Welfare Spending
Nusrat Ghani Excerpts(1 week, 3 days ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
I inform the House that Mr Speaker has not selected any amendments. I call the shadow Secretary of State to move the motion.
Alison McGovern
The hon. Gentleman is not the only person who worries about it, and I will receive his intervention as a submission to the child poverty taskforce.
The child poverty taskforce is looking at all the levers we can pull—across income, costs, debt and local support—to prevent poverty, including social security reform. Our universal credit review is considering ways that the system can improve in order to stabilise family finances and provide roots into good work.
On the two-child limit specifically, the consequences of the Conservative choices made over the past decade and a half are clear for all to see. We have rightly said many times that we will not commit to any policy without knowing how we will pay for it. Taxpayers in this country—who include many parents, grandparents and those who care deeply about the fortunes of the next generation—have the right to know that they have a Government who will help grow our country and our economy. Poverty creates stony ground for that growth. It robs people of the dignity of being able to look after themselves and the choices about how to live their own lives. It robs children of what should be a worry-free time and makes them less able to take risks and try new things as they grow up.
This makes bad beginnings for a country that needs its next generation to be innovators, to be inventors and to build our future. I say this as one of three in a family with hard-working parents where money was tight. We knew every day in those years when I was growing up that the Tory Government at the helm did not give a stuff about people like us—we knew that every single day. Families in this country who are struggling should know that this Labour Government think about them every day. We have taken action to improve life for our kids, and we will keep fighting for that every single day.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We have two Opposition day debates that are both heavily subscribed, so we will start with a speaking limit of four minutes.
Dr Mullan
I want to finish my speech.
Poverty is, of course, a matter for Government. It is about policies and about incomes, but there is another important side to child poverty in this country that people are too uncomfortable to talk about: child maintenance and the absence of payments made in single-parent families. Research by the single-parent advocacy organisation Gingerbread found that 43% of children in single-parent families in the UK are living in poverty, compared with 26% in couple families. We know that poverty has many causes and there is no single solution, but there is clear evidence that when child maintenance is paid in full, it has a significant impact in lifting children out of poverty. Research shows that where it is received, child maintenance cuts the child poverty rate by 25%.
Gingerbread’s “Fix the CMS” report found that 57% of parents who care for a child and had a child maintenance arrangement in place reported that they did not receive the full amount. The amounts involved are significant. At the end of September 2024, total cumulative arrears of payments that were formally expected stood at £682.1 million, and that figure is due to reach £1 billion by the end of the decade. That is just a fraction of the story, because those figures are based only on the sometimes quite pitiful amounts that non-custodial parents have to pay, either because they earn little or because they hide what they earn. Those figures also do not include parents who are not pursued for money by the custodial parent.
Absent parents are denying children much higher amounts of money than the official figures suggest, and there is a deep unfairness to that. If a custodial parent simply chose not to provide any more resources to the child they care for, they would face criminal sanction for neglect. A non-custodial parent who does not give money for the upkeep of their child faces no similar ramifications. I have no idea why we do not place an expectation on a non-custodial parent to make the same efforts to find work and earn money as we do with out-of-work people on benefits, as they are also creating a burden on the taxpayer.
As the Minister may know, there is legislation that allows steps to be taken to place non-paying parents in home detention. I urge her and the Government to look closely at that. If people cannot be bothered to go out, work and pay for their children when they do not live with them, they should not be allowed out on a Saturday night to drink beers with their mates. That would help to drive down the huge amount of money that is owed to children by parents who are simply not paying for them—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The speaking limit has now been reduced to three minutes.
Universal Credit and Personal Independence Payment Bill
Nusrat Ghani ExcerptsWednesday 9th July 2025
(2 weeks, 2 days ago)
Commons ChamberRead Full debate Universal Credit Bill 2024-26 View all Universal Credit Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at as at 9 July 2025 - (9 Jul 2025)
Richard Burgon (Leeds East) (Lab)
Sometimes politics seems complicated. Sometimes the passage of a Bill through Parliament, especially with antics and shenanigans like those we saw last week, may confuse people. But actually, the issue before all of us when we vote tonight is very simple. Today, Wednesday 9 July 2025, are Labour MPs going to vote through cuts to universal credit that will take £2 billion from 750,000 sick and disabled people who are already on low incomes—people who will have been judged not fit to work? Will we put our name to a Bill that will, on average, take £3,000 off every single one of those 750,000 people? I think that if we had not had the complications with the Bill the week before, Labour MPs would find it very easy. They would see a Bill that asks us to take billions of pounds from low-income people in our constituencies across the country and find it very easy to vote no.
I ask my friends on the Labour Benches to cast their minds back to when they were first selected and first elected. None of us got into politics to take £3,000 a year off low-income people who are sick and disabled and on universal credit. It has been said that what is morally wrong can never be politically right. People outside this Chamber see the issue before us very clearly indeed. The Bill is being railroaded through, disabled people’s voices are being excluded, and when colleagues say, “Don’t listen to those who say we shouldn’t press on,” that means, “Don’t listen to disabled people.” I think we should listen to disabled people, and not one disabled people’s organisation supports the changes.
The reason the Bill is being rushed through a Committee of the whole House, rather than a Committee where disabled people and their organisations—people with lived experience—could talk to the MPs on the Committee, is because of a politically imposed artificial deadline that is there to save face. I welcome the changes made last week as a result of pressure from disabled people and Back-Bench MPs, but we are voting tonight on taking money off people on low incomes. We are voting tonight on whether we think, after saying last week that it was wrong to have a two-tier PIP system, that it is right to have a two-tier universal credit system.
The reality is that people will remember how we vote tonight. It has been said before, but I will say it again: some votes define us. They define us as politicians and they define how we view our time in Parliament. Disabled people who come to see us in our constituency surgeries will not understand if we, as Labour people, vote for this cut to universal credit tonight or abstain. We will live with that vote in every single constituency surgery between now and the next general election.
Let us take a step back and imagine that we did not have a Whip system in this House. Of course, all of us agree on 99% of things all the time. That is the reality, but if this were not a whipped vote, I think the vast majority of Labour MPs would vote with their conscience and with their disabled constituents against cutting universal credit. All the rest is sophistry. We will live with this vote. It is often said that the longer the statement on Twitter from an MP after a vote, the worse the decision they must have made. You start at the first sentence and by the time you get to the end, the constituents are thinking, “Did they? Did they really vote for that after all they said on the TV, in their tweets and in the Chamber?”
We are Labour people. This is not a left and right issue in the Labour party; this is a right and wrong issue. I say this: any Labour MP who votes against these cuts to low-income people on universal credit tonight will sleep soundly, knowing that they did all they could, on £90,000-odd a year, to stand up for their disabled constituents. That is what we got into politics to do. We should not plough ahead. We should vote this out.
The Chairman of Ways and Means (Ms Nusrat Ghani)
I call the final Back-Bench speaker, David Pinto-Duschinsky, after which I will call the Liberal Democrat spokesperson.
David Pinto-Duschinsky (Hendon) (Lab)
I rise to speak against amendment (a) to amendment 2, amendments 45 and 52, and new clause 12.
The creation of the modern welfare state by the 1945 Labour Government remains one of our proudest legacies. At its heart was the powerful idea that people should be protected from hardship and supported to realise their full potential. Underpinning that vision was a clear principle: everyone who can work should work, not just for the dignity and agency work brings, but because it is the most effective route out of poverty. Children in workless households are five times more likely to grow up poor than those in households where every adult works.
That principle holds true today, but it is under strain. One in 10 working-age people is out of the labour market; among young people, that figure is one in eight. This is not a global trend, but a challenge unique to the UK, rooted in the welfare system’s design. Too often, that system locks people with health conditions and disabilities out of work; too often, it penalises attempts to get ahead and fails to offer real support; too often, it writes people off.
Disabled people in the UK have an employment rate 29% lower than those without disabilities and face a wider unemployment gap than many of their international peers. Their poverty rate is 10% higher. This is not compassion. We owe it to these individuals and to the welfare state’s founding principles to fix this problem. We cannot avoid change or fall back on impractical slogans—to do so would be to abandon those who most need help.
Yet that is what these amendments and new clauses do. I shall start with amendments 45 and 52 and new clause 12, tabled by the Opposition, whose Benches are empty. These measures reveal a lack of seriousness and of a plan. The Tories presided over this crisis of opportunity and soaring claimancy. They failed to reform the system, to address the disability employment gap or to tackle fraud, which tripled on their watch. Throughout this debate, they have been unable to explain their alternative—the shadow Minister, the hon. Member for East Wiltshire (Danny Kruger), whom it is good to see in his place, recently admitted as much, saying that he could not say exactly what he would do—so they resort to gimmicks.
Amendment 45 demands that all assessments be face-to-face, forgetting that it was the Conservatives who cut face-to-face assessments by 90%. If there were an Olympic event for brass neck, they would win the gold medal every time. This proposal is unworkable, denying frontline managers discretion—a fact the Conservatives essentially admit in the small print. It is also unnecessary; unlike the Conservatives in government, this Government are restoring most assessments back to being face-to-face.
The same applies to amendment 52 and new clause 12. PIP already has strict residency and qualification rules and is needs based. These proposals would not effect meaningful change, but would slow down reform. Once again, this is gesture politics—the Conservatives do not have a plan.
While the Opposition admit a problem but offer no plan, amendment (a) to amendment 2 seems, I fear, to deny that there is a problem at all, proposing simply to remove all changes to the LCWRA. The changes those behind the amendment want to scrap are vital to rebalancing the system, which will not just remove disincentives to work but enable the largest above-inflation increase in basic jobseeker benefits since the 1970s. These benefits will rise £725 a year for 6.5 million people by 2029, helping 15,000 people in my constituency. Removing these changes risks losing measures that would lift 50,000 children out of poverty.
None of this is easy. We are talking about real lives, not abstract policies. I understand the anxiety this debate causes, but freezing the system in aspic and ignoring its failings would lock in current injustices and create future problems. We should start reform by reaffirming the system’s basic purpose: to protect and treat all with dignity, but also to empower people and give them true agency. That means recognising that some cannot work, ensuring protection for the vulnerable, and listening to and co-producing with disabled people. However, it also means ensuring that those who can work do so, offering support and holding employers to account. I believe that the Government’s proposals do so.
Just as Attlee’s Government reimagined the role of the state after the war, so we must reimagine it now after the upheavals of the pandemic, economic change and rising ill health. The world has changed, and our welfare system must do so too. We must reform the system—not in spite of Labour values, but because of them.
The Chairman of Ways and Means (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Steve Darling (Torbay) (LD)
Colleagues have described the events surrounding this Bill as “chaotic” and “shambolic”, and they were right to do so. Sadly, by failing to consult on key elements, the Government were setting up the Bill to fail. Moreover, the Government’s impact assessment is, I fear, somewhat misleading, because it bakes in cuts that the previous Government had planned, but not actually implemented. As a result, I am somewhat cautious of some of the Government’s figures.
Danny Kruger (East Wiltshire) (Con)
So here we are. Labour has had 15 years, including 14 years spent complaining about welfare reform while the Conservative Government fixed the catastrophic mess of unemployment benefits that we inherited—the alphabetti spaghetti of welfare that we had in 2010, if any of their Members can remember it. We fixed all those benefit traps, introducing universal credit, making work pay and supporting people off welfare and into jobs. In the first decade of our time in government, 100,000 fewer people were economically inactive every single year of the 2010s. In 2019 we had the lowest number of workless households since records began. Then covid hit, and Labour were clamouring for more welfare throughout that period. After the covid incident, as we left office we were introducing reforms to fix the health and disability benefits system. All of that was opposed every step of the way by Labour.
The Chairman of Ways and Means (Ms Nusrat Ghani)
Order. Before the hon. Member makes her intervention, will colleagues make sure that their language is parliamentary and respectful?
Olivia Blake
I want to pull up the shadow Minister on the ADHD statistics. Will he recognise that women were not recognised as having ADHD for many years and thus there is a backlog of women now accessing their right to benefits relating to ADHD? Many women like me were misdiagnosed with depression and anxiety disorders instead of ADHD.
