Welfare Spending

Matt Rodda Excerpts

Tuesday 15th July 2025 Commons Chamber

[Matt Rodda (Reading Central) (Lab)]

It is a pleasure to speak in support of the policies outlined by the Minister. I wish to discuss the crisis in the system, the situation in my constituency, and some of the important initiatives under way to get people back into work.

It is worth reviewing the scale of the crisis that the current Government inherited just a year ago. After 14 years of the previous Government, 4.5 million children were living in poverty, 2.8 million people were on long-term sickness and disability benefits, and the cost of those benefits was up by £20 billion since the pandemic.

[Jim Shannon]

Will the hon. Gentleman give way?

[Matt Rodda]

I will not, I am afraid. I need to make some progress.

In addition, one in eight young people were out of work due to long-term sickness and were on sickness and disability benefits. In short, the system that the Government inherited this time last year was in crisis and, moreover, trapped people in poverty.

We are lucky to have a growing local economy in my constituency. We have a town that attracts many new businesses, and we grow our own businesses. However, that wealth is not spread evenly. Despite the impressive array of new buildings in the town centre, there is a stark contrast between the wealth in those businesses and some of the wonderful science parks on the edge of the town, and the poverty in which some of our residents live. I want to see that issue addressed. The Government are taking important steps forward in tackling that issue. I certainly saw the problems when I was a councillor in Reading. They can include families struggling to get by in an area where the cost of living is particularly high and the cost of housing is high; that is a crucial part of the issue.

Creating more good jobs is very important, and that is not just my opinion. Those jobs need to be spread across the country, and I believe the Government are making real progress on that, and on growing the economy. Indeed, I will correct a point that was made earlier: the UK economy has grown more in the first quarter of this year than any other comparable G7 economy, and that is in a difficult economic context around the world. As well as a need for economic growth, there is a need to improve access to good jobs. That is one of the points I want to cover.

[Anna Dixon (Shipley) (Lab)]

Does my hon. Friend agree that disabled people have been written off by the Conservatives for too long? They have not been given opportunities to access work and good jobs, and they have been blamed by the Conservatives, for the sake of cheap headlines. Does he also agree that the Labour Government’s proposed transformation of jobcentres, which is already under way and will involve retraining dedicated work coaches, will help people to access the good jobs that he talks about?

[Matt Rodda]

My hon. Friend is absolutely right and makes an excellent point.

[Dave Doogan]

Will the hon. Gentleman take an intervention from a Member on the Opposition Benches?

[Matt Rodda]

I will make a little more progress.

I have discussed some of the challenges in my constituency, which are very pertinent to the wider debate. Even in areas of the UK where economic growth is at quite a reasonable level, we face real challenges accessing some of that wealth. The Minister outlined the 17 initiatives aimed at encouraging people to return to work, building their confidence and growing their ability to access work. That is so important. I would like to see more of that, and I hope that the Minister will say more about that later.

Many of my constituents who are not able to benefit from the great opportunities in our town are struggling with a series of challenges in their lives. That is not through their own lack of initiative, but often because of pressures on childcare and many other issues.

[Jim Shannon]

I agree with the points that the hon. Gentleman makes about child poverty. In Northern Ireland, child poverty has grown by between 35% and 40% in total, so many people in Northern Ireland have experienced child poverty in the last five years who would not have experienced it for a long time before that. The Government have indicated that having a strategy may work. Does he feel, as I do, that we need a strategy not just for Westminster, but for the whole United Kingdom, so that we can collectively address this issue?

[Matt Rodda]

The hon. Gentleman makes a very important point. This must be a strategy for the whole United Kingdom. I am obviously reflecting on the issues in my community, where we are lucky to have relatively high economic growth, but that growth is not spread or shared evenly. I want more detail from the Minister about the 17 very exciting pilots, which have focused on offering help and support.

I appreciate that time is pressing, but let me briefly focus on some of the very important first steps that the Government have taken in this area. Some of these policies are not solely within the remit of the Department for Work and Pensions, but are cross-Government. It is important to see the context. We have had the biggest investment in employment support for many years, with £3.5 billion being invested in that important field. There has also been an increase in the minimum wage to £12.21 per hour, and the initiative to build more homes during this Parliament. That is vital. As I said, one of the biggest challenges for families in my area is the very high cost of housing, so it is very important that we build homes to buy and to rent across the country, and that families can access those. Greater supply will obviously drive down the cost.

