Social Security and Pensions

Justin Tomlinson Excerpts

Monday 6th February 2023 Commons Chamber

[David Linden]

My hon. Friend is absolutely right. I understand that political ideology will separate us, but in the five years that I have been a Member of this House I have struggled to get my head around the fact that, while the hon. Gentlemen who do their surgeries on a Friday morning see the same people as we do in our surgeries, who come and say that the social security system is inadequate and has left them in dire straits, there is no conviction to come into this Chamber and say to the Government, perhaps as the hon. Member for Amber Valley has done, that this is wrong.

[Justin Tomlinson (North Swindon) (Con)]

rose—

[David Linden]

I am sure the hon. Gentleman is about to tell us what the Government could do better.

[Justin Tomlinson]

In the same spirit of trying to help those most in need, why do the Scottish Government not mirror our proposed changes to the terminal illness rules within disability benefits?

[David Linden]

The hon. Gentleman is missing what is happening, given the limited social security powers that the Scottish Government have. Bearing in mind that 85% of welfare spending is reserved to this place, he will see that we are doing an awful lot to try to help people with social security, but if the Minister wants to back up my calls to devolve all social security to the Scottish Government, that will certainly be welcome.

Research from the Child Poverty Action Group shows that the majority, some 59%, of those affected by the two-child limit are working families. Perversely, some of those families work for the Minister’s own Department, which administers said benefits; that would be funny if it wasn’t so tragic. The fact that a few weeks ago the Lords Minister, Viscount Younger, could not justify to the Work and Pensions Committee how the two-child limit is compatible with the Government’s own family test is a damning indictment of a Minister who is not over his brief and whose policies do not even comply with the family test for which he is responsible.

I turn now to universal credit, which should be topical, given Labour’s significant change in stance. That change provides an opportunity to seek cross-party agreement on reform of universal credit, because all three main parties in this Chamber now agree with the broad principles and the aims of universal credit. The challenge for us now is to make it work and to iron out the creases, which are by no means insurmountable. We know, for example, that the five-week wait for a first payment is needlessly pushing people into hardship. That could be relatively easily fixed by implementing proposals to turn advance payment loans into non-repayable grants after a claimant has been deemed eligible.

On sanctions and conditionality, far too many households face destitution, largely because DWP rules are pushing them into debt through sanctions and deductions. Recent changes to the universal credit administrative earnings threshold mean that even more people will risk having their vital universal credit payments sanctioned. These 600,000 people are already working, and there is clear evidence that sanctions do not work in getting people into work or to increase their hours or earnings. To that end, I have tabled early-day motion 715 to annul the relevant regulations, which I hope the Government will grant us time to debate and vote on, and I certainly hope we can count on Labour support in that.

However, there are other problems with sanctions and conditionality. For example, individuals who have had a sanction applied have also been denied the vital cost of living payments the Minister was rightly trumpeting earlier. That demonstrates a fundamental issue with the DWP’s attitude to those on low incomes, because preventing vulnerable families from receiving the social security they are entitled to when they need it most strikes me as somewhat back to front.

I will turn now to the UC childcare offer. If the Tories actually cared about working people, they would want to improve childcare support for UC claimants by supporting them with childcare costs up front and in full. The SNP continues to call on the Government to increase payments for those aged under 25 in line with increases for older claimants. We also continue to call for local housing allowance to cover the average cost of rents and for the shared accommodation rate for those under 35 to be suspended—that age range has always struck me as somewhat arbitrary.

The SNP has called for the British Government to fix these fundamental flaws in social security and to deliver a system that actively tackles poverty and empowers people. However, it is an inescapable and undeniable fact that the Scottish Government cannot change these policies while 85% of welfare expenditure and income-related benefits remain reserved to this institution here in London, and that includes universal credit, which is of course a reserved benefit. The only way to ensure that Scotland has a decent social security system is for us to take all legislative and fiscal responsibility for these issues by way of independence and to no longer hope that the full-fat Tories, or the diet Tories on the Labour Benches, will one day reform the social security system, which is clearly broken beyond repair.

