Pension Schemes Bill

Kit Malthouse Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Kit Malthouse (North West Hampshire) (Con)]

I congratulate the hon. Member for Tamworth (Sarah Edwards) on her speech. I am afraid, however, that you, Madam Deputy Speaker, will have to forgive me for puncturing the air of bonhomie and positivity about the Bill, because I am really not content with it.

Frankly, I feel it is my duty as an Opposition Back Bencher to be suspicious of consensus, particularly when the City of London is conspiring with a Labour Government to muck about with our pensions. We have seen that before. I am old enough to remember Gordon Brown’s so-called reforms in 1997, which struck a hammer blow to the British people’s pension funds. You will remember, Madam Deputy Speaker, that the late, great Frank Field—who was then the Pensions Minister—later called those changes a spectacular mistake that struck a hammer blow to the solvency of British pension funds and drove a dagger deep into the heart of the defined-benefit landscape, resulting in its extinction.

As such, I am afraid that must rise to raise some very significant reservations about this bit of legislation—and not just its technical execution, but the political instinct that it betrays. While the Bill is wrapped in the warm words of reform and modernisation, what it actually does is centralise control, unsettle previously settled rights, and risk disenfranchising precisely those people whom it purports to help.

To begin with the Bill’s technical aspects, I reiterate my point of order. I am a member of the local government pension scheme through my membership of the London Pension Funds Authority, and I am uniquely affected by this legislation, as are 6.5 million other former and current public sector workers. My view is that, under this Bill, those people’s rights are being denied, and that through the hybrid legislation process, they or their representatives should have the right to petition the Bill Committee and explain why they feel they are affected by investment pooling, the changes to fiduciary delegation and the asset consolidation. They are uniquely affected by this Bill, which strikes profoundly at the governance of the pension funds they have paid into in a way that it does not for other pension funds in this country. That is the definition of hybridity—if that is a word—so if we are going to stick to the rules in this House, we really should stick to them. I look forward to getting the letter that you promised me, Madam Deputy Speaker, and I know that you have asked me not to refer to procedure in the other place, but this is not the only Chamber that will be looking at this legislation.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who is just about to leave—I am sorry to detain her but will be brief—asked the Minister what the problem is. I repeat her question, but in relation to the local government pension scheme, I also ask what it has to do with him. It is my money, not his, and it is for scheme members to make decisions about how they wish their money to be used. It is not taxpayers’ money; it is my money. It is a defined-contribution and benefit scheme, and we have all paid into it. He is the second Minister in the space of 18 months to try to interfere with the local government pension scheme, and I stood in this Chamber and opposed Michael Gove, now Lord Gove in the other place, when he attempted to manipulate the local government pension scheme for political reasons. I urge the Minister to think twice before he does so.

Secondly, I believe that this Bill is conceptually flawed. If we are being generous—[Interruption.] By all means, the hon. Member for Oldham East and Saddleworth is free to go—I will not be mentioning her again. She was hesitantly rising to leave. If I am being generous, the ambition behind this Bill is to unlock capital that can be invested for the purposes of growth, but the methods it proposes are chillingly dirigiste and make the dangerous assumption that Whitehall knows best and that central direction by the Government can outperform the dispersed judgment of hundreds of experienced trustees managing diverse funds in varied contexts. Essentially, with this Bill the Minister is turning the pension fund industry into an element of Government procurement by the back door.

There are three further points that I want to put on the radar on Second Reading. I understand that the Bill will go through, but I hope the Minister will take them into account. First, it is simply not true that megafunds perform better. There is plenty of academic and empirical evidence that the picture is much more mixed. Often, smaller funds with better governance and a more focused investment strategy can perform better. These supertanker monopoly funds lose agility, lack accountability and become distant from pensioners and members of the fund. Their investment discretion and their ability to move quickly on investment decisions becomes sclerotic and bureaucratic. In particular, it is true that these megafunds specifically underperform when they invest in exactly the kind of illiquid assets that the Government are hoping to push them into: infrastructure and private equity. I urge the Government and the Minister please to examine carefully the evidence from the United States and elsewhere that shows that these very large funds do not necessarily produce better returns for investors. They may well be able to reduce costs because of scale, but I am afraid that the evidence is just not there on fundamental investment returns.

My second point is on the danger of politicisation. We have seen elsewhere in the world where pension funds have been pushed into the Government’s priorities to their own detriment. In Canada, large pension funds have come under significant Government pressure to invest in state infrastructure. In France, pension fund surpluses have been directed into Government bond-buying programmes effectively against their will. Once those assets become controlled and directed into state-favoured investment vehicles, which is what the Government are proposing through this Bill, the temptation for Ministers—not necessarily this Minister, but future Ministers—is to go further and push funds into politically convenient infrastructure projects that may prove to be financially disastrous. If that power had been available to the political team that decided to instigate the frankly financially disastrous HS2, and my pension fund had been put in it, where would I be now? I urge the Minister to think carefully about the responsibility for my retirement and my future. By me, I am referring to myself as a member of the local government pension fund. I am everyman for these purposes.

I am afraid that essentially what has happened in France and in Canada, and what may happen under this legislation in the UK, is that the pension fund system effectively becomes a tool of Government fiscal policy. Effectively, absent capital spending available directly from the taxpayer, the Government direct capital spending from pension funds—from private money—and plug holes that they create by writing cheques that they cannot fulfil. I would be interested in the Minister’s response to that.

[Lincoln Jopp]

I was just googling “dirigiste” and my right hon. Friend’s everyman quote. Will he comment on the fact that OMERS, which he would probably agree is one of these megafunds that he thinks are slow and unwieldy and invest in infrastructure and illiquids, returned a 7.1% net return over the last 10 years and the London Pensions Fund Authority returned a 7% return over the last 10 years?

[Kit Malthouse]

As I said, the evidence about performance across the population of funds is mixed. Some smaller funds do extremely well, because they have strong governance and a focused and nimble investment strategy. Some megafunds do reasonably well, because they can spread their risk across a variety of asset classes, but it is not a given that a big fund will perform better than a smaller fund. In fact, in certain circumstances smaller funds, because they have better accountability and can have a more focused investment strategy, may well perform better.

Frankly, and this speaks to my hon. Friend’s point, it is for me as a member of the pension fund to decide what I want to do, performance or otherwise, because it is my money. Given that I have contracted with this pension fund under circumstances made clear to me when I contracted with it as part of my employment or otherwise, it is not necessarily for the Government to steam in and tell me what I should or should not do with my own money. That means I carry a certain element of risk—absolutely—but unless we are going full-throated for the total financial infantilisation of the British people, I cannot see that we have any other way to preserve our financial freedom and autonomy.

[Debbie Abrahams]

Does the right hon. Member accept that he might be atypical among scheme members?

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[Kit Malthouse]

That may well be true, but that is a different question. There is a question about financial education and the ability of large numbers of our fellow citizens to understand these financial complexities. We have a large and professional independent financial adviser community, and all pension funds are required to have pension advisers who can speak to members, tell them what is going on and explain the decisions before them. I do think that over the years, such steps have disenfranchised the British people from their financial decisions, yet we hold them responsible for their debts, their mortgages and their future. There is a larger question for us in this House about how much we have subtracted from the autonomy of the British people, and therefore how much blame attaches to us as politicians when their financial circumstances are not what they expect.

[Torsten Bell]

The right hon. Member is giving a lucid speech, as he always does—he speaks very well—but I am failing to understand exactly the point he is making. He is talking about a local government pension scheme, which is guaranteeing him an income in retirement, as if it is a defined-contribution scheme where he is the one at risk from changes in the investment performance. It is local taxpayers with their employer contribution who ultimately bear the risk in the scheme he is talking about. It is our job to make sure that those taxpayers have the best possible chance of not having bad returns, leading to bad outcomes for them. He is not at risk in the way he is talking about.

[Kit Malthouse]

But I have paid into that scheme.

[Torsten Bell]

You have.

[Kit Malthouse]

Yes, I have. I paid contributions through my employment at City Hall, as did my employer. Admittedly, it was a scheme based on a defined benefit, rather than a defined contribution, but that was the deal done with me on a settled contract, saying that this was what I would be provided for from my contribution. Every year, I review my pension benefit forecast. I am consulted by the fund about how it should conduct its affairs. I am asked to turn up to my pensioners’ conference to discuss with trustees how they are looking after my future. The point is that the Government are steaming in with absolutely no consultation with me as a pensioner and I have no right to be represented, although I am uniquely affected, beyond other pension schemes. I consider that to be high-handed and, as the hon. Member for Oldham East and Saddleworth said, to be solving a problem that does not exist.

My third point was also raised by my hon. Friend the Member for Wyre Forest (Mark Garnier): who carries the can? What happens when the Minister tells my private pension scheme or the parliamentary pension scheme that it must invest in, for instance, HS2 and it turns out to be a disaster? What happens when whichever ministerial pet project rises to the top of the priority list for pension allocation—what rough beast, its hour come round at last, slouches towards Whitehall to get its finance—and it all goes horribly wrong? I am sorry to quote Yeats to the Minister, but who will pay when that happens? When there is a deficit in defined-contribution pension funds that have been so directed by the Minister, who will pay for that deficit?

[Torsten Bell]

rose—

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[Kit Malthouse]

I have already given way to the Minister. He said that the Bill contained an opt-out for pension funds, but that is not strictly accurate. It does not create an opt-out for trustees; it creates an opportunity for them to request the ability to opt out from the regulator, with whom the discretion to opt out lies. It also reverses the burden of proof. Even if it is on their own judgment, the trustees must prove, empirically, that investing as the Minister so directs will be to the detriment of their fund. That is not a true opt-out. It is not at the discretion of the trustees. All they can do is request, and all they can do is try to offer whatever evidence they may have. We must reflect on the fact that an awful lot of investment decisions are made by trustees on their judgment—yes, on advice, but on their judgment—and that is a very hard thing to disprove.

I am afraid I feel that the Bill is bulldozing into an area of highly sensitive financial structure, and is not taking care of the interests of those whom it purports to protect. It is reclassifying risk, it is recentralising power, and it is rewriting contracts that have hitherto been extant for many years. It is too important to my future, and the future of millions of pensioners, for us to rush into this consensus-driven Bill without proper examination in Committee, with pensioners and pension funds themselves able to petition, as they should be, under a hybrid Bill structure.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

I am probably a parliamentary oddity, given that I have been looking forward hugely to rising to support the Bill—and what luck to follow such a colourful and interesting speech from the right hon. Member for North West Hampshire (Kit Malthouse).

I believe that this landmark piece of legislation, which builds on the progress made by the last Administration, has the potential to fundamentally reshape the trajectory of British capitalism by addressing one of the most important long-term challenges facing our country, namely how we can unlock and unleash the full potential of British savings to support growth and prosperity here at home. It is a challenge that we must overcome if we are to tackle a number of deep-rooted structural weaknesses in our economy: low productivity, low business investment and regional inequalities, as well as the financial insecurity that pervades the lives of too many of our older citizens, especially those who do not own their homes.

Before I go any further, I must pay tribute to my hon. Friend the Minister—the Bill bears the hallmarks of his serious and determined leadership—and also commend my hon. Friend the Member for Tamworth (Sarah Edwards) for her very interesting speech.

The Bill seeks to address the lack of alignment between our nation’s vast pool of domestic savings and the long-term investment needs of our economy. Over recent decades, that growing misalignment has become all too evident in communities across the United Kingdom. During that time, our domestic pension funds, which now amount to about £.3 trillion, have steadily retreated from investment in the UK, although the trend has not been replicated in other comparable developed economies. Despite taxpayer support amounting to more than £60 billion a year—or £70 billion, according to the right hon. Member for Salisbury (John Glen)—too little capital is finding its way into British companies, infrastructure and innovation.

Data from the Capital Markets Industry Taskforce—I must disclose the fact that I once worked for one of its member firms before entering this place—lays bare the scale of the problem. The data focuses primarily on public equity markets, but when we look at the largest pension schemes and funds in other countries and compare the size of their total equity allocations relative to their domestic equity markets, we see that Canada’s pensions are 2.5 times overweighting their home market, while France’s are nine times overweight, Italy’s 10 times overweight, Australia’s 27 times overweight, and South Korea’s are 30 times overweight. The UK is, massively, an international anomaly. Our domestic pension funds are underweighting our equity market by about 40%. That, I think, represents a structural weakness, with direct consequences for the global competitiveness of our economy, the vitality of our industries and, ultimately, our national economic resilience. If we are unwilling to invest in ourselves, we hold back our growth prospects.

The UK has long needed catalysts for a modern economic renaissance. The Government have taken important first steps through their industrial and infrastructure strategies, the artificial intelligence opportunities action plan and the reforms of our planning system, but the common ingredient that is required to ensure their success is a reliable source of long-term capital. Even a modest rebalancing of that £3 trillion could unlock billions in investment for domestic growth. In real currency that our constituents can understand, that means investment in digital, physical and social infrastructure, and it means greater opportunities for entrepreneurs to not only start up businesses but scale them into something globally consequential, providing better jobs and higher incomes for families throughout the country.

