Pension Schemes Bill

Helen Whately Excerpts

Consideration of Lords message
Tuesday 28th April 2026 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

Let me begin by welcoming the Minister back to his place—we missed him last night, and it is good to see him back in the Chamber.

Throughout our many debates, we have broadly agreed on the policy intent behind most of the Bill, but as I have said time and again, agreement on the principles of a Bill is not the same as offering the Minister unqualified support for every measure in it, particularly the power contained in clause 40, the power of mandation—or the reserve power, as the Chief Secretary calls it—which enables Ministers to instruct pension funds where to invest. When the Bill was first introduced, that mandation power was truly breathtaking in its scope. It was extraordinary—an unconstrained power that would have allowed the Secretary of State access to 100% of at least £400 billion-worth of auto-enrolment default pension funds. It would have allowed Ministers to direct their investment in whatever way they saw fit.

What happened the moment that became clear to people? Members sitting opposite and, indeed, behind me—not least those in Reform UK—were already queuing up with pet projects and struggling sectors. They thought that savers’ money should be used for net zero schemes, steel and renationalising water. They were not proposing those measures on the grounds of the return on investment for savers, and the income that they would generate for people’s later life; that much is obvious. But we said no—no to politicians having that power, no to Ministers directing pension savings into their pet projects, and no to overriding the interests of savers in favour of politicians desperate for access to capital.

I was clear from the outset that the power was dangerous and had no place in the Bill. After sustained pressure from the industry, from the other place and from this side of the House, the Government have, very slowly, been forced to row back. They have rowed back from a power grab that threatened trust in auto-enrolment pensions and risked damaging savers’ retirement incomes. Let us be clear about what those concessions amount to. First, on allocation limits, the original Bill contained no cap whatsoever on how much of a saver’s pension could be mandated into specified assets. Now, after pressure, the Government have imposed hard limits. No more than 10% of a default fund may be directed into qualifying assets, and no more than 5% may be directed specifically into UK assets. That is a major retreat from the original proposal.

Secondly, on sunset and single-use restrictions, the Government have brought forward the expiry date of the reserve power to 2032, if unused. They will repeal the whole regime by 2035 unless it is renewed by fresh primary legislation, and have limited the core mandation power so that it can be exercised only once—another retreat. Thirdly, the scope has been narrowed. Mandation can now apply only to the main default auto-enrolment fund, not the entire pension scheme or every pot—again, another retreat.

Today we have had further concessions. The Government now accept that before this power can be exercised, regulators must conduct an independent assessment of whether a genuine collective action problem exists—whereby no one wants to be the first mover—and whether that problem is inhibiting investment in private markets. We have been consistent in our view that mandation is not the right solution, but we accept that requiring independent assessment before the power can be exercised is a safeguard against ministerial overreach, and I appreciate the Pensions Minister’s assurances from the Dispatch Box on the weight of evidence required. The Government have also accepted that the reserve power cannot be used before 2028—again, another retreat.

The Government have further strengthened the savers’ interest test following yesterday’s amendment. Schemes will no longer have to prove that compliance would likely cause “material financial detriment”. Instead, they need only demonstrate that compliance is likely not to be in the best interests of members, thereby aligning the test with trustees’ existing fiduciary duties. That matters, because fiduciary duty is sacrosanct and must be protected. Nothing is more important in a modern pension system than the duty to act solely in the best interests of savers. That duty is the foundation on which trust in our pension system rests. This amendment means that in a conflict between mandation and fiduciary duty, fiduciary duty wins—again, another important retreat. Finally, the Government have agreed to remove discrimination between investment vehicles by clarifying that both direct and indirect holdings in the relevant asset classes count towards compliance—the final retreat.

Every one of those changes tells the same story: the Government introduced a power that was too broad, too vague and too dangerous. Step by step, and under pressure, they have been forced to narrow it, constrain it and hedge it with safeguards. Why? Because the original power was indefensible, and because the Government knew that the concerns were real. The work that we have done has obliterated the Government’s original proposal. As it stands now, the mandation power looks nothing like how it was first imagined. What began as a sweeping ministerial power grab has been stripped back, pared down and boxed in on all sides. Only now, after our intervention, has it become at least palatable. It is a vestige of its former overmighty self—a shrivelled husk.

Let me be clear: we do not believe that the Government should direct private capital, or that Ministers should interfere in investment decisions that are properly left to trustees and markets. Here we have Labour doing what it always does: thinking that the Government are the answer, with the state going where it has no place to go. When the Conservatives return to government, we will remove mandation from the statute book entirely, because at the heart of this policy lies a dangerous assumption that Ministers in Whitehall know better than trustees, fund managers and markets on how to invest the public’s pension savings. I have yet to meet anyone who wants a politician managing their pension, and pensions belong to the people who earn them, not Government Ministers. It is as simple as that.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

Oral Answers to Questions

Helen Whately Excerpts

Monday 27th April 2026 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

I was disappointed that the Secretary of State did not answer the question put by my hon. Friend the Member for Fylde (Mr Snowden), so let me help him. Unemployment among 18 to 24-year-olds is at 14.3%—that means that one in seven young people is unemployed. There are thousands fewer jobs and thousands fewer vacancies under the right hon. Gentleman’s Government. I speak to young people across the country, who tell me that it is desperately difficult to get a job, and it is no wonder. His Government have made it much harder for businesses to employ people, especially young people.

I appreciate that the Secretary of State may be trying his best with his plethora of work schemes, but they are just a sticking plaster for the damage that the Chancellor has wreaked. Governments do not create jobs; businesses do. His Government need to change tack and back businesses to create opportunities for the next generation. I am on their side—isn’t he? Will he help the Chancellor understand before it is too late?

[Pat McFadden]

The hon. Lady neglected to mention that youth unemployment never recovered to levels enjoyed under the last Labour Government at any point during the Conservative party’s time in power; it was exacerbated during their last few years in particular. The difference is that we are responding with the initiatives that I have set before the House today. That is because we believe that work is the best answer and the best opportunity for young people. I will keep going, to give young people hope and opportunity because that is what this Labour Government stand for.

--- Later in debate ---

[Mr Speaker]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

Mr Speaker,

“We cannot defend Britain with an ever-expanding welfare budget”.

That is the view of the author of the Government’s strategic defence review, the Labour peer, former Labour Defence Secretary and former Secretary-General of NATO Lord Robertson. Which will the Secretary of State choose: defending the country or paying people not to work?

[Pat McFadden]

The Conservative party failed to reform welfare and failed to back our defence forces—it left the armed forces at their smallest size since Napoleonic times—and it says that there is a choice. The truth is, the Conservatives did neither of those things; we are doing both. We are increasing defence spending to 2.5% of GDP—something they never achieved, despite inheriting that level from us when they took office—and we are reforming welfare by putting work and opportunity at the heart of everything we do.

