Universal Credit and Terminal Illness

Marion Fellows Excerpts

Wednesday 9th May 2018 Commons Chamber

[Drew Hendry]

The hon. Gentleman is exactly right in his description of the circumstances that have brought about this situation.

Since the roll-out of full service, I have stood here too many times to relay the devastation roll-out has caused for many of my constituents. I have supported hundreds of constituents with their universal credit issues, I have all the case studies, I have shared them and given voice to them as their MP, but, again, that has all been ignored. Such was the devastation we experienced from full-service roll-out that we even set up a universal credit roundtable group, which included the Highland Council, local Department for Work and Pensions staff, Citizens Advice, housing officers and others, to come up with local workarounds. We wrote to the Prime Minister, the previous Minister and anyone who would listen. We tried to be constructive. We shared real stories to back up our arguments. We offered process solutions. I even held a summit that included heartbreaking testimony from constituents and invited every Conservative Member to attend. Again, we were ignored.

For many, many months, I have campaigned alongside Macmillan CAB in my constituency, as well as Marie Curie, the Motor Neurone Disease Association and clinicians, on the specific issues facing people with a terminal illness.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I have a personal interest in this debate. I am very glad that, when my husband was declared terminally ill in December, he could only claim attendance allowance, which was not under universal credit. Some of these stories are horrendous. I speak from experience: people who are terminally ill want to do the best for their families, but under this system they cannot.

[Drew Hendry]

I thank my hon. Friend, not only for her intervention but for her fortitude and bravery in raising that particular matter. It hit home in showing why the whole issue is so important, and why it is so important for something to be done.

Housing and Social Security

Marion Fellows Excerpts

Thursday 22nd June 2017 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to follow the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), whose maiden speech was very funny and insightful, and commended some of his predecessor MPs: well done.

Housing, and especially social housing, has been shown up in sharp focus as a result of the Grenfell Tower tragedy. Indeed, in her statement this morning the Prime Minister admitted that “for too long in our country”—meaning England—“under Governments of both colours, we simply have not given enough attention to social housing.” That is in stark contrast to what is happening in Scotland, where the Scottish National party Government are committed to spending over £5 billion by 2021 to build social and affordable housing. The UK Government have allowed the sale of housing association properties; the Scottish Government have ended the right to buy, to protect the existing stock of social rented homes.

The UK Government do not really help 18 to 34-year-olds, and the Government’s tremendously difficult housing benefit recall for 18 to 21-year-olds is causing real hardship across the country. The Scottish Government welcome the fact that the UK Government are now looking into protecting vulnerable people in private landlord lets, but in Scotland we have made a real issue of this, because we want our younger people and tenants to be well protected. The SNP welcomes a full public inquiry into the Grenfell Tower fire and believes that no stone should be left unturned in order to ascertain the causes, ensure appropriate lessons are learned, and get justice for the many families of the victims and survivors.

The Scottish Government resilience operation has met to discuss any potential impact for Scotland of the Grenfell Tower tragedy. Building standards are devolved and Scottish Ministers are in discussion with local authorities today. The Cabinet Secretary for Communities has convened a short-term ministerial working group to review Scottish regulations, and the Scottish Government will work closely with the UK Government and learn any lessons relevant to construction practices following the subsequent investigation.

Moving on to social security, I call for an end to austerity. If one thing came out of the recent election campaign, it was that the Tories’ cost-cutting austerity agenda, especially where it impacts on our older citizens, is not wanted. The Prime Minister paid a heavy price for her suggestions on the dementia tax and on restricting winter fuel payments. Even Ruth Davidson, the Scottish Tory leader, could not swallow that bitter pill and announced that there would be a different policy in Scotland.

In Scotland, we value all of our citizens, whatever their age or ethnicity. Many constituents have approached me in desperation and disbelief. I have a long list and I do not have time to go through it, but during the election campaign I was approached by a grieving grandmother whose son had just been widowed. The so-called simplification of bereavement support resulting in cuts for widows and widowers when they are at their most vulnerable is scandalous. I ask Members to try to imagine how someone who is grieving must feel when having to give up their employment to deal with a young family and finding out that the financial support they expected because of their circumstances was no longer there. That happened in April of this year.

The SNP is opposed to any increase in national insurance, especially at a time of low consumer confidence and squeezed household budgets. We need a freeze on NI contributions and VAT. The SNP here in Westminster will fight for a moratorium and review of the closure of HMRC offices in Scotland and across the UK, for beneficial ownership of companies and trusts to be made public, for measures to improve the transparency of tax paid by major international companies, and for further action by the UK Government to tackle international tax avoidance. If these measures were taken, there might be no need for austerity cuts at all, or at least they could be lessened.

