Draft Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022
Guy Opperman Excerpts(2 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I beg to move,
That the Cttee has considered the draft Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022.
It is an honour to appear before you again, Sir Graham. The regulations continue the Government’s agenda of ensuring that the best possible value is obtained from the supply side of occupational pension schemes, allowing savers to achieve the best possible outcome in retirement. They bring into law various duties on trustees in defined-benefit and defined-contribution occupational pension schemes. The duties relate to the appointment of fiduciary managers and the use and performance review of investment consultants. The regulations replace the rules that are currently enforced by the Competition and Markets Authority; compliance will now be run by the Pensions Regulator.
The regulations will require trustees of occupational pension schemes to set objectives for persons who provide them with investment consultancy services, to review those objectives at intervals of no more than three years, and to review annually the performance of providers against the objectives. Setting objectives will enable trustees to monitor the performance of their advisers and, quite simply, get better value for money in the long term. The regulations also require trustees to carry out a qualifying tender process. Additionally, through the regulations, the Government have defined “investment consultancy providers”, “investment consultancy services”, “fiduciary management providers”, and “fiduciary management services” for the first time in pensions legislation.
We believe that the duties will encourage trustees to become more engaged with the ways in which services are bought, monitored and evaluated, and to consider more efficient consolidation options, which is also a priority for the Government. That will in turn lead to better outcomes for scheme members and employer sponsors of schemes. We believe that good investment is a key element of any well-run pension scheme. Trustees are responsible for investment governance and are accountable for any investment decisions. They also have a duty to consider proper advice and to act in the best financial interests of the beneficiaries. The regulator will take over the monitoring of compliance with the duties. I commend the regulations to the Committee.
Guy Opperman
I thank colleagues for their speeches and support. I will not necessarily respond to any of the hon. Lady’s comments, because she supports the regulations and I entirely accept that the Work and Pensions Committee did look at the matter. We think that we have acted having done all the due consultation required by the Government.
I think it a good thing that the monitoring of compliance is being passed from the CMA to the Pensions Regulator. I meet the TPR regularly—indeed, I met its chair, Sarah Smart, only today. That will bring monitoring much more within the ambit of the DWP. We have an independent regulator for a reason, but it is important that the Government, through a Work and Pensions Minister, hold it to account. That is why I think monitoring will be way better.
I refute the idea of slippage entirely. Everything that the Government do is perfect, as we know, and we are moving forward at a serene pace. I am certain that these things are all going in a perfect way. The serious point is about levels of engagement by trustees, which are not good enough at present. We are doing a huge amount on this, including these regulations and the enhanced chair’s statement, for example. The hon. Gentleman follows my every pronouncement with great glee, so he will be aware that on 1 November, we will do a detailed value-for-money assessment consultation, which will genuinely bring together a host of different obligations on trustees to ensure that they evaluate outcomes for members in a way that, at present, is not done to the degree that I and the Government would like. That is what we are trying to achieve.
There are other bits and bobs. I am sure that the hon. Gentleman engaged in Pension Credit Awareness Day on 15 June, and he will be aware that the pension engagement season starts in September and October. Their aim is to get trustees much more behind engagement with members, but that is a constant struggle.
Matt Rodda
Can the Minister offer some additional assurances on the question of small pension funds? The scale of such funds can cause particular difficulties for trustees.
Guy Opperman
The hon. Gentleman is aware of all the consultations that we have done, so he will know that following the regulations that we passed previously, smaller pension funds—those of up to £100 million—are now judged on value-for-money outcomes. My strong view is that there should unquestionably be greater consolidation. It is only through size that we can get greater expertise, greater monitoring of performance and greater response to members. That is a work in progress.
We are dramatically reducing the number of pension schemes through more and more consolidation. I encourage trustees to consider it, particularly if they are in any doubt about whether they are getting value for money for their members. We are asking the Pensions Regulator to apply that pressure to trustees to ensure that members ultimately get better outcomes, which is what we all want. That is dependent on trustees performing their job, but that is difficult in small schemes, which is why we are encouraging them to merge, to put it bluntly.
Question put and agreed to.
Office for Nuclear Regulation: Corporate Plan 2022-23
Guy Opperman Excerpts(2 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
My noble Friend The Parliamentary Under-Secretary of State for Work and Pensions (Baroness Stedman-Scott) has made the following written statement.
Later today I will lay before this House the Office for Nuclear Regulation corporate plan 2022-2023. This document will also be published on the ONR website.
I can confirm, in accordance with schedule 7, section 25(3) of the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.
[HCWS119]
Oral Answers to Questions
Guy Opperman Excerpts(2 years, 6 months ago)
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Felicity Buchan (Kensington) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Since 2012, in the Wantage constituency, 14,000 local men and women have been automatically enrolled into a workplace pension. We thank the 2,410 local employers who are helping these employees to save from 8% of their earnings.
David Johnston
Auto-enrolment has been one of the most successful Government policies for the workplace in decades, but my hon. Friend will know that contributions are often not yet at the levels needed for people to have a secure retirement. What steps is he taking to encourage an increase in contribution levels?
Guy Opperman
We keep all policies under review, and auto-enrolment got to 8% only in 2019. We will proceed with the 2017 auto-enrolment review by lowering the eligibility age and making it from the first £1 earned in due course. We will also look at all matters in terms of contribution rates on a longer-term basis as time moves on.
Felicity Buchan
I understand that 36,000 people in Kensington have been signed up through auto-enrolment, which is great news. What can my hon. Friend do to ensure that even more people in Kensington are signed up?
Guy Opperman
Where Kensington leads, the rest of the country follows. There is no doubt that 36,000 is a phenomenal number of employees who are saving the 8% through auto-enrolment. My hon. Friend will be aware that, in her community and in this country, less than 40% of women were saving in a workplace pension prior to 2012, and it is now 86%. Less than 24% of young people were saving in a workplace pension, and it is now 84%. This is a game-changing policy developed under successive Governments but pioneered by this Conservative Government.
Elliot Colburn (Carshalton and Wallington) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Government have provided a generous package for those most in need with a one-off cost of living payment of £650, including to those in receipt of pension credit. In addition, all pensioner households will receive an extra £300 to help cover the rising cost of energy this winter.
Elliot Colburn
I welcome the measures the Government have taken to support pensioners with the rising cost of living. Many pensioners in Carshalton and Wallington who are eligible for pension credit still do not know that they are entitled to it, so they are not claiming. Will my hon. Friend set out what steps the Government are taking to increase the uptake of pension credit? Will he join me at an older persons fair in my constituency later in the year to promote it?
Guy Opperman
I will be delighted to join my hon. Friend at his older persons fair, which is one example of how we want to promote the take-up of pension credit. I was pleased today to meet a group of stakeholders, ranging from Citizens Advice to Independent Age, the BBC, ITV, local authorities and utility companies, all of which are trying to work collectively to promote pension credit take-up. As we know, pension credit is a £3,000-plus benefit to the most venerable in our society, and it is particularly important that they claim it this winter.
Mr Speaker
I call Sir Stephen Timms, Chairman of the Select Committee, whom I congratulate on his knighthood.
Sir Stephen Timms (East Ham) (Lab)
Thank you very much, Mr Speaker. I welcome the efforts on pension credit take-up. The Chancellor’s additional payments are very welcome, but the need for them highlights the failings of the current pensions and benefits uprating system. The Select Committee will be looking at this, but does the Minister agree that now is the time to review how we uprate pensions and benefits each year and the level at which they are set?
Guy Opperman
You got there first, Mr Speaker, but I also congratulate the former Pensions Minister, the Chair of the Select Committee, on his knighthood, which is genuinely deserved. The whole House wishes him well when he goes to meet the Queen for his investiture.
The right hon. Gentleman is a former Pensions Minister and will recall that the present uprating policy started in April 1987 and has continued under successive Governments, including the 13 years of Labour Government. I will, of course, come to the Select Committee to listen to its suggestions, but the same process has been in place for the best part of 35 years. The level is set between September and November, and the uprating takes place thereafter.
Mr Richard Holden (North West Durham) (Con)
Pension credit is important, and I have been pushing take-up in my North West Durham constituency. The Minister will understand that ensuring better pension savings is the most important thing in the long term. I backed the 2019 manifesto, and I back the Prime Minister who delivered it. Will my hon. Friend the Minister implement the auto-enrolment review, and will he back my private Member’s Bill to deliver it as soon as possible?
Guy Opperman
Answer that one! The truth is that, in respect of the 2017 auto-enrolment review and the changes that my hon. Friend sought in his outstanding ten-minute rule Bill and the private Member’s Bill we did not get to debate before the close of the last parliamentary Session, he knows he has my full support. The matter will be brought before the House as soon as possible.
Matt Rodda (Reading East) (Lab)
The cost of living crisis is leaving families and pensioners wondering how on earth they will make ends meet. Inflation is running at 11% for everyday goods, and petrol is now nearly £2 a litre, yet the Government’s response has favoured the wealthier while failing those in greatest need. Will the Minister explain why second home owners were offered extra help while at the very same time the Government have yet to drive up the take-up of pension credit? Will he also now publish the advice he received from his own civil servants that warned of the effect of this deeply unfair policy?
Guy Opperman
I do not believe that £37 billion of support should be sneered at. The Chancellor set out £22 billion of support in the spring and a further £15 billion of support last month; that includes £650 on top of the pension credit from July, and the winter fuel payment of £300 going to 8.2 million households. I strongly believe that shows that the Government are taking serious action to support the most vulnerable.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The removal of the triple lock is costing pensioners £500 this year alone, and come October energy bills will have risen by £1,700 compared with April 2021. The £300 winter fuel payment does not come close to plugging that gap, let alone addressing the other inflationary pressures that pensioners are dealing with. Then we have the WASPI women, who have been struggling for years. Following the findings of the parliamentary and health service ombudsman, surely now—this time of crisis—is the time for the Government to agree fair and fast compensation for the WASPI women.
Guy Opperman
There was a lot in that question. In respect of the full package of support, most pensioner households will receive £850 via the additional winter fuel payment, the council tax rebate and the energy bills support scheme. Pensioners who receive means-tested benefits and are most in need of support will receive £1,500, including payments in July and September.
The hon. Gentleman will be aware that the matter of the WASPI women is a subject of and decision for the Court of Appeal, where the matter was decided in favour of successive Governments—this and the previous Labour Government—and that the ombudsman process is an ongoing one, on which we do not comment.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Information regarding deferral is published on gov.uk and provided in the state pension claim invitation letter and through the “Check your State Pension” forecast service, or someone can speak to the Pension Service direct. Deferring a state pension is a personal choice, and whether deferring a claim to the new state pension is the right decision will depend on a range of factors that are relevant to the personal circumstances of the individual, but no specific financial advice is given.
Mhairi Black
The DWP wrote to my constituent encouraging him to defer his pension. Unfortunately, he passed away last year, but the DWP told his wife Caroline that she was entitled to a £30,000 lump sum and £100 a week. After weeks of being passed from pillar to post, the DWP is now saying that Caroline is entitled to nothing, but it will give her £50 for the emotional distress and incorrect information. All the correspondence that she has from the DWP contains conflicting information and no warning of the risks of deferring a pension. Will the Minister meet me to rectify the situation and ensure that it does not happen to anyone else?
Guy Opperman
If the hon. Lady sends me the correspondence, I will make sure that it is looked into within a matter of days.
Carolyn Harris (Swansea East) (Lab)
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Obviously, there is the Government site—gov.uk—and the phone number 0800 99 1234. More particularly, I today met Citizens Advice, Age UK and various other pensioner charities that would be very keen to assist on an ongoing basis. I must very strongly recommend my hon. Friend to get behind the pension credit awareness day, which takes place on Wednesday 15 June. Obviously his local authority, Essex County Council, has a role to play, as do all local authorities, because it has the data that can identify specific individuals who could apply for but do not have pension credit.
