Oral Answers to Questions

Matt Rodda Excerpts

Monday 8th March 2021 Commons Chamber

[Dr Coffey]

No, I do not accept that, and I want to be clear. It has been explained to the House in multiple ways over the past year why that decision, which the Chancellor announced last year, was taken at the time. Let us be straight about this: universal credit is working and will continue to work. It worries me how many Members of Parliament criticise universal credit when it is clearly working. It has done what it was designed to do. For those people who have had their hours reduced, universal credit has kicked in and the payments have gone up. Frankly, unlike in the last recession, in 2008, when the Labour party did nothing to help with some of the financial instability that people were going through, I am very proud of what we have undertaken by investing over £7 billion extra in the welfare system in this last year.

[Matt Rodda (Reading East) (Lab)]

Pensioners who have worked hard their whole lives have seen their life savings disappear after becoming the victims of some truly dreadful scams, which have happened both online and on the telephone. The Government say they want to protect the interests of savers. However, there is mounting evidence that they are failing to act sufficiently to curb some appalling abuses, and this was not mentioned in the Budget. Will the Secretary of State explain to the House just how these dreadful scams have happened, and will she commit to taking further action? She is taking action against scams on the phone; will she now also commit to taking action against scams online?

[Dr Coffey]

We have just passed the Pension Schemes Act 2021, and aspects of scams were considered in that legislative process, so the suggestion that somehow we are not doing things to tackle scams is far from the case. Indeed, the hon. Gentleman will be aware from the Budget of the ongoing support that we continue for pensioners in honouring our triple lock.

Pensions

Matt Rodda Excerpts

Monday 1st March 2021 Commons Chamber

[Matt Rodda (Reading East) (Lab)]

I thank the Minister for his remarks. Auto-enrolment has proven to be one of the most positive developments for savers and in securing people’s long-term prosperity in recent memory. It was a Labour Government in 2008 who first introduced legislation to require auto-enrolment, and millions of people have benefited since. It is heartening that the current Government appreciate the value of the scheme, and are committed to continuing and, indeed, expanding it.

The current economic climate is a tough one. The coronavirus pandemic has left many employers and employees facing unexpectedly difficult decisions. In this light, it is right that the Government focus on ensuring the long-term sustainability of schemes and helping employers weather the immediate crisis. It is for this reason that Labour will not be voting against the statutory instrument tonight, even though it only represents a relatively small real-terms increase in the number of employees set to be automatically enrolled by their employers into pension schemes and a small real-terms increase in the earnings that employers must pay contributions on. I would like to take this opportunity to urge the Government not to abandon the ambitious spirit in which the original legislation was introduced in 2008, and to make sure that, once the economy has regained its strength, the Government do all they can to ensure workers are saving more and are saving earlier for their retirement.

Many experts have made the case for lowering the qualifying earnings threshold and, indeed, the minimum age. The People’s Pension, for example, has endorsed proposals to do so. It argues that millions of new savers would be created, many of whom would be women and people from ethnic minority backgrounds. Similarly, the Association of British Insurers found that employees would be able to save an additional £2.6 billion a year if the earnings trigger was scrapped. At a glance through Hansard, we can see that a large number of colleagues, many of whom have expertise in this area, from all major parties and in both Houses have also called for these changes. In fact, I remind the Government that they made a commitment themselves in 2017, in the review of auto-enrolment, among other things to remove the lower earnings limit and to reduce the age threshold for automatic enrolment to 18 by the mid-2020s. It would be disappointing if this goal could not be met on time or soon after, and I urge the Government to clarify their position on this issue.

It is also important that the Government are clear about the implications of freezing the earnings trigger and only modestly increasing the upper limit for the qualifying earnings band. Labour has pushed for this in previous years, pointing out last year, for example, that 37% of female workers and 28% of black and minority ethnic workers are still not eligible for the scheme. This is an area of pensions policy that I urge the Minister to look at most closely.

I would like to use this opportunity to provide some context for the decision that we are being asked to make tonight. We will see how the roll-out of the pensions dashboard in the not-too-distant future may benefit savers and we must do all we can to ensure that this service lives up to its potential. Similarly, it is right to work hard to continue the fight against pension scams, to increase the take-up of pension credit and to give savers more transparency around their investments. I would also like to take this opportunity to remind the Minister of a commitment that he made to my predecessor, my hon. Friend the Member for Birmingham, Yardley (Jess Phillips), about meeting the Allied Steel and Wire pensioners group, which is very concerned about its pension scheme.

I should also say that Labour supports the pensions triple lock as a way of ensuring a fairer state pension, and that we will be working hard in the coming months and years to continue to push the Government to take bold steps to use the economic might of pension funds to support the fight against climate change. I have raised these points to emphasise that there is much to do in the pensions and savings sector, and because I believe that it is important to consider the whole picture when taking big decisions such as the one being made today.