The SNP will fight for an end to benefit sanctions, to the roll-out of universal credit and to charges from the Child Maintenance Service, and we will fight to end private company involvement in social security benefits. Finally, we will fight to abolish the premium-rate telephone charge for those seeking advice or claiming benefits from the Department for Work and Pensions. Not only do the Government cut benefits, but they charge people increasingly large amounts to access what is rightfully theirs. We must help the worst off and most vulnerable in our society, not impose further cuts on them.

I cannot finish without mentioning the WASPI women. I made it—I got my state pension—but anyone who was born a year after me did not. Women have retired expecting to get what they paid in. They were not told that the changes would happen, and they are now living in straitened circumstances as a result of them. The Government need to stop the austerity and cuts and look after the people in this country much better.

Child Maintenance Service

Marion Fellows Excerpts

Tuesday 18th April 2017 Westminster Hall

[Mr Peter Bone (in the Chair)]

We start with a debate on the Child Maintenance Service. It is good to see so much media interest in this today at Westminster.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I beg to move,

That this House has considered the Child Maintenance Service.

It is a pleasure to serve under your chairmanship, Mr Bone. I want to thank the Backbench Business Committee for giving us the opportunity to discuss this extremely important issue affecting families across the UK. I would also like to extend my thanks to my colleagues present, who may have had to cut short their Easter weekend to attend today. The fact that they are present highlights the importance of this debate.

Many constituents have approached my office regarding issues with the Child Maintenance Service. In their experience and mine, it is an extremely frustrating and inefficient service to deal with. When it is responsible for something as important as financial support for children, and quite often single-parent families, it must execute its duties properly and get it right. That is not happening.

The Child Maintenance Service is under-resourced, unfit for purpose and failing families across the UK. It has disregarded historical maintenance arrears. It allows non-resident parents to renege on their responsibilities by failing to collect current maintenance, and it imposes a tax on parents who desperately require its services. It fails to provide a service of the decent standard that should be expected of any Government agency.

Despite the length of time I get to speak, when writing this speech I was not thinking about which issues to speak about; I was thinking about what things I would have to leave out, as the maintenance system is so rife with issues. The CMS needs a radical overhaul to ensure that parents and their children can access the support they are entitled to. That support is not optional.

[Mr David Burrowes (Enfield, Southgate) (Con)]

I congratulate the hon. Lady on securing this important debate on an issue that is getting attention in lots of areas at the moment. A group that she may want to leave out is those who are able to reach agreement. The Minister will come back and say that family-based assessments have increased and that many more are reaching agreement. Will the hon. Lady drill into the detail of whether or not that shows the success of the current system?

[Marion Fellows]

The hon. Gentleman is right; I am not going to concentrate on that. Family-based arrangements are what everyone wants, but they do not happen in all cases. I am here to support and talk about those who are outwith that scheme.

The support that the CMS gives is not optional; it is a legal right for children. The Child Maintenance Service is failing to secure children and their parents with care their rights, or it is taxing them to gain access to what is theirs. Maintenance payments have had both a current and historical problem with underpayment, people not paying and arrears. To date, the outstanding arrears for child maintenance stand at an astonishing £4 billion. That figure alone shows the extent to which the Child Support Agency and the Child Maintenance Service are failing people. At this point, I should add my thanks to the charity Gingerbread, because I am drawing heavily on its work in its recent report. It is likely that that figure does not represent the full picture, as paying parents under direct pay are assumed to have paid their maintenance in full unless the CMS is told otherwise.

According to Gingerbread, which has been doing fantastic work to raise this issue and support families, during the transfer process from CSA to CMS many parents have been pressured into not transferring their historical arrears over to their new claim. The Department for Work and Pensions calls that a fresh start. However, no equivalent letter is sent to paying parents to encourage them to pay off their arrears. In 2013, the UK Government issued “Preparing for the future, tackling the past”, in which they outlined their strategy of disregarding past debts and instead focusing on the payment of current maintenance. In line with that strategy, between December 2015 and March 2016, debt collections per case dropped from £35 to £22.

The DWP has calculated that as little as 12% of CSA debts on both the CSA and CMS systems will actually be collected. Current arrangements are allowing parents to renege on their responsibilities. Even though these debts were accrued in the past, parents should still be held responsible now. Collecting historical arrears should not mean a trade-off with current arrears; both are a priority.

[Stephen Timms (East Ham) (Lab)]

I agree very much with what the hon. Lady is saying. I want to mention one of my constituents, who first approached me in September 1999 and the father of whose child has steadfastly refused to contribute anything. He has spent a great deal on lawyers in the intervening almost 20 years to avoid paying maintenance. Today he owes £55,000, of which £15,000 is owed to my constituent. Does the hon. Lady agree that it is absolutely vital that the money is collected and that the parent receives what is owed to them?

[Marion Fellows]

The right hon. Gentleman makes an absolutely valid point. That is exactly what I am trying to argue. We should chase arrears; not to do so seems to fly in the face of common sense and natural justice.