Guy Opperman
The reality is that the Chancellor has announced two packages, worth £37 billion. Those will see a £650 uplift in pension credit from July this year, as well as a £300 increase in the winter fuel payment, which goes to 8.2 million households. There are also the council tax rebate, the energy bill support scheme and the disability cost of living payment, on top of other matters that have been set out.
Robert Halfon (Harlow) (Con)
Mohammad Yasin (Bedford) (Lab)
Guy Opperman
We met a whole host of organisations, from Citizens Advice to Age UK, BBC and ITV as well as utilities, banks and local authorities, all of whom will try to assist with the process over and above what the Government are already doing. But, much as I said to my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), there is a role for Bedfordshire county council to play, which I believe is the hon. Member’s local authority—[Interruption.]. Well, his local authority can play a role in identifying and supporting people from the local area and getting them to claim.
Chris Bryant (Rhondda) (Lab)
Fruit is going unpicked, there are long delays at airports because there are not enough baggage-handlers, flights are being cancelled because there are not enough people to work in the airline industry and lots of bars and restaurants cannot open at all because they simply have not got enough staff. Where will we find the additional workers to ensure that the economy grows?
Helen Morgan (North Shropshire) (LD)
I am troubled by the number of constituents who have recently come to me because either they have been overpaid in error by the DWP or they are struggling to receive their first payment because of administrative difficulties, when they are already really struggling. What steps is the Department taking to ensure that errors and disputes can be resolved satisfactorily and in a timely way so that those repayments will not push them over the edge and into poverty?
Guy Opperman
If the hon. Lady writes to the Department, whether to me or to the Secretary of State direct, we will look into those specific examples, ensure that they are addressed and get a decent answer to her on the specific problems. However, I cannot give a generic answer today.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
According to the Child Poverty Action Group, each month some 4,300 households in my constituency are receiving an average of £57 less than they are entitled to because of automatic deductions from their universal credit, and that affects about 3,700 children. What action is the Department taking to reform the deduction system so that innocent children are not disadvantaged?
Child Maintenance Arrears
Guy Opperman Excerpts(2 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
What an honour and a privilege it is to speak in this very important debate, which relates to every single constituency in the country. My hon. Friend the Member for Crewe and Nantwich (Dr Mullan) should be congratulated on raising a really important issue that has great relevance up and down the land, and every constituency Member will benefit from the fact that he has brought forward this issue in an Adjournment debate. I congratulate him doubly because, as I understand it, this is his first ever Adjournment debate. Obviously, no Member can have an Adjournment debate, as you know, Madam Deputy Speaker, without being blessed by an intervention from the hon. Member for Strangford (Jim Shannon), who I know has supporters in the Gallery and, frankly, across the House of Commons.
Guy Opperman
It is not, Madam Deputy Speaker, but it is an honour for my hon. Friend to be blessed by such an intervention.
My hon. Friend knows, because we have discussed this before, that I am not the Minister with direct responsibility for this issue in the Department for Work and Pensions; that is the noble Baroness Stedman-Scott. I have already informed the hon. Member for Motherwell and Wishaw (Marion Fellows), who has a Westminster Hall debate on the subject, that another Minister will be responding to that debate. As she knows, I have long booked that day off—I have a birthday—so the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Macclesfield (David Rutley), will be responding to her debate on Thursday.
I want to deal with a number of key points at the outset. First, my hon. Friend the Member for Crewe and Nantwich asks whether there can be a meeting very shortly between him and the Minister concerned. I have spoken to the noble Baroness tonight, and she has assured me that on Monday or Tuesday, subject to the demands of his diary and hers, they will meet either in the House of Lords or in the Department for Work and Pensions to take this matter forward.
We should not forget that the purpose of the Child Maintenance Service is to facilitate the payment of child maintenance from one separated parent to another when the parents are unable to reach agreement on how to care for their children following separation, but the interests of the child are at the heart of this policy. The key issue my hon. Friend raises today—this is a perfectly legitimate point that any Member would genuinely want to grasp—is the desire to get the best outcome for the child, namely the payment of the sums to support the child. There is also a desire, as he rightly outlined, to punish the parent who is not participating in the payment. However, the public policy point that always has to be grappled with is that it is very important that the punishment of the offending parent does not impact on their ability to make the payment for the child, because the most important thing is that the child is supported. There are balances to be struck, and that is the really difficult issue that the Child Maintenance Service has to grapple with at every single stage.
Jim Shannon
The Minister is absolutely right about the importance of the child, but the system sometimes falls down, as the hon. Member for Crewe and Nantwich (Dr Mullan) mentioned. One of the ways it falls down is in consistency in the officers who look after each case; they often change. Is there any way that that could be looked at, so that each case is looked after by one officer, rather than three, four, five or six?
Guy Opperman
The hon. Gentleman has forestalled one of the issues that I was going to raise. I remember the debate secured by the hon. Member for Motherwell and Wishaw on 21 January 2021, in which there was discussion of how the CMS was managing during covid. It was a struggle, to be perfectly blunt; all such services were struggling to provide assistance during the pandemic, and there were complications. I would like to think that all colleagues accept that the Child Maintenance Service has improved as covid has disappeared, as people have been able to return to work, and as consistency has returned because people are no longer getting ill, having to shield and having all the problems that follow.
The hon. Member for Strangford raised the issue of numbers. There are approximately 4,000 staff working for the Child Maintenance Service in the United Kingdom. That is a lot of people who are addressing this problem on an ongoing basis. I take the criticism, and the constructive criticism, about consistency in dealing with a case. In every MP’s office up and down the country—whether on this issue, on passports, on the Driver and Vehicle Licensing Agency or on any public services—there are desires and hopes for consistency, so that people can build up a relationship with a particular individual. Clearly individuals working in the public sector are free to move on to other things, but the criticism is legitimately made, and I take it on board; I am certain that the noble Baroness does, too.
My hon. Friend the Member for Crewe and Nantwich talked about collections in his outstanding speech. Collections are increasing. The criticism can be made that they are not increasing enough, but despite the difficulties of the pandemic, CMS collections have continued to increase; they rose by 8% between 2018 to 2021, and in 2021 some 71% of paying parents who used the collect and pay service were complaint.
In the quarter ending December 2021, a total of £46.6 million was paid through the collect and pay service; in addition, £210 million was due to be paid through direct pay arrangements. As a result of child maintenance payments, between 2018-19 and 2020-21—the most recent period for which there are statistics—the households of some 140,000 children were taken out of the category of low-income households. That goes to the point made by the hon. Member for Strangford and emphasises the desperate importance of this issue. It is particularly relevant in a cost of living crisis. Those payments are made both through family-based arrangements and the CMS.
The main point of the speech by my hon. Friend the Member for Crewe and Nantwich was about enforcement, and I turn to that now. When a parent fails to support their child and fails to fulfil their financial responsibilities, a number of options cut in. If arrears have begun to accrue, the CMS aims to take immediate action to re-establish compliance. For example, £3 million was collected between October and December 2021 through CMS civil enforcement action.
There are other enforcement powers, too. If a non-compliant paying parent is employed, the service will first attempt to deduct the maintenance and any arrears directly from their earnings. That is done by a deductions from earnings order or request; employers are obliged by law to take that action. This represents a quick and efficient way of going directly to the source of income to obtain the money. We learn these lessons from those who are the best at this: the taxman, who basically goes to earnings directly and ensures that they get immediate recovery.
Marion Fellows
That works in the civilian world, but not always with certain military people. There are real issues with chasing them for child payments.
Guy Opperman
I will reveal the product of a conversation I had earlier with the hon. Lady. I take note of her point, and if she gives me details of specific examples, particularly if there are regiments where this is a problem, I and the Department will be most interested to know about them. Of course, it would be best if we could respond to them before her important Westminster Hall debate on Thursday.
Where earnings cannot be accessed directly and there is a solely-held bank account—an absent father or mother has a bank account in their name—deductions can be taken directly from that account, and administrative methods can then be used to take control of goods, passports and other things on an ongoing basis.
My hon. Friend the Member for Crewe and Nantwich talked about sanctions. We clearly use them only as a last resort, but a paying parent found guilty in court of wilful refusal to pay, or of culpable neglect in relation to payment of arrears, may be prevented from holding or obtaining a driving licence for up to two years, or alternatively may be committed to prison. As I indicated, we have also got the power to disqualify non-compliant parents from having a passport. Those are pretty serious penalties, but I take the point that that is not a direct penalty for the offending behaviour.
Dr Mullan
The important point is that those powers tend to be at the end of an extensive, long-winded process, but people get very good at dropping in and out of it and, as a result, are no worse off. They can play the game all the way to the end and then say, “Okay, fine. I’ve got some money that I’ll give you.” They give money for a couple of months and then drop back out. They are no worse off as a result—they have not paid an extra penny in maintenance or served any punishment. It is about tackling that wider behaviour. That is not to say that the powers are not used effectively on occasion—as the Minister said, the deduction orders work well for some people—but a contingent of people are playing the system and not getting punished for it.
Guy Opperman
My hon. Friend makes a totally fair point. As always, a way forward is to take up specific examples with the CMS and Ministers directly, and I urge him to go to the Minister next week with those specific examples so that she and the director of the Child Maintenance Service can be challenged on why a particular individual is not being pursued in a particular way. Although there is the public policy thing, I keep coming back to how, ultimately, one is trying to encourage payments to be made. That is the difficult bit that one must address.
I want to touch briefly on sanctions, because these are pretty major powers. Between January 2020 and December 2021, the CMS initiated almost 6,000 sanctions against paying parents, so there are not one or two examples but thousands. While the majority of those do not involve the courts as compliance is achieved, between 2020 and 2021, £3.5 million of child maintenance was collected from paying parents undergoing sanctions actions. The trigger of a sanction producing payment does work, albeit I accept that in individual examples there are not sufficient amounts. I mentioned prison sentences, and in that period there were 249 prison sentences and a multitude of driving licence suspensions.
I come finally to curfews. My hon. Friend raised a number of points in respect of the curfew policy, and it is very much the case that we are proceeding with that. He was right to raise it with the Secretary of State, and she agrees with it. We are required by law to consult on it, and I want to give him the specific dates and how he, his constituents and fellow colleagues in the House can get involved. First, he—and his constituents through him—can feed into the consultation process prior to it happening. A public consultation on the power is intended to run from 13 June to 22 July, with the aim of its being published on 12 October. The order will then be commenced, subject to the approval of Parliament—it must pass through this place. He therefore has two windows: the first to influence the consultation before 13 June; and, secondly, he, his constituents and other colleagues can feed into the consultation in the normal way. [Interruption.] I need to face the front of the House. I apologise, Madam Deputy Speaker. I meant no discourtesy to you—I was attempting not to be discourteous to my hon. Friend—and I accept the implied criticism.
It is very important that representations are made in that way, and that there is the opportunity for my hon. Friend’s constituents to ensure that the extra power is a strong enforcement power and that there are more options, so that they can use the right lever to obtain compliance. The existing sanctions clearly disrupt a paying person’s earnings and that is the key conflict with the desire to get money to the children. The benefit of the power is that it is likely to disrupt a paying person’s lifestyle, rather than their earning capacity. Given that curfew orders will not affect employment or the ability to earn, we feel that that is the right way forward.
I thank my hon. Friend for raising this important matter. I hope that I have addressed some of the points he considers important. I want to finish on one key outside point. We are in very difficult times with the pandemic having ended, but more particularly with international breakdown and the war in Ukraine. The Government’s priorities are: growing the economy to address the cost of living; making streets safer; funding the NHS; and providing the leadership we need in challenging times. One of those bits of leadership, unquestionably, is ensuring that the Child Maintenance Service, particularly in challenging times, is genuinely performing to the best of its possible ability, getting the best outcomes for individual children and the constituents who we all serve. This reform and the work we are taking forward, I hope, will get that outcome.
Question put and agreed to.
State Pension: Legal Entitlements and Administrative Practices Exercise
Guy Opperman Excerpts(2 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I wish to update the House on the state pension correction activity that is addressing historical errors, that were unaddressed by successive Governments. We are fully committed to ensuring that any historical errors are addressed as quickly as possible, to ensure that individuals receive the state pension they are rightfully due in law.
