Benefit Sanctions

John McDonnell Excerpts

Tuesday 13th December 2022 Westminster Hall

[John McDonnell (Hayes and Harlington) (Lab)]

I congratulate the hon. Member for Glasgow South West (Chris Stephens) on securing the debate. I concur with all that has been said about his past work, both on the Work and Pensions Committee and more generally on this issue.

I have a simple question to ask the Minister. What is his understanding of the increase in this recent period? It is true that conditionality has always been an element of our social security system since the second world war, but there has been nothing on this scale. What worries me is the dramatic increase—comparing the figures now with the figures before the pandemic—and therefore the significant increase in the past year after the worst parts of the pandemic. Like others, my experience of conditionality and the use of sanctions has largely centred on the impact on constituents who live the most chaotic of lives. They have difficulty complying with the various requirements that are made of them and, in some instances, actually even understanding the conditions that are attached to them. Living those chaotic lives means that they become intensely vulnerable.

I will go through the figures again, so that I have this clear. The monthly universal credit sanctions reached a peak of 58,548 in March. They have now fallen back to an average of 45,100 in the last quarter—that is two and a half times the average in the three months before the pandemic, so there has been a 250% increase in that period. Sanctions as a percentage of UC claimants subject to conditionality are currently at 2.5% per month; in the three months before the pandemic it was 1.4% per month. The monthly sanction rate on unemployed UC claimants in July 2022 was higher, at approximately 2.8%—or one in 36 claimants—for those in the planning for work category. The number of UC claimants who were serving a sanction in August was 115,274, after a peak of 117,999 in July. That is more than three times the pre-pandemic peak of 36,771 in October 2019.

It just goes on like that. The figures on the scale of the sanctions being imposed at the moment are quite staggering. According to the report by Dr David Webster, which I believe was produced for the Work and Pensions Committee, the average sanction is about 11 weeks. For most of my constituents, surviving beyond 11 weeks becomes almost impossible—even just getting by.

[Margaret Ferrier]

In response to a written question, the Minister said that data on the average length of sanctions

“is not readily available and to provide it would incur disproportionate cost.”

The length of a sanction is directly associated with the level of hardship faced by claimants. Does the right hon. Member share my concern that the Department is seemingly not tracking essential data that should inform policy making?

[John McDonnell]

I fully concur and agree. That is the main question that I will come on to. I will add that, although there was an increase in sanctions in the recent period, a lot of this concerns people being sanctioned for not seeking or being unable to increase their hours. We are now going into a recession—well, we are in a recession at the moment. Based on the Government’s figures, the Office for Budget Responsibility predicts that the number of unemployed people will increase by half a million, and the Bank of England suggests that it will most probably go above 2 million. It becomes much more difficult to find or secure work overall or to increase hours. That will increase the pressure on those who are already on the edge of being sanctioned.

My fear, which has consistently been identified as a problem, is that the system is not working; it is not dealing effectively with people who have chaotic lives. There are some conditions attached and criteria that work coaches take into account, but in no way do they embrace fully the nature of the individuals they are dealing with. The decision maker never actually gets to see the individual either to do a proper assessment. When the individual comes to me in my constituency surgery and I get a fuller understanding of their life, I can understand why they have slipped up at some stage and why the system is not working to give them the support they need to get back into work and earn a decent income.

[Debbie Abrahams]

My right hon. Friend is making a powerful point. I will just pick up on what he said at the start of his speech about conditionality. There is currently no evidence that supports the efficacy—let alone the humanity—of sanctions at all. A University of York study, which was published in 2018, showed absolutely that they had no effect on out-of-work conditionality or on in-work conditionality. What is the purpose of this programme?

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[John McDonnell]

I was going to come on to that. My question to the Minister is: what is his understanding of how this increase has taken place? What are the factors behind it, because it does then lead on to questions about the efficacy of the whole process? Looking at the excellent House of Commons Library briefing, we can see that there was a Work and Pensions Committee report in 2015, a National Audit Office report in 2016, a Public Accounts Committee report in 2017, the welfare conditionality project in 2018 and another Work and Pensions Committee report in 2018. All of them reached the same conclusion as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams): there is no connection between this programme and effectiveness in supporting people getting into work. There is a bizarre situation: the raison d’être of this whole process has been challenged consistently—almost annually—by independent and objective reports, yet the Government have not moved. What does the Minister believe are the reasons for this increase?

I would also like to ask another question. If the Minister cannot answer it today, I would like him to write to us with an answer. I am really worried about the impact that the sanctions and the whole process of conditionality has on the mental health of the constituents I deal with. I am anxious that the Government should at least assure us that they have in process a mechanism for monitoring that, learning lessons from that monitoring, then coming back to the House to explain what improvements will be made. I am worried about the mental health consequences because, as we go into recession and we have a cost of living crisis, people have a fear of sanctions being levelled against them, which pushes some over the edge. To be frank, we have seen too many people lose their lives, unfortunately sometimes as a result of suicide because of the pressures that they have been under as a result of these types of measures that have been introduced over this period. I would welcome the Government’s reassurance that there is monitoring of the mental health consequences and that there will be a report to the House about how that is being addressed and any lessons that can be learned.

[Several hon. Members rose—]

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[Guy Opperman]

On the second point, I am not aware of any such policy or any such incentivisation in any way whatsoever. If the hon. Gentleman has any evidence of such incentivisation, he should publish it and name it individually, because there is no such evidence as far as I am aware.

The hon. Gentleman also asked about the rise in the numbers. It is right to have a legitimate discussion about what is a fair and effective welfare system that supports people into work and provides value for money for taxpayers. Our work coaches support claimants by setting out the activities to move them into work or to progress in work and work more. Activities are set out in the claimant commitment, which is surely the start or base of all the discussions. They are tailored to reflect individual circumstances and take into account health conditions, caring responsibilities, current work and opportunities for training.

The hon. Gentleman asked specifically about the rise in the number of sanctions. Some 98.2% of sanctions are for missing a meeting with a work coach. Such sanctions can be quickly and simply resolved by attending another appointment. The evidence is that approximately 50% of such sanctions are resolved with mandatory reconsideration.

I wish to address in particular the issue in relation to the most vulnerable. It is right that the most vulnerable in society receive extra support. The Government have clearly shown a commitment to that by adding a further £26 billion in the cost of living support in the autumn statement, on top of the £37 billion for 2022-23 that we announced earlier this year, in May.

Where benefit claimants have vulnerabilities, safeguards exist to ensure that they are not sanctioned inappropriately. Those with severe health and mental health conditions, those with full-time caring responsibilities and those with children under the age of one are not required to look for work and cannot be sanctioned. Many of the most vulnerable receive other elements of universal credit in payment, such as housing, child or disability support. Those payments are not affected by a sanction.

Finally, when people experience particular challenges, such as childcare difficulties, accommodation issues or bereavement, work coaches have the discretion to switch off work-related activities for a period of time. Such measures enable us to support vulnerable claimants and provide tailored support. To answer the follow-on question, we have a well-established system of hardship payments, which are available as a safeguard if a claimant demonstrates that they cannot meet their immediate and most essential needs—including for accommodation, heating, food and hygiene—as a result of sanctions. I am advised that the relevant percentage is 1.987%.

Various colleagues made specific points. The hon. Member for East Lothian (Kenny MacAskill) and the hon. Member for Slough made the point that work is hard to find. I will address that point in two particular ways. First, the evidence from the labour market statistics shows that the employment rate is up 0.2 percentage points on the quarter; the number of payroll employees is up on pre-covid levels by 932,000 to a record high; and the inactivity rate has fallen. On the vacancies rate, which surely relates to the point that work is hard to find, there were 1.2 million vacancies. Although obviously it remains high, the rate has fallen for the fifth consecutive month, to 1.187 million. Inactivity, which is a long-term issue, has fallen by 0.2 percentage points on the quarter, to 21.5%.