[Helen Whately]

Let us put some facts on the table, because it is time for the Government to confront the hard choices. We are spending less than 2.5% of GDP on defence, but 5.3% of GDP on welfare. Six million people of working age are living on benefits. Under the Secretary of State’s Government, over a million more people have gone on to universal credit and hundreds of thousands have gone on to sickness benefits—and the Government are choosing to spend even more by scrapping the two-child cap. We cannot go on like this. When will he and the current Prime Minister come forward with a plan to bring the welfare bill down? Or is it like with Sir Olly Robbins: another topic where his judgment and the Prime Minister’s differ?

[Pat McFadden]

The shadow Secretary of State said that she wanted some facts, so let me give her some facts. The Tories inherited spending on defence at 2.5% of GDP; they left office with it lower. They left the Army at its smallest in two centuries, and they cut the number of frigates and destroyers by 25%. It is the Labour Government who are increasing expenditure on defence. It is the Labour Government who are reforming welfare, including the changes in universal credit this month, and the youth employment initiatives that we have talked about throughout these questions.

Pension Schemes Bill

Helen Whately Excerpts

Consideration of Lords message
Monday 27th April 2026 Commons Chamber

[Madam Deputy Speaker]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

First, may I thank the hon. Gentleman for opening this evening’s debate, and for setting out the latest Government amendments, in place of the Pensions Minister? These ping-pong sessions with the hon. Member for Swansea West (Torsten Bell) have become a regular in my diary, and I will miss him this evening.

When this Bill was introduced last summer, we said that much of it was a sensible step forward that built on the work of the previous Conservative Government. We stand by that view, but supporting the broad direction of a Bill does not mean unqualified support for its every provision. Throughout its passage, we have challenged the Government on the local government pension scheme, on member communications and on the scale requirements in the Bill, but you will be pleased to know that those debates are behind us, Madam Deputy Speaker.

Today, there is just one issue left: mandation, or, as the Government prefer to call it, the reserve power—a power that sat in clause 40 until the noble Lords once again removed it from the Bill last Wednesday. The Government’s case for this power is straightforward: they want more pension investment in private markets and, by extension, more pension investment in the UK. That was the ambition behind the Mansion House accord, and it is an ambition that we share. We want to see the accord succeed, we want more productive investment, and we want pension capital to work harder for savers, but although the ambition is right, this policy is not. Mandation is the wrong lever to achieve those aims.

As the House has heard from me and my hon. Friend the Member for Wyre Forest (Mark Garnier) at each stage of this Bill, mandation is flawed both in principle and in practice. The Government may call it a reserve power, but everyone knows what it is: a threat hanging over pension schemes if they do not fall into line. The Mansion House accord was a voluntary agreement built on trust, with mutual commitments between industry and the Government. Mandation replaces trust with a threat in law. Why would the pension sector, or in fact any sector, ever try to come together and agree a voluntary pact with the Government again if it is hammered into law a few months later?

Mandation puts in statute a power that, though more limited in its current manifestation, could be put to all manner of uses. It cuts across the fundamental duty of trustees to act in the best interests of savers; instead, that duty is trumped by Government requirements in law. It means that pension savings, or a share of them, will be put to work to serve the interests of the Government, not the interests of the saver who wants their pension to provide them with a decent income in later life. Perhaps most seriously of all, mandation risks undermining public trust in the pension system. That is why the power is not just unnecessary; it is dangerous and has no place in this Bill.

I will now turn to the Government’s latest amendments on mandation that are before us today, which apply to the so-called savers’ interest test. At the moment, if a pension scheme believes that complying with the Government’s mandation power would not be in the members’ interests, it may apply for an exemption, but to secure one, it must show that compliance would cause “material financial detriment” for members. That is an extraordinarily high bar. The Government have heard the concerns raised in this House and the other place, particularly by Lady Bowles, and have now brought forward further amendments.

The Minister told us that the amendments will strengthen the exemption process. Well, they do make it slightly easier for schemes to argue that a mandated investment allocation may damage returns. Instead of having to prove that mandation “would” cause material financial detriment, schemes will now need to show that such detriment is just “likely”—we have gone from “would” to “likely”. Frankly, if the Minister thinks that this one-word change offers a truly robust safeguard, I urge him to think again.

The need for these amendments tells its own story: the Government accept that mandation risks conflicting with the duties that trustees and pension providers owe to savers. If no such conflict existed, there would be no need at all for an exemption process. The right to appeal, enhanced through today’s amendments, demonstrates that Ministers accept that mandation may force schemes away from doing what is in their members’ best interests. Under the amended Bill, schemes must still prove likely financial harm before they are allowed to do what is best for savers. That misunderstands the principle at the heart of fiduciary duty. Trustees should not need state approval to act in the best interests of their members. These amendments just tinker at the margins; they do not fix the flaw in the policy.

I have been talking in somewhat technical terms, but I want to remind the House of the consequences of what we are talking about. If the Government push pension schemes into the wrong investments, those investments underperform and savers end up with weaker returns, who carries the can? Not the Minister, who has stepped in valiantly today, and not the Government, who legislated for this power. It will be pensioners, who will retire with less. Let us remember whose pensions we are talking about here. Who is most likely to suffer if the Government turn out to be a poor asset manager? The millions of workers who contribute via auto-enrolment—people who have never chosen an investment strategy, but who trust pension providers to do the right thing on their behalf.

Those people are not poring over fund fact sheets; they are getting on with work and supporting themselves and their families, hoping that one day they will be able to retire with financial security. This policy asks those savers to place their trust not in pension managers, but in Government Ministers. In doing so, it risks undermining the very trust on which auto-enrolment depends. We can debate whether the level of auto-enrolment is right, but no one challenges whether it is a good thing overall. Yet the Government are putting at risk this success story, around which there has been great political consensus, and the consequences do not stop with pension savers.

What signal does this send to the wider investment community? We hear that major City reforms are to come in the King’s Speech, but will the market really greet those reforms with confidence if this Bill becomes law with mandation in it? Confidence would be created if investors could see that the Government are committed to making the UK a good place to invest in. Mandation sends the opposite message. It tells people that we have a Government who are prepared to go where the UK state does not usually go: to get involved in the allocation of private capital. It tells people that the Government will take a shortcut to getting investment in the UK by forcing pension schemes to do so, rather than fixing the underlying problems. I do not think that the Minister’s colleagues have really thought this through. The easy answer is rarely the right answer.

Where does that leave us? It leaves us at an impasse, with agreement on the diagnosis but profound disagreement on the prescription. We all want more pension investment in the UK, and the Conservatives support moving from a focus on cost to a focus on value. We support removing barriers to the Mansion House accord, but there is no consensus for state compulsion. Pensions belong to the people who earn them, not Ministers. I have yet to find anyone who wants to trust a politician with their hard-earned pension savings, but that is exactly what the Government are trying to force on the country’s savers through this Bill.

