Social Security

Kit Malthouse Excerpts

Monday 5th February 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Kit Malthouse)]

I beg to move,

That the draft Social Security Benefits Up-rating Order 2018, which was laid before this House on 15 January, be approved.

[Mr Speaker]

With this it will be convenient to consider motion No. 2:

That the draft Guaranteed Minimum Pensions Increase Order 2018, which was laid before this House on 15 January, be approved.

[Kit Malthouse]

With the forbearance of the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for any prior confusion, I move the motion. In my view, you will pleased to hear, Mr Speaker, the provisions in both orders are compatible with the European convention on human rights.

The draft Guaranteed Minimum Pensions Increase Order 2018 is an entirely technical matter that we attend to each year in this House and I do not imagine that we will need to spend much time on it today. The statutory instrument provides for contracted-out defined benefit occupational pension schemes to increase members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 3%.

I turn to the rates that are included in the draft Social Security Benefits Up-rating Order. The Government continue to stand by their commitment to the triple lock guarantee, which means that, this year, the basic state pension and the full rate of the new state pension will go up by the increase in prices, at 3%, as outlined in the autumn Budget on 22 November last year. We will increase the pension credit standard minimum guarantee by more than the growth in earnings to match the cash increase in the basic state pension, and we will increase benefits to meet additional disability needs and carer benefits by 3% in line with prices.

The Government’s continuing commitment to the triple lock for the length of this Parliament means that the basic state pension rate for a single person will increase by £3.65 to £125.95 a week from April 2018. As a result, from April 2018, the full basic state pension will be £1,450 a year higher than it was in April 2010. We estimate that the basic state pension will be around 18.5% of average earnings—one of the highest levels relative to earnings for more than two decades.

In 2016, the Government introduced the new state pension for people reaching their state pension age from 6 April 2016 onwards, with the aim of making it clearer to people at a much younger age how much they are likely to get and providing a solid base for their saving and retirement planning. We are committed to increasing the new state pension by the triple lock for the duration of this Parliament. As a result, the full rate of the new state pension will increase by 3% this year, meaning that, from April 2018, the full rate of the new state pension will increase by £4.80 to £164.35 a week—around 24.2% of average earnings.

The benefits of the triple lock uprating will also be passed on to the poorest pensioners through an increase in the standard minimum guarantee in pension credit to match the cash rise in the basic state pension. That will be paid for through an increase in the savings credit threshold. To match the cash increase in the basic state pension, the standard minimum guarantee will rise by 2.29%, which exceeds growth in earnings of 2.2%. That will mean that, from April 2018, the single person threshold of this safety net benefit will rise by £3.65 a week, to £163.

On the additional state pension, this year, state earnings-related pension schemes will rise in line with prices by 3%. Protected payments in the new state pension will be increased in the same manner. Consistent Government support for pensions has seen the percentage of pensioners living in poverty fall dramatically in the past few decades; it is now standing close to the lowest rate since comparable records began.

[Kate Green (Stretford and Urmston) (Lab)]

The Minister will know that state pension is deducted from pension credit, leaving those pensioners no better off than if they had not contributed to qualify for a state pension. Because state pension is also taxable if other income is brought into the household, the pensioner may have both to pay tax on it and to see it deducted from their pension credit. Therefore, they could be worse off than if they had not contributed to qualify for a state pension. What are the Government doing to address that long-standing inequity?

[Kit Malthouse]

Significant measures have been taken by the Government to deal with pensions and, in particular, pensioner poverty over the last few years. We have seen that fall from something approaching 46% to around 16% in the last few years. One measure, in particular, that will have benefited many millions of pensioners is raising the personal tax threshold. That has taken millions of people out of the tax system altogether and particularly those, such as pensioners, who are on a fixed income.

I turn to disability benefits. The Government will continue to ensure that carers, those who cannot work and those who have additional needs as a result of disability get the support that they need. We continue to follow the principle in our welfare reforms that more of the money should get to the people who need it most. That results in disability living allowance, attendance allowance, carer’s allowance, incapacity benefit and personal independence payment all rising by 3% in line with prices from April 2018. Disability-related and carer premiums paid with pension credit and working-age benefits will also increase by 3%, as will the employment and support allowance support group component and the limited capability for work and work-related activity element of universal credit.

All in all, the Government will spend an extra £4.2 billion in 2018-19 on uprating benefits and pension rates. With that spending, we are upholding our commitment to the country’s pensioners by maintaining the triple lock on their state pension, helping the poorest pensioners who count on pension credit, and providing support to disabled people and carers. I commend the orders to the House.

--- Later in debate ---

[Kit Malthouse]

This has been a lively debate—certainly more lively than it has been in the past. Doubtless many of the arguments made—not least as much of the debate was about what is not in the order rather than what is in it—were exactly the same as those made last year. Therefore, I do not propose to detain the House for too long. A number of Members raised a series of detailed points, which I will try to address in writing, if I may, should I fail to address them in my speech.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) raised a couple of issues I want to address. First, she asked when the Government will produce a cumulative impact assessment of all welfare reforms. The Treasury published a cumulative distributional analysis alongside the Budget, in November last year, showing the impacts on household income of tax, welfare and expenditure, so I would point her to that. She also asked about the new state pension communications, as did a number of other hon. Members. She will be pleased to know that, following the National Audit Office report last year, from which she quoted, the Department for Work and Pensions launched an online “Check your State Pension” service.

[Debbie Abrahams]

rose—

[Kit Malthouse]

I will carry on. The service has had 7 million views since February 2016. Notwithstanding that, there is obviously more work to do on communications.

The hon. Member for Airdrie and Shotts (Neil Gray) asked why bereavement support payments have not been uprated. A bereavement support payment is not a cost-of-living benefit and is paid in addition to means-tested benefits to protect the least well off, so it is not necessary to uprate it in line with the cost of living. Unlike bereavement allowance and widowed parent’s allowance, bereavement support payment is paid in addition to other benefits to which the recipient is entitled, helping those on the lowest incomes the most. The hon. Gentleman will know that the up-front payment for those with children has been increased from £2,000 to £3,500.

[Neil Gray]

Will the Minister give way?

[Kit Malthouse]

I will not; I do not really have time and the hon. Gentleman and his friends had plenty to say during the debate.

A wider point was raised by several Members that for me distils the difference between the Government and Opposition on this issue. There seems to be on the Opposition Benches a kind of Stockholm syndrome attachment to the old benefits system, despite the fact that it is obviously a fraud perpetrated on the poor, more often than not designed to keep them poor rather than to give them the tools and ladders to climb so that they can take control of their own lives and financial control of those of their families into the future. I understand and would never seek to doubt Opposition Members’ motivation to do the best by their constituents and the rest of the country, but for some reason they seem to think that that motivation applies only to them, rather than to Government Members as well. I reassure the House that the motivation of every Conservative Member of Parliament is the betterment and welfare of our fellow citizens, which is what the order is designed for. With that, it gives me great pleasure to commend the orders to the House.

Question put and agreed to.

Resolved,

That the draft Social Security Benefits Up-rating Order 2018, which was laid before this House on 15 January, be approved.

Pensions

Resolved,

That the draft Guaranteed Minimum Pensions Increase Order 2018, which was laid before this House on 15 January, be approved.—(Kit Malthouse.)

Smart Meters Bill (Programme) (No. 2)

Ordered,

That the Order of 24 October 2017 (Smart Meters Bill (Programme)) be varied as follows:

(1) Paragraphs (4) and (5) of the Order shall be omitted.

(2) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.—(Richard Harrington.)