As of 28 February 2022, we have undertaken 58,809 reviews, repaid £94.3 million, and informed individuals of how much they will be receiving in arrears and the reasons for the change to their state pension rate. More details will be available in the publication on gov.uk.
The Department now has a dedicated team of over 500 people working on the correction activity and, recognising the scale and complexity of the activity, we will continue recruiting.
[HCWS719]
Cost of Living Increases: Pensioners
Guy Opperman Excerpts(2 years, 9 months ago)
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Alan Brown
Yes!
Returning to fossil fuel, obviously petrol and diesel prices have increased massively at the pump. They have gone up by between 35p and 40p a litre compared with a year ago—a 30% increase. That also means that while people struggle to run their cars, VAT returns to the Treasury have increased massively. The current rates compared with last year mean that the Treasury is getting something like £3 billion a year extra in VAT returns, but that should be recirculated to support hard-pressed people, especially pensioners. It seems that the Chancellor may respond to calls to cut fuel duty, but if he does, he will be demonstrating the folly of a 12-year duty freeze. When we had lower prices, that was the time when bolder action could have been taken to raise fuel duty, so that when fuel prices increased in the way they have, fuel duty could have been decreased. That would have created a much smoother curve, instead of peaks and troughs, and the Treasury would have had a far more stable income as well.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I am just trying to understand the hon. Gentleman’s policy. Is it genuinely his policy to raise fuel duty? That is the impression he has just given.
Alan Brown
I repeat that the time to be bold and increase fuel duty would have been when fuel prices were at a record low. That would not have had the same impact on people’s pockets. The current rise is unsustainable—[Interruption.] The Minister did not listen to what I said. This here-and-now policy from the Government is unsuitable; it should involve bolder long-term planning. Had they raised fuel duty earlier when prices were lower, they could have reinvested the revenue in public transport and in creating money for a rainy day, like right now.
Alan Brown
Absolutely. My hon. Friend has made my point much better than I was making it myself, and I appreciate that. A fuel duty regulator is exactly what would have given better stability for the Treasury and for people’s pockets.
Looking at other windfalls the Treasury receives, we see a VAT windfall from the £800 increase in average household bills. That is well over another £1 billion coming into the Treasury coffers. The Treasury is also benefiting from increased oil and gas revenues. The last Budget predicted an extra £6 billion in oil and gas revenues in this Parliament compared with the March 2021 Budget, but given the sustained period of increased prices, that £6 billion will prove to be an underestimate. That is more money that should have been reinvested.
I know that Labour has targeted a windfall tax on the oil and gas companies, but that sounds a wee bit like raiding the one traditional cash cow. Why do we not, as the SNP motion suggested last week, look at this in the round? Why do we not target all sectors or companies that have benefited disproportionately from the pandemic, and in particular the new-start companies and the Tory crony companies that were awarded PPE contracts and that have realised record profits since? That is a real obscenity that should be targeted. Anyone who has read Private Eye and seen the eye-watering sums that those companies have made should be truly horrified.
I want to highlight some additional measures in Scotland where the SNP Government are providing mitigation for pensioners, but even the powers the Scottish Government have are nowhere near enough to make the transformational changes that we want. Older people in Scotland get their bus passes at the age of 60, instead of having to wait until the state pension age. They also have universal free prescriptions and are more likely to have had targeted energy efficiency measures for their homes. All charitable organisations in this sector, as well as the energy companies themselves, want the UK Government to follow the lead of the Scottish Government in making energy efficiency a national infrastructure programme. The low-income winter heating assistance will give around 400,000 low-income households a guaranteed £50 payment every winter instead of the complicated UK cold weather payment of just £25.
Guy Opperman
I am just trying to understand the hon. Gentleman’s speech. Is it still SNP policy that, post-independence, the rest of the UK would have to pay for Scottish pensions? He seems to be unclear on that, and I just want to be utterly clear.
Ian Byrne (Liverpool, West Derby) (Lab)
Thank you, Mr Deputy Speaker.
The fear being felt across this nation is palpable. Millions, including pensioners, are worried about whether they will freeze or starve in their homes. In the fifth richest country in the world, how has this injustice been allowed to happen? That is the position so many face, due to political choices taken in this House. Shamefully, the figures show that one in five pensioners in the UK is living in poverty, 1.3 million retirees are undernourished and 25,000 die each year due to cold weather.
Food and energy bills are rising at the highest rates in 30 years. It is immoral that the Government have chosen this moment to force through a real-terms cut to the state pension of £388 this year—a state pension, let us remember, that is already one of the least supportive by international comparison. In November, I asked the Minister:
“What impact assessment has the Department for Work and Pensions made of scrapping the triple lock, and how many more pensioners in Liverpool, West Derby will be living in poverty and unable to afford food as a result?”—[Official Report, 8 November 2021; Vol. 703, c. 16.]
I was not given an answer, so I ask again on their behalf: what impact assessment has been made? I would like to touch on the impact of the cost of living crisis on the 5,360 women in Liverpool, West Derby who were affected by the changes made to the women’s state pension age by the Pensions Act 1995, 4,000 of whom were further affected by the Pensions Act 2011, which accelerated the increases to ages 65 and 66. It is clear from the correspondence I have received and from speaking to people in our area just how much hurt has been caused by the actions of the DWP, as women who were paying in with the expectation of a set retirement date had that taken away from them without proper notice.
Guy Opperman
I notice that the hon. Gentleman jumped through the 13 years of the Labour Government on state pension age increases when there was the same policy, including a pensions Act that raised the state pension. With great respect, this Government and the coalition Government have increased the state pension exactly in line with the policies of the Labour Government in the 13 years that they were in power. There is no difference.
Ian Byrne
I thank the Minister for that intervention. I will go on to the issue of full restitution shortly.
The harm caused by this situation goes beyond just financial matters. Many women who are facing this unjust situation have faced huge disruption to their lives, their wellbeing, their work and their plans for themselves and their families—and now the cost of living crisis has worsened this dire situation even further. I would like to read out some of the correspondence I have received from women affected. One said:
“As a single parent with a dependent child and caring for elderly parents, it was terrible to discover the huge financial loss caused by the Government removing my state pension for 6 years with no notice. Near destitution was the result, despite me and my employers paying National Insurance contributions for 45 years.”
Another email said:
“I like millions of other 50’s women never received an official letter from the state informing me that the pension age was changing and allowing me time to build up a private pension, which I never had. All my money went towards paying a mortgage as no council houses were ever available. Rightly or wrongly, I chose not work when my children were born so that I could spend as much time with them as possible while they were young. My plans for the future were to retire at 60 and finally spend time with my Mother, time that my siblings and I never had growing up as she was always working. The Government robbed me, not just financially but in so many other ways.”
It is unacceptable that the Government have so far refused to act to right this wrong. I urge Members in all parts of the House to support my early-day motion 906 on providing full financial restitution to women born in the 1950s.
Pensioner poverty is a political choice, fuel poverty is a political choice, and hunger is a political choice: all choices made by this Government that could be reversed if Conservative Members had the political will to do so. Let us hope they start this week with the Chancellor’s spring statement.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
With a mother who was a Llewelyn by birth, I am under tremendous pressure with this speech. I will attempt to address in some detail the points that the hon. Member for Cynon Valley (Beth Winter) made.
This year, we will spend more than £129 billion on the state pension and the benefits accrued for pensioners in Great Britain. We have never supported our pensioners with more in this country. That figure includes more than £105 billion on state pension, £5 billion on pension credit, £2 billion on winter fuel payments, £325,000 on cold weather payments so far this winter and £144 million on the warm home discount payments last year.
Before I get into the meat of the debate, may I address one key point? The spring booster campaign was announced today. It is utterly vital that Ministers send out the message from this Dispatch Box that we really want the 5 million people at whom the campaign is targeted to take up the vaccine, which is being offered to adults over the age of 75, care home residents and the most vulnerable over-12s—those who, like me and several other Members of this House, are immunocompromised. Approximately 600,000 people will be sent invitations over this coming week, as I understand it, and 5 million people will ultimately be contacted. I urge everyone, primarily the pensioners with whom we are all concerned today, to apply and to come forward when asked.
Jonathan Ashworth
In a cross-party spirit, may I endorse what the hon. Gentleman says? I shadowed the Department of Health and Social Care for many years, and I completely agree. I want the message to go out across the country that there is no division: everybody who needs the vaccine should get it. I encourage my constituents, his constituents and all hon. Members’ constituents to come forward for the vaccine.
Guy Opperman
The right hon. Gentleman does himself credit with what he says. Much as he did as shadow Secretary of State for Health and Social Care, he seeks cross-party ground where it is right and proper, which I support and really appreciate. We need to get that message across.
I thank all colleagues who have contributed today. As the Secretary of State set out, we are experiencing a period of increasing consumer demand that, together with disruptions to global supply chains and the impact of the war in Ukraine, is definitely placing a strain on household and other finances. The Government recognise that inflation is rising; together with the Bank of England, we are closely monitoring the situation.
I applaud the many Members across the House who have put in detailed recommendations to the Chancellor for the spring statement. I am sure that those on the Treasury Bench have been listening most carefully. In the intervening period, we have taken significant steps to ease the financial pressures by providing a support package worth billions of pounds during this fiscal year and the next.
The state pension is clearly the foundation of support for older people. Over the last two years, the basic and new state pension will have increased by more than 5.6%, taking into account the 2.5% rise this year and the 3.1% rise from this April. There has been much discussion of pension credit, which continues to provide invaluable financial support to approximately 1.4 million vulnerable pensioners. We want all pensioners to claim it.
Peter Gibson
My hon. Friend has had the opportunity to raise the matter of pension credit at the Dispatch Box on several occasions today. What advice can he give Members across the House on engagement with our constituents to raise the profile of that valuable benefit, which opens up the gateway to other benefits and help for pensioners? What help is available from the Department to Members across the House?
Guy Opperman
My hon. Friend is right to raise the issue. A bit like with the jab, we are all responsible for making the case to our constituents that there is huge benefit in what is in reality a passport to several hundred pounds a month—potentially £3,000-plus a year. The stats are extraordinarily good. When we took office in 2010, the take-up was 70%; it is now up to 77%. Obviously we want it to go higher. The take-up figure for guarantee credit is up to 73%, and internal management information suggests that in the 12 months to December 2021, the number of new claims for pension credit was about 30% higher than the figure for the 12 months to December 2019.
My hon. Friend specifically asked what the Government could do. There are a number of things that we have been doing for some time. We set up the pension credit taskforce to work with key stakeholders such as charities—including Age UK, which many Members rightly mentioned and whose representatives we have met several times—the Local Government Association, Virgin Money, and several of the banks. The energy company Centrica is involved, and ITV and the BBC have a key role to play in raising awareness, ensuring that we have greater knowledge of pension credit and that our constituents are aware that the opportunity is out there.
As the Secretary of State said, 11 million letters about the state pension uprating were sent out—that has never been done before—along with copies of the pension credit information factsheet containing information for pensioners so that they could apply. That, too, seems to be making a difference. There was a pension credit awareness day last June, when we worked with the BBC throughout the country. We also worked with the other stakeholders, including Age UK, with which we formed a specific partnership. We have been making the case to local papers: we wrote to all of them on three occasions last year, we did it again this year, and we will continue to do it. Individual Members of Parliament can do a fantastic amount in making the case to their local communities, working with their citizens advice bureaux and Christians Against Poverty groups. Mention has been made today of the older persons fairs, which have been very successful in individual constituencies and have made a big difference to pension credit take-up.
Guy Opperman
I will give way to the hon. Gentleman, because he allowed me to intervene on his speech.
Alan Brown
How much extra money do the Government set aside each year on the assumption that there will be a greater uptake of pension credit, and what happens if that sum is not used? Does the Minister agree that any money that is not used for pension credit should be recirculated to support elderly people?