It is also important that families are supported with childcare. That is a very important aspect of helping parents return to work, particularly when they have young children. I was delighted to hear the Best Start announcement, and there will be a Best Start project in Reading. Other initiatives have provided similar support; the free breakfast clubs, for example, are also very important. I want a quicker roll-out of those programmes.

[Adrian Ramsay (Waveney Valley) (Green)]

Will the hon. Gentleman give way?

[Matt Rodda]

I am afraid that I really am pressed for time.

We need to see the wider context of the very difficult inheritance the Government had. Hard work is under way, but it will obviously take time to shift some of these very persistent problems. The focus on helping people to return to work is so important, and I hope that the Minister will say more about these important trailblazers; they seem extremely well-designed. Thank you for my time today, Madam Deputy Speaker.

Pension Schemes Bill

Matt Rodda Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Matt Rodda (Reading Central) (Lab)]

My hon. Friend is making an excellent speech. She has convened a very powerful group—indeed, the former City Minister played an active part in its most recent meeting. Does she agree that this Bill is particularly important for our high streets and many other entrepreneurs in our local communities, to try to find new forms of investment to help them boost business?

[Sarah Edwards]

I thank my hon. Friend for that contribution. It is absolutely essential that we ensure that investment is getting to our high streets and towns, not just our cities, and that people see that change when they walk around.

I urge the Minister to take a supportive approach towards pools that are currently in transition, since they cannot necessarily reallocate assets while they are not members of the new pool that they are going to join. Their investment strategies are therefore effectively on hold until they join the new pool. I also ask him to liaise closely with colleagues in the Ministry of Housing, Communities and Local Government during the process of local government reorganisation. Whatever the new framework is for local government in Staffordshire, the pension fund will still be there. Local authority workers in my Tamworth constituency are part of the Staffordshire LGPS. It is one of eight authorities that are jointly own LGPS Central, which last year reported £29.9 billion in assets under management. The sheer scale of such funds is what underlines the link between pensions and growth.

The British growth partnership, announced in October 2024 by the Chancellor of the Exchequer and the Secretary of State for Business and Trade, sits alongside the British Business Bank, and its primary goal is to stimulate investment from UK pension funds into high-growth, innovative companies, thereby supporting the UK economy and creating new jobs. The partnership aims to raise hundreds of millions of pounds from institutional investors, including pension funds, to invest in UK venture capital. That will be supported by a cornerstone investment from the Government. Investments will be made on a long-term, fully commercial basis, independent of Government influence, leveraging the expertise and market access of the British Business Bank to identify potential companies. That will offer pension funds fruitful investment opportunities that deliver for their members as well as for the British economy.

By unlocking domestic investment, the partnership seeks to enhance the UK’s competitiveness in future industries, particularly in the technology and innovation sectors. I am fortunate that in my constituency I have an innovative technology company called PI-KEM, which has grown its business and workforce over the past 34 years. By linking pension funds to growth, it will be possible to have more such companies creating opportunities for skilled employment that sees Britain at the forefront of markets.

However, there is one area of caution: a trend towards Government finances being pooled into funds of which there is limited parliamentary oversight. While I understand and recognise the power of the larger funding pools, I must raise my concerns over how the funds will be reported on and how we will ensure that both taxpayer and pension member money is stewarded appropriately through the British growth partnership.

As the chair of the all-party parliamentary group on pensions and growth, it has been a great pleasure to meet with colleagues and hear from a variety of industry sectors about where they see the strengths and challenges in these proposals. I take this opportunity to thank the Minister for agreeing to attend a meeting of the APPG to assist us in gaining a greater understanding of the approach that he is taking in the next stages of the discussion of the Bill. I also take this opportunity to invite colleagues to come along and join us on Wednesday.

Chapter 2 in part 1 of the Bill reforms the regime governing trustee payments of surplus to employers and enables surplus to be paid out of more defined-benefit schemes. It is stated that trustee oversight and the regulatory framework will ensure the responsible and secure sharing of surplus funds.

The triennial revaluation of a scheme may determine that there is a deficit or a surplus, but despite being calculated by highly skilled actuaries, both are only a snapshot in time. For example, a scheme being evaluated this spring would have reflected the moment at which the US President’s decision to introduce tariffs hit asset prices. An alternative set of circumstances could have created an apparent surplus. I have been through this process as a trustee, and I have put on record—and must put on record again—my scepticism about whether the potential figure is the true one when it comes to the surplus. I ask the Minister to reassure my constituents, and pension scheme members in general, that he recognises that the interests of scheme members must always be the priority. It would also be welcome to understand how “surplus” is to be defined and calculated, as I have received at least four different versions by canvassing the pensions industry.

