Social Security (Up-rating of Benefits) Bill

Jonathan Reynolds Excerpts

2nd reading
Monday 20th September 2021 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Thank you, Madam Deputy Speaker, for calling me to close the Bill’s Second Reading for the Opposition. We have heard many good speeches, but, before I turn to them, I want first to deal with the central case that the Government have made for the legislation.

As my hon. Friend the Member for Reading East (Matt Rodda) set out in opening for Labour, Opposition Members accept that there has been an anomaly in the earnings data due to the pandemic, and we recognise that a solution is required. I have listened carefully to passionate speeches from colleagues across the House, but I simply do not believe that anyone in the UK believes that wages are rising at 8.3% in real terms across the board. If I were to put that case to my constituents, I think they would very much question my judgment. However, as we said since the announcement was made, the duty is on the Government to explain why their preferred solution—a move to uprating by inflation or 2.5%—is the right one. That duty is particularly important because the triple lock was a Conservative manifesto commitment and, as many hon. Members pointed out, the announcement to break it has come after a series of decisions to break other Conservative manifesto commitments. It is therefore reasonable that the burden of proof lies on the Government and that the threshold for support should be high.

We have had some valuable contributions. The hon. Member for Glasgow East (David Linden) was right to highlight the trust in the Government stemming from the decisions of the last few months. He was also right to point out figures that show that the number of pensioners living in poverty taken by the measurement that he indicated—those living with an income below 60% of the median after their housing costs—is rising. Given that we know overall spending on pensions is going up every year by quite considerable numbers, why are we also seeing that rise in poverty? That is a question for us all and one on which we may need more time in future.

The hon. Member favours auto-enrolment, and I very much agree. The question is about how to do that in a post-pandemic environment. He will understand, however, that I cannot agree when he posits that Scottish independence might be the solution to some of those problems, because an independent Scotland would clearly face some difficult economic decisions in its own right. I do not think it is necessarily helpful to put that across.

[David Linden]

Yes, an independent Scotland would face difficult economic decisions, but does the hon. Member accept that the central point of independence is about people in Scotland—the people who live and work there—making those economic decisions?

--- Later in debate ---

[Jonathan Reynolds]

I understand the basis of any nationalist claim for any sense of self-determination, but—this debate may be taking us a little away from the pensions uprating discussion, Madam Deputy Speaker—we all live on these islands together and, when we look at difficult economic decisions, the strength that we have by being a Union is of benefit to us all. [Interruption.] I will come to the speech by the hon. Member for North Ayrshire and Arran (Patricia Gibson), but I do not think there is time for a debate on Scottish independence as part of our discussion of pension upratings.

The hon. Member for Runnymede and Weybridge (Dr Spencer) made a brave case that the Government might actually lose trust if they held to their manifesto commitments, and I admired the style in which he did it. He wanted a wider debate on the earnings lock, but I would respectfully have to disagree with him on that. I do believe there is a need to maintain the value of the state pension and the objectives of the triple lock are ones we should keep to—many of the reforms in Parliament since I have been here have been based on a provision for the triple lock to take place—but I did appreciate his speech.

The hon. Member for Amber Valley (Nigel Mills) made, as ever, a thoughtful contribution. He questioned the ability—my hon. Friend the Member for Reading East raised this in his opening remarks—to analyse the underlying wage trend taking away the impact of the pandemic. The hon. Member for Amber Valley will know that that has been an open question, and several organisations have tried to do a piece of work on it. Ultimately, I do agree that it is challenging to do so in a way that is unchallengeable, and that is a fair point to make when looking at possible alternatives.

My right hon. Friend the Member for East Ham (Stephen Timms), the Chair of the Select Committee, pointed out that pensioner poverty is rising, as the hon. Member for Glasgow East did, and I think that has to be central to our discussions. My right hon. Friend the Member for East Ham made the point repeatedly that the question must be how we can increase the take-up of pension credit. He has raised this point consistently, and I know there has been some engagement with the Government Front Bench on it, but I think there is strong support for his words from all sides whenever he raises it. Of course, I believe he was absolutely right to raise the juxtaposition of the decision today with the cut to universal credit, and I believe the case is getting stronger every single day not to proceed with the Government’s cut.

The hon. Member for Wantage (David Johnston) raised pension upratings in the past. He will not, I think, mind my saying that if we look at the position say in 1997, when the Labour Government came to power, we see that a third of all pensioners back then lived in poverty. There was a very strong correlation in those days between growing old and being in poverty, and that was reduced to record low levels by the end of that Labour Government, so the record has to be considered in the round. However, I do agree with him, and I have said this myself, that I reject discussion of pension uprating as an issue of intergenerational conflict. I think it is very much about the value of the state pension when today’s workers do retire, and we should never forget that.

The hon. Member for North Ayrshire and Arran also highlighted the lack of trust stemming from recent Government decisions to break successive manifesto commitments. She obviously strongly opposes this measure. I think what is required is more engagement with the issue of whether the data we have before us is a true and accurate reflection of what we believe is happening in our constituencies. I have said very clearly to her that I do not believe that level of wage growth is the real picture, certainly in a constituency such as mine. Where I do agree with her is that coming, as this decision has, after other manifesto commitments have been broken, that is the context in which our constituents will look at what is happening.

My hon. Friend the Member for Birkenhead (Mick Whitley) also reflected on the run of broken promises and how this has come across to the public. He is absolutely right on pensioner poverty and absolutely right to demand transparency from the Government on this decision and commitments to reassure his constituents.

The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) raised the cost of living, and I think that case is getting stronger every day. Again, we will not dwell on it, but I do not believe his analysis of independence as the answer to that is the right way forward.

The hon. Member for Strangford (Jim Shannon) was not convinced of the Government’s case either. He was also right to raise particular issues in Northern Ireland about the post-Brexit trading situation and the impact on his people as a result—something about which I think all the House shares concerns. Of course, he is again absolutely right about the impact of the universal credit cut.

However, there is no doubt that the most valuable contribution and perhaps the one of most interest was from the former Secretary of State for Work and Pensions the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith). Again, we have heard in the debate, and it is something I have said myself, that the triple lock is not a straightforward question of an intergenerational clash, and I know some people have concerns about linking the two issues together. However, I do believe he was right to raise—and to attempt to have his own amendment on—the impact of that universal credit cut, which we discussed in depth last week. I believe that the case against it gets stronger with every single day, and I would appeal to noble Lords in the other place to give this matter the due consideration that has not quite been possible today, but is still very valid.

On the reasoned amendment moved by the hon. Member for North East Fife (Wendy Chamberlain), this is an opportunity to discuss the wider context in which this decision has been taken and it makes reference to the universal credit cut that is imminent. However, while the amendment makes passing reference to that, its main argument is that there has been no anomaly, which is not the position of the Labour Front Bench. I can tell the House that I have had my own discussions with the Office for National Statistics, and I am very satisfied that the case for the 8.3% figure is, frankly, unsound.

I know there is an argument for simply insisting on a rise of 8.3%, but I do not believe that that is a responsible course of action. We make the case for the Government to change course on the universal credit cut, but that is because the Government can do so, it is the right decision and it is very much in the national interest, but I do not think, frankly, that the same factors apply to the decision before us today. Again, it goes back to whether we ultimately believe that that is the correct rate of wage growth or earnings growth across the economy as a whole.

For that reason, I will not be supporting the reasoned amendment, and I do not see much merit in dividing the House on Second Reading. However, we will be seeking to interrogate the Minister during future stages of the Bill, and we will be looking for the reassurances and that transparency we have sought since the original decision and announcement were made. Therefore, we look forward to the remaining stages of the Bill.