(6 years, 5 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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This is a brand new benefit that, for the first time, looks not just at people with physical disabilities, but fundamentally at all the disabilities people have—cognitive, sensory, health and mental health conditions—and supports more people than DLA ever did.
Nobody was forced to come here to explain why I did not appeal the mobility case. I made a decision by myself, which I thought was true and in keeping with how PIP was designed, and I made sure that we did not seek leave to appeal that.
There was a period of uncertainty for the five months between the court case and when the new regulations came into play. I agreed that in the cases of AN and JM, they should not be living in uncertainty. I believe that in both instances, I have done the right thing in not seeking leave to appeal.
I appreciate that the Opposition do not like to hear the fact that we have, I would say, made a positive move by not seeking to appeal and by supporting these extra people. No one would believe it from the screams from the Opposition Benches, but what I have decided to do and what this Government have decided to do is to support disabled people as best we can and to provide this new benefit, which is a personalised, forward-looking benefit, which was not the case with DLA.
How many claimants will be affected by this decision, which I welcome? Will my right hon. Friend reassure the House that it will in no way impact on her sterling efforts to ensure that more disabled people find their way into work?
My hon. Friend raises several questions about helping disabled people into work. Over the last three years, we have helped more than 600,000 people into work. People will know that PIP is a benefit for those in work and those out of work, and we have helped another 200,000 people in work through PIP. This is what we are about: supporting disabled people who are in work and out of work, and bringing in a more tailored and personalised benefit. What I will say is that if something has gone wrong and if something is not right, we will correct it to make sure that people get the payments they deserve.
(6 years, 5 months ago)
Commons ChamberThe pensions industry can and should make the most of the opportunity presented by FinTech. We believe that if it is to succeed, it will be vital for industry and Government to collaborate in the development of the pensions dashboard. As others countries have shown, pensions dashboards are a fantastic way of giving people access to pension information in a clear and simple form, bringing together an individual’s savings in a single place online.
Well, the question was about Windsor, but the answer was broad and expansive in its scope. The hon. Member for Horsham (Jeremy Quin)—as befits a former constituency chairman of mine—is a keen young fellow, and I think that we should hear from him.
Young? You flatter me, Mr Speaker. I already had my excuse: I was going to say that we were all taking a close interest in the Windsor constituency at present. My particular interest, in relation to Windsor pensioners, is in the fact that they are being held back by a lack of knowledge about their pension provision. Does my hon. Friend agree that a properly constituted pensions dashboard would encourage pensioners to take their own fate in their hands, and would encourage accountability?
It is true that Windsor is the centre of the universe, and we should all congratulate Prince Harry and Meghan on their marriage at the weekend. It is also true that Windsor, and all parts of the United Kingdom, will benefit from the pensions dashboard. The internet has transformed travel, insurance and other businesses when they have gone online, and we believe that when the pensions industry comes out of the Victorian age and goes online, there will be great progress for everyone.
(6 years, 7 months ago)
Commons ChamberWe have had this debate before, and this has been corrected many times. Actually, 50,000 more children are going to have free school meals. These scaremongering stories are not true at all. Let us look at what is happening. We now have 1 million fewer people in absolute poverty—a record low. We now have 300,000 fewer children in absolute poverty—a new record low. There are also 500,000 fewer working-age adults in absolute poverty—a record low. This Government are about helping people to get into work, which is the first step they can take towards taking control of their life. From there, they can have career progression.
I commend my right hon. Friend for the roll-out of universal credit. How does that compare with the debacle that was the implementation of tax credits under a previous Government?
Order. No dilation is required. A pithy encapsulation of what the Secretary of State regards as her personal triumph is one thing, but a lengthy denigration of the policies of the previous Government would be another.
(6 years, 8 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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I am grateful for the opportunity to speak, Mr Davies. I am most grateful to my hon. Friend the Member for Chippenham (Michelle Donelan) for calling this debate. Too often, we come to the Chamber to have a good moan about things, but I sincerely hope that we have cross-party agreement today. Auto-enrolment should be warmly praised on both sides of the House, because it has been a great success. Some 19 million people are now enrolled in qualifying workplace pensions, 9 million of whom came through auto-enrolment. That means that we have increased by a quarter the percentage of the population who are in qualifying schemes. That is a success on any terms.
In addition to the policy being a success, its execution has been a success. My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) was too modest to refer to his role in that, but a succession of Secretaries of State, both Conservative and Labour, oversaw the successful introduction of a good policy. For 1 million employers to be part of the scheme—including, I am proud to say, 1,860 in my constituency—and for opt-out rates to be as low as they are is a success.