Guy Opperman
I can answer that question easily. There is no limit whatsoever. This is a means-tested benefit which was set up by Gordon Brown. If there were a 100% take-up, the Government would pay. If the take-up is 70%, the Government pay.
I was going to address some of the comments made by the hon. Gentleman in his interesting speech. I genuinely felt that it was the policy of his party to raise fuel duty, which is certainly an interesting approach to cost of living difficulties. He made no mention of the powers conferred by sections 24, 26 and 28 of the Scotland Act 2016 and the capability of his Government to intervene if they should choose to do so—which, to be fair, they have done. The hon. Gentleman shrugs his shoulders and heaves a sigh, but he probably does that when he tries to analyse and understand the policy of that humble merchant banker-crofter the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), whose approach to the state pension is something that we all struggle to comprehend.
I did test the hon. Gentleman by asking him what genuinely was the Scottish National party policy on the state pension in the unlikely event that the Scottish people were unwise enough to choose independence. Is it the old policy that was agreed previously, or is it the new policy of his leader in Westminster that the rest of the UK should pay for this? I genuinely do not understand, and I think one of the reasons why the popularity of independence is falling in Scotland is the fact that the leadership that the hon. Gentleman so strongly supports are not making the case in any way whatsoever.
The arguments of the hon. Members for Cynon Valley, for Liverpool, West Derby (Ian Byrne) and for Leicester East (Claudia Webbe) centred on the issue of the state pension age. Let me say, with respect, that that is a matter that has been determined by successive Governments. As I pointed out earlier, this Government continued, as did the coalition Government, the policy of the Labour Government under Tony Blair and Gordon Brown. I realise that no one is a Blairite any more, but those 13 years saw exactly the same policy. The arguments put forward on that issue were comprehensively rejected by the Court of Appeal.
The situation in respect of energy prices has been addressed in detail by the Secretary of State, but it is right to make the point that the key intervention was announced by the Chancellor on 3 February with a £9.1 billion energy bill rebate, and there is in excess of £12 billion of support over this financial year and the next to ease cost of living pressures. We have set out in sufficient detail the £200 rebate for households, the £150 non-repayable council tax rebate for all households in bands A to D, and the fact that local authorities will in addition have access to £144 million of discretionary funding to support households in need, regardless of their council tax band.
Alex Sobel
I spoke to my constituent Maggie Stead today. Maggie has been diagnosed with chronic lymphocytic leukaemia. She told me that she cannot afford her rising bills on her state pension, and that she sits at home in her hat, scarf and gloves and eats only one meal a day. I am doing everything I can to help Maggie. What can the Minister tell me to tell her about how we can support her, given the ever-increasing energy bills that she cannot afford?
Guy Opperman
Quite clearly she should be contacting her local authority, because several million pounds has been set aside for individual councils up and down the country so that they have the capability to intervene for such constituents. Obviously I would hope the hon. Gentleman has advised her to apply for pension credit, which could unleash £3,000-plus for her, and although I cannot comment on individual circumstances, I presume she will qualify for the winter fuel payment, which runs to £2 billion, the cold weather support payment and the various other supports that exist, including the warm home discount scheme, where payments will increase from £150 in 2022-23, with spending rising from £354 million to £475 million. Pensioner households are able to access the £144 million of discretionary funding from local authorities to support households who need support but are ineligible for council tax rebates.
My hon. Friend the Member for Amber Valley (Nigel Mills) rightly defended the record of the coalition and of this Conservative Government. I will just briefly remind the House that the change to the state pension that has been taking place under the coalition—to be fair to our Liberal Democratic colleagues—and the Conservative Government has been absolutely transformational. There has been a 35% increase in the state pension, with massively enhanced figures going forward. Without a shadow of a doubt the triple lock, which the right hon. Member for Leicester South (Jonathan Ashworth) never mentioned, has had an impact. Not once in any of the 13 years of the Labour Government did they have a triple lock—not once. Gordon Brown famously raised the state pension by 75p in 1999, so I will take no lessons on that from Labour.
My hon. Friend the Member for Darlington (Peter Gibson) is a brilliant champion for his local area, and he was right to say that pensioner poverty has decreased under this Government—
Guy Opperman
Yes, it has. I am terribly sorry to have to point out that on this particular point the hon. Gentleman is utterly wrong. The number of pensioners living in absolute poverty has fallen. There are now 200,000 fewer pensioners in absolute poverty, both before and after housing costs, than there were in 2009-10.
My hon. Friend the Member for Broadland (Jerome Mayhew) made a very good speech and was right to mention the impact of the Ukraine conflict. He was also right to talk about automatic enrolment, which has transformed private pensions in his constituency, with 2,150 employers supporting 9,000 employees who are saving 8%. That is a cross-party, cross-Government implementation of real impact to address pensioner poverty on a long-term basis. It is a 20-year policy that is transforming this particular situation.
This Government are committed to ensuring that people have security and dignity in retirement. We have recognised and acted on the concerns of pensioners struggling with the cost of living, and we will continue to spend £129 billion on pensioner benefits this year, which includes the £105 billion on the state pension. Obviously there is also the £9.1 billion energy rebate pack and the £2 billion on winter fuel payments and the warm homes discount scheme. I strongly urge the House not to accept this Labour motion.
Question put and agreed to.
Resolved.
That this House is concerned that older people and pensioners risk being at the sharp end of the cost of living crisis as a result of spiralling inflation, a lack of Government action on household energy bills, a poorly thought-through tax rise on older people in work and a real-terms reduction to the state pension; notes that the state pension is being cut in real-terms by hundreds of pounds a year and that working pensioners will begin paying the Health and Social Care Levy from next year; regrets that levels of pensioner poverty and pensioner debt have risen over the last decade even before the current cost of living crisis with almost one in five pensioners now living in poverty; and calls upon the Government to cut home energy bills, halt the planned tax rise on working pensioners and ensure older people are protected from the cost of living crisis.
Mr Deputy Speaker (Mr Nigel Evans)
Minister, your pronunciation of “Cynon Valley” was very good as well.
Oral Answers to Questions
Guy Opperman Excerpts(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Philip Hollobone (Kettering) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
This Government provide more than £5 billion of pension credit. In August 2021, there were 1,864 people receiving pension credit in the Kettering constituency. That accounts for approximately 10% of those in receipt of the state pension in the Kettering constituency in broad terms.
Mr Hollobone
Pension credit is largely unclaimed across the country; there could be 4,500 people in north Northamptonshire who are eligible but not claiming. Those who do claim it get extra help with council tax, heating bills, dental treatment and TV licences. Would the Minister be kind enough to join me in Kettering at an older persons fair that I am organising in the summer so that we can encourage the take-up of pension credit in the Kettering constituency?
Guy Opperman
Rumours had reached me of the Kettering older persons fair, which I believe is taking place on Friday 1 July. All roads lead to Kettering on that occasion. I would be honoured and privileged to attend to support my hon. Friend, who is a doughty champion of his constituency, and all the good charities, such as Age UK and Citizens Advice, that are working hard to get those numbers up, which is what we all want to do.
Stephen Timms (East Ham) (Lab)
The Minister could have a busy summer ahead. Take-up of pension credit remains low: an estimated 850,000 pensioner households across the country are not receiving the help that they are entitled to. The Department could feasibly work out who those households are and simply make them an award of pension credit. Given the scale of the current cost of living crisis, will the Department commit to an ambitious target for increasing the take-up of pension credit across the country and to a much more ambitious campaign to promote it?
Guy Opperman
I hate to disagree with the Chair of the Select Committee but he is wrong. As he knows, because he did this job in 2007-08, the Department does not know the exact numbers of a means-tested benefit that was set up by Gordon Brown specifically for circumstances where there is not the capability of saying exactly who can apply. The right hon. Gentleman is also wrong, however, that the stats are going up, not down, because they are up on the main income element.
Guy Opperman
The right hon. Gentleman is shaking his head, but he is wrong: they have gone up from 70% to 73%.
Huge efforts are also being made by the Department in the form of the work with the BBC and the utility companies, the pension credit taskforce, and all the letters that were written only this morning. I wrote to the right hon. Gentleman’s local paper and to that of the shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth), to set out what we are doing to try to get people to take up pension credit and why we want everybody to do so.
Scott Benton (Blackpool South) (Con)
Henry Smith (Crawley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
This year, we will spend more than £129 billion on the state pension and benefits for pensioners in Great Britain, including, as I said, £5 billion on pension credit for the vulnerable. Pensioners can also benefit from wider Government support with energy costs on top of the warm home discount, the winter fuel payment and cold weather support.
Scott Benton
I thank the Secretary of State for visiting Blackpool last week and for opening our brand-new, Government-funded youth hub, which will help young people to find work. Many pensioners will be extremely concerned about the recent increases in the cost of living. Alongside the measures that the Minister mentioned, what steps is he taking to ensure that those eligible for pension credit and the expanded warm home discount are able to apply and do so?
Guy Opperman
I know that the Secretary of State loved her trip to Blackpool and I congratulate my hon. Friend on his jobs fair, which I gather was a great success. He is a great champion for Blackpool and for the elderly residents in his community, and he is a big improvement on his predecessor. I am delighted to say that I wrote to the Blackpool Gazette this morning to set out in more detail how we are trying to get more people to take up pension credit, and it is definitely the case that we are doing that.
Mr Speaker
Order. I do not think it is becoming of anybody to condemn a Member of Parliament who has not been here for a long, long time. I do not really want to get into that, so we should think about what we say in future.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
Has the Minister written to the local paper?
Guy Opperman
I have—I have written to all local papers in the country.
The bottom line is that there is a £200 discount on energy bills from this autumn for domestic electricity customers in Great Britain. There is also the £150 non-repayable council tax rebate and the £144 million of discretionary funding for local authorities to support households who need support but are not eligible for the council tax rebate.
Mr Dhesi
We know that the Government have already abandoned their promises on keeping the pensions triple lock and free TV licences for the over-75s. Now, before the soaring inflation and the soaring energy bills have even kicked in, thanks to the Government’s policies, almost a fifth of all pensioners in the UK are living in poverty. One million households are missing out on pension credits and thousands of pensioners, including in my Slough constituency, are bothered by delays, underpayments and other issues. When will the Government finally get a grip and resolve these problems?
Guy Opperman
With respect, there are 200,000 fewer pensioners in absolute poverty, both before and after housing costs, than in 2009-10. [Interruption.] With respect, the statistics are correct. The hon. Gentleman will recall, as a Labour Member of Parliament, that when the Government changed in 2010, the state pension was barely £100; the new state pension will be over £185 this coming year. It has risen by £2,300 in cash terms over the last eight years.
Jonathan Gullis
Claiming pension credit is a passport to a variety of other benefits for elderly residents in Stoke-on-Trent North, Kidsgrove and Talke, so could my hon. Friend advise local people what support becomes available to them if they submit a valid claim for pension credit?
Guy Opperman
I have. Literally hundreds of pounds a month can become available in the form of support for housing, council tax, the TV licence for the over-75s, NHS dental, warm home discounts and many other things—as I am setting out in my hon. Friend’s local paper. I am delighted to say that in so many different ways we are making the case that pension credit and the support is out there for our local residents.
Henry Smith
What success has my hon. Friend had in ensuring there is greater take-up of pension credit in the Crawley constituency, and will he consider joining me at the older persons fair that I am planning to hold later this year?
Guy Opperman
Again, all roads lead to Crawley, and quite right too. I would be delighted to attend my hon. Friend’s older persons fair in the summer or the autumn. It is definitely the case that there is a larger take-up of pension credits on an ongoing basis, and that is something we want to see going forward.
Matt Rodda (Reading East) (Lab)
Pensioners who have worked hard and paid in all their lives face an absolutely enormous increase in the cost of living. Food prices are up, the cost of heating is going up and the cost of living as a whole is going up. This huge increase in inflation was clear before the invasion of Ukraine and it is crystal clear now, yet so far the Government have only come up with a buy-now-pay-later scheme for heating bills, so I would like to ask the Minister: just when will the Government start listening to pensioners and when exactly will they show even a shred of understanding of the dreadful situation facing our pensioners at this time?
