Autumn Statement Resolutions

Jonathan Edwards Excerpts

Monday 27th November 2023 Commons Chamber

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Before beginning my critique, I would like to welcome some of the Chancellor’s announcements. First, I welcome the decision to maintain the benefits calculation based on September’s inflation figure. Considering that energy and food prices are still rising, it would have been callous to change policy, as was briefed beforehand. I also welcome the increase in the minimum wage for those on the lowest wages and the unfreezing of the local housing allowance, albeit I read over the weekend that the unfreezing is only a temporary measure.

On moving those on disability benefits back to work via home employment opportunities, I agree that, if these opportunities exist, we need to help people by offering tailored support. In my view, these reforms would have fitted better within a wider Government strategy to promote homeworking.

I also welcome the extension to business investment relief. The UK faces chronic, long-term productivity challenges, and a key part of addressing them is encouraging businesses to invest for the future. Regrettably, this was not complemented by extra support for public investment. There was no increase in the Government’s capital budget, which has been frozen at a pathetic 1% of GDP. Surely this has to be increased to address our productivity challenges, with the investment targeted at those parts of the UK that have historically underperformed.

The Resolution Foundation estimates that the UK’s approach to public investment represents

“an institutional failure of the British state”.

It says that, had the UK followed the OECD average over the last two decades, an extra £500 billion would have been pumped into the UK economy, resulting in long-term economic benefits.

In the autumn statement, the Government claimed credit for halving inflation since its peak, thereby meeting one of their self-proclaimed key priorities for this year. Inflation at over 4% means that prices are still rising, of course—they are just rising at a slower rate. This means that, next year, energy costs are forecast to be around twice as high as they were before the price spike. I am disappointed that there was nothing in the autumn statement to help the most vulnerable with their bills. With higher energy prices, the Treasury is raking in extra revenue from VAT. Surely some of that revenue could have been used to provide a scheme to help those in dire need.

Furthermore, the OBR report indicates that inflation will remain higher for longer than predicted in its March forecast. As the OBR states, the assumption is that interest rates will remain higher than forecast, at a time when the central bank estimates that over half the impact of the rate rises over the past two years has yet to be felt. The OBR report indicates that economic growth will be slower than even its March forecast, with GDP growth estimated to be only 0.6% this year and 0.7% next year. It states that cumulative real growth from 2023 to 2027 will be 2.4% lower than forecast in March.

The OBR’s revised figures on real household disposable income indicate that living standards will fall at the fastest rate since records began in the 1950s. Living standards will not recover to the pre-pandemic level until 2027-28. The Resolution Foundation estimates that the average worker will be £1,900 worse off in real terms at the end of this Parliament compared with the start.

The real income of the average worker lags way behind the OECD average. Whereas the OECD average for real wage growth between the financial meltdown in 2008 and 2023 was a measly 8.8%, the UK is firmly in the relegation zone at only 2.7%. Such has been the weakness of wage growth that the Resolution Foundation estimates that the average worker is £11,000 per annum worse off after 15 years of wage stagnation, following the financial crash of 2008, compared with pre-2008 trends.

The proverbial rabbit in the hat was the higher-than-expected two percentage point cut to national insurance. This comes at a cost of £46.8 billion per annum over the forecasting period, according to the Treasury’s figures. However, the Chancellor did not comment on the impact of freezing income tax allowances and thresholds, which has resulted in a tax bonanza for the Treasury as a result of so-called fiscal drag. If my understanding of the OBR report is correct, fiscal drag will result in more than £201 billion of extra revenue for the Treasury over the next six financial years. That is the economic equivalent of nabbing the electorate’s wallet and expecting them to be grateful that a fiver has been placed in their pocket.

Once again, the OBR report highlighted the harm that Brexit has caused to the economy. It found that long-term trade intensity will be reduced by 15% as a result of the UK Government’s decision to operate outside the European economic frameworks. Meanwhile, it also found that the flagship post-Brexit trade agreement, the comprehensive and progressive agreement for trans-Pacific partnership, will add only 0.04% to GDP in the long run. Despite this major elephant in the room, we face an election in which no UK political party is willing to entertain the one obvious economic move that could be taken to improve matters for the country, namely reintegrating economically as much as possible with the rest of our continent.

The political debate between the parties in this place has completely converged on the economy. As we face an election, the obvious question is where will future growth come from? Public investment is at historically low levels, exports are struggling as a result of a kamikaze Brexit, and consumer spending is likely to remain suppressed as living standards decline. In this environment, it is a bit far-fetched to expect business investment to step up and fill the void. I wish the official Opposition well when they inherit the mess in front of us.

Cost of Living Support

Jonathan Edwards Excerpts

Tuesday 20th June 2023 Commons Chamber

[Tom Pursglove]

I of course recognise that food prices are a challenge not just here in the UK, but abroad, too. For example, I am aware that food inflation here is 19%, but within the EU it is 19% and in the euro area it is 18%. People are experiencing these significant challenges not just here, but abroad. I have seen reports just today of retailers discounting products to try to help with some of these pressures, which goes beyond the package of support that the Government are providing. That £94 billion figure is not insignificant. We also continue to support families on a case-by-case basis through the household support fund, and I encourage the hon. Lady to signpost her constituents to that support, because where people have particular needs and challenges, they can be supported through that help.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

In his statement, the Minister mentioned support with energy bills. Earlier this week I received an email from a constituent in the village of Capel Hendre in my constituency, which is on the mains gas network, but a large proportion of households use alternative fuels such as heating oil. The payment on alternative fuels was not made directly through electricity bills, but people had to apply for it. She has missed the deadline for the alternative fuels payment scheme. I know this is not the Minister’s direct responsibility, but will he raise with the responsible Minister the fact that a cohort of people have missed out? Is there a possibility of reopening the scheme so that constituents can get the support to which they are entitled?

[Tom Pursglove]

I commend the hon. Gentleman for his nifty way of getting that important question into the proceedings this afternoon. If he could share those details with me, I will gladly make sure that that reaches the Minister responsible at the Department for Energy Security and Net Zero.

Social Security (Additional Payments) Bill

Jonathan Edwards Excerpts

2nd reading
Wednesday 22nd June 2022 Commons Chamber

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

I beg to move, That the Bill be now read a Second time.

The cost of living challenge facing many families right now is being driven by forces beyond their control. The aftershocks of covid on global supply chains, and Putin’s invasion of Ukraine, have caused a hike in prices and a spike in bills, particularly for energy costs. As a result, household budgets are being stretched further than at any time in recent memory, so just as we did during covid, the Government are stepping up at this challenging time to help families who are feeling the strain. It is because we got the big calls right that we have the fiscal firepower to take decisive and direct action to help millions of people across the country.