Members of the public, and indeed Members of this House, may not be aware that during the switch from CSA to CMS case history is not transferred, leading to a loss in accumulated knowledge that wastes resources and could allow a non-resident parent another chance to renege on their payments. Despite waiting years for an effective service that will proactively seek to collect owed maintenance, these parents with care and their children are being forgotten, with no option for recourse. If debts are uncollectable or unlikely to be collected, parents must be made aware of that. Additionally, if the UK Government are unwilling or unable to take the steps to secure children their rights, they must compensate receiving parents for their failings.

Although the CMS is taking the approach of focusing on current maintenance, it is also failing in that regard. Most arrears were accumulated under the CSA. However, since the launch of the CMS in 2012, nearly half of paying parents have been allowed to accrue arrears. As I have said, those in direct pay are assumed to have paid the full maintenance. Given that 70% of CMS cases come under direct pay, compared with just 33% of CSA cases, the magnitude of the problem under CMS is likely to be far larger than the numbers show.

Just because parents agree to pay, it does not mean they will fulfil their obligations. Under the CSA, between January and March 2016, one quarter of paying parents did not pay the full amount due. Of that number, two thirds paid less than half or nothing at all, which demonstrates that the priority of focusing on the payment of current maintenance is not being met. This Government’s strategy is failing.

Stringent criteria must be fulfilled before CSA debts will even be considered for collection under the Child Maintenance Service: a parent must open a CMS case, and CSA arrears payments must have been received in the last quarter before moving to the Child Maintenance Service, or the parent must explicitly ask for those arrears to be collected.

The Child Maintenance Service process is extremely difficult to understand and is often not communicated properly to parents. For example, DWP figures show that 17% of those using direct pay whose payments stopped or never even started were not aware that the CMS could even pursue payments for them. Similarly, 15% did not even know about the collect and pay service. Shockingly, a recent report from PayPlan found that more than half of single parents did not even know their child was eligible for support from their absent parent. Communication with parents about services available to them and their rights is lacking; they need to be informed.

The CMS needs not only to take action to collect historical arrears, but to make parents aware of their rights and of what the CMS can do to assist them. A variation claim—the main tool for receiving parents to ensure that their ex-partners’ proper income is taken into account—is kept secret. The cynic in me believes that that information is intentionally withheld to reduce the likelihood of any sort of action being taken.

Taking simple measures such as providing written breakdowns of arrears, how they were accrued and what options are available to people would go a long way towards improving parents’ interaction with the service and awareness of their rights.

[Ms Margaret Ritchie (South Down) (SDLP)]

I congratulate the hon. Lady on securing this very important debate. Is she aware that in Northern Ireland, 40 members of staff in the Department for Communities who deal with child maintenance are apparently to be laid off? The Department will find itself without experienced staff when it should be ensuring that money goes from absent parents to the children who urgently require it.

--- Later in debate ---

[Marion Fellows]

I thank the hon. Lady for her intervention. She is absolutely correct. Indeed, what she refers to ties in with the whole DWP agenda of closing offices. I will come on to the under-resourcing of that Department.

Even if parents have an understanding of what the CMS can do to assist them, there is a hesitance on the part of the CMS to take enforcement action. That is a major reason why arrears have been allowed to accrue historically and currently.

[Antoinette Sandbach (Eddisbury) (Con)]

Does the hon. Lady agree that in effect that deprives resident parents of their rights, because they have no other means of enforcement? Their legal rights to enforce through the courts have been taken away by the child maintenance system, and that leaves them powerless to pursue what is their right: the maintenance due to them for their children.

[Marion Fellows]

I thank the hon. Lady for her intervention. Again, I completely agree. When I went to the Backbench Business Committee to apply for this debate, I was aware even there of the consensus across the House on the lack of action and the failings of the Child Maintenance Service, and that is being reinforced by these interventions.

Variation claims place the burden of proof on the parents with care to show that their ex-partners’ incomes are misrepresented. I have constituents who have either hired private investigators or become private investigators themselves to prove to the CMS that their ex-partner is lying about their income. That is not their job; it should be the job of the CMS.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

I congratulate my hon. Friend on bringing this debate to the House. Does she agree that improvements need to be made to diminish further the ways in which former partners can manipulate and use the system as a weapon of abuse and control? That was the case with one of my constituents, who, as my hon. Friend clearly states is happening commonly, had to prove her ex-partner’s financial status.

[Marion Fellows]

I thank my hon. Friend for his intervention. Yes, that is at the heart of what I am trying to get across today. This system is not working, and the bottom line is that children are suffering because of it.

