Pension Schemes Bill [Lords]

Neil Gray Excerpts

2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons
Wednesday 7th October 2020 Commons Chamber

[Dr Coffey]

The Bill will require the pension schemes to provide all the data that they have available, so that it can be brought together to provide that information. I am conscious that this is further data, which may take a little time to come together, but this has been worked on for some time and we have made careful progress with the industry to get to this point. If my hon. Friend has any more detailed questions, my excellent Pensions Minister, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), will be able to pursue this either in later interventions or in Committee.

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

We welcome this part of the Bill in particular. We support informing savers about their savings landscape, but one concern we have is that the amendment in the Lords that allows for the public dashboard to be bedded in for a year before commercial dashboards come in could be removed in Committee. Can the Secretary of State confirm now that she has no intention of watering that down? If that were to happen, it would be met with the vigorous opposition from the Opposition.

[Dr Coffey]

Our aim is to empower consumers through dashboards and the Government believe that they are best served through multiple dashboards. Of course we have listened carefully to the concerns expressed in the other House as well as in this place. We are still on Second Reading, and I think it is fair to say that we will be considering the contributions carefully and that any matters that may need to be looked into further can be considered in Committee.

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[Dr Coffey]

I know that the right hon. Gentleman and his Select Committee are looking at this matter carefully, and I appreciate that he has been in discussions with my hon. Friend the Under-Secretary of State for Work and Pensions, who I believe wrote to the right hon. Gentleman yesterday. It is certainly an issue on which we want to continue to work to identify circumstances that could raise red flags, and legislate to enable trustees to act when they appear. The powers in the clause are broad enough to cover some of the scenarios about which the right hon. Gentleman is concerned.

[Neil Gray]

I welcome the intervention from the Chair of the Select Committee. During the passage of the Financial Guidance and Claims Act 2018, the SNP tabled a number of relevant amendments that may well have covered some of these problems, which are a hangover from pension freedoms. Would the Secretary of State and the Minister be willing to look at some of those amendments again in Committee to make sure that some of those issues, particularly in respect of advice and guidance, are tied up?

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

It is a pleasure to follow the right hon. Member for South Northamptonshire (Andrea Leadsom), who made some very interesting points that we would want to listen to, and that highlight why, on such an important issue, it is so important for Government to listen to Members across this House and work constructively on this very important piece of legislation.

The SNP broadly supports the Bill. There are key elements that we wish to see advanced, but also areas we hope to work on with other parties to help to improve. I am grateful to the Pensions Minister for his time over the past number of weeks, and in the previous Parliament, in keeping me up to date with the Bill. Similarly, I am pleased that the two main Opposition parties have been able to work together so constructively on these matters. I am grateful to the hon. Member for Birmingham, Erdington (Jack Dromey), in particular, for his approach, and look forward to maintaining that collaboration into Committee stage. I also echo the message to the pensions industry from the shadow Secretary of State. We engage regularly with it, as I am sure he does, on UK pension policy areas—and also, obviously, on looking towards pensions post Scottish independence. We are happy to see the Bill as it has arrived from the Lords advance into Committee, and we will not oppose its Second Reading, but I wish to lay down a few markers for the UK Government.

First, I want to set out our view on the key measures in the Bill. Parts 1 and 2 provide for the framework to operate and regulate collective defined-contribution schemes. There is great support for this from the Royal Mail and the Communication Workers Union. Like the shadow Secretary of State, I would be keen to have an assurance that while CDC schemes are worthwhile projects worth pursuing, they should not be a replacement for good DB schemes. We also support part 3, which provides greater powers for the Pensions Regulator that we hope would be a deterrent to any future BHS-type moment happening again.

We also support part 4, as it provides the legislative framework for the pensions dashboard—the digital platform that will enable people to see all their pension savings in one place so that they can make better decisions and informed decisions about their retirement plans. Part 5 pulls together a number of other provisions that we support—specifically clauses 123 and 124—and other areas such as climate change reporting. It is incumbent on all of us to do what we can to address the climate emergency, so we welcome these measures.

We support these measures because we see them as helping to take important steps to encourage lifetime savings and provide greater clarity and protection for people dealing with their pensions. However, we do not want the UK Government to attempt to row back on improvements to the Bill that were made in the Lords, and particularly on providing the public dashboard, with a bedding-in period, before commercial dashboards arrive. Baroness Drake’s amendment, at least, should stand. I hope the Minister will confirm, as the Secretary of State was unable to do so, that he has no intention of removing it or watering it down in Committee. We do not oppose commercial dashboards. We understand that they will be coming and they have an important part to play. We just want the UK Government to invest properly in marketing and embedding the public dashboard as the first port of call for people to seek impartial information on their pensions. If commercial dashboards are allowed to take off at the same time as the MaPS dashboard, I fully expect the usage of the MaPS dashboard to be lower than it should be. It will be a huge missed opportunity to engage and inform people about their pensions in an impartial way. If the Government are serious about empowering and informing people about their pensions—I hope that they are—they will accept the Bill as it stands in this area.

We feel that compromise can be found to resolve any concern the Government may have about the wording of amendment 71, which was tabled by Baroness Bowles, to ensure that open schemes can be treated differently. I am willing to work with the Minister on clause 123, but urge him not to remove it altogether. That would have major implications for open schemes—a point on which my hon. Friend the Member for Gordon (Richard Thomson) will elaborate in more detail later.

It is true that the Government enjoy a majority in this House, but they should not abuse that. I think that the Minister will today find unity on the Opposition Benches for protecting the amendments made in the Lords, some of which were supported by Conservative peers and former Pensions Ministers. I hope that he will be willing to work constructively, as he has been doing up to now, and as he went out of his way to do when we were first looking at the Bill in the previous Parliament, when the Government did not have the support of such a majority behind them. Matters such as those contained in the Bill should see consensual working. I hope that he will agree and listen to what he is hearing, not just from Opposition Members but from stakeholders across the industry, about protecting these amendments.

What the Bill sadly does not do is address a series of pensions injustices. The 1950s-born women are still waiting for justice, but we may have someone who is able to help. He said this:

“I have made several representations already on behalf of my own constituents who fall into this category. And I must say the answer I’ve got back from the Treasury is not yet satisfactory. But I will undertake—if I’m lucky enough to succeed in this campaign—to return to this issue with fresh vigour and new eyes and see what I can do to sort it out… But you know obviously the Treasury raise some stupefying sum that they say will be necessary to deal with it. I’m not convinced that’s necessarily true. Let’s see what we can do.”

The Member of Parliament who made that commitment last year is now the Prime Minister. Surely, the Pensions Minister will be keen to work with his leader to lobby the Treasury to honour that promise. The least it could do would be to organise an impact assessment to better understand the detriment suffered by 1950s-born women and work on recompense from there.

Another area of injustice I would expect to be discussed in Committee is plumbers’ pensions schemes. My hon. Friends the Members for Perth and North Perthshire (Pete Wishart), for Kilmarnock and Loudoun (Alan Brown) and for Gordon have been working hard on this, to their credit, and I look forward to further discussions in Committee.

Another long-standing area of campaigning for the SNP has been on the creation of an independent pensions commission. I believe that there is sympathy for such an idea in the official Opposition, and the Minister may have considered this matter in the previous Parliament. We want to see a standing pensions commission that would ensure that injustices such as those suffered by the WASPI women are not allowed to happen again. We also feel that it would take the political sting out of difficult issues needing wrestled with. We accept that such a broad standing commission may be outwith the scope of the Bill—unless the Government were willing to propose it, of course—but we hope that it could be considered in the longer term.

We also want to see much greater speed applied to the roll-out of auto-enrolment to people on lower incomes and younger people. Although we wholeheartedly support automatic enrolment, far too many have been left behind and still cannot benefit from this important measure. Now, more than ever, we need the UK Government to be more ambitious. We have called for them to lower the age threshold for auto-enrolment to 18 so that young people can benefit from saving early for retirement, remove the lower limit for the qualifying earnings band so that contributions are payable from the first £1 earned and expand contribution rates beyond the 8% statutory minimum. This would recognise the importance of starting a savings habit early, given the powerful impact that early career contributions can have on the size of retirement savings. Saving from the first £1 earned would be simpler and help low-income workers to save more.

