how we know this is working: if it were not working, we would not have an extra 3.1 million people in work.

[Neil Gray (Airdrie and Shotts) (SNP)]

Contrary to the “SNP bad” broken record from the hon. Member for Gordon (Colin Clark), will the Secretary of State join me in welcoming the Scottish Government’s recently introduced flexibilities for universal credit payments, and will she consider implementing Scotland’s model down here, especially as her colleague in the Scottish Parliament, Adam Tomkins, has said he is “very much in favour” of them?

[Ms McVey]

The underlying principle of how we get people into work is working right the way across the United Kingdom. It is working in Scotland, and that is correct. Equally, we agree with giving extra powers to devolved Governments, and Scotland has the right to do things in its own way. As we pointed out earlier, however, some of the changes taken on board in Scotland have actually resulted in slower payment to people who need their benefits.

[Vicky Ford (Chelmsford) (Con)]

7. What recent comparative assessment she has made of rates of unemployment in the UK and other European countries.

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

The UK has the joint fifth lowest unemployment rate in the EU—better than France, the Netherlands and Denmark. The UK’s unemployment rate, at 4.3%, is the lowest in 42 years. It is less than half that of the euro area, which is 8.7%, and 3 percentage points below the EU28 average of 7.3%.

[Vicky Ford]

Unemployment in my constituency of Chelmsford is now less than 1.5%, and those who are able to work are finding jobs, but will the Secretary of State reassure my constituents who need our financial support that they will continue to be supported when universal credit is rolled out later this year?

[Ms McVey]

I congratulate my hon. Friend on the work she is doing as a new MP, and her constituents on the work they are doing to find employment, getting on in their careers and moving forward. As I have said, this Government believe in hand-up support and opportunity. The support of universal credit—a benefit that supports people in and out of work—will continue not only for her constituents, but for people right across the country.

[Tony Lloyd (Rochdale) (Lab)]

Will the Secretary of State confirm that of those who have gone into work as a result of this Government’s policies—and that is a good thing—many are living in poverty because of low pay and the inadequacy of our benefits system?

[Ms McVey]

It is interesting how differently people measure getting into work, poverty and life chances. Children born into workless households are actually five times more likely to be in poverty than those in working households. Under this Government, we have seen 3.1 million more people in work, and the number of workless households has gone down by over 600,000. We are helping people out of poverty: we are helping them get a job.

[Philip Davies (Shipley) (Con)]

Earlier the Secretary of State mentioned dodgy statistics from the Opposition. I have heard people say that lots of the new jobs created are on zero-hours contracts and for part-time work. Can she say what the actual figures are for the number of jobs created that are full-time, permanent jobs?

[Ms McVey]

It was not me talking about dodgy statistics, it was the chair of the UK stats authority who said that, but I thank my hon. Friend for pointing that out. The overwhelming majority of jobs are full-time and permanent jobs, and the vast majority of those in part-time jobs have chosen to be in part-time jobs.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

On job searching, has the Secretary of State had the opportunity to review the very helpful and generous offer made by Liverpool City Council to her predecessor to provide office space for closure-threatened jobcentres? There are two jobcentres in my constituency—not one, but two—that her Government wish to close, leaving my constituency with zero jobcentres. They are due to close in just a few weeks’ time. Has the Secretary of State had an opportunity to review that offer, to ensure that my constituents continue to receive employment support?

[Ms McVey]

It is really important that everybody gets the support they need, and a lot of the support going forward will be outreach work, so that people do not need to go to Jobcentre Plus, thanks to further support in the community. Obviously I am pleased that in the Liverpool city area—and in the north-west area—which is my hometown, employment is now far higher than it was in 2010. The unemployment rate under the Labour party was 2.8 million in 2008, even before the banking crisis, but now it is 1.4 million, so we are supporting people and we will continue to support people, because that is what this Conservative Government do.

[Thelma Walker (Colne Valley) (Lab)]

8. What assessment she has made of the effect of the roll-out of universal credit on the number of disabled people living in poverty.

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[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

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

We had a record-breaking 2017 for employment, and I am delighted to see the trend continue as we enter the new year. The proportion of people in work is at an all-time high at 75.3%—so 32.2 million people are now in work, 415,000 more than were working last year. Figures also show that there are a record 810,000 vacancies in the economy at any one time, which proves that the Government are delivering on our promise to build a strong economy.

[Bridget Phillipson]

No child in modern Britain should grow up in poverty, but figures from both the End Child Poverty coalition and the Secretary of State’s own Department reveal that we face a growing crisis. Does she seriously believe that ploughing ahead with universal credit will do anything to help the millions of children who are trapped in avoidable poverty in our country or will bring that number down?