Graham Stuart
On a point of order, Madam Chair. We were told that the Bill was going to bring a £5 billion saving to the Exchequer, then it was £2.5 billion. Is it in order not to have any idea what this will cost the taxpayer?
The Chairman of Ways and Means (Ms Nusrat Ghani)
That is a point of debate, not a point of order. Continue, Minister.
Pension Schemes Bill
Nusrat Ghani ExcerptsMonday 7th July 2025
(2 weeks, 4 days ago)
Commons ChamberRead Full debate Pension Schemes Bill 2024-26 View all Pension Schemes Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts
Torsten Bell
The right hon. Member invites me to skip quite a long way forward in my speech, and it is a long speech.
Torsten Bell
That was not the support I was hoping for from the Chair—understandable, but harsh. I will come to some of the points that the right hon. Member raises. I think he is referring particularly to pre-1997 indexation, which I shall come to.
As I said, the Bill includes a reserved power that will allow the Government to require larger auto-enrolment schemes to invest a set percentage into wider assets. That reflects the wider calls that have been made for this change but have not led to its taking place. What pension providers are saying is that they face a collective action problem, where employers focus too narrowly on the lowest charges, not what matters most to savers: the highest returns. I do not currently intend to use the power in the Bill, but its existence gives clarity to the industry that, this time, change will actually come.
Some argue—I will come to some of the points made by my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier)—that this somehow undermines the duty that pension providers have to savers. That is simply wrong. First, the Bill includes clear safeguards to prioritise savers’ interests and is entirely consistent with the core principle of trustees’ fiduciary duties. Clause 38 includes an explicit mechanism, which I have discussed with Members from the main three parties in this House, to allow providers to opt out if complying risks material detriment to savers. Secondly—this is the key point that motivates a lot of the Bill—savers are being let down by the status quo. There is a reason major pension schemes across the rest of the world are already investing in this more diverse range of assets.
Fragmentation within the pensions industry happens within providers, not just between them. Some insurers have thousands of legacy funds, so clause 41 extends to contract schemes the ability that trust-based schemes already have to address that. Providers will be able to transfer savers to another arrangement without proactive individual consent if, and only if, it is independently certified as being in the member’s best interest.
Another point that I hope is of common ground across the House is that we need to do more to realise the untapped potential of the local government pension scheme in England and Wales. We need scale to get the most out of the LGPS’s £400 billion-worth of assets. Again, the Bill will turn that consensus into concrete action. It provides for LGPS assets spread across 86 administering authorities to be fully consolidated into six pools. That will ensure that the assets used to provide pensions to its more than 6 million members—predominantly low-paid women—are managed effectively and at scale. Each authority will continue to set its investment strategy, including how much local investment it expects to see. In fact, these reforms will build on the LGPS’s strong track record of investing in local economic growth, requiring pension pools to work with the likes of mayoral combined authorities. In time, bigger and more visible LGPS pools will help to crowd private pension funds and other institutional investors into growth assets across the country.
Our measures will build scale, support investment and deliver for savers, but the Bill does more to ensure that working people get the maximum bang for every buck saved. To reinforce the shift away from an excessively narrow focus on costs, clause 5 provides for a new value-for-money framework. For the first time, we will require pension schemes to prove that they provide value for money, with standardised metrics. That will help savers to compare schemes more easily, and drive schemes themselves to focus on the value that they deliver. For persistently poor performers, regulators will have the power to enforce consolidation. That will protect savers from getting stuck in poorly performing schemes—something that can knock thousands of pounds off their pension pots.
We are also at last addressing the small pension pots issue. I was out door-knocking in Swansea earlier this spring, and a woman in her mid-30s told me that something was really winding her up—and it was not me knocking on the door. [Laughter.] This is a very unsupportive audience. It was trying to keep track of small amounts of pension savings that she had from old jobs; the only thing that was worse was that her husband kept going on about it. There are now 13 million small pension pots that hold £1,000 or less floating around. Another million are being added each year. That increases hassle, which is what she was complaining about, with over £31 billion-worth of pension pots estimated to currently be lost. It costs the pensions industry around £240 million each year to administer. Clause 20 provides powers for those pots to be automatically brought together into one pension scheme that has been certified as delivering good value. Anyone who wants to can of course opt out, but this change alone could boost the pension pot of an average earner by around £1,000.
Of course, once you have a pension pot, the question is: what do you do with it? We often talk about pension freedoms, but there is nothing liberating about the complexity currently involved in turning a pension pot into a retirement income. You have to consolidate those pots, choose between annuities, lump sums, drawdowns or cashing out. You have to analyse different providers and countless products. Choice can be a good thing, but this overwhelming complexity is not—77% of DC savers yet to access their pension have no clear plan about how to do so.
Mark Garnier
The hon. Member makes an important point. The earlier people start putting money in, the better. As a result of compound interest, over many years they will end up with a bigger pension pot, even if at the beginning the contribution is quite small; the amount aggregates over a long period. We will discuss that in Committee.
We are concerned about the lack of detail in the Bill. Too much is left to the discretion of regulators and to secondary legislation. Parliament deserves to have proper oversight of these reforms. From my discussions with the industry, it seems there is tentative support for many of the reforms in the Bill. However, the message that keeps coming back is that the devil will be in the detail, so I hope that as this Bill makes progress through the House, the Minister will be able to fill in more of the blanks—and I am sure he will; he is a diligent individual.
I move on to the most important thing that this Bill hopes to achieve: growth. We want to support Labour Members on the growth agenda, but too often they go about it in slightly the wrong way. Surpluses in defined-benefit pension schemes are a great example. Interest rates have risen post-covid, and that has pushed many schemes into surplus. In principle, we support greater flexibility when it comes to the extraction of these surpluses, but there need to be robust safeguards; that is certainly the message coming back from the industry.
Under the legislation, there is nothing to stop these surpluses being used for share buy-backs or dividend payments from the host employer, for instance. Neither of these outcomes necessarily help the Government’s growth agenda. We would welcome a strengthening of the Bill to prevent trustees from facing undue pressure from host employers to release funds for non-growth purposes. In addition, to provide stability, the Government should carefully consider whether low dependency, rather than buy-out levels, will future-proof the funds, so that they do not fall back into deficit.
Although the Government are keen to extract surpluses from the private sector, there is not the same gusto shown in the Bill when it comes to local government pensions. The House has discussed in detail the Chancellor’s fiscal rules, not least earlier today. Under the revised rules introduced by the Chancellor, the measure of public debt has shifted from public sector net debt to public sector net financial liabilities. As a consequence, the local government pension scheme’s record £45 billion surplus is now counted as an asset that offsets Government debt. This gives the Chancellor greater headroom to meet her fiscal targets—headroom that, dare I say it, is shrinking week by week. I do not wish to sound cynical, but perhaps that is the reason why the Bill is largely silent on better using these surpluses. This may be a convenient accounting trick for the Chancellor, but the surpluses could have been used, for instance, to give councils pension scheme payment holidays. The Government could make it easier to follow the example set by Kensington and Chelsea, which has suspended employer pension contributions for a year to fund support to victims and survivors of the 2017 Grenfell Tower tragedy. These revenue windfalls could be redirected towards a range of initiatives, from local growth opportunities such as business incubators to improving our high streets. We could even leave more money in council tax payers’ pockets.
I turn to the part of the Bill on which we have our most fundamental disagreement: the provisions on mandation. The Bill reserves the power to mandate pension funds to invest in Government priorities. That not only goes against trustees’ fiduciary duties—although I appreciate and recognise the point the Minister made earlier—but means potentially worse outcomes for savers. Pensions are not just numbers on a spreadsheet; they represent a lifetime of work, sacrifice, and hope for a secure future. The people who manage these funds and their trustees are under a legal duty to prioritise the financial wellbeing of savers. Their job is not to obey political whims, but to invest prudently, grow pension pots and uphold the trust placed in them by millions of ordinary people.
That fiduciary duty is not a technicality; it is the bedrock of confidence that the entire pension system rests on. These pension fund managers find the safest and best investments for our pensions, no matter where in the world they might be. If things go wrong, we can hold them to account. But if this reserve power becomes law, we have to ask the question: if investments go wrong, who carries the can? Will it be the pension fund manager and the trustees, or the Government, who did the mandation?
Likewise, while the reserve power in the Bill focuses on the defined-contribution market, the shift in emphasis has potentially profound impacts across the sector. UK pension funds, along with insurance companies, hold approximately 30% of the UK Government’s debt or gilt market. If mature defined-benefit schemes move from the gilt market to equities, that potentially has a profound impact on the Government’s debt management, or ability to manage debt, and therefore interest rates and mortgage rates. For that reason, we would welcome the Minister confirming whether any concerns have been raised by the Debt Management Office, and possibly the Bank of England. There is widespread opposition from across the industry to this power—I am approaching the end of my speech, you will be pleased to hear, Madam Deputy Speaker. There are better ways for the Government to deliver growth, such as changing obsolete rules and removing restrictions.
In the annuity market, solvency rules prevent insurers from owning equity in productive UK assets. Wind farms, for example, deliver stable returns through contracts for difference and contribute to the Government’s green agenda. They could be an ideal match for long-term annuity investments, while also delivering clean energy. Releasing the limits on the ability of insurers to fully deploy annuity capital has the potential to unlock as much as £700 billion by 2035, according to research by Aviva. Rather than imposing top-down mandates, we want the Government to maximise growth opportunities from our pension industry by turning over every stone and seeking out the unintended consequences of old regulations, not imposing new ones.
I will conclude, Madam Deputy Speaker, as you will be delighted to hear. [Interruption.] Yes, I have taken a lot of interventions. We reaffirm our commitment to working constructively with the Government. Stability in the markets is of paramount importance, and we recognise the need for a collaborative approach as the Bill progresses through the House. We will bring forward amendments where we believe improvements can be made, and we will engage in good faith with Ministers and officials to get the detail right.
We want to go with, not against, the grain of what the Government are seeking to achieve through this Bill, and I look forward to working with the Minister in the weeks and months ahead.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Chair of the Select Committee, Debbie Abrahams, after whom I will call Steve Darling.
Debbie Abrahams
I understand what my hon. Friend says. There is always a balance to be found with long-term financial decisions, but this is partly a political decision, so I point to the Pensions Minister to come up with a response.
Do the Government propose to consult on the design of the mandation power and how to mitigate against unintended consequences? Do the Government think that there is a case for changing the law on fiduciary duty to make clear that trustees can take account of wider issues, such as the impact of pension scheme investments on the economy and the environment? What would be the pros and cons of doing that?
Briefly, I would like to touch on the LGPS. I slightly disagree with some of the shadow Pensions Minister’s points. Since 2015, the 86 funds have been formed into eight groups. If the Pensions Minister is proposing to reduce that still further, will he set out the reasons behind that? What is the problem that merging them even further is trying to fix? Will he let me know about that in his closing remarks?
Finally, I would like to touch on the pre-1997 indexation, as the Pensions Minister knew that I would. At the end of March 2024, the Pension Protection Fund had a surplus of £13.2 billion. The PPF has taken steps to reduce the levy from £620 million in 2020 to £100 million in 2025. However, under current rules, if it made the decision to reduce the levy to zero, it would then be unable to increase it again. The 2022 departmental review by the Department for Work and Pensions recommended that the PPF and the DWP work together to introduce changes to the levy, so that the PPF would have more flexibility in reducing and increasing the levy level.
There is another issue, which the Pensions Minister will know about. PPF and financial assistance scheme members, particularly those in their later years, are really struggling. I came across a piece—I think it was in The Daily Telegraph—that said that one of the key supporters of the Pension Action Group and a FAS member, Jacquie Humphrey died a few days ago, just 11 weeks after the death of her husband. They were both employed by Dexion, which folded, and, like hundreds of others, refused to leave it there. Is there any comfort that we can provide? I understand and recognise what the Minister says about the PPF surplus being on the public sector’s balance sheet, but given that these people, who are in their 70s and 80s, are unable to live in dignity, what can we do to provide that for them in their later years?