In chapter 4 of part 2, provision is made for providers of automatic enrolment and pension schemes regulated by the Financial Conduct Authority to change the way in which a pension pot is invested, to transfer a pot to a different pension scheme with the same provider, or to transfer a pot to another provider without individual member consent where it would be in the best interests of members, taken as a whole. I welcome the fact that the Bill states that a range of safeguards and procedures must be followed before an override or transfer can occur, as sadly, it is often difficult to engage members in the details of their pension. That is particularly true where a number of small pots are accrued early in a working life, which has become the norm in many communities with the rise of insecure work.

As such, I also welcome the efforts that this Government are making to create fair and secure work, because when that is coupled with a well-funded pension, working people are protected not just at work but when they sit on their retirement beach, thinking about how their working career contributed to that welcome rest. Will the Minister ensure that the safeguards are clear and given real prominence in discussion? There is a real need for such fallback powers, but there also needs to be a positive narrative about encouraging engagement.

Chapter 1 of part 2 confers powers on the Secretary of State to make regulations to evaluate and promote the provision of value for money by pension schemes. It will enable defined-contribution occupational schemes to be compared based on the value they provide, rather than just their cost. There is an argument that too high a focus on cost—management fees, for example—has had a detrimental effect on investment by pension funds. This stems from an approach that says that if the employer chooses a fund simply based on cost, the fund may look to minimise that cost, and may achieve that through the tracker funds that have come to characterise much of the market. That is potentially why little investment has occurred in the UK so far. Therefore, by pushing forward on the value for money agenda, the Minister can encourage more investment in the UK, strengthen competition in the sector, and ultimately offer better returns to members.

Chapter 3 of part 2 will require multi-employer DC pension schemes to participate in a default fund of at least £25 billion if they are to be used for automatic enrolment purposes. The aim is to encourage smaller funds to merge into larger ones that are more likely to invest in the productive finances of the UK. I suggest to the Minister that there are two issues here, the first of which relates to the market for assets. In any market, the price of a good rises if there is a shortage of that good. In this instance, the Government are being innovative and asking the pensions industry to invest in productive assets, which can include infrastructure and regeneration schemes that are vital to the places where people live. It is therefore vital that we balance the pace and scale of the development of new profitable investment opportunities with the use of any regulations to push investors in a particular direction.

To use an analogy, the Tamworth is a rare breed of pig. Unless an appropriate opportunity were available to expand supply first, any ministerial direction to buy stock of the Tamworth pig would just result in a spike in its price and poor returns for investors.

[Matt Rodda]

My hon. Friend is making a wonderful speech. May I also say that there is a wonderful pig from Berkshire as well, which has distinctive markings? However, moving away from animals, perhaps my hon. Friend wishes to say a little more about the success of the type of legislation she describes in Canada and Australia. It has delivered real value in those countries’ economies and real value for pension savers.

[Sarah Edwards]

Absolutely. There have been some really interesting changes arising from those countries’ reviews of their pensions markets, and I will be very interested to hear what the Minister has to say about what he has learned from those changes. Certainly, in the meetings that we have attended, we have learned a lot about some of the various initiatives that are driving real growth and real change in those countries.

I urge the Minister to focus on the process of expanding the pipeline of suitable projects, while building on the Chancellor’s success—and, I am sure, his own—in creating a voluntary framework for industry and Government through the Mansion House accord.

--- Later in debate ---

[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.

[Matt Rodda]

My hon. Friend is making an excellent speech. Does he agree that there is a growing consensus in the pensions industry? Indeed, some of the trade bodies have been heavily involved in promoting the idea of consolidation for some time, and perhaps what he is describing is a growing body of opinion in the pensions industry.

[Callum Anderson]

My hon. Friend is absolutely right. Stakeholders and firms that I have spoken to—in the local government pension sector, the private sector and the City of London—are unanimous that scale is very much an economic imperative. Have the Government considered what role fiscal incentives can play in helping to accelerate the consolidation of private DC funds, and whether there is scope to reduce the number of LGPS pools in the year ahead?

I particularly welcome the Bill’s proposal for a comprehensive value-for-money framework to guide DC consolidation, which my hon. Friend the Member for Tamworth (Sarah Edwards) mentioned. This correctly tackles head-on the trustee cost mindset, which too often prioritises the cheapest over the most appropriate asset allocation. That approach has frequently been tried and tested, and it delivers poorer returns for savers and missed opportunities for the wider economy, so I very much hope that DC consolidation can be implemented as soon as possible.