Labour wants to make this the best country in which to grow old. If we are to achieve that goal, we must be ambitious and build on the success of auto-enrolment to make it as good as it possibly can be. We should address the other issues that I identified earlier as part of that work.

Pensions

Matt Rodda Excerpts

Tuesday 9th February 2021 Commons Chamber

[Matt Rodda (Reading East) (Lab)]

I thank the Minister for his generous introductory comments and for setting out the Government’s proposed approach. I thank DWP staff and, indeed, all those supporting pensioners for their work at this difficult time.

Britain should be the best country in the world in which to grow old. One of the first responsibilities of Government is to ensure that there is a proper state pension, as a central part of the welfare state, and that people are able to look forward to a decent income in retirement. That is why we support the triple lock.

This statutory instrument addresses the needs of a particular group of state pensioners—those who paid into the state earnings-related pension scheme—and offers them an increase in line with inflation. Labour supports the measure and will not oppose the Government’s proposals; nevertheless, I wish to put those proposals into a wider context.

First, we should bear in mind the fact that huge numbers of pensioners in the UK rely on the state pension for their income. Figures from the Office for National Statistics show that in recent years we have seen the highest proportion of pensioners who are reliant solely on the state pension since the 1990s. In that light, it is clear that decisions made in this House about the state pension, including SERPS, have wide-ranging repercussions for people’s quality of life in retirement and should not be taken lightly.

As Labour has pointed out before, today’s retirement landscape is a challenging one, and we will have to work hard to find new ways to meet those challenges, including by ensuring that there is real regulation of profit-making consolidation vehicles for defined benefit pension schemes, which are often referred to as pension superfunds. They are currently subject only to an interim regulatory regime announced by the Pensions Regulator this summer.

We also need to create the conditions to support defined benefit schemes more widely. Part of that work involves listening carefully to experts and organisations on the funding requirements of both open and closed defined benefit schemes. We received assurances from the Government during the final stages of the Pension Schemes Bill in the other place, and an important dialogue will take place over the coming months to ensure that the emerging regulatory framework works for all schemes.

Furthermore, although we welcome the approval of the new pensions dashboard as a great opportunity for people to see all the information about their pension in one convenient location, it is vital that we protect consumers from the risk of exploitation. As the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), told this House when the dashboard was being discussed in relation to the Pension Schemes Bill:

“The last thing we want is for people to make bad choices, prompted, for example, by market disruptions or unscrupulous operators, until they are more accustomed to that level of access.”—[Official Report, 16 November 2020; Vol. 684, c. 106.]

I reiterate his call to safeguard the public dashboard by giving it a head start and keeping commercial transactions off the dashboard until protections can be guaranteed.

Labour also believes that there must be accessible and transparent fee information on the dashboard. We have seen how complexity can make it difficult for those saving for their pensions to understand transaction costs. We should now take the opportunity to fix this problem. In the same light, the Government must do more to end pension scams. Although progress has been made, we must none the less stamp out this behaviour, as the consequences of people falling victim to scammers can be utterly devastating and can turn their lives upside down.

I welcome the growing interest in the assessment and disclosure of climate risk in pension investments. This is a very important issue and we must not rest on our laurels. Pension funds represent trillions of pounds in value and, as such, have huge potential for good if properly directed.

It is important to see today’s announcement in terms of what it means here and now as many pensioners face a hard and difficult winter due both to the coronavirus and the current very cold weather. Over 1 million pensioners who are entitled to pension credit are not claiming it, with very serious consequences, including tens of millions of pounds-worth of linked support for home heating being denied to those who have not claimed. The story is similar for pensioners who are entitled to a free TV licence. I challenge the Government to do much more to make people aware of pension credit entitlements and to encourage far greater take-up.

It is also important to raise the issue of those with concerns about their occupational pensions. For example, in the immediate term, what assessment have the Government made about the viability of Arcadia’s pension scheme and the impact that the sale of the high street businesses will have on staff and pensioners?

While this motion might appear on the surface to be a technical measure that affects only a proportion of pensioners, it is important that we understand the context in which we pass it. I hope that the points I have made emphasise how important it is that in the longer term we consider the pension system as a whole when making any decision that has the potential to affect so many people. As Members of this House, we make decisions that shape not just the lives of millions of current pensioners but the lives of millions of hard-working people who are yet to retire. If we are to make Britain the best place to grow old in, then we must work hard to address the issues that we have discussed today.