Guy Opperman
The hon. Member will be aware that we raised state pension by 2.5% this year, when we did not need to do so, and it is going up by 3.1% in April, on top of which there is the support from the Chancellor with the £9 billion scheme set out only a few weeks ago. He will also be aware that huge efforts are being made to ensure there is take-up of the support benefits, which definitely assist. There is over £5 billion of them, but we want much more to be taken up.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Despite what the Minister says, the Government’s last-published figures show that there are 200,000 more pensioners in poverty compared with 2018-19, and it is going to get worse. Next month, pensioners will face an increase in their heating bills of over £800 a year compared with this time last year, and at the same time, due to breaking their triple lock promise, the Government will have taken £500 a year out of the pockets of pensioners. It is shameful. Does he agree that Wednesday represents the one opportunity the Chancellor has to reverse the breaking of the triple lock and to do something to help pensioners?
Guy Opperman
I wish the hon. Gentleman a swift recovery from the trip or fall that caused his injury.
It is definitely the case that pensioner poverty is declining. [Interruption.] The hon. Gentleman’s statistic is manifestly wrong on that: pensioner poverty is down in relation to 2009-10. Of course, there are conversations with the Chancellor, but it is absolutely the case that state pension has increased year on year on year, and we have never paid a higher state pension than we presently do.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Christine Jardine (Edinburgh West) (LD)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Government are wholly committed to alleviating levels of pensioner poverty. State pensions are at record levels, pension credit take-up is increasing, and we are taking a number of other steps to provide assistance. On the day of the launch of the spring booster, I should also stress the need for all pensioners, residents of care homes, and those like me and, I think, you, Mr Speaker, who are immunocompromised to get that booster jab. It is vital for everyone’s welfare.
Christine Jardine
According to a recent report from Independent Age, 40% of pensioners will spend one year in poverty during any nine-year period, and with the situation set to be exacerbated by spiralling inflation and the Government’s removal of the triple lock, pensioners will now be £270 worse off every year. Does the Secretary of State agree with my party that we should double, and extend eligibility for, the winter fuel allowance?
Guy Opperman
The hon. Lady will be aware that the state pension rose by 2.5% last year, in circumstances in which prices were not so rising, and that it will rise by 3.1% this April. Money is also being provided in the form of the cold weather payment, the winter fuel allowance and many other kinds of support, including the £9 billion package announced by the Chancellor and administered by the Department for Levelling Up, Housing and Communities.
Kerry McCarthy (Bristol East) (Lab)
Kerry McCarthy
I welcomed the announcement made by the Minister for Housing, the right hon. Member for Pudsey (Stuart Andrew), towards the end of last week about regulation of supported housing—that is a very good move—but at present there are people in supported housing where there is an exemption from the housing benefit limit, so they could be paying hundreds of pounds a week in rent. My local DWP branch tells me that that is a real deterrent for them to come off housing benefit or universal credit and get into work. What is the Minister doing to address the problem?
Guy Opperman
The income taper in housing benefit ensures that claimants will always be financially better off working than not being in work. We believe that maintaining housing benefit in these cases has allowed claimants to continue to receive more tailored financial support for their housing costs than would currently be available through universal credit.
Andrew Jones (Harrogate and Knaresborough) (Con)
Andy McDonald (Middlesbrough) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The factual matter is that the state pension has increased by in excess of 5% over the past two years. There is also £5 billion-worth of pension credit—I encourage the hon. Gentleman to get his vulnerable constituents to apply for that—and the Chancellor’s £9.1 billion package for energy bills. I also encourage the hon. Gentleman to get his constituents to apply to the local authority fund.
Mr Laurence Robertson (Tewkesbury) (Con)
Cat Smith (Lancaster and Fleetwood) (Lab)
While the Secretary of State was enjoying our warm Lancashire hospitality in Blackpool this weekend, just a few miles up the coast in Fleetwood, my constituent Patricia was emailing me as her MP. She is a disabled pensioner and says:
“The state pension does not keep up with rises in cost of living or inflation…Fuel costs are crippling, as I don’t move and feel the cold but we have to be careful with the heating. I need carers but their costs rise faster than the annual increase.”
What does the Secretary of State have to say to my constituent?
Guy Opperman
I urge the hon. Lady’s constituent to contact her local authority to see whether there is local authority access to funds. As of April, there will be £9.1 billion of energy support from the Department for Levelling Up, Housing and Communities fund. There is also pension credit and efforts are being made on a whole host of levels. I have listed three clear examples of access to cash for individuals such as her constituent.
Dehenna Davison (Bishop Auckland) (Con)
Following last week’s announcement of changes to the DWP estate, 55 of my constituents are directly affected by the closure of the Bishop Auckland back-office function. Joanne Illingworth, who has worked for the DWP for 36 years, has written to me because she is really concerned that moving her job would not be compatible with balancing her work life and caring responsibilities. To give Joanne and others reassurance, can the Minister confirm that individuals will be given specifically tailored support to find a new role that is suitable for them in their current circumstances, and, if not, that, as an absolute last resort, exit packages will be made available?
Stephen Timms (East Ham) (Lab)
The Minister referred earlier to the modest reported percentage increase in take-up of pension credit. Does he recognise that that increase is a consequence of the removal of mixed-age pensioner couples from eligibility for pension credit, rather than of any actual increase in take-up? Is it not high time that the Department set an ambitious take-up target and published an action plan to deliver it?
Guy Opperman
With great respect to the right hon. Gentleman, with whom I have repeatedly debated this matter, we already have an action plan. We are already engaging with all the key organisations, whether that is the energy companies, television companies or media in the normal way. I respectfully say to him that pension credit take-up is increasing. It is up by 3%, which is definitely not for the reason he asserts, and we continue to make the case for pension credit to the wider population. We want not just individuals to claim; we want carers or people on behalf of their mum or dad to put in a claim.
Peter Gibson (Darlington) (Con)
Almost £4 million of pension credit remains unclaimed in Darlington. What advice can Ministers give to my constituents and others to encourage them to take it up?
Guy Opperman
I sincerely hope that my hon. Friend’s local paper contains a letter from me this week explaining exactly why upwards of £3,000 is available to vulnerable pensioners—serious money that is as yet unclaimed. We are keen that my hon. Friend’s constituents and others claim pension credit, because it is an important source of money for the most vulnerable. We already spend £5 billion on it, and we want to spend more, but people must claim.
Helen Morgan (North Shropshire) (LD)
Countless pensioners across my constituency have been forced to make the heartbreaking choice between heating and eating. They were told all their lives that if they worked hard enough then, when their time came to retire, we would take care of them. However, it is evident from those contacting me that that is no longer the case.
As the Secretary of State and the Pensions Minister have already outlined, the Government provide a range of benefits to older people in a whole host of areas, including housing, NHS dental treatment and transport costs. Those things can go a long way to helping with the cost of living crisis, but many such benefits go unclaimed each year. What steps is the Secretary of State taking to ensure that older people are aware of and able to access the benefits for which they are eligible?
Pensions Guidance and Advice
Guy Opperman Excerpts(2 years, 9 months ago)
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Nigel Mills (Amber Valley) (Con)
I beg to move,
That this House has considered take-up of pensions guidance and advice.
It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank colleagues for turning up after we had a late night last night. We have picked a day when pensions are topical, as we have a tube strike over the very issue that we are talking about.
Nigel Mills
It is not the Minister’s fault on this occasion.
I do not think the main topic that I am proposing today is one that divides us. I think we would all accept that the problem is that we have a hugely complex pension system. Most people do not really have any understanding of how it works or what their options are, and far too few end up receiving advice or guidance before taking difficult decisions, having probably saved for 30, 40 or more years. They get to the end point and, sadly, do not always understand what they are doing. The huge risk of that situation is that they make a terrible mistake that they could have avoided, which has a detrimental impact on their retirement and reduces their quality of life in their last few years. The real question is what we can do to improve that situation.
We are not here today to talk about the level of pension saving, which is a hugely important topic but one for a different day. We are talking about what we can do to help people who get to the end of their saving journey to get the outcome that they want—the best outcome that they can have with the money that they have. I am not here to criticise auto-enrolment, which has been a huge success. It has hugely improved the situation for many people in work and at least gives them something to worry about when they get to retirement, whereas that would not have been a problem a decade ago. Millions of people would not even have had a pension pot to be thinking about.
Equally, I am not here to criticise the pension freedoms reforms that took place almost exactly seven years ago, which have been a huge success and are hugely welcome. In its recent report, the Works and Pensions Committee accepted that they should stay in place. However, we have to accept that we have a contradiction between the two systems and that we have chosen a way to get people to save pensions by almost tricking them into it, so that they do not realise. They just get defaulted in and do not have to engage, although we wish they would. At the end of that, we now have a hugely complicated system with lots of choices that people are not prepared for, and we need to find a way to prepare them for that, either at some point in their saving journey or when they get to retirement.
This is a problem that is actually getting worse. Statistics show that fewer people than before have taken advice over the last years, and the problem is getting worse because we have more and more people reaching retirement who will not have any defined benefit pension that can provide the majority of their retirement income. In order to ensure their quality of life in retirement, more and more people will be relying on their defined contribution savings and on the decision they make when they hit the age of 50 and get the chance to take a lump sum. It looks like a hugely attractive way to solve their present financial woes, but they do not realise that it makes their future woes a lot worse, having lost a quarter of what they had, which probably was not enough in the first place.
During the pandemic, a lot more working people over a certain age have now decided that they actually quite like being furloughed and have wondered whether they can eke out their retirement savings over a longer period by using the lump sum and not going back to work. It may be a terribly bad decision that they are making. I think the Government are now waking up to the fact that we have lost hundreds of thousands of people from the workforce who could come back but who would quite like not to do so. I am sure we would all like to be able to afford to retire early, but not if that gives us huge financial problems in later life.
Nigel Mills
Yes, I think that is right: employment has grown, but participation has reduced. I have spent many years arguing about whether people are in fake self-employment—not really self-employed but being made to be, or pretending to be, because their employers are being unscrupulous or trying to get a tax advantage. Shifting people who were not really self-employed into thinking that they are employed is quite a good outcome—it makes the data more reasonable. The hon. Gentleman is right: we have lost hundreds of thousands of people who could still be working. When there is a workforce shortage, any measure that could get people from those cohorts back into work would probably be good for the majority of them and for the economy as a whole.
To return to today’s topic, Her Majesty’s Revenue and Customs data tells us that £45 billion was taken from pension pots in the first six years of the pension freedoms policy. Some 3.7 million defined-contribution pensions were accessed in that period, and over 2 million of those pots were cashed in full. This is not a problem for the future when defined-benefit pensions start to run off. It is a situation we have seen over the first five years of pension freedoms. It is happening now. Hundreds of thousands of people are accessing their pension pots without knowing what they are really trying to do.
It is worth quickly noting that we still have a problem with the data. The data that we have shows pots being accessed, not pots being accessed by individuals. We do not know whether the data shows one individual accessing 15 different pension pots from 15 different jobs, or 15 different individuals accessing one pension pot each. If we are to have a proper understanding of the situation, we need better data, so that we know what people are doing and what outcomes they are facing. We raised that as a Select Committee on multiple occasions, but we still cannot seem to get that data to be gathered.
The reason for asking for this debate—and what I would quite like the Minister to recognise when he wraps up—is that we have a large problem here. I am sure that the Minister does recognise that; he has said so on many occasions. I would also like the Minister to set out a direction of travel for the regulators and industry. We know that the take-up of pension advice and guidance is far too low—I will come on to the data in a little while. The Minister has made some welcome steps, which will come into force in a few months’ time, but even those steps will not fix the problem or take us to anything like the level that we need. I know that we do not like targets or benchmarks, but perhaps the Government could set an aspiration, an indication of what good practice is, or what the level should be. We need to set an aspiration for the regulators as to what the level of take-up of advice and guidance should be, and we need a plan for how we get there. I will talk through a few ideas about how we could bridge that gap.