I turn now to the order on pensions, and I start by genuinely welcoming the Pensions Minister to her place. I respect her enormously, and although we will doubtless disagree on aspects of policy, I have no doubt as to her motivations. Where we have common cause and we can agree—for example, on pension credit—she can be assured of SNP support. However, I am afraid that that is probably where the warm words and cross-party consensus will come to a halt for this evening, because the British Government have a serious job of work to do if they are to rebuild credibility among pensioners. Time and again, we have seen the Tory Government short-change pensioners, who are getting a raw deal from a pension system that they have paid into their entire lives.

Pensioners on low incomes are among those hardest hit by the cost of living crisis, and the British Government must do much more to ensure that they are properly supported, so let us start with the state pension. Westminster already provides a lower state pension relative to average earnings than most other advanced economies. Last year’s breaking of the triple lock will cost each pensioner £520 on average during the course of living crisis. The Government’s own Red Book shows that that will take £30 billion in total from pensioners by the 2026-27 financial year. Retaining the triple lock is the bare minimum I would expect, but I rather fear that that policy pledge will not survive the rigours of manifesto writing when it comes to both main parties in this House. However, I would like to be assured on that issue in the winding-up speeches.

A recent report from the Pensions and Lifetime Savings Association found that the annual income required to maintain a basic standard of living in retirement has massively outstripped the rise in the state pension. For a single person, the minimum income now sits at £12,800, while the state pension will rise to only £10,600 in April for those on the full flat rate. Indisputably, the state pension remains an important source of income for pensioners living in, or at risk of moving into, poverty because of the very low take-up of pension credit, which I accept is the Minister’s biggest priority and one I am certainly willing her on to succeed with. However, Independent Age highlights that 5% of pensioner couples and 19% of single pensioners have no source of income other than the state pension and benefits.

The Joseph Rowntree Foundation’s “UK Poverty 2023” report revealed that 1.7 million pensioners were living in poverty in the UK in 2020-21, the poverty rate for single pensioners is almost double that of couple pensioners, and almost one in seven pensioners overall are living in poverty—something I can see in its rawest form in communities such as Sandyhills, Carmyle and Baillieston in my constituency. We know that pension credit is a vital support for many older people, but only around seven in 10 of those who are entitled to it actually claim it, and up to £1.7 billion of available pension credit is, I am afraid, going unclaimed. In crude terms, that amounts to £1,900 a year for each family in the east end of Glasgow entitled to receive pension credit.

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[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to follow the hon. Member for Glasgow East (David Linden) and I pay tribute to his encyclopaedic survey of the landscape of the Department. It is fair to say that no stone was left unturned, and we are grateful to him for that. It is also always a pleasure to come to the Chamber to support the Minister when he does the right thing—indeed, it is perhaps a pleasure to listen to him here when he does the wrong thing.

I speak today to express my satisfaction—indeed, my relief—at the Government’s decision to uplift benefits by CPI. Over the summer, my most disadvantaged constituents faced real fear from the sudden increases in the cost of living and what was coming down the track towards them. They were perturbed, confused and daunted by the confusion in public messaging from both our leadership contest and the “interim” Government, as I should perhaps call it. They were very worried, so the news that we will update benefits by CPI was a great relief for them, not least because we know that inflation always hits the poorest in society worst, so protecting those in receipt of benefits from inflation is the most important duty of Government. Indeed, it was Milton Friedman no less who said inflation is a tax on the poorest in society. So the Government did the right thing. Inflation does matter. It is not an economic sideshow, and we should always remember that.

I listened carefully to the hon. Member for Westminster North (Ms Buck), the shadow Minister. She may not be aware that a shadow Front-Bench reshuffle is due, but I can only assume that that was the reason for some of her comments—she may get a surprise in a few days—because she was praising the previous Labour Government. It was like an exercise in nostalgia. Her opposition to conditionality leapt out at me. My constituents remember the something-for-nothing welfare state that Labour created in that era, and by refusing to accept the role of conditionality in our welfare system, she is committing the Labour party to that agenda once more; I was very surprised to hear it.

I represent an area that sadly still has high levels of pensioner poverty, so I particularly welcome the Government’s decision to extend CPI protection to those who rely on the standard minimum guarantee in pension credit. It will cost some £700 million above the statutory minimum requirement, so I welcome the Government’s commitment to supporting the poorest pensioners at this time of high inflation. However, like any Back Bencher, I will urge them to do more. Despite the best efforts of many, my constituency still saw a slight dip in the number of pension credit claimants last year, so I urge the Pensions Minister, who has done so much to get people claiming pension credit, to continue those efforts; the battle is not yet won.

