State Pension Triple Lock

Hywel Williams Excerpts

Tuesday 8th November 2022 Commons Chamber

[Hywel Williams (Arfon) (PC)]

It is a pleasure to follow the hon. Member for Newport West (Ruth Jones) and the hon. Member for Gloucester (Richard Graham); they are both my friends. I was glad to hear the hon. Member for Gloucester refer to Steve Webb, who I thought was a fine Pensions Minister and deserves credit for his work in bringing in the triple lock in the first place. My party has always pressed—as well as we can from this small part of the Bench—for pensions to be linked more to earnings, which, on the whole, would ensure that pensioners were not continually in poverty, and the triple lock does that to an extent.

Around one in five people in Wales lives in relative poverty. Pensioners are among the groups hardest hit by the jump in energy and food prices, and there are severe long-term consequences to being unable to afford food and heating. Public policy, social policy and health policy in Wales are very much geared towards the concept of wellbeing rather than the separate headings of health, benefits or whatever. That is the thrust of policy in Wales, but the severe consequences of being unable to afford food and heating very much militate against it. The income squeeze is also preventing some people from engaging in social activities, which are crucial for wellbeing. The cost of those activities might be small, but they are often the first things to go when people have to economise.

As has been said, the UK spends below the OECD average on state pensions, which compare poorly relative to average earnings. The UK also compares poorly on the net replacement rate, which I do not think has been mentioned. That measures pensions as a percentage of previous earnings, and the difference is quite significant: for mandatory pensions at least, the UK stands at 58.1%, the OECD is at 69.1% and the EU is at 70.8%.

As a number of Members on both sides of the House have said, the triple lock ratchet has been very effective, and abandoning it will trap some older people in persistent poverty. That would make the case for a fundamental review of the state pension even more pressing than it is now, and such a review must be aimed at eradicating pensioner poverty.

Meanwhile, auto-enrolment to pension credit should be introduced, and mechanisms for doing that—using the Post Office or perhaps banks—have already been suggested. That would be a way of providing direct financial support and a gateway to further benefits and support. In Wales, it would mean immediate financial relief for more than 70,000 households who are eligible for pension credit but who do not claim it at present.

I want to refer briefly to two pension scandals—“scandals” is the correct term—both of which need immediate action. I will not go into any detail about the plight of WASPI women, as that has been referred to already, but the Government really should set out the steps they will take to compensate 1950s-born women.

The second scandal, which has not been mentioned and which has been pressing for many years, is the plight of former Allied Steel and Wire workers, who lost their livelihoods and their pensions when the firm went bankrupt in 2002 in very distressing and suspect circumstances, which I will not go into now. Under the financial assistance scheme and the Pension Protection Fund, any money paid in before April 1987 was not fully inflation-proofed, and many ASW pensioners have been severely impacted, with some receiving only half the value of what they are actually owed. When my right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) asked what that meant in real terms, the response from the DWP was that it would be too costly to find out. Well, the ASW pensioners are actually paying that cost, and the response from the DWP was a disgrace, so I press the Government to look at that case yet again.