Scotland was raised specifically, so let me give the Scottish figures. The number of people employed is at 2.725 million, up 22,000 on the quarter and up 61,000 on the year. The employment rate is at 75.9%, up 0.7 percentage points on the quarter and 1.4 percentage points on the year. Unemployment is at 93,000, down 21,000 on the year and 12,000 against February to December 2020. The number of people in workless households has fallen by 113,000 since April to June 2010.

[John McDonnell]

I do not want to stop the Minister’s flow, other than to correct him: there is no Member here from Slough. I may have missed his answer to this question, but why has there been an increase in the number of sanctions on such a scale, even compared with pre-pandemic levels? Could he answer the question that we have all asked?

[Guy Opperman]

The answer has already been given to the hon. Member for Easington (Grahame Morris). The figure in respect of persons failing to attend an individual appointment is at approximately 98%. That 98% is for failing to attend a specific appointment.

[John McDonnell]

Will the Minister give way?

[Mark Pritchard (in the Chair)]

Order. Is the Minister giving way?

[Guy Opperman]

No. I have one minute left to address this debate. In November 2018 the Work and Pensions Committee specifically said that the Committee agreed with the Government that the principles of conditionality and sanctions were an important part of the welfare system.

I congratulate the hon. Member for Glasgow South West on securing the debate. The Government have been utterly clear that we are fully supportive of all people who are on benefits.

[John McDonnell]

Just answer the question!

[Mark Pritchard (in the Chair)]

Order. The right hon. Gentleman is very experienced in this place and should know better. If the Minister is not giving way, he should not be speaking.

[John McDonnell]

I can tell the Minister—

[Mark Pritchard (in the Chair)]

Order. We are running out of time. Minister, I think the hon. Member for Glasgow South West would like to hear replies to his questions at least.

UN International Day of Persons with Disabilities

John McDonnell Excerpts

Thursday 24th November 2022 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

I welcome the initiative that my hon. Friend the Member for Battersea (Marsha De Cordova) has taken in applying for and obtaining this debate. I want to pick up on a number of important points that she made in her excellent speech, but I will begin by commenting on the problem that the Government have over engagement with disabled people.

We know that poverty is particularly focused among families living with disability. That is very clear in the work of the Social Metrics Commission, chaired by the noble Baroness Stroud, who was the special adviser to the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) when he was Secretary of State for Work and Pensions, so this is not a partisan point at all. Poverty is focused among those families, so it is not surprising that disabled people, from time to time, have cause to criticise the benefits system.

In the last few years, the Department for Work and Pensions has tended to respond to that by pulling up the drawbridge and refusing to talk properly to people, which led to the fiasco of the disability strategy to which my hon. Friend referred. It was launched with some fanfare in July last year but declared unlawful in January this year because of the failure to consult disabled people. As far as I know, it is still languishing—stuck and going nowhere—as a consequence.

The Social Security Advisory Committee is appointed by the Government and made up of experts, not politicians. It is chaired by Stephen Brien, who was one of the original architects, with the Centre for Social Justice, of universal credit. The committee produced a useful paper in December 2020 called, “How DWP involves disabled people when developing or evaluating programmes that affect them”—a slightly long-winded title, but it is clear what it is about. It says:

“DWP officials themselves acknowledge that the Department is not trusted by many disabled people and by some of the organisations who are led by, or work with, disabled people. Our own research confirmed this. Some of the individuals we spoke to did not believe that the Department engaged with disabled people’s organisations or sought views from individual disabled people. There was also a widespread belief that DWP would not represent accurately disabled people’s views when they did seek them.”

The committee therefore recommended that:

“DWP should develop a clear protocol for engagement…It should cover both national and local engagement”.

That is a clear, straightforward, constructive and helpful suggestion to try to overcome that serious problem, but the Department’s response was simply to reject the recommendation.

The committee also recommended that the Department should routinely report on its engagement with disabled people, but the Department rejected that as well. It said:

“We believe that our existing reporting provides sufficient information on our engagement with disabled people and stake- holders.”

I must say, however, that that is not the view of disabled people, as a Conservative Member of the House of Lords, Lord Shinkwin, told the Work and Pensions Committee that

“the DWP is handling its engagement with disabled people badly”

and, he said, with “palpable disrespect”. We now know that it is not the view of the courts either, hence the fiasco over the disability strategy.

The Department commissioned a report from a respected external agency to investigate disabled people’s experiences of the benefits system. It talked to a large number of disabled people in carrying out that research. When asking if they would take part in the study, it told each of them that the results would be published. When Ministers saw the report, however, they decided not to publish it, which is a clear breach of the cross-Government protocol on social research that requires such documents to be published. The Select Committee used its powers to obtain a copy of the report from its authors and published it, so that it reached the public domain.

It is true, of course, that being open about criticisms and difficulties exposes Ministers to awkward questions, but refusing open discussion and trying to keep things secret or keep a lid on them does far more damage than letting such debates take place in the open. I warmly welcome the new Minister and his colleagues in the ministerial team to their posts and I hope that they will take the opportunity to have a fresh look at how they deal with, talk to and engage with disabled people and their organisations. The practice of the team led by the previous Secretary of State was unnecessarily disastrous—there was no need to try to hide all those things. It would have been far less damaging to be open and to, yes, sometimes have a robust exchange. To try to keep it all hidden was very damaging and counterproductive.

As a first step, we have been told by the Department that it will not publish the number of work capability assessments that it carries out each month—I have no idea why; it is absolutely basic and fundamental data. I suppose the reason is that, if people know how many are being carried out, they can ask awkward questions about what is going on. That is another example of that damaging and counterproductive attempt to bury what is really happening.

[John McDonnell (Hayes and Harlington) (Lab)]

I am sorry that I came late to the debate; I was delayed in traffic after another meeting. I remind my right hon. Friend that some of the concerns expressed by disabled organisations over the years commenced largely around the WCAs. I remember that he, I and several other hon. Members simply asked the DWP whether it was monitoring, for example, the consequences and impact of WCAs on certain vulnerable people and the suicides that were taking place. It denied us that knowledge at the time, so it is understandable that a number of disability organisations are sceptical about its role.

[Sir Stephen Timms]

My right hon. Friend is absolutely correct that this has quite a long history, but my sense is that it has got considerably worse in the last few years and the Department has stopped publishing things that obviously should be published and answering perfectly reasonable questions. As a result, it has badly damaged its reputation with disabled people. I hope that the new ministerial team will want to rebuild those links and rebuild trust.

My hon. Friend the Member for Battersea made some important points about the disability employment gap, which has increased in the last two quarters. Many disabled people would like to work but cannot. The pandemic has had a damaging impact, because since then, there has been a steep rise in the number of people who are out of work on health grounds. We urgently need to be able to support disabled people who would like to work into jobs, because that is one of the key ways to tackle the current labour shortage. We can take advantage of that big opportunity.

In July last year, the Select Committee published its report on the disability employment gap. Shortly before the 2015 general election, David Cameron announced a target to halve the disability employment gap, but the target was scrapped shortly after that general election. We want it reinstated. Our report called for a radical overhaul of employment support for disabled people. The big national Work and Health programme is helpful but it is not working for many people. The truth is that, as we can all recognise, smaller specialist providers are often best placed to deliver the help that is needed. People have to be on the ground locally to know who can do the best job; that kind of support cannot be commissioned from Whitehall.

We proposed that funding for this employment support should be devolved. Where the capacity exists, we want groups of local authorities, probably based on the new NHS integrated care system boundaries, to be responsible for commissioning and delivering employment support for disabled people. The Department should allocate funding, monitor performance and publish detailed comparative performance data, but it should not deliver the support, which should be closely integrated with the local health service, colleges and voluntary sector groups. In its response to our report, the Department did not reject that idea, but it has not moved in that direction at all since; I hope that it will.

My hon. Friend was right about Access to Work, which is vital to overcoming work-related obstacles resulting from disability. It is a lifeline for many, but it is not well enough known. Many employers do not know about it and it is dogged, as she said, by a bureaucratic and extraordinarily cumbersome application process that puts people off and leaves many in limbo. Once they have applied, they sometimes have to wait for quite a long time to find out what support they will receive. If somebody benefits from Access to Work in one job and then changes job, they have to go back to square one. There should be a passporting arrangement, as my hon. Friend argued. If they apply for a new job at the moment, their potential new employer cannot be certain what, if any, help Access to Work will provide.

