Social Security (Up-rating of Benefits) Bill

Lord Bishop of St Albans Excerpts

2nd reading
Tuesday 13th October 2020 Grand Committee

[The Lord Bishop of St Albans [V]]

My Lords, I add my words of welcome to the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston, and look forward to their maiden speeches.

I welcome the Social Security (Up-rating of Benefits) Bill. Pension credits are vital for the welfare of low-income retirees and it is right that measures are taken to support them in this challenging time. However, there is certainly scope for going further. Accusations relating to intergenerational fairness are not entirely unfounded. While I am for uprating the basic state pension, providing a guaranteed rise of 2.5% at a time when millions have lost income due to the pandemic, I realise that it will raise questions over whether this Government represent the entire country or just those who are older.

As other noble Lords have mentioned, the situation is perilous for those on the breadline. The Government’s failure to guarantee the permanence of the April 2020 universal credit uplift will be devastating for those formerly employed and now relying on universal credit. Across the country, arrears are building up, and immediate action will be required to prevent low-income families being burdened with unrealistic debt.

While the pandemic has affected everybody, when it comes to income, it is not retirees but low working-age households that have been most affected, whether through cuts in income or redundancy and rising living costs. I hope that the Government make the right decisions and stay true to their levelling-up agenda by being a national Government who choose to represent all age demographics.

Faith groups have been working hard to raise awareness of the financial difficulties endured across the country. For example, the recent Reset the Debt report by a coalition of four national Christian denominations drew attention to the increasingly unstable position that those made redundant due to Covid-19 now find themselves in, with many through no fault of their own sliding into debt spirals and homelessness. Their call to reset the debt through a Jubilee fund is the sort of innovative policy required so not to condemn generations to imposed poverty. I join my Church of England colleagues, the right reverend Prelates the Bishop of Durham and the Bishop of Portsmouth, and the Joseph Rowntree Foundation in its “keep the lifeline” campaign in urging the Government to make permanent the universal credit uplift that occurred in April this year.

I understand that difficult economic decisions will need to be made. However, given the uncertainty that we face, cutting back on economic support before the crisis is over will only exacerbate the situation and do so quickly. The Treasury has been taking bold decisions and will need to take more that will entail spending additional revenue in the short term to give those chances on the line a chance in the long run.

Social Security (Up-rating of Benefits) Bill

Lord Bishop of St Albans Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 27th October 2020 Lords Chamber

[Lord Shipley (LD) [V]]

My Lords, in speaking to Amendment 4, to which my name is attached, I also wish to support Amendment 3, which addresses similar issues. The aim is to understand better the impact of this Act on pensioner poverty.

According to the Joseph Rowntree Foundation, pensioner poverty has been decreasing across the UK. Given the existence of the triple lock, that should not be a surprise. Indeed, it shows the success of the triple-lock policy since 2010 in reducing pensioner poverty generally. That is something of which my party should be proud.

Yet, as we have heard from the noble Baroness, Lady Sherlock, pension credit is still needed by large numbers of individual pensioners, and we know from a Question asked yesterday by the noble Lord, Lord Foulkes, that the campaign to encourage take-up of pension credit this year seems not to have achieved very much.

As we have heard, too many people who would qualify for pension credit still do not claim it. One reason could be clawback. I think a main reason is lack of face-to-face support to assist individuals for whom digital and telephone access is a barrier. I hope the Minister will look carefully at this problem, because if the Government really want to reduce pensioner poverty, they have to will the means of doing that. As the noble Baroness, Lady Sherlock, said, we need a new campaign.

Our Amendment 4 also identifies a considerable pensions gap between men and women and calls for a specific review of the impact of the provisions of the Bill on women. I hope the Minister can agree to that.

We said at Second Reading that the Bill is primarily a technical Bill. But the amendment in my name and that of my noble friend Lady Janke adds an important dimension, which is that any further decisions on pensions uprating should be brought forward by the Government in the light of their findings from the review; in other words, we need the clear, evidence-based decision-making that Amendment 4 would provide.

[The Lord Bishop of St Albans [V]]

My Lords, I will speak to Amendment 3, and thank the noble Baroness, Lady Sherlock, for her work on it. I have previously spoken about the importance of the Government fulfilling their promise to deliver the triple lock to pensioners, so I support the general thrust of the Bill. However, it is important that a considered approach to uprating is taken that analyses the benefits of this policy. After all, pensioners, like the rest of the population, represent a very diverse range of income levels.

Covid-19 has shaken the economic standing of much of the working population—a fate that pensioners have largely been shielded from. The taxation of future generations to pay for current pensions must be balanced with assessments that clearly outline the effectiveness of this policy. The reality is we do not have unlimited economic resources at our disposal, and trade-offs are required. I do see dangers in uprating the entire pensions scheme by 2.5%, without the necessary impact assessments, at a time when unemployment and working household debt are rising. Reviewing both the cost and relative success of this policy in determining not only whether it reduces existing levels of pensioner poverty but whether the relationship between pensioner and working household incomes throughout a given period might lend itself, in the future, to a much more targeted approach to uprating.

I expect the report’s assessment of existing levels of pensioner poverty will be reflective in assessing the efficacy of blanket uprating policies and whether considered and targeted increase in social security and relief would better account for uncertainties such as the Covid-19 crisis, which has had a disproportionate economic effect on the working-age population. Of course, pensioners need to be adequately looked after. Until a review on whether the 2.5% minimum uprating delivers intergenerational fairness, it is right that the House approves these measures.

Finally, on intergenerational fairness, which was mentioned at Second Reading, I once again call on the Government to extend April’s universal credit increase and extend this lifeline that so many across the country are relying on.

[Lord Addington (LD)]

My Lords, I have only a little to add to what has been said. If you do not know how severe a problem is, you cannot do much about it. Having something that looks into the problems of pension policy is a very sensible idea. The Minister will undoubtedly say, “We are—we are doing X, Y and Z” and give us a list, but the fact is that the non-claiming of benefits is something that bedevils our system. By necessity, it is a bureaucratic system, and even if you make the bureaucracy as manageable as possible, it is still there. People who think, “Well, I should not be asking for something else”—something that the pensioner population seems to get an A grade in—means that we have poverty that leads to other problems.

The reason we have given people these back-ups is because they need them: they make their lives better and mean they are not as big a drain on the National Health Service or emergency care going in to support them. It is actually in the general public’s interest to make sure that people are not living in poverty: it leads to problems, to costs and to knock-ons; it makes our lives less pleasant. So, I hope that when the Minister replies, she will give us some idea of how the Government are trying to find this information, because it is needed. To make the system work well, it is needed across the board. If we do not have enough information about issues, we cannot address them. The idea of having some solid knowledge to base future planning on cannot be a bad thing.