I will dwell on that success for just a second longer while I talk about the long-term implications of what we have done. It is estimated that by 2019-20 an extra £20 billion a year will be being saved in pensions, which will ensure that people have a more comfortable retirement than would otherwise have been the case. There is more success in the small print: the biggest increase in participation has been among those on lower incomes and those working for smaller employers.
Unfortunately, as we are all aware, that is not the end of the story. We have had such positive buy-in from employers that, like other Members, I am nervous about the increase in the contribution rate to 3% in April 2019, but that is clearly a risk we have to take. If we cannot take that risk and push that envelope at a time when we have record rates of employment, there will never be a time for it. Even from there, as has been alluded to by my hon. Friend the Member for Chippenham and by my right hon. Friend the Member for Preseli Pembrokeshire, a savings rate of 8% will still leave 12 million individuals undersaving for their retirement.
We all know the huge power of inertia. There is a real risk that if people are told that is what they have got to save, they believe that is what they need to save, but we in this House know that that is not the case. The evidence from Australia and elsewhere is that higher rates will be required. I welcome the scheduled review of contribution rates. It may be difficult and painful, but it is necessary. I also welcome some of the other proposed reforms over the next few years that have been alluded to, such as lowering the relevant age from 22 to 18, bringing an extra 900,000 workers into the scheme, and removing the lower earnings limit, which will add nearly £3 billion a year to benefit in particular lower earnings workers, those with a part-time job and those with a number of part-time jobs.
My hon. Friend the Member for Chippenham eloquently described the issues faced by the self-employed. I agree that a participation rate in that growing sector of 19% is far too low. That is rightly a matter of concern. She produced some interesting ideas, and I look forward to the ministerial response. She and I would agree that there needs to be a structure in place for the self-employed. Again, it comes back to default and inertia: as long as there is no structure in place, they will not feel a need to go in, participate and make the provision for retirements that they require.
Many good things are coming out of the review. Of course, I have extra questions to ask my hon. Friend the Minister. Has the Department made an estimate of the number of individuals with earnings below the trigger rate of £10,000 per annum who are opting into the scheme? That would be good to know, to work through whether the scheme can be usefully extended below that rate. Opt-out rates are particularly low, but less so for small and micro-employers. Is that a matter of concern for the Department? What is it doing to address that?
My hon. Friend the Member for Amber Valley (Nigel Mills) referred to the need to understand the position and what can be done about it. I would love to hear more from the Minister about the pensions dashboard, which he referred to in his intervention, which I want to see extended to cover not just pensions but more assets. I also want to hear more about the mid-life review. My hon. Friend the Minister is a mere spring chicken, so he may not be under any personal time pressure to implement a mid-life review, but an MOT, as recommended by John Cridland, would be an excellent way to help people, as the Minister said, understand where they stand.
I call Paul Masterton— I think you have got time for your pension.
(6 years, 9 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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I am pleased to follow the Chairman of the Select Committee. In the recent past, with regard to BHS, his Committee and this House have raised grave concerns about corporate governance in private companies. Does my right hon. Friend agree that those concerns are particularly pertinent when private companies are so reliant on the public sector? If she shares those concerns, will she ensure that that is included in the remit of the NAO report?
(6 years, 9 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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And finally, Mr Speaker.
Will my right hon. Friend confirm that PIP claimants, including those who will benefit from her decision, which I warmly welcome, will not be subject to the benefit cap in respect of these payments, and that payments will continue to be untaxed and, indeed, will rise by the rate of inflation?
(6 years, 9 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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The situation is being assessed at the moment, and what happened is being investigated. The regulator already has the power to look into anti-avoidance measures and enforcement, which could be utilised to do precisely what the hon. Lady talks about. Strengthening the regulator’s hand was in our manifesto, and we will be bringing that forward in the White Paper.
Hon. Members are understandably focusing on the directors of Carillion but, having been through the BHS investigation conducted by this House, I encourage my right hon. Friend to look closely at the expertise, advice and powers available to pension trustees.
(6 years, 9 months ago)
Commons ChamberIt is a pleasure to follow the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy). I was interested in what she had to say, particularly about care leavers, which is a subject I hope we will take up later.