Madam Deputy Speaker (Ms Nusrat Ghani)
Jennie seems to have captured the mood of the House, but I call the spokesperson for the Liberal Democrat party.
Universal Credit and Personal Independence Payment Bill
Nusrat Ghani ExcerptsTuesday 1st July 2025
(3 weeks, 3 days ago)
Commons ChamberRead Full debate Universal Credit Bill 2024-26 View all Universal Credit Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Gill German (Clwyd North) (Lab)
It is safe to say that the topic of today’s debate has been my overriding focus in recent months. I thank my constituents and all organisations for their input, as well as the Secretary of State and the wider DWP team for listening to concerns, and indeed for acting on them with recent amendments.
The Bill will raise the universal credit standard allowance by the largest increase since the 1970s. It will help 3.9 million families with an average gain of £265 a year, bringing us closer, finally, to ensuring that every family can afford the essentials without relying on charity or community support. I wholeheartedly welcome this as part of the Government’s wider efforts to rebalance universal credit to better reward work and improve basic adequacy, along with an end to reassessment for those with the most severe conditions and an end to work capability assessments, as well as the right to try work without the risk of losing existing entitlements and crucial increased investment in health and into work pathways.
However, the undeniable focus of the Bill has been changes to the personal independence payment. I truly thank my Clwyd North constituents for their time and their trust in sharing their stories so openly. To them, I say: I hear you, and will continue to represent you. So many of my constituents have been desperately worried about what the eligibility changes mean for them; this concern is real, and it must be taken seriously. One constituent said to me:
“Every time I turn on the news, it’s there. I’ve looked at the changes and I know they won’t affect my payments, but I keep wondering if I’ve got it right…and it’s causing me real anxiety.”
That level of fear is hugely regrettable, and is a responsibility we all share.
Thanks to the incredible support of advice organisations in Clwyd North, many of my constituents have navigated the complex PIP system—one, by the way, that is too reliant on appeals and outside agencies—and now have some stability in meeting daily costs, which remain far too high for far too many. It is right that the Government have listened to these concerns, and I welcome the Government’s amendments to protect existing claimants and the accelerated review of PIP assessments with a stronger commitment to co-production with disabled people.
However, it is also right to recognise that the system is not working as it should be. It is right that we recognise that too many believe that they have nothing to offer and that their health, and particularly their mental health, defines what they can do. It is also right that we stop that belief being passed on to the next generation—something I have seen far too often as a teacher—and stop too many young people feeling that they do not belong in the social networks and financial independence that good work provides.
The expected soaring reliance on PIP reflects the woeful lack of health and local support that has been offered until now. Areas such as mine have sought to fill this gap, with services that create bespoke pathways to work—like the pathway trod by my constituent whose life changed forever when he was helped out of his bedroom, which he had stayed in for years while struggling with his mental health, and into stable work in our local hospitality sector. There are many more like him. We must turbocharge that support, working closely with health services to provide the wraparound care that people need. And, as an inactivity trailblazer area, Clwyd North is determined to lead this effort.
Reform is endlessly challenging, but it is necessary as the system we inherited is not working. It is a hugely ambitious challenge and requires us to be bold and determined. I came into politics to be bold, and I will work tirelessly to make real change happen. And it is with that belief that I support this Bill today.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Steve Witherden—not here. I call Ian Byrne.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We have run out of time. I call the shadow Secretary of State.
Helen Whately (Faversham and Mid Kent) (Con)
On a point of order, Madam Deputy Speaker. In the light of the shambles this afternoon, with the Bill being ripped apart literally before our eyes in this Chamber and the Minister unable even to tell us how much it will now save, can you please advise me whether it should still be rushed through to be debated next week in Committee of the whole House, or whether the Government should in fact withdraw it?
Madam Deputy Speaker (Ms Nusrat Ghani)
The hon. Member has put her point on the record. She has been a Minister in the past and so will know that the scheduling of business is a matter for the Government, and not for the Chair.
Universal Credit and Personal Independence Payment Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7),
That the following provisions shall apply to the Universal Credit and Personal Independence Payment Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and on Third Reading
(2) Proceedings in 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 those proceedings are commenced.
(3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the day on which proceedings in Committee of the whole House are commenced.
Programming committee
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.—(Chris Elmore.)
Question agreed to.
Universal Credit and Personal Independence Payment Bill (Money)
King’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 Universal Credit and Personal Independence Payment Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any increase in the administrative expenses of the Secretary of State that is attributable to the Act;
(b) any increase in sums payable by virtue of any other Act out of money so provided that is attributable to increasing—
(i) the standard allowance or limited capability for work and work-related activity element of universal credit;
(ii) the personal allowance, support component, severe disability premium or enhanced disability premium of income-related employment and support allowance.—(Chris Elmore.)
Question agreed to.
Oral Answers to Questions
Nusrat Ghani Excerpts(1 month ago)
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Torsten Bell
That was a powerful and long question, and I am glad that Conservative Members listened to every word of it, because they left us 1 million young people not in education, employment or training—that is what a disgrace looks like. What is happening now? We have seen falling numbers of NEETs over the past quarter and the past year.
Helen Whately (Faversham and Mid Kent) (Con)
Two weeks ago, the hon. Gentleman’s Government told people they were U-turning on winter fuel payments because the economy is on a “firmer footing”. The next day, the unemployment figures were released, showing that a quarter of a million jobs have been lost since the Chancellor’s job-taxing Budget. The country is now losing 100,000 jobs a month. These figures are worse than even the most pessimistic forecast. Is that what a firm footing looks like to the hon. Gentleman?
Charlotte Cane
Over 4,500 people in Ely and East Cambridgeshire claim PIP, and they are not just anxious, as you put it; they are seriously worried that they are going to lose the payments and, with them, their independence. Contrary to what you said—sorry, contrary to what the Minister said—the Government’s own data suggests that 85% of people getting standard payments and 11.5% of those getting enhanced payments will lose support under the proposed changes. What steps is the Minister taking to support those who will be affected, including to make sure that their health and eligible care needs are met and, most importantly, that they can maintain their independence?
Madam Deputy Speaker (Ms Nusrat Ghani)
I suggest that, in future, shorter questions might prevent mistakes such as “you”.
Sir Stephen Timms
It is really important for claimants of PIP that its funding should be sustainable into the future. The trajectory of the past few years has been unsustainable. We are taking action to put that right. The hon. Member is wrong to say that because people did not get four points last time, they will not keep their PIP. As I said, the view of the OBR, which I think is correct, is that most of them will. We are consulting on how to support those who will lose their PIP as a result of the changes that we have announced.
Sir Stephen Timms
No. Members will be voting for reforms to open up opportunities for people who have been denied opportunities for far too long. We are putting that right.
Danny Kruger (East Wiltshire) (Con)
I respect the Minister very much, and I know that he cares deeply about people who rely on the social security system. That is why it is such a tragedy that he is presiding over these profound reforms without having consulted disabled people. Can he explain why so many benefit claimants feel that these reforms have been rushed through, not to make a fairer system but because the Treasury demanded cuts to meet the fiscal emergency created by the Chancellor’s job-destroying, growth-stopping Budget? They are right to think that, are they not?
Sir Stephen Timms
I am not sure whether the shadow Minister wants me to go further or not so far—he seems to be facing both ways. He is right that we are not at this point proposing any changes to the Motability scheme.
John Milne (Horsham) (LD)
Recently I met Kathryn from my constituency who had to give up a £90,000-a-year job in order to care for her husband. With 150,000 carers set to lose their allowance due to PIP eligibility reforms, some of our country’s most hard-pressed households face losing £8,000 a year. Will the Minister confirm that even if the welfare reforms work out to the most optimistic expectations, there will be far more net losers that net gainers among PIP claimants?
Liz Kendall
I congratulate, through my hon. Friend, those in his constituency on the fantastic work that he has described. I recently visited an incredible supported internship programme that helps young people with learning disabilities to get work and stay in work, including in our local NHS and with our local hotel voco in the heart of Leicester. This Government are determined to tackle the disability employment gap, which fell under the last Labour Government, although movement stalled under the Tories. We are going to turn this around with the biggest ever investment in employment support, introducing mandatory disability pay gap reporting and looking at what more we can do to support brilliant employers, like the one my hon. Friend described, to recruit and retain more disabled people.
Helen Whately (Faversham and Mid Kent) (Con)
More than half of new health and disability benefits claims are now for mental health, yet under the Government’s welfare cuts Bill the personal independence payment could be stripped from three quarters of claimants with arthritis and two thirds of those with heart disease but fewer than half of those with anxiety. Does the right hon. Lady believe this is the right decision?
Liz Kendall
Let me tell the hon. Lady what we are doing to improve mental health support for people in this country and to make sure that it is treated with equal importance to physical health: we have made significant progress towards recruiting the additional 8,500 mental health workers we said we would recruit in our manifesto to reduce delays and provide support; we have confirmed funding to help an extra 380,000 patients get access to talking therapies; and we are investing the biggest ever amount in employment support for sick and disabled people. I say to the hon. Lady, who left 2.8 million people out of work due to long-term sickness and 1 million young people not in education, employment or training, that it is about time she apologised to the country and made up her mind about whether she will back our reforms.
Madam Deputy Speaker
I remind Members that topical questions and answers should be brief.
Graeme Downie (Dunfermline and Dollar) (Lab)
Sir Stephen Timms
I commend my hon. Friend for all his work on this issue, including his seminal 2022 independent review. He is right that care leavers need support as they move to independent living. The Department for Work and Pensions at the moment exempts care leavers from the shared accommodation rate, and provides support toward sustained employment and career progression. We will certainly consider if there is more that we can do.
Victoria Collins (Harpenden and Berkhamsted) (LD)
Andrew Western
I am very sorry to hear about the plight of the hon. Member’s constituent. If she would like a meeting with me, I am very happy to give her that, and I am also happy to look into the matter, as she suggests.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Previous changes in eligibility for disability benefits have resulted in significant adverse health impacts, including an additional 600 suicides in 2010 and 130,000 more people with new onset mental health conditions in 2017. What estimates have the Government undertaken of the impacts on health of the Universal Credit and Personal Independence Payment Bill, which is due to have its Second Reading next week?
Winter Fuel Payment
Nusrat Ghani Excerpts(1 month, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
On 21 May, the Prime Minister told this House that the Government wanted to extend eligibility for winter fuel payments to a wider range of pensioners in England and Wales. Today we are setting out how this will happen for the coming winter and the years ahead. This will provide certainty for pensioners and ensure that payments can be made swiftly and automatically, which is our priority. I hope this statement will also answer many of the questions that hon. Members have raised with me and others in recent weeks.
Let me set out for the House how this system will work. All pensioners with incomes up to and including £35,000 will benefit from support, as will all those on pension credit and other income-related benefits. The payment of £200 per household, or £300 per household where there is someone aged over 80, will be made to all pensioner households in England and Wales. Individual pensioners with taxable income above £35,000 will have any winter fuel payment automatically recovered via His Majesty’s Revenue and Customs without the need for them to take any action. This will be via PAYE for the majority, or in their self-assessment tax return for those who already complete one. No one will be brought into tax or into self-assessment just to repay their winter fuel payment. Those that prefer not to receive a payment can opt out of receiving it. As was previously the case before July 2024, where the household is not getting an income-related benefit and there is more than one pensioner in the household, shared payments split across the recipients will be made.
This Government have had to make tough decisions. It is right to means-test the winter fuel payment—[Interruption.] I thought the Conservative party supported means-testing the winter fuel payment. We will find out in this debate shortly. We have had to make take tough decisions because of the disaster left by the Conservative party. It is right to means-test the winter fuel payment on grounds of fairness and fiscal sustainability. Most people accept that it makes no sense to pay hundreds of pounds to pensioners irrespective of their incomes. Those on the highest incomes do not need it, and there are many other calls on public spending.