These investments are not just good for local economies. If we get the broader fundamentals right, they can also deliver stronger returns for tomorrow’s growing cohort of retirees, so the Government are right to propose tackling fragmentation across the UK pensions system. In particular, the private defined-contribution market and the local government pension scheme remain too fragmented. I must gently disagree with the right hon. Member for North West Hampshire: I think that there are too many small, sub-scale schemes that have not only driven up costs and created market inefficiencies, but resulted overall in suboptimal investment outcomes. I think that larger funds can manage risk better, and can invest in opportunities that can deliver higher returns for savers.

[Kit Malthouse]

I do not dispute the fact that there are too many small funds that are suboptimal; my question is whether it should be the Government who correct that. If, for example, I am a member of a small suboptimal pension fund and the Government, through the Bill, consolidate it with another pension fund, and it turns out that this reduces my return, who carries the can?

[Callum Anderson]

As I have said, I think that larger funds can manage risk better and deliver better outcomes for savers, which means that they can take greater ownership of how they spend their retirement years. I also think that the £25 billion threshold for megafunds in the defined-contribution market is the right level to deliver the objective. Other jurisdictions, especially Australia, Canada, and the Netherlands, have demonstrated that scale drives better governance, lower fees and stronger returns.

I welcome consolidation and the path towards the professionalisation of the local government pension scheme. I disclose that before I entered this place, I chaired a local authority pension fund, so I know at first hand the potential of pooling, and share many experiences of pension fund meetings with the shadow Minister. I fully acknowledge that there will be resistance to pooling in some quarters.

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[Kirsty Blackman (Aberdeen North) (SNP)]

I start with an apology to the Minister, because I had a bit of a giggle when the timeline for pensions dashboards was mentioned. I have been here quite a long time, and I feel like we have been talking about pensions dashboards for that entire time. It has been suggested that they are just around the corner for most of the last 10 years. It feels like this is something that we rehash on a regular basis. It would be great if they really were just around the corner; I look forward to seeing them.

The right hon. Member for North West Hampshire (Kit Malthouse) will not be surprised to hear that our political ideologies are slightly different when it comes to interventionism and what the Government should or should not do. It is completely acceptable for the Government to give some direction on the largest assets, but I am specifically not talking about the LGPS, because it does not exist in Scotland. That part of the Bill does not apply to my constituents, so I will not touch too much on that.

[Kit Malthouse]

I understand where the hon. Lady is coming from. She is keen on Government intervention in our pensions, but does she recognise that that represents a fairly significant transfer of investment risk, and that the Government should underwrite that risk in all fairness to pensioners, who may lose money as a result?

[Kirsty Blackman]

Auto-enrolment was a fairly substantial intervention by the Government in pensions. Since 1997, pensions have had to increase in line with inflation, and that was an intervention by the Government. There has been a long trail of interventions by the Government in how assets are managed and where they are held, but pension trustees are still required to get a return. I agree with the right hon. Gentleman about specific projects, and I would be particularly concerned if we were looking at specific projects, but the mandation relates to UK assets, and the funds in which they could be invested.

I would love to see much more investment of pension funds in social housing, for example, where the trustees can get a pretty great return, but they will still have a fiduciary duty and responsibility. For defined-benefit schemes, the member will always get what they have been promised they will get. No matter how the fund is managed, they have a defined benefit from the scheme, unlike in a defined-contribution scheme, where it depends on the size of the pot as it grows—but I am going to carry on, because I have a lot to cover that is not to do with mandation, and as I say, the LGPS does not apply in Scotland.

On value for money, I think the Bill is good, because comparing pension schemes is difficult. Comparing any financial schemes is difficult because they are all laid out in different ways and the fees are calculated in different ways, so it does not make sense to most people. Some of stuff on requiring the publication of information on value for money in certain ways is important, and the surveys are also important. I have slight concerns about the chapter on value for money because, in comparison with the small pots consolidation section, there is no requirement to publish the regulations in draft before they actually become regulations. There is a requirement for consultation, as there is in both those chapters, but not a requirement for publication in draft. I think it is important for those to be published, so the widest possible range of views can come forward, because value for money is so important for such a wide range of people, whereas some of the other stuff in the Bill is much more technical and will have an impact on far fewer people. The point about publishing the regulations in draft is important.

I am disappointed that the Government have not made more moves on adequacy, but given where we are in the cost of living crisis, I can understand why it may be difficult to get cross-party political consensus on the creation of adequacy provisions. This Bill could have taken more of a look at pensions in general, rather than being about pensions specifically, because in a lot of ways the Bill is seeking to do is improve every individual’s pension pot’s potential for growth. That is an admirable aim, but some of the larger picture could have been included—for example, in relation to auto-enrolment, the under-22s and people earning small amounts of money who do not qualify.

The right hon. Member for Salisbury (John Glen) alluded to the mid-life MOT, which I have previously shouted about. I agree that people should be sent an appointment for a mid-life MOT, in the same way as they are asked to get their bowel cancer screening sent through the post. It should be exactly the same with a mid-life MOT, which is so important, but so many people duck and dive about it. Millennials are coming up to reaching this point, but millennials are a generation particularly averse to thinking about retirement, because we do not think it will happen to us. We think we will die before we get there, because there is an incredible amount of cynicism among millennials. We tend to avoid thinking about it because we are not going to reach that point, so forcing millennials—in the nicest possible way—by giving them such an appointment and making it for them means they are much more likely to undertake it.

On guided retirement, again I think the Bill tackles the issue pretty well by ensuring that people have more information. I am particularly concerned about the people who draw down the 25% tax-free sum of money, and then do not have a plan for the rest of it. How many of them have just thought about the 25%, and have not thought about the rest of it, or about how complicated and unpredictable annuities can be depending on the year? I am thinking about somebody I know who does not smoke or drink and runs 10 km a couple of times a week, but they will get a smaller annuity than somebody who does the opposite. Do people know how unpredictable it is—how much they will get and the fact that they cannot tell from what the pot looks like the actual outcome to cover their living expenses? Any kind of understanding people can be given about that is really important. I do still have concerns about some of the issues with freedoms and how financially disadvantageous it can be for a significant number of people.

I agree with some of the stuff on the consolidation of small pots. I have a concern about the fact that the Secretary of State or the Minister can make changes to the definition of small pots by looking at some consultation and then bringing a statutory instrument to the House. I would appreciate some clarification, and agreement that the Minister will consult pretty widely before taking a decision about changing the definition of small pots in secondary legislation.

On surplus release, I would disagree with a chunk of the Conservative Members who would use it for slightly different things. I press the Minister on the balance between the economic growth mission and what employees will get as a result of surplus release. I am pleased to hear that trustees will have some flexibility, but I am concerned that that creates a system with a number of tiers, because it depends on how passionate the trustees are about helping the employees or helping the Government’s growth mission. I would ask for some guidance from the Government about what they expect. When they are making that deal with employers, they have to agree with the employer where that money will go—how much of the money will go to increasing the pension pots and how much into people’s salaries. There will need to be a significant amount of guidance for trustees on where the Government expect money to go. It would be appreciated if we could be involved in the creation of that guidance, or at least be consulted on what it is supposed to look like.

On megafunds, there is a bit of a “wait and see” on what megafunds, both master trusts and the superfunds, will look like and how they will pan out. I can understand looking at other places the Government consider to be successful in how pension funds are managed and the very large investments that could be created as a result of huge funds. I appreciate that overheads can be reduced and that funds can be run more efficiently as a result, and that investments can be made into very large, long-term patient capital projects if the fund is significant.

My specific question on superfunds is about new entrants to the market. The Bill states that there is an ability for transitions. Organisations likely to meet superfund status at some point, given a certain amount of time, will be given slack until they can reach that status, which is utterly sensible. But then it talks about new entrants coming in to become a superfund. There is a pathway and the ability to get approval to do that, but only if they are innovative. I am slightly concerned about what innovative means, because it is not defined—I think it will be defined in secondary legislation. Why should they be innovative? Surely, if a new entrant is excellent, that should be enough? Innovative concerns me. I do not really understand what it means, or why it is in the rules for new entrants. Anything the Government can say to explain what they think that is supposed to mean, and what they intend it to mean in the secondary legislation, would be helpful.

On the whole, the SNP is cautiously optimistic about the Bill. We believe there need to be some changes and we have specific questions in various areas, such as: on the rationale in relation to mandating; on the rules on value for money and how they will impact individuals; and on the consolidation of small pots and how they will ensure individuals have better outcomes. It is not in the Bill, but ensuring the pension dashboard happens so that people can see the consolidation of small pots happening in real time would be incredibly helpful. The best outcome we can get is for everybody to have an adequate pension when they reach retirement. We will not get that if people cannot see and cannot understand what they have in their pensions and if those small pots are not consolidated.

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[John Grady (Glasgow East) (Lab)]

I rise to speak in favour of the Bill. On a policy basis, the Bill addresses a number of very important challenges.

The first is ensuring that the pension system delivers good outcomes for the millions of pension savers in Britain. That is absolutely critical. In my lifetime, the risk of pension savings has shifted from the employer to the employee—in other words, to our constituents. At the heart of the reforms is one essential fact: investment in a diverse set of assets leads to better returns and better outcomes than investment in a narrow set of assets. We need to move away from a focus on cost in the industry and on to a focus on overall value and the outcomes that savers get, so they have comfortable retirements. I am determined that the working people in Glasgow East have comfortable retirements and are properly rewarded for their hard work. Therefore, the Bill’s objective of ensuring that savers in Glasgow East and across the United Kingdom ultimately have access to a wider pool of investments, which have historically been restricted, is a good outcome and a good policy.

The second challenge the Bill seeks to address is growth. People in Glasgow East are very ambitious, as I know they are in Aberdeen North and in Hampshire. As I knocked on doors ahead of last year’s election, people would say to me, “Britain has lost its way.” And many people said that they felt their children would be better off working abroad, or that there were more opportunities for their children abroad. That is the challenge the Bill plays a part in addressing. We do not invest enough in our productive capacity so we have lower, sclerotic economic growth.

Pension savings are an essential source of finance for British industry and infrastructure. In that regard, the Bill includes, in chapter 3 of part 2, something that seems to be causing anxiety: the backstop mandation of investment by defined-contribution pension funds into private asset classes linked to the United Kingdom. Private non-listed shares and debt are now central to investment in a way that they were not when I started off as a junior lawyer many years ago. Growth companies in areas such as medicine, AI, technology and, of course, space remain in private hands for much longer, and list on public markets much later, if at all. The mandation power must be viewed in that context. If UK pension funds do not invest in those classes of domestic assets, working people may miss out on significant returns, and we risk losing the opportunity of growth and of developing the great innovations from our fantastic universities, including the University of Strathclyde.

[Kit Malthouse]

The hon. Gentleman is making a good point, but does he accept that illiquid investments, by their very nature, tend to be more volatile, and that from a risk-adjusted point of view they therefore represent much higher risk for investors? He mentioned investment in life sciences companies; he will be aware of the collapse a couple of years ago of the fund led by Neil Woodford, which was a significant investor in illiquid private sector life sciences companies and, because of that illiquidity, collapsed. The point is that if we are mandated to do that stuff—I ask the same question as I asked the Minister—who will pay? Who carries the can?

[John Grady]

I hope the right hon. Gentleman would accept that diversification is critical here. Of course, illiquid private assets are not something that one holds for a couple of years and then sells, but the funds are designed to be large enough to bear the risk from diversification. That is the critical point.

Pension funds are a statutory arrangement, with significant taxation and other legal benefits. That creates a business opportunity for pension providers—and quite right, too. Against that background, it is right that the Government review whether, under the existing arrangements, savers are getting a fair return from that special statutory and legal arrangement. Given the tax breaks, it is not unreasonable to address the question of whether there is sufficient investment in the United Kingdom.

Let me turn to our attitude to risk in the UK, on which the success of pension arrangements turns, as does our desire for more economic growth. We will not get more economic growth unless we take more reasonable risks, as the Chancellor of the Exchequer and others have made clear. It is essential for banks and fund managers to consider whether they take enough risk.

The chief executive of the National Wealth Fund, John Flint, made the point last Tuesday at the Treasury Committee, when he said,

“I would encourage the stewards of private capital to go back and challenge themselves on their risk appetite…the country’s growth outcomes are, for me, largely consistent with the country’s risk appetite generally.”

I venture to say that our great fund managers and banks need to turn their minds to whether they are taking enough risk, because that drives economic growth and drives successful outcomes for savers.

Another aspect of pensions reform and risk taking is the individual savers, as was brought home to me in a quite different context, when I was on a football history tour organised by Football’s Square Mile, which promotes the history of football in Glasgow East. As we stood mainly in Glasgow East—I must admit that some of it was in Glasgow South—the guides explained to us that when Queen’s Park decided to organise the first international football match between Scotland and England in 1872, the club had just over £7. It had a choice: the low risk was to hold the match at a rugby club, free of charge; the higher risk was to hold the match at the West of Scotland cricket club at Partick, an old, closed ground where tickets could be sold and there was potential revenue. The problem was that the West of Scotland cricket club wanted more by way of rent than the Queen’s Park had—much more than £7. The guides put the choice to us all as we stood just in Glasgow South constituency, and just outside my constituency. The vast majority of people on the tour picked the low-risk option: an indication, at the end of the week, of how risk-averse we have become in Britain.