Notwithstanding its many flaws, the market economy is the best means we have to improve the long-term living standards of our people. The pace of technological change, however, and the impact wrought have, for all their many improvements, given rise to real concern among consumers. We have moved rapidly from a pensions and savings environment that, for most, was relatively simple: a pension entitlement derived from the state or from an employer after many years—perhaps a lifetime—of continuous service; a relationship with a known bank manager in a local branch; and savings, where they existed, that perhaps focused on state provision such as national savings or premium bonds.
Instead, we have moved towards a system where choice is far wider. Returns are likely to be far better, but risks undoubtedly increase. This transformation has taken place at the same time as confidence and trust in financial service providers—I speak as a former company adviser—has rarely been lower. The products available can and will act in the interests of society and play a role in particular in meeting the needs of our expanding retired population, but we need to provide people with access to the tools and services they need to plan their financial future with confidence. Not enough people know how to manage their money effectively, and it is in all our interests that we help to bridge that gap. Above all, however, we have an obligation to ensure that those who are most in need of support and guidance receive it.
It is my privilege to be a member of the Financial Inclusion Commission, which has championed many of these issues, and I am delighted to welcome the Second Reading of the Bill, as indeed I did, in advance of its arriving in the House, in an Adjournment debate on financial inclusion at the end of last year. As a member of the Work and Pensions Committee, I enjoyed meeting the some of the existing providers: Pension Wise and the Money Advice Service and Pensions Advisory Service. These have given sterling service, and I am delighted to understand that the leaderships of all three organisations view the creation of a single body as the best means to ensure that those who are struggling can easily access free and impartial guidance to help them make more effective decisions about their pensions and seek advice on debt.
We have already heard a great deal this afternoon on the scale of the problem the Bill seeks to help address, and I will not repeat what has been said, but one fact we have not heard is that Citizens Advice has found that 13.5 million adults find managing money and making financial decisions challenging. People across the income spectrum lack good financial guidance and advice to make the right long-term decisions for old age. Increasing longevity only contributes further to this phenomenon. The fact that we have 8.5 million people auto-enrolled for a pension is good news indeed, but as a recent report from the Select Committee highlights, the fact that more people will be able to benefit from the pension freedoms the Government have introduced makes the availability of effective guidance all the more critical.
The creation of a single financial guidance body is being welcomed not only across the House but among charities and industry. At present, according to Which?, and as was alluded to earlier, only 36% of consumers use Government advisory bodies as an information source about their financial options. I hope that the creation of this body will help to increase uptake, particularly among those who have most to benefit. The Bill sets out the objective that guidance be available to those most in need of support. In the Adjournment debate, I raised issues faced by the disabled, lone parents and single pensioners, while my hon. Friend the Member for Mid Derbyshire (Mrs Latham) has just referred to the terminally ill. I hope that the Minister will agree that, as we measure the success of this body, we will scrutinise its ability to direct support to the hardest-to-reach people who need it most.
More broadly, I hope that the establishment of this body will serve as an important step towards a culture change and a situation where guidance is sought as a norm at key points in one’s life. Pension Wise was a significant step towards this goal, but given the importance of pension saving earlier in life, I am keen to see this service available to all, rather than restricted to the over-50s.
I appreciate that the terms of the body are yet to be specified, but I would be interested to hear the Minister’s view on the accessibility of pension guidance earlier in life. Unlike the hon. Member for Airdrie and Shotts (Neil Gray), who made a good contribution earlier, I was pleased to learn that the name of the body had not yet been announced. We will therefore not have a bunch of imposters setting up rival sites. I welcome the specific offence being established in the Bill. The last thing any of us would want is for those who are seeking help to find themselves victims of scams.
In any event, in common with the hon. Member for Makerfield (Yvonne Fovargue), I urge caution about too much reinvention of the wheel. Originally, the intention was for the single financial guidance body to be purely a commissioning body. We are all aware of trusted and well-established organisations in our own constituencies, such as Citizens Advice, at national level, and many more organisations at local level. In my case, that includes the Horsham Debt Advice Service. The new body will be most effective as an enabler, a director of resource and an upholder of standards. I trust that that is but the first of many steps to enhance individuals’ ability to manage their finances effectively, and I have sympathy with the points raised earlier about financial resilience and financial education.
I look forward in particular to the report on the pensions dashboard that, as I understand from the Secretary of State’s words at the Dispatch Box, will be produced in March. The dashboard will be of significant benefit to consumers and will help to drive cultural change in the industry and among savers. I know that I am not alone in thinking that, alongside the pensions dashboard, more visibility for other forms of saving would be advantageous.