The Government have, however, listened to concerns about the level of the means test. We are acting to ensure that all lower-income pensioners receive support. The new individual £35,000 threshold is significantly above the income of pensioners in poverty, and broadly in line with average earnings. It will mean that the vast majority—over three quarters, or 9 million pensioners—will benefit from a winter fuel payment. This change ensures that the means-testing of winter fuel payments has no effect on pensioner poverty.
Means-testing the winter fuel payment in England and Wales like this will save around £450 million a year, subject to certification by the Office for Budget Responsibility, compared with the system of universal payments. It will cost around £1.25 billion in England and Wales, compared with the position last winter. Decisions about the situation in Scotland and Northern Ireland remain for their devolved Administrations in the usual way. As the Prime Minister has previously set out, these are changes that will be fully funded at the next fiscal event, the autumn Budget. That will ensure that final costings and funding decisions come alongside the latest forecast from the OBR. We will ensure that the Government’s non-negotiable fiscal rules are met.
We are setting out these changes before the summer to ensure that more pensioners receive support this winter. Regulations will be laid in the coming months to ensure that the payments are made, and tax changes will be legislated for in the Finance Bill.
I want to spell out clearly today that pensioners do not need to do anything. Winter fuel payments will be paid automatically this winter to all pensioners who receive the state pension, pension credit or anyone who has previously received a winter fuel payment. Similarly, payments will be recovered automatically through the tax system for those with an income of over £35,000.
Pensioners will also continue to receive wider support. Our pension credit take-up campaign has seen almost 60,000 awards made. I thank hon. Members on both sides of this House, local authorities and charities for their work on that campaign. Over 12 million pensioners right across the UK are also benefiting from the triple lock. The full new state pension is set to increase by up to £1,900 a year over this Parliament as a result. I commend that support for pensioners, and this statement, to the House.
Torsten Bell
My hon. Friend sets out the principle case for means-testing the winter fuel payment very well indeed. I do not think that anybody with common sense thinks it right that millionaires receive each year from the Exchequer hundreds of pounds towards their winter fuel payments—people have recognised that for years. The Government are making the tough choice of saying that that we will no longer pay the winter fuel payment in that way.
Steve Darling (Torbay) (LD)
Our country needs stability. I fear that this policy is from the book on how to botch running the country. Although last year’s decision was wrong and this change is right—the Liberal Democrats had long campaigned against those proposals, and it is important to acknowledge Independent Age, Silver Voices and Age UK, which have all driven the change—a Government who wobble do not give us the stability we need for our economy.
Some 300,000 pensioners in Devon and Cornwall have been worried sick about the proposals, so why did the Government not implement this approach 12 months ago? The Government comms have not been clear on single pensioner households, about which there are grave concerns, so will the Minister provide clarity on that matter? What about households in which there are pensioners on higher and lower rates—how will they be treated? Finally, may I have assurances that the Government will continue to push hard on pension credit? For the poorest pensioners, it can offer a boost of £11,000 a year to their income, which is the real way to tackle pensioner poverty in the UK.
Torsten Bell
This is why I am confused. What is the position of the Conservative party? Is it to support means-testing of the winter fuel payment—yes or no? Are you going to send out the shadow Chancellor to give a speech—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. “Are you going to send?” I do not think the Minister is speaking to the Chair.
Torsten Bell
Is the Conservative party going to send out the shadow Chancellor to give a speech in which I cannot tell whether he is apologising for Liz Truss, then come to this House the very next week and call for universal winter fuel payments? If the Conservatives are calling for universal winter fuel payments, they need to set out how that will be funded. This is a Government who have made their choice. It is right to means-test the winter fuel payment, because millionaires should not receive it. If the Conservatives do not know what their policy is on that, they will not know their policy on anything else.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
I welcome the decision today, and I am delighted to hear the announcement from the Minister. Let us be crystal clear: this is a direct result of the progress that this Labour Government are making in turning around our economy. For my constituents, however, the future of the winter fuel payment—or its equivalent—lies in the hands of the Scottish Government. Can the Minister confirm that the Barnett consequentials to Scotland resulting from today’s announcement will exceed what the Scottish Government are already planning to spend on their equivalent of the winter fuel allowance? [Hon. Members: “Will the hon. Lady give way?”] Will he join me in urging the Scottish Government to follow suit and ensure that the additional funds that are provided due to today’s decision will restore the full winter fuel payment to all those who need it in—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Please be seated. I do not need any help with managing the Chamber, but questions need to be short. Minister, let us have a short, sharp answer.
Torsten Bell
My short, sharp answer is that wages have grown in the first 10 months of this Government faster than in the first 10 years of the last Conservative Government. Interest rates have been cut four times. My hon. Friend is right to say that progress is being made, and that needs to continue. We need to ensure that more people feel the benefits of that growth in their pockets. The changes we are making to winter fuel payments today are one of those benefits. I can confirm that there will be a block grant adjustment exactly as she sets out.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I give another reminder to colleagues that questions must be short, as must answers. Otherwise, many colleagues will be disappointed.
Mohammad Yasin (Bedford) (Lab)
I share the deep concerns of my constituents about the loss of the winter fuel payment, which the Minister will know I relayed to the Department. I am glad that the Government have acted on those concerns and reviewed the threshold so that the majority of pensioners will receive the payment this winter. Does the Minister agree that in stabilising the economy we are now in a better position to do what Labour Governments have always done best: protecting the vulnerable in our society?
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
I thank the Minister for his statement, which I know will be greatly welcomed by my constituents. Over 14 years, we became used to a Government who did not listen and did not change course when circumstances changed, so I for one am grateful for a Labour Government who do so.
While there was an uptick in pension credit—
Kirsteen Sullivan
Will the Minister commit himself again to working with local government and devolved Administrations to increase the number of people receiving pension credit, so that pensioners on the lowest incomes do not lose out but receive the support that they need?
Madam Deputy Speaker (Ms Nusrat Ghani)
We could have gone faster in the past hour and 10 minutes if the Minister was faster with his answers.
Jessica Toale (Bournemouth West) (Lab)
I have worked hard with Citizens Advice Bournemouth, Christchurch and Poole in my constituency to get pensioners on to pension credit. However, on the doorstep, I have met far too many people, especially single women, who are £10—or even £1—over the threshold for pension credit. I welcome the statement, and thank the Minister for listening to my constituents’ concerns about the threshold. Does he agree that this policy shows the difference between this Government and the previous one? This Government are doing what is necessary to get stability in our economy, what is fair to get money back into our public services, and what is right to protect the vulnerable in our society.
Madam Deputy Speaker (Ms Nusrat Ghani)
That is the end of the statement. I will allow the Front Benchers a moment to shuffle over.
Public Authorities (Fraud, Error and Recovery) Bill
Nusrat Ghani ExcerptsTuesday 29th April 2025
(2 months, 3 weeks ago)
Commons ChamberRead Full debate Public Authorities (Fraud, Error and Recovery) Bill 2024-26 View all Public Authorities (Fraud, Error and Recovery) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 29 April 2025 - (29 Apr 2025)
Madam Deputy Speaker (Ms Nusrat Ghani)
With this it will be convenient to discuss the following:
Government new clause 18—Consequential amendments to the Social Security Fraud Act 2001.
Government new clause 19—Devolved benefits.
Government new clause 20—Powers of Scottish Ministers.
New clause 1—Recovery of overpayments of Carer’s Allowance—
“The Secretary of State may not exercise any of the powers of recovery under this Act in relation to a person who has received an overpayment of Carer’s Allowance until such time as—
(a) the Secretary of State has commissioned an independent review of the overpayment of Carer’s Allowance;
(b) the review has concluded its inquiry and submitted a report containing recommendations to the Secretary of State;
(c) the Secretary of State has laid the report of the independent review before Parliament; and
(d) the Secretary of State has implemented the recommendations of the independent review.”
This new clause would delay any payments being taken from people who the Government may think owe repayments on Carer’s Allowance until the independent review into Carer’s Allowance overpayments has been published and fully implemented.
New clause 2—Impact of Act on people facing financial exclusion—
“(1) The independent person appointed under section 64(1) of this Act must carry out an assessment of the impact of this Act on the number of people facing financial exclusion.
(2) The independent person must, after 12 months of the passing of the Act—
(a) prepare a report on the review, and
(b) submit the report to the Minister.
(3) On receiving a report the Minister must—
(a) publish it, and
(b) lay a copy before Parliament.”
This new clause would look into the impact of the Act on people facing financial exclusion.
New clause 3—Audit of algorithmic systems used in relation to Carer’s Allowance overpayments—
“(1) An independent audit of algorithmic systems used in the assessment, detection or recovery of Carer’s Allowance overpayments must be conducted at least once every six months.
(2) Any audit under subsection (1) must be conducted by persons with relevant expertise in data science, ethics and social policy who have no direct affiliation with—
(a) the Department for Work and Pensions, or
(b) any person or body involved in the development or operation of the algorithmic systems under review.
(3) An audit conducted under this section must consider—
(a) the accuracy of the algorithmic systems in identifying overpayments, and
(b) the fairness of the systems’ design, application and operation, including any disproportionate impact on particular groups.
(4) After every audit a report on its findings must be—
(a) published;
(b) laid before both Houses of Parliament within 14 days of publication; and
(c) made publicly available in an accessible format.
(5) If any audit identifies significant inaccuracies, unfairness or biases in any algorithmic systems, the Secretary of State must, within 30 days of the publication of the report outlining these findings, present an action plan to Parliament which outlines the steps which the Government intends to take to address the identified issues.”
This new clause would provide for an audit of algorithmic systems used in relation to Carer’s Allowance overpayments.
New clause 4—Inclusion of systems within the Algorithmic Transparency Reporting Standard—
“(1) For the purposes of this section, “system” means—
(a) algorithms, algorithmic tools, and systems; and
(b) artificial intelligence, including machine learning;
provided that they are used in fulfilling the purposes of this Act.
(2) Where at any time after the passage of this Act, the use of any system is—
(a) commenced;
(b) amended; or
(c) discontinued;
the Minister must, as soon as reasonably practicable, accordingly include information about the system in the Algorithmic Transparency Reporting Standard.”
This new clause would require the use of algorithms, algorithmic tools, and systems, and artificial intelligence, including machine learning, to be included within the Algorithmic Transparency Reporting Standard.
New clause 5—Duty to consider domestic abuse risk to account holders—
“(1) Before any direct deduction order under Schedule 5 is made, the Secretary of State has a duty to consider its effect on any person who—
(a) is a victim of domestic abuse, or
(b) the Minister reasonably believes to be at risk of domestic abuse.
(2) In this section “domestic abuse” has the meaning given by section 1 of the Domestic Abuse Act 2021.”
New clause 6—Review of whistle blowing processes in relation to public sector fraud—
“(1) Secretary of State must, within one year of the passing of this Act, conduct a review of whistle blowing processes in relation to fraud in the public sector.
(2) A review conducted under this section must consider—
(a) the appropriateness and efficacy of existing whistle blowing processes;
(b) barriers to reporting fraud and reasons for under reporting of fraud; and
(c) recommendations for change.
(3) The Secretary of State must publish a report containing—
(a) the findings and conclusions of the review, and
(b) a timetable for the delivery of any recommendations for change within six months of the completion of the review.”
New clause 7—Overpayments made as a result of official error—
“(1) Section 71ZB of the Social Security Administration Act 1992 is amended as follows.
(2) In subsection (1), for “The” substitute “Subject to subsection (1A), the”.
(3) After subsection (1) insert—
“(1A) The amount referred to in subsection (1) shall not include any overpayment that arose in consequence of an official error where the claimant or a person acting on the claimant’s behalf or any other person to whom the payment is made could not, at the time of receipt of the payment or of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.””
This new clause would provide that, where universal credit overpayments have been caused by official error, they can only be recovered where the claimant could reasonably have been expected to realise that there was an overpayment.
New clause 8—Offence of fraud against a public authority—
“(1) A person who-
(a) commits,
(b) assists or conspires in the committal of, or
(c) encourages the committal of,
fraud against a public authority commits an offence.