The Minister’s predecessor told the Select Committee about a planned “digital transformation” for Access to Work, which I hope will address those obvious failings, and I hope the Department will involve disabled people themselves in the redesign of the Access to Work programme. I would be particularly grateful if the Minister, in winding up, could give us an update on the progress of that initiative.

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[Marion Fellows (Motherwell and Wishaw) (SNP)]

As ever, it is a pleasure to follow the hon. Member for Strangford (Jim Shannon) and I truly want to congratulate the hon. Member for Battersea (Marsha De Cordova) on securing this important debate. I listened with great interest to the contribution from the right hon. Member for East Ham (Sir Stephen Timms)—I was going to say West Ham, because I am thinking about football the moment. I hope he will forgive me.

The hon. Member for Strangford says I am always appearing in these debates. That is because I am the SNP spokesperson on disabilities, but since I took on that role I have really learned and learned to understand how important it is that we debate these subjects, so even if I cease to be the spokesperson I will still be here, because what we do with regard to people with disabilities, and talking about them, is really important.

It is a privilege to mark the UN International Day of Persons with Disabilities, which falls on 3 December, to promote the rights, dignity and wellbeing of people with disabilities across the globe. Disabled people are key members of society and they make a huge positive impact on the world we live in. That huge impact is embodied by the inspiring story of the former British Paralympian John McFall, who this week became the first disabled astronaut. Isn’t that amazing? I also note that it is Disability History Month, and there are a number of wonderful events taking place across Parliament. I will be speaking in one directly after this debate today, organised by ParliAble. I encourage my fellow parliamentarians to attend some of the events. The people here probably will, but I am sending the message further—furth of the Chamber, as we would say in Scotland—as we celebrate the history of those with disabilities.

In my role as spokesperson, I regularly meet disabled people and disability organisations and would like to pay tribute to those with disabilities and their carers who regularly offer inspiration to me personally. In line with the UN’s commitment to “leave no one behind” as part of its 2030 agenda for sustainable development, the UN has outlined that in moments of crisis it is vulnerable people, such as those with disabilities, who are most often left behind and excluded.

About 1 billion people in the world live with a disability, with 80% of them living in developing countries. There are higher levels of disability among women, the poor and the elderly. The significant cut to the UK Government aid budget has left a £4.6 billion black hole in the budget compared to 2019, resulting in a significant reduction in the number and size of programmes targeted at disabled people. Many disabled people in developing countries will be impacted. For example, in Rwanda 150,000 girls and 50,000 boys, including 8,000 adolescents with disabilities, are no longer able to take part in an education and life skills programme.

The covid-19 pandemic, as we have heard, deepened already pre-existing inequalities in society, and the latest rise in inflation has disproportionately hurt the most vulnerable. That feeling of being left behind is something I have heard from many of the organisations I have met recently, as many disabled people feel left behind by the current Government in response to the ongoing cost of living crisis. The Government’s inadequately targeted measures have done very little to address the concerns of disabled people and their families, who have much higher energy needs. Simply putting on another jumper or taking measures to limit the use of gas and electricity are not feasible possibilities for those living with disabilities. Staying warm is essential for many disabled people, and many risk worsening their condition if they cut corners by not putting the heating on. Likewise, many disabled people cannot cut corners with electricity as they need to charge or power essential life-saving equipment such as ventilators and wheelchairs.

Recently, at a Muscular Dystrophy UK drop-in event in Parliament, I was shown a stark graphic that reinforced that point. A mother of a child with muscular dystrophy showed a picture of the six plugs needed to charge her child’s life-saving equipment at any given time. For disabled people and their families, the choices between charging, heating and eating are impossible. The position this Government are putting the parents of disabled children in is totally unacceptable and devoid of empathy. Those parents are certainly not reaping the rewards of the so-called compassionate conservatism we hear so much about in the Chamber. One example is the recent case of Carolynne and Freya Hunter, which demonstrates the inadequacy of the Government’s targeted support. Carolynne, the mother of Freya, was facing an energy bill of £17,000 to keep Freya’s life-saving equipment running. Fortunately, the actress Kate Winslet most kindly stepped in to cover their bills, but it is unacceptable that society’s most vulnerable in the United Kingdom have to rely on philanthropy and the charitable nature of others to live with dignity.

The UK’s reliance on charity, rather than Government policy, to ensure vulnerable people can survive this current crisis is also demonstrated by the increased use of food banks.The Trussell Trust has released research showing that disabled people are hugely over-represented in food poverty demographics, with 60% of food bank users having a disability. Poverty and disability are often mutually reinforcing and almost half of all disabled people are planning not to turn their heating on, despite the reasons I have given for doing so.

[John McDonnell]

The hon. Lady mentioned an aspect of this. If a family includes a person with a disability, that is a key factor in ensuring that the whole family lives in poverty. I chair a group of unpaid carers and the key issue is the lack of support for unpaid carers and the low level of carer support allowance for them.

[Marion Fellows]

I totally agree and thank the right hon. Gentleman for his intervention. I am hugely impressed and inspired by unpaid carers, many of whom save this country an absolute fortune and get no thanks for their work. I take this opportunity, on behalf of everyone here, to thank them for what they do.

According to Scope, millions of disabled people will be cold, hungry and at risk. Disabled people are “at the sharp end” of this cost of living crisis, and Government support has so far simply not been enough. A one-off cost of living payment to disabled people is an inadequate form of support.

However, disabled people being left behind by this Conservative Government is not a new phenomenon. The Government’s national disability strategy last year left behind the views of those with disabilities. It was found to be unlawful, as has been said, and those with lived experience of disabilities were not talked to adequately. We do that in Scotland. I have talked in this Chamber and in Westminster Hall about what Scotland does. Will the Minister please look at what Scotland does, because it is worth looking at. Disabled people here in Parliament have come to me and said, “I wish I lived in Scotland; you do it so much better.” We are a small nation. Parts of the social security system are devolved, and with that devolution we are doing everything we possibly can to help disabled people and to treat them with fairness, dignity and respect. As the right hon. Member for East Ham said, we do not do that here. People are made to jump through hoops unnecessarily. Please look at what we are doing and learn lessons.

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[Tom Pursglove]

To directly address the hon. Lady’s point, we are fully committed to the convention, but as a general principle the UK Government do not incorporate international treaties into our domestic law. However, the rights of disabled people under this convention are largely reflected in existing domestic policies and legislation, including the Equality Act 2010, in England, Scotland and Wales, and the Disability Discrimination Act 1995, in Northern Ireland. As I have said in the context of other debates in previous ministerial roles, it is for this House and this Parliament to interpret our international obligations and to reflect those in our domestic body of legislation in a way that this House, and Parliament more generally, sees fit.

Let me get back to the wider points. The UK continues to support disabled people living in lower and middle-income countries through our flagship disability-inclusive programmes. We are also providing support to disabled people in Ukraine. We are providing global leadership, but we are clear that more needs to be done. The Foreign, Commonwealth and Development Office published an ambitious disability inclusion and rights strategy to embed disability inclusion across FCDO’s diplomacy, policy and programming work at the Global Disability Summit in February 2022. The strategy reaffirms the UK’s commitment to act as a global leader on disability inclusion, setting out our approach through to 2030.

The FCDO also announced 18 public commitments in February to make its international development work more disability inclusive. The commitments include increasing meaningful participation with disabled people, and specific work on tackling violence against women and girls and on sexual and reproductive health and rights. The FCDO’s disability inclusive development programme is a six-year, £30 million programme designed to test “what works” for disabled people. By the end of March, the FCDO had provided more than 375 disabled children with a quality education, almost 6,000 disabled people with improved access to healthcare and more than 6,400 people with disabilities with training and skills development to improve their income, and encouraged more than 16.5 million people to change their attitudes and behaviours towards disabled people to tackle stigma and discrimination.