I also urge the Government to consider the need for flexibility in our pension system. My favourite statistic of the month is that the old age dependency ratio currently shows 28 people over 65 for every 100 of working age, some of whom are probably not in work. The ratio will rise to almost 50:100 by 2050, causing fundamental challenges for any Government. All those who flatly oppose raising the state pension age need to engage with that, not take cheap positions that involve no thought at all—however encyclopaedic their speeches might be. Raising the state pension age clearly makes sense on one level, but many of my poorest pensioners dropped out of the labour market well before the state pension age. Indeed, my constituency has the lowest healthy life expectancy in the country. Given that people can defer the receipt of state pension in return for higher payments, could those claiming early, whether down to ill-health or physically intensive work, not have a slightly reduced payment? That would strike a fair balance.

The Government are doing an immense amount to support those facing sharp increases in energy bills. I welcome the extra £150 for personal independence payment claimants, and the uprated PIP being discussed today. However, will the Minister please take away from this debate the numerous emails I have had from those reliant on electronic beds, electronic wheelchairs, oxygen concentrators, sleep apnoea machines—all manner of electricity-reliant equipment—to keep them alive? They have seen their bills go up by £150 a month, not £150 a year, and they are deeply concerned at the energy price trajectory not coming down sharp enough.

Our benefits system remains generous, but it could go so much further. Too often it is being asked to bear the weight of other structural inadequacies in the system, where other Departments could or should be doing more, or where the private sector is allowed to shirk some of its moral responsibilities as players in what we ought to call responsible capitalism. The consequence is that people continually ask for more money to be spent by the welfare state, when the solution should be to make that money go further by ensuring that we have better value and a fairer system in which people can spend that money.

The cost of energy for those with complex medical equipment is just one example of the purple pound, where the disabled pay hidden costs over and above what PIP could ever meet, despite its being there to meet the extra costs of disability. The poverty premium is another area where the DWP and the wider state can ensure that the benefits system does not allow and reinforce poor practice elsewhere. For example, inflation is at its highest in the food and retail sector, but it is higher still in the smaller neighbourhood supermarket stores in the most deprived parts of my constituency. Residents relying upon a local One Stop, Tesco or whatever may not be able to afford to go to the large out-of-town supermarket for better-value food. The private sector is obliging the benefits system to take up the slack of the dysfunctional market in which my constituents are trapped.

[Justin Tomlinson (North Swindon) (Con)]

My hon. Friend makes a powerful point. He highlights the fact that everyone has individual circumstances, which is why the Government brought forward the £2 billion local welfare assistance scheme. Has he had any success in his casework in getting that additional support for people with additional individual challenges?

[Paul Maynard]

I am grateful to my hon. Friend for that intervention. He used the phrase “local welfare assistance scheme” which, sadly, could provoke me to speak for even longer than the hon. Member for Glasgow East (David Linden), because it is my specialist topic, but I ought not to go there—[Hon. Members: “More!”] Perhaps Members should wait for me and the hon. Member for North East Fife (Wendy Chamberlain) to finalise our report into emergency food aid, where they will be able to see exactly what I think.

To finish on perhaps a more fundamental point, one strength of our benefits system is that sufficient incentives are built into the structures of in-work benefits, along with conditionality—I am sorry to say that to the shadow Minister—to ensure that, as far as possible, work is seen to pay. However, that has been distorted through the more complex pattern of financial support that has emerged during covid and the wider cost of living crisis. Those living just below a particular threshold that qualifies them for extra state support get large payouts, but those just above the threshold feel greatly aggrieved. They regard it as unfair because they are being punished for being seen to do the right thing. The bedrock of our benefits system is a belief in its fairness, not just to those who need support at any one time, but to those who have to fund the system and may one day, of course, require it. Although I strongly welcome the Government’s decision to uprate benefits, we must bear in mind the needs of, and treat fairly and responsibly, not just those who are in receipt of benefits, but those who fund the system and are in work, day in, day out. They are two sides of the same coin.

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[Justin Tomlinson (North Swindon) (Con)]

It is a real pleasure to follow the right hon. Member for East Ham (Sir Stephen Timms). I was proud to serve under his chairmanship for a whole three weeks or so on the Committee, and then to reappear as a Minister some weeks later. He has a formidable knowledge of a broad spectrum of issues, and always chairs the Committee’s meetings in the right spirit to tease out what needs to be done to help some of the most vulnerable people in society.