Encouraging sensible risk taking is critical to pension saving and if we want more economic growth. In fact, Queen’s Park took the higher-risk option: it rented the cricket ground and made a huge profit. The game transformed the profile of football and was the foundation for Queen’s Park’s building the first international football stadium in the world, which opened a year later in 1873 in my constituency. Queen’s Park took a risk that was pivotal to the development of modern football, and modern football contributes billions to the Exchequer. My point is that risk is essential to economic activity, as Mr Flint explained and as was illustrated later in the week.

The Bill is critical for economic growth. It takes active steps to ensure that money flows to the entrepreneurs and risk takers who will create wealth across Britain. It ensures that working people have access to better pensions. On that basis, I support the Bill.

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[Kit Malthouse]

My hon. Friend is making a strong speech and some strong points. Does he agree that the alarm bells he is ringing about financial education, the under-provision of pensions and longevity are even more stark and alarming next to the demographic change that means that over the next 30 years, we will see the number of workers per pensioner plummet? We will go from about 3.6 workers per pensioner at the moment to well under three by 2070, which means that even if pensions are not enough, the country will not be able to afford to plug the gap as it does at the moment?

[Mr Bedford]

My right hon. Friend makes a compelling case. As I said in my speech, this goes back to financial education and ensuring that we all understand the implications of pensions adequacy.

My concern about adequacy does not mean that the Bill does not have its merits. The continuation of Conservative policy, the small pots consolidation and the creation of megafunds are sensible reforms that will increase individuals’ pension pots by reducing dormant pots and increasing economies of scale. However, this is a missed opportunity for a Government with a large majority. They could have acted more boldly, moved faster and improved pension adequacy throughout the United Kingdom.

I would like a clear commitment from the Government that they are actively looking at improving pensions adequacy. The Labour party has long professed to be the party of workers, yet some who look at the Bill will sense that it does not go far enough in preventing the UK from declining into being a society funded by welfare in retirement. Let us encourage people to strive, work hard and save more for a better future. I very much hope that the Government will work collegiately and cross party with His Majesty’s Opposition in Committee to ensure that our constituents do not sleepwalk into a retirement crisis.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)]

At the outset, I take the opportunity to declare my own interest. Unlike the hon. Member for South West Devon (Rebecca Smith), I was elected prior to Lord Cameron ejecting councillors from the local government pension scheme. As a former member of Trafford metropolitan borough council, I also have savings in the local government pension scheme. I am therefore set to benefit from the improved governance of the LGPS initiated by the Bill.

These measures are testament to our dedication to building a resilient, efficient and fair pension system, galvanising and creating the potential to boost our economy at every opportunity. It is our aim to build a future in which every saver can look forward to a secure and prosperous retirement.

I welcome the broad, if not entirely universal, support for the Bill. The open discussion in which we have engaged today is important because, as a responsible Government, we want the House to be assured that the new powers in the Bill come with appropriate mitigations. We understand that Members will have questions, and I have listened carefully to those that have been raised. I remind everyone that the highly fragmented pensions framework has not served savers well, and there is a need for improvement as both the industry and savers demand a better service. The Bill goes to the core of what is needed, providing big solutions to the big problems that are undermining so much potential for savers and the economy.

Let me now turn to some of the comments and queries that have arisen throughout the debate. I thank my hon. Friends the Members for Tamworth (Sarah Edwards), for Luton South and South Bedfordshire (Rachel Hopkins), for Buckingham and Bletchley (Callum Anderson), for Poole (Neil Duncan-Jordan), for Truro and Falmouth (Jayne Kirkham) and for Glasgow East (John Grady) for speaking in favour of some elements in the Bill, and for their recognition of the investment and growth opportunities that it can unleash.

I am grateful for the constructive support and consensus that we heard from both the hon. Member for Wyre Forest (Mark Garnier), who opened the debate for the Opposition, and the hon. Member for South West Devon, who closed it. They were right to mention the specular success of automatic enrolment, but that was half the job, as pointed out by the Pensions Minister, and I think the hon. Member for South West Devon acknowledged that we now need to move on to the pressing task of dealing with pension adequacy, which will be taken forward by the pensions review. They were also right to refer to the complexity and fragmentation of pension pots.

I welcomed the support from the hon. Member for Wyre Forest for the long-awaited pensions dashboard, and was particularly pleased to hear of his support for changes in the local government pension scheme, although he expressed concern about certain parts of the Bill and the potential for propping up a failing scheme that arises from those changes. Let me reassure him that no cross-subsidising between administering authorities would be caused by any changes made by the Bill. As for the question of safeguards in respect of surplus release, we cannot stop share buy-backs and the like, but we have confidence in the ability of trustees to adhere to their fiduciary duties.

I understand that mandation has given rise to the fundamental objection of not just the hon. Gentleman but a number of other speakers, but I do not believe that it undermines fiduciary duties, and I do not agree with that analysis. The Bill contains clear safeguards that are consistent with those duties, not least in clause 38, which refers to an opt-out in the event of material detriment to members of a fund. The hon. Gentleman also raised questions relating to gilts; we believe that nothing in the Bill would undermine a well-functioning gilt market. However, as I have said, I welcome the broad support for the Bill, particularly with regard to value for money, small pots, guided retirement products and terminal illness changes.

[Kit Malthouse]

I want to be clear—so that the House is clear—about the opt-out to which both Ministers have referred. Is it a correct interpretation to say that it is not an opt-out at the discretion of the trustees of the fund, and that the Bill requires them to apply to the regulator with evidence for the regulator to make a decision to grant them the ability to opt out? The idea that trustees are somehow free to make a decision in the interests of the fund is not actually correct, is it?

[Andrew Western]

The right hon. Gentleman is correct in his interpretation, although I do not entirely agree with his characterisation. It is, I think, perfectly reasonable that we would ask trustees to explain how they feel that what is proposed would be to the detriment of their scheme members.

I welcomed the support of the Liberal Democrat spokesperson, the hon. Member for Torbay (Steve Darling), for many of the general proposals in the Bill. I entirely agreed with his comments about the need to give savers the best possible advice and protections. I also agreed with what he said about the opportunities to deliver further investment in our economy. As for social housing, which others also raised, he will know that many pension schemes already make such investments, and I certainly support their continuing to do so.

We then heard an excellent speech from my hon. Friend the Member for Tamworth. I particularly welcome her comments on the value-for-money changes, and she is absolutely correct to highlight the importance of looking at schemes in the round, not just on cost. On the pipeline of investments that she set out, I hope she is reassured by some of the steps that the Government are taking—for instance, through the Planning and Infrastructure Bill—to ensure that there are a range of exciting major projects, such a reservoirs and houses, that people will be able to invest in.

The right hon. Member for North West Hampshire (Kit Malthouse) is certainly correct to say that he punctured the air of consensus in outlining his reservations. I know that my hon. Friend the Pensions Minister has agreed to have a conversation with the right hon. Member next week, and I hope that he will find that incredibly helpful. Clearly, it is not for me to comment on whether this should be a hybrid Bill. On the question of megafunds, he is right that not all large schemes provide a better return, but the evidence shows that while that is not always the case, they do see better returns on average. That is an important point.

The hon. Member for Aberdeen North (Kirsty Blackman) was correct to raise how long we have been waiting for the pensions dashboard, and I am similarly excited and anticipate its arrival. I promise that it will be worth the wait when it finally arrives. On her point about the scope of the Bill, the pensions review will take forward a number of the issues on which she and other Members said the Bill could have gone further. The pensions review is under way, and we will say more about that incredibly soon.

Oral Answers to Questions

Kit Malthouse Excerpts

Monday 2nd July 2018 Commons Chamber

[Ruth George (High Peak) (Lab)]

6. What assessment she has made of trends in the level of financial hardship experienced by universal credit claimants.

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

The best way to help people financially is to help them into work, and universal credit will get 200,000 more people into work. Our recent survey evidence shows that people on UC and in work had an average increase in reported earnings of £600 a year. There was also an 8% fall in the number of people on incomes of £10,000 a year or less.

[Ruth George]

The DWP’s own survey also found that after nine months on universal credit, 40% of claimants were falling behind with their bills or experiencing real financial hardship. This is a problem not of the initial waiting period but of ongoing insufficient income. The Secretary of State has tested and learned about hardship levels. How will she fix them?

[Kit Malthouse]

As my right hon. Friend the Secretary of State said earlier, the close and constructive relationship between work coaches and their clients should enable them as a team to get through any hardship that arises. The hon. Lady is attempting to build a career on bashing universal credit, but she never does so in context. We have chosen to fight poverty in a different way. We have chosen to fight it with work rather than with welfare. She never points out that, under the last Labour Government, the number of households where no one worked almost doubled.

[Stephen Kerr (Stirling) (Con)]

Earlier on, the Minister for Disabled People, Health and Work, my hon. Friend the Member for Truro and Falmouth (Sarah Newton), mentioned scaremongering by the Opposition. I can confirm that that scaremongering causes grave anxiety among my constituents. Will the Minister confirm that, for example, an advance payment does not involve rates of interest and that it is reimbursed by deductions made over a period of months?

[Kit Malthouse]

My hon. Friend is exactly right. I was pleased to be able to sit with him in a meeting with some of his third sector organisations, including his local food bank, his citizens advice bureau and his local refuge, to try to scotch some of the mythology that has been created around universal credit. Wherever universal credit has been in place for some time, it receives universal praise from work coaches on the frontline and very high satisfaction levels from the people who are using it.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

7. What progress her Department is making on the roll-out of universal credit.

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[Damien Moore (Southport) (Con)]

21. What steps the Government are taking to improve employment opportunities for people with family responsibilities.

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

Universal credit supports parents into work through better incentives, and through simplifying and smoothing their transition into the workplace—with UC work will always pay. Furthermore, the Government now provide more support than ever before to help parents with the costs of childcare; under UC people can now claim 85% of their costs, which compares with 70% under tax credits.

[Mary Robinson]

Will my hon. Friend join me in welcoming the figures from the House of Commons Library showing that since 2010 the number of children living in workless households in Greater Manchester has fallen by 7.2%? Does he agree that that is in no small part thanks to the record number of jobs created by this Government?

[Kit Malthouse]

It will not surprise Members to know that I am more than happy to celebrate the results of that research and to thank my hon. Friend for the work she does in her constituency in promoting this, not least in being a champion for Manchester airport, where thousands of her constituents work, and where there is a strong capacity for growth and yet more jobs.

[Mr Speaker]

Enunciation from Lichfield—Mr Michael Fabricant.

[Michael Fabricant]

I will be very precise, Mr Speaker. Does my hon. Friend agree that the key to getting people out of poverty is work? Given that this Government have created 1,000 new jobs every single day since 2010, we have produced the key to unlock that door.

[Kit Malthouse]

My hon. Friend has absolutely put his finger on the button. As I said in an earlier answer, in this country we have tried fighting poverty with welfare in the past and failed. The Labour Government spent some £150 billion on tax credits and hardly moved the poverty indicators at all. We have chosen the route of work as the way to human dignity, prosperity and control for people and their families. I celebrate with him the success of the entire country, and not least his constituency.

[Damien Moore]

By delivering record numbers of jobs, reducing taxes, increasing childcare provision and raising wages, does my hon. Friend agree that it is this Conservative Government who are delivering for families?

[Kit Malthouse]

We are indeed delivering for families. I know it is a joy to many in this House to hear a voice of optimism from Southport at last, from a new Member who works closely with his local business community, recommending that its prosperity lies at the heart of that of many of his constituents. We know that outcomes for children, in particular, are significantly improved if the adults in the household are working and that children in workless families are more than twice as likely to fail to achieve at school.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

Ministers will know from the experience of women born in the 1950s that giving people advance notice of changes means they have time to plan. Given that in 2019 families in work with more than two children are set to lose their universal credit support for their third child, what steps is the Department taking to let people know in advance so that they have time to plan?

[Kit Malthouse]

As the hon. Gentleman knows, there are no cash losers from this policy: anybody who has an existing third child will continue to retain their support, and that will be preserved as they transition on to UC; we will continue to pay child benefit, no matter the number of children; and of course there will be significant childcare assistance for those who move on to UC.

[Chris Stephens (Glasgow South West) (SNP)]

Is it not the case that universal credit claimants with family responsibilities could face a sanction for refusing a job offer with a zero-hours contract? Is it not also the case that the Government are forcing people into insecure, low-paid work?

[Kit Malthouse]

The whole point of the new constructive relationship between work coaches and their clients is that they are able to take people’s personal circumstances into account, particularly in respect of children and childcare responsibilities. If sanctions are required, they are at all times reasonable and commensurate with the person’s circumstances. The enormous assistance that we are giving for childcare should hopefully overcome any barriers, but if the hon. Gentleman has constituency cases that he would like to bring to my attention, I would be more than happy to look at them.

[Mr Philip Hollobone (Kettering) (Con)]

12. How many people have taken receipt of the state pension in (a) 2010 and (b) 2018 in Kettering constituency; and what the change in the value of the state pension has been over that period.