The Association of British Insurers notes that by reducing the lower age limit to 18 and removing the lower earnings limit, a further £2.5 billion could be saved. The UK Government’s failure to act on this at speed is disproportionately affecting women. Again, the ABI reports that the average pension pot for a woman at 65 is one fifth of a 65 year-old man’s and that women receive £29,000 less state pension than men over 20 years. That deficit is set to continue, all else being equal, closing by only 3% by 2060. Extending the coverage of auto-enrolment further by reducing the earnings threshold to the national insurance primary threshold would bring 480,000 people—mostly women—into pension saving, so further delays would be unacceptable. The UK Government should set a clear timetable for their plans on the expansion of auto-enrolment.

For people to get the most out of their savings, we need strengthened consumer protections and measures to boost confidence in the pension system. Pension freedom reforms were introduced in April 2015 by the Government to allow people to draw on their pension pots early, potentially resulting in future financial hardship for them. The introduction of pension freedoms muddied the waters further for individuals trying to understand their pensions. We voiced our opposition to the reforms at the time, highlighting that they could result in people transferring out of their pension to their detriment, and we have been shown to be correct.

It is clear that the UK Government have not put in place adequate safeguards for older people who are opting to free up funds to ensure that they will not end up in a desperate financial situation later. A pension pot should be looked at as deferred income, not a cash machine, and those with less money are more vulnerable to economic shocks in their personal finances, as well as potentially being more vulnerable to scammers who give misleading or false advice for a fee. Many people have since been given unsuitable financial advice to transfer their valuable DB pension pots into less suitable and less secure DC schemes, leading to growing compensation payments from the Financial Ombudsman Service and the Financial Services Compensation Scheme. The issue may represent a large mis-selling scandal, the full scale of which may only come to light in time, but as we fast approach an economic impact from coronavirus, I suspect that time might not be too far away.

Age UK notes that the introduction of the freedom and choice reforms in 2015 led to new opportunities for scammers, perhaps most notably people transferring out of their DB scheme, but also by people charging very high fees and selling unregulated investment opportunities to DC savers. We support measures in the Bill that will provide greater protection and reduce scams, but we hope to be able to tie up some more loose ends from pension freedoms when the Bill moves into Committee.

Given the challenges faced in so many areas, it is also disappointing that the Bill does not address pension taxation or having a more equitable spread of the benefits of the UK Government’s investment in pensions tax relief. It also does not address the issues regarding superfunds, and we hope to be able to return to those areas later as well.

In conclusion, we support this Bill’s Second Reading. As I have said, we will work with all parties to protect the Opposition amendments secured in the Lords, and we hope to be able to advance our own amendments, working with others, to make a decent Bill with necessary measures even better. Let us work together to make the most of this opportunity for current and future savers.

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[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to follow the hon. Member for Gordon (Richard Thomson), who made a lot of important points. It is also a pleasure and a novelty for me to speak without a time limit, but I will try not to test the House’s patience too much.

This is a very important Bill that delivers on our manifesto commitments and has consumer welfare at its heart, and I am glad that it largely enjoys cross-party support. I welcome the speeches from around the Chamber. I particularly welcome the fact that colleagues from the 2019 intake are speaking in the debate, and I see that there are another three of them yet to speak. Either we are not as young as we look, or we have taken the advice to heart that it is never too early to start planning for retirement.

As a member of the all-party parliamentary group on pension scams and someone who has a general interest in these matters, I am pleased to speak in favour of the important work that the Government have been undertaking. This important legislation will benefit members of the public and help people to plan for their future. It will have an important impact on people saving into pensions for their retirement and ensure that reckless bosses cannot gamble with people’s savings. It will transform the way that people get information about their retirement savings, and it will empower the Pensions Regulator by making it tougher and making its guidance clearer.

We have come a long way on pensions in the last decade, and particularly on automatic enrolment, which most colleagues welcome, but in some ways, we are still in the 20th century. Some pension schemes still provide once-a-year statements. That might well reflect the view that pensions are a long-term investment, and we do not want people to panic as their value goes up and down week by week, but when those statements are frequently being sent to old addresses, it is a problem. People have an average of 11 jobs throughout their career, and with automatic enrolment, they are now likely to have nearly as many pension pots. We really need to bring this into the digital age. At present, these information failures make it harder for individuals to get a holistic view of the pensions they are building up, even if they have the help of a financial adviser. Control over our pension provision, which is often our largest financial asset, is hugely important, and the pension dashboards will be a huge step forward for consumers.

Just to pick up on something my hon. Friend the Member for West Worcestershire (Harriett Baldwin) said, making charges more visible to everybody would be a huge benefit, because sunlight is often the best disinfectant. It will drive out schemes that are not competitive and push people into better-value schemes. Also, the recent reforms we have made mean that individuals can choose to bear more responsibility for risk and decision making, so it is right that they should have access to the information they need to make those informed choices. That will let them plan better for retirement and enable them to have good financial wellbeing as they get older.

I have heard the concerns from the hon. Member for Airdrie and Shotts (Neil Gray) and others about the dashboards, but I would say to him that I think regulation and legislation in all fields must go where the consumer is. A paragraph from the Which? report of February 2018 on dashboards states:

“It is clear that even if the government was to decide that there should only be a single government-run dashboard, other private sector dashboards would continue to develop outside of the regulated market. These may rely on screen-scraping or other potentially unsecure forms of transmitting customer data. They would even be able to screen-scrape data from the official government-run dashboard. If there were any problems with private sector dashboards then the consumer would have no easy method of obtaining redress, as they would remain outside regulation and outside the remit of the Financial Ombudsman Service”.

I cannot really put it better than that. Private sector dashboards are inevitable. Indeed, there are commercial products out there are already, looking at consolidation and so on. Drawing on my own experience in FinTech, these private sector solutions are likely to be more innovative and more responsive to consumer needs than the Government-driven solution.

[Neil Gray]

I take what the hon. Gentleman says, and I do not disagree. I understand that commercial dashboards are coming; that is not where the dispute is. What I and others across the House are looking for is for the Government to invest in and have a period to allow the Money and Pensions Service dashboard to bed in as the default position for consumers to go to, where they know they can get trusted impartial information about their pensions, and then to allow the commercial dashboards to go from there. That is the very reasonable position that the Lords took, and I think that we should agree to it in Committee. I ask the hon. Member to reflect on that.

[Aaron Bell]

I thank the hon. Gentleman for that intervention, and I ask the Minister to comment on that in his summing up, but I reiterate that we have to go where the consumer is. I understand the point he is making. We need clear supervision and a robust regulatory framework, as provided for in the Bill, and we need a non-commercial service, but we have to be realistic: people are going to go to these services first, and they are already springing up. We cannot be constantly trying to catch up. In this regard, I note the earlier intervention from my hon. Friend the Member for North West Cambridgeshire (Mr Vara), who is not in his place at the moment. These dashboards will encourage consolidation, and that may or may not be a good thing in specific cases, so we must continue to ensure that consumers have access to appropriate advice and that any administration fees are reasonable when consolidation takes place.

Turning to scams, in recent years there has been a significant increase in the number of members of the public being scammed out of their pensions. The FCA and the Pensions Regulator report that in 2018, 180 people reported to Action Fraud that they had been victims, losing on average £82,000 each. A total of nearly £31 million has been reportedly lost to pension scammers since 2017, according to complaints filed with Action Fraud. I therefore welcome the measures in clause 125.

To personalise the scams issue for a moment, a couple of my Newcastle-under-Lyme constituents contacted me about their experience in this area earlier this year. They have had to make very unwelcome changes to their retirement plans as a result. They, together with thousands of others, were convinced by commission-driven sales people to move their money into a scheme called Dolphin Trust, which is now called the German Property Group. The Minister might be aware of the scheme. It was set up to buy derelict listed German buildings in prime locations and redevelop them. In many cases, pension holders who invested were told, by unregulated salesmen who were paid up to 20% commission, that they would almost double their money if they left their savings in the scheme for five years. The scheme was often recommended by independent financial advisers, who advised their clients to invest via a self-invested personal pension.