Although we have always been clear that the Government cannot cover every situation or solve every problem, we are providing financial support to every household to help relieve some of the pressures that people are under, and to help them cut costs across their household expenditure. Approximately four in five households—all those living in band A to band D homes—are receiving a £150 discount on their council tax, with millions already benefitting from the money landing in their bank accounts, and all households that are domestic energy customers will get £400 towards their energy bills this autumn, in the form of a grant with nothing to repay. We are, however, principally targeting help at those who need it most, helping ease the squeeze for those on low and fixed incomes, who we know spend a higher than average proportion of their income on energy.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

There is an issue with people who live in park homes—I have a few sites in my constituency—because the energy rebate does not make it through to them. Are the Government looking at innovative ways of addressing the issues faced by those individuals and households?

[Dr Coffey]

My understanding is that the Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), is aware of that particular channel. I am led to believe that a solution is being developed so that people will benefit from that cost even if they do not receive the money directly, because a lot of park home owners do not pay their energy bills directly. I know that my right hon. Friend is aware.

Returning to what we are doing to help people, we are providing a direct cost of living payment of £650—split into two payments of £326 and £324—to over 8 million families who already get help through means-tested benefits. This includes people on universal credit, income-based jobseeker’s allowance, income-related employment and support allowance, income support, working tax credit, child tax credit and pension credit—both guarantee and savings credit recipients. On top of that, we are providing a £150 payment for approximately 6 million people with disabilities who are on qualifying benefits, and giving 8 million pensioner households an additional £300 alongside their winter fuel payment. Combined, that is extra support of at least £1,200 this year for the majority of households that are least able to absorb rising costs, which takes our total support package to £37 billion.

--- Later in debate ---

[Dr Coffey]

The warm home discount is not relevant to the Bill, but I understand the point. It is the policy of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, but I do not know that the intention was—[Interruption.] I am trying to answer the hon. Lady’s question. My understanding of the policy rationale is that because PIP is not means-tested—it is not income-based—a decision on warm home discount eligibility was made to include many more households on the basis of income rather than PIP eligibility. I am sure that she will welcome the fact that we have included £150 in this legislation.

These one-off tax repayments do not count towards the benefit cap and will not affect existing benefit awards. They will provide a budget boost for millions of the lowest-income households right across the United Kingdom.

[Jonathan Edwards]

Will the Secretary of State give way?

[Dr Coffey]

No, I will not.

This Government have supported and continue to support those most in need. I am proud of our record of lifting people out of poverty.

Anyone listening to Opposition parties could be forgiven for thinking that poverty was going up. The fact is that in 2021 there were 1.2 million fewer people in absolute poverty, before housing costs, than when we came into government in 2010. Between 2019-20 and 2020-21, every measure of poverty, whether absolute or relative, saw a reduction in poverty. In terms of statistics, on absolute poverty, our preferred measure, the number of working-age people in poverty is down by 100,000, the number of children in poverty is down by 200,000, and pensioner poverty is down by 200,000.

We know from the latest available data that for most families the best way out of poverty is through work.

[Jonathan Edwards]

Will the Secretary of State give way?

[Dr Coffey]

I will not take any further interventions from the hon. Gentleman, because he has already intervened. I am sure that if he wants to contribute to this debate he will have put in to speak.

In 2019-20, children in households where all adults were in work were about six times less likely to be in absolute poverty than children in a household where nobody works. That is why our economic priority during the pandemic was to protect, support and create jobs through the furlough scheme and the many other measures we took as part of our plan for jobs.

--- Later in debate ---

[Jonathan Ashworth (Leicester South) (Lab/Co-op)]

Let me begin by being clear with the Secretary of State: we do not intend to divide the House. We understand that the Government need to put in place the architecture to make these arrangements swiftly. None the less, we want to put on the record a number of points, on which I hope Ministers will provide some clarity in their response to Second Reading and throughout proceedings today.

Like many Members, the message that I am hearing up and down the country could not be clearer: for many of our constituents, these are the toughest times that anyone can remember. More than a decade of underwhelming economic growth has meant that today the cost of living is skyrocketing and pay packets are failing to keep pace with inflation. By next April, wages will be worth £2,000 less in real terms than in 2020, with real pay in the UK falling at the fastest rate for 20 years, leaving household finances stretched to breaking point. Prices are up in the shops and the cost of petrol is through the roof. Energy bills are sky-high, and the lifting of the price cap later this year means that they will increase further. Families everywhere are saying, “Enough is enough!” It should be no surprise that today’s statistics show a 12% increase in those with council tax arrears.

The Secretary of State took great care to explain why she is taking action to help those in need now, and the measures are welcome as far as they go, but the House has to understand that the future is bleak: energy market expert Cornwall Insight is warning that the energy cap could rise by a further £1,000 in October; inflation is at 9.1% today, with worse on the way; the cost of living will rapidly rise further; pensioners will see the value of their pensions and savings attacked by inflation; and working families will be left desperate to protect the value of their wages from the ravages of inflation—and the edict of Ministers tells them to take a pay cut.

Ministers hope that interest rates and tax increases will dampen demand in the economy, and thereby slow economic output. Pain today and pain tomorrow is their policy to get inflation under control, even though the Office for Budget Responsibility warned, following the spring statement, that we are heading for the biggest fall in living standards since the 1950s, with more children set to be pushed into absolute poverty. Labour was clear that taking no action following the spring statement would have amounted to the wilful impoverishment of many of our constituents—a price that we never believe is worth paying. We therefore proposed a windfall tax on North sea gas and oil producers to help families and pensioners, and we are pleased that after some months the Government finally listened to our representations.

We recognise the extra support that the Government are allocating today, but in reality this legislation—important though it is—is a short-term sticking plaster because of a series of long-term policy failures to grow our economy sufficiently, and to address the longer-term problems and hardship that have been growing over the last 10 years due to attacks on social security and unfair pay settlements.

[Jonathan Edwards]

Does the shadow Secretary of State agree that missing from the Bill is any support for unpaid carers, and does he share my hope that the Government will bring forward proposals in the near future to help that group?

[Jonathan Ashworth]

The hon. Gentleman anticipates a point I am going to make, which is why now is a good moment to turn to the specifics of the Bill. I want to raise a number of points that I hope Treasury Benchers will address throughout proceedings this afternoon, particularly regarding how the Bill impacts on four groups: the self-employed on universal credit; disabled people and carers; pensioners; and larger families.

First, on the self-employed who claim universal credit, the minimum income floor will reduce universal credit payments for some self-employed people to zero. Could the Minister clarify, in responding to the debate, whether self-employed universal credit claimants whose UC payments are zero purely because of the minimum income floor will be entitled to these cost of living payments?