Finally, I want to address the issue of mandation, which, to be honest, probably warrants a debate all by itself. I appreciate the concerns that have been raised by Members from across the House, and by people in the investment industry. My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) referred to the parliamentary fund, and I note non-facetiously that the parliamentary fund, of which we are all ultimately beneficiaries, allocates barely 1% of its assets to UK companies.

Asbestos Removal: Non-domestic Buildings

Matt Rodda Excerpts

Wednesday 18th June 2025 Westminster Hall

[Emma Lewell]

I thank the hon. Member for cleverly pre-empting some of what I am going to say in my speech. He is absolutely right, but we also see people coming forward now, so it not just a historical issue. It is something we need to deal with right now, before it gets worse.

I pray to God that I do not end up suffering from it one day, but if our homes and public buildings have led to people being exposed, it is not a stretch to say that I and those around me could also have been exposed and could end up unwell. We know that from the point of feeling unwell to diagnosis can take up to and above 30 years.

Recently, the Daily Mail, as part of its ongoing campaign, revealed an asbestos ticking time bomb in our supermarkets. I am not being alarmist when I say that the investigative work undertaken by journalist Steve Boggan makes it clear that asbestos is all around us, including in this building. Of course, we know that it becomes a risk only when it is disturbed, which is why successive Governments have maintained the policy that if it is left in a reasonable condition, it should not be disturbed. But that is a risky strategy that I would say is no longer valid, because as asbestos ages, it breaks down, which means the deadly fibres are released and then inhaled. Asbestos-related disease is not only in our past and present; it will be in our future if we do not act.

[Matt Rodda (Reading Central) (Lab)]

My hon. Friend is making an excellent speech and I commend her for the honesty and sincerity with which she deals with these very difficult issues. She is right that, across the country, a large amount of building stock and commercial properties have this terrible material, and that a large number of illnesses and deaths may well still to be come. Does she agree that it is important for the Government to look at the matter, investigate it further, and see what more can be done to try to prevent the worst?

[Emma Lewell]

My hon. Friend is absolutely right. I think my right hon. Friend the Minister would also agree, because in his 2022 Work and Pensions Committee report, he asked for a central asbestos register and a deadline for the removal of asbestos from non-domestic buildings. The previous Government rejected that recommendation. Even now, people are still shocked when they discover that, despite the 1999 ban, there is no national database or register and, as a result, the Government do not have a comprehensive picture of where asbestos is. Consequently, there is no strategic plan to have it safely removed.

I thank the Minister for his engagement with me on the issue to date, and for his consideration of a census, whereby it will be mandatory for the owners of non-domestic buildings to advise if their buildings have asbestos or, if the building was built before 1999, they believe it to be there. He has promised to meet me and the Health and Safety Executive as it works towards timelines and a delivery plan, but I hope he can offer some updates today. As we continue to push for net zero and retrofitting, it makes sense that we start to remove asbestos as soon as possible.

I again make the plea that we start the census and the removal of asbestos in South Shields, and that the Minister helps me to discuss with our colleagues in the Department of Health and Social Care a specialist clinical hub for South Shields, to improve diagnosis, care and support.

These are all familiar asks to the Minister, not just from me but from long-time campaigners such as the TUC, Asbestos Information CIC, Mesothelioma UK and so many more who have seen the pain that asbestos causes and are living with it daily. I pay tribute to the work that they have done and continue to do and, in particular, to the kindness that Liz Darlison from Mesothelioma UK and Steve Boggan showed me after I spoke about my lovely grandad at Prime Minister’s questions.

My grandad, John Henry Richardson, was a sheet-metal worker. He worked in shipyards all over the north-east, and then went on to work in the Elsy Gibbons factory, making water tanks. While he was there, they introduced an annual health check scheme, and they found a shadow on his lungs. He retired at 62 through ill health.

Grandad always had a terrible cough and had struggled with his breathing for years, but because he worked in heavy industry, no one thought it was serious. In our area in the ’80s and ’90s, most men who worked in heavy industry had persistent coughs. As my mam said, everyone thought that was just part of the job. Grandad ended up with three inhalers and could not walk anywhere, even to the local shops. It would take him half an hour just to walk down the small flight of stairs in his house because he had to stop on every single one to catch his breath.