Finally, I want to touch on the debt respite provisions that have been incorporated into the Bill. I welcome them, and I hope that the guidance body’s report and the Government action that follows will be accelerated as swiftly as possible, as the hon. Member for Kingston upon Hull West and Hessle has said, consistent with effective legislation. Although the provisions are useful and appropriate, they will not solve the problem of debt. The nature of the debt providers matters. I hope that I am allowed, as the chair of the all-party group on credit unions, to make a small plug in favour of credit unions. The amount that they lend has doubled since 2006, and they now have 1.3 million members across the country. That is to be welcomed. The more people save with and borrow from responsible providers, the better. For all who get into difficulty, a breathing space is a practical and essential measure. I commend the Bill to the House.
(6 years, 11 months ago)
Commons ChamberI am grateful for the opportunity to raise the crucial subject of financial inclusion and the single financial guidance body. It has been more than two years since financial inclusion was considered by the House, in a Westminster Hall debate secured by my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd). He applied for the debate to draw Members’ attention to the invaluable work conducted by the Financial Inclusion Commission, the cross-party body on which he served. I have since had the honour of succeeding him in that role. The last two years have seen the publication of an excellent House of Lords Select Committee report into this issue.
We are approaching the halfway point to 2020 by when the commission still hopes to see a step change in financial inclusion. The commission’s report covered a wide range of recommendations and demanded that, by 2020, every adult should have access to objective and understandable advice on credit, debt, savings and pensions. Among other objectives, it also called for a specific Minister to take the lead on financial inclusion and financial capability. I am delighted that a Minister with just those responsibilities will respond to this debate, and I know that his task is to break down silos across the Government on this important issue. I congratulate the original authors of the commission’s report on achieving that objective, and I also congratulate the Minister. I know that he is deeply committed to this area and, as a former director of a credit union myself and the chairman of the all-party parliamentary group on credit unions, I recognise a kindred spirit given his extensive work supporting credit unions in his constituency.
It is a fair to say that the work of the Financial Inclusion Commission—I have met many of its members—needs to be recognised. In relation to credit unions, it is right that we pay tribute to the work that my hon. Friend has done. Does he agree that we should laud the fact that credit unions now have 1.29 million members, that their members and loans have doubled since 2006, and that their deposits and assets have trebled? With respect, he is following on from the great work of my hon. Friends the Members for Worcester (Mr Walker) and for South Ribble (Seema Kennedy), who were outstanding chairs of the all-party group before him.
I am most grateful to the Minister. He raises a valuable point about credit unions, although they are not the focus of this debate. I do not wish to push my luck, but I hope we will have another opportunity to discuss them in the future.
The Minister is right about the progress that has been made since 2006. The increase from 2% to 3% in the interest rate allowed for credit unions has helped to make them more sustainable. It has permitted higher dividends, while ensuring that credit unions’ borrowing rates are very competitive. Without wishing to go all Gilbert and Sullivan, there is something apt in making the punishment address the root of the crime, so I am delighted that funds recovered from convicted loan sharks will, from next year, help to pay for incentives for credit union membership in the communities on which loan sharks prey.
A financially inclusive system is one that is fit for purpose for all in society, regardless of their economic status. It is one in which individuals can participate fully and not face punitive restrictions in the financial products that they can access. It is also a system in which measures are taken to help to prevent people from falling into a downward spiral of financial hardship.
Every constituency MP knows the scale of the issues. There are approximately 1.5 million unbanked adults in the UK. According to Citizens Advice research, 13.5 million adults have difficulty managing money and making financial decisions. The ONS found that in the first quarter of this year only 2% of income was put aside as savings. The savings of those who do have them are often woefully insufficient to deal with life’s inevitable financial pressures—because of the breakdown of a washing machine or a car needed for work—through to more fundamental losses of income. The requirement for credit is therefore a given.
Financial exclusion can be further exacerbated by factors such as the high cost of credit and pay-as-you-go services. The commission estimated this poverty premium to be a cost of £1,300 a year to our poorest families. In the meantime, many from across the income spectrum lack good financial guidance at a time when the range and complexity of financial products has never been greater, and the need to make the right long-term decisions, in the light of increasing longevity, has never been more acute.
Financial inclusion is a huge topic, but the House will be pleased to hear that I intend to focus this debate on education, information and guidance. I was the a director of a credit union before entering this place, so I knew our sense of frustration—indeed, I am afraid, our sense of failure—at not being anywhere near as effective as we felt we should have been at persuading those in need of credit to use our cheaper community rates rather than accessing high-cost and high-risk lending.