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[Bambos Charalambous (Enfield, Southgate) (Lab)]

T3. Is the Minister aware of the hardship that parents face under the current regime of child maintenance non-resident parent capital rules? Will he meet me and my constituent, Elizabeth Green, to help to resolve her case, whereby her former partner has not paid a penny in maintenance in over 14 years, yet owns assets worth in excess of £5 million?

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

I am more than happy to meet the hon. Gentleman and his constituent to discuss that particular issue. He will be aware that earlier this year the Government consulted on changes to the rules about child maintenance, including a power to impute an income from assets of 8.5%, and we hope to publish the conclusions from that consultation shortly.

[Craig Tracey (North Warwickshire) (Con)]

The last jobs fair that I held in my constituency focused on Disability Confident employers, and it is great to see that more than 5,000 are now signed up nationally. What more can MPs do to encourage more employers to join this fantastic scheme?

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[Fiona Bruce (Congleton) (Con)]

Family relationship support providers such as Relate, Tavistock Relationships, OnePlusOne and Marriage Care are concerned that there could be a gap in funding—and therefore in critical services such as parental conflict resolution—after current contracts end next month and before new contracts start. How will Ministers address this?

[Kit Malthouse]

I pay tribute to my hon. Friend’s work in this area. She was instrumental in securing a £39 million commitment from the previous Prime Minister towards this area of work. She knows that we are in the process of going through a procurement process for a new parental conflict programme, of which face-to-face therapy forms about 25%. We have recently published a timetable for the procurement process. I would be more than happy to meet her and the organisations to talk about what we can do to help.

[Alex Norris (Nottingham North) (Lab/Co-op)]

T9. Universal credit is having a profound impact on local authorities, such as enormous housing revenue account pressures. Ahead of the roll-out of universal credit in Nottingham, what new resources will be made available to Nottingham City Council to mitigate this impact?

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[Mr Philip Hollobone (Kettering) (Con)]

Children in workless households are five times more likely to live in poverty than those in working households. Can the Minister tell me by how much the number of workless households has risen or fallen since the Conservatives entered government in 2010?

[Kit Malthouse]

The proportion of people in absolute poverty is now at a record low, with 1 million fewer people and 300,000 fewer children in absolute poverty since 2010. I cannot at this moment recall the number of households, but I will write to my hon. Friend with that number.

[Dan Carden (Liverpool, Walton) (Lab)]

There are just three case examiners working on 2,841 WASPI cases. The average wait for a complaint is 36 weeks, and last year 687 complaints took more than 43 weeks. Why are Ministers treating WASPI women with such disdain?

Mortgage Interest

Kit Malthouse Excerpts

Tuesday 19th June 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am pleased that the hon. Member for Lanark and Hamilton East (Angela Crawley) has raised the question of support for mortgage interest and I congratulate her on securing the debate. However, she seems to have developed a number of misapprehensions about the scheme, how it operates, and, in particular, how the system works.

It is worth restating the principles behind the change in the policy. Back in 1948 when the policy was introduced, the housing market was a different place and mortgage products were a different thing. In those days, it was unheard of for people to take mortgages into retirement, there was no such thing as an interest-only mortgage and the average house price was about £1,700. In the intervening decades, the housing market has changed significantly, yet this part of the benefits system remained unreformed and unchanged to reflect the reality we now face.

Back in 2015, when the reform was announced in the Budget, it was deemed to be appropriate and fair to reform the system to reflect the fact that there had been significant changes in the housing market and, as the hon. Lady outlined, to transfer this payment from a welfare payment in the benefits system to a loan. It was also decided that from a cosmetic point of view, as far as possible, there should be no change in how people see the scheme operate. It was recognised that the original scheme was designed to maintain people in their own homes and, exactly as the hon. Lady says, to ensure that they did not go into the private rental sector or lose their homes because of temporary unemployment. Back in 1948, this was meant to be something temporary for a few months or perhaps a couple of years, not the 20 years for which some people have been on it.

It was decided—we have carried this out in the execution of the scheme—that there should be as little disruption as possible to the recipients of these payments in the reformed new system. On a day-to-day basis, recipients of support for mortgage interest should see no difference between the old and new scheme.

The only difference is that when the property is sold or transferred at the end, perhaps even after the owners of the house have died, the amount of accumulated loan is recovered from that property. That is the only difference. On a day-to-day basis, the payments will still be made at exactly the same rate, with the same frequency, in the same way and with the same purpose of maintaining people in their own homes.

Let me cover some of the issues that the hon. Lady raises. On numbers, there is a significant acceleration in the number of people deciding either way. The bulk of people have now made a decision in principle. Large numbers of people are now in payment of the new support for their houses and quite a lot of people are in the process of getting through the system. The numbers are looking better and better. We expect to be on timetable for the transition to be complete later this year. We will publish statistics on SMI on a regular basis to keep the House updated.

Secondly, the hon. Lady raised Serco’s involvement. Let us be clear: Serco is not administering the loan. It was contracted only to provide information to individuals.

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[Mr Philip Hollobone (in the Chair)]

The sitting was suspended for 11 minutes, so the debate can last until 4.41 pm. I call the Minister.

[Kit Malthouse]

Thank you, Mr Hollobone. I was going through a number of the issues that the hon. Member for Lanark and Hamilton East raised about support for mortgage interest, and I had reached the involvement of Serco, about which she raised concerns. Let me be clear: Serco does not administer the loan scheme. Serco was contracted merely to provide some of the initial information about the scheme—the initial correspondence, the follow-up phone calls to give people information about it, and the booklet to inform people how it works.

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

Does the Minister not accept that the issue is with the timescales and the lack of notice? Have the Government learned no lessons from the changes to the state pension age? What assessment has been made of the number of women affected by those changes who are also affected by this change?

[Kit Malthouse]

I do not accept that there has been a lack of communication. If anything, we have over-communicated about the scheme. We went out of our way as a Department to ensure that literally hundreds of thousands of letters were sent and hundreds of thousands of telephone calls were made. We are still trying to contact some people, given the lack of clarity about the data we need to make those contacts. We are taking this in a very steady and sensible way.

Everyone is given plenty of time to make a decision—everyone is given up to six weeks from the loan offer to decide whether they want the loan. Once the loan documents are issued and sent off and a loan offer is made, people get six weeks to make a decision. We signpost people to the Money Advice Service or Citizens Advice if they need any kind of financial advice, because neither Serco nor the Department for Work and Pensions can offer such advice. As I said, there is a communication phase, which Serco handles, and the execution and administration of the loan is done entirely by DWP operations.

[Angela Crawley]

Does the Minister accept, though, that six weeks is in real terms quite a short time in which to get the relevant and necessary financial advice? Relying on services such as Citizens Advice—voluntary, third sector services that are often financially strapped—to give people the necessary financial advice about their future seems a bit irresponsible on the Government’s part.

[Kit Malthouse]

I do not accept that sending people to Citizens Advice or the Money Advice Service for advice is irresponsible. That is exactly what those organisations are there to do, and they do it very well on a daily basis. Do not forget that the six weeks are from the loan offer—the point at which someone says in principle that they would like to have a loan. They then have six weeks in which to decide, execute the documents and send them back. There is a whole period before that in which people gather information and discuss the matter with their financial advisers and, indeed, with Serco if they need more information on which to make a decision. Do not forget that the communication process started in July last year, so it has been ongoing for quite a while, and tens of thousands of people have successfully made a decision either way.

[Chris Stephens]

The Minister seems to indicate that affected individuals receive correspondence from his Department before the Serco letter. That is not what my constituents tell me, so will he place that correspondence in the Library for us to review?

[Kit Malthouse]

No, people do not receive correspondence prior to the Serco letter. An initial letter and an information booklet are sent out by Serco to warm them up to the change that is coming, and there is then a variety of follow-up information. Once someone has had all the information and thinks they are in a position to make a decision, they are in effect handed over to the operations people in the Department, who proceed to execute the loan—or otherwise—and load them on to the system for payment. As I said, tens of thousands of people have successfully made the transition, and many people are now receiving payment of the new support for mortgage interest.

I want to move on to a couple of other issues. The hon. Member for Lanark and Hamilton East mentioned vulnerable recipients. We have taken particular care over those who are vulnerable and those who might not have the mental capacity to make financial decisions on their own. In those cases, the timeframe for execution, resolution and transition has been significantly extended. We are working with people either who we know are vulnerable or who were identified during the process as vulnerable to ensure that they have an appointed financial adviser, deputy or whatever it might be to make those financial decisions for them. That process is much longer; we are able to extend it to be pretty much as long as they need to make the position clear.

The hon. Lady raised a particular constituency case. I urge her to reassure her constituents that the new scheme is designed to maintain them in their home. On a day-to-day basis they will see absolutely no change whatsoever. They can stay in that home for as long as they like—for the rest of their natural life. The only change for them is if they sell that house or it is inherited by someone following their death and there is any equity in the house, the accumulated loan will be recovered from the proceeds. If there is no equity, we write the loan off. Do not forget that it is a very low-cost loan: the interest we charge is the same as that charged to the Government on their debt. It is in statute that it is a low-rate loan. We recognise that this is a disruption and change for people, but as we take the scheme forward we will try to make it as painless as possible.

We expect that a number of people will decide not to take the loan but to try to go it on their own, making their own mortgage payments. We are hearing anecdotally that people are either managing to make the rest of their mortgage payments or turning to family for assistance. However, if in three or four months’ time they do not think it is manageable, they think they have got themselves into trouble or they are in arrears on their mortgage because they have not been able to make payments, it is open to them to come back to us and reapply for SMI. If they are in trouble, we will be perfectly willing to backdate that to the date of change for them, to 6 or 7 April, to clear their arrears and ensure that we do not put anyone in a difficult position.

I stress that this change is about increasing sustainability and fairness, balancing the interests of the taxpayer against those of someone who is in extremis and needs assistance but nevertheless is in ownership of what could be a very valuable capital asset. In other parts of the benefit system, we do not necessarily allow people to accumulate capital assets. If someone applies for housing benefit, we look at their assets and if they have between £6,000 and £16,000 in cash in the bank, whatever it is that affects it. SMI is specifically about protecting people’s homes and ensuring that they are maintained in those homes for the long term.

[Angela Crawley]

Does the Minister accept that through housing benefit most people forced into the private rented sector are paying someone else’s mortgage? Is it not a tad hypocritical to say that someone in hardship or who will not otherwise be able to work again should not have their mortgage paid when those in the private sector, often renting from private landlords, are paying mortgages through housing benefit?

[Kit Malthouse]

I do not accept the equation the hon. Lady is creating between the two. Those on housing benefit are being supported by us with a legally enforceable rental liability. It might be to a private landlord, a housing association or a council—who knows? They have a rental liability and we want to maintain them in their home, so we will support them in that through housing benefit.

Through SMI, if someone gets into extremis, we want to maintain them in their home and support them in their mortgage, subject to capital limits. All we are saying is that if someone stays on SMI for some time and therefore profit accumulates in their home, once they sell it some or all of that very low-interest, low-cost loan should be recovered so we can recycle that into support for other people in search of housing, in need of support and housing benefit or, indeed, in need of SMI. That seems only fair and reasonable.

We reckon that the overall saving for the taxpayer will be £150 million, plus or minus—we will see where we get to. Overall, in fairness, given how the housing market has changed and that SMI was only ever meant to be a temporary support—only for us to find people who have been on it for decades, and about half the people on SMI are pensioners, so there is likely to be significant equity locked into the property being supported—it seems reasonable that, when that house is sold, the taxpayer should recover some or all of the money advanced to maintain that person in their home.

Critical for us is that the scheme achieves exactly the same objective as the old benefit payments. People who need support for their mortgage can rely on the state to support them while they get back on their feet, or whatever it might be, and maintain them in their home. The hon. Lady’s constituent can be reassured that SMI should not change their status at all. If they take the loan, we will do our best to support them to stay in their home for the foreseeable future.

Question put and agreed to.

Oral Answers to Questions

Kit Malthouse Excerpts

Monday 21st May 2018 Commons Chamber

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

Housing benefit has been paid direct to tenants since 2008. Universal credit replicates that so we would not expect to see a change in landlord behaviour.

[Stephen Lloyd]

I am very disappointed with that answer because, having had meetings with a number of residents associations and landlords, I already know that the private sector is fairly loth to let houses to people on housing benefit. The same applies to universal credit, the reason being that the payment goes direct to the tenant. I urge the Government to at least have a default, if both sides agree, for the payments to be made to the landlord.

[Kit Malthouse]

It is deeply disappointing when Members of this House trade their principles for perceived political advantage, as the hon. Gentleman seems to have done on universal credit, having of course previously been a strong supporter of the coalition Government’s reforms. He knows full well that direct payments to landlords are available. I have myself met the two most prominent residential landlord organisations very recently and, if he looked at the data, he would see that the proportion of working-age recipients of housing benefit and universal credit in the private rented sector seeking support has not really changed over the past 10 years.