(2) A person who commits an offence under subsection (1) is liable-
(a) on summary conviction, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);
(b) on conviction on indictment, to imprisonment for a term not exceeding 10 years.”
New clause 9—Application of the Police and Criminal Evidence Act 1984 to investigations conducted by the Department for Work and Pensions—
“(1) The Secretary of State must, within six months of the passing of this Act, introduce regulations for the purpose of applying certain powers of the Police and Criminal Evidence Act 1984, subject to such modifications as the order may specify, to investigations of offences conducted by the Department for Work and Pensions.
(2) The powers to be applied must include–
(a) the power of arrest;
(b) any other such powers that the Secretary of State considers appropriate.
(3) Regulations made under this section shall be made by statutory instrument.”
New clause 10—Liability orders—
“(1) Where a person–
(a) has been found guilty of an offence under section 1 or section 11 of the Fraud Act 2006, or the offence at common law of conspiracy to defraud,
(b) that offence relates to fraud committed against a public authority, and
(c) has not paid the required penalties or not made the required repayments,
the Secretary of State must apply to a magistrates’ court or, in Scotland, to the sheriff for an order (“a liability order”) against the liable person.
(2) Where the Secretary of State applies for a liability order, the magistrates’ court or (as the case may be) sheriff shall make the order if satisfied that the payments in question have become payable by the liable person and have not been paid.
(3) The Secretary of State may make regulations in relation to England and Wales—
(a) prescribing the procedure to be followed in dealing with an application by the Secretary of State for a liability order;
(b) prescribing the form and contents of a liability order; and
(c) providing that where a magistrates’ court has made a liability order, the person against whom it is made shall, during such time as the amount in respect of which the order was made remains wholly or partly unpaid, be under a duty to supply relevant information to the Secretary of State.
(4) Where a liability order has been made against a person ("the liable person"), the Secretary of State may use the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (taking control of goods) to recover the amount in respect of which the order was made, to the extent that it remains unpaid.”
New clause 11—Publication of results of pilot schemes—
“Within three months of the passing of this Act, the Secretary of State must publish the results of any pilot schemes run with banks to test the provisions in Chapter 1 of Part 2.”
New clause 12—Report on cost implications for banks—
“The Secretary of State must, within three months of the passing of this Act, publish a report on the expected cost implications of the provisions of this Act for banks.”
New clause 13—Annual reporting of amounts recovered—
“(1) The Secretary of State must publish an annual report detailing the amount of money which has been recovered under the provisions of this Act.
(2) A first report must be published no later than 12 months after the passing of this Act with subsequent reports published at intervals of no more than 12 months.”
New clause 14—Impact of Act on vulnerable customers—
“(1) The Secretary of State must, within six months of the passing of this Act, lay before Parliament an assessment of the expected impact of the Act on vulnerable customers.
(2) For the purposes of this section, “vulnerable customers” means someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.”
New clause 15—Publication of an Anti-Fraud and Error Technology Strategy—
“(1) The Secretary of State must, within six months of the passing of this Act, publish an Anti-Fraud and Error Technology Strategy.
(2) An Anti-Fraud and Error Technology Strategy published under this section must set out–
(a) how the Government intends to use automated technologies or artificial intelligence to tackle fraud against public authorities and the making of erroneous payments by public authorities, and
(b) a series of safeguards to provide for human oversight of decision making that meet the aims set out in subsection (3);
(c) how rights of appeal will be protected;
(d) a framework for privacy and data sharing.
(3) The aims of the safeguards in subsection (2)(b) are—
(a) to ensure that grounds for decision making can only be reasonable if they are the result of a process in which there has been meaningful human involvement by a human of adequate expertise to scrutinise any insights or recommendations made by automated systems,
(b) to make clear that grounds cannot be reasonable if they are the result of an entirely automated process, and
(c) to ensure that any information notice issued is accompanied by a statement—
(i) setting out the reasonable grounds for suspicion that have been relied on, and
(ii) confirming that the conclusion has been formed on the basis of human involvement.”
New clause 21—Offence of encouraging or assisting others to commit fraud—
“(1) The Social Security Administration Act 1992 is amended as follows.
(2) In section 111A (dishonest representation for obtaining benefit etc), after subsection (1G) insert—
“(1H) A person commits an offence if they—
(a) encourage or assist another person to commit an offence under this section, or
(b) provide guidance on how to commit an offence under this section.
(1I) An offence under this section can be committed where the encouragement, assistance or guidance happens online.
(1J) A person who commits an offence under this section is liable on conviction on indictment to imprisonment for a term not exceeding five years or an unlimited fine.”
(3) In section 112 (false representations for obtaining benefit etc), after subsection (1F) insert—
“(1G) A person commits an offence if they—
(a) encourage or assist another person to commit an offence under this section, or
(b) provide guidance on how to commit an offence under this section.
(1H) An offence under this section can be committed where the encouragement, assistance or guidance happens online.
(1I) A person who commits an offence under this section is liable on conviction on indictment to imprisonment for a term not exceeding five years or an unlimited fine.””
New clause 22—Impact of Act on people with protected characteristics—
“The Secretary of State must, prior to making regulations under section 103 to bring into force any provision of this Act, lay before Parliament an assessment of the expected impact of the Act on people with protected characteristics who are in receipt of social security benefits.”
This new clause would ensure any impact of the Bill on people with protected characteristics in receipt of social security benefits was examined prior to the Act’s implementation.
New clause 23—Report on public sector fraud during COVID-19 pandemic—
“(1) The Minister for the Cabinet Office must, within six months of the passing of this Act, lay before Parliament a report evaluating the extent of public sector fraud that occurred during the COVID-19 pandemic.
(2) The report must include—
(a) an account of fraudulent or erroneous payments made by or on behalf of public authorities, including but not limited to the Department of Health and Social Care and NHS England,
(b) a review of how public procurement practices in place between March 2020 and December 2021, including—
(i) the use of high priority and expedited contracting for suppliers, and
(ii) the role of political appointments and personal connections in procurement decisions,
may have contributed to fraud against public authorities,
(c) the cost to the public purse of fraud against public authorities during the COVID-19 pandemic, and
(d) an assessment of the adequacy of Government oversight and other measures then in place to prevent fraud against public authorities.
(3) Where the report finds or concludes that there were—
(a) failings in Government oversight and other measures then in place to prevent fraud against public authorities, or
(b) any action or inaction by the Government which enabled fraud against public authorities,
the Minister must make a statement to the House of Commons acknowledging these findings and setting out actions planned to ensure any failings are not repeated.”
Amendment 15, in clause 3, page 3, line 10, leave out “10” and insert “28.”
Government amendments 23 and 24.
Amendment 16, in clause 4, page 3, line 33, leave out “Minister” and insert “First Tier Tribunal”.
Amendment 13, page 3, line 33, after “notice” insert
“or of the duration of the period mentioned in section 3(4)(a)”.
Amendment 80, page 3, line 34, leave out “7” and insert “28”.
Amendment 17, page 3, line 36, leave out “Minister” and insert “First Tier Tribunal”.
Amendment 18, page 3, line 38, leave out “Minister” and insert “First Tier Tribunal”.
Amendment 14, page 4, line 2, after “notice” insert
“, including by extending the duration of the period mentioned in section 3(4)(a) where satisfied that the person is reasonably unable to comply with the requirement to provide the information within the time required by the notice”.
Amendment 19, page 4, line 3, leave out “Minister” and insert “First Tier Tribunal”.
Amendment 81, page 4, line 10, at end insert—
“(7) Where a person has applied for a review of an information notice, the period mentioned in section 3(4)(a) is to be treated as beginning on the day after which the outcome of the review is notified to the person to whom the information notice was given.”
Government amendments 25 to 29.
Amendment 1, in clause 64, page 34, line 15, at end insert—
“(1A) Prior to appointing an independent person, the Minister must consult the relevant committee of the House of Commons.
(1B) For the purposes of subsection (1A), “the relevant committee” means a committee determined by the Speaker of the House of Commons.”
This amendment would provide for Parliamentary oversight of the appointment of the “Independent person”.
Government amendments 30, 31, 76, 75, 32 and 33.
Amendment 2, page 40, line 36, leave out clause 74.
This amendment removes the requirement for Banks to look into relevant claimants’ bank accounts.
Amendment 3, in clause 75, page 41, line 21, at end insert—
“(1A) Prior to appointing an independent person, the Minister must consult the relevant committee of the House of Commons.
(1B) For the purposes of subsection (1A), “the relevant committee” means a committee determined by the Speaker of the House of Commons.”
This amendment would provide for Parliamentary oversight of the appointment of the “Independent person”.
Government amendments 34 to 43.
Amendment 8, in clause 89, page 55, line 6, leave out from “unless” to the end of line 14 and insert—
“(a) the liable person agrees, or
(b) there has been a final determination by a court or tribunal that it is necessary and proportionate to exercise a power under Schedule 3ZA.”
This amendment would mean that the Secretary of State can only exercise powers to recover amounts from a person where the person agrees or where a court or tribunal has determined that such recovery is necessary and proportionate.
Amendment 10, page 56, line 16, leave out clause 91.
Government amendments 79, 78, 77, 74, 73 and 44.
Amendment 4, in clause 103, page 63, line 29, leave out from start to “following” in line 32 and insert—
“Subject to subsections (1A) and (2), this Act comes into force on such day as the Secretary of State or the Minister for the Cabinet Office may by regulations appoint.
(1A) No part of this Act may come into force until the recommendations of a report commissioned under section [Recovery of overpayments of Carer’s Allowance] have been implemented.
(2) Subject to subsection (1A), the”
This amendment which would delay the implementation of the whole Act until the findings of the independent review into Carer’s Allowance overpayments has been published and fully implemented.
Amendment 20, page 64, line 1, at end insert—
“(3A) Before bringing into force any of the provisions of Part 1 of this Act, the Secretary of State must consult with banks as to the costs which will be incurred by banks upon application of the provisions of Part 1.
(3B) Where consultation finds that the expected costs to banks are at a disproportionate level, the Secretary of State may not bring into force the provisions which are expected to result in such disproportionate costs.”
Government amendments 72 and 45.
Amendment 5, page 73, line 6, leave out schedule 3.
This amendment is related to Amendment 2 and removes the requirement for Banks to look into relevant claimants’ bank accounts.
Amendment 11, in schedule 3, page 73, line 25, leave out from “accounts” to the end of line 31 and insert—
“which belong to a person who the authorised officer has reasonable grounds to suspect has committed, is committing or intends to commit a DWP offence.”
This amendment would limit the exercise of an eligibility verification notice to cases where the welfare recipient is suspected of wrongdoing.
Amendment 22, page 84, line 12, at end insert “(d) housing benefit.”
Amendment 6, page 84, leave out line 12
This amendment would remove pension credit from being a “relevant benefit” for the purposes of the Act.
Amendment 71, page 84, line 13, leave out from “to” to end of line 17 and insert—
“remove types of benefit from the definition of”.
This amendment would mean that benefits could not be added to the list of “relevant benefits” by regulations.
Amendment 7, page 84, leave out lines 13 to 17.
This amendment ensure that the bill can only be used in relation to benefits listed in the Bill.
Amendment 21, page 84, line 25, after “money” insert
“or such an account which is held by a person appointed to receive benefits on behalf of another person.”
Government amendments 46 to 67.
Amendment 9, in schedule 5, page 98, line 10, leave out from beginning to end of line 24 on page 99.
This amendment would remove the requirement for banks to provide information to the Secretary of State for the purposes of making a direct deduction order.
Government amendments 68 and 69.
Amendment 12, page 111, line 18, leave out schedule 6.
Government amendment 70.
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
It is my pleasure to bring this Bill back to the House. I start by thanking all Members who have made contributions so far, and extend a special thanks to Members of the Bill Committee, some of whom are present today, for their detailed scrutiny.