Both parents and my staff have raised concerns about the difficulty of making a complaint. The new system makes the first complaint an “inquiry” rather than a complaint. Parents and even my staff have to be persistent in escalating their issue to a complaint to have it properly investigated. I understand that the CMS cannot utilise the enforcement actions available to it without proper cause. However, I have had through my door numerous constituents who have not received full and proper payments from their ex-partners. Despite that evidence having been shown to the CMS, there is a severe lack of urgency. Parents are required to jump through hoops to get any sort of action taken and to fight their case. That demonstrates the lack of understanding of how important it is for parents with care to receive full and timely payments. It has also contributed to a culture of non-payment, which leads to ironically named “paying parents” not paying at all.

Without wishing to sound dramatic, I believe that the Child Maintenance Service should strike fear into the hearts of parents not making their proper contributions. If the CMS took more seriously its duties to pursue maintenance, parents would perhaps not be allowed to make incomplete, late or non-payments. The UK Government have sanctioned benefit claimants and clawed back supposed overpayments. I would like to see them take an equally enthusiastic approach in ensuring that “paying parents” actually pay.

In addition, parents must pay the maintenance that reflects their income. A major difference between the CSA and the CMS is that parents cannot claim for a variation on the grounds of a “notional income” if parents have assets of more than £65,000 or a lifestyle inconsistent with their stated income. That has removed a vital option whereby parents with care can challenge their ex-partners’ claims.

Furthermore, non-PAYE income such as dividends and rental income is not automatically taken into account when calculating maintenance. I have constituents who know that their ex-partner is earning large sums from rental income, for example, but that is not taken into account, allowing parents to minimise their maintenance payments at the expense of their children. We have to see the CMS take action against non-payment, and a change in the rules is required to ensure that maintenance calculations reflect incomes and that, in particular, wealthier parents with assets support their children.

A closer relationship with Her Majesty’s Revenue and Customs would be welcomed, especially regarding data sharing. A bolstering of the financial investigation unit would also be welcomed. That would ensure thorough investigations into those who are self-employed or have complex financial arrangements, so that they pay the right maintenance. It is not enough simply to add to parents’ arrears; action must be taken to collect the money.

The Child Maintenance Service is at crisis point. So long as that continues, we are allowing parents to avoid their responsibilities to their children. It is a common misconception that it is the receiving parent who is losing out if a paying parent fails to make proper payments, but it is the children who are paying the price. Proper receipts of child maintenance have been shown to lift one in five families out of poverty. If the UK Government do not take proper action to secure children their rights, they will be allowing that to happen. The risk of poverty for children in single-parent households is almost double that for children in a household with two parents. Child maintenance is therefore a vital source of income for those families. Some single parents are working themselves to exhaustion to provide for their children while non-resident parents and the Child Maintenance Service allow them to. The Minister must publish the new maintenance collection strategy with set targets for collection; a dedicated enforcement team focused on arrears collection and the collection of current maintenance; and greater use of enforcement powers.

Before the process of coming under the child maintenance system, a parent must pay a £20 charge, and when they come under collect and pay, receiving parents are taxed 4% of their payments. Responses from Ministers have revealed that that is to raise money to fund the maintenance service and to encourage parents to make family-based arrangements—arrangements between themselves—rather than having an application to the CMS as the default option.

When I tabled a question asking what percentage of those who applied to the CMS were parents with care and what percentage were non-resident parents, I was dismayed to find that those figures were not available. It makes sense to assume that the vast majority of people who make the initial application are parents with care. Many of those parents will be applying to the CMS out of necessity; they will pay the £20 application fee and be taxed at 4% of the maintenance that is collected simply for accessing their rights.

Of those who applied to the CSA, one third had already had a failed family-based arrangement. Although charges may encourage some parents to make family-based arrangements, they can also deter people from going into the child maintenance system in general, leaving them entirely without assistance or recourse. That is particularly true for people on low incomes, who require support the most. Two fifths of receiving parents on direct pay said that they found the application fee difficult to afford; so, too, did half of those on very low incomes. One quarter of receiving parents who moved from direct pay to collect and pay said that they found the 4% collection fee difficult to afford also. Astonishingly, 16% of parents with an FBA said that being unable to afford the fees was one reason why they did not apply to the CMS. Instead of supporting families, charges are taking money out of parents’ pockets, food out of children’s mouths and clothes off their backs—through no fault of their own and all for simply accessing their rights.

Pushing parents out of the maintenance system can leave them without any money at all. Some 29% of former CSA parents with care said that the application fee was a factor in not having an arrangement, and the 4% collection charge influenced 24% of those same parents. The charges are actively deterring people from seeking any assistance at all when they most need it.