As the House can imagine, the results were not as advertised. I thank the Treasury for its help with this case so far, but I would welcome further engagement with the Minister when that is possible. My understanding is that this specific case is currently with the Financial Services Compensation Scheme. That is the real human impact of retirement scams on people in my constituency, and I am sure in the constituencies of Members all around the House. I understand that the Government have already taken measures against so-called introducers, but I welcome the measures in clause 125 to strengthen consumer protection. As the Secretary of State put it in her opening speech, we need to have the option of

“prison for pension pot pinchers”.

I want briefly to touch on another couple of the elements of the Bill. I know that postmen and women, in particular, in Newcastle-under-Lyme will welcome the provisions enabling the introduction of collective defined contribution schemes. These have cross-party and industry support, and unions including the Communication Workers Union, as well as Master Trust and other pension providers, have expressed a desire to see more people benefiting from the advantages and risk-sharing that collective defined contribution schemes can bring. I think that that is broadly welcomed across the House. I will also mention the good work being done so that we use our pensions for the good of the planet, and the requirement that the Bill puts on trustees and managers, with a view to securing effective governance over the effects of climate change, and publishing information. That is not being prescriptive; it is about informing and empowering schemes and individuals to make decisions.

In conclusion, I pay tribute to the Minister for his passion for this subject and his willingness to engage with us. I also echo the remarks of the hon. Member for Birmingham, Selly Oak (Steve McCabe) about the Minister’s personal tragedy earlier this year. The sympathy of the whole House is with him.

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[Guy Opperman]

I will come to dashboards in more detail. I am happy to discuss this with the hon. Gentleman individually. The long and short of it is that we are keen that there is a detailed authorisation regime and that there are suitable restraints in place to ensure that the system is not open to abuse. This is different from the type of dashboard envisaged by some, which is a repository of all data. We are definitely not going down that route. With the data team, we are designing the dashboard to ensure that it is data accessed by the individual, not a pot that all parties can take data from. It is a detailed conversation and one that I would be delighted to take up with the hon. Gentleman, but I assure him that our objective is to ensure that there are no problems of the kind he raised.

Let me turn to green technology and climate change. I look forward to my visit to mid-Wales and to working with the Welsh Government. I agree with the point made that if one wants to change the world, investing in a pension is unquestionably the right way forward. I endorse the comments of my hon. Friend the Member for West Bromwich West and my hon. Friend the Member for Grantham and Stamford, and I am certain that the Treasury is listening to the idea of green gilts as an alternative vehicle for pension funds to invest in on an ongoing basis.

There is no doubt that, by including TCFDs in the Bill, we are continuing a narrative: this Government are driving forward work against climate change more than any other Government in the world. We are the first Government in the G7 to legislate for net zero. We are leading the way on environmental, social and corporate governance throughout the European Union, as is acknowledged by all our partners in the EU. We are the first Government to legislate to bring TCFDs into law in this country. Without a shadow of a doubt, this builds on the work that we have done, and on the promises and assurances made by my right hon. Friend the Prime Minister in his speech to the Conservative party conference yesterday.

I turn to CDCs, for which there is welcome support across the House. Royal Mail, and all the postmen and women who support all our constituencies up and down the country, are keen to see this measure. I have worked extensively with the Communication Workers Union, Royal Mail and the various organisations that have supported this policy. I do not want to be too Blairite in a spirit of cross-party unity, but there is no doubt that CDCs are the third way in pensions, and a way forward that provides an alternative to the current regime.

With the dashboards, we are trying to bring pensions into the 21st century. We are building on the work that has been done in other markets, whether energy, banking or savings, all of which have similar things with open banking, savings apps and the ability to change an energy provider. I can assure the hon. Member for Birmingham, Selly Oak that the state pension will be part of the dashboard. On the formulation of the dashboard and what it looks like, many people want to talk about the end product. I merely want to get the product up and running, but the end product will, quite clearly, have something about costs and charges, which addresses the point that the hon. Gentleman raised, as did my hon. Friend the Member for West Worcestershire (Harriett Baldwin). I can assure her that charges are under review on an ongoing basis. The dashboard will also, we hope, do much to provide simpler statements, simplifying something that has been very technical for very long time.

We heard about the issue of small pots and the difficulties in understanding those on an ongoing basis. It may have escaped the House’s attention, but the Department has an ongoing small pots review that is working cross-industry to try to assess exactly what the particular problems are. That will include, I assure the House, a consideration of “pot follows member”. Clearly, all that would require future regulation, but we are definitely looking at it as a Department.

We believe very strongly in the importance of a Government-backed, impartial dashboard, and we have committed to having the MaPS dashboard available from the start. We strongly believe, though, that multiple dashboards will help a consumer base with differing priorities. In launching a product, do we expect the customer to find it, or do we launch the product where the customer is? There are different customers who have different expectations and needs, and some already have a relationship with a provider. A variety of dashboards can help to evolve the project.

[Neil Gray]

I thank the Minister for giving way. I want to say at the outset how pleased I am to see him in his place. He should rest assured that the thoughts of my family are very much with his. Likewise, I take a moment to ask the House to remember that my hon. Friend the Member for East Dunbartonshire (Amy Callaghan) would have been here, were it not for her health issues, as the SNP pensions spokesperson.

I think it is clear that Members on both sides of the House, even those on the Government Benches, are not far apart on the issue of the dashboard. Between now and the Committee stage, would the Minister be willing to discuss his intentions with me and with Labour Front Benchers and the Liberal Democrats to see what compromise could be sought in all our interests going forward? This is a really important issue for us. I know the Minister to be someone who seeks consensus where possible, and I hope he would like to do so again in this case.

[Guy Opperman]

I have already engaged in extensive discussions, but I would be delighted to continue to do so both in and out of Committee. I think it is very clear that the Secretary of State and I have gone to great efforts to try to take the House with us in that dialogue and debate, and I can assure the hon. Gentleman that that will continue.

Let me move on to address the powers of the Pensions Regulator. I think it is right for me to put on record that TPR has done a good job during Covid, and, as an organisation, it is definitely improving. I accept that there have been criticisms, but it has unquestionably progressed under the supervision of its current chairman. I agree with my hon. Friend the Member for Delyn that these regulatory powers provide a fresh set of dentures for TPR to ensure that its bite is a little more substantial than its previous bark. That is a fair point well made. This builds on work that has already been done.

Several colleagues have raised the issue of open DB pension schemes. The Government continue to engage with the schemes and the Pensions Regulator, and we want to understand the concerns. I met stakeholders last Friday, and I have discussed this with Opposition Members. The measures in the Bill are designed to deliver clearer funding standards while upholding the flexibility of the scheme funding regime. There is an ongoing consultation, issued by the regulator, which looks at a potential bespoke regime. I have already discussed with the individual schemes whether the consultation is the right way forward, but I am happy to continue that dialogue, as I am on other issues.

I thank many colleagues for their kind words and support for my wife and I following the death of our twin boys. It is genuinely appreciated. This House is a special place when we are presented with adversity. It brings us together, and I think it humanises us that, while we disagree politically, we share the same problems. I echo the comments made by the hon. Member for Airdrie and Shotts and wish the hon. Member for East Dunbartonshire (Amy Callaghan) well.

We are pushing ahead with an innovative and ambitious pensions agenda that is reforming retirement. It delivers on commitments made in a manifesto backed by the people of this country in December 2019. It makes our constituents’ pensions safer, better and greener—safer by cracking down on scams and unscrupulous bosses, better by utilising new technology to develop and create a dashboard, and greener by ensuring that we get to net zero through ethical and sustainable pension investment. I look forward to further discussion, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Pension Schemes Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Pension Schemes Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 5 November 2020.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Michael Tomlinson.)

Question agreed to.

Pension Schemes Bill [Lords] (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Pension Schemes Bill [Lords], it is expedient to authorise:

(1) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided; and

(2) the payment of sums into the Consolidated Fund.—(Michael Tomlinson.)

Question agreed to.