The battle to ensure financial awareness has to start very early. I welcome the fact that the new national curriculum has made financial literacy statutory for the first time as part of citizenship education for 11 to 16-year-olds. I also recognise that improvements in basic maths, alongside the excellent results we have seen recently in literacy, are fundamental. However, I am afraid that focusing on secondary level may be too late. A report by the Money Advice Service found that financial habits are largely formed by the age of seven. Worryingly, a separate study by the Gambling Commission found that nearly half a million children as young as 11 are gambling weekly.
All we can do to increase financial literacy among children at primary school should be encouraged, and much can be done incrementally. I am aware that educational cartoons have been produced in Singapore and elsewhere to teach the basics of financial literacy at the very earliest ages. Simply having a single teacher in a school with the knowledge and understanding of how to teach financial literacy, who can act as a focus for provision inside that school, can be critical.
Any Member of this place knows how bewildering financial information can be to consumers. We all, in common with every citizens advice bureau in the country, are aware of the dreaded presentation at advice surgeries of a carrier bag full of financial information, much of which will be highly complex. We need to harness modern technology to help to provide our citizens with clear information about their financial position so that we help them to make educated judgments. Nowhere is this more apparent or more pressing than on pensions. All too many people suffer the scandal of lost pensions, while countless others are unaware of their post-retirement financial position until it is too late. I certainly know of examples of lost pensions from my own constituency.
It was a real pleasure to serve on the Work and Pensions Committee in the last Parliament. Our first report after I became a member of that Committee was “Pension freedom guidance and advice”, which highlighted the critical importance of the pensions dashboard for explaining clearly to consumers what they can expect and to ensure that they do not lose out.
I am delighted by the fresh impetus that the Minister has given the pensions dashboard. Bringing together data from 64 million pension pots is ambitious but necessary. Providing a single accurate and comprehensive source of pensions knowledge will be immensely useful to help to facilitate financial capability and retirement planning. I appreciate how complex a process this is and I have no wish to break the back of any camel. However, when the system is up and running, I want the concept to be extended to clarify for consumers with savings products, a mortgage or debts the full extent of their financial position, thereby helping them to plan accordingly.
On guidance, I welcome what is outlined in the Financial Guidance and Claims Bill and the Government’s plans, which have broad cross-party support, to create a single financial guidance body. This, too, is in keeping with the recommendations of the Financial Inclusion Commission’s report, and it has been welcomed by Which?, Citizens Advice and Age UK.
A lot of great work is conducted at a community level—I particularly draw hon. Members’ attention to the valuable work conducted by the Horsham debt advice service—but the scale of this issue requires support on a national level. I have witnessed at first hand the excellent work carried out by the Money Advice Service, the Pensions Advisory Service and Pension Wise. They are all superb in their different ways, but I am certain that a single body will provide a more effective means by which to impart co-ordinated and consistent guidance.
I am at one with Citizens Advice in seeing three aspects of the Financial Guidance and Claims Bill as particularly positive: the new body will support only advice that is free at the point of use and is independent; it has an objective of targeting help at those most in need; and it has a remit to support joined-up services and to fill gaps, not to duplicate current provision. I am only too aware of the other pressures on time in this Chamber, but I look forward to the Bill’s Second Reading in this place as soon as possible.
One of the Bill’s provisions begins the process of implementing the Conservative manifesto commitment to provide a debt respite scheme. Under the terms of the Bill, the Secretary of State must, within three months of the establishment of the body, seek its advice on the establishment of such a scheme. That will be an early test, and one to which a great number of us look forward to the SFGB and the Government rising.
This will be but one early example of the body’s strategic function to support and co-ordinate the development of a national strategy to improve financial capability. The SFGB will have to rise to the challenge outlined in research by Which?, which shows that only 36% of consumers use Government advisory bodies as an information source about their financial options.
Advertising and effective resourcing are key to ensuring high uptake, particularly among the groups who would benefit most from accessibility. Financial exclusion disproportionately affects lone parents, single pensioners and the long-term sick and disabled, and the active recruitment of those people requires the effective use of Government funding.
I would also like pensions guidance made much more widely available. Without wishing to be indelicate, Madam Deputy Speaker, I can say that the services of Pension Wise, determined by age as they were, are available to our excellent Minister, but not, alas, to his excellent Parliamentary Private Secretary and nor, surprisingly, to myself. The younger the age range, the more effective this service will be.