I warmly welcome the various increases being announced by the Minister this evening, in what must be his 20th of these debates: they seem to come round more quickly every year. Having been a Minister for disabled people, I am pleased that we are delivering record amounts in disability benefits to some of the most vulnerable, and that we are getting better at providing support for those most in need. For example, those with mental health conditions who are receiving personal independence payments are six times more likely to receive the highest level of support than they were under the old legacy benefits.

However, welcome though the additional funds have been, we should also—with one eye on the forthcoming White Paper—think about the wraparound support that is provided. For the purpose of disability benefits, people are assessed before being awarded, for a fixed period, a level of financial support, but we do nothing to signpost the additional help that is available. We are all committed to providing additional support for people with mental health conditions, and the Government receive cross-party backing for that, but it is often difficult to target the support provided by either the NHS or associated organisations because we cannot identify the people who need it. However, having now identified them through the personal independence payment system, we should be signposting claimants to the wide range of support—support from charities or the Government, whether formal or informal—so that they know what is available in their postcode areas. My office hosts monthly Parkinson’s coffee mornings, mainly for carers so that they can share their experiences and discuss where they are able to find support, and they are of huge benefit to those people, but we could be using the data we have to share that best practice.

Let me now say something about the support for those who are receiving unemployment benefit, predominantly through universal credit. I welcome the Government’s moves this year to increase that support, but—again, with one eye on the White Paper—we must not lose sight of the need wherever possible to localise and target the support that is available. We spend billions of pounds on work support programmes, but they involve national contracts covering various regions, which means that only generic offerings are available. We need to set aside some of that money to empower the work coaches in jobcentres to commission support in localities where smaller organisations can unlock people’s undoubted potential to put them on the first step of their careers.

We should also bear in mind that we lose about 300,000 people a year from the workplace as a result of changing health conditions. Our Government have a fantastic record of delivering disability employment, having exceeded the target of 1 million more disabled people in work—the figure is about 1.4 million now—but there are misconceptions surrounding it. For instance, the vast majority of people who have either a disability or a long-term health condition will develop it while they are of working age, and we must get better at providing earlier intervention to keep those people out of the benefits system.

There is nothing worse than a deteriorating health condition, with the added pressure and challenges that it causes, for those whose confidence is then shattered because they have crashed out of work and must suddenly present themselves at a jobcentre. A big business should be investing in access to additional support and healthcare. I had the pleasure of visiting some that paid attention to the welfare of their staff, and that was not just because of corporate responsibility. Recruiting and retaining employees, particularly when there are skill shortages, is a win-win situation. Many small and medium-sized enterprises would not necessarily be able to do that, but again, the Government need to get better at signposting advice and support.

Let me give the example of the Health and Safety Executive. We are world leaders when it comes to safety—the HSE is respected across the board, and commands huge fees from international companies to provide best practice from the United Kingdom—but we need to get the health side right as well, so that fewer people have to rely on annual upratings and counting the pennies because being in work will give them the best chance of improving their lot.

Finally, let me pick up a point made by the shadow Minister about pensioner poverty. Twenty-three years ago, at the beginning of my political journey, I was proud to be elected as a councillor in Swindon, and here I am now as the Member of Parliament for North Swindon. My first election was on the back of a 75p rise in pensions, which is a light year away from the triple lock that has delivered some £2,400 more, in cash terms, for pensioners on fixed incomes.

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[Wendy Chamberlain (North East Fife) (LD)]

It is a pleasure to follow the hon. Member for Broadland (Jerome Mayhew), who made a thoughtful contribution, although obviously there are differences of opinion on some of the things he said.

I am pleased to contribute to this year’s debate. The Minister’s initial contribution was pretty factual and to the point, but these debates are always an opportunity for Members to comment generally on social security and uprating. I am pleased that this year’s debate is slightly less controversial than last year’s. Indeed, I think there has been relief on both sides of the House that the uprating will be in line with inflation. That means we have not seen the triple lock abandoned and benefits will be uprated in line with inflation. However, those conventions have been broken previously, so the challenge is that people are already behind as a result of previous commitments having been reneged on. But I am pleased to welcome this uprating.