The UK also supports the growth of the global disability movement by providing capacity-building grants to disabled people’s organisations around the world. The FCDO funded the training of more than 1,200 disability activists last year to help them advocate for disabled people’s human rights and hold Governments to account for progress on disability rights. A new allocation of £15 million in funding will help local responders in Ukraine and Poland support up to 200,000 of the most vulnerable impacted by Russia’s invasion, including older people and those with disabilities. That will fund grassroots civil society groups to provide food assistance, water and sanitation, psychological support and childcare services, alongside other emergency assistance.

I would like to take a moment to bring attention to some of the progress made by this Government that has positively impacted the lives of disabled people. Our Social Security (Special Rules for End of Life) Bill received Royal Assent on 25 October 2022 and will enable people who are thought to be in the final year of their life to get fast-tracked access to disability living allowance, personal independence payment and attendance allowance.

[John McDonnell]

This is the Minister’s first outing, so it is not the time to rough him up on anything. However, the background to this, for those of us who participated in it, is the UN report, which demonstrated that as a result of austerity there have been systemic gross violations of human rights of disabled people in this country. One point that has been made by Labour Members is the importance of the Government engaging with disability organisations. May I suggest that one of those should be the preventable harm project, run by Mo Stewart, who might be able to take the Minister through some of the issues, particularly those associated with the work capability assessment, that developed the problems we have with regard to the violation of human rights of disabled people in this country?

[Tom Pursglove]

I am grateful to the right hon. Gentleman for his intervention. I would be happy to meet him to discuss those issues further. I am determined that Ministers will have constructive working relationships with colleagues across Parliament, and with third sector organisations and international organisations pertinent to this work, to ensure that we deliver the best outcomes possible. I would be happy to have a conversation with him about the particular point that he has raised.

We also made similar changes to universal credit and employment and support allowance in April this year.

One particular Bill reflects positively on the cross-party constructive work that has gone on. The hon. Member for West Lancashire (Rosie Cooper) brought the British Sign Language Bill to Parliament and worked constructively with Ministers to deliver it, including with my right hon. Friends the Members for Suffolk Coastal (Dr Coffey) and for Norwich North. The Bill passed into law earlier this year and will recognise BSL as a language of England, Wales and Scotland in its own right. It is also supported by a duty on the Secretary of State for Work and Pensions to regularly report on what each relevant Government Department has done to promote or facilitate the use of British Sign Language in its communications with the public.

We laid regulations in the summer to allow more health- care professionals to certify fit notes in addition to doctors. Nurses, occupational therapists, pharmacists and physiotherapists can all legally certify fit notes, reducing the pressure on NHS doctors, particularly GPs. This followed legislative changes in the spring, which removed the need for fit notes to be signed in ink.

On World Mental Health Day in October, we announced the expansion of a joint programme by DWP, DHSC and NHS England—with expenditure of £122 million—to expand the provision of employment advisers in improving access to psychological therapy services across England.

Oral Answers to Questions

John McDonnell Excerpts

Monday 31st October 2022 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

9. If he will take steps to provide additional support during winter 2022-23 to women affected by the rise in state pension age.

[The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)]

A wide range of support is available to those of state pension age and for those on low income who are entitled to pensioner benefits.

[John McDonnell]

Members across the House will have appreciated the sense of grievance and injustice from women born in the 1950s who were not given proper notice of the rise in the state pension age. The ombudsman has recognised this as maladministration, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), when he was the Prime Minister and leading the campaign in the 2019 general election, said he would address this matter. Since then, more of those women are now living in poverty and 200,000 of them have died, yet not a single Minister has met them since 2016. Is the Minister willing to meet a delegation from the WASPI campaign to talk about their plight and find a way forward?

[Laura Trott]

I thank the right hon. Gentleman for his question and understand where he is coming from, but there is an ongoing investigation so it would be inappropriate for me to meet people at this stage.

Universal Credit and Jobseeker’s Allowance (Work Search and Work Availability Requirements @0017 Limitations (Amendment) Regulations 2022

John McDonnell Excerpts

Wednesday 20th April 2022 General Committees

[John McDonnell (Hayes and Harlington) (Lab)]

To be frank, I may have taken my eye off the ball, but I did not think that the policy was a contentious issue from the past. I did not think it was an issue to be addressed at all. Over the years, there has been consensus about the nature of a policy that allows people a breathing space. That policy originally came from discussions between the TUC, the CBI and others, I think, and particularly related to skilled workers. They were given breathing space to ensure that they found employment that used their skills most effectively, which is beneficial to both them and the economy overall. The key issue was about ensuring that people kept within their profession or trade and maintained their skill level. As a result, they benefited from higher wages.

I honestly did not think that that was an issue to be challenged. I do not know where the proposal has come from. I certainly do not understand why there is urgency. I am really surprised that such regulations have been brought forward without full consideration of the rationale for the original policy, which was, as I said, largely to maintain people’s level of skills and to provide them with a decent income. Exactly as the hon. Member for Glasgow South West has said, the intention was to avoid putting pressure on these workers to go into sectors or unskilled work from which it would be very difficult for them to retrieve their position. The three-month period was to ensure they had the time to find alternative suitable work away from the pressures of the daily grind.

I literally do not understand the measure and what worries me is that usually experts are consulted before new policies such as this are introduced. Years ago, as a youngster, I used to work for the TUC. I used to do the papers for trade union representations on the Social Security Advisory Committee, and its members are the experts. To say that the Government will consult the committee retrospectively is farcical. Once the Government have introduced a policy, it is very difficult to see them suddenly reversing it if it is rejected by the Social Security Advisory Committee. In addition, what I find bizarre is that the 21-day rule gets thrown out as well. We will introduce the policy immediately after it is legislatively agreed. I also do not understand why there has been no consultation with the legislatures in Scotland, Northern Ireland or Wales. Additionally, there has been no impact assessment.

That is not a good policy-making process. I am critical of the Government on a number of issues, but usually they have abided by a standard process of consulting the appropriate organisations and making sure there is time for proper consideration of any impact a policy might have. I honestly cannot understand the rationale for bouncing the measure through at such speed. I cannot understand the rationale behind the principle. It will be counterproductive and will particularly affect skilled workers. It will put them under undue pressure, and we will lose their skills over time.

I am also fearful that, as the hon. Member for Glasgow South West says, the change will have an impact on the financial standing of some who will be unfortunately forced into work that is inappropriate to them, reduces their overall incomes and subjects them to the potential of sanction and the loss of all income. I think it is a misguided policy. The only objective I can see is that somebody, somewhere in Government—civil servant, Minister or whatever—has set the target of getting 500,000 people into work by the end of June, and the regulations are one of the blunt instruments they are going to use to do that. The problem is that they will put square pegs in round holes, in that they will be counterproductive for the individuals and the economy. That is why I wish to vote against them. I think they are misconstrued and misguided.

--- Later in debate ---

[Mims Davies]

The hon. Lady makes an important point about the evidence and why employers want more people to apply for their jobs who normally would have ruled themselves out. On labour market figures day last Tuesday, I was at a job fair at one of our 190-plus new jobcentres, just outside Gatwick airport. They have 5,000 vacancies at the jobcentre there, and I spoke to representatives of Gatwick airport and local supply chains who were delighted to be meeting claimants who were looking to change and move into the sector, to help reinvigorate and bring back tourism and aviation. Those people had perhaps done different things before the pandemic, or were looking to progress and do something else. I can give the hon. Lady plenty of examples of employers, going beyond surveys. This is about real people—it is beyond statistics. It is about jobs, livelihoods, and real people progressing.

The right hon. Member for Hayes and Harlington was wondering why this is suddenly an issue. According to my records, he has not been to his local jobcentre since 2017, so perhaps if he popped down to that jobcentre and spoke to the work coaches, he would see it in action.

[John McDonnell]

rose—

[Mims Davies]

Perhaps he has been recently; forgive me if I am incorrect.