I finish where I began. The SFGB will have a role in advancing financial inclusion, as will the new financial inclusion policy forum, which will be co-chaired by the Minister and the Economic Secretary. Especially at a point when the interest rate cycle is turning, financial inclusion is of critical importance. I welcome the moves by the Government that are under way, but I welcome still more the further reforms that I look forward to the Minister progressing.
I am grateful to the Minister for quoting Lord Stevenson, another member of the Financial Inclusion Commission, but I would like to bring my hon. Friend back to the importance of ensuring that this financial advice reaches those who need it most. I referred, for example, to the disabled, lone parents and single pensioners. It will be absolutely critical, as we measure the success of this body going forward, that it does reach the hardest-to-reach people who need its support the most.
It is interesting that my hon. Friend raises that point, because it was specifically addressed by their lordships in some detail. He will be aware that the new financial guidance body will simplify the existing public financial guidance landscape, making it easier for all people to access information and guidance.
Let me briefly address the statutory objectives and functions, because I think that that will reassure my hon. Friend on the point about those in society who are vulnerable. The single financial guidance body will have a number of statutory objectives: to improve the ability of people to make informed financial decisions; to support the provision of information, money and pensions guidance and debt advice in areas where it is specifically lacking; to ensure that information, guidance and debt advice is clear, cost-effective and not duplicated elsewhere; to ensure that information, guidance and debt advice is available to those most in need, particularly people in vulnerable circumstances; and to work with devolved authorities.
I stress that the chief executives of the three organisations—Michelle Cracknell, Jamey Johnson and Charles Counsell—all agree that bringing these organisations together and harnessing the product of the whole will enable specific opportunities to address this point. That is particularly appropriate given that one of the functions of the body is not only the protection of individuals as consumers but a strategic approach to ensure that this guidance is there. I hope that my hon. Friend is reassured that that is something that we massively support.
My hon. Friend raised financial education. The strategy behind the creation of the guidance body is to develop evidence that clearly shows which projects are successful and which are not. The Government want the body to prove what helps people to make better financial decisions throughout their lives, and then to deploy that understanding actively in its efforts in the area and share the knowledge as part of best practice.
The Government want the body to maximise the positive impact of financial education for children and young people, so that they are better prepared. We definitely see the guidance body taking forward the issue that my hon. Friend raises, to ensure that children are better prepared for financial challenges at any age. That strategic function is underpinned by the premise that, although Government bodies, industries, charitable functions and the voluntary sector are already doing excellent work, if they work together the impact will be that much greater.
I want to take the opportunity to celebrate the LifeSavers project, which I am pleased to say exists in my constituency. The organisation provides at primary level exactly the sort of thing that my hon. Friend described. The community bank of which I was a part is the provider of six LifeSavers programmes, which are supported by the Church of England and Virgin Money. There is literally a bank in the school, educating children about the importance of finance, loans, deposits and long-term saving, which is the way ahead.
A large number of schools are part of that project, and we are evaluating its impact. It is Treasury-supported to a limited degree. I have visited participating schools, such as Hexham East First School in my constituency, and the difference that the programme makes is off the charts. My hon. Friend will be aware that my right hon. Friend the Chancellor has provided a great deal more money for maths education, more maths teachers and support across the curriculum to ensure that that key point is addressed on an ongoing basis.
Briefly, I will mention other areas of the Bill that address some of the points that my hon. Friend raised. I believe that we all accept that problem debt is an issue for too many people. The Conservative party manifesto set out the commitment that the Government would adopt a breathing space scheme, to allow someone in serious problem debt to apply for legal protection from further interest charges and enforcement action for a period of up to six weeks. The Financial Guidance and Claims Bill will enable the Government to introduce such a scheme.
The breathing space scheme builds on the local work of organisations such as those that my hon. Friend mentioned in Horsham. It sounds as though they are approaching the matter in an interesting way. The Bill will build on the existing work of the Financial Conduct Authority, which has instituted rules. Also relevant is the fact that in October, the Treasury published a call for evidence on breathing space, and evidence is still being taken on the best and most appropriate way forward. My hon. Friend the Economic Secretary to the Treasury, officials and I have met the people behind the operation of the scheme in Scotland, which has already introduced a debt respite scheme and breathing space scheme.