If Parliament does not set the regulators a target, benchmark or aspiration—call it what you will—they will flounder, flap around and go round in circles. We need to be clear: “Here is where you need to get to, and here is how long you have to get there; if you do not get there, we will have to take some different measures of our own.” We had a problem during the debate on the Pension Schemes Bill last year or the year before. Amendments were tabled that called for various solutions, and the fact that they were not adopted means that people think that Parliament does not actually want them, whereas that is not how parliamentary debates work. We move amendments to float ideas, and we debate them. The fact that they are not voted on does not mean that we did not want them; it just means that we think that there may be other ways to achieve them. I hope that we can send a strong message today.
Guy Opperman
I did warn my hon. Friend that I would quote back to him his exact words from debate on the Pension Schemes Bill. His speech on Second Reading genuinely struck me, and to try to beef up the process I revised the specific guidance largely on the back of what he and the Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms), said. My hon. Friend said:
“I personally would prefer a default guidance appointment, with someone having to sign in blood if they really did not want this free, excellent quality guidance before they could access their money.”—[Official Report, 16 November 2020; Vol. 684, c. 69.]
With respect, that is exactly what the stronger nudge is. We have taken on board the exact comments he made on Second Reading of the Pension Schemes Bill.
Nigel Mills
I am grateful to the Minister. He did say that he wanted the take-up of pension guidance to be the norm. Even with his changes, which I welcome, the take-up of Pension Wise will increase from a totally inadequate 14% to a really quite unacceptable 22%. I do not know how he defines a norm. I am not sure if there is a written definition of a norm, but I have a feeling that less than a quarter does not count as a norm. In that speech, which I stand by, I said that before they access their pension pot, I want the clear majority of people who have any level of pension savings to have taken guidance or advice.
However, I do not agree that such advice should be mandatory. We cannot put a gun to people’s heads and say, “You cannot have your money unless you sit through this. If you refuse to do it, no matter how long it takes, we’re not giving you your money.” Clearly, we cannot do that, but we can get pretty close to that situation. We need to find processes, techniques and measures that get that percentage up to somewhere much nearer the norm, so that people are not suffering the harm of doing this without understanding the whole landscape of what they are trying to do.
My big concern is not necessarily that people cannot understand the subject, although it is complicated, but that people do not know that there are all manner of uncertainties out there that they have not thought about. It is the “unknown unknowns” that are the problem here.
The beauty of a pension guidance appointment is that it gives people the chance to understand what they do not know, and then gives them the chance to go and find out what they do want to know so that they can make an informed decision. I am not suggesting that we can fix every problem of engagement through an hour or an hour and a half’s pension guidance appointment, but it would give people the tools to get the best possible outcome in their situation.
Nigel Mills
I would not use that word. It is a little unfair on the Minister, who has put in place some measures that have not yet come into force, to say that he is being complacent. I urge the Government to see those measures as part of the set of solutions we need.
The Government’s role is to set the aspiration for the level of take-up that we need, so we can then judge the success of their policies. It is a slightly strange situation and we had some rather baffling evidence sessions with the regulators during the recent Work and Pensions Committee inquiry. Everybody accepts that the take-up is not high enough and we should do more, but when asked, “What ought take-up to be?” they say that they do not know and do not have a number. So we know that what we have now is not good enough, but we do not know what is good enough, and therefore we cannot tell when we are going to get to good enough.
It is a slightly strange way of running a strategy, an organisation or a service to not know what is good and what you are aiming for, but to start trying to aim for it in the hope that you might get there by luck. We need a direction of travel, and someone to say, “We think the right target is 60%.” That is the number we had in our Select Committee finding and it seems quite reasonable. We are not asking for 100%, which would not be practical or useful, but we could set that kind of guide.
Guy Opperman
My hon. Friend is talking about guidance on its own, but 55% of pots over £10,000 are accessed after taking guidance or advice, and above £100,000 the figure is 74%. Surely on those two, the stats are better, with respect, than he is purporting to suggest, and we must look at this in the context of some people taking advice as well.
Nigel Mills
Absolutely. We hope that more people will take advice and have a properly informed situation, rather than just relying on guidance, and I accept that we want to look at those two things in aggregate. The problem on the numbers the Minister is quoting is that there is still a huge gap in respect of the, I think, 45% of people who have not had advice or guidance. My fear is that they are the people about whom we are most concerned: those with some retirement savings—not a huge amount, although not a very small amount—for whom, if they do not make the right decision and understand all the parameters they are dealing with, there could be a material impact on their retirement.
Should we worry so much about those with a £1 million pension pot? They are probably the ones who are taking advice in the first place. For people who have really a very small amount, there is probably not much that they will be able to do differently after they have had the guidance than take it as a lump sum. Are we to think it is okay that we have 45% of people who in the scheme of things have a relatively small amount and who could, by getting this wrong, materially harm their retirement, and that we do not have a plan for how to close that gap? I am not sure that that is a position I would want to take.
This shows that we have a problem here, and we need to find ways to try to fix it. The Minister is getting defensive, but I hope that when he speaks later he will accept that we need to close that gap and that the measures that will come into force in a few months will not be sufficient to close it. We need to look at different ways—
Guy Opperman
I am not being defensive; it is just that I do not think that we can look at this matter solely in the context of stronger nudge. We have to look at it in the context of, obviously, the work done with the pension schemes legislation, with the dashboard coming next year; the accumulation pathway, with collective defined contributions coming in; the awareness campaigns, which we are beginning to boost; simpler statements and so much more. Stronger nudge is just one element of about six to eight measures that we are taking to address the problem that my hon. Friend raises, and I accept that he is right to raise it.
Nigel Mills
I am grateful to the Minister. There is a danger, or there will be if we are not careful, of us starting to disagree on the fundamentals, whereas I thought we had a broad consensus of agreement that we needed to find a way to go further on the issue. Sir Hector Sants chairs the Money and Pensions Service, whose job it is to deliver financial advice and support to people around the country, and even he agrees. Sir Hector said that
“the vast majority of people, left to their own devices, will probably make a poor decision.”
The problem we have is that a large number of people—unless we are able to convince them to take some kind of guidance or input—are at risk of making a very poor decision that they will not be able to reverse. This is not like taking out the wrong mortgage, which people can change after two years. If people take out the wrong pension, they are stuck with it for the rest of their life. It is not fixable if someone has bought the wrong product.
I accept that all manner of other moving fields around the pension situation all have to come together, but if the Minister was saying—I am sure he was not—that the combination of a slightly-easier-to-read statement that gets sent out once a year, and which might or might not get sent out at the same point and that has some advantages, and the creation of a dashboard, which we hope people will engage with and look at regularly, will fix the fundamental problem of our having a pensions system that is hugely complicated and that people do not engage with or understand, even though they will have to make a difficult decision at some point, I am not that optimistic that we will get such a level of engagement through people’s saving journey that they will not need some input before they make their decision.
When we introduced these freedoms—I was on the Select Committee seven or eight years ago—we said yes to providing those freedoms, but the big ask was, “Are we going to help people on that journey?” I am perhaps a little disappointed that the solution that the then Government came up with was the Pension Wise service. At that point, the Government and the regulators expected huge take-up, and we were worried about the service being swamped and unable to cope, but we have found that Pension Wise has exceeded all expectations—except one. The feedback from people who use the scheme is hugely positive, as is its impact on their understanding of the pension landscape and on the decisions they go on to make. The one expectation it has not met has to do with take-up, which is nothing like what it was. In evidence sessions on pension schemes, people were saying that we might get 75% take-up, but we are stuck in the low teens, and the figure has been falling in recent years.
It is slightly incongruous: we introduced a policy of pension freedoms, recognised at the time that the situation would be difficult for people, and put in place a new guidance system to help them. We thought there would be huge take-up, and said that its use should be the norm. A few years on, the position has got worse, and we have more people retiring with only DC pensions—people who need this input. We have this huge gap in take-up, but think that is probably okay, because there are a few things online that people can find. That is a challenge. We need a sense of urgency and direction, so that we can hold the regulators to account for achievement.
I am grateful to all who helped me prepare for this debate and sent me useful briefings, particularly the House of Commons Chamber Engagement Team, which conducted an online survey of people’s lived experience. That chimed with what we see in our constituency casework and in evidence to the Select Committees. It is clear that people do not understand the situation and do not feel well informed during their saving journey, and then have problems over time.
One quote is from Charlotte:
“Guidance and advice is not provided in my workplace, unless you are almost at retirement age, which is way too late.”
Carole said:
“I have tried researching the information online but I find it very confusing.”
Anne, a constituent of mine, said:
“The Government should arrange pension roadshows to assist people with enquiries etc. Employers should hold pension surgeries and ensure guidance is available. There isn’t enough signposting and guidance in place.”
The evidence is pretty clear: there is a gap, and we need to fix that. What are the solutions? The Minister dragged me into talking about solutions earlier than I had planned; I was articulating the problem. Data on the size of the problem shows that HMRC received about £2 billion more than forecast in the early years of pension freedom as a result of people accessing their pensions. That is likely because people took the whole of their pension, as they now can, and became higher-rate taxpayers for the only time in their working life. That was a hugely foolish decision, giving the taxman 20% of their pension. That would not have happened if the pension had been taken out in a smooth way over years.
I am sure the Government do not want that benefit, but that £2 billion was a third more than was forecast. That suggests that something has gone wrong, and that people have not been making the wisest decisions. A Nobel- prize-winning economist has described working out what to do with a pension as
“the nastiest, hardest problem in finance”.
Nobody knows how long they will live, and many people assume they will live fewer years than they do, and end up with the horrible risk of running out of money.
I will move on to the argument the Minister was keen for us to have about how to improve the take-up of Pension Wise advice, and issuing appointments automatically or by default. I am asking for what the Select Committee asked for in its recent report: for the regulator to undertake trials on how to improve the take-up of pension guidance. We are not asking for tens of hundreds and thousands more appointments, and huge costs. We accept that, even with a stronger nudge, we will not get the figure high enough. We could give people an even stronger nudge and look at some of the options. Those include writing to people when they turn 50 or are approaching state pension age to say, “We have made you an appointment with Pension Wise at half-past three on such a date,” and giving them the chance to change the appointment. Or we could go back one step and say, “In six months’ time, you’ll hit state pension age. Before you can access your pension, you need a Pension Wise appointment. Here is the booking number.” There could be other combinations; for example, the pension provider could make planned appointments.
Whatever the trials and the options we look at, we are trying to work out whether giving people an appointment —a real kick—increases take-up, especially in the hard-to-reach groups that are not using the guidance service. I would have thought there were enough good-quality pension schemes out there that are keen to help their members and that would be willing to participate in a trial with the regulator, who could agree the rules and set the parameters. We could do that for a few thousand people on a representative basis.
Jim Shannon (Strangford) (DUP)
May I start by wishing you a return to full health and strength, Ms Bardell, so that you are able to play football again? At the moment, it is quite unlikely that you are able to. It is nice to see you here.
It is a pleasure to hear the hon. Member for Amber Valley (Nigel Mills), who I thank for securing the debate. It is no secret that I am totally sold on the pensions issue. I know its importance, and I have expressed that in previous debates. As a teenager, I was encouraged by my mother—you never say no to your mum—to take out a pension at a very early age. Obviously, over the years, we have taken out a few others as well. There is no doubt in my mind that, in these uncertain times, it is more important than ever that people ensure not only that they have a pension, but that they have the one that works for them.
I am pleased to see the Minister in his place. I know that, like me, he is sold on this issue. We can see from his earlier response that he is energetic and keen to respond to hon. Members’ questions.