Today the Minister finds himself tasked with defending the indefensible, and one provision is preventing an otherwise good Bill from passing. The Government amendments make mandation less bad, but if something is wrong in principle, it does not become right in smaller doses. I leave the Government with one simple message: remove mandation, and the job is done—this Bill will pass.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Andrew Western]

I am sorry to disappoint the hon. Gentleman, but that is not going to happen. We have to deal with the collective action problem that we are facing, to ensure that providers can move forward with the commitments that they have made. The power gives them assurance, but we hope that we will never need to use the power. The fact of the matter is that the industry requires that certainty; without it, it will not be able to move forward, given the collective action problem that exists. That point has been accepted by the shadow Secretary of State.

[Helen Whately]

The hon. Gentleman is quoting selectively from a letter that I have written to the industry. We had this exact debate with the Pensions Minister last week. There is an acknowledged and debated collective action problem; on that, there is a level of consensus, but there is no consensus that mandation is the right answer. In fact, there is a consensus in the sector that mandation is the wrong answer. This Bill contains measures that will make a difference, and will go towards fixing this collective action problem, such as the value for money framework. The Mansion House accord was only signed last year, and the Government should give it time to work. We do not need mandation in this Bill.

[Andrew Western]

On the consensus in the industry, I say to the hon. Lady that it wants this Bill done and taken through this House. Tonight’s amendments make the savers’ interest test easier to pass, create a lower threshold for an exemption, and give certainty that the exemption will be granted where the threshold is met, with due regard being paid to the scheme’s assessment. Reasons for any refusal will be set out.

The House has now considered this Bill three times. On each occasion, it has endorsed the Government’s position. We have listened to the concerns raised in the other place, and we have responded with numerous material changes to the primary legislation across three rounds. The power is capped, neutral across asset classes, restricted to a single use, completely sunsetted in 2035 and subject to a savers’ interest test that tonight’s amendments have materially strengthened.

The TUC has said that it is “vital” that this Bill passes. Age UK has said that the measures in this Bill

“will help both today’s and tomorrow’s pensioners”.

The industry wants to get on with implementing these reforms. The Association of British Insurers and its members have said the same. They have welcomed the safeguards that the Government have put in place on the reserve power. It is time to get this Bill passed, and I commend the Government’s position to the House.

Question put.

Pension Schemes Bill

Helen Whately Excerpts

Consideration of Lords message
Wednesday 22nd April 2026 Commons Chamber

[Helen Whately (Faversham and Mid Kent) (Con)]

What a difference a week makes. When the hon. Gentleman rose to conclude our debate last Wednesday, he delivered from the Dispatch Box what I can only describe as a tirade. Serious and considered concerns—not just from me and my hon. Friends, but from noble Lords and many respected people across the industry—were met with accusations. We were told that those concerns were “nonsense on stilts”. He said that I had been “infected” by my party. If by that he meant that I have strong opinions—that I believe in a smaller state because Governments do not have all the answers and often need to get out of the way—then I must break the news to him that I have held those views for many years. I came to Parliament after a career in business. I knew my views then, and I still know them now.

Last week I thought that the Minister could and should do better, and I am glad that since then he has. His tone has shifted, and I am grateful for the discussions he has had with me and my team. His engagement has been constructive, and we have indeed made progress.

Turning to the amendments tabled since our last debate, I first welcome the Government’s commitment on the local government pension scheme. A faster and wider review of the triennial valuation by the Government Actuary’s Department is sensible and significant. If the review is to be meaningful, it must focus on what actually drives employer contribution rates, and we welcome that the Government have now recognised that.

Secondly, the Government have committed, in their amendment in lieu of Baroness Neville-Rolfe’s amendment 77, to examine the costs and sustainability of public sector pensions. That too is welcome. That review should consider questions of intergenerational fairness, long-term sustainability and how best to protect the benefits already promised to people, particularly at a time when demands on the state are rising and taxpayers are being asked to contribute more than ever.

--- Later in debate ---

[Liam Byrne]

I rise to say a couple of things in support of the Minister, who not only has done a heroic job in laying out the intellectual architecture for the legislation before he got to the House, but is so expertly steering it through the House. I wish him all the very best this afternoon in finishing the job.

I want to make three points. First, the measures that the Minister has set out are essential if we are to pursue the long-term interests of pension savers in this country. It is in their fundamental interests that they live and retire in an economy that is growing faster in the years to come. The only way in which we can collectively achieve that is by raising the investment rate in this country. For a long time, our investment rate was the lowest in the G7; it is improving and is now the second-lowest in the G7. It is for exactly that purpose that hon. Members on both sides of the House made the argument that we need to repatriate investment saving.

The fact is, we have got to resolve the paradox that, on the one hand, we have £3 trillion-worth of pension savings and, on the other hand, while we have some of the world’s best life science, best universities and best entrepreneurs, we do not have the investment institutions and systems that connect long-term savings to that brilliant tradition of entrepreneurial genius. Unless we fix that long-standing paradox, this country will not grow faster. That is not a Labour analysis; it is an analysis that was first advanced by the former Conservative Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt).

If we manage to get that right, the investment rate in the country will go up and the economy will grow faster in the years to come. Therefore, there is not a cost to the savings of Britain’s pension savers—it will actually be to their advantage.

[Helen Whately]

As I think the right hon. Gentleman will have heard in my speech, there is widespread agreement that we want to see more investment by pension funds in the UK; the debate is about whether mandation is the way to achieve that. Actually the Minister’s main argument for the mandation powers is not about investment in the UK; it is about solving a collective action first-mover problem in trying to improve returns and the risk that that will put up costs to pension funds and for savers. That is what he’s really arguing, rather than the point made by the right hon. Gentleman about investment in the UK.

[Liam Byrne]

I am grateful for that intervention, because the hon. Lady made my second point for me. It is just not good enough to will the ends and not the means. The reality is that, after all the heroic work of the former Conservative Chancellor, built on ably by the current Chancellor of the Exchequer to advance the Mansion House accord and the Sterling 20, the repatriation of long-term savings into our country is going at a snail’s pace. If we want to deliver it by a timetable on which we are both agreed, we will need to give a little bit of encouragement to the industry. That is exactly what the Minister’s proposed provision would do.

--- Later in debate ---

[Torsten Bell]

I fear the hon. Lady has not sat through enough of these sessions. Earlier, those on her own Front Bench engaged exactly with some of the arguments that I have made, explaining exactly the points she has raised. I will just say that she should go and have a look at what Australian pension schemes are doing investing in UK infrastructure and go and look at what is happening when US investors are investing in UK venture capital. Why is that happening? It is not because of differential tax breaks—there are very strong tax incentives. No, it is because of a history of not having the collective action problem that we have set out, and the fact that those on the Conservative Front Bench do not wish to engage with that is holding us back.