[Margaret Greenwood (Wirral West) (Lab)]

It is reported that the Law Centres Network says cases are now common in which eviction proceedings come to court after the Department for Work and Pensions has failed to pay rent directly to the landlords of universal credit claimants, even though it says on a claimant’s journal account that a direct rent payment has been made. What action is DWP taking to address this issue as a matter of urgency?

[Kit Malthouse]

As the hon. Lady will know, we have taken significant action to try to improve the situation upfront, not least by providing an additional two weeks of housing benefit for people transitioning to universal credit. People can receive a 100% advance and help with budgeting support, and of course a direct payment is available if landlord or tenant require it.

[Peter Grant (Glenrothes) (SNP)]

6. What progress her Department has made on processing back-payments for personal independence payment claims.

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[Jo Platt (Leigh) (Lab/Co-op)]

9. What assessment her Department has made of the effect of the introduction of universal credit on the ability of victims of domestic violence to claim benefits.

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

Universal credit continues to support victims of domestic violence to claim benefits through a range of measures. These include special provisions for temporary accommodation and same-day advances. Work coaches will also signpost domestic violence victims to expert third-party support.

[Jo Platt]

I am grateful for the Minister’s response, but the Government have still not committed to assessing the operation of split payments or collecting data. Will they commit to looking at specific areas of new universal credit roll-out, such as Leigh, which has also been highlighted as a hotspot by the local police, to ensure that we are adequately safeguarding victims?

[Kit Malthouse]

Obviously we take domestic violence enormously seriously at the Department, and we certainly believe that we should play our part in detecting and seeking to combat it. We will keep the position under review. As we have said, we remain open-minded on the issue of split payments. If the Scottish Government proceed with their wish to introduce them, we will note what progress is made, and will review the issue in due course

[Mary Robinson (Cheadle) (Con)]

10. What progress is being made on automatic enrolment for employees in Cheadle constituency.

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[Vicky Ford (Chelmsford) (Con)]

T10. What action are the Government taking to make sure that parents cannot hide earnings from their child maintenance payment calculations?

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

The Child Maintenance Service is working hard to improve its recovery efforts and will be increasing the number of individuals assigned to the financial investigations unit. The Child Maintenance Service is working much more closely with Her Majesty’s Revenue and Customs to make sure that we have as full a picture as possible of people’s earnings and to ensure that people take responsibility for their children.

[Laura Pidcock (North West Durham) (Lab)]

Dupuytren’s contracture, or miner’s claw, as it is commonly known, is a progressive condition that causes the fingers gradually to curl up, occasionally requiring amputation. It is a very common disease among former miners, and the Industrial Injuries Advisory Council has made it clear to the DWP that there is a link between the use of percussive tools and miner’s claw. Why has the Secretary of State chosen to ignore that expert advice, and will she explain why the condition has not been added to the industrial injuries disablement benefit list of conditions?

--- Later in debate ---

[Nigel Huddleston (Mid Worcestershire) (Con)]

A number of my constituents have reported difficulty with the Child Maintenance Service on issues such as undeclared income and missing payments. What is being done to ensure that complaints about the CMS are dealt with in a timely manner?

[Kit Malthouse]

It is typical of my hon. Friend that the welfare of children in his constituency should be uppermost in his mind. As I said previously, we are putting significant extra resources into the financial investigations unit and into making sure we are able to track down as much of the income as possible of parents who should be paying for their children. I am pleased to tell my hon. Friend that I recently instituted monthly meetings with the Child Maintenance Service to ensure that it lives up to the high standards of customer service that we expect.

[Ms Karen Buck (Westminster North) (Lab)]

T8. This morning I was contacted on behalf of a constituent who has an inoperable tumour on her spine all the way down to her pelvis, leaving her unable to walk and compounded by arthritis and severe depression. Her ESA has been suspended, her housing benefit has been suspended and she is now threatened with the possibility of eviction. Can the Minister help me make sure my constituent is protected? Can she also help me understand why so many disabled people feel they are living in a hostile environment?

Violence and Harassment at Work

Kit Malthouse Excerpts

Wednesday 16th May 2018 Westminster Hall

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

It is a great pleasure to serve in front of a fellow Liverpudlian, Mr Hanson, and, unusually, to appear in a debate where the majority of Members present are native Liverpudlians. It cannot happen that often, but perhaps it will happen more often in future. I also congratulate my neighbour and right hon. Friend the Member for Basingstoke (Mrs Miller) on securing this important debate, and on the leadership that she has shown on the issue recently. She has invested an enormous amount of political capital and energy into driving the agenda and pushing it up the political priority list; she is to be commended for that.

The Government take this matter extremely seriously. We welcome the inquiries by the Women and Equalities Committee into sexual harassment in the workplace and in public places, and the International Labour Organisation’s initiative on ending violence and harassment in the world of work. We all have a responsibility to bring an end to inequality and injustice and to do that, we must work together across gender, social, political and national divides.

Sexual harassment can have a significant impact on those who are subjected to it. Nobody should be subjected to unwanted conduct of a sexual nature or be put in a compromising situation, and the law in the UK on harassment, sexual assault and rape is clear. Whether it is in the workplace, on the street, or part of domestic or sexual abuse, unwelcome advances that intimidate, degrade or humiliate are an abuse of power. The simple truth is that sexual harassment, in any situation, is unacceptable.

Workplace harassment is unlawful under the Equality Act 2010, which provides a remedy for harassment specifically in employment and other paid work, the provision of services, the exercise of public functions, the occupation, disposal or management of premises, education and associations such as private clubs. The Government believe that the criminal law also provides protection against violence and harassment for both men and women in the working environment and elsewhere. However, we keep the legislation under review to ensure it works as intended, and on all these matters we await with interest the outcome of the Select Committee inquiries.

On an international basis, we know that violence and harassment is a crucial barrier to women’s economic engagement and to gender equality worldwide. We know that if women had the same role in labour markets as men, up to an estimated $28 trillion, or 26%, could be added to global GDP in 2025—but we also know that it is not about the economic argument alone. Violence and harassment of women is an endemic human rights abuse, which prevents women from reaching their potential and living the life that they choose.

We have a responsibility to act as a global leader. We have strong laws on violence and harassment in the UK, but as my right hon. Friend said, many countries around the world do not have such protections. My right hon. Friend the Secretary of State for International Development has been clear that we should be proud to put British values on this issue at the centre of our international development work. She has launched a global call to action on gender equality and has put women’s economic empowerment at the heart of her Department’s economic development strategy.

We are working to tackle violence against women and girls around the world. Through our “What Works to Prevent Violence Against Women and Girls” programme, we are working in 12 countries across Africa and Asia to demonstrate the economic cost of violence and to understand the most effective approaches to prevention. The programme will reach up to 100,000 people worldwide. In Bangladesh, it involves working with textile workers to address violence against female garment workers in four factories in Dhaka. It provides workplace training to male and female workers to raise awareness and build skills, and works with managements to develop workplace politics and systems to address violence.

We are putting the economic empowerment of women and girls at the heart of the Department for International Development’s economic development strategy, which was launched earlier this year. It focuses on trade as an engine for poverty reduction and investment in sectors that can unlock growth. All our economic development work will tackle gender discrimination and will deliver safer, more secure work with higher returns for women. We are having a real impact: between 2011 and 2015, we helped 36.4 million women gain access to financial services and helped 3 million women to improve their land and property rights across the world.

My right hon. Friend the Member for Basingstoke rightly spoke about our stance at the ILO convention in Geneva later this year. The Government are committed to ending violence and harassment against workers worldwide. I assure her that we are fully engaged in discussions at the International Labour Organisation to develop measures that, if agreed, would provide an international legal framework in this area. My officials recently met CARE International, the CBI and the TUC to hear their views on the proposed measures. They will be attending the ILO conference in Geneva later this month for the first of two committee discussions on the proposed instrument.

The Government are already in a strong position to champion the need for international provision—particularly in the light of our leadership on modern slavery and gender-based violence initiatives. We recognise that there is a potential benefit in closing the gap in international law. In negotiating a new instrument, the UK will be looking for sufficient alignment with UK criminal and civil protections, on which the UK is already in a strong position. The definitions and scope of any instruments need to be reasonable and justifiable for all parties, and they must allow for practical implementation and enforcement. Our stance generally is constructive, and we are listening.

[Mrs Miller]

My hon. Friend the Minister is choosing his words very carefully in talking about the negotiations and discussions that will be going on towards the end of the month. He is talking about the development of an instrument, but in my remarks I clearly said it is important to have a convention, which would have far more weight than recommendations. Will the Government support a convention?

[Kit Malthouse]

As I say, we are going to the conference with an open mind about what may come from it. We are generally supportive of the initiative on ending violence and harassment at work, which the ILO is undertaking. We need to be assured that what is produced is consistent with British practice and law, and is justifiable. Much of the devil of that work will be in the detail—particularly on some of the definitions. We definitely support an international push—we can assist it in ways other than just having an international initiative—to improve the situation of workers across the globe.

The UK is proud to be a global leader in efforts to eradicate violence against women and girls in all its forms, including through our leadership on efforts to eradicate modern slavery—one of the worst forms of abuse. I am proud that, in my time as deputy mayor for policing, I produced the first ever violence against women and girls strategy in a global capital city. That work was commended by the United Nations.

Everyone should be able to go to work without fear of violence or harassment, no matter who they are, where they work or what they do. The Government will continue to press for real progress through instruments such as the sustainable development framework and organisations such as the ILO, to help make this a reality worldwide.

Question put and agreed to.

[David Hanson (in the Chair)]

I would normally commence the next debate in these circumstances, but unfortunately the Minister is not here, for obvious reasons—the debate starts at 4.30 pm. I therefore have to suspend the sitting until 4.30 pm.

Workless Households and Educational Attainment

Kit Malthouse Excerpts

Wednesday 28th March 2018 Written Statements

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

Later today I will publish “Workless households and educational attainment statutory indicators”, an annual report pursuant to Section A1A of the Life Chances Act 2010 as amended. “Improving Lives: Helping Workless Families”, published on 4 April 2017, set out this Government’s vision to improve outcomes for children who grow up in workless families and face multiple, associated disadvantages. To track our collective progress in improving outcomes for disadvantaged families, my Department made a commitment to publishing the latest data on seven additional non-statutory national indicators each year.

The annual report ‘Workless households and educational attainment statutory indicators’ will be available here later today:

https://www.gov.uk/government/publications/workless-households-and-educational-attainment-statutory-indicators-2018.

The “Improving Lives: Helping Workless Families” indicators will be available here later today:

https://www.gov.uk/government/publications/improving-lives-helping-workless-families-evidence-base.

[HCWS596]

Work and Pensions

Kit Malthouse Excerpts

Wednesday 28th March 2018 Ministerial Corrections

The following is an extract from a Westminster Hall debate on the Welfare Reform and Work Act on 21 March 2018.

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

The employment rate for women stands at 70.9%, which is also a record high. Unemployment is down to the joint lowest level since 1975, and 876,000 vacancies are open to people in search of employment, which is also close to a record high. [Official Report, 21 March 2018, Vol. 638, c. 151WH.]

Letter of correction from Kit Malthouse:

An error has been identified in my speech.

The correct response should have been:

[Kit Malthouse]

The employment rate for women stands at 70.9%, which is also a record high. Unemployment is down to the joint lowest level since 1975, and 816,000 vacancies are open to people in search of employment, which is also close to a record high.

Oral Answers to Questions

Kit Malthouse Excerpts

Monday 26th March 2018 Commons Chamber

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

Good morning, Mr Speaker. [Interruption.] The Government are committed to action that improves children’s long-term outcomes by tackling the root causes of poverty and disadvantage. In April 2017, we published nine indicators that track progress in tackling the disadvantages that can affect families and children, and we aim to update them annually. The next publication is due shortly.

[Mr Speaker]

Order. Members should not chortle; the Minister is a courteous fellow and should be respected.

[Steve Double]

Given the huge costs financially and socially of family breakdown to people both in and out of work, what is the Minister doing to improve the family indices across society and to reduce family instability?

[Kit Malthouse]

I congratulate my hon. Friend on his constant and vigorous campaigning on the issue, and particularly on the importance he attaches to fatherhood and family stability. The Government agree with him about that, and a number of programmes are designed to move the dial on the nine indicators that we have published. For example, alongside the fight against worklessness and the troubled families programme, we are specifically investing £39 million in a programme to reduce parental conflict and increase family stability.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister may be in a bit of a time warp this morning, but is the Secretary of State on a different planet from the Children’s Commissioner for England? Will she talk to the Children’s Commissioner about child poverty in our country and look at this morning’s report, which links child poverty and low educational expectations? Get on with it, man!

[Kit Malthouse]

As the hon. Gentleman will know, all hon. Members should be engaged in the battle against poverty. We in particular have chosen to take a different approach. Pleasingly, the Children’s Commissioner has identified that low educational attainment is critical to the future employment and economic prospects of all children. That is why we are focused on it as one of the two planks of Government policy on the matter, why we have concentrated so hard and why we are so pleased that so many more children are going to good and excellent schools.

[Andrew Bridgen (North West Leicestershire) (Con)]

22. The latest figures for the east midlands show that just over 106,000 of children in poverty are in workless households. That is down 23,000 since 2010. Although there is much more to do, does my hon. Friend agree that jobs created under this Government are transforming the lives of the most vulnerable in our society?