[John McDonnell]

I do not think that is true—that is the first thing. The second is that I am in continuous conversations with the jobcentre, and occasionally will visit, because it is next to my home. The issue is whether there is any evidence of reluctance among workers to take those jobs. Is that what the measure is about? Is there some evidence of reluctance, of people not wanting the jobs that she has explained exist?

[Mims Davies]

We will have a look at our records about whether there has been an official visit, but according to what I have, there has been no visit in the past four years.

[John McDonnell]

I do not do official visits, but I continue to work—

[Mims Davies]

I understand, but there have been comments about people being shoved into jobs, not tailored support. If the right hon. Gentleman chatted to work coaches, he would see that the reality is that people are getting tailored support and understanding what is right for them. We have reinstated those crucial face-to-face appointments, the first commitment meetings where work coaches can build that crucial rapport with claimants and then build on it, delivering regular, intensive support for claimants at the beginning of their claim and helping them to move back into work more quickly.

Crucially, Way to Work is bringing employers and claimants together quicker, helping to optimise the recruitment process through job fairs, employer hubs, social media channels, the DWP’s Job Help website and our “Find a job” service. All those interventions have grown during the pandemic and post-pandemic to help people, and employers are offered a named, dedicated local employment adviser at their jobcentre to work with them to fill their local vacancies. If they are a national employer, they are also offered a dedicated national account manager.

I have met many of those people, who have been keenly helping people leaving prison, Afghan resettlers and others; they are very keen to extend all those opportunities more widely. We are also vastly extending our existing network of employer contacts, setting up work trials, for example, and using our existing sector-based work academies to give employers the opportunity to see what local recruits have to offer via the DWP. In fact, on my last visit to my local jobcentre in Haywards Heath, one gentleman was meeting an employer on the day and got offered a job, and he had not been in work for seven years. These measures are life changing, because people are having those conversations in our jobcentres.

--- Later in debate ---

[Mims Davies]

Absolutely. My hon. Friend makes a very good point. Many people have stepped into work in sectors that they would never have considered, because of the pandemic. They have done it because it is the right thing to help their community and their family or because of the impact on their sector. Through our plan for jobs, including the restart programme that supports people after nine months’ unemployment—previously it was after a year—we are helping people with their wellbeing, confidence and skills. The longer someone is out of work, the harder it is to progress. Once someone is in a job, it is much easier to get a better job and reach the next stage of their career.

In essence, I think that people are saying that the regulations are trying to get people to go into the wrong roles. It is all down to good-quality work coaching with our local jobcentres and teams opening up people’s mindsets and abilities, in the way that the pandemic has for some people, so that they try new sectors. That does not mean that they will leave the sector that they have not been able to get back into forever, but they can transition and use their skills in a way that perhaps had not occurred to them, and we are making sure that people understand that.

[John McDonnell]

rose—

[Chris Stephens]

rose—

[Mims Davies]

I would like to conclude—

[John McDonnell]

Don’t follow that advice; the Minister wants constructive engagement.

[Mims Davies]

I think I have been very generous to the right hon. Gentleman, but I will hear him out just this once.

[John McDonnell]

I am grateful for that. This is about getting the policy right at some stage. If the Government are to retrospectively engage with the Social Security Advisory Committee, it might well be that some of these issues can be taken up and the policy honed as it goes to implementation.

The hon. Member for Sleaford and North Hykeham is right that often it is best to be in work to find another job, but I am worried that this policy seems to be based on an idea that people are reluctant to take alternative work in different sectors. That is why I asked for evidence of that. When the Minister writes to my hon. Friend the Member for Wirral South, I would be grateful if she included any evidence of such reluctance in the correspondence.

The issue is that once people are forced into work, which could be long hours on low pay, that makes it more difficult to get into other work, so when the consultation takes place with the SSAC, it is important to ensure opportunities for the individual to challenge some of the decisions, based on the reasonableness of getting back into a level of work or professional grade that they had before. [Interruption.] I apologise for the length of my intervention.

[Mims Davies]

I do not think I have ever spoken about the reluctance of our claimants to be tenacious and open-minded and to move forward. In fact, that is what the relationship that we build among work coaches, local employers and sector-based work academies, and our approach that we have developed through the plan for jobs, has really brought out. Given the transitions and opportunities and our 50-plus choices and 50-plus champions, I often remind people that the latter part of their careers, when they have great choices, can be the most fulfilling of their working lives. In fact, that is 25% of a working life. The hon. Member for Wirral South mentioned those who fall into economic inactivity, which is something we are focused on.

--- Later in debate ---

[John McDonnell]

On a point of order, Ms Elliott. The Minister made reference to my visits to a local jobcentre. My office—we are in almost daily dialogue with the local jobcentre on individual cases—does say that my visits are fairly frequent, but they have largely been on the picket lines with PCS in the disputes that have taken place.

May I just make this point? Are MPs’ visits to Government offices now being monitored by the Government? If that is the case, could we be informed of that? If that is to be raised in debates such as this one, we will need to make sure that all our visits are properly logged. I think that monitoring the activities of individual MPs is a dangerous process and we should be aware of it.

[The Chair]

Thank you. That is not a matter for the Chair, but the point has been noted and is recorded.

Question put.

Carer’s Allowance

John McDonnell Excerpts

Wednesday 30th March 2022 Westminster Hall

[John McDonnell (Hayes and Harlington) (Lab)]

The reason I am participating in the debate is that I brought together an unpaid carers group that has been meeting over the past few months to talk about the current situation. The fact is, it is heart-rending to talk about the struggle that most of them are having. The pressure they are under is immense, and the pressure that they have been under as a result of covid has exacerbated the way in which their lives have been transformed by the altruistic act of caring for someone else.

The carers in the group are, basically, families looking after a child with a disability or a special need, or families looking after an elderly relative. What is also remarkable is the number of the children who look after others in their families. What came across in the group is that that act of caring has implications for the whole family: individuals have given up their careers to undertake caring, and siblings who have given up the opportunity of going to university to help the family out with care overall.

It is interesting that none of them asks for anything in return. They do not even ask for thanks. They just want to get by. They just want to be able to survive. To be frank, from the discussions I have been having with them, I do not think that some will survive this coming period. We call it the cost of living crisis glibly, but it is a crisis for this particular group of people in our society in a way that it is possibly not for others.

To run through some things that they would emphasise—points others have made—for example, the issue of higher energy costs is not just about heating; it is the energy that is needed to maintain basic equipment to enable the person people are caring for to survive, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said. Apart from the health-support devices and the special equipment, other issues raised were the transport costs to get to appointments—again, that can become very costly—and nutritional costs, in particular as inflation hits hard a number of nutritional inputs required for the person they are caring for.

It then comes down to what those carers receive. My hon. Friend the Member for Kingston upon Hull East (Karl Turner) raised the issue of the contradiction between the earnings allowance and carer’s allowance. It is ludicrous—we all know that it is ludicrous—and it just needs resolving quickly. I do not understand what logic there is for arguing for anything other than reform on that issue. It comes down to the basic level of carer’s allowance, as far as I am concerned. We are inflicting a level of poverty on these people, who do so much work to assist our society overall.

[Liz Twist (Blaydon) (Lab)]

I thank my right hon. Friend for giving way. We have Carers Week, when we celebrate and thank carers, coming up in June. Does he agree that there is no better time to look seriously at raising the carer’s allowance and making sure that we not only recognise carers with words but treat them decently?

[John McDonnell]

I fully agree. There is a sense of urgency about this issue now, because what came out of the discussions that I have had with the carers group that I brought together is the stress that carers are under, and the mental health implications not only for themselves as individuals but for their whole family. We know that there are examples in the past of how such stress has caused a mental health problem that has led to suicide.

There is a need for urgent action now. We have gone beyond intellectual debates about this issue; we just need some action rapidly, given the fact that carers face these massive increases in prices, particularly around energy. And then effectively they face a cut—a 3.1% increase, as against inflation now, which ranges between 7% and 10%. That level of inflation comes in like a whirlwind for these particular families and we need urgent action now. Perhaps that action has not been considered effectively in the past, but it certainly needs to be considered now.