[Helen Whately]

On the ABI report that he referred to—he has referred to it before—yes, the ABI has agreed with the diagnosis of the problem, as I set out, as a collective action problem. However, it does not agree with mandation as the remedy. The Minister needs to be clear about that.

[Torsten Bell]

The truth is that there is a range of opinion among ABI members about that. However, there is agreement across the industry about the need to deliver change.

I turn to some of the comments made by the hon. Member for Torbay (Steve Darling) who, again, kindly did not refer to the Lib Dem manifesto, which called not just for reserve power, but for the direction of pension scheme assets into certain asset classes. I gently say that it is a shame to not see him engage with the substance, rather than taking the easy option of offering high-level, throwaway comments about a thing that he had in his own manifesto. On the plus side, however, he is right to say that the investment pipeline is important. The issue there is that that is different in different sectors. Within the infrastructure sector, it is obviously about having a country that is delivering actual infrastructure. Within venture capital, it is about making sure that there is easier intermediation for pension schemes into a market of which they have less experience. We are doing exactly that and that is what the Sterling 20 process is doing. I see very good engagement between pension schemes right across the board on that and every chief executive I speak to is engaging with exactly those questions that the hon. Member for Torbay raises.

The Bill has received detailed scrutiny over the past year, and it is a better Bill for it. We have brought forward amendments that, subject to delivering the core pension reform programme of the elected Government, respond to the detailed points raised by peers in the other place. With those improvements, this is a Bill that industry worker representatives and charities wish to see passed into law. The TUC said:

“It’s vital the Bill is passed so workers can start to benefit.”

Age UK has said the measures in the Bill will help both the pensioners of today and the pensioners of tomorrow. It is important that these can be implemented as soon as possible. Aviva welcomed today’s amendments and said:

“We hope this is enough to build the consensus needed for the Bill to be passed”.

The ABI has said that it and its members are

“clear that we want the Bill to pass”.

They are right, and I commend the Government’s position to the House.

Question put.

--- Later in debate ---

That this House insists on its disagreement with Lords amendments 77 and 85 but proposes amendments (a) to (c) in lieu.—(Torsten Bell.)

[Helen Whately]

On a point of order, Madam Deputy Speaker. The last Division we voted on was on a motion proposed by the Government that grouped a series of amendments with which we agreed, alongside amendments on mandation, with which we had strong disagreements. What steps can be taken to bring about a separate Division on the mandation clauses, with which we disagree?

[Madam Deputy Speaker (Judith Cummins)]

I thank the hon. Member for her point of order. The content of the motions is a matter for the Government. I can reassure her that they would not have appeared on the Order Paper unless they were in order. Those on the Government Front Bench have heard what she has said. If she would like any further advice on procedure, I recommend that she contact the Public Bill Office.

Pension Schemes Bill

Helen Whately Excerpts

Consideration of Lords amendments
Wednesday 15th April 2026 Commons Chamber

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

Who knew that the Pension Schemes Bill would become so controversial? It is a Bill on which there was so much consensus; a Bill begun by one party in government and now being continued by another; a Bill that could have sailed through Parliament. But no, that was not to be, because the Government had an idea—a bad idea. Labour saw £400 billion-worth of pension funds, the savings built up through years of successful auto-enrolment, and it was tempted. We can picture Labour Members looking at the pensions piggybank and saying to each other, “Just imagine what we could do with that money—we could perhaps put it towards some of the Energy Secretary’s net zero schemes.” They have taxed the country to the hilt, they cannot bring themselves to make savings on welfare, and they have run the Treasury dry, so now they are coming for pensions.

Labour snuck in the power that we talk about as mandation under the auspices of a backstop to the voluntary Mansion House agreement. Well, well, well. It really did not have to be this way. If only the Pensions Minister had been a little more receptive to suggestions from other parties or from the pension sector itself. It is hard to find anyone who supports his mandation policy. Pensions UK, the Pensions Management Institute, the Association of British Insurers, Aviva and BlackRock—I could go on—are all against mandation, as are any number of economists and respected voices, from Paul Johnson to Dominic Lawson, and even the Minister’s former colleague Ed Balls. In the other place, noble Lords in their droves have sought to expose this policy for what it is. He should have listened to their debate, as I did, but listening may not be something he likes to do. He even blocked one respected industry voice, Tom McPhail, on social media when Tom simply called out mandation for what it is: a dangerous power grab by the Government.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Is not the hallmark of every Labour Government that they end up running out of other people’s money? When they do that, they end up borrowing. When that runs dry, they end up eyeing up our pensions, as Gordon Brown did. My constituents and many people who contact me are deeply concerned by the mandation powers in the Bill and the impact those will have on their savings. Does my hon. Friend agree that this is a real concern? Many people up and down the country are outraged by these powers and what the Government could do with their money.

[Helen Whately]

My hon. Friend is exactly right. Sometimes the Pensions Minister talks about this all as being technicalities, but the fact is that the Government are coming after people’s hard-earned savings, and the public can see it. The Government think it is a pension pot they can mess with. We know that it is people’s own savings. The Government do not know best. [Interruption.] The Minister should not just listen to us; he should listen to the noble Lords in the other place.

The Minister has returned to this House after suffering 12 defeats in the other place. That is what happens when a Government put their fingers in their ears. This situation is entirely of the Pensions Minister’s own making, because there is a great deal of common ground here. Across this House, we want pensions policy to move forward. We have shared ambitions for our pension system, such as boosting pension pots through increased pension scheme scale and a greater focus on returns, rather than minimising costs. We want greater transparency and consumer engagement in the size and performance of pension pots and a system that works better for people with terminal illness. Despite all the consensus, the Minister’s Bill is still far from the finish line.

Returning to Lords amendment 1, which the Government are seeking to eject from this Bill, relates to the mandation powers. I have no disagreement with the objectives of the voluntary Mansion House agreement. On the contrary, I want to see more investment in the UK and higher returns for savers in default pension schemes, and there is widespread support for those objectives, but even the Minister should have realised that he could not get away with saying that the provision is just a backstop to the Mansion House agreement when the mandation power in his Bill was so glaringly different. Back in December last year, I warned him that mandation would not wash, but he did not listen. That is why I have fought mandation every step of the way, along with the pension sector, my colleagues on the Front Bench and the noble Lords in the other place, who resoundingly rejected it.

The Minister is back here with his tail between his legs, and he has changed his tune from, “It’s all fine, nothing to see here”; he reluctantly tabled three amendments last week. I recognise the direction that the Government are trying to move in. They are reining in the power that they are taking, and trying to make it look more aligned with the voluntary Mansion House accord. The fundamental problem remains unresolved, however, because at its core, the Bill still gives the Government the power to direct the investment of people’s pension savings, and that, as a matter of principle, is wrong.