Oral Answers to Questions

Neil Gray Excerpts

Monday 14th September 2020 Commons Chamber

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

This issue is in addition to the UK Government continuing to deny justice for WASPI women at a time when women are disproportionately impacted, socially and economically, by the coronavirus outbreak. The Scottish National party believes that mistakes were made in the changes to the state pension age and has repeatedly called on the UK Government to oversee a full impact assessment that considers the wide-reaching effects of the detriment felt by 1950s-born women. Will the Minister commit to a full impact assessment on both issues?

[Guy Opperman]

The hon. Gentleman knows that I cannot comment on live litigation, but he also knows that when the High Court heard the judicial review, it found for the Government on all the issues that he outlines. I point out that sections 24, 26 and 28 of the Scotland Act 2016 give the Scottish National party Government in Holyrood extensive powers to intervene, if they choose to do so.

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[Justin Tomlinson]

As a Government, we have provided an extra £9.3 billion-worth of support during the covid crisis, which has been very much welcomed. Specifically, in my area of disability, we will see spending increase this year from £19 billion to £20 billion, which is just shy of a 5% increase, and many disabled people will gain from the additional support provided through universal credit, through the increases in the discretionary housing payment, or through the £500 million given to local authorities as a hardship fund based on individual circumstances.

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

But the UK Government’s decision to exclude people claiming legacy benefits from the £20 per week covid uplift to universal credit, many of whom are sick or disabled people and carers, is surely untenable. Nearly 300,000 people in Scotland are missing out on the £20 per week increase as a result. Does the Minister agree that people on legacy benefits deserve the same amount of support as everybody else; and if he does, will he put his money where his mouth is and push the Chancellor to extend the uplift and make it permanent at the upcoming Budget?

[Justin Tomlinson]

The Government are putting money where their mouth is with the £9.3 billion-worth of support, which is pretty much unprecedented across the world. I would urge all claimants, disabled or not, to talk to their work coaches and review their circumstances to see whether they could be better off moving over to universal credit. But as I set out in the previous answer, there has been a wide range of support, and as a Government we will always target support at those most in need.

Kickstart Scheme

Neil Gray Excerpts

Thursday 3rd September 2020 Commons Chamber

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

We welcome any intervention that can protect jobs and secure the future of young people across these isles. The most effective intervention would, of course, be to extend the furlough scheme. I have three clear questions to ask in the time I have. First, why have the UK Government failed to respond to Scottish Government correspondence asking to work together on the implementation of the kickstart scheme, which is for Scotland, England and Wales? The Scottish Government have introduced a £60 million youth guarantee, which will guarantee every young person an opportunity for education, a job or training, backed by additional funding for apprenticeships and the new job start payment.

Secondly, why have the UK Government set as a minimum to qualify for the kickstart scheme that employers need to take on 30 new employees? Adding the bureaucracy set out yesterday will not help small businesses or young people in Airdrie and Shotts, and there is deep concern from the Federation of Small Businesses about this being a barrier, so why is there a 30-job minimum? Finally, will kickstart participants be paid the real living wage? I understand that they will not —why not?

[Dr Coffey]

The hon. Member may not be clear on the elements of the scheme, so I encourage him to read the written ministerial statement, the “Dear colleague” letter and what is on gov.uk. It is not a case that an employer has to come forward with a minimum of 30 placements over the lifetime of the scheme. That is if they want direct access to the DWP and a direct relationship, which is completely different from what happened under the future jobs fund. Small businesses can go through intermediaries, and that is why we have those links.

In terms of working with the Scottish Government, I am very conscious, and it is right, that the Scottish Government should be doing elements of this. Scotland has the highest unemployment rate in the UK, so it is no surprise that they are trying to fix that. It is important that we have the scheme consistently across Great Britain. In Northern Ireland, this is entirely devolved, but we will be working closely with it. It is important that we have a national framework and local delivery, and I am pleased that our jobcentres in Scotland are already on the case.

Oral Answers to Questions

Neil Gray Excerpts

Monday 29th June 2020 Commons Chamber

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

My hon. Friends have highlighted the range of expert reports out over the past couple of weeks showing that the DWP has no idea how universal credit impacts child poverty. It has done precious little to address it and could have made it worse through systematic cuts, leaving families and children worse off since 2011. The Joseph Rowntree Foundation and Save the Children say that families need an extra £20 a week in the child element of universal credit and child tax credits. Will the Minister ask the Chancellor to make that happen?

[Will Quince]

As I just said, in 2020-21, we will spend more than £120 billion on benefits for working-age people. We spend more on family benefits than any other country in the G7 at 3.5% of GDP. The measure that the hon. Gentleman raises would alone add another several billion to that bill. We will continue to reform the welfare system so that it encourages work while supporting those who need help. It is an approach that is based on the clear evidence that work offers families the best opportunity to get out of poverty.

[Neil Gray]

I note that the Minister did not answer my question. There is growing pressure on the UK Government to act here. The former DWP Secretary of State, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), has called on the Minister and his colleagues to accept the recommendations of the Joseph Rowntree Foundation and Save the Children and to uprate legacy benefits, too. Poverty Alliance’s report today shows that UC is pulling people into poverty rather than acting as a lifeline, so will he agree to convene a cross-party meeting, including the former Secretary of State and a Treasury Minister, to look at ways to make that recommendation happen?

[Will Quince]

For a start, the hon. Gentleman knows that that is well above my pay grade, but I gently remind him that universal credit will be over £2 billion a year more generous when fully rolled out compared with the legacy benefits system that it replaces. He also fails to recognise the £6.5 billion to £7 billion that this Government have put in place to support people through covid-19. As the Chancellor has said, we will do “whatever it takes”, and this Government are doing that: we are supporting people and this Department is getting that support to those who need it quickly.

Universal Credit: Court of Appeal Judgment

Neil Gray Excerpts

Thursday 25th June 2020 Commons Chamber

[Will Quince]

I thank my hon. Friend, who is a firm champion of his constituents in this place. He is absolutely right that we have introduced a series of changes during the covid-19 pandemic, targeted at those facing the most financial disruption, that could be operationalised as quickly as possible, ensuring that people get the support that they need. He is right that that is close to £7 billion in the welfare system alone and it will benefit approximately 10 million families.

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

I pay tribute to the four women who brought this case and all those who supported them, including the Child Poverty Action Group, and I thank the Work and Pensions Committee Chair, the right hon. Member for East Ham (Stephen Timms), for securing this question. This really is damning for the Government and successive Secretaries of State, who have belligerently fought this in the courts. Why should women and disabled people have to go to court to get basic fairness? I am sorry that the Secretary of State is not here to respond.

The issue of people getting paid salaries on irregular but predictable days of the month is something that the Scottish National party has been raising as an issue with UC for years, and the Court of Appeal has ruled that it was irrational for the Work and Pensions Secretary not to act to resolve the problem. Why should claimants lose UC support simply because of the day of the month that they are paid? That question has not been answered. As part of the process of accepting this ruling, will the Minister at the very least ensure that the predicted 85,000 people thought to be directly impacted have their situations resolved? Will the Minister work with the Chancellor to finally add flexibility to the monthly assessment period to resolve this issue and the five-week wait, which is also impoverishing people?

[Will Quince]

I thank the hon. Gentleman for his question. I stress that we received the judgment only on Monday and it is a hugely complex issue. That is recognised by the court—it is not a simple fix, as the hon. Gentleman points out. He knows that we are facing unprecedented demand, because he has raised this question with me before. I said that I will keep the House and the right hon. Member for East Ham (Stephen Timms), the Chair of the Work and Pensions Committee, updated as we progress.

On the hon. Gentleman’s points relating to assessment periods, there are some aspects of the universal credit system that are fundamental to its design and are deliberately designed to achieve its original objectives—to mirror the world of work. This includes the mechanism of a monthly assessment period and, of course, the initial assessment period at the beginning of a claim. It is important to stress that over 75% of people in this country are paid monthly and the majority of countries in the European Union also have systems that operate on a monthly basis.