[David Linden (Glasgow East) (SNP)]

I am grateful to the right hon. Member for giving way. Does he also believe that it is incumbent on the state to view this matter through the prism of preventive spending? If we pile so much pressure on these carers, who are caring for some of the most vulnerable people, and then the carers themselves end up in mental health predicaments or poor health, the costs of that will be borne by the state anyway. So it is a false economy not to support them.

[John McDonnell]

That is exactly the final point that I was going to make, because most of the people who I have talked to are at a tipping point, where they and their whole family can no longer survive on the level of income they have, given the pressure they are under.

What comes across time and again is that carers have to struggle: first of all for recognition; then for assessment of the person they are caring for; then for support services; and then for just a respite every now and again. For some of them, that struggle is becoming insurmountable. Then what happens? The person they are caring for is taken into care and the costs escalate beyond anything that we have seen so far. So there is a desperate need to resolve this matter.

I will just throw in one other point as well. The benefit that carers get is not an access benefit to other benefits. With regard to energy costs in particular, a small step would be access to winter fuel allowance and—to be frank—a doubling of that winter fuel allowance.

--- Later in debate ---

[Chloe Smith]

I am sorry if the hon. Lady thought that that was a useful use of the minutes we have left, when I have plenty more to say. She stops me to insult me rather than letting me talk about carers; that is not particularly helpful.

Like other hon. Members, I want to talk about the rate of carer’s allowance. I will start with whether it is high enough. The Government continue to provide financial support to unpaid carers through carer’s allowance, the carer element in universal credit, and other benefits. We have chosen to focus extra support on carers who need it the most. About 360,000 carer households on universal credit can receive nearly £2,000 year through the carer element, and that amount will increase from April 2022. Universal credit is of course a key benefit—indeed, it is the key benefit—for carers on low incomes, on whom we most need to target the support. Indeed, carers in receipt of universal credit do not face the cliff edge identified by the hon. Member for Kingston upon Hull East in opening the debate.

[John McDonnell]

Will the Minister give way?

[Chloe Smith]

I am afraid I need to make progress.

The hon. Member for Salford and Eccles (Rebecca Long Bailey) argued that we need to increase the rate of carer’s allowance even further to reflect the current rate of inflation, rather than last September’s rate of CPI. Of course, the Secretary of State undertakes an annual review of benefits and pensions; and CPI in the year to September, as published by the Office for National Statistics, is the latest figure that the Secretary of State can use to allow sufficient time for the needed legislative and operational changes before new rates can be introduced at the start of the new financial year.

Let me turn to the carer’s allowance earnings limit. Right hon. and hon. Members have mentioned the limit throughout the debate and argued that it ought to be increased. Carer’s allowance has an earnings limit, which permits carers to undertake some part-time work if they are able to do so. This recognises the benefits of staying in touch with the workplace, including greater financial independence and social interaction. In many cases, carers are keen to work, so we want to encourage them to combine some paid work with their caring duties, if they wish to do so and wherever possible. That is why we regularly increase the earnings limit.

The limit for those in receipt of carer’s allowance will increase to £132 net earnings a week from this year, which means that the earnings limit will have increased by about a third since 2010. Many of those who are receiving carer’s allowance and doing some work will also be receiving universal credit. In those cases, the 55% taper rate and any applicable work allowance will help to ensure that people are better off in work, which means more generous treatment in universal credit of earnings above the carer’s allowance earnings limit.

Right hon. and hon. Members have mentioned the increases in fuel bills, which I absolutely recognise. The Government acknowledge that people are facing pressures with the cost of living, including rising fuel and heating costs, and Members will know about the measures announced in the spring statement last week, which build on the existing support that the Government provide and will be worth over £22 billion.

A number of schemes are in place to help with heating costs, depending on carers’ circumstances. They include the winter fuel payment, the cold weather payment and the warm home discount. I recognise the argument made by the hon. Members for Salford and Eccles and for Bolton South East about extending the warm home discount to carers. I think they will know that colleagues in the Department for Business, Energy and Industrial Strategy recently consulted on the scheme and announced that automatic rebates will be extended from those getting the guarantee credit in pension credit to include other low-income households whose homes are fuel inefficient.

The hon. Member for Worsley and Eccles South (Barbara Keeley) and others made the point that it is important that carers apply for all the support that might be available to them. Many working-age carers receive means-tested benefits as well as carer’s allowance, and I have already mentioned universal credit. Pensioner carers may be able to receive pension credit, which includes an additional amount for carers. Very importantly, receiving a means-tested benefit can act as a passport to other support, so if carers are not already receiving a means-tested benefit, I encourage them to look at gov.uk or to seek other advice, to see whether they might be entitled to that.

Social Security and Pensions

John McDonnell Excerpts

Monday 7th February 2022 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I resent the premise of this debate. I resent the Government bringing forward an unamendable order on such a significant issue, because that leads to the conclusion, as the hon. Members for Amber Valley (Nigel Mills) and for North East Fife (Wendy Chamberlain) said, that if we reject the order there will be no increase whatsoever. We should not allow Parliament to be blackmailed in that way. The response is fairly straightforward: on the issue of poverty in this country, there has to come a time when this House rises up. We have heard example after example. We can all give examples from our own constituencies—the heartbreaking stories of how people are suffering at the moment. So we should not accept the Government bringing forward an unamendable order and expecting us either to go through the Lobby like sheep and vote for it, or to abstain.

[Andy McDonald]

Does my right hon. Friend agree that this country is facing a crisis that is being visited on the poor, and that to put this House in the position of simply having to accept it is absolutely reprehensible? We should be demanding that this order be taken away and that we get a proper settlement and a proper increase for the people most in need. Surely that is the duty of this Parliament.

[John McDonnell]

I completely concur. I understand those who say that if we vote against this tonight we will be accused of voting against an increase, but far from it—if we vote against it we will be instructing the Government to come back immediately with an alternative that meets the cost of living challenge that working people now face.

It is no good relying on statistics from seven months ago when we know the crisis that people are facing. I find it interesting that the Government can arrive at flexibility when they are saving money but not when they want to assist our constituents. I say that because I was here for the debate on the triple lock. At that time, as my right hon. Friend the Member for East Ham (Stephen Timms) has pointed out, we were facing the prospect of an increase of 8% based on the triple lock linked to earnings. Actually, that was pretty damn accurate as to what people would be facing. The Government were fleet of foot. They scrapped the triple lock altogether, suspended its operation and then came forward with this.

Every Member who has spoken so far, on both sides of the House, has said that this will mean a cut in people’s living standards when faced with the prospect of a 7% rate of inflation. The hon. Member for Waveney (Peter Aldous) eloquently set out the rationale for why the Government needed to do more, but I say to him that the Government will not do more unless this House is firm in its view and rejects this order tonight. They will not come back with an emergency package unless we start kicking up a fuss on both sides of the House. That is why they have come to the House with an unamendable order. They were worried that if there was an amendable order, we could have had a majority in this House for doing something better on behalf of our constituents. I find it outrageous that they have tried to put us in this position.

The hon. Member for Amber Valley, who is no longer here, made an extremely interesting speech, as he always does. I do not usually agree with him on much, but he always presents an argument we can understand—or a rationale, anyway. His argument to the Government was that if they are trying to tell us that their social security system is meeting the needs of our people, they should publish the basket of goods, the costings and so on. Well, the Government do not do that, but others do.

Frequent reference has been made tonight to the Joseph Rowntree Foundation’s analysis of poverty and of what the Government’s measures will do. The figures are startling. Over 8 million working households are in poverty, as are 2.1 million pensioners and 4.3 million of our children. My hon. Friend the Member for Cynon Valley (Beth Winter) made the point that, in the fifth richest country in the world, we have over 4 million children living in poverty. The figure for disabled people is now 3.8 million, which has increased dramatically over the last four or five years as a result of benefit cuts.