[Kit Malthouse]

My hon. Friend is absolutely right, and is a renowned champion of those in poverty in his constituency. It is interesting to note that nearly three quarters of children in poverty move out of poverty when their parents move into full-time work. We must capture and use that in our constant fight against poverty.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

17. Two thirds of children in poverty live in a household where at least one parent works. New analysis shows that child poverty will increase dramatically by 2030, with the main reason cited as UK Government cuts. Will the Secretary of State come to my constituency to see for herself the devastating effects of her Government’s cuts, which already have an impact on too many children in North Ayrshire and Arran?

[Kit Malthouse]

I have seen reports of the new analysis this morning and, obviously, we are more than willing to have a look. However, such reports—there have been several in the past few weeks—tend to accept in the small print that forecasting poverty in the future is a very inexact science and often leads to odd results, not least because they often do not take behavioural change into account. The whole thrust of the Government’s welfare reforms has been not just to ensure that we get assistance and money to people efficaciously, but to effect behavioural change because we know that accessing work is by far and away our most potent tool in the fight against poverty.

[Alan Mak (Havant) (Con)]

School breakfast clubs play a key role in tackling child poverty, including helping parents get to work. Will my hon. Friend join me in welcoming the announcement last week of £26 million investment in school breakfast clubs and commit the Department to supporting them across the country?

[Kit Malthouse]

Absolutely. My hon. Friend is a doughty champion of school breakfast clubs and has established one in his constituency. He is on the right lines and we support him in his efforts.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

16. Last week, figures from the Equality and Human Rights Commission showed that child poverty among single-parent families is predicted to rise from the current figure of 37% to 62%. In the same week, the new all-party parliamentary group on single parent families followed Ronald Reagan’s lead in 1984 and held a UK Single Parents’ Day for the first time. Will the Minister please unfreeze the benefits cap so that the figures I cited are not realised? Will he or his boss—either would be welcome—address our APPG at the first opportunity?

[Kit Malthouse]

There is no question of unfreezing the benefit cap because it is encapsulated in primary legislation. It might be interesting for the hon. Lady to know that, in the year after the benefit cap was imposed, 100,000 children moved out of poverty altogether. I am surprised that she has not welcomed the news that was announced last week that, as the Secretary of State said, more than 1 million people have moved out of absolute poverty. That shows the greater usefulness of the absolute poverty indicator compared with those for relative poverty, which the EHRC used in its report.

[Neil Gray (Airdrie and Shotts) (SNP)]

Today, we have learned from independent analysis from the Scottish Government the full impact of the UK Government’s cuts on levels of child poverty. Later this week, the Scottish Government will be publishing their plans to do what they can, using the limited powers of the Parliament up the road, to address this looming crisis, but what are this Government doing to address child poverty?

[Kit Malthouse]

As I outlined in my earlier answers, this Government believe that the two routes out of poverty are education and work. We have seen, in essence, a jobs miracle in this country over the past few years, with millions of people moving into work since 2010. It is absolutely the case that children in workless households achieve less, have less good welfare and have more mental health problems, so moving people into work is critical. I have seen reports in the media of the evidence the Scottish Government have brought forward this morning, and we will look at it carefully. I am always aware that one foundation of nationalism is to blame everyone else for problems, and I look forward to seeing the Scottish National party’s proposals in Scotland and whether they will actually work.

[Neil Gray]

Of course we know that 68% of children living in poverty do so in working households, so the Minister’s rhetoric simply does not match the reality. We also know from the research today that the root cause of child poverty and its predicted rise comes directly from the cuts to the reserved benefits in respect of the benefit freeze and the two-child limit. So when will his Government face up to reality and act to stop children being hungry, because everyone knows that it is this Government’s responsibility?

[Kit Malthouse]

This Government have moved heaven and earth to help those on lower incomes: with the introduction of the national living wage, they have had the fastest pay rise in 20 years; we have taken millions out of paying tax altogether with the rise in the personal allowance; and we have given parents up to £5,000 of assistance by increasing their access to free childcare up to 30 hours a week. There is an enormous amount done, but an awful lot still to do. As I say, we have yet to see any concrete proposals from the SNP on its much-vaunted plans to deal with poverty in its own patch, and we look forward to seeing them.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

5. What plans her Department has for the future of jobcentres in Glasgow.

--- Later in debate ---

[Matt Western (Warwick and Leamington) (Lab)]

6. Whether her Department has made an assessment of the potential merits of introducing a legal obligation on parents paying child maintenance to report increases in their income.

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

Such an obligation already exists.

[Matt Western]

If that is the case, can the Minister explain what the lead time is in respect of someone having to declare that change in income? What would be recommended—for example, would it be one month or two months?

[Kit Malthouse]

Paying parents who are in the Child Maintenance Service must declare changes in income immediately if they vary by more than 25% of the previously declared level. Of course every paying parent is subject to an annual review, where adjustments are made to the payments if required.

[Mr Marcus Jones (Nuneaton) (Con)]

25. I have recently spoken to several parents in my constituency who are not receiving child maintenance payments because former partners are not declaring all their income, despite apparently having lifestyles that would enable them to contribute. What more can the Minister do to make sure that people are contributing properly to looking after their own children?

[Kit Malthouse]

My hon. Friend raises an extremely important point. As he may know, we have just finished a consultation on what greater powers we can take to ensure proper and efficient recovery for those in receipt of support. We are looking at a series of measures, not least integrating our information systems much more closely with those of Her Majesty’s Revenue and Customs, so that we have a fuller picture of people’s income. We will be looking at proposals to make estimates of unearned income and, indeed, imputing income from asset values for those who attempt to conceal their income but still hold very significant assets. In the final analysis, we may well take powers, depending on the results of the consultation, to deny people a passport—and remove their passport—if they refuse to pay.

[Laura Smith (Crewe and Nantwich) (Lab)]

7. What assessment she has made of trends in the number of in-work households living in poverty.

--- Later in debate ---

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

As Members would expect, we make constant assessments of the level of poverty in the UK, given that our primary purpose as a Department is to stimulate and support social mobility and give people the tools and assistance to build a better life. There are 1 million fewer people living in absolute poverty since 2010, and working families are around four times less likely to be in relative poverty than working-age adults in workless families.

[Laura Smith]

Even though they are in work, many families in my constituency of Crewe and Nantwich are struggling to feed their children. That suggests that work is no longer an escape route out of poverty. The Institute for Fiscal Studies predicts that child poverty will increase from the 4.1 million recorded in the Government’s latest figures to 5.2 million by 2022. The Government originally claimed that universal credit could lift 350,000 children out of poverty. How many children do they now expect to lift out of poverty, and by when?

[Kit Malthouse]

I hope that no one in the House is complacent about poverty, particularly child poverty. As I said in answer to earlier questions, and as my right hon. Friend the Secretary of State has said, we are entirely focused as a Department on doing what we can to try to deal with these issues, but they are complex and deep-seated, so the solutions will be, too. Having said that, we believe that there are two primary causes and two primary solutions, the first of which is work and the second education. We are throwing everything we have at that to try to improve things. If we look back at the results thus far, we see 1 million fewer people in absolute poverty, 300,000 fewer children in absolute poverty since 2010, and half a million fewer working-age adults and 100,000 fewer working-age lone parents in absolute poverty since 2010.

[Mr Speaker]

The copious character of the briefing is in one sense very impressive, but unfortunately exceeds the time available for its delivery.

[Mr Cunningham]

With your permission, Mr Speaker, I wish to pay tribute to a stalwart in Coventry who for many years helped the homeless. Mike Parker started the Coventry Open Christmas shelter in 1992 to provide warmth, food and shelter. His funeral was today. The shelter started as a one-night one-off and developed into a long-running campaign. It helps hundreds of homeless people in Coventry every year. Mike Parker helped to ensure that those who were lonely and hungry had somewhere warm and friendly to go. He will be sorely missed in Coventry.

Now for my question: will the Government look into ending the freeze on children’s benefits, lift the two-child limit on tax credit and fix universal credit to help to lift in-work households out of poverty?

[Kit Malthouse]

May I, too, salute the hon. Gentleman’s constituent? I did not know him, but he sounds like a remarkable man. I am sure he will be missed by those who loved and knew him.

The hon. Gentleman asked about the two-child limit. In our welfare reforms, we have tried to establish for those who require assistance through the welfare system the same choices that are made by those who do not have that kind of assistance. Having said that, we have ensured that nobody who currently has more than one child will suffer, and of course all children will continue to receive child benefit, irrespective of their status.

[Stephen Morgan]

As we have already heard, the majority of children living in poverty live in households in which at least one person works, so why does the Minister refuse to end the freeze on the majority of in-work social security support and to provide the support that working families so desperately need?

[Kit Malthouse]

We believe that the solution for working families is universal credit and that people should take control of their own lives and work hard so that they can build a life for themselves and their families. That is exactly what we are trying to achieve through our welfare reforms.

[Sir Desmond Swayne (New Forest West) (Con)]

rose—

[Sir Desmond Swayne]

Is there evidence that in-work benefits depress wages?

[Kit Malthouse]

My right hon. Friend raises an interesting point. A fair amount of analysis of that idea is currently going on. As soon as we have a conclusion, we will let him know.

[Rachel Maclean (Redditch) (Con)]

Will the Minister confirm what he and the Government think is the most useful measure of poverty? Is it absolute or relative poverty, and can he tell us why?

[Kit Malthouse]

My hon. Friend displays her normal mental acuity in putting her finger on the point here. She is completely right: relative poverty is a poor indicator of how people are faring. For example, if everybody’s wages were to double overnight tonight, absolute poverty would plummet, but relative poverty would stay exactly the same.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

My hon. Friend is absolutely right: using relative poverty produces perverse results. What is he doing about it and what is a better measure?

[Kit Malthouse]

My hon. Friend made a remarkably good speech about this just a week or so ago, and I congratulate him on his foresight. He is absolutely right: relative poverty as currently measured suggests that there are quite a lot of poor people in Monte Carlo, which, of course, is not an intuitive picture that people would have. As a Department, we are looking at other measures. We believe that absolute poverty, which currently stands at an all-time low, is a better indicator. Of course material deprivation, which asks specific questions about how people live, holds some promise as an indicator that the public might appreciate.

[Margaret Greenwood (Wirral West) (Lab)]

I am disappointed to hear the Minister be so facetious about a subject as important as child poverty. At the last count, 72% of households whose benefits were capped were those of lone parents and 77% of those lone parents had a child under five. They can escape the cap by working at least 16 hours a week, but are then hit by the cuts to work allowances in universal credit, which trap many in poverty. According to Government figures released last week, more than half a million children are currently in poverty in lone-parent families where their parent—usually the mother—is either in full or part-time work. If the Government really believe in making work pay, will they reverse the cuts to work allowances?

[Kit Malthouse]

I know that the hon. Lady likes to present herself as some kind of latter-day mahatma and as the only person in this House who cares about poverty, but, of course, that is not true. Many of us—as councillors, voluntary workers, social workers and so on—have spent many years fighting poverty, so it would be helpful to the general tone of debate in this House if she were not quite so accusatory. Our view, and the Office for National Statistics points this out, is that 100,000 fewer work-age lone parents are now in poverty and that their biggest problem—the biggest thing that assails them—is childcare. The 85% payment for childcare under universal credit and the increase in availability to 30 hours will give the greatest assistance to lone parents.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

8. What progress has been made on the Government’s review of personal independence payment claims; and if she will make a statement.

--- Later in debate ---

[Patrick Grady (Glasgow North) (SNP)]

13. What assessment she has made of the effect of the Welfare Reform and Work Act 2016 on levels of poverty.

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

Impact assessments of policies in the Act were published in 2015. Evidence shows that work is the best route out of poverty. The welfare reforms are designed to incentivise people to make the choice to move into work and to give them the tools and assistance to progress.

[Patrick Grady]

Does the Minister agree with his colleagues in Westminster Hall last week who were still trying to blame the financial crash of 10 years ago in making it a justification for these reforms? Will he finally admit that the reforms are in fact an ideological smash and grab on the poorest in society by a Government obsessed with rolling back the size of the state?

[Kit Malthouse]

One of the really disappointing things about the debate on welfare and benefit reform in this place has been the persistent defence of the old benefits system, which was effectively a fraud perpetrated on the poor designed to trap them into being so. I would have hoped that the hon. Gentleman would welcome the fact that in the three years to 2016-17 the number of children living in poverty in Scotland was down by 24% compared with the three years to 2009-10, with relative poverty down in the same period too.

[Michael Fabricant (Lichfield) (Con)]

With unemployment soaring at 9.3% in France and 11% in Italy but only at 4.3% in the UK, does my hon. Friend agree that one of the best ways of staying out of poverty is getting a good, educated job?

[Kit Malthouse]

My hon. Friend is exactly right—[Interruption.]