I did a quick round robin in my office among the six staff I employ. Of the six, only two actively check their pensions—one personally and one with her financial adviser. I thought having a financial adviser was quite impressive. Some staff are obviously very aware of the future. The other four members of staff, ranging in age between 20s and 40s, have no knowledge of what to do with their pensions. I think that is query. They have a pension—that is good news—but they have no idea what it really means. That is the question and that is the thrust of this debate.
Without a UK-wide perception of the importance of pensions, we may be in trouble. People must be aware that it is not enough to know that they have a pension; they should be aware of what it is and actively try to understand what it will do for their future.
I received a detailed briefing from Just Group, which highlighted that, as noted by the Financial Inclusion Commission in January 2021,
“pensions have largely been absent from the financial inclusion debate—even though they are a major factor in ensuring people are financially and socially included in retirement.”
The concepts, terms and associated risks are unfamiliar to most, which creates risks for savers when research shows that the complexity of related decisions is high and the familiarity with the products, options and processes is so low.
Guy Opperman
I am trying to make it a tradition to always intervene on the hon. Gentleman in any debate. I feel that Parliament is better when he intervenes, so I have decided that I will always try to intervene on him. The hon. Gentleman raised the point that pensions are not part of the financial inclusion debate—I look forward to appearing in front of the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) tomorrow, sort of. [Laughter.] The serious point is that the financial inclusion forum, which was set up after the Financial Guidance and Claims Act 2018 was brought in, specifically has Ministers from the Treasury and the Department for Work and Pensions working together. While it is not the main event—I totally accept that—there is no doubt that a real effort has been made. I would urge those who doubt my comments to look at the specifics of the reports of that financial inclusion forum.
Jim Shannon
I never doubt the Minister’s commitment to do what he says; I am sold on it already.
The Government created Pension Wise in 2015 as a free, impartial guidance service for people to use before accessing defined contribution pensions under the pension freedoms policy. There has been a lot of change in policy direction. The service was intended to enable informed decision making and has received consistently excellent feedback. User evaluations found that 94% of Pension Wise appointment customers were either very or fairly satisfied—at 77% and 18% respectively—with 97% saying they had already recommended or would recommend the service to others. That is good news for Pension Wise, but it also leaves people more informed and better equipped to avoid pension scams than non-users.
However, Pension Wise usage remains low and has actually fallen over the last three years. I do not think that we can ignore that. FCA data shows that the number of DC pension pots accessed after Pension Wise was used fell from 94,744 in 2018-19 to 94,274 in 2019-20, and down to 81,805 in 2020-21—a 14% reduction. We cannot ignore those facts. Perhaps the Minister will tell us how we can energise that again. Similarly, the number of pensions accessed via a regulated financial adviser fell by 4% in that period. That is important because Pension Wise provides an opportunity for savers who do not access financial advice to at least understand their options and speak with a professional who can impart key, relevant information, answer their questions and correct misunderstandings. However, the FCA data confirmed that hundreds of thousands of savers are accessing their pension benefits each year without first using Pension Wise, even though appointments are available for free. We must reach that mindset and change that.
There is clearly a massive breakdown in communication with our working people regarding pensions and the fact that they should have an active role in that respect. There is a fear concealed behind the attitude of my younger staff, which we should perhaps look at, that they “don’t do finance”—those are their words. When I asked whether they had ever topped up their pension with additional money in their account, they looked at me blankly and asked, “What does that mean?” We must get the message across, beginning in schools and throughout working life, that pensions are not something to be scared of.
Ms Bardell, you have been kind with your time, as have other hon. Members, so I will conclude with this point. A pension is a part of life, in preparation for the hopefully happy days of retirement—hopefully people will all see that. However, what will add to that happiness is a working pension that can provide when we cannot and do not work. We all have a part to play in that. I look to the Minister, as I always do—I know that he understands where I and others are coming from—to outline how we can get the engagement that is apparently, for some, missing.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
First and foremost, we all wish you well, Ms Bardell. We gather you were doing your best Franz Klammer impersonation down the slopes; I am certain that you will be back on the football field before too long. You are also the third Chair that we have enjoyed in barely a one-and-a-quarter-hour debate.
Today is an odd day, as we have all struggled through the pension-related tube strikes. We have dealt with many known unknowns, both in life and in the speech of my hon. Friend the Member for Amber Valley (Nigel Mills). In broad terms, I was in glorious agreement with him. The wonderful thing about pensions debates in this House is that effectively we are all singing from the same hymn sheet, and trying to get the same outcomes. However, there might be differences in how we reach those outcomes and, in the nine minutes that I have, I will try and address the 35 to 40 points that have been put to me that require urgent answers.
I will defer some of the questions asked by the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) because, to my great delight—I was told only last week—I am going to the Treasury Committee tomorrow specifically to answer on financial inclusion. That issue was also raised by the hon. Member for Strangford (Jim Shannon). The hon. Member for Kingston upon Hull West and Hessle raised a couple of points that I want to refer to briefly. She described the number of pension pots as four to five; we will probably have 10 to 11. It is a much bigger problem, but we are on it with two particular interventions. In the short term there is the pension tracing service, which I strongly urge all colleagues to recommend to their constituents, because they can be tracked down on the present basis. However, it is relatively basic and clunky; the dashboard is clearly a much better thing.
I will address a specific point about the dashboard at the outset. Many parts of my portfolio and job involve herculean heavy lifting—as the right hon. Member for East Ham (Stephen Timms), who has done my job previously, knows. The dashboard involves the most herculean heavy lifting of them all, taking 40,000 pensions schemes, getting all the data together, making them all talk to one another, incorporating the state pension and doing so in a data-friendly safe way.
I want to put on record my support for Chris Curry and the team. I have to say that I am not aware of such criticisms from businesses. That relates to the point made by my hon. Friend the Member for Amber Valley: data is everything here. It really is. The pension schemes have to improve their data, and once they do, a whole host of positive actions can flow. The dashboard is clearly one of them. It will allow an individual to see what they have, in the comfort of their own home or with an independent financial adviser, and do all of the things that we want them to do. The data flows from the dashboard decisions. The industry is concerned that I am pressing them to get its data together in a robust way; I do not shy away from that. Some people want me to go faster than I am. I would like to think that we are actually going quite fast to get the dashboard up and running. It will be live, in some shape or form, very soon.
That brings me to the specific points made in the debate; I obviously look forward to being grilled on all matters of financial inclusion tomorrow. In my experience, automatic enrolment opt-outs are not actually as bad as the hon. Member for Kingston upon Hull West and Hessle described, but I will take her point away and have a look at it. Obviously, they are a relevant factor.
I want briefly to deal with the point about the FCA. Clearly, my hon. Friend the Member for Amber Valley chose to have the Pensions Minister answer today’s debate rather than the Treasury Minister who deals with all matters of advice and the FCA. That makes my life a little difficult, but we are one Government, so I answer for everything, whatever the situation. The 2020 evaluation of the “Financial Advice Market Review” found that the financial advice market was going in the right direction, with more people accessing advice, but also recognised that some remaining challenges in the market needed further work. The Treasury is working with the FCA on the next steps. The hon. Member for Kingston upon Hull West and Hessle raised the FCA’s stronger nudge approach. I believe that the Department for Work and Pensions is actually going way faster. In 93 days, by my count—on 1 June—the stronger nudge policy will come into law. Although I obviously revere and adore the FCA and Treasury, and everything that they do, the DWP is at the front of that particular queue and is driving that policy forward.
Let me try to address the point about the signposting of Pension Wise by pension schemes. Wake-up packs are provided on an ongoing basis, but we also believe very strongly that impartial guidance from the Money and Pensions Service is a very good thing. MAPS is a very young institution. Parliament decided, following Select Committee reports, to legislate to create it and it melded all the previous operations together. It is a young institution—not even four years old. We are gently trying to nudge it into a greater take-up of all of its services, and it is part of the dashboard delivery service, for example. Although Pension Wise provides guidance about the options for accessing defined-contribution savings, it is primarily designed for those aged 50 and above who are making decisions about how to access such savings.
However, we are ignoring the MoneyHelper pensions service, formerly the Pensions Advisory Service. No one has mentioned it in any way whatsoever. The stats show that there were 113,000 Pension Wise appointments in 2020-21, and that MoneyHelper supported 220,000 people during that time. We are very focused. I understand why, in discussing Pension Wise, we have not discussed in any way all of the great work that the Money and Pensions Service is doing with MoneyHelper on pensions. The number of people using the service went up by 8% in 2019-20.
Separately, a report by the Social Market Foundation, which is a lovely organisation—I revere the fact that any think-tank is doing any work on pensions, and I agree with my hon. Friend the Member for Grantham and Stamford (Gareth Davies) that the more we talk about them, the better—made the point that we need a greater online service. The number of people using MoneyHelper’s digital pension tools has grown by 47%, from 170,000 users in the first quarter of 2020-21 compared with Q1 of the following year. There is much greater usage of MoneyHelper and other online services.
The statistics on MoneyHelper show how much the service helps, but I want to address the stronger nudge. It comes into force on 1 June, which, off the top of my head, is in 93 days. It requires schemes to go beyond signposting to guidance, as they currently do. They will be required to take an active role by offering to book a Pension Wise appointment on behalf of the member when they seek to access their defined contribution savings. That will be presented as a normal part of the process for accessing a pension.
Schemes will also be unable to proceed with any application to access savings until members have either received or explicitly and clearly opted out of guidance. For occupational schemes, the opt-out must be given in a separate communication from the member. We believe that that will ensure that all members are required to make an active, informed choice on guidance before they are able to access their savings. I believe that that strikes the right balance and is the right way forward. Although we all want to do more, Parliament has decided and has legislated for the Money and Pensions Service, Pension Wise and the Department for Work and Pensions to drive forward the stronger nudge as the way forward. I urge colleagues to get behind that in the short term.
In the short time I have left, I want to address fraud. Obviously, we believe that the stronger nudge will help. The Pension Schemes Act 2021 sets out four red flags to address those specific problems, and I pay tribute to the Pension Scams Industry Group and the other organisations with which I have worked. I hope that the draft Online Safety Bill will continue the good work that pre-legislative scrutiny has shown we are doing on pensions and investment scams. I have personally raised that with Google, Facebook, Instagram and LinkedIn. All those companies, particularly Google, need to be acutely aware that it is utterly unacceptable that there are 47 fake versions of Aviva at the top of the online search list, and that that needs to stop. To be fair, those companies can do that themselves without Government action.
Guy Opperman
I do not have time, as I have only 30 seconds left. Those companies do not need Government action. They can stop all of that by simply vetting their advertisers. It is long overdue that Google and others took such action. I sincerely hope that they do so on an ongoing basis, rather than our having to force them to do so at the threat of penalties.
I have totally run out of time, but I thank all colleagues. I genuinely believe we are all on the same pathway and journey, but just nudging each other in slightly different ways.
Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill
Guy Opperman ExcerptsFriday 25th February 2022
(2 years, 9 months ago)
Commons ChamberRead Full debate Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022 View all Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Government propose to transform United Kingdom pensions. We are making them safer, better and greener and the Bill is a further way forward. I am grateful to the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) for introducing the Bill and for the support of the official Opposition and other political parties.
Let me briefly address the three points raised by the hon. Member for Westminster North (Ms Buck) on behalf of Her Majesty’s Opposition. I assure her that there will be full consultation on the legislation. There will also be broad communication, but I will write to her on that point and place a copy of the letter in the Commons Library and the House of Lords Library so that all peers and Members can see it.
In respect of gender inequality, the hon. Lady will be aware that successive Governments have concluded that the way ahead on that is automatic enrolment—that is the greatest change. There is no doubt that automatic enrolment has transformed saving in this country. For example, in terms of workplace pensions, women were at less than 40% in 2012 and are now at more than 80%, and young people aged between 22 and 29 were at less than 40% and are now at 80%.
Mr Richard Holden (North West Durham) (Con)
I agree with the Minister and welcome the Bill from the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). It is a great Bill and part of the reforms to pensions that the Government are making. As the Minister mentioned auto-enrolment, can he enlighten me on the Government’s position on my Bill, which is scheduled for later today, on expanding auto-enrolment to under-22s and part-time workers, particularly women as he just mentioned?