Secondly, on how this impacts on disabled people, the disability charity Sense has warned today of the increasing numbers of disabled people pushed into debt as a result of the rising cost of living. Those on the Treasury Bench must surely understand that many disabled people have needs that make heating and electricity to power equipment particularly central to their wellbeing, so that economising on energy can bring severe hardship.

As my hon. Friend the Member for Battersea (Marsha De Cordova) raised a few moments ago, disabled people on non-means-tested benefits will get £150 as a minimum, and indeed those on means-tested benefits will get the £650. I appreciate that the Secretary of State says this is a responsibility of the Business Secretary, but Ministers did recently change the rules on the warm home discount scheme so that 290,000 people on disability living allowance, PIP and attendance allowance are no longer eligible.

For people on PIP, that means that the Government are giving £150 to them after it was taken off them through the changes to the warm home discount scheme. This is robbing Peter to pay Paul, and it suggests that one hand of Government does not know what the other hand of Government is doing. How can that be justified?

Working Tax Credit and Universal Credit: Two-Child Limit

Jonathan Edwards Excerpts

Thursday 21st April 2022 Westminster Hall

[Beth Winter]

I totally agree. Action needs to be taken on all those policies, including reinstating the £20 universal credit uplift and extending it to those on legacy benefits. We need a whole raft of policies to prevent, reduce and tackle the extreme levels of child poverty that currently exist in this country.

I refer briefly to the Child Poverty Action Group and Church of England report commissioned for the fifth anniversary of the two-child-limit policy. It is very clear in saying that the two-child limit breaks the historic link between need and entitlement. The benefit should be an entitlement, but that link, which was the founding principle of our social security system, has been broken. The report is clear that our social security system should support families and give children the best start in life, regardless of how many siblings they have. They are our future and we should invest in our future generations. The report concluded that the Government must remove the two-child limit to allow all children to thrive.

April’s below-inflation benefits rise means that affected families with three children face a further £938 a year shortfall in benefits to cover the basic costs of raising them, on top of the pre-existing £6,205 shortfall from 2021, with larger families facing an even bigger hole in their income. That is absolutely appalling and devastating for millions of families throughout the UK.

The two-child limit restricts child allowances in universal credit and tax credits worth £2,953 per year to the first two children in a family unless the children were born before 6 April 2017, when the policy came into force. As the hon. Member for Glasgow Central (Alison Thewliss) has already outlined, the disparities, inconsistencies and discriminatory practices in terms of who is and is not entitled are completely unfair.

Unless this two-child limit is abolished, the number of children affected will reach 3 million, as more are born under the policy. We currently have 4.3 million children across the UK living in relative poverty. That equates to around nine in every 30 children in a UK classroom.

As the two-child limit is the biggest driver of this rising level of child poverty, CPAG has estimated that it will push another 300,000 children into poverty, and 1 million more into deeper poverty, by 2023-24. By 2026-27, over 50% of children in families with more than two children will be living in poverty—half of the population in poverty.

We already knew in 2019, from the Work and Pensions Select Committee report on the two-child limit, of concerns that it breached not only the Government’s wider responsibility and international commitments to equality but human rights, including the European convention on human rights and the United Nations convention on the rights of the child. Breaching such human rights commitments appears to come easily to this Government, however; we only need to look at the United Nations High Commissioner for Refugees’ comments on yesterday’s Nationality and Borders Bill for another example of that.

One of the core authors of the Child Poverty Action Group report, Dr Ruth Patrick, says:

“the two-child limit is a poverty-producing policy and one which should be removed”,

but what about the voices of the parents who have contributed to those pieces of research? I will quote just one, who says:

“We wear extra layers of clothes as I cannot afford to put the heating on. We shower on a Wednesday and Saturday to reduce energy bills but we shouldn’t have to live like this.”

Nobody should have to live like that, and I am sure the Minister would agree on that point.

As in Scotland, the Welsh Government have tried to take action to counter some of the worst aspects of this policy, the cost of living crisis, and child poverty in Wales, for example through the commitment to extend free school meals to all primary school pupils from September 2022. However, unfortunately, the main problems causing child poverty lie here in Westminster. The Welsh Affairs Committee, on which I sit, recently looked at the benefits system in Wales.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I congratulate the hon. Lady on making a very powerful case during her speech. However, ultimately, has she come to the position that I have, in my political life, that a just and fair economy and society for Wales will never be created by Westminster? The only solution for us is to take control of those powers ourselves. As the hon. Lady outlined in her speech, where we have those levers, we are making a positive difference, but ultimately, we need all of those levers. Surely, that should be the normal position for her to take now.

[Beth Winter]

I was just coming on to that. The Welsh Affairs Committee quite strongly recommended that we should be exploring the possibilities of devolving the administration—at the very least—of social security and benefits to Wales. We are still awaiting the Minister’s response to the report.

The Committee also recommended an urgent review on ending the £20 universal credit uplift, and on the five-week wait for universal credit, the benefit cap, the bedroom tax, and—crucially, for the purposes of this debate—the two-child limit. We would be very interested to hear the Government’s response to that report.

This policy is having a devastating impact on a large number of my constituents in Cynon Valley, where wages and household incomes are already well below the UK and Welsh averages. The two-child limit therefore has an even deeper impact on my neighbourhood. I recently commissioned some research from the Bevan Foundation on the economy in my constituency. There were some alarming findings on people’s incomes and the levels of benefit-dependent families. They are being impacted drastically by this pernicious policy, and we all know that it will get worse—and already has—with the cost of living crisis, which is having a devastating impact on so many people.

A fortnight ago, I launched in my constituency a survey on the cost of living crisis. Within 48 hours, I had received in excess of 400 responses. I am in the process of collating and analysing those responses to produce a report, but at first glance, the stories coming through from local people are absolutely harrowing—the way people have to live, not having food on the table for their children, not having the heating on. It is absolutely appalling and needs to be addressed urgently. A lot of those people are affected by the two-child limit. I will share that report with the Minister when it is completed—within the next month, I hope.

I very much look forward to the Minister’s response outlining why the Government remain determined to pursue their low-pay, low-income agenda, despite the misery that it imposes on millions of people and their children across the country. Diolch yn fawr.

Social Security and Pensions

Jonathan Edwards Excerpts

Monday 7th February 2022 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

I think the Minister will find that he has managed to unite the whole House and every speaker in this debate. Sadly for him, he will find that every speaker, including me, thinks that the rise we will vote through tonight is not sufficient for the situation we find ourselves in. We will all ask the Government to go away and try to find some more.

We should be aware of the logic behind what we are doing. We are trying to give the people on the least—those who are out of work, those who cannot work, and those who have retired and therefore no longer work—sufficient money to pay all their bills. Unless we believe that people’s benefits are way higher than what they need, if we do not give them an inflationary increase every year, by definition they cannot possibly pay next year for all the things they had last year.