One group in particular requires special attention and sensitivity: parents who have been the victims of domestic abuse or violence. Of those who applied to the CSA, half had experienced violence or abuse at the hands of an ex-partner—a substantial group, which must be considered with great care. After a year, about a fifth of receiving parents whose direct pay arrangements had broken down or had not even started said that domestic violence was a factor. In addition, 22% of receiving parents said that domestic violence made it difficult to set up a direct pay arrangement. That shows that so many such parents need maintenance services and need them to be effective. I appreciate that the Government have removed the £20 application fee for these parents; however, the same understanding and approach must be implemented in relation to the 4% collection charge. Those parents cannot be expected to interact in any shape or form with their abusive ex-partners. For most parents, the Child Maintenance Service should not be a default starting point but for such parents it absolutely should. Taking simple steps such as allowing for anonymised direct pay could protect those victims. When we consider that many parents on low incomes are deterred by charges, forcing those parents to deal with their ex-partners to save money is a danger to their security and wellbeing, and often, I should add, to the children involved as well. Some parents end up not reporting unpaid maintenance out of fear of reprised attacks or worsened relations. Those parents deserve to be treated with the utmost dignity and respect, and the Government must therefore make urgent provision for that.

Charges can be a barrier for parents and their children. While I believe that parents should seek a FBA if possible, we should not exclude those who have tried and failed. While I appreciate the Government’s need to fund the service, they should not penalise children. In a worst case scenario, the 4% charge should be added on to the 20% charge that non-resident parents incur under collect and pay—they should pay the price for non-compliance, not their children, especially if it can be proven that a FBA is not working or that the paying parent is not making the contributions that they should.

Gingerbread recommends that a means test also be implemented to ensure that those who most need the service are not deterred by the £20 application charge. Taxing children and parents, many of whom apply to the CMS out of necessity because of low incomes or domestic abuse, is not just. They have a legal right to this support, and the Government should not be skimming off the top of what can be a vital lifeline. We must therefore see an end to the 4% tax on maintenance.

I do not want to portray all paying parents as villains. Many pay support for their children both inside and outside of the maintenance service, but the CMS system also penalises them. It is an imperfect system for either parent. Implementing a 25% threshold on a change in income on paying parents can leave many lower income parents struggling, and allow higher income parents to retain more money that could be used for supporting their children. I agree that having the threshold provides payment stability and ensures that the CMS does not incur large administration costs for changes in income; however, it must be set at a level that ensures a more accurate reflection of parents’ incomes—the 25% rule must be looked at. CMS staff have also indicated to Gingerbread that there has been reluctance to move cases from direct pay to collect and pay because of the high 20% charge. Staff therefore need to utilise other enforcement measures to ensure proper payment. There must be a review of those charges to encourage staff to move cases to collect and pay if need be, and not to be deterred by placing higher charges on the payments of non-resident parents.

Both groups of parents will undoubtedly have had major issues with actually dealing with the Child Maintenance Service. That is one complaint that every parent who comes to my office has in common. The main complaint is that they are passed from pillar to post and every time they call the CMS they are given a new caseworker who has no previous knowledge of their case, requiring the calling parent to provide lengthy explanations of often complex arrangements within a complex system. Staff often provide parents with conflicting information depending on the call handler. One caseworker told a staff member from my office that due to a lack of resources, oral responses were given rather than written responses. That often leads to contradictory information being given to parents by different caseworkers. My staff have said that it is even difficult for MPs’ staff to receive a written response from the Child Maintenance Service. In one instance, it caused one of my constituents to accrue thousands of pounds worth of debts. He was not notified of that over the phone and was only informed in writing several months down the line. However, when letters are sent, and they still are, they can be misleading. The most ridiculous issue brought to my office was when a constituent received a letter outlining his maintenance for his three children. Imagine his surprise—or horror, rather—considering he had only ever fathered two children.

I have already outlined how receiving parents lack awareness as to what options are open to them to pursue maintenance, and that staff are reluctant to enforce action. However, parents who are aware have reported to Gingerbread and my office that they feel they constantly have to pursue the CMS to pursue their ex-partner. Rather than a game of cat and mouse, this is a game of dog, cat and mouse. When we look at how much is spent in total each year on the collection of child maintenance, that is not surprising. From 2013-14 to the forecasted projected spending for 2016-17, the total spent on the CSA and the CMS has decreased by 21%. That reflects what has been heard from staff—that the service is underfunded and unable to deal with its workload properly. As a result of poor customer service, satisfaction rates among both groups of parents have dropped significantly over the years.

“Dissatisfied” would perhaps be an understatement for how people feel about the Child Maintenance Service. Both groups of parents are suffering from the CMS’s administrative and operational inefficiency, which makes any dealings with it unbearable. Complaints are not taken seriously and communication on rights and actions is almost non-existent. I welcome the Government’s reviews, but the CMS is rife with problems, requiring a radical overhaul of how it operates.

With £4 billion of uncollected maintenance, and parents being allowed to renege on their current liabilities, the Child Maintenance Service is failing parents and children. Yes, implementing arrangements to deter and minimise non-compliance are welcome, so long as they do not deter parents with care. What is inescapable, however, is that the best way to secure for children their legal rights is for the Child Maintenance Service to get in there and secure those rights for them.