The key to inclusion is access to engagement with savings and pensions. Surely, the game-changer on that over the past five years is the development of auto-enrolment, as part of a cross-party approach down many years. It is one of the unseen success stories of successive Governments, and it has engaged individual consumers and members of the public to an astonishing degree and reversed generations of decline in savings and pensions. The statistics bear some contemplation. We are about to approach the point at which 9 million people are auto-enrolled in a workplace pension. Hundreds of thousands of individual employers have signed up to the scheme, and it has not only totally stopped the rot in relation to pensions but reversed a long-term decline.
We are conducting an auto-enrolment review to assess where we are with the programme, and we will be considering a number of key areas. Those include the existing coverage, how to achieve the right balance between enabling as many people as possible to save and ensuring that it makes economic sense for them to be included, how we can improve engagement and how to strengthen the evidence base around contributions to support future decisions on contribution rates. I will report the findings to Parliament before the end of the year. We hope that the review will provide a clear sense of direction as part of the ongoing conversation.
I want briefly to talk about the pensions dashboard, which is an important part of the conversation about how we can better use technology. Just as the private sector has reformed the travel industry, insurance and so many other business, such that we now go online to access information, so we believe that the same will bring pensions into the digital age. The dashboard is an opportunity to give people access to their pensions data in a clear and simple form by bringing together savings information in one place online. It is an opportunity to give more people a sense of ownership and control over their pensions. This is a complex process, but I look forward to a massive meeting of stakeholders on Monday, to which hon. Members are most definitely invited. The good news is that the Department for Work and Pensions is taking this forward. We are utterly committed to the ongoing feasibility study and believe that by placing consumers at the heart of our approach, the Government, working closely of course with industry, regulators and other interested parties—notably, consumer organisations —can achieve the goal of such accessibility.
I want to make a brief final point about the mid-life MOT. It has struck me in this job that although we address individual issues, in relation to our health and our ongoing status quo as human beings—my GP regularly, and rightly, contacts me with ways to improve my health—we do not address our finances in a similar way. The concept of the mid-life MOT, as pioneered by John Cridland in his outstanding state pension review, published earlier this year, could enable us to better encourage and support people in preparing for later life and retirement in a holistic way. I encourage all private sector companies, through their human resources departments, to conduct mid-life MOTs— organisations such as Aviva are leading the way—and I certainly hope that the public sector will address those points as well. We believe that it is unquestionably a promising idea worth detailed scrutiny. Individual workers or employers could be provided with holistic advice and guidance to prepare for the gradual transition to retirement—whether at 45, 47 or 50—and it is something that the Government should be progressing.
It is often asked what brings us into politics. Social justice and financial inclusion are among the things that brought me into politics. When talk about the achievements of this Government and the coalition since my hon. Friend and my colleagues at my side—my hon. Friends the Members for Calder Valley (Craig Whittaker) and for North Devon (Peter Heaton-Jones)—first entered the House of Commons, and when we talk about extending free childcare, improving schools results, introducing the national living wage, creating 3 million jobs, reducing income inequality and record high household incomes, we should remember that they are not just statistics, but steps towards tackling injustice and spreading opportunity. I believe passionately that the Bill will enable us to tackle financial inclusion. I welcome the work of those who have taken us this far on the journey, but I also welcome the opportunity to report to the House on the progress we have made and the opportunities that lie ahead to tackle this fundamental issue of social justice.
Question put and agreed to.
(7 years ago)
Commons ChamberI will say exactly what I am proposing very shortly.
If the Government’s position is that Opposition day debate motions should have no binding effect on the actions of the Government, it fundamentally alters the relationship and balance of power between the Executive and Parliament. It would mean that apart from votes on legislation and matters of confidence, the Government could ignore the decisions and will of Parliament. This is very dangerous ground, and the situation needs to be seen in the context of the blatant power grab by the Executive that we witnessed on Second Reading of the European Union (Withdrawal) Bill last month.
For the hon. Lady to accuse the Government in such a way is to suggest that there has been a change from precedent, but votes on Supply days have never been binding on the Government. That is a clear precedent going back many years, and the position was entrenched by the Fixed-term Parliaments Act 2011.
The point is that we need an urgent response to this really important issue. We are calling for a clear set of proposals from the Government that will reflect the will of the House and pause universal credit roll-out while the issues that I raised—and many more that I did not have time to raise—are fixed.
It is a system that is replacing a deeply flawed system and striving to face up head-on to endemic problems that we have had for decades and that were left in the “too difficult to deal with” tray—an old system, where complexity and bureaucracy had so often served to stifle the independence, limit the choice and constrain the outlook of its claimants.