In this pretty unique situation of the rising cost of living, we are asking those with the least to get themselves not only through this winter, but through all of next year and all of next winter, based on an inflation measure that was taken before this winter. What they have to pay their energy bills in March 2023 will be based on a calculation of what was needed in September 2021. That surely cannot be right or logical. When bills are rising as sharply as they are, I cannot see how it is physically possible for people to do that.

Sadly, it does not look likely that we will be sat here in a year’s time with it all having reversed and with the gas price back to where it was a year ago. It does not look like a temporary blip; it looks like some of these prices will be baked in for a long time. There is sufficient uncertainty out there that there could be further challenges to come. I urge the Government to have a long, hard look at whether we really ought to have this system and whether we cannot do better than using September inflation figure to set the benefits and pension rise six months later.

At the start of the pandemic, the Government rightly chose to introduce the £20 uplift in universal credit. We managed to get that done in a matter of days. Last November, at the Chancellor’s financial statement, the reduction in the taper rate was announced and the Government managed to get that into force in a matter of days—on 1 December. Yet now we are told that they have to use the September inflation figure and cannot use a later one, even though we had the December figure in the middle of January, about three weeks ago, and three whole months before the rise comes into force.

I accept that some of the older, clunkier benefits—those whose systems are based on steam-driven 1980s IT that seems to work by shoving KitKat wrappers into the fuse box to patch it—may take a bit longer to programme. However, I would hope that for universal credit and the state pension—the two largest ones and the ones that affect the most people—we could take a more up-to-date figure. That would not fix the situation and wholly resolve the fact that inflation will be at 6% or 7%, but at least people would have got a 4.8% rise based on the December CPI rate rather than 3.1%. That would have been of help.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

The hon. Gentleman speaks with great authority on all these issues. I have been in the House for over a decade, and it is always a pleasure to listen to him on economic matters. In his view, is anything stopping the Chancellor from making a statement in his March Budget to reflect the cost of living and address some of the issues raised in the debate?

[Nigel Mills]

No, I think the Chancellor could do that at any point and, as I said, he can make changes to the biggest benefit system quite quickly if he sees the need to.

The case that I am trying to make to the Minister is that, at times, the Government can act much faster. I accept that huge investment in IT for legacy benefits that we are phasing out may not be effective, but I would have thought that, in the modern world, with the more modern systems, we could move on from basing the April rise on the inflation position six months earlier. I hope that the Government can find a way to base the rise at least on the December measure, so it is only three months out of date. I accept that for most years that would not make much difference, and for some years it could actually mean a slightly lower rise than using the September figure, but at least that would give us the best possible protection against this awful situation. Inflation is already much higher than it was at the reference point, and it will be even higher still by the time these amounts are paid.

I fear that the position is even worse than that at which I started—that of believing that benefits are in the right place and therefore an inflationary rise is needed. I genuinely fear that many of the benefits we have are now lower than people need, so a lower than inflation rise for benefits that are already too low leaves people in an impossible position. That is why I supported retaining the £20 uplift in universal credit.

I have told the Government many times that, if they believe that all these benefits are sufficient for the standard of living that we want people to have, they should do and publish an assessment of the basket of things that people have to buy and prove they can afford to buy them all. I would then happily support them. If such an assessment showed that benefits were too high, we could have a debate, but it is incredibly unlikely that it would show that. It is overwhelmingly likely that it would show that the measures that were necessary over the last 10 years have ended up going too far and that we are not giving people enough for the decent standard of living they ought to have. If that is so, we need to fix them. I challenge the Government to publish that assessment over the next year and prove their case that benefits are okay. Let us then get the inflationary increase done right. We cannot keep having this same debate in which many of us think that benefits are not in the right place and yet we cannot prove it because that is for the Government to do and, for some reason, they do not want to.

Social Security (Up-rating of Benefits) Bill

Jonathan Edwards Excerpts

2nd reading
Monday 20th September 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I am pleased to follow the hon. Member for Amber Valley (Nigel Mills), who makes an important contribution to the work of the Work and Pensions Committee. I echo his words of appreciation and good wishes to the hon. Members for North Swindon (Justin Tomlinson) and for Colchester (Will Quince).

The Bill reduces an increase in the state pension that the Government’s triple lock policy would have delivered. I understand why it has been done, but let us not kid ourselves; we have a growing problem with pensioner poverty, after a quite long-sustained improvement following the introduction of pension credit 18 years ago. The charity Independent Age has analysed the Government’s households below average income statistics. Its analysis shows that pensioner poverty has started to increase again since 2012, with 18% of pensioners—more than 2 million people—in 2020 living in poverty after paying housing costs, of whom more than 1 million are in severe poverty. This is a significant challenge and it is getting worse. Of the English regions, the problem is particularly acute in London. There is no room for complacency about pensioner poverty.

The Bill will increase the standard minimum guarantee of pension credit by 2.5% or inflation—whichever is the greater—next April. When the Minister responds, will he tell us what the Department will do to increase take-up of pension credit so that more people can benefit from the increase? The most recent figures show that only six in 10 of those who are eligible for pension credit are claiming it, and that only 76% of the total amount of pension credit that could have been claimed is claimed. That is quite a significant reason why the problem of pensioner poverty is rising.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I am extremely grateful to the right hon. Member for making that important point. In preparation for this debate, I read an incredible stat: in Wales alone, about £214 million of pension credit is not claimed. Increasing take-up would be an easy way to deal with the growing tides of pensioner poverty, but the key thing with pension credit is that it is also a gateway to other support.

[Stephen Timms]

The hon. Gentleman is absolutely right. That is why Independent Age has called on the Government properly to research who is not claiming pension credit, and to draw up a plan to increase take-up over five years.

Research by academics at Loughborough University found that maximising pension credit uptake could lift three in 10 pensioners out of poverty and reduce the number living in severe poverty by half. When the Secretary of State came to the Select Committee in July, I asked her whether the Department would bring forward an action plan. She replied that there had been a “media day of action” in June to encourage take-up of pension credit, and told the Committee:

“We will continue to advertise it in a different way but I am not anticipating a big action plan, no.”

That is disappointing. Given that the Bill will deny pensioners an increase that the Government’s policy appeared to promise, I ask the Minister to look again at further steps to increase pension credit take-up.

My name was also on the reasoned amendment tabled by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), which, as he reminded the House, was not selected. However, I want to comment on the reasoned amendment that was selected, which states that we should reject the Bill because it

“fails to increase key benefits, such as making permanent the uplift to Universal Credit.”