Oral Answers to Questions

Matt Rodda Excerpts

Monday 25th January 2021 Commons Chamber

[Dr Coffey]

I completely agree with my hon. Friend. The terms of the condition of the grants to councils were clear that they needed to reach out to support children of all ages who are disadvantaged. Councils have the ties and the knowledge that make them well placed to identify that. I commend Shropshire County Council, which has received £850,000 over the scheme, for drawing on this information to target its support to help children of all ages, including pre-schoolers and care leavers who are exactly the groups that I hoped would also benefit from the support.

[Matt Rodda (Reading East) (Lab)]

Too many pensioners face a harsh and challenging winter. Deep concerns about the high rates of coronavirus have been made worse by the effects of the severe weather and isolation from the usual networks of support. Will the Secretary of State reassure the House that the Government will take urgent action both to raise take-up of pension credit for those most in need and to take other steps to protect pensioners? The Government have dithered for too long, and they need to set out a comprehensive package of support for our vulnerable pensioners.

[Dr Coffey]

I welcome the hon. Gentleman to his place and congratulate him on his new role. On supporting pensioners, I genuinely believe that the Government have gone a very long way with the triple lock. We continue to see that boost with the basic state pension. He may not be aware of the extensive advertising in GP surgeries, post offices and similar that took place in 2020 to encourage people to take up the pension credit. We will continue to consider how that can be improved.

Statutory Sick Pay and Protection for Workers

Matt Rodda Excerpts

Wednesday 18th March 2020 Commons Chamber

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to speak in this important debate. Let me start by thanking my hon. Friend the Member for Leeds North West (Alex Sobel) and many other speakers, including the hon. Member for North East Bedfordshire (Richard Fuller), who spoke very eloquently, and my hon. Friend the Member for Ilford North (Wes Streeting),, who made some thoughtful and far-sighted points.

I want to address not just the policy responses that we need, but the underlying scale of the problem. We have heard today that as many as 5.5 million people in this country are self-employed. I want to describe my experience of that as a constituency MP, but also to set it in the context of the wider crisis that we face.

We face an unprecedented situation, and I fully acknowledge the action that the Government have taken. Measures to reduce the spread of the outbreak are vital, and I am pleased that Ministers have announced robust measures this week, including the measures to support businesses that they announced yesterday. However, I want that action to go much further and to be much more resolute, because of the scale and need of people who work for themselves, and those who are on low incomes or in the gig economy.

I support the range of measures outlined earlier by my hon. Friend the Member for Wirral West (Margaret Greenwood). Let me draw the Minister’s attention in particular to the approach taken in Scandinavia, and also by a number of other European Governments: we have heard mention of the Irish Government today. The UK Government now need rapidly to develop a comprehensive approach and provide a safety net for all workers, and, indeed, all renters, who are uniquely vulnerable in the current crisis. Let me explain what that means to local people in Reading and Woodley, the area that I represent. Self-employed people are the absolute bedrock of our local economy, carrying out a range of activities in the knowledge economy, public services and other forms of service, retail and distribution.

Let me begin by highlighting the role and the importance to our local economy of IT subcontractors. Some of the largest IT businesses in the world are based in our part of the Thames valley. Those large businesses subcontract to many, many smaller businesses, most of them one-woman or one-man bands who are very dependent on a relatively unstable economic situation. As a growing and rapidly expanding area close to London and the midlands, we have a large amount of construction taking place. We have many small builders and other tradespeople who are dependent on jobs and work which is relatively short-term, and who may see only a few weeks ahead economically. We also have a vibrant transport sector, with a large number of people employed in the aviation industry at Heathrow, many taxi drivers, and many people who work on the railways. All are part of a transport sector that looks set to be severely constrained because of the crisis.

Reading is the main shopping town for the Thames valley and the related parts of the south midlands, and we also have a vibrant gig economy, with a number of distribution centres and warehouses nearby. Many people in this group are also renters, so we have a double hit in our local economy. We have many people who are vulnerable because they have only one month’s guaranteed income ahead, whether they are professional people, people with trades, or people who have other skills, and in the same group of people we also have many young families living in rented accommodation, which is very high cost in an area that is similar in cost to outer London or the centre of major cities around Britain.

I draw the Minister’s attention to this local example, which reflects the situation in many towns and cities throughout the country. There is this collision and reinforcement: people have insecure incomes, are vulnerable and have not yet had their situation addressed by the Government’s measures—however helpful those measures are for larger businesses—and they are also renters in a high-cost local rental economy, where rental income can be as much as £1,000 a month for basic accommodation.

We need to take action and to take it urgently. Will the Minister reconsider the Government’s approach, focus on the needs of these groups of workers and renters, and think about the world from their perspective? Their income is not guaranteed and is vulnerable, and they are the bedrock of the local economy in so many parts of our country and, indeed, in the country as a whole. They deserve our support and respect. We need to come up with a realistic and workable plan, using whatever policy measures are necessary to protect them and their family income and to ensure their safety and security.