In recent years it has become increasingly clear how important the social security safety net is as a public service. As I have said previously, covid has meant that some people who never expected to be supported by the state have had to access that support. That is the reality: we never know when we might need support. We might become injured or ill; the company that we work for might go under, maybe because it cannot get enough staff and cannot open its full hours, and therefore does not have the productivity it needs to keep going; or indeed, we might need to care for loved ones. Social security is, and should be, there to make sure that no one is left behind.

The hon. Member for Blackpool North and Cleveleys (Paul Maynard), who is no longer in his place, mentioned the all-party parliamentary group on ending the need for food banks. I co-chair that APPG, and have been very pleased to have the hon. Gentleman as part of our inquiry team. The final evidence session of our “Cash or Food?” inquiry is tomorrow, and I would be delighted if the Minister could attend our report launch on 22 March—I am grateful to the Under-Secretary of State for Work and Pensions, the hon. Member for Mid Sussex (Mims Davies), for her written response to our inquiry. We are looking at that issue because, as I said in my intervention on the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), the only time during the covid pandemic when we saw a decrease in food bank use was when universal credit had its £20 uplift. That suggests to me that people were using those additional moneys for the purpose of putting food on the table.

As I said, this debate is quite factual, but it gives us an opportunity to comment on Government policy and practice. I want to touch on something that the hon. Member for Glasgow East (David Linden) mentioned, which is universal credit for the under-25s. It may have been uprated by 10%, but it remains lower than for the over-25s, and I would argue that there is simply no good reason for that. Indeed, about 18 months ago I wrote to the Department for Work and Pensions on this topic in support of a campaign by One Parent Families Scotland. I was told, in terms that, frankly, I found quite patronising, that the reason for the policy is that the DWP believes young people are more likely to live at home—that was assumed even if they themselves are parents—and generally have lower earnings expectations.

That response totally ignores the experience of the majority of under-25s who claim universal credit. Of course, as parents we would hope to support our children as they take their first steps in the world, and to provide a safe haven to which they could return if necessary. However, that does not help the young people who need to leave home because they are looking for work and there are no jobs in their area; the young people who do not come from stable homes and need to support themselves; or the young parents who cannot stay in their family homes with their own children. I hardly want to deign to give a response to the statement about having lower earnings expectations, but I will say that no one who is out of work and receiving universal credit, or who, as has been pointed out, is in work and receiving universal credit, even at the full amount, is sitting idly by, wondering what to do with that excess income.

As many Members have said today, we are in a cost of living crisis. Universal credit is a safety net, and this Government policy assumes that young people deserve less safety than older people. That is the wrong message. Given the ministerial churn within the DWP and, indeed, elsewhere, I hope that we can review that misguided position. At the very least, I ask the Minister to review one aspect in his closing remarks: reinstating the higher rate for young parents, as it was under legacy benefits. Young parents are most likely to be struggling, and surely they and their children deserve the same support as a family where the parents are just a year or two older.

I will highlight a few other issues, starting with PIP. All of us in this place will have a caseworker who spends a lot of time providing support for PIP appeals, the vast majority of which are successful. It is a long, stressful application process, and we have assessors who simply do not understand the process or what applicants are experiencing, resulting in widespread mistakes that we as MPs end up dealing with. It costs the taxpayer more money to reverse those decisions than to get them right in the first place. The stress makes people who are already struggling even more ill, and as we know, very sadly, some people give up as a result. The system does not work. This issue is so important when the Government are currently looking at measures to deal with the economically inactive—I look forward to hearing their proposals. They want to get people back into work. Now is the time to bring those specialist assessors and the assessment process for PIP back in-house, and to stop lining the pockets of private providers with taxpayer money when they simply do not get the job right.

[Justin Tomlinson]

The hon. Lady raises a very important point about getting the job right. Thankfully, the vast majority of the millions of claims are right first time round, and for those where it sadly goes wrong, on the vast majority of occasions, that is because of missing additional supportive evidence. As such, will the hon. Lady join me in welcoming the Government’s move to a system where, at the mandatory reconsideration stage, rather than waiting for claimants, the assessors have now started proactively contacting them to identify the missing evidence and help them find it? That has seen the number of those able to be sorted quickly more than double.

[Wendy Chamberlain]

I am happy to support any improvements to the process, but what the hon. Member has done is to point out just how complex these processes are and how difficult they can be for people to navigate. It is only when there is a proactive approach that we start to get things right.