Work and Pensions

Helen Whately Excerpts

Wednesday 25th March 2026 Written Corrections

[Pat McFadden]

I think that the statement offers hope to young people throughout the United Kingdom. I look forward to a positive and close working relationship between the UK and Welsh Governments on this issue, because I believe that both Governments share a desire for young people, in Clwyd North and everywhere else in the country, to have the best start in life. I think that, for example, the £3,000 hiring bonus and the jobs guarantee for the long-term youth unemployed, which are GB-wide initiatives, can help people in my hon. Friend’s constituency and offer hope that there is a solution to the scarring effect of leaving young people to fester in long-term unemployment, which is not good for them and not good for the country either.

Universal Credit: Foreign Nationals

The following extract is from Work and Pensions Questions on 9 March 2026.

[Helen Whately (Faversham and Mid Kent) (Con)]

The working-age benefits bill is set to reach £171 billion by the end of this Parliament, yet the Government are doing nothing to get it under control. In fact, by scrapping the two-child cap, they have added another £3 billion. It is time to stop spending and get saving. The Conservatives would stop benefits for foreign nationals and save £7 billion a year. Britain cannot be a cash machine for the world. With war in Ukraine and now in the middle east, we must boost our national security, so why are the Government continuing to bankroll benefits for migrants rather than investing in defence?

[Andrew Western]

The hon. Lady will be aware that the Conservatives created this system. On her specific question about what we are doing to restrict access to the benefits system by foreign nationals, she will also be aware that the Home Secretary has brought forward proposals to extend the period before somebody can achieve settlement from five to 10 years, and there is a consultation under way to move that point from the point of settlement to the point of citizenship.

[Official Report, 9 March 2026; Vol. 782, c. 6.]

Written correction submitted by the Under-Secretary of State for Work and Pensions, the hon. Member for Stretford and Urmston (Andrew Western):

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[Helen Whately]

The working-age benefits bill is set to reach £171 billion by the end of this Parliament, yet the Government are doing nothing to get it under control. In fact, by scrapping the two-child cap, they have added another £3 billion. It is time to stop spending and get saving. The Conservatives would stop benefits for foreign nationals and save £7 billion a year. Britain cannot be a cash machine for the world. With war in Ukraine and now in the middle east, we must boost our national security, so why are the Government continuing to bankroll benefits for migrants rather than investing in defence?

Youth Unemployment

Helen Whately Excerpts

Tuesday 17th March 2026 Commons Chamber

[Helen Whately (Faversham and Mid Kent) (Con)]

The Government have lost control of welfare. The benefits bill is ballooning. Sickness benefits alone will cost us £109 billion by the end of the decade. Working-age benefits are costing £161 billion right now and rising. But instead of bringing forward welfare savings, Labour MPs have chosen to spend ever more on benefits. Just the other day, they backed an extra £3 billion spending on scrapping the two-child benefit cap. It is all paid for in the same way—by taxpayers, by hard-working people, and by the businesses that employ them.

First the Government tax jobs, and then they wonder why there are fewer of them. Let me tell them: if you tax it, you get less of it. Under Labour, unemployment has gone up month after month. Our youth unemployment now rivals that of Greece, at over 16%. That is one in six young people out of work, wanting employment but denied the chance—and a university degree will not save them, either. Some 700,000 graduates are out of work, and nearly 1 million young people are not in education, employment or training. So many young people have done everything asked of them. They have studied hard, done their exams and got their grades, but now they are getting rejection after rejection to their job applications.

The Government are letting down a whole generation, and the Secretary of State knows it. He said so himself this week on the radio. He talked about the “scarring effects” of youth unemployment: worse mental health, worse outcomes and even lower life expectancy. He is right, so why are his Government making things so much worse? Let us be clear about what this new policy is. It is not a jobs plan or a serious new deal for young people; it is a sticking-plaster, and an expensive one costing over £1 billion. These are state-subsidised jobs to replace the real ones that Labour has killed.

The Secretary of State has laid into our record on apprenticeships, but he knows perfectly well that the drop he refers to happened because we raised the standard of apprenticeships to make them a qualification that would actually count, and to make them a meaningful alternative to university, not just a way for businesses to get cheaper workers. I warn him not to just chase higher numbers in his reforms; quality matters. And why are the Government doing nothing about dead-end degrees and mounting student debt? Why not adopt the policy we have announced of cutting back on low-value degrees, and using the saving to increase apprenticeships? This Government’s answer is to just go back, cap in hand, to the taxpayer.

At the end of his statement, the Secretary of State talked about welfare reform, but why do we never hear the important word “savings”? I think we know why. The Government tried and failed to make welfare savings last summer. What has changed since then? The Prime Minister is only weaker and more indecisive, though the problem becomes ever more urgent. Today’s personal independence payment figures show that claims are up again. There are over 300,000 more people on PIP since Labour took over—a rise of 9%—and the number of young people claiming PIP has risen by 14%. There are nearly 150,000 more people claiming benefits for mental ill health and neurodiversity. I have been clear: this cannot go on. Benefits are not the right answer. Work is better for us. People who can work should work.

The Secretary of State needs to answer some questions. Where exactly has the extra £1 billion that he has just announced for state-funded jobs come from? Will this latest plan actually bring down youth unemployment? Will it even touch the sides? How will he stop fraudulent claims for the cash? How will he make sure that no one loses their job because of his cash handouts? How will he make sure that all this spending makes a difference, and that he is not subsidising employment that would have happened anyway? Does he accept that taxing jobs on the one hand and subsidising them on the other is not an economic strategy, but the economics of the madhouse? Finally, can the Secretary of State at least agree that the benefits bill needs to come down? Perhaps he could take this chance to use the word “savings”. Does he see the irony? Does he understand my feeling of déjà vu? This is another plan from his party for welfare reform that spends more money, rather than saving it. When will he bring forward a plan to actually bring down the benefits bill? He talks about welfare reform; is this it?

[Pat McFadden]

I fear that the hon. Lady’s response was written without her listening to a word in the statement. She has confirmed that the Conservative party not only bequeathed us the problem, but has learned nothing about how to tackle it. There was no statement of responsibility, no statement of regret and no apology for the record on youth apprenticeships—in fact, she defended cutting youth apprenticeship starts. It is a continued pretence that somehow all of this started just two years ago.

The hon. Lady asks where the funding to help young people comes from. It comes from stable management of the economy—something that the Conservatives know nothing about and that we have practised for the past two years. Young people, at whom all of this is aimed, will have heard her disparage efforts to get them into work and to give them more opportunity. They will have heard her dismiss our changes, which will boost youth apprenticeships. They will have heard her pretend that we can somehow wish all this away with tax changes. That proves that the Conservatives have learned nothing from their disastrous management of the economy. They will have heard her say that the package does not offer young people anything, when we have announced a plan to give them a new deal with more jobs and more apprenticeships. That is the difference between our approach and theirs.