I am not willing to sit here tonight and be blackmailed into either voting for this motion or abstaining. I want the opportunity to vote against it and to give an instruction to the Government to go away and do better: to come back with a real proposal that will increase benefits, at least so that they match inflation. After 11 years of austerity, I would expect the Government to be coming up with proposals to start making up some of the ground that has been lost over that time, as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) said.

I will make one final point. Every time we have one of these debates, we get a Government Minister telling us how wonderful they are because they have created all these new jobs that people can go into. I met a group of unpaid carers this morning, and I said that it looked as though their allowance was going to go from 67% to 69%. Given the hours they work as unpaid carers, even if they are doing 35 hours per week—most of them do triple that at times—they will be paid something like £2 an hour for what they do. Unpaid carers save this country about £130 billion in costs that would otherwise fall on the state. They cannot get other jobs because they are looking after their relatives. They are desperately underfunded and most of them, as a result, are living in poverty. This order will do nothing for them whatsoever.

My commitment to that group of carers I met this morning means that I will not vote for this. I will vote against it, and I will demand better action from this Government. I will demand that Ministers go away and come back tomorrow with a realistic proposal that will tackle poverty in this country and lift at least some of those carers out of the hardship and suffering that they are unfortunately experiencing at the moment.

--- Later in debate ---

[David Rutley]

I will make some more progress.

The aim over the two years of the pandemic has been to give fairness to pensioners by protecting the value of the state pension in 2021-22, despite the decline in earnings, and to taxpayers in 2022-23 by suspending the earnings limb of the triple lock because of a statistical anomaly, distorted by the cumulative effects of the economic impacts of coronavirus. Although inflation rose by 0.5% last year, pensions rose by 2.5%, and this year they rose by 3.1%. Over two years, pensions have risen by 5.6%.

The right hon. Member for East Ham (Stephen Timms) made an important point about pension credit take-up. I have been speaking to my colleague the Pensions Minister, who says that take-up increased from 71% in 2017-18 to 77% in 2018-19. However, more work is clearly needed, and we are working very hard to increase awareness.

[John McDonnell]

Will the Minister give way?

[David Rutley]

I will, but probably for the last time. I need to make progress.

--- Later in debate ---

[John McDonnell]

Can the Minister explain why 8% is a statistical anomaly and 7% is not?

[David Rutley]

I do not know what maths the right hon. Gentleman is talking about, but what I have been saying is that we have been working hard—

[John McDonnell]

rose—

[David Rutley]

The right hon. Gentleman has had a chance to make his point, and it was not made particularly well. [Interruption.] I was listening, but I did not understand the point that the right hon. Gentleman was making. The point that I am making is that we are taking important steps to tackle the challenges faced by the country.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) made a couple of points about GMP uprating formulas. That is a separate piece of primary legislation. The right hon. Member for East Ham—the Chair of the Select Committee—also made points about GMP, and particularly about communication-related issues. The Department will supply a written review of those issues shortly. The hon. Member for Westminster North made points about local housing allowance rates. We have increased them by about £1 billion, which has given 1.5 million claimants an average of £600 more housing support in 2020-21, and we are maintaining those significant increases.

It is interesting to note that throughout much of this debate, hardly any Opposition Members mentioned that we are now experiencing a record number of vacancies. Our focus needs to be on getting people into work. There has been talk of poverty. Our approach is absolutely to tackle poverty. Since 2020, 700,000 fewer people are in absolute poverty before housing costs, including 100,000 fewer children and 200,000 fewer pensioners. We need to ensure that we fill those vacancies and end those shortages, and that more people take jobs in hospitality, tech, social care and healthcare.

[John McDonnell]

Will the Minister give way?

[David Rutley]

I have already given way once to the right hon. Gentleman.

Employment stands at 32.4 million, up 60,000 in the quarter and up 3.2 million since 2010. The year 2010 is significant, as the right hon. Member for Hayes and Harlington knows, because his party had 13 years in power to change how the uprating legislation works, and it did not do a thing.

The draft Social Security Benefits Up-rating Order increases state pensions and benefits by 3.1% from April 2022. The draft Guaranteed Minimum Pensions Increase Order increases the guaranteed minimum pension by 3%, in line with primary legislation. For those reasons, I commend these orders to the House.

Question put.

Social Security (Up-rating of Benefits) Bill

John McDonnell Excerpts

Consideration of Lords amendments
Monday 15th November 2021 Commons Chamber

[Stephen Timms]

The Minister did indeed say that in response to my intervention, but that does not answer the question. The question was: do the Government intend the value of the state pension, over time, at least to keep track with earnings? I was hoping that he would reaffirm that. I do not think that is controversial—it is a policy long held by the Labour Government, the coalition Government and this Government—and I hoped that he would say that that was still their intention, even though in the current year, for reasons that we all understand, the value of the state pension will fall significantly behind the increase in earnings.

As I hope I made clear in my intervention, I think it is entirely reasonable not to increase the state pension by 8% this year; I completely understand the case for not doing that. It looks as though we will get an increase of around 3%, in line with CPI. The hon. Member for Glasgow East (David Linden), who spoke for the SNP, talked about the likely rates of inflation, and, depending on increases in prices and earnings next year, it is quite likely that the state pension will never catch up with earnings unless there is a catch-up initiative of some kind. The Lords amendments would provide such a mechanism. If there is not a catch-up at some point, that would be contrary to the Government’s long-held intention that the state pension should at least keep track with earnings. The fact that—as the Minister has now told the House twice—it will get back in line with the triple lock next year does not solve the problem, because there is a significant backwards move this year. Will there be a catch-up initiative at some point? It looks and sounds as though there will not.

Keeping the value of the state pension going up in line with earnings was a key pillar of the new pensions framework set out in the report by Adair Turner and his fellow commissioners John Hills and Jeannie Drake, published in 2005 and 2006. The settlement’s key elements were that the state pension should keep track with the increase in earnings over time, and auto-enrolment. It was accepted by the Government then and by every Government since.

The importance of that needs to be spelled out. It is not just about being more generous to pensioners and helpful to older people. It is important because it ensures a sound foundation for pension saving, so that people auto-enrolled into pension saving through that successful initiative, which we have all celebrated, are not being encouraged by the state into a bad deal. If the value of the state pension will no longer at least keep track over time with earnings, some people will be better off spending their money now, rather than saving into the pension pot that they are being auto-enrolled into, and later relying on the means-tested safety net of pension credit.

If the state pension slips behind earnings, modest pensions accrued through auto-enrolment will become worthless, because those who claim them in due course will not get above the means-tested threshold and they will still have to depend on pension credit for their income in retirement, and the fact that they have saved into a pension will do them no good at all. That will be a growing problem if the level of the state pension is allowed to slip behind the increase in earnings.

If that does happen, people who are looking forward and saving but are going to end up with fairly modest pensions should instead spend the money at the time they earn it, rather than save it in a pension that, in the end, is not going to take them above the means-tested threshold and so will not give them any additional income. That is why what the Minister is arguing for is such a threat to the success of auto-enrolment. Auto-enrolment will no longer be a sound basis for pension saving if the level of the state pension is allowed to drift below the level of earnings.

People must be able to trust in the state pension under the policies of the Government. They have been able to do so up to now, and now they will not. That raises a pretty fundamental question about the future of the Government’s pensions policy. There is a real danger in allowing, almost by sleight of hand albeit for reasons that we all understand and sympathise with, the state pension to fall permanently behind the increase in earnings and weakening the pension framework that, as far as we all know, is still the basis of the Minister’s policy.

We should not allow that to happen. We need either a measure, and the Minister needs to reassure us that there will be, such as a catch-up initiative to make sure that the state pension over time—not this year, but by next year or the year after—will keep track with the increase in earnings, or the House needs to accept the amendment agreed with a significant majority in the other place, because that keeps the pension framework in place and keeps it effective. There is a real worry if there is a significant falling behind. If there is a 3% increase in the state pension at a time when earnings have gone up by 8%, that will be a one-off 5% fall in the state pension behind the level of earnings. Depending on what happens to earnings growth, which will certainly not carry on at 8%, and on inflation rises next year, that fall could well be locked in for good and the pension framework will have been weakened.