This Government have an ambitious plan for change. To deliver everything we want to achieve, we must spend taxpayers’ money wisely, which is why we committed in our manifesto not to tolerate fraud or waste anywhere in our public services. The Bill delivers on that commitment. It is part of the biggest crackdown on fraud against the public purse in a generation. Nothing less will do, given the appalling position we inherited.
Andrew Western
The hon. Gentleman is correct that we have a problem with so-called “sickfluencers”, but as we will hear in the debate more broadly, the Government do have existing powers through the Fraud Act 2006 and the Serious Crime Act 2007 to take action in those areas if necessary. He is right to suggest that we should be doing more, and I encourage Conservative Members to reflect on what they did in this space during their period in power. He will be reassured to know that I have commissioned work within the Department to look at what further we can do, but in legislative terms—[Interruption.] I do believe that we have somebody crossing the Floor, Madam Deputy Speaker.
Madam Deputy Speaker (Ms Nusrat Ghani)
Just for the record, in case Hansard did not pick that up, that was Jenny the dog crossing the Floor, not a Member of Parliament.
Andrew Western
I am sure the hon. Member for Torbay (Steve Darling) is grateful to you for that clarification, Madam Deputy Speaker, even if I am not, as Jenny would always be most welcome on this side of the House.
I hope that I have reassured the hon. Gentleman that we do have the legislation required to act.
Ann Davies (Caerfyrddin) (PC)
Over the past few months, it has been one thing after another for the vulnerable, the sick and disabled people. The recently announced cuts to welfare will affect 6% of the population in Wales, according to Policy in Practice, punishing the sick and disabled. This Bill adds to that punishment by increasing state financial surveillance of welfare recipients. It is full of intrusive measures, from granting access to three months of bank statements, to allowing direct deductions from bank accounts without court orders and providing police with powers under the Police and Criminal Evidence Act 1984 to enter and search a property. That is not just my opinion: numerous charities and organisations from Age UK to the Child Poverty Action Group support Big Brother Watch’s recommendation to oppose eligibility verification powers under clause 74, for example.
Similar powers were proposed by the previous Conservative Government and considered a potential breach of privacy under the Human Rights Act. Labour MPs at that time were among critics of those powers. It is disappointing to see so few Labour MPs here today, but I thank those who have once again spoken up. I am glad to see amendments, including amendments 8 and 9 tabled by the hon. Member for Liverpool Wavertree (Paula Barker) and amendment 11 tabled by the hon. Member for Poole (Neil Duncan-Jordan), that seek to address such concerns, including by limiting or removing powers to compel banks to provide sensitive financial information.
Even the thought of this provision is causing real anxiety and distress, such as for my constituent Simon Mead and his family. Mr Mead’s daughter, who receives PIP due to the long-term effects of brain cancer as a child, and his son, who suffers from psychosis and schizophrenia, are extremely worried about the Government accessing their private financial decisions. It is already affecting their day-to-day life and decisions. When I wrote to the Government outlining Mr Mead’s concerns before the Bill was published, I was told that the Bill is
“not designed to cause distress or to undertake covert surveillance of disabled people, or any benefit claimant”.
Well, that is obviously not the case, is it?
Combined with restricting winter fuel payments, the refusal to abolish the two-child cap and the sweeping welfare cuts, many vulnerable and disabled people genuinely feel that they are being disproportionately targeted. This is a reality that the Labour Government must accept and address. The Bill further stigmatises people who we are supposed to protect—those who are entitled to state support—who are already suffering following recent UK Government decisions. As Members of Parliament, it is our job to better people’s lives and ensure that everyone in our community feels supported. We are here to serve and to serve all our constituents, which includes the vulnerable, the elderly, the disabled and the infirm. We are not here to cause further distress and hardship. We need to ensure that constituents have access to the help and services they need. Sadly, this Bill does the opposite.
Madam Deputy Speaker (Ms Nusrat Ghani)
That is the end of the Back-Bench contributions. We come to the Front Benches and first the shadow Minister.
Rebecca Smith
With the leave of the House, I will make a few additional comments. This is the perfect opportunity to respond to some of the points made about Conservative amendments and new clauses.
The hon. Member for Hendon (David Pinto-Duschinsky) was on a short time limit and was not able to take any interventions, but I want to speak to the points he made on including our new clauses—for example, new clause 12. He rattled off the other amendment numbers quickly, so I hope he will forgive me if I did not hear them all, but I believe that new clauses 12 and 15 were included. His implication was that the new clauses we tabled would delay the Bill being put into law. That would not be the case, because each of them is worded for after the Act comes into force. The new clauses would be additional safeguards on the cost implications for banks, annual reporting and the publication of an antifraud and error technology strategy that would make the Bill even better, rather than essentially being wrecking amendments. Regardless of the other amendments included in the hon. Member’s list, ours are certainly not in that vein.
The hon. Member for Aberdeen North (Kirsty Blackman) said that she was slightly unhappy about new clause 21 because those who genuinely help benefit claimants get what they are entitled to may inadvertently be caught by it. That is not our intention. We want only those who push people towards committing fraud to be caught. Citizens Advice and Improving Lives Plymouth, for example, which help people claim what they are entitled to, would not be caught by the new clause, because they would be involved in error only if a mistake were made, rather than through fraud. I appreciate what she said, but that was not our intention. The wording of our new clause covers that.
Concern was raised in Committee about the extent of bank account searches. In our view, other bank accounts used by those who commit fraud would not be checked under the Bill, so we probably need to go further to ensure that fraud is properly tackled. To be more light-hearted for a moment, if I may, anybody reading the report of the debate will see plenty of references to cheesecake, and I think I should explain why. Concern was raised in Committee about the fact that, under the Bill, an account’s individual transactions could be assessed and judged, so everybody would feel terrible if they bought a cheesecake from Waitrose—other shops are available—and that would be a problem in future. If anybody was wondering why we were talking about cheesecake, it related to concern about transactions being checked. At the time, the Minister kindly reassured us that the Bill would not provide for individual transactions to be checked; it would deal just with benefit payments and whether someone has capital that they should not have while claiming benefits. I hope that that is helpful.
The Secretary of State for Work and Pensions (Liz Kendall)
I beg to move, That the Bill be now read the Third time.
This Labour Government were elected on a mandate for change—to create more good jobs in every corner of the country, to drive up living standards for working people and to get our vital public services back on their feet. Delivering our plan for change means ensuring that every single pound of taxpayers’ money is wisely spent and goes to those in genuine need. That is what this legislation will help to deliver, with the biggest-ever crackdown on fraud against the public purse.
It is unacceptable that the Conservative Government allowed fraud against the public sector to spiral to £55 billion a year. That includes a staggering £7.4 billion a year of benefit fraud alone. It is unforgiveable that they failed to ensure that the Public Sector Fraud Authority was fit for purpose, or to properly update the DWP’s anti-fraud powers for 14 long years. When we think of all the new ways in which fraudsters and scam artists rip people off, including by using data and technology, that simply beggars belief. Today we say: no more.
Our Bill updates the powers of the Public Sector Fraud Authority so that it can effectively fight fraud across the public sector on behalf of Government Departments and public authorities. It also makes vital upgrades to the DWP’s fraud powers and sets out new powers to investigate fraud, so that for the first time, our serious and organised crime investigators can apply to the court for a warrant to enter and search the premises of suspected fraudsters, and can seize evidence such as computers and phones. There are updated powers to gather information, so that we can compel third parties such as airlines to give us information, and can require it to be delivered electronically, so that we can tackle fraud as quick as possible. Our new eligibility verification measure will enable us to get crucial data from banks and financial institutions to check if people are getting money they are not entitled to, and if they have more savings than the rules allow, or are fraudulently claiming benefits abroad when they should be living in the UK.
The Bill extends financial penalties to people who have fraudulently claimed any type of DWP payment, including grants and loans, not just benefits, and it gives us new powers to get money back from people who can pay but who have repeatedly failed to do so, bringing our powers in line with those of other parts of Government, such as the Child Maintenance Service and HMRC. All this is being done in a fair and proportionate way; the measures are tightly defined in the legislation, and there are strong safeguards and independent oversight, including through annual reports to Parliament and codes of practice, which we will bring forward in Committee in the other place.
I thank the Minister for Transformation and the Parliamentary Secretary, Cabinet Office, for steering the Bill through its Committee and Report stages, supported by excellent civil servants and House of Commons staff. I thank all members of the Public Bill Committee from right across the House for their detailed questions and thoughtful scrutiny of the Bill. They have done this country a good service, because this Bill provides us with the tools we need to tackle modern fraud in the benefit system and across the public sector, helping to save £1.5 billion over the next five years as part of the DWP’s wider action to save a total of £9.6 billion from benefit fraud and error.
People who work hard and play by the rules, and people who depend on our public services and vital benefits, deserve to have trust and faith in the system, and they are rightly angry when they see people abuse it. Our message is clear: if you knowingly defraud the benefit system or cheat our public services, whether you are a large or small company, a criminal gang or an individual, we will find you; we will stop you; and we will get our money back. This Labour Government will restore trust and fairness in the system and ensure that every pound of public money delivers for the British people and our country. I commend this legislation to the House.
PIP Changes: Impact on Carer’s Allowance
Nusrat Ghani Excerpts(3 months, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Members will need to move a little faster, as will the Minister.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for his statement. I declare an interest as the chair of the all-party parliamentary group for young carers and young adult carers. Does the Minister agree that the role of young carers is critical not only to those who are cared for, but to the economy? Although young carers under 16 do not receive carer’s allowance, will he consider the impact of any plans on young carers and how we might better support them?
Madam Deputy Speaker
Order. Before the Minister responds, I remind the hon. Member that this is an urgent question, not a statement.
Social Security Benefits
Nusrat Ghani Excerpts(5 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Social Security and Disability (Sir Stephen Timms)
I beg to move,
That the draft Social Security Benefits Up-rating Order 2025, which was laid before this House on 15 January, be approved.
Madam Deputy Speaker (Ms Nusrat Ghani)
With this it will be convenient to discuss the following motion:
That the draft Guaranteed Minimum Pensions Increase Order 2025, which was laid before this House on 16 January, be approved.
Sir Stephen Timms
In my view, the instruments are compatible with the European convention on human rights.
The draft Social Security Benefits Up-rating Order 2025 will increase relevant state pension rates by 4.1%, in line with the growth in average earnings in the year to May to July 2024. It will increase most other benefit rates by 1.7%, in line with the rise in the consumer prices index in the year to September 2024. The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by whichever is highest out of the growth in earnings, the growth in prices, or 2.5%. That will mean 4.1% for 2025-26. From April this year, the basic state pension will increase from £169.50 per week to £176.45, and the full rate of the new state pension will increase from £221.20 to £230.25.
We are fully committed to maintaining the pension triple lock. There is some confusion about the position of the Conservative party, and I hope that the shadow Minister will clarify the position when he speaks.
Sir Stephen Timms
On the two-child limit, as the right hon. Member knows, we very quickly set up after the general election the child poverty taskforce, which is looking in a very ambitious way at the whole range of levers that the Government have at their disposal for tackling the problem of child poverty. We would very much like to repeat the success of the last Labour Government in reducing child poverty so dramatically in when in office. I say that with particularly strong feeling, having taken the Child Poverty Act 2010 through the House towards the end of that Government’s term. Under consideration certainly will be social security changes—we will look at what changes might be appropriate. We are not able to say whether the two-child limit will be removed, but all those things will be considered carefully during production of the report, which the taskforce will bring forward.
We are not looking, I do not think, at changing the arrangements around the overall welfare cap. Of course, there is always some confusion between the individual benefit cap and the overall welfare cap. As the right hon. Member said, there was a debate last week on the overall cap. There is certainly scope for debate about that and, indeed, the benefit cap as well, but we are not proposing any changes to those arrangements in the short term.