Let me pick up that specific point. As the amendment drafted by the right hon. Member for Chingford and Woodford Green pointed out, the money that the Bill will save the Government next year would almost deliver the £20 a week uplift to universal credit next year. Many Members across the House are deeply worried by the plan to remove the uplift next month. The Select Committee’s call to at least postpone the removal of the uplift was unanimous. There are lots of different kinds of worry, which I will outline.

First, this is not the right time, because the furlough scheme is about to end. We are told that Ministers’ intention in introducing the uplift was to protect people who were becoming newly unemployed, but there will be a surge of newly unemployed people when furlough ends. Ministers told the Select Committee last week that the Government have no estimate of the number of redundancies that will follow the end of the furlough scheme, but the most recent figures showed that 1.6 million people were furloughed at the end of July. Surely the consideration given to people who became unemployed at the start of the first lockdown should be given to those losing their livelihood next week as well. What justification could there be for treating them differently?

Secondly, since the decision to introduce the uplift—especially in the past month—we have seen a surge of price rises. September’s inflation figure was a record, reflecting increased food prices in particular, and earlier this afternoon the House was considering the current steep increases in energy prices. This cannot be the right time to take £20 a week away from everyone receiving universal credit. The Select Committee recently heard evidence of people having to skip meals before the uplift was introduced. Well, their position will be a good deal worse if the uplift is taken away in a couple of weeks, because the prices they now face are so much higher, and have become so much higher in just the last few weeks.

Thirdly, what justification can there be for reducing universal credit to a historically low level? If the uplift is taken away, support for unemployed families will be the lowest in real terms for more than 30 years. The economy has grown by more than 50% in real terms over that period, but we are being asked to agree that support for unemployed families should be no higher at all in real terms than it was 30 years ago. As a proportion of average earnings, support for unemployed families will be the lowest since the modern welfare state was introduced in 1948. The Library tells me that it will be lower as a proportion of average earnings than it was when unemployment benefit was first introduced in 1911.

We are told that the Government’s priority is levelling up. This policy is not levelling up; this is a policy of grinding down. Social security has a job to do—an important job that we all recognise needs to be done. Pushing it inexorably downwards when prices are surging upwards means that it cannot do that job. People cannot focus on getting a job if they are worrying about whether they can afford to eat their next meal.

Speaking to the Committee last week, Ministers from the Department could give no reason at all for the Government choosing to set the rate of universal credit so low, other than as a consequence of historical accidents. They said that the Government had made no assessment of the impact of ending the £20 a week uplift on people claiming, nor of how many people would be pushed into poverty as a result. The Legatum Institute has today published research suggesting that the number of people in poverty will go up by 840,000, including 290,000 children, if the uplift is removed. The Government have also made no new estimate of the annual cost of keeping the uplift.

Oral Answers to Questions

Jonathan Edwards Excerpts

Monday 13th September 2021 Commons Chamber

[Will Quince]

That of course would depend on their individual circumstances, but to answer the hon. Gentleman’s question, the Government have always been clear that the £20 increase was a temporary measure to support households affected by the economic shock of covid-19. There have been significant positive developments in the public health situation since the uplift was introduced, with the success of the vaccine roll-out, restrictions being lifted and our economy opening up, and now there are more than 1 million live vacancies in our jobs market. I will take one issue with what the hon. Gentleman said: he referred to a cut. A cut would represent savings. There are no savings. What he is proposing is an extra £6 billion to £9 billion, which would need to be raised by taxes.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

8. What steps her Department is taking to support pensioners living in poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Thank you, Mr Speaker—diolch. There are now 200,000 fewer pensioners in poverty compared with 2010. Rates of material deprivation among pensioners are at a record low, falling from 10% to 6% in the last 10 years. Pension credit also provides financial support for the most vulnerable pensioners and a passport to many other benefits.

[Jonathan Edwards]

Diolch yn fawr iawn, Mr Speaker. Older women in particular find themselves in relative poverty because 30% completely rely on the state pension for their income. That makes the recent findings by the Parliamentary and Health Service Ombudsman about maladministration by the Department and its failure to inform 1950s-born women about changes to their state pension allowance particularly galling. What is the Department’s response to the findings of the ombudsman and, more importantly, what will be done to rectify the situation that WASPI women in my constituency find themselves in?

[Guy Opperman]

The hon. Gentleman will be aware that we have never spent as much as we do now on pensions. The triple lock has seen a £2,050-a-year increase in cash terms. The Government decided the changes 26 years ago, and that policy was continued by successive Governments, including during the 13 years of the Labour Government. In respect of all matters on an ongoing basis, we consider the PHSO, but clearly, it is a three-stage process and we are only at stage 1.

Income Tax (Charge)

Jonathan Edwards Excerpts

Thursday 4th March 2021 Commons Chamber

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

It is a pleasure to speak in this debate. Pandemics by their very nature offer an opportunity for reflection about the sort of society we want to develop for the future. If the aftermath of this dreadful pandemic is not an opportunity for a reset, when will there ever be one? It is not as if the structural or economic deficiencies of the British state are not obvious to all, with chronic geographical, sectoral and individual wealth polarisation and an over-reliance on one economic sector.

I welcome the Chancellor’s commitment to underpinning public health strategies with economic support, and extending furlough to September seems sensible. However, if for whatever reason the Welsh Government are required to implement a different strategy to control the virus—for instance, as the result of a new autumn wave—will measures such as furlough be extended, or does the unionist talk about the broad shoulders of the British state only apply to Wales if it also benefits England?

On corporation tax, I support the proposed increase to 25%. The Washington-based thinktank the Tax Foundation estimates that the global average corporation tax rate is just over 25%. France and Germany have rates of 30%, and the Biden Administration have announced plans to increase the rate in the US from 21% to 28%. Therefore, it is difficult to make the case that a 25% rate in the UK would be uncompetitive. Of Biden’s three-year $1.4 trillion extra taxation plan, according to Moody’s Analytics, well over half—$822 billion—comes from corporate taxation. Equally important is the Biden Administration’s determination to target firms that offshore jobs and those that shift profits overseas.

The Chancellor’s income tax proposals are far too timid. He should have followed the new US Administration by increasing income tax directly on incomes above $400,000—about £300,000—by introducing a new pandemic tax band. However, the redistributive zeal required to tackle the UK’s inequalities should also look at taxation on held personal wealth, as is the case in Norway, Switzerland, and Spain.

I hope the Treasury’s tax day on 23 March will signal a full-scale review of how wealth in the UK can be taxed more fairly and justly in the long term. It will also be an opportunity to finally introduce much needed reforms of capital gains tax and to investigate the possibility of varying corporation tax within the UK. This would be one way to help redirect investment to those less productive parts of the British state. Considering that only three of the UK’s regions and nations are in surplus, this might be one way to address the geographical wealth disparities that exist in a far more coherent manner, I suspect, than sporadic freeports.