I want to give young people in this country opportunities to get skills, to get a job, to get off benefits and to build a better life for themselves. That is much better than kicking the ladder away and leaving the system unchanged, which is what the Conservatives did. How does the hon. Lady explain the number of NEETs rising by a quarter of a million in the last three years in which they were in power? How does she explain their lack of action to deal with it? When it comes to welfare, what I have said today is very clear and simple: the best means of welfare reform is to put work and opportunity at the heart of the system, and that is what we are doing with this plan.

Oral Answers to Questions

Helen Whately Excerpts

Monday 9th March 2026 Commons Chamber

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

The working-age benefits bill is set to reach £171 billion by the end of this Parliament, yet the Government are doing nothing to get it under control. In fact, by scrapping the two-child cap, they have added another £3 billion. It is time to stop spending and get saving. The Conservatives would stop benefits for foreign nationals and save £7 billion a year. Britain cannot be a cash machine for the world. With war in Ukraine and now in the middle east, we must boost our national security, so why are the Government continuing to bankroll benefits for migrants rather than investing in defence?

[Andrew Western]

The hon. Lady will be aware that the Conservatives created this system. On her specific question about what we are doing to restrict access to the benefits system by foreign nationals, she will also be aware that the Home Secretary has brought forward proposals to extend the period before somebody can achieve settlement from five to 10 years, and there is a consultation under way to move that point from the point of settlement to the point of citizenship. However, if it is the Conservatives’ position to suggest that somebody who has worked here for decades, contributed to the system and made a positive contribution to this country should have absolutely no access to support, we have a fundamentally different point of view.

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[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

[Helen Whately (Faversham and Mid Kent) (Con)]

Madam Deputy Speaker, you are no doubt familiar with the dramatic principle of Chekhov’s gun: if there is a gun on the wall in the first act, it will be fired by the final scene. Ministers say that the mandation power in the Pension Schemes Bill is merely a backstop that they do not intend to use, but once they have a power in law like a gun on the wall, how long will that intention last? Will the Secretary of State make a commitment to the House that the mandation gun will never be fired at the expense of UK pension savers?

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

I thank the hon. Lady for her question. She will know that the industry itself set out in the Mansion House accord that it thinks there needs to be change in the pattern of investment in our largest defined contribution schemes. It says that because it is in the interests of savers, and that is why the previous hon. Member for Hexham, the longest-lasting Conservative Pensions Minister, labelled it a good thing. All the Pension Schemes Bill does is put in place the mechanism to make sure that change, which the industry has said is in the interest of members, actually happens.

[Helen Whately]

Given that the savings of millions of people are at stake, I am disappointed that the Secretary of State did not rise to answer this important question. The Pensions Minister needs to stop conflating the voluntary Mansion House agreement with changing the law to give Government the power to direct pension fund investments. The two are not the same. Both the Association of British Insurers and Pensions UK are urging the Government to drop the mandation power from the Bill. The Pensions Minister has a tendency to think he always knows best, but he is not always right; apparently, the Ed stone was his idea. Let us not have people’s retirements savings suffer the same fate as the quest of the right hon. Member for Doncaster North (Ed Miliband) to become Prime Minister. The Government should not be giving themselves control over how people’s retirement savings are invested, but that is what mandation does. I am against it, the pensions sector is against it, and savers are against it. Will he listen and change tack?

[Torsten Bell]

The hon. Lady is going to be absolutely furious when she finds out what those on the Opposition Front Bench did when the Pensions Schemes Bill came through this House. There is all this sound and fury now, but, when it came to choosing whether to vote against the very power she now says is incredibly dangerous, she went for a snooze on both Second and Third Reading. She is going to be even angrier when she finds out what her right hon. Friends the Members for Salisbury (John Glen) and for Godalming and Ash (Sir Jeremy Hunt) have called for, which is the mandation of pensions schemes in the UK to invest—

Universal Credit (Removal of Two Child Limit) Bill

Helen Whately Excerpts

Committee of the whole House
Monday 23rd February 2026 Commons Chamber

[Helen Whately (Faversham and Mid Kent) (Con)]

I thank my hon. Friends for their contributions during the passage of this Bill. In particular, I thank my hon. Friend the Member for South West Devon (Rebecca Smith), who has argued with true passion against the Bill, drawing on her own experience as well as her sound principles. I also thank my hon. Friends the Members for Solihull West and Shirley (Dr Shastri-Hurst) and for Hinckley and Bosworth (Dr Evans), my right hon. Friends the Members for Tonbridge (Tom Tugendhat) and for North West Hampshire (Kit Malthouse) and my hon. Friend the Member for Bridgwater (Sir Ashley Fox), who spoke on Second Reading, and my hon. Friend the Member for Weald of Kent (Katie Lam), who spoke in Committee this evening, and pointed out with customary clarity the flaws in the reasoning of Labour Members.

We have all seen the strength of feeling among MPs who support this Bill, but passion does not make a policy right. Children are a blessing, but they are also a responsibility. Parents up and down the country work long hours and make sacrifices to bring up their children. Many couples question whether they can afford one child, let alone three, four or five. They make tough but responsible choices, yet this Bill means they will be taxed to fund other people who make choices they know they cannot afford, and that is fundamentally unfair. It is unfair to people who make responsible decisions, unfair to people who decide to live within their means and unfair to the people who cannot get a job, let alone afford to start a family, because this Government are wrecking the economy with ever higher spending and higher taxes.

People do not get a pay rise from their employer when they have another child; they make their money stretch further. However, for people on universal credit, this Bill means their benefits will rise by thousands of pounds for each extra child they have. Some families are about to get tens of thousands of pounds extra. A single parent with five children will be able to get £10,000 more, and an annual income just from benefits of over £45,000 untaxed. To get the same through work, someone would need to earn £60,000.

I heard that the Secretary of State for Work and Pensions, who is standing behind the Chair, was due to talk about welfare reform this evening. I say to him and all Labour Members that anyone serious about welfare reform or about ending the welfare trap would vote against a Bill that makes benefits pay this much more than work. Anyone serious about fiscal responsibility would not vote for a Bill that adds £3 billion a year to the ballooning welfare budget and costs £14 billion over the next five years. That money is not just sitting there jingling in the Treasury bank account waiting to be spent on this; it will have to be taken from a small business desperately trying not to let staff go, from a family already struggling with food and energy costs, or from the next generation through higher borrowing. However Ministers dress it up, someone else will pay.