Oral Answers to Questions

Neil Gray Excerpts

Monday 11th May 2020 Commons Chamber

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

The two areas of universal credit causing the greatest hardship are the five-week wait and the two-child cap—both need scrapping. Taking a UC advanced loan means that payments will be lower than the already impossible to live on levels, so why will the Government not look at the idea of making the advance loan a grant when a person has been confirmed as eligible for UC? That stops the fraud excuse. The only barrier is political will.

[Will Quince [V]]

I thank the hon. Gentleman for his question. As I have said, we have announced measures that can be quickly and effectively put in place that will benefit as many disadvantaged families as possible who are facing financial disruption. We are under huge increased demand, and I have had to prioritise the safety and stability of the benefits system overall and put that above any structural change. I will always prioritise ensuring that people get their money in full and on time, over and above system change.

Covid-19: DWP Update

Neil Gray Excerpts

Monday 4th May 2020 Commons Chamber

[Dr Coffey]

My hon. Friend is right to speak up for the people he represents, and especially small business owners, who have set up their companies in particular ways—I am sure that they were well advised by accountants at the time on the optimal way to do that. It is fair to say that the self-employed income support scheme is expected to cover 95% of people who receive the majority of their income from self-employment, but if not, I recommend that those other people look online at their potential eligibility for universal credit. We have removed the minimum income floor—an assumed level of income in universal credit for self-employed people—so that should no longer be considered when trying to calculate the benefits for which they may be eligible.

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

I thank the Secretary of State for advance sight of her statement. I wish to put on record my thanks to the DWP staff, who are continuing to work hard to deliver social security benefits as quickly as possible in very difficult circumstances, but the circumstances have been made more difficult by the decisions of the UK Government, who have introduced bureaucratic support schemes instead of a far simpler universal basic payment with a longer view towards universal basic income. Millions have been forced on to still inadequate universal credit, and despite DWP staff being moved to cope with the UC demand, over 200,000 people had their UC claim paid late, according to the UK Government’s best estimate. Because DWP staff have been moved to help process UC claims, MPs and other advice organisations are not getting casework inquiries answered in the normal way, which is also causing unfair hardship.

On the last day that I contributed in this House—18 March—before lockdown, I said that people needed help in hours, not days, yet the people applying for universal credit in that week will have only just received their first payment a few days ago. The British Government must finally stop the five-week wait. They claimed that they cannot solve it by making the advance payment system a grant rather than a loan because of vulnerability to fraud, so why not make the advance a grant when the applicant is confirmed as eligible for universal credit? I would appreciate proper consideration of that proposal. Airdrie food bank in my constituency has reported a 47% increase in demand for its services since the onset of covid-19. That should focus minds.

The Prime Minister said that nobody would get left behind, so why has there not been an uplift in legacy benefits, such as employment and support allowance, as there has been to universal credit? Finally, will the Government scrap the immoral, poverty-inducing two-child limit, the bedroom tax and the benefit cap, and will they uprate all benefits to make up for the years of cuts that came through the benefit freeze? 1.7% just does not come close.

[Dr Coffey]

I thank the hon. Gentleman for his questions. In terms of bureaucratic schemes, the Government have worked at pace to introduce brand new schemes in order to protect people right across the country. We have seen the success of the job retention scheme. The self-employed scheme is under way. Significant flexibility has been put into that system to help people who may not have had three years of earnings to give them time to submit their latest tax return promptly to get support.

There is a variety of analysis on universal basic income. The latest report I saw estimated it would cost over £400 billion a year. It is not targeted at the poorest in society and is not an appropriate way for us to try to distribute money. Instead, our schemes are focused on making sure that the poorest do get help.

On DWP staff being moved from department to department, we have made sure that we are monitoring performance and where there are increases in how long it takes to process certain kinds of payments I have made it clear to my officials that we then need to move people back. We are in the key peak of payments this week, with the largest uptake of applications, and I am confident that we will get through that with at least 90%, if not an even higher rate, of people getting their payments on time.

I have already answered the question about why the legacy benefits have not increased. On the question about making an advance a grant, that comes back to the principle that getting an advance effectively means people have 13 payments in a year instead of 12 to cover the annual allocation to which people are entitled. Nearly 700,000 people have received an advance, while nearly 1.8 million people have applied for universal credit and those others have not sought to have an advance. So it would not be fair to the other new claimants if one group of people got more money than they did simply because they had applied for an advance.

On the increasing use of food banks, extensive work is going on across Government. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince), is involved in a taskforce on helping vulnerable people. I am conscious of the increase in food bank usage and the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Banbury (Victoria Prentis), and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs are doing excellent work in making sure we can work with them to ensure food can get to the most vulnerable people in society. While recognising the increase in food bank usage, I point out that we have had a sixfold increase in the number of people claiming UC and we are making sure we get our money to them.

Statutory Sick Pay and Protection for Workers

Neil Gray Excerpts

Wednesday 18th March 2020 Commons Chamber

[Justin Tomlinson]

When people in work are isolating due to Government guidance, which seems to be the case in the circumstances that the hon. Gentleman describes, they would be eligible for statutory sick pay through their employers. In addition, it is always worth their looking on gov.uk to see whether they can get additional support through the welfare system, whether universal credit or new-style ESA.

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

Like the Minister and other hon. Members, I am looking to be collaborative, as I generally try to be, particularly in this type of circumstance, but the issue raised by the hon. Member for Strangford (Jim Shannon) typifies the confusion surrounding the guidance and support for people, which was why my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) recommended at Prime Minister’s questions some form of minimum income guarantee that would cover all these issues and mean that people could just do what is right at the right time without having to worry about the financial consequences. Is the Department looking at that?

[Justin Tomlinson]

I thank the hon. Gentleman. I have said many times at the Dispatch Box that I admire the way that he contributes and offers support in trying to help some of the most vulnerable people in society. There were two aspects to his question, the first of which was about general communication. These are fast-moving events, and all constituency MPs are getting a lot of correspondence that asks very reasonable questions. We are trying to give answers that are as good as possible, but we really have to keep pushing people towards the gov.uk website, on which there is consistent communication. On the second point about a minimum net, that is where the welfare system comes into play, because statutory sick pay—it is important, and I will go over that—applies in only some cases, whereas the welfare safety net applies to all who need it.

--- Later in debate ---

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

I thank the Labour party for devoting some of its Opposition time to allow us all to discuss this serious, pertinent, timely and important issue, given the uncertainty facing many of our constituents across the UK.

With your forbearance, Madam Deputy Speaker, I stress at the outset for anybody watching that people should follow the advice of their local health authorities, such as NHS Scotland or Public Health England. Regular updates are coming from the Governments across the isles. I recommend that, as best as possible, employees and employers follow the available guidance.

I commend everyone leading the response to the situation, including NHS staff, other emergency services, local authorities, the voluntary sector and Governments across the isles, who have been working together as best as possible to ensure that the best advice, based on science, and the best support is available at the right time. I particularly praise Professor Jason Leitch, a former dux of Airdrie Academy in my constituency and the Scottish Government’s national clinical director. Alongside the Scottish Health Secretary Jeane Freeman and the First Minister Nicola Sturgeon, he has been the model of calm, erudite leadership.

In the spirit of cross-party co-operation that we have seen emerge at Holyrood, I, too, have no desire to be political or criticise where working constructively can bring about better outcomes and engender greater confidence in the response of all Governments to the crisis. When I call for further action, therefore, it is not because I think the UK Government are deliberately holding back. I believe there is a genuine desire across all Governments to do the right thing at the right time.

The concerns that remain in large sections of society regarding the UK Government’s economic response to covid-19 essentially boil down to ensuring that incomes are protected when demand falls in huge sections of the economy. Renters, the self-employed, small business owners and people who are in or out of work just want to know that they will get the financial support they need to survive.

Constituents who are self-employed, such as taxi drivers, driving instructors, childcare providers and many more, have contacted me because they are worried about making sure that they do the right thing at the right time, while providing for their families and employees. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) and the shadow Health Secretary, the hon. Member for Leicester South (Jonathan Ashworth), have led calls for statutory sick pay arrangements to be improved to help workers who contract covid-19 or who have to self-isolate.