My grandad spent the first five years of his forced retirement travelling all over the country for medical tests, and at constant hospital appointments. He kept saying that the Government were hoping he would die before they had to pay out his compensation. When he was 69 years old, he was admitted to hospital with a heart attack because his heart could no longer take the pressure. After nearly a week in hospital, he suffered another heart attack. He was surrounded by my family, listening to the slow, dying breaths of this smart, kind, gentle, hard-working family man as his heart broke away. A little piece of ours broke away with him too. He died in a hospital that most likely had asbestos in it, and those caring for him have probably also gone on to suffer from this awful disease, which will continue to haunt the north-east and elsewhere for generations to come.

Mansion House Accord

Matt Rodda Excerpts

Tuesday 13th May 2025 Commons Chamber

[Torsten Bell]

The hon. Lady is right to say that we see higher engagement levels among young people today in investing more broadly. Whenever I go into a school sixth form, a surprising volume of the questions are not, unfortunately for me, on what the Government are doing and how we will bring inequality down and get growth up, but are instead, “How do we make a lot of money quite quickly?” We should support that level of engagement and active investment.

On the hon. Lady’s specific point, schemes are required to set out their policy and approach, and many pension schemes provide members with options for how they wish their funds to be invested. Nothing that has been set out today on the accord gets in the way of those approaches that are already in place.

[Matt Rodda (Reading Central) (Lab)]

I warmly welcome the Mansion House accord and the Minister’s statement. During the last Parliament, I had the pleasure of taking part in a cross-party visit with the then hon. Member for Hexham to see a solar farm that was funded by pension investment. It is a wonderful scheme close to the M4 and my constituency. Could the Minister say a little more about how this announcement will support much broader investment in the green transition, both in the south of England and across the country?

[Torsten Bell]

I have benefited from conversations with my hon. Friend about this topic, given his previous experience. He is completely right to set out that one of the large reasons—although not the only one—why we need to move to being a higher investment country is that our energy infrastructure has to be upgraded, and fast, if we are going to give this country the energy security it needs. He mentioned solar. This Government signed off in a matter of days and weeks a string of solar farms that needed to be invested in and that had been sitting on Ministers’ desks for year after year. More broadly, when the Leader of the Opposition stands up and says, “We don’t want to see this progress on net zero,” what she is really doing is putting up a sign across Britain saying, “Closed for business.”

Social Security

Matt Rodda Excerpts

Wednesday 31st January 2024 Commons Chamber

[Debbie Abrahams]

My right hon. Friend makes a very important point, which I will come on to.

We have talked about children, but disabled people are another cohort who have been punished over the last 14 years. Again, that is disgraceful—I apologise for repeating the same phrases, but I cannot think of adequate vocabulary to express my rage about what is happening in different terms. Ethnic minority communities are also disproportionately affected.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making a deeply important speech. Does she agree that it is also important to consider the effect poor-quality housing has on all the groups she mentions, in particular the combination of poverty and poor-quality housing, which leads to actions such as parents turning heating down?

[Debbie Abrahams]

That is a very good point. The Department for Work and Pensions has the largest spending across Government. The state pension accounts for the largest part of the Department’s spending, followed by universal credit, but third on the list is housing benefit and the support provided through the housing element of universal credit. Given that the Government are investing a large amount of taxpayers’ money in housing, one would think there was some way to safeguard its quality.

My hon. Friend the Member for Wirral South made important points about the escalation in the use of food banks. As I have said before, we did not have a food bank in Oldham before 2010; we now have several to meet the need. We are aware of the impact of poverty on the labour market, which I know is of interest to the Minister. We need a healthy labour market to be able to provide the growth we all want to see across the country, but, again, all the evidence suggests that will not happen for the reasons set out by my right hon. Friend the Member for Hayes and Harlington (John McDonnell).

This is becoming an increasingly unhealthy country. Our healthy life expectancy is declining and our life expectancy is declining, and that has been happening since 2017. At the time, Professor Sir Michael Marmot warned what the consequences would be, and he was right. In the report that he produced at the beginning of the year—I asked the Prime Minister a question about this just last week—he said that

“if everyone had the good health of the least deprived 10% of the population there would have been 1 million fewer deaths in England in the period 2012 to 2019. Of these, 148,000 can be linked to austerity”—

directly linked to austerity.

“In 2020, the first year of the covid pandemic, there were a further 28,000 deaths”

that could have been prevented. Those are the consequences of the poverty and inequality that we have in this country.

The Select Committee is undertaking an inquiry into the adequacy of social security support. With that in mind, I once more commend the Joseph Rowntree Foundation and the Trussell Trust, which have put together some interesting recommendations on the essentials guarantee. They suggest that what we provide should be based on need rather than on some quite subjective view of what the level of support should be. I hope the Work and Pensions Committee can support some aspect of that. Finally, I will just mention that £120 per week for a single person, instead of the £70 currently, would be a good step in the right direction. Thank you for your latitude, Madam Deputy Speaker.