I hope that I have made it clear why this is actually quite important. It is not just about whether we are being generous enough to pensioners. The question is: are we keeping in place a robust and reliable framework for pension saving based on which people can plan with confidence for the future?

[John McDonnell (Hayes and Harlington) (Lab)]

May I say that we in the Opposition, and I think Members on both sides of the House, take pride in the expertise of my right hon. Friend the Member for East Ham (Stephen Timms)? Time and again, as Chair of the Work and Pensions Committee, he has warned the House —both sides of the House, at times—about the approach that needs to be taken if we are to have a stable social security and pensions regime. I pay tribute to the work he does.

I am an ardent advocate of the coalition Government’s policy on the triple lock. That seems somewhat ironic, given the history of this policy, but I am. The historical background is that I was a total opponent of Mrs Thatcher’s breaking of the link between pensions and earnings. To be frank, the state pension still has not recovered from breaking that link. I was elected in 1997, and at the end of Conservative rule in 1997 the basic state pension would have been 50% higher in value if Mrs Thatcher had not broken the earnings link in 1980.

From 1997, I prepared alternative Budgets to the new Labour Budgets. Gordon Brown had a sense of humour about that, and when I was on a platform with him recently—when I was the shadow Chancellor—he said, “Actually, he’s always been the shadow Chancellor,” because I was producing alternatives to his Budgets. In every alternative Budget, I put forward the restoration of the link between earnings and pensions. I did so because the breaking of that link had undermined the progress we had seen until then in improving the state pension and lifting pensioners out of poverty. That is why I was a strong supporter of the triple lock when the coalition Government introduced it. Despite a decade of the triple lock, however, the basic state pension would still be 37% higher if the earnings link had been maintained. That means that today a single pensioner on the basic state pension would be £2,662 a year better off, and a pensioner couple would be £4,277 a year better off, if the link had not been broken by Mrs Thatcher all those years ago.

According to figures on pensioner poverty from Age UK, there are 2.1 million pensioners living in poverty in our country at the moment, up from 1.6 million in 2014—a 30% increase. What is interesting about this, and not shocking to some in this House, is that the majority of pensioners living in poverty are women. In addition, pensioners from black and Asian communities are about twice as likely to be living in poverty.

What I find interesting are some of the individual examples we can bring to the House about what this means. I remember that, the last time energy prices rose, I had a constituent who used her bus pass to stay on the bus all day to keep warm. Such stories about the reasons why people were living in such fuel poverty were not uncommon. I remind the House that this year fuel bills are increasing on average by £139 and they are expected to rise again next year, so I predict that we will have more of our pensioner constituents going cold this winter and, if we are not careful, in future winters as well, especially as, as has been said, inflation is now likely to be 4% and some are even predicting 5%.

I just wonder what this row is all about, because I support the amendments. I would have given the 8%, because I do not believe that people should break the principle of a manifesto commitment in such circumstances and I believe the additional top-up would have worked. However, the Altmann amendment is moving towards a 5% increase and the Government will award a 3% increase, so the difference we are talking about—this is the argument—is about £2.75 a week. Even if we went to the full amount of the 8%, there would only be an additional £7 a week between the 3% and the 8%. Are we really having a row in this House about robbing pensioners of £2.75 a week? I just find it unbelievable that we can even contemplate that.

I have seen the range of costings, but I have examined the DWP estimates on the effect of the Altmann amendment. They said it would cost £1.3 billion in ’22-23; that was in comparison with the uprating with prices. I was in the House a few weeks ago. We are arguing about an additional £1.3 billion for pensioners. Actually, a £25 billion corporate tax break was given away by the Chancellor in the Budget. It will be £12.5 billion next year.

--- Later in debate ---

[Guy Opperman]

I thank all colleagues for their contributions. The factual reality of the situation is that this Government are spending £129 billion on pensioners. That is £105 billion on the state pension and £24 billion extra on the various add-ons for pensioners, including winter fuel; free eye tests; bus passes; free NHS, obviously; pension credit—I could go on in great detail. My hon. Friend the Member for North Norfolk (Duncan Baker) asked whether the triple lock will return. I can assure him that that is the case.

[John McDonnell]

On that point, it is almost as though the state pension is a charitable donation to pensioners. They paid for it, working throughout their lives, through their taxes, their national insurance—their contributions. Some of them served on our behalf in the armed forces. They paid for this; it is not some charitable donation by the Government.

[Guy Opperman]

There is so much that I could reply to; I could genuinely take some considerable time replying to the right hon. Gentleman. Let us start with this. During the last Labour Government, in which time the right hon. Member for East Ham (Stephen Timms), who is a former Pensions Minister, another former Pensions Minister who is in the Chamber, and the right hon. Member for Hayes and Harlington (John McDonnell) were Members, did they in any way link the state pension to earnings? Not on one single occasion over 13 years. It is this Government—the coalition Government and this Conservative Government—who have linked it to earnings.

The right hon. Gentleman talks about the state pension. That is paid for by the working taxpayer on an ongoing basis. The working taxpayer is paying more for the state pension, and it is a larger state pension than ever before; £129 billion is spent—[Interruption.] A hundred and twenty-nine billion. He does not want to hear it, because it is the largest state pension there has ever been. Thirteen years of a Labour Government, and what did they do? They never linked it to earnings. I remember the 75p increase in state pension by Gordon Brown. It is astonishing, the hubris that the right hon. Gentleman comes up with.

The factual reality is that there was never a situation where the Labour Government did anything like the coalition and Conservative Governments did. I asked the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), who represents the Opposition, to come up with a figure. You can search Hansard for as long as you like, Madam Deputy Speaker; answer came there none. There was not a single figure. The factual reality is that the Opposition have no idea how they would approach this, they have not come up with an individual figure, and they are not able to do anything—

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

John McDonnell Excerpts

2nd reading
Tuesday 8th June 2021 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab) [V]]

The Bill will bring relief to thousands of investors who were let down not just by a failed company but by a failed system. That is why we need a Bill that will address the failures of regulation, governance and auditing, but this Bill does none of that. The Government are yet again bailing out victims of an under-regulated finance system that is regularly ripping off smaller investors. I have to say that Government Ministers are guilty of gross negligence for standing by while this happens time and again.

LCF was offering customers mini-bonds. The FCA said:

“There is no legal definition of a ‘mini-bond’”,

but it did nothing to stop the mis-selling. The FCA saw no issue with LCF’s operations, yet in March 2019 HMRC found that products advertised as ISAs by LCF did not meet the rules. In addition, the FCA was advising that investments would be protected by the financial services compensation scheme; the High Court judged that they were not. The FCA was asleep at the wheel.

The then chief executive of the FCA, who is now the Governor of the Bank of England, sat on his haunches and did nothing. Some 18 months ago, I called on the previous Chancellor, the right hon. Member for Bromsgrove (Sajid Javid), to delay Mr Bailey’s appointment as Governor, given the concerns.

I am pleased that the Dame Elizabeth Gloster’s report actually identifies some of the problems. She described the FCA’s supervision of LCF as “wholly deficient” and said that there were “significant gaps and weaknesses” in the FCA’s practices. She said that staff were

“not…trained sufficiently to analyse a firm’s financial information to detect indicators of fraud or other serious irregularity.”

LCF’s founder was Simon Hume-Kendall, a former chairman of the Tunbridge Wells Conservatives and a party donor. It has been reported that the investors’ cash in LCF has been used to buy horses, a helicopter and lifetime memberships to private Mayfair clubs. Perhaps the Minister could update us on the ongoing inquiries into the activities of this gentleman and LCF.

As has been said, this is not a one-off. There are so many other examples, including Blackmore, Basset & Gold and Chilango. Perhaps the Minister can tell us when further Bills will be introduced to compensate the investors in those schemes who lost so much money. I welcome the Bill—of course I do—but it is now time for the Government to bring forward serious legislation to stop crimes like this happening in the first place and to protect our constituents from these spivs.