Although we welcome the UK Government’s move to make sick pay kick in from day one, and for the cost of sick pay to be met by them for companies with fewer than 250 staff for a period of 14 days, there is still more to do to support workers and businesses. Statutory sick pay is a reserved matter, as is employment law, so those areas are required to be decided upon here.

My right hon. Friend compared statutory sick pay rates in the UK with the rates of our European neighbours. As the House will be aware, that is not currently a favourable comparison for the UK Government. The UK rate is currently £94.25 a week—the second lowest rate when compared with EU nations. Ireland doubled its rate to £266 in response to covid-19, while Germany and Austria both pay £287 a week. At £94.25 a week, the UK Government are presiding over a system of poverty pay for those who are sick. One Tory MP was asked on Twitter whether she could live on £94.25 per week, and she simply responded “Get a life”.

This is really serious. We are asking people, even if they have mild symptoms, to self-isolate for the greater good, to contain and delay the spread of covid-19. We must be sympathetic with constituents who are asking legitimate questions about the advice and support they are getting. Statutory sick pay is an issue that should have been resolved before now, frankly. In response to this situation, the UK Government must act quickly.

At the Work and Pensions Committee hearing this morning, there was consensus among the witnesses that statutory sick pay should be raised. Citizens Advice is asking for it to go up to £180 per week. Scope is asking for it to be the equivalent of the national minimum wage. Others have said that the equivalent of the real living wage would be more appropriate, and Scandinavian countries are making it 100% of wages. The UK Government must act.

Alongside the rate of statutory sick pay, there are other specific areas where we want to see action from the UK Government.

[Richard Fuller (North East Bedfordshire) (Con)]

Just for clarification, is the hon. Gentleman asking for a permanent change in Government policy on statutory sick pay, or a temporary change for this period?

[Neil Gray]

We have to reflect on the fact that, even not at times of crisis, UK statutory sick pay rate is considerably lower than that of other European nations. A permanent change is required, but a temporary measure which might go beyond that permanent increase is required to deal with covid-19, so the answer is both, if that makes sense.

The Government must extend the policy further to ensure that sick pay is set at an hourly rate and available for everyone for 52 weeks instead of 28. Current rules on statutory sick pay are not flexible enough to meet real-life needs and fall far short of meeting a dignified standard of living, even with this new change. Disability groups have been especially vocal in calling for an overhaul of the sick pay system. Their concerns must be factored into the UK Government’s response to the sick pay consultation.

The UK Government should accept the TUC’s recommendations on sick pay for all. Those include abolishing the lower earnings limit, which would extend coverage to almost 2 million additional workers; permanently removing the waiting period for sick pay; increasing the weekly level of sick pay from £94 to the equivalent of a week’s pay at the real living wage; permanently agreeing that the legal requirement on fit notes after seven days of absence be extended to 14 days, with employers accepting self-certification for anything less than that; and permanently providing funds to ensure that employers can afford to pay sick pay.

The UK Government must do all they can to support businesses, to ensure that jobs are kept for the duration of this crisis. I would like to see the UK Government provide much greater grants, rather than loans, to help all businesses stay afloat, and attach conditions about ensuring that jobs are protected. We have seen that type of initiative in Denmark, and I hope the UK will follow.

Clearly, we all hope that these issues are temporary. The UK Government must do all they can to ensure that the attachment between employer and employee is not detached. That is important for workers, employers and the wider economy. Yesterday, Robert Chote, the chair of the Office for Budget Responsibility, urged the UK Government not to be “squeamish” about spending whatever it takes to prevent mass foreclosures, bankruptcies and millions of job losses as the UK effectively goes into lockdown. He said:

“When the fire is large enough you just spray the water and worry about it later.”

I turn to measures to support people who are self-employed and other business owners. The UK Government must do more. I echo the calls from my hon. Friend the Member for Glasgow Central (Alison Thewliss) last night. We must protect the incomes of people who are self-employed and do so quickly, to give them confidence. She was also right to raise issues around maternity leave, parental leave and support for people with no recourse to public funds; they are extremely vulnerable at the best of times, but right now they must be supported. The UK Government must give information to the devolved Governments as quickly as possible, and encourage much greater information sharing to allow all Governments to act swiftly and appropriately. At Prime Minister’s questions, my right hon. Friend the Member for Ross, Skye and Lochaber raised the prospect of some form of minimum income guarantee, such as a universal basic income. The Prime Minister appeared to accept the general premise, but time is now of the essence. Can the Minister give an idea of when he expects some form of announcement on people receiving financial support?

The UK Government should consider whether they will extend the normal deadlines for people to provide the necessary information to support social security applications, while paying people much more quickly as the demand is likely to be much greater. There is clearly a need to go further on social security. Ministers have heard me discuss the various issues that there are routinely with universal credit. The changes I want to universal credit, although they would undoubtedly help in this crisis, may not be practically achievable in a useful timescale—I am talking about scrapping the five-week wait, the two-child cap and increasing work allowances.

Instead, for the duration of this crisis, the UK Government need to ensure that those who are in or out of employment, those who are employed or self-employed, are paid an amount that allows them to get through. Universal credit advances, for instance, should now come in the form of a grant, not a loan. The Government should also look at urgently suspending the tax credit income disregard for reductions in earnings, at least for the 2020-21 financial year, to ensure that, where earnings fall, household tax credits entitlement takes account of that loss.

We now know that schools in Scotland and Wales are to close at the end of this week. That puts huge pressure on families who rely on free school meals, so I urge the UK Government to look at this area, as pressures are going to be on those families for the duration of the school closures.

[Kirsten Oswald]

One of the issues that constituents have contacted me about a number of times over recent days is the finance of households that rely upon prepaid meters for their energy. These households are likely to already be financially more vulnerable. It is very likely that they have to travel some distance to get the meter top-ups that they require. As part of their thinking, could the UK Government give serious thought to compelling the energy companies not to cut people off and to take account of the fact that there will be higher needs for energy and less money to go round while this is happening?

[Neil Gray]

I absolutely agree. Many calls are being made across the country today for direct payments to be made from the Government to utility companies to ensure that people in these circumstances do not miss out, but it goes back to my original premise: incomes for people, regardless of their circumstances during this period, are going to be hit, so the Government need to provide some form of minimum income guarantee to ensure that people in all circumstances are able to get through, whether that is via statutory sick pay or the social security system. If they are in work, the Government must ensure that, if people lose hours, those could be picked up again, so they continue to pay their bills and continue to live a sustainable life.

The monthly allowance for universal credit should also be increased dramatically and all other social security payment levels should be swiftly reviewed as well. Clearly now, this is not business as usual. We cannot continue to pay social security rates which impoverish in normal times, never mind now. We are going to have to accept that, to get through, the UK Government are going to need to inject a massive amount of money into the economy to make up for what is undoubtedly going to be a massive downturn across a wide range of sectors, the like of which I do not think we have ever seen before—a downturn that will result from the actions that the UK Government and other Governments are rightly taking in asking people to self-isolate and take other actions to contain the virus. We cannot tell people to stay away from work if they have symptoms, to stay away from restaurants, bars and cinemas and to work from home, and not expect an economic impact, an employment impact and an income impact. The UK Government must fill that hole to ensure that they fulfil the promises of the Prime Minister that nobody will be penalised and everyone will be protected for doing the right thing.

I wish to conclude with an encouragement to everybody who may be following this debate. Please be community-minded. We have already seen some fantastic ideas and responses to the crisis in all our communities. Watch out for your neighbours. Help if you can. Buy only what you need. If they have the means to buy more, add what you can to the food bank trolley and know that others certainly do not have the ability to stockpile. Many of my constituents are already worried about how they will access essentials because they are self-isolating, have lost their job or have other vulnerabilities. Now, like never before in so many of our lifetimes, we need the community-mindedness that got previous generations through such emergency situations.

We also need to start talking about how those of us who are fit and well—and who have contracted and come through the other side of covid-19—can help key sectors of the economy and emergency services to cope with what is to come. I suspect that, in time, with self-isolation and illness, we will need to mobilise that volunteer army. But that can only happen if we ensure that everyone has their income protected. Support for business is important, but at the end of the day it will be income protection, in whatever form that takes—a cash grant or a temporary universal basic income—that will finally give everyone the comfort to do the right thing by society. That will give the answers to the questions that we are all getting from businesses, the self-employed, renters and others.