Oral Answers to Questions

Matt Rodda Excerpts

Monday 4th September 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Matt Rodda (Reading East) (Lab)]

As inflation rises, being able to top up pension contributions is vital for many part-time workers, who would otherwise not be able to claim the full state pension. However, a Daily Mail investigation showed that the Government are failing to accurately record people’s top-up contributions. Pensioners are terrified that their money has simply disappeared, so when will the Government get a grip of this terrible problem? When will Ministers show that they understand the pressure on families and pensioners due to the cost of living crisis?

[Laura Trott]

With the comprehensive package of support I have talked about today, we have shown that we are taking action during the cost of living crisis to help pensioners as much as we can. We know that accuracy is the most important thing when it comes to the state pension, which is why we have taken action very quickly to correct issues where they have occurred, for example, with LEAP—the legal entitlement and administrative practices exercise. We will do the same in all such cases.

Universal Credit Deductions

Matt Rodda Excerpts

Wednesday 19th July 2023 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Dame Maria. I, too, congratulate the hon. Member for Glasgow South West (Chris Stephens) on securing today’s debate. The issue of deductions is both incredibly important and sadly often neglected. We often discuss the adequacy of social security as if it were simply a matter of looking at the value of benefits, which has fallen in real terms since 2010 as a result of below-inflation uprating and freezes. However, that is only part of the story.

As we have heard today, we cannot assume that people are even getting the amounts set out in benefit rates. About 2 million households, or about 42%, on universal credit have their benefits reduced below the standard rates every month to repay debt to the Government. Deductions and debt to the Government are at a scale we have never seen before and have become a routine aspect of social security administration under the current Government, and I am afraid to say that that major change to the benefits system has largely escaped scrutiny.

The official Opposition are not opposed in principle to deductions, but the problem is the scale. There will probably always be a need for benefit deductions in social security. For a start, it is unlikely that any system will ever completely eliminate incorrect benefit payments, and taxpayers expect overpayments to be recovered wherever possible. There is also—views differ on this—a role for repayable loans to smooth out the pressure of unpredictable costs, as other hon. Members have said.

We need to recognise that deductions cause hardship for many families that, by definition, are on very low incomes. The Trussell Trust reports that 57% of universal credit households that use food banks face deductions—we have heard accounts of that today. Its evidence shows that 50% of people on universal credit with deductions have had more than one day in the previous month either having only one meal or having gone without eating altogether. That compares with 26% of those without deductions. The Joseph Rowntree Charitable Trust has shown that decisions particularly hit families with children and people with limited capability for work, more than half of whom face deductions.

There is little doubt that, in the middle of the worst cost of living crisis for decades, benefit deductions are pushing families that are already struggling into destitution, as hon. Members have said. I hope Members from across the House agree that, as far as possible, the Government should aim to minimise deductions, but unfortunately the opposite seems to be happening. Nearly half of all universal credit households face deductions each month, so we need to recognise that the system is not working as it should.

One of the main reasons for that is the timing of universal credit payments—a problem that the Government were repeatedly warned about at the design stage of UC. Families have to wait five weeks for their first universal credit payment, and somehow the Government persuaded themselves that that would not be a problem for the great majority of families claiming because they would have a pay packet or savings to tide them over. According to the Department for Work and Pensions, about 60% of people making new claims for universal credit have had to take out an advance, and as of February this year, 732,000 households were paying off new claims advances.

In addition, more than 900,000 universal credit families are facing deductions for budgeting advances. In other words, nearly one in five of all UC households have had to take out a loan to get through the month. We were promised that universal credit would deal much better with fluctuations in income and need than the benefits it replaced. The fact that so many people need to take out budgeting alternatives shows that that is unfortunately far from the case.

Although deductions may be a necessity, there is no excuse for using them as a default mechanism to deal with problems that the Government have failed to address. Ministers should be trying to minimise deductions by addressing those problems at source, but that is the opposite of what the Government have actually been doing. Where deductions are unavoidable, the Government need to manage them much more sensitively, as we have heard pleas for today, and take into account households’ circumstances.

Qualitative research by the Trussell Trust states:

“Many people who have experienced government debt repayments were not supported to understand the situation they were in”—

that is a crucial point.

“They didn’t know why the money was owed, they didn’t know how much they needed to repay, and they didn’t know how long the repayments were going to last. Of particular concern was that they also didn’t know what—if any—options or choices were available to them.”