Guy Opperman
I will deal with that point, because it is relevant to this Bill and to the consideration of the House later. As my hon. Friend will understand, we are in the latter part of this parliamentary Session. It is the end of February and the Queen’s Speech will come, in all probability—obviously I cannot commit, but it is usually—on the second Wednesday in May, so the House has a relatively limited period of time.
The hon. Lady’s Bill had its Second Reading in November. It required a Committee stage in the House of Commons, then it had to come back for Report and Third Reading. It has not even gone to the other place for consideration. It will only just get under the line, although I am sure that the other place will be keen to accept it. The reality is that there is no real way for my hon. Friend’s Bill to get through this House and the House of Lords in the time allowed, and that is the requirement of private Members’ Bills of the nature of his and all others, to be fair.
I can confirm, however, that the Government remain committed to the 2017 automatic enrolment review. It remains the case that we will, in the fullness of time, bring forward or support legislation to take the matter forward. My hon. Friend will have to bear with me. He and I have had ample conversations. I am so pleased that he is my neighbour—a great improvement on the previous one. He is a doughty campaigner for his constituents and he is right to make this particular case.
I thank my hon. Friends the Members for East Surrey (Claire Coutinho), for Broxtowe (Darren Henry), for Hastings and Rye (Sally-Ann Hart), for Darlington (Peter Gibson) and for Meriden (Saqib Bhatti) who all supported the Bill and spoke extremely well and eloquently about these matters. I will not repeat my entire Second Reading speech, which lasted for, I think, nearly an hour, and of which I know all hon. Members enjoyed every word.
The greatest hits of pensions are often underrated in my experience, but the points that I made then should be repeated as if I were to speak for the next hour. We are correcting a simplification that was brought in by the last days of Mr Callaghan’s Labour Government in 1978. It is an utterly vital piece of legislation that addresses everything from survivor benefits to reforms in relation to HMRC and the need to get proper equalisation. To be utterly clear, all parties will benefit from this and there is no loser by reason of the Bill.
It is absolutely to the credit of the hon. Member for Rutherglen and Hamilton West that she has successfully brought the Bill forward on a cross-party basis and navigated its passage. She should be very proud of her work. I am delighted to restate that the Government support the Bill. We continue to support it in this House and will support it in the House of Lords. I wish it every success as it travels on to another place.
Long Covid
Guy Opperman Excerpts(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Russian invasion of Ukraine colours everything we talk about today, and I wish to put on record my support for what has been said by all political parties. I am sure I speak for all colleagues on both Front and Back Benches when I say that we stand with the people of a sovereign and independent Ukraine. We are a legitimate democracy, which means that we can debate things. We can have a discussion in a way that other countries, such as Russia, cannot do. I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing this important debate on an important issue. As she knows, the Minister for Disabled People, Work and Health, who would normally respond to this debate, cannot be with us tonight because of personal reasons. She apologises for that, and I am here to respond to the best of my ability on all matters on behalf of the Government.
The Government recognise the impact of long covid on individuals and their families. We are committed to working across the Government to ensure that appropriate provision and support is available to those suffering from the condition of covid. The hon. Lady is right to say that we have been through the worst pandemic since the Spanish flu of 1919, and all Governments around the world are playing catch-up in an attempt to understand, appreciate and deal with the consequences of this terrible disease. It is also a chance for us in this House to put on record our thanks to the pharmaceutical companies, everyone behind the vaccine taskforce, the NHS, the public and private sectors, and the volunteers behind the vaccine roll-out.
We cannot discuss covid without raising the specific issue that it is in everybody’s interests to get the jab. I have done everything possible, including videos with my dog, Zola, to encourage vaccine take-up, and it is very much in our interests to have a continuation of that take-up. Sadly, however, a significant proportion of the population have still not had the jab, and we urge them to go forward and do that.
Mr Steve Baker
One thing I notice when I look at the vaccination map brilliantly provided by the Government is that the areas of Wycombe with the highest ethnic minority populations are the least vaccinated. Will the Minister take this opportunity, if he can, to tell us a bit more about what the Government are doing to help those people?
Guy Opperman
A great deal is being done; I will write to my hon. Friend and set it out in copious detail. The most important thing is that thought leaders, whether voted for or not—they range from Members of Parliament to religious leaders and community leaders—make the case in their communities that people need to get the jab, because the way out of this and back to normal life and living with covid is clearly to embrace the vaccine. There is much more that I could touch on, but that is the main point.
Specific guidance was set out in the detailed “COVID-19 Response: Living with COVID-19” document put forward by the Prime Minister. The hon. Lady said that there was no reference in the Prime Minister’s statement to long covid. That is not the case for the document—I refer her in particular to paragraphs 87 and 118—but this is clearly a work in progress. I will come to the specifics in a bit more detail. We remain committed to ensuring that everybody can access the health and support that they need. We are doing what we can to ensure that care pathways are available and clearly signposted so that people who need extra help receive it.
The hon. Lady rightly mentioned that she is a Scottish MP and that this is a devolved system. I will therefore briefly touch on the health approach before turning to benefits. The Department of Health and Social Care has invested over £50 million in dedicated research to improve the diagnosis and treatment of long covid. In addition, NHS England and NHS Improvement have invested £224 million to provide care for people with long covid, including £90 million in 2022-23. There are 90 long covid assessment services across England, including 14 specialist paediatric hubs that have been established to support adults, children and young people with long covid and to direct them into appropriate care pathways.
The Government recognise that while England has adopted a clinic-based service model, no one single approach is likely to fit all areas and circumstances, and it is right and proper that each part of the UK can adopt a service model for long covid that most effectively responds to its patients’ needs. That recognises that—this goes to the hon. Lady’s point—everyone experiences long covid differently and that health services are organised differently depending on where they are located.
In Scotland, I understand, NHS boards are developing pathways between primary and secondary care according to local services and the needs of their respective populations, with a focus on providing care and support that is as close to home as possible. In Northern Ireland, assessment services have been established featuring multidisciplinary assessment and support in primary and secondary care settings. Similarly, in Wales, a recovery programme has been established whereby the majority of people accessing services will do so directly via their GP practice and, following assessment, people may be supported by a range of healthcare professionals depending on their individual needs.
I turn to benefit entitlement. It is vital that the existing benefit system provides inclusive, accessible and sustainable support to all people with health conditions that impact on their ability to work and participate fully in society. That includes, obviously, people with long covid. However, the benefit system is set up to consider the impact that a health condition has on an individual’s ability to work and carry out day-to-day activities. In the case of long covid, there would be an assessment of a person’s needs in the same way as for other conditions, by understanding its impact on their day-to-day activities.
Claimants can apply for benefits on the basis of their symptoms and the impact that those symptoms are having on them. The hon. Lady rightly outlined that there are a multitude of different symptoms, which goes to my point that the NHS in the UK and particularly in England—I cannot speak in detail for the Scottish NHS—is making great efforts to better understand diagnosis and treatment. Clearly, however, the main symptoms would be pain, fatigue, breathlessness and some things that are akin in many ways to ME and other illnesses. Clearly, how those symptoms fluctuate is particularly relevant to long covid and the ability to function on an ongoing basis.
Assessments for health and disability benefits take those matters into consideration. Our healthcare professionals are trained to explore and evaluate those factors. Overall, there are three ways in which we assess a claimant’s needs. First, irrespective of a person’s income or whether they are in or out of work, we can assess mobility or care needs through the disability living allowance, the personal independence payment and the attendance allowance. For the current financial year 2021-22, PIP alone will provide around 2 million people of working age with £12.2 billion of support.
Secondly, we can also look at a person’s capability for work to understand if, owing to the impacts of a health condition, they might have difficulty finding and keeping a job. We assess that through the work capability assessment, which provides access to the employment and support allowance and the additional health-related element of universal credit. Anybody who is unable to work can claim those benefits. New-style ESA provides support to those with sufficient national insurance contributions, and universal credit provides support for those without contributions. Overall, in 2021—I accept that it is an ongoing process—we are supporting over three-quarters of a million people on the universal credit health journey and spend over £17 billion a year on working-age benefits or incapacity.
That brings me to the third type of need that we must address, which is financial need, whereby the system of universal credit looks at a household’s situation in and out of work, and provides support according to that household’s financial needs. For those out of work, it is also the main gateway to access Jobcentre Plus support to help them get back into work.
The hon. Lady referred to industrial injuries. I cannot speak to the specifics for Scotland, but the Department for Work and Pensions is responsible for the industrial injuries scheme, which compensates for injuries arising from an industrial accident or a disease contracted as a result of a person’s occupation. The Industrial Injuries Advisory Council advises the Secretary of State for Work and Pensions regarding industrial injuries disablement benefit, and is considering available scientific and epidemiological evidence on long covid. IIAC does not specifically apply in Scotland. It is important to add that any changes to the scheme can be recommended only where there is sufficiently robust evidence. However, it is reviewing the available evidence on an ongoing basis to inform on whether long covid can and should be prescribed as an occupational disease for the purposes of industrial injuries disablement benefit. The House will be updated as that work progresses.
In addition, work is being done on occupational health support. The hon. Lady will be aware that in July 2021 we published the response to the “Health is Everyone’s Business” consultation—if she is not, she should look at it—which specifically sets out the measures the Government are taking to help employers better navigate the work and health system. They include improved access to occupational health, particularly for employees of smaller employers and self-employed people who are least likely to have access; testing a new occupational health financial incentive; and stimulating the development of innovative quality services while addressing workforce capacity constraints.
In addition, there is clearly a situation in respect of data on long covid. I am aware of the figures from the Office for National Statistics which the hon. Lady cites, but they are not necessarily a reflection of what the NHS is seeing. The nature of that particular report would disagree with, for example, the NHS England activity data. I will read out some of the figures, as they are published. Information is published on activity and demographic characteristics of patients referred to a post-covid assessment clinic in England. For the period 22 November 2021 to 19 December 2021, there were 5,539 referrals to NHS post-covid assessment services, 458 fewer than in previous weeks. Of those, 4,946 were accepted as clinically appropriate for assessment. There were 4,750 initial specialist appointments assessments, which were completed together with 8,695 follow-up appointments. Those figures are the highest reported since publication of that data commenced.
A whole host of further long covid research is being done through the National Institute for Health Research and UK Research and Innovation, which invested some £50 million in research to better understand long covid and to treat it. My strong advice to the hon. Lady is that she sits down with Health Department colleagues from Scotland and this country with a view to getting the details on that. I cannot give more information about that tonight given the limited time that I have.
Clearly, however, a lot of work is being done. There is £8.4 million being spent on the post-hospitalisation covid-19 study at the University of Leicester, and £18 million of funding has been given to four research studies to better understand and address the long-term effects of covid-19 on physical and mental health. The studies will examine the causes, consequences and treatment of what is known as long covid. Similarly, a further £19 million has been given to 15 research studies to accelerate the development of new ways to diagnose and treat long covid as well as to consider how to configure services to provide the absolute best healthcare. It is clear that this is a work in progress. This is a journey. It is important that the hon. Lady raises these points and we debate them, and that we all understand that the journey is not complete.
In conclusion, the Government recognise that long covid can have a significant impact on individuals and their families. We are committed to working across Government to ensure that people suffering from this terrible condition can access the appropriate provision and support. The initial £50 million investment in research to improve the diagnosis and treatment will help us to understand the condition and its impact more fully. That, alongside investment in expanding care and assessment facilities for patients, shows that the Government recognise the condition and are acting.
In addition, the Department for Work and Pensions provides a great deal of financial support in the ways that I have outlined, which enables those affected by the pandemic to access the help that they need. We will carefully monitor and consider the advice of the Industrial Injuries Advisory Council regarding long covid. We remain committed to this support. We continue to review our approach and to ensure that there is ongoing support, and I thank the hon. Lady for the points that she has raised tonight.
Question put and agreed to.