[Mr Speaker]

Order. The Minister is treating us to a combination of his intellect and his eloquence, and his ministerial colleague, the hon. Member for Hexham (Guy Opperman), is engaging in a rather undignified finger-wagging exercise with the hon. Member for Blyth Valley (Mr Campbell). It is very unseemly and very unfair on the cerebral Minister at the Dispatch Box. Mr Opperman, Mr Campbell: calm yourselves. Take some sort of soothing medicament and you will feel better.

[Kit Malthouse]

My hon. Friend the Member for Lichfield (Michael Fabricant) is exactly right. Time and again when we visit Jobcentre Pluses—I would recommend that people do so—we hear heartwarming, encouraging and inspiring stories of people who have got themselves out of poverty by working and being educated and trying hard. Our entire objective is to give them the tools and assistance to do so.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

14. What recent assessment she has made of trends in the number of job vacancies.

--- Later in debate ---

[Scott Mann (North Cornwall) (Con)]

T4. Will my right hon. Friend confirm that the new support for mortgage interest scheme has been specifically designed to maintain people in their homes and that none of my constituents should be concerned about the day-to-day payments on their mortgages?

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

My hon. Friend raises an important point, not least because we are approaching the deadline for the switchover of SMI from a benefit to a loan. He is absolutely right—this change is specifically designed to keep people in their homes. I urge people to ignore the scare stories being put around, look at the paperwork, take the phone call that has been made and ensure they make a good decision in time.

[Margaret Greenwood (Wirral West) (Lab)]

Had the Secretary of State read the full article that she refers to on Channel 4’s FactCheck, she would have seen that it said that our numbers were in fact correct.

[Margaret Greenwood]

Well, it did. I recommend that the Secretary of State rereads it.

In less than two weeks’ time, support for mortgage interest will change from a benefit to a loan. Government figures released on Friday show that, even at this late stage, the DWP has still not managed to contact 40% of claimants by phone to explain the change, and 30% of all claimants have already declined a loan. A large proportion of claimants are pensioners, and Age UK is warning that many may instead try to manage by cutting back on essentials such as heating. Why have the Government failed to give claimants adequate notice, and will they call a halt to this policy, which risks inflicting hardship on thousands?

[Kit Malthouse]

We have been communicating the changeover with approaching 500,000 pieces of paper since last July, and well over 350,000 telephone calls have been made to the something like 90,000 people in receipt of this benefit. There are specific provisions, post the changeover, to deal with people who perhaps attempt to manage on their own and feel that they cannot do so in that, post the deadline, they can reapply for support and backdate it to 6 April if they so wish.

[Mr Laurence Robertson (Tewkesbury) (Con)]

T8. The Government have done a lot to help pensioners, but far too many still suffer from poverty, particularly older pensioners. What more will the Government do to help that particular group?

--- Later in debate ---

[Hannah Bardell (Livingston) (SNP)]

T3. What equality impact assessment have the Government and the Secretary of State made of the emotional and psychological impact on the women subject to the two child cap and the rape clause and, further, on the DWP workers who have to implement it? Does she agree with my hon. Friend the Member for Glasgow Central (Alison Thewliss), who has fought so valiantly on this issue, that forcing women to relive abuse in an interview is an utterly disgusting and abhorrent policy?

[Kit Malthouse]

The hon. Lady raises an important point. She will know—I was asked this question in a Westminster Hall debate last week—that we have attempted to deal with this issue with some sensitivity. The undertaking I have given to her hon. Friend the Member for Glasgow Central is that if she believes there are particular issues with the system in place for dealing with this, we are more than happy to look at them. I would be more than happy to meet the hon. Lady as well to discuss it.

[Jeremy Lefroy (Stafford) (Con)]

Will my hon. Friend give an example of a policy that has been strengthened, or indeed dropped, as a result of being subject to the family test?

[Kit Malthouse]

My hon. Friend raises a very important point, and one with which I have been grappling since I was appointed to this position. He will know that a number of programmes across the Government are aimed at strengthening families, not least the troubled families programme, which has seen an investment of something like £982 million. On new initiatives, he may have heard me mention in my answer to my hon. Friend the Member for St Austell and Newquay (Steve Double) that we are investing—newly announced in the Budget last year—£39 million in a programme designed to reduce parental conflict. That has been done on the basis of looking for parenting programmes that will create more stability and therefore happier outcomes for families.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

T5. Thanks to the beast from the east, a lot more people now understand that how cold they feel has more to do with wind chill than with ambient temperature. Why do the Government not take wind chill into account when triggering cold weather payments?

[Kit Malthouse]

As the right hon. Gentleman knows, triggering cold weather payments is done on the basis of absolute temperature: it has to fall below 0 °C for a length of time. I must confess that, as someone who is married to a Canadian, I know only too well the effects of wind chill and the significant difference it makes. If he will allow me, I will take away that issue and have a look at it.

[Luke Graham (Ochil and South Perthshire) (Con)]

I welcome the comments from my hon. Friend the Minister for Disabled People, Health and Work about getting more people with disabilities into work. Given that there are 650 potential employers in this House, what more can be done to improve disability employment in the House and in our offices around the country?

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T10. My constituent, Emily Johnson, having worked all her adult life, gave birth to a baby daughter in December. Because she moved into an in-work training programme in September, she has been denied maternity pay and maternity allowance. Because her husband is self-employed, universal credit assumes he earns enough to support all three of them, although this is demonstrably not the case. Why is a woman who has paid into the benefits system all her adult life denied any support at this time?

[Kit Malthouse]

The hon. Lady raises what sounds like quite a complicated case in terms of entitlement. If she would like, I am more than happy to arrange for a meeting in the Department to make sure that her constituent is getting the help and support that she needs.

[Mr Speaker]

I am trying to help colleagues, but I would ask colleagues to help each other. A short sentence each would suffice, and then you are not denying somebody else the chance.

--- Later in debate ---

[Jo Swinson (East Dunbartonshire) (LD)]

The abolition of support for mortgage interest has been characterised by the poor provision of information to vulnerable claimants with learning disabilities and a very low take-up of the new loan scheme. Will the Secretary of State cancel the abolition of SMIs, or at the very least delay it while these issues can be resolved?

[Kit Malthouse]

We will not be cancelling or delaying, but we are of course sensitive to vulnerable claimants, in particular those who lack mental capacity and may need assistance or representation when dealing with their financial affairs. There is a separate process for enabling their transfer across and they will not be subject to the deadline. Indeed, our contractor, who is making contact with recipients thus far, has people who are specifically trained to identify those who may have become incapacitated or vulnerable during their receipt of the benefit to make sure they too are not subject to the current deadline.

Welfare Reform and Work Act

Kit Malthouse Excerpts

Wednesday 21st March 2018 Westminster Hall

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

It is a great pleasure to be in your capable hands this morning, Mr Gapes. I thank the hon. Member for Central Ayrshire (Dr Whitford) for securing the debate, and all Members who have participated this morning and continue to take an interest in the issues of welfare reform and work.

When the Welfare Reform and Work Act was first debated, in the summer of 2015, Ministers spoke of three principles that underpinned the legislation: first, work is the best route out of poverty, enabling people to take control of their lives and achieve their full potential; secondly, spending on welfare should be sustainable and fair to the taxpayer, while protecting the most vulnerable; and thirdly, people who receive benefits should face the same life choices as those who do not get the same support from the state. We remain committed to those three principles. Indeed, in the two years that have passed since the legislation became law, we have been putting them into practice.

Many of the measures in the Welfare Reform and Work Act that hon. Members across the Chamber have highlighted this morning form part of a package of policies through which we have been increasing incentives and support for people to find work, stay in work, build a career and progress.

[Neil Gray]

Will the Minister give way?

[Kit Malthouse]

Not at the moment.

With the national living wage we have been helping people to earn more. From April 2018 the Government will raise the national living wage by 4.4% to £7.83 an hour. At that point, the annual earnings of a full-time minimum wage worker will have increased by more than £2,000 a year since we introduced the national living wage in April 2016. Since April 2015, the lowest paid have seen their wages grow by almost 7% above inflation.

With increases to the income tax personal allowance, we have been helping people to keep more of what they earn. Next month we will raise the personal allowance in line with inflation to £11,850. A typical basic rate taxpayer will pay £1,075 less income tax in 2018-19 than they did in 2010-11. Compared with 2015-16, there are now 1.2 million people who, as a result of our changes to the personal allowance, will no longer have to pay any income tax at all.

[Neil Gray]

Will the Minister give way?

[Kit Malthouse]

I am not going to give way, because I want to address some of the specific questions, and give the hon. Member for Central Ayrshire a chance to respond.

With universal credit, as my hon. Friend the Member for Redditch (Rachel Maclean) touched on during the debate, we are providing claimants with a simpler system that ensures that work always pays. It offers families more generous childcare, and gives parents access to tailored support from personal work coaches to find, and then progress in, work. Three separate research studies have shown that universal credit is having a positive impact on employment outcomes. Compared with jobseeker’s allowance, our evidence shows that people on universal credit are 4% more likely to be in work after six months, put more effort into finding work, apply for more jobs, and do more to increase their hours and earnings. Universal credit is being introduced in a careful and co-ordinated way, allowing us to make improvements along the way. We are listening to the concerns of our stakeholders and making changes where necessary.

The topic for today’s debate invited us all to reflect on what impact this Government’s policies are having. As the hon. Member for Central Ayrshire rose to give her opening speech, the Office for National Statistics published its latest release on the state of the labour market in the UK. That release presents a striking picture, with 32.25 million people in employment as of this morning—a record high. The employment rate for women stands at 70.9%, which is also a record high. Unemployment is down to the joint lowest level since 1975, and 876,000 vacancies are open to people in search of employment, which is also close to a record high.[Official Report, 28 March 2018, Vol. 638, c. 4MC.]

The figures are particular significant when it comes to children—many hon. Members have spoken about children today. The evidence is clear: children living in households where no one is in work are five times more likely to be in poverty than those where all adults work. The chances of a child being in poverty where one parent works full-time and the other part-time is one in 20.

In 2014-15, 75% of children in families where no one is in work failed to reach the expected standard at GCSE compared with 39% for all working families, and 52% for low-income working families. We are supporting parents to find and stay in work with record spending on childcare, which will reach £6 billion in 2019-20. In England, working parents of three and four-year-olds can now get 30 hours of free childcare a week, saving those using the full 30 hours around £5,000 per year in total.

[Neil Gray]

rose—

[Kit Malthouse]

We are making good progress. Nationally, there are now about 880,000 fewer households where no one is in work, and around 600,000 fewer children living in such households compared with 2010. The number of children living in absolute poverty on a before-housing-costs basis is down 200,000 since 2010, and the UK is now the highest spending of all OECD countries as a percentage of GDP on family benefits, standing at 3.5% against an average across the OECD of 2%.

[Neil Gray]

Will the Minister give way?

[Mike Gapes (in the Chair)]

Order. Mr Gray, the Minister has made it clear that he is not giving way. He does not have to give way, so I would be grateful if you would allow him to carry on.

[Kit Malthouse]

I have lots to get through. I want the hon. Member for Central Ayrshire to reply, and the Scottish National party has had a lot to say today.

The hon. Lady majored fairly heavily on disability benefits in her speech. We are committed to ensuring that more of the money goes to the people who need it most. We have continued to increase benefits for people with disabilities and health conditions, and we will spend £800 million extra in 2018-19 to do that once again. For people in the employment and support allowance support group, that means £720 more per year than in 2010. For recipients of the monthly rate of disability living allowance, paid to the most disabled children, it is more than £1,200 a year more.

At the same time, we are determined to break down the barriers to employment faced by disabled people. The hon. Lady spoke about the removal of the work-related activity component under ESA. The old system, as we all remember, was failing to help disabled people and those with health conditions into work. Only one in 100 ESA work-related activity group claimants leave the benefit each month. We believe that disabled people and people with health conditions deserve better than that.

We believe that the changes, working in tandem with a £330 million support package over the next four years, will provide the right incentives and support to help new claimants with limited capability for work. Taken as a whole, our policies to help people with disabilities to find employment have been making good progress. More than half a million more disabled people are now in work than four years ago, and on a before-housing-costs basis the absolute poverty rate among people living in a family where somebody is disabled is now down to a record low.

On the underpayment of ESA, the hon. Lady asked about paying back further than 2014. We are actually legally restricted from recalculating payments back beyond 2014. Statute governs that position, which we are not allowed to exceed. The hon. Lady also raised the success rate of personal independence payment claimants who go through the appeals process. It is worth remembering that the vast majority of PIP decisions do not go to appeal. Some 2.9 million PIP claims were decided on between April 2013 and September 2017, of which only 8% of initial PIP decisions were appealed against, and only 4% were overturned at appeal. A decision being overturned does not necessarily mean that the original decision was incorrect; often it is because the claimant has provided more cogent oral evidence or other new evidence that has allowed a more accurate assessment.

In a forensic speech, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) dissected the case against welfare reform very ably. In particular, he pointed towards the benefits cap, which a number of Members have criticised. Of course, the numbers show that the benefits cap has been extraordinarily successful as an incentive to get into work. Over the last couple of years, tens of thousands of people have come out from under the benefits cap, because of course it does not apply once someone moves into work. The amount at which they are capped has dropped significantly too.