The draft Guaranteed Minimum Pensions Increase Order sets out the yearly amount by which the GMP part of an individual’s contracted-out occupational pension earned between April 1988 and April 1997 must be increased if it is in payment. The increases paid by occupational pension schemes help to provide a measure of inflation protection to people who are in receipt of GMPs earned between those two years. Legislation requires that GMPs earned between those two dates must be increased by the percentage increase in the general level of prices, as measured the previous September, capped at 3%. This year, it means that the order will increase the relevant part of the GMP by the September 2024 consumer prices index figure, which is 1.7%.
The draft Social Security Benefits Up-rating Order, if Parliament approves it this afternoon, commits the Government to increased expenditure of £6.9 billion in 2025-26. The changes will mainly come into effect from 7 April and will apply for the tax year 2025-26. The order maintains the triple lock, benefiting pensioners who are in receipt of the basic and new state pensions; raises the level of the safety net in pension credit beyond the increase in prices; increases the rate of benefits for people in the labour market; and increases the rate of carer’s benefits and support to help with additional costs arising from disability or health impairment.
The draft Guaranteed Minimum Pensions Increase Order requires formerly contracted-out occupational pension schemes to pay an increase of 1.7% on GMPs in payment earned between April 1988 and April 1997, providing people with a measure of protection against inflation, paid for by their scheme. I commend to the House the draft Social Security Benefits Up-rating Order 2025 and the draft Guaranteed Minimum Pensions Increase Order 2025.
Danny Kruger
The hon. Gentleman reflects the experience that many of us have had in our surgeries. Nevertheless, I do not think that health reform on its own will do the job. As I mentioned, the House of Lords Economic Affairs Committee has looked into the matter and reported last week, pointing out that the increase in welfare claims cannot be attributed to longer waiting lists or, indeed, to worsening health conditions. The welfare problem is outstripping the problems we see in the nation’s health, so we have to do more in the DWP. We wait with bated breath to see some movement on that front.
In fact, it was in this debate last year when we were uprating benefits that the hon. Member for Birkenhead (Alison McGovern), now a ministerial colleague of the right hon. Member for East Ham, said that, “Labour has a plan”. That was a year ago. Seven months ago, Labour won the election. She did not say that the plan was oven-ready, but she implied it. I know the Minister says that the delay is because of a court case that happened two weeks ago, but I do not quite understand how that explains the delay that has been going on for seven months.
Here we are approving a measure that will increase expenditure by nearly £7 billion, as the right hon. Gentleman said, and we have no idea how the bill will be brought down over time. But after much head scratching in the DWP—and, we are told, people pulling their hair out in No. 10—we are getting closer to the big reveal. We hear exciting hints in the media that the Government might scrap the limited capacity for work category altogether, scrap the work capability assessment, merge employment and support allowance into the personal independence payment system, or require people on sickness benefits to engage with work coaches. I am encouraged by all that pitch-rolling.
If the Government are softening up their Back Benchers for serious reform, I applaud them for it, but I will believe it when I see it, because Labour opposed every step towards tougher conditions, more assessments and more incentives to work. They opposed reforms that we were introducing to the fit note system. In fact, I see from a written answer to a question in the other place that the Government say they have no plans to reform the fit note system, which I regret. I wonder whether the Minister could help clarify if that is the case.
On universal credit, it appears that the sinner repenteth, or sort of repenteth. The Government are on some kind of journey. In the last Parliament, they said they would scrap universal credit, then they said they would replace it, and now, as we have heard, they are reviewing it. I am glad to hear that, although the right hon. Gentleman just said that they are reviewing it over the course of this year, so that seems to be unrelated to the Green Paper process, which we are expecting in the spring. I would like to understand how those two processes are aligned.
Rather than scrapping, replacing or reviewing universal credit, I invite the Government simply to use it. It is a flexible system, as we saw during the pandemic, and it works; it just needs to be adapted to the new challenge. In conclusion, let me make a few suggestions for the right hon. Gentleman to consider as he prepares his Green Paper and his universal credit review.
The back to work plan that we announced before the general election would have got 1.1 million people into work, using more support and tougher conditions—“more support” meaning more of the WorkWell pilots that my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) introduced. I was glad to hear the Secretary of State praising those pilots yesterday, although sadly without attribution. In our view, the work capability assessment should be face to face, and it should be asset-based, not deficit-based; it should be asking what a claimant can do, not what they cannot do. The claimant should begin the journey of recovery—the journey back towards work—then and there. Rather than budgeting for ever higher welfare, as we are doing today, we should be investing in a universal support system to run alongside universal credit.
We also need tougher conditions. We simply cannot have people with a bad back or anxiety being signed off sick for the rest of their lives; they need to know that we believe in them, and that believing in them means having high expectations of them. In exchange for benefits paid for by working people, claimants should take active steps, when they can, to address their physical and mental health needs, and they should work meaningfully on their own health and wellbeing. That will not look the same for everyone and it must not be a tick-box exercise. That is why we need the help of civil society, not just coaches and therapists, providing the human touch and the range of help and opportunities that people need.
Most of all, we need a clear message to go out from the Government that unless a person is so severely disabled or ill that they genuinely can never work at all, they will not have a life on benefits. That clear message, enacted through reform that the right hon. Gentleman’s Department must bring forward urgently, is the only way to get our exorbitant welfare bills under control, and to get our workforce and our economy moving again.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Work and Pensions Committee.
Debbie Abrahams
No, I am not going to give way. [Interruption.] I am not going to give way.
I welcome the social security order and, in particular, what my right hon. Friend the Minister has said about it. It was an absolute pleasure to serve on the Select Committee when he was its Chair, and in this respect I agree with the shadow Minister: my right hon. Friend’s transfer from the Select Committee to his ministerial position is very welcome. We all appreciate his gravitas and experience, but also his common decency in the role.
I want to talk about the context of this uprating order and the importance of our social security system in providing, at the very least, a safety net for people when they need it, and from cradle to grave, like the NHS. Unfortunately, though, over the past 14 to 15 years, the adequacy of support for people on low incomes has been dramatically eroded, particularly for people of working age—again, contrary to what the shadow Minister has said. Between 2010 and 2012, the uprating was about 1.5%; between 2012 and 2016, it was 1%; and between 2016 and 2020, it was zero. The average annual consumer prices index increase for each of those years was about 3%.
There has been a steady and consistent erosion in the value of social security support, which has affected the value of universal credit, jobseeker’s allowance, employment and support allowance, income support, housing benefit, child tax credit, working tax credit and child benefit. The Resolution Foundation has estimated that this erosion was equivalent to a cut of £20 billion a year from social security support for working-age people. That is clearly not well understood by the Conservative party.
Something else that is not well understood is that these are predominantly people in low-paid work. The vast majority of people in receipt of working-age social security support are, or have been, working people—that is something for us all to consider. Only a tiny proportion of DWP spending is spent on jobseeker’s allowance, for example—it is 0.001% of the current budget. As is evidenced in the Work and Pensions Committee’s report from last year, which I invite shadow Ministers to read, out-of-work support is at the lowest level in real terms since 1912. This is not a generous system; according to OECD comparisons, we are not supporting people in the way that a civilised society as well off as we are should do.
The consequences of inadequate social security are clear. Last week’s Joseph Rowntree Foundation poverty report made for bleak reading—again, I invite people to read it. Over one in five people in the UK are in poverty; that is 21%, or 14.3 million people. Of those, 8.1 million are working-age adults. Some 4.3 million children are in poverty—three in 10 among the population as a whole, while in my constituency the figure is one in two—and 1.9 million of those in poverty are pensioners.
Disabled people are at greater risk of poverty, partly by virtue of the additional costs that they face due to their disability and ill health, and partly due to the barriers to work that disabled people face. Disability employment has flatlined; when it comes to being in work, the gap between people who are not disabled and those who are has been about 30% for the past 14 years or so. It went down by about 1%. Some 16 million people in the UK are disabled—nearly one in four—and almost four in 10 families have at least one person who is disabled. The poverty rate for disabled people, which is 30%, is 10 percentage points higher than it is for non-disabled people. The rate is even higher—50%—for those living with a long-term, limiting mental health condition, compared with 29% for people with a physical disability or another type of disability.
Other groups of people are also disproportionately more likely to live in poverty, including former carers, people from ethnic minority communities and lone parents, but given the media speculation there has been about the future of disability support, I want to focus on that. Last year’s Select Committee report on benefit levels set out a wide range of evidence suggesting that benefit levels are too low and that claimants are often unable to afford daily living costs and extra costs associated with having a health condition or disability. Although the Select Committee supports the Government’s ambition to get Britain working and a social security system that supports work, these ambitions are not achievable within a few months. Meanwhile, people are barely clinging on.
The DWP does not have an expressed objective for how it will support claimants with daily essential living costs. In the Select Committee’s report we recommended building a cross-party consensus to take this forward, and for the Government to outline and benchmark objectives linked to living costs to measure the effectiveness of benefit levels, and to make changes alongside annual uprating. I would welcome my right hon. Friend the Minister revisiting this Select Committee report, particularly our recommendations.
I would like to set out the consequences of our currently inadequate social security system. From peer-reviewed articles, we know that for every 1% increase in child poverty, six babies per 100,000 live births fail to reach their first birthday. That is the consequence of living in poverty for children. The hon. Member for Hinckley and Bosworth (Dr Evans), because of his medical training, will know much of this, but a rewiring of the brain of children living in poverty affects them for the rest of their lives.
In another peer-reviewed piece published in 2016 in a BMJ journal, entitled “First, do no harm”, a metadata analysis of the impacts of the changes to and reassessment of the work capability assessment between 2010 and 2013 in 149 local authority areas in England found that, for each additional 10,000 people who were reassessed, there were an additional six suicides, 2,700 additional cases of mental health problems and over 7,000 more antidepressant scripts. This is evidence.
Many Members will know of my previous campaigns, and I want to refer to the deaths we have seen of social security claimants whose benefits have been stopped. I mention again Errol Graham, a 52-year-old Nottingham man with a severe mental health condition, who basically starved to death after his social security support was stopped. There are so many others I could mention, and I pay tribute to the families who have campaigned on their behalf for justice, because it is quite horrific.
Talking about people surviving our social security system, there is the case of TP—I will use his initials—also a 52-year-old man, who had worked all his life. He was diagnosed with non-Hodgkin lymphoma and, sadly, his diagnosis was terminal. He was trying to be migrated from his particular incapacity support to universal credit, and he lost all his disability premiums. He was one of the litigants in a case about transitional protections when migrating from ESA and disability premiums to universal credit. This is an example of somebody who has worked all their life, and four out of five disabilities and health conditions are acquired—it could happen to any one of us, and I would just like us to consider that.
In another case, AB was born with congenital cerebral palsy and worked for 25 years, but then could not go on. If I read out the whole story, we would all be in tears, because it is just heartrending, describing the indignity of having to rely on such low-level support.
I will leave it there, but I know my right hon. Friend the Minister takes this very seriously, and I hope all of us here will work towards making the social security system more adequate for those people.
Neil Duncan-Jordan (Poole) (Lab)
You are making a very powerful case. Would you agree with me that—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I am sure the hon. Member is not intervening on me, so the word “you” is not appropriate. Interventions should be brief.
Shockat Adam
I could not agree more; that would be vital for pensioners. Ever since I was elected, emails from pensioners on that issue have been in the top three issues—it is a real issue. If alongside increasing pensions we could reverse the cuts to the winter fuel payment, that would save lives.
Madam Deputy Speaker
That concludes the Back-Bench contributions. I believe that the Minister would like to do a short wind-up.
Income Tax (Charge)
Nusrat Ghani Excerpts(8 months, 3 weeks ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
I call Sadik Al-Hassan to make his maiden speech.
Sadik Al-Hassan (North Somerset) (Lab)
Thank you, Madam Deputy Speaker. I congratulate hon. Friends who have made excellent and moving maiden speeches so far—they have set a high bar today and over the past few weeks—but we have, as they say, saved the best until almost last. I thank the people of North Somerset for the trust that they have placed in me. I promise them that I will not, for a moment, stop fighting to fulfil the promises that I have made to them.