Labour Members have said that this Bill cuts child poverty. What they generally mean is that it reduces relative poverty, a statistic that tells us nothing about whether children’s lives are actually looking up. They ignore that relative poverty tends to look better when the country gets poorer, which is exactly what their policies are doing to this country. They have done it before and they are doing it again—taxing more to spend more, killing growth and killing jobs.

What really makes a difference to children’s lives is having their parents in work, but what are the Government doing about that? They are making it less likely. Under this Government, we have seen—[Interruption.] I know that Labour Members do not want to hear it, but we have seen the fastest increase on record of children growing up without a parent in work. Unemployment has gone up every month; now it is at its highest for five years.

This debate is about more than just one policy; it is about two different visions for our country. Labour’s answer to every challenge is the same: spend more money. Labour Members see people as victims of circumstance, and their instinct is always to compensate rather than change the circumstance. We see it differently. We know that children are better off if the country is better off; if there are more jobs, higher wages, lower inflation and stronger growth. Look at the moments in our history when living standards rose for everyone. It was when people were motivated to strive, ideas were turned into businesses and hard work reaped rewards. That is how countries get ahead and their children thrive. [Interruption.]

I do not expect the argument that I am making to be popular in this Chamber, although—[Interruption.] I am not expecting Labour Members to like what I am saying, but it is popular out there in the real world. I know that every other party represented here wants to expand the state—not just Labour, but the Lib Dems, the Greens, the SNP, Plaid, and who knows how Reform will vote tonight? I can see one Reform MP is here; maybe somebody will help his colleagues to find their way to the right Lobby tonight.

I think Reform now says that it would keep the cap, but it still does not back it in principle; it is just a question of timing. Well, well. The Prime Minister has decided that the time is now because he needed to save his skin. He is not a Prime Minister who will take the tough decisions to control the welfare bill and make work pay, because that would require a backbone and the support of his Back Benchers. Only Conservatives are prepared to make the argument for welfare savings and stand up for principles like fairness, personal responsibility and living within your means. Other parties compete to be more generous with other people’s money; we do not. Conservatives believe in a country where work pays, responsibility is valued, and welfare is a safety net, not a lifestyle choice. That is the difference not just over the two-child cap, but over the direction of Britain itself.

Universal Credit (Removal of Two Child Limit) Bill

Helen Whately Excerpts

2nd reading & Money resolution
Tuesday 3rd February 2026 Commons Chamber

[Helen Whately (Faversham and Mid Kent) (Con)]

Every week, millions of people up and down the country sit at their kitchen table and do the sums to work out what is coming in, what is going out, and what simply is not affordable. Sometimes the conversation may take a more serious turn to one of life’s biggest decisions: “Shall we start a family?” or “Can we afford another child?” Though romantics might love that to be a decision about whether people want the joy of bringing new life into this world, the reality is that many ask themselves, “Can we afford it?” They are not looking to someone else to help them make ends meet or pick up the bill; they are just doing the maths. That is a difficult conversation, but Members have to ask themselves a simple question before we vote: why should people on benefits get to avoid the hard choices faced by everyone else?

Let us be clear about what the two-child cap is and what it is not. The two-child cap restricts the additional universal credit a household can get to the amount for two children, with carefully considered exceptions, such as twins or non-consensual conception. It does not apply to child benefit. It says that there is a limit, and a point at which it is simply not fair to make taxpayers fund choices that they themselves cannot afford to make.

[Dame Meg Hillier]

What does the shadow Secretary of State have to say to my constituent, who found herself single with three children in temporary accommodation and then moved into a one-bedroom flat? In those overcrowded conditions, her youngest got ill, and she had to give up her good job to look after that child. This Bill is a lifeline for her. She wants to go back to work, but it is difficult. She did not choose to be in that situation—it was not a choice. And, for the record, most of my constituents do not have space for a kitchen table.

[Helen Whately]

I am sure that all of us in this House care about poverty and children’s prospects, but the answer is not to spend more, to hand out more money and to trap people in worklessness; the answer is to support people to work, and that is exactly the opposite of what the hon. Lady’s Government are doing.

We all know that bringing up children is expensive and important, but when working couples are having to make tough decisions about whether they can afford to start a family at all, they should not be asked to pay higher taxes to fund someone else to have a third, fourth or fifth child. Someone who is in work does not get a pay rise because they have another child. If we are serious about avoiding a benefits trap, whereby it pays more to be on welfare than in work, we should be honest about what happens if we lift the two-child cap. Benefits for individual households will rise by thousands. Nearly half a million households will receive around £5,000 more on average. A single parent on universal credit with five children could get an extra £10,000 without doing any work, taking their household income to more than £45,000, untaxed—people have to earn about £60,000 to get that income from work! Around 75,000 households will get between £10,000 and £21,000 extra as a result of this Bill. For some households, the extra money will be more than a full-time income, after tax, for someone on the minimum wage.

[Joy Morrissey (Beaconsfield) (Con)]

Does my hon. Friend agree that it is an issue of fairness for the taxpayer if people are working hard in a job but being rewarded less than someone else getting benefits? That is why we need to keep the two-child benefit cap.

[Helen Whately]

It is exactly as my hon. Friend says. The extra money that some families will be receiving—without even working—would require such a high income to achieve through work. This simply exacerbates the poverty trap.

[Several hon. Members rose—]

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[Helen Whately]

I will give way to Members on the Government Benches in a moment. I just ask them to think about the implications of the extra money that people will be receiving. Some people will—frankly and factually—calculate that they can boost their income far more by having children than by working. The best way out of poverty will not be work—[Interruption.] Government Members do not like to hear this, but I am afraid it is just rational. The best way out of poverty will not be work; it will be having babies.

I want to address the argument that lifting the cap is necessary because women are not having enough babies. We know that a declining birth rate is a cause for concern, but falling birth rates are driven by many factors, including changes in people’s aspirations, the poor jobs market, the cost of housing and childcare, the penalties that motherhood imposes on careers and the changing nature of 21st-century relationships. Children are important and we need to have more, but the answer to that complex problem is not, “Here’s some cash for having a kid.”

[John Grady]

We in the Treasury Committee looked at this issue extensively, and I am unaware of any particular evidence that supports the behavioural arguments the hon. Lady is setting out. In any event, why should 95,000 bright and talented children in Scotland be punished by an utterly cruel policy? Is it not fatuous to suggest that people are having children for money, as well as insulting to people in Glasgow and across the United Kingdom?

[Helen Whately]

The fact is that people do the sums. That is the reality of the world we live in. The hon. Gentleman indicated that he is a member of the Treasury Committee, so he must be interested—even though he is looking at his phone—in these unavoidable questions. Where will the £3 billion to fund this Bill come from? Where will the £14 billion over a five-year period come from? We all know where it will come from: taxpayers—either today’s or tomorrow’s—and the men and women who get up every morning, go to work, pay their bills and do the right thing. In the last Budget, as she knows, the Chancellor made a deliberate political choice: to raise taxes on people who work and save, so that millions who do not work will receive more in benefits. Working families already make hard choices. Many already strive and struggle to live within their means. This Bill asks them to shoulder even more.