Given that deductions cause genuine hardship for so many families, we should expect the DWP to adopt a high standard of customer service. It should proactively contact claimants—I hope the Minister will address that point—take into account affordability and ensure claimants are fully aware of the scale of debt and the options available to them, but improving customer service can go only so far. Debt and deductions are playing a much bigger role in social security than they have in the past, largely because of the failure of universal credit to live up to the claims that were made for it. We should not welcome that situation at the best of times, and certainly not in the middle of the worst cost of living crisis in a generation.

--- Later in debate ---

[David Linden]

rose—

[Matt Rodda]

rose—

[Guy Opperman]

I will give way to the hon. Member for Glasgow East (David Linden). The hon. Member for Reading East has had his say.

Construction Workers: Pension Age

Matt Rodda Excerpts

Wednesday 12th July 2023 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Midlothian (Owen Thompson) on securing today’s debate, and I thank him for his work in this important policy area. I also thank colleagues from across the House who have taken part in the debate. I will address a number of issues, including the wellbeing of construction workers, how they can take their pension early in some cases, the importance of support for people looking for work and, indeed, the state pension age.

I turn first to the wellbeing of construction workers and those in similar industries. I think it is fair to say—I hope we all agree—that construction is clearly a very important industry. Despite improvements to health and safety, there are still significant risks to workers in the industry, and I believe that it is important for the Government to take action to protect workers and to reduce risks at work. As has been noted by the shadow Secretary of State for the future of work, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), we need a new deal for working people, and an incoming Labour Government will create the right and safe conditions for proper competition and growth.

I am pleased to support the need for safety, both as a shadow Minister and as a constituency MP. There is much more to do to improve safety at work, and further action should be taken in this important area. For example, I believe that there needs to be a review of health and safety at work to make sure that outdated legislation is fit for purpose—something that I think other Members may have implied but that was not commented on. I also believe that those who are not able to work should receive support. There needs to be welfare reform to help support more people to make the breakthrough into sustained employment and, indeed, to progress in work. Without action, we risk condemning a generation to a life on the margins.

Today, unemployment is up, with 1.3 million men and women unemployed. The number of people out of work due to sickness has risen to a record high of 2.5 million, and 760,000 young people are not in education, employment or training—all at a time when we have millions of vacancies in the labour market. That is why reform is so urgent. After 13 years of Conservative Governments, too many people are trapped on welfare, sadly going nowhere. It is an unforgivable waste of their potential. We need reform, and we need new thinking.

I want to talk about the state pension and to briefly recap on some of the changes to state pension age, because there has obviously been a lengthy discussion of aspects of the policy. From the 1940s until April 2010, the state pension age was 60 for women and 65 for men. Legislation to increase the state pension age was introduced in stages, with the Pensions Act 1995 including provisions to increase the state pension age for women aged between 60 and 65 in a series of stages between April 2010 and 2020, to bring it into line with the state pension age for men. The Pensions Act 2007 made provision to increase the SPA from 65 to 68 in stages between 2024 and 2046, and the Pensions Act 2011 brought forward the completion of the increase in the women’s SPA to 65 to November 2018.

As a result of those Acts, the current timetable is for the SPA to rise to 67 between 2026 and 2028, and to 68 between 2044 and 2046. The announcement that the Government are not going ahead with accelerating the state pension age rise is welcome. It is the right decision, but it is the clearest admission yet that a rising tide of poverty is dragging down life expectancy for so many. Life expectancy appears to be stalling and even going backwards in some of our poorest communities, as was hinted at by hon. Members who spoke earlier. I am afraid that that is a damning indictment of 13 years of failure under the current Government and, indeed, the coalition Government. I hope the Minister will acknowledge that later.

The hon. Member for Midlothian has called for the state pension to be available early for some construction workers, and I appreciate that he spoke about that today. As I said, I congratulate him on securing the debate. However, I believe that the approach he suggests could lead to a series of unintended problems for the Department for Work and Pensions in administering the state pension. It is important to remember that other help is available, and I want to see the help and support improved. I would also like to make a broader point to him: it is very important that our pension system offers security and predictability for people of working age who are saving for a pension. I am grateful to him for securing today’s debate, and I look forward to hearing the Minister’s response to the matters raised.

Draft Pensions Dashboards (Amendment) Regulations 2023

Matt Rodda Excerpts

Monday 3rd July 2023 General Committees

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I also thank the Minister for updating the Committee on this important matter. The Opposition support the dashboard. It is an important initiative that should offer a great deal of benefits to pension savers and the pensions industry.