It is also imperative that the UK find an answer to the question of how to tax the digital world. I appreciate that the G7 will be a key forum to discuss a global digital tax regime, and I welcome the tentative first steps taken by the UK Government with the introduction of the digital services tax. However, now is time for the UK to go further and faster, leading by example and setting global standards. This is crucial, given the pandemic-induced shift to online retail, with online sales accounting for a record 35% of total retail spending in January 2021, up from 20% in February 2020.

The political choice facing electors as we emerge from this pandemic is between the forces that want to return to the old normal and those that believe the pandemic must result in the creation of a new economy that works for all, not just for the select few. The Chancellor nailed his colours to the mast in the Budget as the former. I will be arguing forcefully for the latter as a key part of a prospectus for an independent Wales.

Future of Pensions Policy

Jonathan Edwards Excerpts

Tuesday 8th December 2020 Westminster Hall

[Rob Roberts]

I thank the Minister for his intervention. The suggestions for the future are about to unfold before his very eyes, as he may have anticipated.

Analysis by the Pensions and Lifetime Savings Association suggests that the current contribution rate of 8% is simply not enough for people to have a good standard of living in retirement. I fear that will be the case for many people in several years’ time who have been auto-enrolled into workplace pensions and assume that, as the rate is automatically set by the Government, that means they will have a comfortable pension pot when they retire. Unfortunately, many people are simply not engaged enough with their pensions to realise that until it is too late, despite them being fundamental to their future. I fear auto-enrolment has created the complacency I mentioned earlier.

To combat that issue the PLSA has proposed an increase in the minimum contribution level, to at least 12%, and I agree. Forty-three per cent. of savers do not know how much of their monthly salary they should be saving, in any case, and the increase would benefit a great many individuals, by increasing their savings further. Additional changes could include reducing the starting age to 18 and removing the lower earnings limit, so that every penny of earned income counts towards pensionable pay. According to the Association of British Insurers that would have the potential to save a further £2.5 billion in pension pots. It would not only increase the number of years over which an individual saved, and consequently increase the pot; it would emphasise the importance of saving from a younger age.

What else can we do with auto-enrolment? Why not think a little more outside the box and create a savings culture in the UK? If covid has taught us anything it is the importance of preparedness and planning for every eventuality. One of the bedrocks of financial planning is having an emergency fund in place, but putting money away each month is perhaps easier said than done—there is always something else to spend it on.

We could look at including a savings element in auto-enrolment. Why not, when payroll makes a deduction for the relevant amount for a pension, put 1% into a savings pot at the same time? There could be an auto-enrolment ISA, and people could be given the ability to increase the percentage to what they can afford. Creating a savings culture on the back of pensions policy could be one of the more pleasant side effects of covid. Many people might be more open to having emergency funds to combat future challenges.

Another area of pension policy that could benefit from further positive change are the annual and lifetime allowances. Bearing in mind that that is a Treasury issue and not necessarily one for the Department for Work and Pensions, I shall not labour the point, but there is no need for an annual allowance if there is a lifetime allowance. Saving should be encouraged, and individuals should not be penalised for taking on extra work and saving more into their pensions. That happened to doctors recently, leading to them not taking on shifts and procedures because of the danger of a significant tax bill. A potential solution to that issue would be to remove the tax penalty for breaching the annual allowance, but keep the restriction on the amount of tax relief available to current limits. There would be no additional cost to the Exchequer, and people would be able to continue saving into their pensions in the same way. Yet those who were unnecessarily penalised under the limits of the annual allowance would not be at a disadvantage. As I have said, it is a Treasury area, and I am sure that the Minister will take great pleasure in passing it along.

Wider change is needed in the pensions industry, and one way to achieve that and encourage people to engage earlier with pensions is by improving the accessibility and reach of financial advice and guidance. Despite having been a financial planner involved in the pensions industry for many years prior to coming to this place, I admit that the topic of pensions can be complex. I can see how, for many without such experience and knowledge, pensions could be viewed as hard to understand or even, God forbid, a boring subject—a terrible thought.

I welcome the Government’s push for a simpler regime, which is coming down the line, to make statements more comprehensible for both the consumer and professionals. Members would not believe the wide range of disparate information that pension providers send out to customers, making it impossible not only to understand what they have but to make accurate comparisons between providers. It is currently extremely complicated, and I look forward to simpler statements that will put the consumer in charge. I keep my fingers crossed that that policy will not be several years in the making, as the wheels of Government tend to take rather an age to turn.

It is right to empower individuals to make their own decisions about their futures, but we should ensure that before they make such life-changing decisions they feel informed and supported, and have considered their own unique circumstances. Advice and guidance about pensions needs to be accessible, affordable and available. Despite the benefits that financial advice can bring, only 8% of all UK adults have received it. That is, amazingly, an increase on previous years, but it is still shockingly low, and it puts individuals’ retirements at risk. Whether that is because people feel that financial advice is unaffordable or only for the wealthy, or because they feel it is a risk and do not trust the financial services industry, we need to work actively to change those perceptions and show that financial advice is for everyone.

I can assure the public that the vast majority of advisers whom I have worked with will treat someone’s £30,000 pension pot with the same care and diligence that they will treat someone’s £300,000 pot, because each sum is just as important to the individual concerned. Indeed, the smaller pot can be considered to be much more important to that individual in many ways, because it will often be a lower-earning individual’s only pension provision, and so the risks of it running out too early are more significant.

If we do not promote the need for and the benefits of financial advice, I worry that we will have a retirement crisis on our hands 20, 30 or 40 years down the line. Recent data shows that 35% of the adult population say they do not have a pension. Of those who do have one, 36% are not sure how much is in their pot. Even more worryingly, the uncertainty around pensions goes further than uncertainty about individual circumstances, with almost half the population admitting that they do not have a clue about how much income they would need to retire comfortably. That clearly shows that widespread advice and education regarding pensions and retirement are urgently needed if we want people to be able to live out their later years in financial security and comfort.

In the past, these types of financial decisions and risks were shouldered by employers, pension providers and life insurance companies. Now, however, with the introduction of greater flexibility and freedom to the pensions marketplace, it is increasingly down to the individual to decide these matters, which is a wonderful thing in some respects, but worrying in others. We should not really place all responsibility for such important decisions on to people themselves. Instead, we should ensure that people feel supported and know where to turn for help and advice.