The Government need to take steps to strengthen enforcement teams to enforce payments and forge a closer relationship with HMRC to see parents’ actual incomes accounted for in maintenance calculations. The UK Government have taken an approach to welfare that promotes self-reliance while shrinking the welfare state. What better way to ensure self-reliance than to ensure that parents pay to support their children? If those children are not the responsibility of the state, they are the responsibility of their parents, who must pay their contributions.

The system of charges needs urgent reform. It is unacceptable for parents who turn to the CMS out of nothing other than necessity to be taxed for doing so. Children should not lose out on a single penny or pound—or shilling, in my memory—due to their parents’ non-compliance. Implementing reforms to abolish charges and collect maintenance properly would benefit parents with care by allowing them to receive maintenance in full and on time, and also provide a lifeline to lift low-income families out of poverty.

A culture of non-payment has developed. Parents are failing to make full and timely payments, because the Child Maintenance Service and the UK Government are allowing them to. As Gingerbread says, children living in single-parent families are at almost twice as much risk of poverty as children in coupled families. The UK Government should protect victims and survivors of domestic abuse, not punish them financially for their inability to engage with their abusive ex-partners. It is clear that the UK Government remain wedded to austerity, in stark contrast with the Scottish Government’s determination to create an inclusive, equal Scotland.

I call on the Minister to follow up on the Gingerbread recommendations. I will not go through them again, but they are easy to access, and there are not a lot of them. They would make a huge difference to parents with care and, more especially, to children. The CMS is insufficient, inefficient and incapable. Our children deserve better.

[Mr Peter Bone (in the Chair)]

Three Back-Bench Members are trying to catch my eye. The Front-Bench speakers cannot start the winding-up speeches later than 12.30.

--- Later in debate ---

[Marion Fellows]

Will the Minister please send her notes? In the short time she may have left, will she send the stuff that she was unable to share with us, because we all want to know? None of us here can say that we will be here after the next election, but the issue will not go away. It needs to be addressed.

Question put and agreed to.

Resolved,

That this House has considered the Child Maintenance Service.

Intergenerational Fairness

Marion Fellows Excerpts

1st reading: House of Commons
Tuesday 28th February 2017 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to follow the eloquent speech from the hon. Member for North Swindon (Justin Tomlinson). The report on intergenerational fairness by the Work and Pensions Committee, under the chairmanship of the right hon. Member for Birkenhead (Frank Field), raises some interesting points. The UK Government have built an economy that offers no long-term security for future generations. The Scottish National party’s vision of economic development is, however, built on the idea of inclusive growth based on equal opportunities, a fair and inclusive job market and a safe, secure future for the younger generation.

I know you, Madam Deputy Speaker, will find it hard to believe that I am not a millennial, but I am apparently a baby boomer. To make my contribution more authentic, I shall use personal examples of what has happened either to me or to others of my generation. According to the report, my fellow pensioners and I are in danger of breaking the intergenerational contract, in that my state pension—which I will always assert is not a benefit but a contract between me and successive Governments—and those universal pensioner benefits that I receive come at too high a cost for today’s working-age population.

I shall pause for a moment to consider the WASPI women, who have been treated abominably by this and previous Governments. Many of them have been required to wait far too long for their pension, which will come later than they were told, and this is causing them serious hardship. I was fortunate to be born when I was. I paid national insurance contributions until I was 60, and I continue to pay PAYE on my salary. I contribute to the national Exchequer. Indeed, over my lifetime, I have paid in more than I take out. I am happy for my fellow pensioners to be paid what they deserve, even if they have been unable to contribute as much as I have done. In Scotland, there are many more folk like me.

I welcome the report’s conclusion that it is not the fault of the baby boomers that the economy has become skewed in their favour. This echoes a point made by the hon. Member for North Swindon. We should not be allocating blame. Believe me, Madam Deputy Speaker, there have definitely been times in my life when the economy was not skewed in my favour. Some people in the Chamber will remember 16 September 1992, and I certainly cannot forget that day. Two years previously, I had taken out my first mortgage at a rate of 7.5% and, after numerous increases on that day I found myself laughing hysterically on my drive home from work. I had just found out that the interest rate was now 15% and that it could rise even higher. Actually, it is not exactly true to say that I was laughing hysterically. I had stopped worrying by that point, because I figured out that no one else would be able to pay their mortgage at that rate either, and that my house would be repossessed and my three children made homeless only after the building society had repossessed the homes of all the people whose names began with the letters A to E.

The economy was definitely not skewed in my favour when the then Chancellor Gordon Brown’s change to dividend taxation in 1997 sounded the death knell for defined benefit pensions. For many of my generation and for future generations, that has had an ongoing effect. After his decision, pension schemes became unable to reclaim the tax credit on dividends. Regular dividends are hugely important to overall investment returns, so having a significant chunk taken out of them at a stroke blew a huge hole in the schemes’ finances, and the vast majority of them were frozen and closed to new entrants.