However, I have noted the Minister’s remarks today, the explanatory note, the considerable delays that she has described to us, the cost overruns and the reliance on guidance—all of which is somewhat concerning. I hope that the Minister will address some questions.

Before I ask the Minister some direct questions, however, I will mention some of the valid points about the delays raised by key members of the pensions industry. Tom Selby, the head of retirement policy at AJ Bell, for example, described the delays as “hugely disappointing”. Others have described the whole dashboards project as one that has been

“beset by difficulties and delays from the get go.”

I hope the Minister will address those concerns and reassure me and colleagues across the House on the future progress of this important project.

I realise that the Minster has not been leading the project in its entirety herself; it has been a project supervised by several Ministers. I hope she will be able to update us on how she feels the delays will affect savers, how they will affect the wider pensions industry, which is a very important part of the financial services industry, and what measures she plans to use to ensure compliance.

The Minister talked about the reliance on guidance and the way that it will work, as opposed to the Government’s previous mandatory approach. Will she reassure us that she is confident about hitting the October 2026 deadline, because we have already seen significant slippage? This is a really important programme that means that pension savers can look at and understand their savings and plan for the future. That is very important at a time when there is a considerable body of evidence showing that people are not saving enough for their pensions, and that they may not know where their pension pots are. I hope the Minister can reassure me on those points.

In-work Poverty

Matt Rodda Excerpts

Wednesday 28th June 2023 Westminster Hall

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Sir George. I thank my hon. Friend the Member for Slough (Mr Dhesi), my Berkshire colleague, for his excellent work on this important issue. He is a doughty champion for people across our county, and is focused on his constituency. In the time allowed, I would also briefly like to thank families who are under enormous pressure at this time. They are working incredibly hard to keep up with a huge range of increases in costs, whether that is in the price of food, which has rocketed, energy costs, mortgages or rents.

I briefly want to mention some points, to which I hope the Minister will respond. I hope he will be able to direct his remarks to me, my hon. Friend the Member for Luton South (Rachel Hopkins) and my hon. Friend the Member for Slough, because we have many residents in high-cost areas who are under pressure because of the high cost of renting and buying homes in the south-east of England and other high-cost areas.

It is staggering that food prices have risen by around 20% in the past few months. Imagine the impact on most families. The cost of common staple goods, such as Weetabix, pasta, eggs and cheese, which every family rely on daily, and which are almost impossible to substitute in a weekly shop, have all gone up enormously. That is affecting people across the whole country in a most dreadful way. Families are struggling because of that, and there is no easy way to avoid it. Children are desperate for their favourite foods—they are often keen to have specific things. The cost of even own-brand items has gone up enormously.

Equally, the cost of housing has skyrocketed. I have mentioned constituents; there are those whom my hon. Friend the Member for Newport West (Ruth Jones) mentioned in a debate yesterday, who face terrible pressures in the mortgage market. I mentioned a couple of constituents who are under enormous pressure, which is common in my area. There are huge additional costs on mortgages. I spoke about a family paying £800 extra a month for a mortgage on a three-bedroom property in a suburb. Another resident, who lives in Reading town centre, is having to pay an extra £400 a month on the mortgage on her flat. She is already suffering from the cladding crisis, because of unresolved cladding problems with the property. Imagine the pressure that a person in that situation is under at this terrible time.

I hope that the Minister will broaden his response and address some of the related issues around housing and the effect on renters. Landlords are under enormous pressure to put up rents because of the increase in mortgages. That is a hugely important related issue. My hon. Friend the Member for Barnsley East (Stephanie Peacock) made an excellent point about the number of families living on very modest incomes. Rents are increasing dramatically. In the area that I represent, there has been an increase in the proportion of people who rent and a decrease in the number of people who can afford to buy because of the high cost of housing. That puts pressure on many young families, many living in terraced housing or flats in our town centre.

In addition—I hope that the Minister will respond to this—energy prices are still extremely high. We still have not seen a proper windfall tax. There is still enormous pressure on households because of that problem, which will only get worse in winter, in the colder months. It might not seem immediate to some people, but it will be a huge challenge for many residents facing enormous costs. Many people in this country still live in poorly insulated properties. In the area that I represent, we have a very large number of terraced houses, as do many British cities and towns of a similar size, such as Derby and Portsmouth; so do London boroughs, and other areas in the north of England. Much of that housing stock is poorly insulated. That is a hugely important related problem, and I hope that the Minister can update us on the Government’s action. So far, they have been woeful on that point. A series of problems has not been addressed by either the coalition Government or Conservative Governments.