Financial advice is not only needed to help people feel more informed and aware when they make decisions that will affect their lives; it also adds real value to people’s pensions, providing them with a better retirement in the long run. A recent report by the International Longevity Centre found that those who have sought professional financial advice are better off by an average of £40,000 in their pension pot compared with those who did not seek advice. That is not an insignificant amount of money. Ensuring that financial advice is seen as a viable option for people is not only the right thing to do, but crucial if we want people to have the best possible future, as well as the peace of mind that they are making the right decisions to benefit themselves.

Most importantly, how can we make sure that people are accessing the right financial advice and support? Forcing people to access support is not an option. Some people will not even take a vaccine to save lives, for goodness’ sake, so mandating things just because people have an in-built aversion to being dictated to does not work.

One option, however, is to encourage individuals to use guidance services, such as Pension Wise, the free and impartial guidance service that was set up in 2015. Accessing guidance is often the first step towards accessing full financial advice and should be greatly encouraged. Seeking guidance helps people to gain a good initial understanding about their options and also helps to boost their confidence in their ability to do things such as avoiding pension scams, which, sadly, are all too common.

In addition, we know that financial guidance is a great enabler for the full advice process. Data from Pension Wise’s user evaluation report recently found that 36% of customers who booked an appointment with Pension Wise went on to speak to a financial adviser in the following three months, compared with only 22% of non-users. That highlights the fact that we need to emphasise the benefits of these services, and ensure that people use them as early as possible to improve advice take-up and improve the financial outlook for many individuals in the UK.

Currently, it is far too easy to opt out of taking this free guidance from Pension Wise. Many studies over many years have shown that individuals need several exposures to information before they start taking action, so perhaps we need to start them on that journey a little bit earlier, so that they are engaged in the process when the time is right.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I commend the hon. Gentleman on his speech, which shows his great expertise in this important policy field, and he is right to press on this issue of financial advice. However, does he agree that the education systems of the respective countries of the UK should play a greater role, so that our children are financially capable when they leave school? When it comes to pensions in particular, the earlier that people start saving for their pension, the better. Interventions need to happen far earlier than they do now.

[Rob Roberts]

Absolutely—that is a very salient and very welcome intervention from the hon. Gentleman. I completely agree.

We need to start financial education in schools about the more basic things: what is a current account? How does it work? What is an overdraft? What is a credit card? The number of people leaving school and university who are already in massive debt before even taking into account things such as university fees is staggering. If we are not getting people on the right footing, I completely agree that we should be looking into developing that. People need to start the journey earlier.

During my research for this speech, I came across an article from years ago with a picture of a young-looking fresh-faced pensions Minister: my hon. Friend the Member for Hexham. He was supporting the concept of a provider’s mid-life MOT. Engagement with the UK population as a matter of course when a person hits particular ages could be a transformative idea. Imagine the benefits of speaking to someone aged 45, when they may be in a more stable home and employment situation after those expensive years of having young children, and providing that person with some guidance on what they should be looking at from a financial point of view! That could have a significant impact on their outlook on pensions and financial planning for their remaining 20-plus years before retirement.

--- Later in debate ---

[Sarah Owen (Luton North) (Lab)]

It is a pleasure to serve under your chairship, Mr Hosie. I congratulate the hon. Member for Delyn (Rob Roberts) on securing this incredibly important debate.

We have rightly spoken a lot over the past few months about how deeply people have been affected throughout this pandemic—people who have lost jobs, businesses that are worried that they are going under and the 3 million people who have not been able to access covid support. I am here today to speak up for my pension-age constituents who are struggling too.

As we have heard, since 2010 at least an extra 400,000 pensioners have been pushed into poverty, and a generation of women born in the 1950s were betrayed. That left millions of women with no time to make alternative plans, with sometimes devastating personal consequences, including for people I have spoken to in Luton North. The people who have written to me have done the right thing in life: they paid into the system and worked hard, and now they want their Government to be there when they need it. They include people such as my mum and her generation of friends—the WASPI women.

One Luton North constituent wrote:

“I am 65 years old and I am due to receive my state pension next year—at the age of 66.

I am currently struggling financially. I was due to receive my pension at the age of 60. I have worked my whole life and then I stopped as I became a carer for my elderly mother.

I am not entitled to apply for any benefits. With the current covid pandemic it is even more difficult for me to consider working. I suffer from a lot of health problems. I was diagnosed with TB last year and since had been receiving treatment for it.

I have never struggled so much financially before as I am now and the pandemic has made it even worse for me.”

I wish I could say that that was a one-off, Minister, but I am afraid that my inbox has been full of similar letters.

[Jonathan Edwards]

I am extremely grateful to the hon. Lady for raising that very important issue. I have also received numerous pieces of correspondence over the years in relation to that group of women. The anger about the injustice relates to the goalposts being changed late in their lives.

What in her view is the way forward to help address the problems faced by those women? Some are campaigning for bridging pensions or early access to their state pension. Is her view that that is the way forward, or does she support an alternative strategy?

[Sarah Owen]

That is something that I will come to later in my speech. Whatever the future of our pension policy is, that injustice must be addressed.

The pandemic has had a devastating impact on older people in this country, in terms of isolation, their mental and physical health, and their finances. I want to put on the record my thanks to wonderful organisations such as Age Concern in Luton, which has been there every step of the way for older people in my constituency.

However, it should not be this way. The Government should not be turning their back on pensioners. I was truly appalled by the decision this year to scrap free TV licences for over-75s, which added yet another financial burden and barrier to accessing important information, especially at this time. What are the Government going to do during the pandemic to help those pensioners who, like so many others, have found themselves struggling to make ends meet?

As we enter one of the worst recessions since records began, what guarantees will the Minister give to protect pensions in the future? The recent findings from the Pensions Policy Institute show that single mothers, carers, disabled people and black, Asian and minority ethnic groups had pension wealth of just 15% of the national average, and that 81% of carers and 21% of disabled people are currently shut out of being automatically enrolled in a workplace pension. What is the Minister doing to tackle that huge savings gap, which is scandalous?

It is clear that even before the pandemic many people already felt a deep sense of unfairness about our pension system. Parliament has debated the issue, in a full Chamber, time and again, because of the strength of feeling among the 1950s women we represent who have been ripped off by this Government.

As a new Member, this is my first opportunity to raise the countless emails that I know we have all received on this issue and the massive number of conversations we have all had. I had many conversations on doorsteps at the time of the election. One gentleman came out of a mosque and said, “I wasn’t sure how I was going to vote, but I’m definitely voting for Labour now, because my wife has told me that you have promised that we will see justice for the WASPI women.”

I would like to give that hope to every family because this is not just about women—it is also about the families supported by those women. Any future reforms of pensions policy must come with justice for the 1950s women who lost out when the Government changed the pension age. Again, this is all about fairness. Those women worked, paid in and did the right thing, then had part of their pensions taken away. I ask the Minister whether the Government’s line from last year still stands. Is there no money for the WASPI women or will that change? Dignity as we grow older should not be an optional extra; it should be the very basic that the Government should provide. In one of the richest countries in the world, we should not have any older people living in poverty.