I hope that, within hours, rather than days, the UK Government will do the right thing and guarantee incomes, as we have seen in other nations. We are willing to discuss any potential measures that the UK Government are thinking of in order to ensure that this is done properly and quickly.

--- Later in debate ---

[Wes Streeting (Ilford North) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Leeds West (Rachel Reeves) and my right hon. Friend the Member for East Ham (Stephen Timms), the Chair of the Select Committee, and I want to build on some of the points they made both about the practical challenges people face in the midst of this pandemic and about some of the fundamental questions posed to each of us as members of a society that has left far too many people far too dangerously exposed, not just in the face of this pandemic but in everyday life—a plight that has gone unanswered for far too long.

I want to begin by paying tribute particularly to the workers in the NHS who are putting themselves in harm’s way as they treat people in the midst of this pandemic, and I absolutely echo what my hon. Friend the Member for Leeds West said: it is crucial that NHS workers have access to the right kit to do the job and that, where there is any concern about the diagnosis of those NHS workers or their family members, they are considered priority cases for testing. Frankly, the Government’s claim to be among the best in the world at testing tells us only that the rest of the world has much more to do, because we are hearing of far too many cases where people who need to be tested are not receiving that test.

The crisis we face is not just a public health crisis; it threatens to be an economic one. The supply and demand-side shocks it will pose will be both simultaneous and severe, so it requires co-ordinated action on the part of Government and industry on a scale that we have not seen since the second world war. A wartime mobilisation is going to be required for this peacetime crisis. Many families, as they gather around the kitchen table this afternoon and this evening to consider what a loss of earnings or perhaps a loss of employment would mean for them and their families, are staring at the hard reality of a social insecurity system that has left far too many people grappling with poverty and insecurity, and ongoing crises as a result, for far too long. No one can or should be expected to live on SSP of £94.25 a week. No one should be expected to live on universal credit, which in some cases can be even less generous—if that is the right word—than SSP. So I echo the calls this afternoon for increases to SSP and UC to ensure that our social security system provides just that—social security, not just in the worst of times, but in the best of times for our country.

Ministers should ask, but so should people in our communities, how the political choices of successive Governments and the political demands of sections of the electorate ever allowed a position in which we allow people who have fallen on hard times to fall into harder times still because of the social insecurity system, which pushes people further into poverty, mental ill health and family crises, which make it harder, not easier, to escape from this. I suspect I am one of a minority of people in this House who know what it is like to grow up in a household that is reliant on the social security system; what it is like when there are more days left to the end of the month than there is money; what it is like when people have to beg, borrow and steal to put food in the fridge; what it is like when the electricity meter has run out and so has the emergency; and what it is like to feel a victim of the state, rather than supported by the state. We should resolve, in the midst of this crisis, that once it is over, never again are we going to allow our social security system to fail people in the way that it did before this crisis and that it threatens to do within this crisis.

Yesterday, the Chancellor set out a series of measures to help businesses and to try to get the economy through this. I welcome those measures, but we have to learn from past mistakes. It is not enough to bail out businesses, although that is important; we also have to bail out people. As we build the economic recovery, we have to ensure that the quantitative easing that helps provide liquidity to our economy to help things keep going as best they can in difficult times is also a quantitative easing for the people. By all means, let us call for an increase in SSP, UC and disability benefits, to make sure that people can live with dignity and have a good quality of life if they are unable to work. All those things are important, but instead of quibbling about piecemeal measures, with a bit of mortgage relief here and a bit of rental support there, why do we not just provide every household in this country with the security to know that the Government will provide protection for people’s incomes, so that they can continue to make sensible choices for their families, so that they know that when the end of the month comes and the mortgage or the rent is due they can pay it, and so that they know that when the bills are due and when they have to do their shop, they will be able to pay for this?

I have always been a sceptic about the principle of universal basic income, because I fundamentally believe in an economy and a social security system that redistributes wealth from those who have it to those who need it most. I am also cynical about it because although there are many principled and decent-minded champions of universal basic income on the left of politics, the left should regard the principle with suspicion when some of its leading champions have been right-wing economists, such as the father of free market economics, Adam Smith. There is a right-wing vision of universal basic income that is about dismantling the state and that says, “If we provide everyone with the income, we don’t need to provide the services centrally because people can pay for them.” That is one reason, I suspect, why the Trump Administration have not needed much persuasion to provide a form of basic income.

But although we should regard the principle with suspicion as an ongoing solution to how we provide social security for people, there is now a strong case for a form of basic income to see us through this crisis. It could be a universal payment made available to everyone, where the tax system is used to recoup the money from those who genuinely do not need it. It could be a form of basic income, where those who need it simply apply for it and then receive it. It could be a form of income protection, as my hon. Friend the Member for Leeds West described, which is already working well in Scandinavia. But one way or another, we have to make sure that families have incomes to see themselves through this crisis, because as we have already heard, the majority of people in this country tonight are one lost payday away from being in a real crisis, and the crisis for them will be a crisis for all of us if demand is further sucked out of the economy. I hope that Ministers will take that message back to the Treasury.

Finally, it is not just the social insecurity system that has left people exposed in this crisis. We have to make sure that this is a turning point. It could be that our political choices further entrench inequality in our society—just as, frankly, the coalition and Conservative Governments did after the last financial crisis, when too many of the political decisions and so-called tough choices meant balancing the books on the backs of the poorest.

[Neil Gray]

The hon. Gentleman is making a very good speech, and I agree with much, if not all, of what he has said. He is coming to the very important point about what happens after all this. There has been a massive fiscal stimulus over the last week, and we expect more to come. What none of us would expect is austerity mark 2 to see us out the other side.

[Wes Streeting]

I wholeheartedly agree.

Let me conclude on this point. In the aftermath of the last financial crisis, the Labour Government—and, in fact, the reputation of the Labour party—were utterly trashed because Gordon Brown’s Government took the courageous steps that were needed to prevent a financial crisis in America, which became a global financial crisis, from becoming a depression, which would have meant people being unable to take money out of the banks. The Government were right then not to be squeamish about borrowing to make sure that our country got through it, and this Government should not be squeamish now.

I suspect that by the end of this the Government will own such a large stake of the British economy that it will make Labour’s last manifesto look positively conservative in its ambitions by comparison. If that is what it takes to see us through this crisis, that is what the Government will have to do that. We are going to need a wartime response to get us through this crisis, so let us think now about the peace that will follow. Just as our generation looks back with pride at the decisions that the 1945 Attlee Government took and the legacy that they left, let us think now about the legacy that we will leave for our country. Let us make the choices now that lessen inequality in our country and provide genuine social security in the best of times, not just the worst of times.

Let us ask how it was that political choices left our social care system at breaking point and the people languishing in it more exposed to this pandemic than they would otherwise have been. Let us repair our broken social care system by making brave political choices. Let us care more about how we fund the living to lead a good life than about how we tax the dead. Let us make sure that, when people get to old age, they are not just looking back on a life well lived, but able to live life to the full until the end. Let us make sure that, when people get to old age, they are not just looking back on a life well lived, but able to live life to the full until the end.

Let us see this as a wake-up call. If a pandemic can seriously disrupt the labour market, and we have to provide serious income protection to see it through, let us think about what a technological revolution will do as it displaces, relocates and significantly changes the shape of the labour market. Let us make sure that we have the social protections needed now to face the next revolution, not just the current crisis. Let us not let the global pandemic distract us from the urgency of the climate emergency. Let us make sure that our recovery is a green recovery.

Finally, let us no longer listen to the siren calls of the populists and the nativists who believe that countries can go it alone, and that we have to build a world where we are all in it for ourselves. Let us recognise that global problems require global solutions and global leadership through global institutions. As the Attlee Government rebuilt the fabric of the country through a new welfare state and built international institutions, let us to resolve to do the same.