Speaking at his party conference in 2009, the right hon. Member for Tatton (Mr Osborne) said:

“Gordon Brown’s disastrous tax raid on pensions heralded the start of the age of irresponsibility.”

He also said that a Conservative Government would

“reverse the effects of Gordon Brown’s pensions tax raid and get our country saving again.”

However, the right hon. Member for Tatton abolished the dividend tax credit altogether in 2010, making it impossible for him to reverse Mr Brown’s raid by making the credit reclaimable in future. Thus, we now have the rise of money purchase schemes, which means that pension values are even more subject to the variations of the stock market. Indeed, many people of my generation suffered after their defined benefit pension schemes were frozen, and the money purchase schemes that they were forced into did not even hold the value of the contributions subsequently paid in. In one case, a pensioner and his employer paid in for more than 10 years, but he received less back when he retired because the market was at its lowest point on his retirement date. All generations will feel the effects of those calculated moves as they move towards retirement age.

When addressing working-age challenges, it is important to be mindful of generational gaps. It is the protections offered by the triple lock to the state pension that protects pensioners in their old age. With inflation set to rise further, the protections must be retained while we address the stress on younger generations. While the triple lock remains in place, we need cast-iron guarantees that it will not be abandoned after 2020.

[James Cartlidge (South Suffolk) (Con)]

The hon. Lady is making a captivating speech. None of us wants to make changes to the triple lock, but there must be some recognition of what the country’s finances can afford. That recognition must be balanced against the security for pensioners.

[Marion Fellows]

There certainly is recognition, but I totally disagree with some of the ideological truths held by those on the Government Benches. We have to look after pensioners just now and pensioners in the future. Indeed, Age UK told me to refer to the Pensions Policy Institute, which calculated that a younger person with lower earnings has a 63% chance of achieving an adequate retirement income if the new state pension is increased by the triple lock, but that could fall to 36% if it is linked to earnings. That is about future generations, not just me and my generation. Other parties should be united with the SNP on future protection. Notwithstanding the report’s importance, we must be clear that addressing the challenges for working-age individuals does not mean deprioritising the safeguards for future pensioners. The way to tackle intergenerational fairness is through inclusive growth, ensuring that all generations can live in security in retirement.

The report also looks at universal pensioner benefits such as winter fuel payments, which are not index-linked and have dropped in value over the years. The Committee’s opinion is that universal benefits should not be off limits when spending priorities are set by future Parliaments. However, some commentators have said that the cost of removing them from better-off pensioners could be more than the benefits themselves.

I have granddaughters and I might have grandsons one day, too—who knows? I want things to be better for them. I would like the UK Government to look closely at what can be done to improve matters for them. As I said, the UK Government have built an economy that offers no long-term security for future generations. The SNP’s vision of economic development is to build on the idea of inclusive growth based on equal opportunities, a fair and inclusive jobs market, and a safe and secure future for the younger generation.

The Scottish Government are building a safe and secure future for future generations. They believe that a fair and inclusive labour market that provides sustainable and well-paid jobs is key to a more equal society and a more resilient economy. To achieve intergenerational fairness, we need to tackle the legacy effects of the economic recession, such as youth unemployment and in-work poverty. The Scottish Government are ambitious in their aim to reduce youth unemployment and are now implementing the Wood commission’s recommendations through a youth employment strategy. Scotland has been a strong advocate of collective action at EU level and has supported initiatives such as the European youth initiative.

I might run out of time, but I will swiftly talk about home ownership and housing costs, which the Scottish Government have done a lot to improve. The Scottish Government will build 50,000 affordable homes, which will help the younger generation, and passed the Private Housing (Tenancies) (Scotland) Act 2016 to create simpler tenancies that offer stability and security to the 700,000 tenants who call the private rented sector home. The Act improves security for tenants, contains comprehensive and robust repossession grounds and includes an opportunity for local authorities to implement rent caps.

What we need for all generations is hope for the future and robust policies that do not pit one generation against another. My children and grandchildren do not begrudge what I have earned and paid for, and I want the best for them, too, but I have grave misgivings about their life chances under this Tory Government. Theresa May has indicated that the UK could follow down a road of deregulation.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady is fine for time, but I am sure she meant to say, “The Prime Minister.”

[Marion Fellows]

Yes. I beg your pardon, Madam Deputy Speaker.

A tax haven-style economy would deny opportunities and security to millennials and the generations to come. Finally, to pursue a deregulated tax haven charter is not only a futile race to the bottom that will affect businesses and harm the economy but a clear admission that the UK Government have not learned from mistakes made during the 2008 financial crisis and, more recently, the Panama papers.