My hon. Friend the Member for Redditch asked about older claimants and when an impact assessment was likely to be approved. I am informed that we will publish the evaluation of the two Jobcentre Plus interventions for older claimants in the spring of 2018—I assume before the summer recess. Those will look at the impacts of sector-based work, academy and work experience interventions.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) raised the issue of reassessments for those who are terminally ill. He will know that in both PIP and ESA we have a fast-track process for any claimants who have fewer than six months to live. In ESA we introduced a severe conditions criteria last autumn, which means that people with the most severe degenerative conditions will not need to be reassessed. It is more complex in the case of disease, but if those individuals qualify for the highest level of ESA under the support group, and there is no possibility of improvement, they do not need to return for reassessment. I am more than happy to keep that under review and have another look at it in future.

Finally, the hon. Member for Glasgow Central (Alison Thewliss) raised the rape clause, which is an issue on which she has campaigned. Obviously, it is a very difficult and sensitive issue, which we are more than happy to keep under review. As she knows, a third-party model has been put in place, but if particular issues are being experienced by women accessing that model, I am more than happy to look at it again. As she also knows, there are particular circumstances in Northern Ireland. My undertaking to her this morning is that I am happy to meet her, if she wishes to discuss it with me, to try to find a way through this issue.

It has been an interesting debate, although it has put the House into two polar opposite groups: those who thought that welfare reform was required, and those who did not. One of the things that I have found most disheartening about such debates since I was appointed to my job is the implicit defence by those who are opposed to welfare reform of an old benefits system that was frankly fraudulent. It was trapping people in poverty, and insisting that it was trying to help them when, in fact, it was holding them back.

We believe in treating everybody with dignity, and giving them the power to take control of their lives and find their own way forward, for them and their families, in work. We believe in giving them all the tools that we can to do that, whether they are disabled, single parents, families, or older people who wish to access work. The way to a dignified future for everybody is to give them control, not to make them vassals of a welfare state.

[Mike Gapes (in the Chair)]

Dr Whitford, you have five seconds to wind up.

Child Poverty: London

Kit Malthouse Excerpts

Thursday 22nd February 2018 Westminster Hall

[Joan Ryan (Enfield North) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Henry. I, too, congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on securing this import debate and on her powerful analysis of the situation. Eight years ago, David Cameron said the Conservatives would be

“the most family-friendly Government you’ve ever seen in this country”.

Less than two years ago, the current Prime Minister stood on the steps of Downing Street and proclaimed that she would fight against “burning social injustices” and

“make Britain a country that works not for a privileged few, but for every one of us.”

What we have heard so far today throws some stark reality on that. This debate is another reminder of how reality fails to match the Government’s rhetoric.

My borough of Enfield, where I have lived for the past 20 years, and where my hon. Friend the Member for Enfield, Southgate (Bambos Charalambous) has lived all his life, is generally thought of as a leafy borough with a very solid foundation for employment, manufacturing, the service sector and logistics. It has always been said, and I have said many times, that it is a great place to live and bring up a family. However, Enfield is in the midst of a worsening child poverty crisis. Four in 10 of Enfield’s children—almost 34,000—live below the poverty line. The borough is the 11th most impoverished area for children in the UK.

My constituency and neighbouring Edmonton are also two of the top 20 constituencies in the country with the fastest growing levels of child poverty, and Edmonton is in the top 10, as my hon. Friend the Member for Mitcham and Morden mentioned. As the End Child Poverty coalition has said, low-income families are struggling to put

“food on the table, heat their homes and clothe their children.”

We should feel anger and shame that that is the situation. Last year, Enfield had the fourth highest rate of food bank usage in London. Is it any wonder that this is happening when wages are flatlining, with one in three jobs in Enfield being paid less than the living wage? I ask hon. Members to look at yesterday’s edition of the Enfield Independent, our local paper, which says that eviction rates are the highest in the capital. Levels of homelessness acceptances in Enfield have risen more than 80% in the past two years.

My hon. Friend referred to my constituency surgery, which I do every Friday afternoon from 3 o’clock. Anyone who turns up will be seen, even if they have not made an appointment, because people are desperate. A huge percentage of the problems relate to housing. Many hard-pressed local families are trying—and often failing—to cope with soaring rents and a lack of affordable and social housing. But under this Government, house building has fallen to its lowest peacetime rate since the 1920s. The number of affordable homes in Enfield increased by just over 300 in the three years to 2016. For most families, what is called affordable is not affordable, as we have already discussed. On top of all of this, most benefits for working families have been frozen, which has cut families’ real incomes. There is a serious shortage of genuinely affordable childcare.

I am proud that the last Labour Government introduced Sure Start, the transformative early years programme giving young children the best start in life. When Labour left office in May 2010, there were 24 Sure Start centres in Enfield. Now there are just five. Government cuts to these vital education services are a scandal and our most disadvantaged children are paying the price. As Save the Children has said, the consequences of a lack of quality early years education for children living in poverty are lifelong and

“it harms not only their quality of life, but their ability to learn and develop at a crucial stage in their lives.”

The lack of Government action to address these issues is in stark contrast to the leadership shown by Sadiq Khan, the Labour Mayor of London, who is championing the London living wage to support low income families.

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

We all did.

[Joan Ryan]

The Minister may make an intervention if he wishes.

The Mayor is investing £15 million to buy homes for homeless Londoners and recently he launched the capital’s largest living rent scheme, to offer more Londoners a genuinely affordable home. He is supporting early years hubs, delivering on his promise to improve access to high-quality, affordable early years education for the most disadvantaged families in the capital. However, the child poverty crisis is a national issue that demands a co-ordinated, national response from the Government.

I urge Ministers to restore targets to end child poverty. The Government must support local authorities as they attempt to address the worst effects of child poverty in their areas, instead of gutting their budgets. Enfield Council alone has had its central Government funding slashed by £161 million since 2010, with another £35 million in cuts due by next year. The Government need to fix their broken housing policy and help to make sure that all families in Enfield, particularly those on low incomes, have the chance to live in a safe, secure and genuinely affordable home. Universal credit still needs to be fixed to ensure that it does not drive even more families into debt, arrears and eviction, and the Government need to take steps immediately to provide more good-quality childcare and early years education.

Child Poverty Action Group rightly says that poverty

“damages childhoods; it damages life chances; and it damages us all in society.”

I am proud that the last Labour Government lifted 1 million children out of poverty. They addressed this issue and, to a large extent, they succeeded. It is time that, rather than making the situation worse, this Government got their act together for these children or moved over and let someone else do it.

--- Later in debate ---

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

It is a great pleasure to appear before you, Sir Henry. I begin by congratulating the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this important and very relevant debate, not least because I spent 16 years as a representative in central London, both as a councillor and as a London Assembly member—where I shared a constituency with the hon. Members for Westminster North (Ms Buck) and for Hammersmith (Andy Slaughter)—so I am well acquainted with some of the problems. Indeed, I started my career as a councillor as deputy chairman of the housing committee on Westminster City Council, dealing with the heavy investment that we made in the Mozart estate in Queen’s Park at the end of the 1990s, as the hon. Member for Westminster North may remember. This issue has been of importance to me in the past and remains so.

I emphasise from the outset that the Government are committed—the hon. Member for Mitcham and Morden referred to this—to building a country that works for everyone, where no one and no community are left behind. I completely agree that we must continue to provide appropriate support for the least well-off and the disadvantaged in our society, so that we can make a meaningful and lasting difference to their lives and outcomes and those of their children.

However, I was disappointed to hear the hon. Lady say, as I think she did on the record, that work is no longer the route out of poverty. The Government believe that work offers families the best opportunity to get out of poverty and become self-reliant. That is why we are undertaking the most ambitious reform to the welfare system in decades—so that it supports people to find and stay in work.

The evidence about the impact of worklessness on children’s outcomes, in both the short and the long term, is clear. In 2014-15, 75% of children in workless families failed to reach the expected standard at GCSE, compared with 39% for all working families and 52% for low-income working families.

[Ms Buck]

Will the Minister give way?

[Kit Malthouse]

No, I am short of time. As adults, children who grow up in workless families are more likely to be workless themselves, compared with children who grow up with working parents, which creates an intergenerational cycle of disadvantage. It is therefore vital that we continue with our policies to encourage work and to address the often complex employment barriers faced by many disadvantaged families.

A number of hon. Members raised concerns about working families who are in poverty. However, the evidence is clear. Adults in workless families are four times more likely to be in poverty than those in working families. Children living in workless households are five times more likely to be in poverty than those in which all the adults work. Children in lone-parent families are three times less likely to be in poverty if their parent is in full-time work. And the chances of a child being in poverty if one parent works full time and the other part time is one in 20.

We are making good progress. Nationally, there are 954,000 fewer workless households and 608,000 fewer children living in such households now, compared with 2010. In London, there are 197,000 fewer children in workless households than there were seven years ago. By 2016, the number of children in long-term workless households in London was less than half what it was in 2010. The latest data shows that the London employment rate has increased by 7.1 percentage points since 2010. Comparable national figures show a slightly lower increase of 5 percentage points, so London is doing better.

Universal credit is at the heart of the reforms and the positive change that the Government are committed to driving. Through universal credit, the welfare system is, for the first time, providing working people with the opportunity to progress in work and to work more hours so that they can increase their earnings and become financially secure. Once fully rolled out, it will boost employment by about 250,000 and generate £7 billion in economic benefits a year.

We are also committed to tackling poverty by helping people with the cost of living. The national living wage, rising to £7.83 an hour in 2018-19, has given the UK’s lowest earners their fastest pay rise in 20 years. The right hon. Member for Enfield North (Joan Ryan) referred to the London living wage in glowing terms with regard to the current Mayor, but of course that project was started well before he came to office. Indeed, I am pleased to say that the largest expansion of the London living wage came when I was responsible for it at City Hall, between 2012 and 2016. However, that is not the only measure that we have taken. We have cut income tax for more than 30 million people and taken 4 million low earners out of income tax altogether. A typical basic rate taxpayer will now pay £1,000 less in tax compared with 2010.

Universal credit, with its generous childcare offer, has been designed to support parents to work after the birth of a child. Working parents on universal credit can have up to 85% of their childcare costs reimbursed, which is worth up to £1,108 a month for someone with two or more children. That is in addition to their entitlement of up to 30 hours of free childcare a week.

Hon. Members have raised serious concerns about child poverty rates, including the key findings in the End Child Poverty report, which came out a couple of weeks ago. Let me take this opportunity to emphasise that whichever way we look at child poverty rates—relative or absolute, and before or after housing costs—the headline national statistics published by the DWP show that in London all are lower than they were in 2010. Across the country, 600,000 fewer people are in absolute poverty now, compared with 2010—the figure is at a record low—and 200,000 fewer children are in absolute poverty.

Let me turn to the figures used by End Child Poverty. Those are projections based on Her Majesty’s Revenue and Customs data from 2014, and even the academics who produced the analysis have pointed out the limitations in the method. More recent data, published by Her Majesty’s Revenue and Customs since the report, shows that rather than rising, the proportion of children in low-income families in London fell in 2015 to an estimated 19%, compared with 24% in 2014. Indeed, every parliamentary constituency saw falls between 2014 and 2015. That includes some of the areas highlighted by the report. For example, in Bethnal Green and Bow there was a fall of 12 percentage points and in Poplar and Limehouse a fall of 11 percentage points. There was a fall of 6 percentage points in Hackney South and Shoreditch, as there was in Westminster North and in Enfield North. The data and the projection from the data in 2014 were immediately contradicted by the data subsequently published for 2015.

Let me deal quickly with some of the specifics that were raised. The hon. Member for Barnsley Central (Dan Jarvis) raised the issue of child poverty targets. Some hon. Members will remember that there was recognition by the Government in the past that making a long-term difference to the lives of disadvantaged children required an approach that went beyond a focus on the welfare system. That is why the Government repealed the income-related targets set out in the Child Poverty Act 2010 and replaced them with new statutory measures of parental worklessness and, critically, as my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) mentioned, children’s educational attainment. That is vital; all the evidence points to its being critical to long-term welfare and prosperity. Those are the two areas that can make the biggest difference.

A number of hon. Members raised issues about housing. The Government have recognised that there is an issue with the housing market, and a huge amount of work is going on at the newly named Ministry of Housing, Communities and Local Government. On standards, we agree that everyone deserves a decent home. That is why the numbers of homes that have been brought up to standard in both the public and the private sectors have increased very significantly, and the numbers that are below standard now lie at record lows. On housing generally, hon. Members will know that a significant amount of extra money has been put into the Government house building programme. That now stands at £9 billion, and no doubt there will be more initiatives to come from the Ministry of Housing.

We are also supporting, I believe, the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill, promoted by the hon. Member for Westminster North. It will give tenants the right to take legal action against landlords who do not fulfil their duties.

It was slightly disappointing to hear from the Opposition a fairly stout defence of the previous benefits system. As far as I can tell, that was a fraudulent system, perpetrating a lie upon the poor. It was designed to trap them in poverty. That is why we saw very little change in long-term poverty, which is what we are dedicated to tackling. I can reassure hon. Members that we are not complacent and particularly not in London, and we will be doing our best over the years to come to try to address the problems that have been raised.