Would my hon. Friend agree that, unlike the disaster that was the tax credit roll-out in 2003, the Minister and the Government had built into this process a slow roll-out, and the Minister has proved himself adaptable on the landlord portal and on the advances and the ever-increasing speed with which these payments are being made?
My hon. Friend is quite right. We will not remake those mistakes of the past, and that is why this is such a careful and gradual process.
I am grateful to have caught your eye, Mr Speaker; I am conscious that I spoke in the recent debate on the Government’s response to Supply day debates and in the debate last week on universal credit. I recognise that in this place repetition is not frowned on, and that hesitation and deviation are positively encouraged in some quarters, but I shall do my utmost not to try the House’s patience.
With the greatest of respect to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), I question the wording of the motion, which asks us to debate the Government’s response to
“the decision of the House”
on universal credit. The House knows what the hon. Lady means—I know what she means—and I am not interested in silly semantic arguments, but this does get to the core of the matter. The Commons expressed a view, as you wisely said in response to the points of order after last week’s debate, Mr Speaker. It gave its advice to the Government on the roll-out of universal credit. However, the House cannot, on the basis of an Opposition day non-legislative motion for debate, take a decision on a matter of Government policy.
As we discussed at length in the previous debate under Standing Order No. 24, and as I believe was agreed among Government and Opposition Members, declamatory resolutions proposed for Opposition day debates are not and cannot be binding on the Government. That constitutional convention was entrenched by the Fixed-term Parliaments Act 2011, the principle of which was supported in the Labour and Liberal Democrat manifestos in 2010. When that Act was last debated, three years ago yesterday, the Opposition spokesman at the time, the hon. Member for Liverpool, West Derby (Stephen Twigg), spoke in its favour and said that the Labour party continued to support it.
There is no constitutional requirement for the Government to respond to resolutions of the nature we are discussing if that is what the Opposition choose to table for Supply day debates. If the Government choose to respond, they have to determine when and exactly how, particularly if there are fiscal consequences to any actions they determine. Part of the role of the House is to hold the Government to account, so I do not think that last week’s debate was in any way fruitless or a waste of time. In the immediate term, the Government were held to account through the Secretary of State’s responding to 17 interventions. By my count, in a much shorter speech this afternoon, my hon. Friend the Minister for Employment replied to 11 interventions. He was held to account by this House.
I have absolutely no doubt that Labour’s talented Front-Bench spokespersons will do their utmost and use all their wiles to ensure that the Government’s decisions on universal credit are drawn to the electorate’s attention. Conservative Members are comfortable with the roll-out, the time we are taking and the way we are presenting it to the country. Ultimately, the electorate will decide. They are seeing the Opposition’s view and the Government’s view, and that is one role of the House.
I am comfortable with the position that our Government are taking in implementing the changes. That is partly because when I talk to staff at my local jobcentre, expecting the usual litany of failure that accompanies IT projects from all Governments, I hear enthusiasm and positivity about the universal credit system and how responsive it is. I am pleased that the Government have already proved themselves similarly responsive, with 50% of new claimants now securing advances, the new landlord portal and the consistent improvement in the time taken to make payments. There may be other measures that the Government can take to bolster the success of the system, but to my mind they would be wholly wrong to pause the roll-out of a system that reduces complexity, increases flexibility and improves employment outcomes for the recipients.
Conservative Members have talked a lot about improving work incentives. I shall not go over the history, but I have constituents who say things such as:
“My own personal position is that of a single parent carer to my disabled child. I can’t work as he has very high and complex needs… Quite frankly the rollout of universal credit is terrifying”—
Order. The hon. Lady’s eloquence is equalled only by her length. Interventions must be brief.
The hon. Lady is always eloquent, and I take seriously the issue she has raised. I urge her to draw that to the attention of Ministers. I cannot handle specific issues in her constituency, but as I conclude I can describe the generality of employment under this Government. We previously debated universal credit on the day on which the new employment figures came out.
If my hon. Friend does not mind, I will not.
I assume that it was only because of the timing of the release of those employment statistics that the Opposition Front-Bench team were unable to weave them too strongly into their speeches on the day. They did not welcome the 52,000 increase in employment on the previous quarter; they did not welcome the 215,000 increase in employment on the previous year; and they did not welcome the fact that unemployment is at the lowest rate since 1975. [Interruption.] Obviously, they did not have time. There is evidence that universal credit is helping this success story. I urge the Government to continue to look creatively at how the system can work better, but under no circumstances to halt the roll-out.