In-work Poverty

Marion Fellows Excerpts

Thursday 28th January 2016 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Swansea East (Carolyn Harris) for securing the debate. I congratulate her on her passion, her facts and her real commitment to her constituents. It is sometimes refreshing to hear how it really is on the ground in the constituencies and how real people who work hard will suffer more and more because of the Government’s actions.

I commend the contributions of the hon. Members for Merthyr Tydfil and Rhymney (Gerald Jones) and for Foyle (Mark Durkan). The hon. Member for Merthyr Tydfil and Rhymney mentioned the problem of zero-hours contracts. “Making work pay” or “Work is the best route out of poverty” are great catchphrases, but people do not have a route out of poverty if they are working on zero-hours contracts and do not know from one week to another whether they will be earning or how much they will earn.

The hon. Member for Foyle gave us, as usual, some wonderful quotes. For example, he said that it is not a lack of work ethic that prevents people from working; it is a lack of work. That is true of many places across the country. He also said that there now seems to be one law for the working poor and another for the working rich. That will lead to even more social division across the United Kingdom.

Hon. Members may well be aware that last week the independent adviser on poverty and inequality, Naomi Eisenstadt, reported to the First Minister of Scotland on tackling poverty and she recommended that we build on living wage accreditation, which has been touched on in the debate. The new national living wage that the Conservative party is touting is not actually a new living wage. It is simply a small increase based on the national minimum wage; it is not much higher. It does not involve looking at actual household expenses and relating it to them. In Scotland, the Government have done a lot of work on trying to increase people’s income—maximise their income—and trying to support people in work. One thing that they have done is in the area of procurement. They have ensured that no firm can now get a contract in Scotland that does not pay the national living wage. It is £8.25 in Scotland and should be much higher.

[Neil Coyle]

Does the hon. Lady share our concern that this Government are even trying to scrap the measures of in-work poverty, and are the Scottish Government committed to keeping them?

[Marion Fellows]

The Scottish Government would actually like to have more powers over all this area, but unfortunately the Smith commission agreement or recommendations have not given the Scottish Government that amount of power. However, within what they are allowed to do, they are maximising, as far as they can, the wages that people get and the amount of work that they are able to get.

Another recommendation and another thing that the Scottish Government have been trying to do is to look at more family-friendly policies. A lot of in-work poverty affects women even more than it affects men. One recommendation and one thing that the Scottish Government will try to move forward is more free childcare to allow women to go to work. It is all very well being able to work, but what if people cannot afford the childcare? Again, that affects family incomes, and more and more children are being affected by that.

Scotland has the second highest proportion of employees paid the living wage—about 80%. The highest proportion is in the south-east of England, where it is 81.6%, but that is a function of the fact that there are many jobs in this part of the United Kingdom and employers have to compete in paying people. If there is high unemployment, there is no competition to raise wages. That has to be addressed.

Opposition Members really do believe that work is a good route out of poverty—indeed, it is the best route out of poverty—but we cannot ensure that that is the case unless we support people, and this Government are attacking the lowest-paid people in our communities, the poorest in our communities and the ones who have to work the hardest.

The hon. Member for Swansea East referred to the Minister saying that, because of the cuts that are going to happen and the reduction in the work allowance, people will just have to work longer. That is, in this day and age, an absolutely scandalous thing to say. We totally refute it, because making people work more and more will only make them ill and less able in the long term to provide for their families.

[Neil Coyle]

I thank the hon. Lady for giving way again; she is being generous about allowing interventions. Another group of working people may not be able to take on additional hours as a result of ill health or impairment. I do not know whether she is aware of the case of Denise Haddon, which was covered in the Daily Mirror. As a direct result of this Government’s introduction of personal independence payments, thousands of disabled people who are already trying to work and are supported through Motability vehicles will have them withdrawn and may not be able to continue in work.

[Marion Fellows]

I thank the hon. Gentleman for his intervention. Fortunately, I do not always get to read the Daily Mirror; it is not top of my reading list, as people can imagine. However, I am aware, as a constituency MP, of people who are losing PIP or who are being transferred to universal credit and who are suffering real hardship. There is a constant stream of constituents into my office, and I am obviously trying to help them, but it is hard when Government Members are absolutely determined to come down hard on the working poor by cutting some of the benefits that those people rely on to support their families.

This debate has shown that, again, there are real issues that Opposition Members are very keen that the Government should change track on. Whether they will listen I doubt, but it is very important for our constituents that the Government understand the real damage that they are doing to families, especially children and women, with this move. To ask a family to lose £1,300 to £1,600 a year when they are already on minimum wage and have no hope of getting more money is nothing short of disgraceful. It is totally abhorrent, and I hope that the Government will think again about introducing the cuts that they are proposing in April this year.

[Mr Andrew Turner (in the Chair)]

I should apologise for not telling Members that the monitor was not working. However, you have about 10 minutes each.