--- Later in debate ---

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to be called to speak in the debate this afternoon, Mr Hosie. I thank the hon. Member for Delyn (Rob Roberts) for securing it.

The insecurity and inequality that people experience throughout their working lives is amplified in older life. I certainly see that in my constituency, where, regrettably, insecure work mars the lives of many people. It was in the city of York that Joseph Rowntree first introduced pensions in his factory in 1906, ahead of the Old Age Pensions Act 1908, which came into effect on 1 January 1909—on pensions day, as it was known. It was Seebohm Rowntree’s work in this field that brought about that Act, so my city has a real investment in today’s debate.

We need to ask what the problem is that we are trying to solve around pensions. Are pensions simply part of reward packages and used as a recruitment and retention tool by employers? Are employers really interested in the economic fortunes of their former employees once they have left their employment? How do we address the serious issue of pensioner poverty, and are pensions fair and equitable or dependent too much on past income, which we know is inequitable in itself? Today, 1.9 million older people live in poverty, which really amplifies how pensions have gone wrong, and we therefore need to look at how we address those issues.

I view this issue through the prism of women and their experiences of the inequality that is already built into their working life by the pay gap. They are more likely to be in part-time employment and more likely to be carers, and there is also the serious issue of underemployment. In fact, since the start of the pandemic, 70% of people who have lost their jobs are women. We therefore need to understand why so many women are in pensioner poverty.

Young workers and black workers are more likely to be in insecure jobs. Disabled people lose out altogether and fare worse. Inequality is hardwired into our pension system, exacerbating the unfairness of employment. I observed over the years as a trade union official how we needed to bring redress into our pension system, which is an issue I would welcome the Minister looking at specifically.

On state pensions, many countries such as the Netherlands, Denmark and Australia have far better statutory provision in later life, as can be seen in the quality of life that people experience. The Netherlands pays 95% of average earnings, Denmark 66%, Australia 58% and the UK just 29%. Insufficiency is also built into our pensions system. We have heard much about the pension credit system, but take-up is only 60% , with £2.8 billion not claimed. I therefore support automation. Data can be shared and the technology is there to tackle inequality and enable people to access not only their pensions but, as we have heard, TV licences and other such benefits. It is really important that the gap is closed with the mechanisms we have available to achieve that.

[Jonathan Edwards]

The hon. Lady is making a very well informed speech, as is typical of her. Does she agree that much of the drive over recent decades to increase the state pension age has been driven by the fact that life expectancy has been increasing? However, there is evidence that that is reversing and life expectancy is starting to fall. If that is sustained, the UK Government need to look at pensions policy and perhaps reverse the pension age increases that we have seen over recent decades.

[Rachael Maskell]

The hon. Gentleman raises an interesting point. Of course, that was the basis on which the Cridland review undertook its exercise of looking at how to address an ageing population, so he is right that the Government need to look at that issue.

Turning to employer schemes, we have seen a change in the schemes over the years from more beneficial schemes such as the defined-benefit schemes, first from final salary to career-average earnings schemes. There has also been a rapid move to defined-contribution schemes, where more risk is placed with the worker. Therefore, people’s lack of engagement in the complex world of pensions is ever more understandable. Of course, auto-enrolment in some of the pension schemes shows insufficiency, which the hon. Member for Delyn drew out, but the employer contribution of just 3% is hardly that of an employer investing in their workers’ future. I would urge, if we are looking at raising the sufficiency of stakeholder schemes, a greater employer contribution into those schemes, as opposed to the burden being placed on the workers’ shoulders.

I would also like the Minister to look at the number of pension schemes. Many countries have just a few hundred pension schemes altogether; we have more than 10,000, and we know that many of those schemes are struggling. I have looked at the charity sector, where, among the top 50 charities, there is now a deficit of £1.5 billion. We know that in other sectors, people move from job to job to job and therefore have no time to build up a pension pot with a company. If we moved to a more sectoral model, that would give individuals a lot more scope to build a pension for their future, and a model of sectoral bargaining could shape such pension schemes. I think it would be helpful to look into that.

As I have mentioned, equality needs to be brought to the fore, not least because of the impact in terms of women in poverty in later life. Economic events impact on pensions so much. We therefore need to address those issues, but we also need to recognise that in later life, people from areas of deprivation are more likely to be in poor health and so working longer is not always relevant. We need more flexibility to be built into pensions in later life, but we also need to ensure that individuals do not lose out because they work in different ways.

I echo the support that has been expressed for more financial education. I, too, was at the event that Aviva held on work, wealth and wellbeing. It was particularly about people having an MOT to check on them—to check their mental health as well as their physical health—and to look in mid-life at the opportunities and the finances ahead. We need to ensure that such opportunities are open to everyone.

Finally, I want to draw attention to the importance of building confidence again in the pensions system. At a time when people have so little dispensable resource, they will be making choices about whether to invest in their longer-term future or to buy essentials, such as a meal for their family. We therefore need to ensure that we address the poverty today as well as the poverty tomorrow. The WASPI women are one example of a group that certainly made the right choices, yet was badly let down by the changes brought about by Government decisions. We need to build confidence in our system to ensure that there are fair choices for people in the future.

Oral Answers to Questions

Jonathan Edwards Excerpts

Monday 30th November 2020 Commons Chamber

[Mims Davies]

The latest ONS labour market data puts the unemployment level in the west midlands region at 145,000. Due to the pandemic, this rate has risen nationally. DWP is working across Government and looking very closely at these figures, using, for example, on older workers, our “Fuller Working Lives” plan. We are working with external organisations and partners to ensure a local and tailored response for all communities so that people are not left behind. As the hon. Member will have heard, we are recruiting additional work coaches as well to make sure that new and existing claimants get the opportunity to return to fulfilling work.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

The decision to deny disabled people on legacy benefits the crucial £20 uplift has been a bitter blow to those who already face years of navigating barriers in the welfare system. Will the Department commit to using the welfare Green Paper and the national disability strategy to ensure that disabled people have access to a welfare system that provides financial security without cruel sanctions?

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

The Department for Work and Pensions will work with disabled people, disabled people’s organisations and disability stakeholder groups on the Green Paper to shape the way we provide financial support and general support across our services. However, I remind the hon. Gentleman that this year, there has been a 5% increase—up to £20 billion—in supporting people with disabilities through benefits, and that the legacy benefit increases also impacted on the changes in the local housing allowance. There has also been the increase in discretionary housing support, the various employment support schemes and additional support from local authorities, from which many disabled people will have benefited.