As a pharmacist, I campaigned on a platform of rebuilding the NHS. Having worked in pharmacies across the area over the past two decades, I have seen at first hand the decline of community pharmacies in many towns across the country. That is why I was proud to see in the Budget such a strong commitment from my right hon. Friend the Chancellor to rebuilding our NHS, with the largest increase in funding—outside the pandemic—since 2010. No one on the Labour Benches doubts the enormity of the task ahead, or the challenges that we may encounter along the way, but the Chancellor has put us on a road to renewal with this Budget, and I am sure that many of my colleagues in the healthcare sector will be grateful to her for that.
North Somerset is more than just where Somerset gives up and Bristol begins. We are the home of the first mass production of penicillin, of one of the oldest cinemas in the UK, and—perhaps our proudest achievement—of the discovery of the Ribena blackcurrant. In the west of my constituency lies Portishead, known across the country for its beautiful marina and lively fish and chips trade, which, rumour has it, stretches all the way back to the town’s Roman founders.
Next, I pay tribute to Clevedon in the south of my constituency. As a pharmacist, I take great pride in telling the House that Clevedon has the distinct honour of being the site of the first large-scale production of penicillin, enabling its use as a vitally important medicine in world war two and undoubtedly saving countless lives. Although the world of pharmacy has matured somewhat since then, Clevedon continues its proud pharmacological heritage with a number of truly outstanding local pharmacies that do the community proud, such as the Well pharmacy, where I had the distinct honour of working not too long ago.
Finally, but by no means least of the major towns in North Somerset, there is of course Nailsea. A little-known fact about Nailsea is that it is so named because at one point it was an island, which is somewhat surprising given how far inland it is. Leaving behind its ancient island status, Nailsea really began to boom in the 19th century, when it became home to one of the largest glassworks in the country, relics of which are still treasured by collectors across the world.
Although all those who have had the pleasure of visiting North Somerset agree that it is a beautiful and blessed place, it is also an unequal place. Neighbourhoods in my constituency are among the most and least deprived areas of England. Among our countless idyllic villages is Long Ashton, the birthplace of Ribena—a drink much beloved across the country, not least by my children. Another of our gems is Pill, which, despite the name, does not have a pharmaceutical history. At one point, Pill’s small footprint boasted 21 pubs, which would no doubt have celebrated the Chancellor’s cut to alcohol duty at the weekend. No tour of our green and pleasant land would be complete without Tyntesfield, which is, in my unbiased opinion, the greatest National Trust site—and that is really saying something. That beautiful Georgian house is a delight for all across the south-west.
North Somerset boasts the unique honour of being home not only to one of the busiest airports in the country, but to a major port. Those twin pillars of infrastructure in the south-west are the foundations of our local economy. In recent years, Bristol airport overtook Glasgow airport to become the eighth busiest airport in the UK. The Royal Portbury dock is no slouch either, handling over 7 million tonnes of cargo a year. I am sure that both have a long and prosperous future ahead of them.
I pay tribute to my predecessor, Dr Liam Fox. Although I may not have shared his views on Europe, I know that we were aligned in our mutually held passion for the North Somerset constituency, which he represented for 32 years and through eight elections—a record that many of us who are new to the House are no doubt keen to replicate. My predecessor was particularly proud of his championing of Down’s syndrome, for which he shepherded a private Member’s Bill through Parliament.
No maiden speech on North Somerset would be complete without a mention of the Portishead railway line. First opened in 1867, the line proved a vital link in connecting the people of North Somerset to Bristol, and then to the wider country. For nearly 25 years now, the campaign to reopen the line has raged fiercely in my constituency, and I want to reassure my constituents that I intend to fight tooth and nail to see that project across the line after decades of false starts.
I first got into politics as a town councillor in Emersons Green, only for my wife to become a district councillor shortly thereafter. Now that I am an MP, I dread to think how she will one-up me this time. [Laughter.] I jest, and in reality, during the long weeks of campaigning this summer, my dad, wife and two children proved to be my bedrock, providing me with an endless source of strength, and I am and always will be eternally grateful to them.
I thank the House for indulging me and the people of North Somerset for putting their trust in me. Every day I will come to this Chamber and fight to put North Somerset on the map and deliver for all those who call that beautiful green pocket of England home.
Greg Smith
As ever, the hon. Gentleman has hit the nail exactly on the head. In its briefing, which I am sure all Members have received, the National Farmers Union points out that the Treasury’s own figures on who will get caught up in the APR changes are fundamentally wrong, because they include a lot of very small-scale areas—perhaps a private residence with one or two fields or a very small number of livestock. That is not what any of us would define as a working farm. In reality, when all those family farms are brought into the numbers, the vast majority of our food producers who contribute to food supply chains will get caught up in those changes.
When the Chancellor was on the BBC on Sunday morning, she said that the individual claim for agricultural property relief is now £1 million, but if a farm is owned by two people, that allowance could be transferred to the other person. Some confusion needs to be ironed out here, because unlike the nil-rate band and residential nil-rate band, the policy paper entitled “Summary of reforms to agricultural property relief and business property relief” published on 30 October this year states that
“any unused allowance will not be transferable between spouses and civil partners.”
Perhaps in summing up the Minister can clear up that confusion caused by the Chancellor on the Kuenssberg show.
The APR changes are not the only changes that will hammer our farming families and agricultural communities. I am sure there is a joke somewhere along the lines of “When is a pick-up truck not a pick-up truck?”, but it is no laughing matter for farmers. For them, it is just a basic bit of equipment that they need to operate, but this Government are hammering them on the cost of that equipment if it happens to have rear seats. As I raised earlier today in this House during the urgent question, the Government’s carbon tax will put up the price of fertiliser by between £50 and £75 a tonne. Either that is going to have a direct impact on the cost of food, or the Government are asking farmers—already operating on incredibly tight margins, often with no profit at all—just to swallow that extra cost. I urge them to reconsider.
Other measures in the Budget that are clearly wrong and the Government must U-turn on include VAT on private school fees. The vast majority of parents I talk to in my constituency who choose to send their children to independent schools scrimp and save and make sacrifices in order to give their children that opportunity. An additional 20% in fees makes that unaffordable for those parents, and when I talk to representatives of independent schools in my constituency some are saying that they can see a path to having to close their doors. I know that a lot of Labour Members would probably quite like that outcome, but the reality is that it will be denying children opportunity and denying parents choice, and it will have the knock-on impact of class sizes in my kids’ school—and, I am sure, every other hon. Member’s kids’ school in the state sector—going up. That will cause overcrowding and put pressure on our state schools. This is all before I come on to the other problems in this Budget, not least the cruel attack on our pensioners through the withdrawal of the winter fuel payment.
Lastly, just to prove how bizarre and simply unserious the Government are about value for money, they have chosen someone as their new value-for-money tsar who is inextricably linked to one of the most inefficient and wasteful projects ever to come out of the British state: HS2. How on earth can someone so linked to that project be considered an arbiter of value for money?
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to another maiden speech. I call Andrew Ranger.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. After the next speaker at six minutes, I will drop the limit to three minutes each.
Gill German (Clwyd North) (Lab)
I could not have been more pleased to hear the Chancellor’s game-changing Budget last week, putting an end to the cynical short-termism of the previous Government and taking on the long-term challenge of rebuilding Britain to be the fairer, more equitable society that we know it can be. Today, what an absolute tonic it was to hear from our Secretary of State for Work and Pensions, who is serious about driving up opportunity and driving down poverty and has a serious plan to do so. No more tinkering at the edges and no more blame game with the very people who deserve our support, but a practical, people-centred plan to get Britain working and to support and empower the most vulnerable for the long term.
People in my constituency of Clwyd North have much to welcome in what the Secretary of State said. There is the £470 rise this year alone in the state pension through retaining the triple lock, despite the financial inheritance left to us by the Conservatives. The significant increase in the earnings threshold for eligibility for carer’s allowance is welcome news for 3,000-plus family carers in my constituency, as are the valuable consequential funds gained by Wales through the extension of the household support fund to support those struggling most with household costs.
If I may, I would like to celebrate the two measures that resonate most with me as a result of my journey to this House through teaching in our classrooms and working with our communities in local government. They are the £240 million package to open up opportunities to all those left behind to get into work and to get on in work, and the fair payment rate for universal credit, which is relied on so much by those in and out of work. Deductions will be capped at 15% rather than the crippling 25%, which stops too many families from ever getting their heads above water.
Our children, families and communities deserve a fighting chance. Only a joined-up, person-centred approach can achieve that, which is why I am delighted to see the dawn of the “Get Britain Working” White Paper, enabled by this Budget. At last, we have a Government who are putting investment front and centre of rebuilding our country—investment in infrastructure, business and, crucially, in our people. It is about time. Our people are our greatest asset. This is a Budget—
Catherine Fookes (Monmouthshire) (Lab)
I congratulate my right hon. Friend the Chancellor not only on being the first woman ever to deliver a Budget to this House, but on being the first Chancellor to deliver a joined-up, grown-up Budget in 14 years.
Representing a Welsh constituency, I am proud that this Budget provides the largest funding boost—£21 billion —that Wales has received since devolution. That is proof, if ever that were needed, that only two Labour Governments working together will ever properly listen to, understand and fight to meet the needs of the people of Wales, who have been ignored, belittled or attacked by generations of Conservatives. We all know that our broken public services would collapse overnight without the selfless dedication of the countless women and men who, day in and day out, serve as unpaid carers. I am particularly pleased that the Budget has raised the amount by nearly £200 a month that carers can earn before losing out on carer’s allowance.
Turning to agriculture, as co-chair of the all-party parliamentary group for farming, and having grown up on a small family farm, I know there has been much disquiet over the changes to agricultural property relief. I have been in constant communication with our excellent local NFU policy staff since the Budget, and I am listening to their concerns and feeding them directly back to DEFRA. It is unsurprising that farmers are worried, given that many journalists and the Conservative party have unfortunately been selectively focusing on a £1 million figure that does not reflect the reality of the policy.
Let me seek to reassure small family farmers and repeat the words of the Exchequer Secretary to the Treasury, my hon. Friend the Member for Ealing North (James Murray) last week, who said:
“The total value of a farm should not be confused with the value being passed on at death. Multiple family members can own part of a farm. For example, if an individual jointly owns a farm worth £3 million with their partner, only £1.5 million is in their estate at death.”
Those are wise words, which will give comfort to many who have been misled by selective and mischievous comments on the Budget. With the additional £500,000 relief for each partner if there is a property on the farm, a farm worth up to £3 million may still pay zero inheritance tax. Yes, this Budget recognises that family farms form part of the backbone of rural communities, but it also recognises that our rural communities rely every bit as much on strong, functioning public services.
This historic Budget calls time on austerity, and brings stability back.
Jim Allister
That illustrates my point. It shows how impossible and unfair it is to say to family farms—and it does not take a lot of acreage to be worth £1 million—“You may have the assets, you do not have the income, but you must pay the inheritance tax to HMRC.” What do those farmers do? They sell off part of the farm, and what does that do? It diminishes the food production, and it diminishes the viability of the farm. That will be how this Budget will be felt in many family farms. Similarly, it will be felt in a negative way by new homebuyers because of the stamp duty threshold reductions: new purchasers will now pay significantly more in tax to buy a new home.
As for the Budget allocation for Northern Ireland, back in 2012 the Government accepted a national barometer of need. Through Professor Holtham, it set out what was needed in each part of this nation. What £100 could buy in public services in England was then translated—because other areas were smaller—into what it would cost to buy the same amount in the rest of the United Kingdom: £105 in Scotland, £115 in Wales and £121 in Northern Ireland. Yes, according to the block grant transparency document this Budget provides for Wales £120 per £100 in England, but in Northern Ireland we continue to be just at need. Why is there that uplift for some parts of the United Kingdom and not for others? We in Northern Ireland also have no guarantee of meeting need beyond 2026-27. That is not assured in this Budget. I ask for my constituents what has been afforded to the constituents of Wales, an uplift on need so that they can see their public services provided properly.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Interventions prevent other colleagues from contributing, so let us be mindful.