[Ms McVey]

One thing on which both of us will agree—on which, indeed, Members in all parts of the House will agree—is that no child should be growing up in poverty. If we take action to ensure that families are working, those children will not be in poverty. We know for certain that if a child’s family are working, that child is much less likely to be in poverty when it grows up and is more likely to attain higher school qualifications. That is the action that this Conservative Government are taking.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T3. Ryedale citizen’s advice bureau has seen a significant drop in the number of universal credit problem cases as a result of the measures introduced by my right hon. Friend and her predecessor, but we are seeing instances of advance payments being used to clear debts. What help and advice is being given to claimants in respect of budgeting and support, so that they can clear problem debts sensibly and sustainably?

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[Maria Eagle (Garston and Halewood) (Lab)]

T2. About 20,000 people in Liverpool have had their personal independence payments cut due to the blatantly discriminatory regulations that the Secretary of State has now accepted were unlawful. When will my constituents get their money back and their entitlement returned?

[Ms McVey]

The first decision I made was to make sure we did not appeal that question about PIP and what we on this side of the House were going to do to live up to the expectations of PIP, and I think it is a very true, honourable and correct thing that we have done. However, to make sure we deliver it correctly and give the correct amount of money to the people who need it, it will take time for us to thoroughly research what needs to be done.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

The attractiveness to many of the two-weekly payments of UC are obvious, but does my right hon. Friend share my concerns that the Scottish Government’s decision to offer this to my constituents and other people across Scotland will leave those who choose it to be worse off than claimants in the rest of the UK?

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[Stephen Morgan (Portsmouth South) (Lab)]

T4. Following last December’s High Court ruling, can the Secretary of State tell me by what date all 1.6 million PIP claims will have been reviewed: will it take weeks, months or even years?

[Ms McVey]

This reviewing will be an administrative process, so we will not need to see the people, but what is most important is that the right people get the right amount of money, and that will take the time it needs.

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

We had a very interesting session on assistive technology in the Select Committee on Work and Pensions recently. Will the Government commit to looking at how assistive technology can be used to help more disabled people into work?

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[Lucy Allan (Telford) (Con)]

The GKN takeover proposal announced last Thursday seeks to pay a £1.4 billion sweetener to shareholders, despite a £2 billion pension deficit. Does the Minister agree that the Government should act to protect the interests of GKN pension fund members?

[Ms McVey]

Of course the Government agree that we have to look after the concerns of the GKN workers. Here we have actually seen the trustees of the pension fund coming out, being bold and wanting reassurance from the other company that it can indeed pay for the pension scheme. We can look at the argument from two sides. GKN has to be strong and robust, but also Melrose should voluntarily ask the regulator to look into the implied costs in that benefit scheme to make sure that it can afford to take over the other company.

[Thelma Walker (Colne Valley) (Lab)]

T8. On 14 December last year, I asked the Minister not to ignore the voices of the 7,000 women in my constituency who are affected by state pension inequality, because we are not going away. Is the Department now any closer to paying us what we are due?

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[Vicky Ford (Chelmsford) (Con)]

I am a mathematician and a mother, so I am concerned that the head of the UK Statistics Authority had to write to a shadow Minister to point out that statements that they made were not based on real sources or real statistics. Does my right hon. Friend agree that the shadow Minister should apologise?

[Ms McVey]

My hon. Friend puts it so eloquently. It is about time that Opposition Members apologise for their scaremongering.

[Mr Speaker]

Even mothers and mathematicians have to respect the method, and the method in the House is that Members question Ministers about the Government’s policies. I do not blame the Secretary of State for taking the opportunity to ram home her point with force and alacrity, but Members must understand that this is not Question Time about the policies, tactics or preferences of the Opposition; this is Question Time about the policies of the Government. Even if there is some Whip handout saying, “Ask the Minister about the behaviour of the Labour party,” that does not make it in order. It is not in order—end of subject.

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[Mr Speaker]

I think not. [Interruption.] The Secretary of State for Work and Pensions is gesticulating at me in a mildly appealing fashion, but she has made her points with considerable force and requires no further opportunity now.

[Ms McVey]

Further to that point of order, Mr Speaker. I will lay the letter from the UK Statistics Authority in the Library, so that other people can read it.

[Mr Speaker]

That is a perfectly reasonable course of action for the Secretary of State to take, but it is not a point of order. It might be called a point of information that some colleagues will find helpful.