[Nadia Whittome (Nottingham East) (Lab)]

The shadow Secretary of State must know that the vast majority of families in poverty include at least one adult in work. She asks how this Bill is being paid for. Well, it is being paid for by increased taxes on gambling giants. Would it not be more truthful to say that the hon. Lady is on the side of gambling giants rather than children in poverty?

[Helen Whately]

Unfortunately, the hon. Lady does not seem to understand that hypothecated taxes are not a thing. What she has said simply does not make sense. The fact is that this Bill will cost the Government money, so it will cost taxpayers money, either now or in the future. That is simply the way it works.

[Sir Desmond Swayne (New Forest West) (Con)]

I have a question too.

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[Helen Whately]

I would be delighted to hear it.

[Sir Desmond Swayne]

We now hear shouts of “cruelty” and “the rape clause”, but I see only one of the seven who were suspended sitting on the Labour Benches. The rest of them kept their heads down and voted to perpetuate what they now call cruelty and the rape clause. How do they sleep at night?

[Helen Whately]

My right hon. Friend has indeed made a significant point about the strange position in which so many Labour Members find themselves. Having previously voted against lifting the cap, here they are now, delighted about lifting it.

Labour Members say that the Bill will end child poverty. They have read that increasing handouts will decrease the metric called relative poverty. However, relative poverty is a deeply misleading measure. It is not an accurate measure of living standards. It tells us nothing about whether people have enough to live on, or whether children will have better life chances. It can get worse when the country gets richer, even when living standards for the very poorest are rising, and it can look better when people are getting poorer. That is not progress; it is levelling down. Throwing money at one flawed metric is not a strategy. In fact, it risks doing the opposite of what Ministers claim to want, trapping families in long-term dependency rather than lifting them out of it.

There is a proven way in which to improve children’s life chances, and that is work. Work allows parents to provide for their families, to pay the rent or mortgage, to put food on the table and clothes on their children’s backs, to set an example to their children, and to create structure and routine in their households. The Centre for Social Justice has found that children in workless households are four times more likely to be materially deprived, but under this Government the number of children growing up in workless households has risen at the fastest rate on record, and has now reached 1.5 million. Contrast that with our record, Madam Deputy Speaker. From 2014 onwards, the number of children in workless households fell year on year. We lifted a million people out of absolute poverty, including 100,000 children, and we drove unemployment down to historic lows.

Under this Labour Government, unemployment is rising month after month, so, sadly, the number of children in workless households will continue to increase. Inflation is up as well, to almost double the level that the Government inherited. Higher inflation means that the money in your pocket is worth less: in other words, you are poorer. Fewer jobs, more unemployment, a higher cost of living—that is what the Government are doing to people. I say this to them: you do not lift children out of poverty by making the whole country poorer.

[Stuart Anderson (South Shropshire) (Con)]

I am enjoying listening to Members who say they have met constituents who have suffered hard times. I grew up in hard times, on welfare, through the death of a parent, watching my mum go without food to feed us. There is no possible way, given that the cuts to benefits have been pulled, that the country can afford this. We will have no defence of the realm. South Shropshire residents will start going without. There is no feasible way to fund this measure, whichever way Labour Members look at it. Does my hon. Friend agree with me?

[Helen Whately]

My hon. Friend has made the important point that no other party in the Chamber seems to realise what a serious financial position the country is in. We have to ask ourselves hard questions about what the country can afford.

[Clive Lewis (Norwich South) (Lab)]

We on the Labour Benches at least understand the historical consistency:186 years ago the Tories made economic arguments against stopping children being sent up chimneys, and 186 years later they are making the same arguments, about stopping children being put into poverty. Same old Tories, nearly 200 years later!

[Helen Whately]

If the hon. Gentleman listens to what I am about to say about the back and forth on this policy on his side of the House, he will see that he should think a bit harder before talking about “consistency”.

So what is this Bill really about? If Labour truly believes that lifting the two-child limit is essential to tackling poverty, why did it take the Prime Minister 18 months to do it? Years ago he called the cap “punitive” and promised to scrap it, but then, once he had secured the leadership of the Labour party, he changed that tune. He said that Labour was not going to abolish the two-child limit. His Chancellor, who is sitting on the Front Bench, said that it was unaffordable. Just six months ago, the Government even suspended the whip from MPs who voted to lift the cap, but now that the Prime Minister’s leadership is under threat, it is the end for the cap. How long will it be before he goes the same way? That is the real reason we are debating the Bill today: we have a weak Prime Minister, running scared from his left-wing Back Benchers.

Talking of the left wing, I expect that Labour will be joined in the Division Lobby later by some of the Opposition Members sitting to the left of me. No doubt the Liberal Democrats, the Scottish National party and Plaid Cymru will also be competing to see who can be the most generous with other people’s money. Reform UK has jumped on the welfare spending bandwagon too. You will have noticed, Madam Deputy Speaker, that we have not tabled a reasoned amendment today, not because we think that the Bill is perfect—I hope that is clear—but because any amendment would still leave us with a watered-down version of the cap. Other parties have got in a right muddle on this—one in particular—but to us it is clear and simple: the cap should stay. Anything else is a worse policy. Amending the Bill is not the right answer; the House should just vote it down.

First and foremost, I have argued against the Bill on the grounds of fairness, but there is another reason to vote against it. More than 50% of households now receive more from the state than they pay in. The benefits bill is ballooning. Health and disability benefits alone are set to reach £100 billion by the end of the decade—more than we spend on defence, education or policing. The benefits bill is a ticking time bomb. We have to start living within our means. Other parties are simply in denial about the situation that we face in our country. The Conservatives are the only party that recognises how serious this is. We would not be spending more on benefits; in fact, we have explained how we would be saving £23 billion. We would stop giving benefits to foreign nationals, stop giving benefits for lower-level mental health problems and milder neurodiversity, stop the abuse of Motability, and bring back face-to-face assessments. We would get the benefits bill under control, and back people to work.

Labour claims to be compassionate, but there is nothing compassionate about making welfare the rational choice, nothing compassionate about rewarding dependency over work, and nothing compassionate about saddling working families with higher taxes to fund political U-turns. Outside this place, people can see what is happening. They know when a system is unfair. They know when a Government have lost their way. They know when a Prime Minister’s time is up. Members should not be enticed by his final throws. They should step back and do what is right for the country. They should back people who do the right thing, back jobs and work and lower taxes, and back living within our means and raising the standard of living for everyone, rather than backing a policy that will add billions to the benefits bill and trap parents in a downward spiral of dependency. This Bill does not end poverty. It entrenches it, so we oppose it.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Work and Pensions Committee.