--- Later in debate ---

[Richard Fuller]

I appreciate the hon. Lady’s intervention. I am not speaking for the Government—I am sure the Minister will seek to address that—but I have to say that it sounds to me as though her constituent’s employer is just making an excuse, because the Government have been absolutely clear that it is the right thing to do socially for everyone in this country, if they have a concern, to be able to isolate themselves from others and to work from home. What more does that person need to understand what they should do? I hope they will get that message very clearly from the Front Bench.

On the point of leaders not doing the right thing, the experience of Virgin airlines has been raised. The owner or partial owner of Virgin airlines has suggested that employees should take eight weeks of unpaid leave, and I decided to look at how much that would cost. Eight weeks at the £94.25 rate of statutory sick pay would cost £754 per employee. There are 8,571 employees of Virgin airlines, so if all of them took eight weeks of unpaid leave, that would be a cost of £6.4 million. Sir Richard Branson’s net worth is $3.8 billion. If he is able to get 2% interest on that money for eight weeks, he will earn the equivalent of £9.9 million. So I say: Sir Richard Branson, give up the interest on your wealth for eight weeks, and pay your employees yourself their unpaid leave.

Big or small—a leader of a church in a small village or a leader of the large business—when it comes to looking at the protection of their workers, the time is now, and we will judge them all by their actions. It will be the same for the Government’s actions.

As I say, are we choosing the right policies? We have heard a lot about that today. I congratulate the Government on the staging of the announcements. There is so much pressure—all MPs are under pressure, with loads of questions: small or micro ones, and very large ones covering many issues—but I think the staging of announcements is a good approach, because we need this to bed in with people each day. If we put everything into an announcement on a single day, I would worry that, although we would feel we were communicating, we would find that it was not being received and understood as clearly as it should be.

[Neil Gray]

I commend the hon. Member’s speech thus far. To some extent I agree that, for preparedness in working through particular policies or interventions, there has to be some preparation and that does take time. However, in terms of people’s livelihoods, people are losing their jobs now and businesses are making decisions about their future viability now, so would he encourage the Government, as I have, to make an announcement about the financial impetus that could be given to protect individuals and jobs in hours, not days, so that this response can be adequate?

[Richard Fuller]

Yes, yes, yes, yes and yes. Those yeses are for each of the businesses in my constituency that I have spoken to in the last 24 hours that have asked for precisely that. We often think: how can a business suddenly be short of money to pay its own workers within a short period of time? But the truth is that, in some sectors, cash flow is of a nature that those issues do come up. More importantly, I say to those on my Front Bench that every single responsible private sector business right now will be thinking, first and foremost, “How can I protect cash flow for the long-term survival of my business?” One of the nearest short-term costs that can be reduced is their employee cost, so there is the sense that this is needed, as the hon. Member rightly says, in hours rather than days. To be fair, I think the Chancellor was very aware of that in his statement yesterday.

To that end, may I encourage hon. Members on both sides—there are slightly more on the Opposition Benches than on the Government Benches for certain reasons—to think more about using what is already in place, such as the systems that connect what the Government can do to those institutions and people that need it, rather than trying to broaden it out into a big and different debate about whether we should have this or that. There is of course a time for debating universal income, and there is time for us to think about ways in which we might look at a better overall system in the future.

Right now, I say to my right hon and hon. Friends on the Front Bench that we should be looking at proposals using the existing arteries of the financial system, of the benefits system and of the pay-as-you-earn and tax system that can reach people, either to amplify payments that are already made or to reverse flows from into the Government to back out to those who need them, and I ask them not to get too distracted by items along the way.

We should also recognise that in this period there will be a test for the labour market structure in the United Kingdom. The UK does have some not quite unique but nuanced features, particularly its reliance on flexible working and on self-employment. The changes that Governments have put in over the past 15 years to create a flexible market—there are benefits to that—will also be tested during this pause in the economy. After we have gone through this crisis, I would encourage the Government to see what lessons can be learnt from that.

This is also a test in terms of the enlightenment we have in our social insurance system. I was moved by the contributions from the hon. Member for Leeds West (Rachel Reeves), the Chair of the Business, Energy and Industrial Strategy Committee, and the hon. Member for Ilford North (Wes Streeting). It is absolutely right that this is an opportunity for us to look at those things and to reflect. We may have different perspectives on it, and we will definitely have different politics, but only a fool would say that we should not look at this and learn lessons. This is no time for fools.

My core message for the Government is this: the staging of announcements is absolutely right, so that they can bed in with people; use the systems we have to get money into the hands of the people and businesses who need it; and follow the advice from both sides of the House, which is that we would welcome the Government’s moving with speed between the announcement and the time that the money is available in the bank manager’s office in Arlesey, Bolnhurst or anywhere else in the country, or in that person’s pay packet, their bank account, or their benefits slip.

Oral Answers to Questions

Neil Gray Excerpts

Monday 9th March 2020 Commons Chamber

[Will Quince]

I thank the hon. Lady for her question. As the Prime Minister set out last week, we will introduce, as part of the Department of Health and Social Care’s emergency Bill, provisions for statutory sick pay to be made from day one. Employers have been urged to make sure they use their discretion and respect the medical need to self-isolate in making decisions about sick pay. People not eligible to receive sick pay may be able to claim UC and/or contributory employment and support allowance, and staff at our jobcentres are ready to support people affected and can rebook any assessment or appointment that is necessary.

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

That just does not answer the question, does it? Will the Minister therefore outline what happens where someone on UC has to self-isolate but has to go through work searches and is unable to attend a jobcentre? Will he expect that person to be sanctioned if she cannot turn up?

[Will Quince]

Absolutely not, and discretion will, of course, be used.

[Neil Gray]

The Minister said last month that he of course thought that improvements could be made to UC. I agree, so perhaps he could outline some, starting with ending the two-child cap, ending the five-week wait and fully restoring the work allowances. Have those conversations been had between his Department and the Treasury, ahead of the Budget?

[Will Quince]

I thank the hon. Gentleman for his question. We are a Government who listen. Let us look at the improvements that have already been made to UC: increased advances, of up to 100% of a full monthly payment; cutting the taper rate, so people keep more of their salary; increasing the amount someone can earn before their UC is reduced; scrapping the seven-day waiting times; introducing a two-week overlap of housing benefit; and, as of July, we are introducing a two-week overlap of various legacy benefits. There are lots of improvements to be made. They do, of course, require Treasury approval, and I am looking at these in a lot of detail.

Draft Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2020 Draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2020

Neil Gray Excerpts

Tuesday 25th February 2020 General Committees

[Justin Tomlinson]

Thank you, Mr Gray. I very much welcome the clear cross-party support for the two sets of regulations. A number of valid points have been raised. I pay tribute to the British Lung Foundation, which is a really good, proactive charity that works with hon. Members across the House. We will take into consideration the points it has raised.

The shadow Minister asked a number of important questions, one of which was about equalising the payments made to those who have the disease and their dependants. The main intention of the schemes is to provide financial support to people living with certain diseases and to help them deal with the issues that the illness brings, so it is right that funding is targeted where it is most needed—to people living with the disease.

Equalising the awards made to people with the disease and their dependants would require changes to primary legislation. That would be a complex task, as awards to dependants under the 1979 Act include payments made in two parts: first, a payment for the effects of the illness before death, based on the assessed level of disability and on the length of time that a person had the illness; and secondly, a payment made in cases in which the death was actually caused by the relevant disease.

I was also asked why the Government do not automatically uprate payments. Although I sympathise with that view—in theory, automatic uprating would be more straightforward—there would be no monetary gain because we have actually uprated payments in line with CPI every year. These debates provide a valuable avenue for Members to discuss their thoughts on the lump sum schemes and, more broadly, on support for people with respiratory disease, and I know that many Members value that. We will, however, keep that under review.

Reference was rightly made to what more the HSE and the Government could do to raise awareness. The HSE does fantastic, proactive work to co-ordinate stakeholder activity on occupational lung diseases. As a Government, we regularly signpost people using the gov.uk website.

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

Obviously, the biggest tragedy is that most people who suffer with mesothelioma are not aware that they have the condition until it is too late. The payments recognise and compensate for that. Can the Government do more to find former workers who may have been exposed to asbestos and other work-related hazards and who may find themselves suffering from such a condition further down the line?