Oral Answers to Questions

Debate between Owen Smith and Iain Duncan Smith

Monday 14th March 2016 Commons Chamber

[Mr Duncan Smith]

The White Paper will be published well before the summer break. It is worth reminding the hon. Gentleman of two things. First, and really importantly, half the spending on welfare and public services still goes to the poorest 40%, as it did in 2009-10. Secondly, it is also important to note that we expect no change in the proportion of spending projected to be received by the lowest and middle quintiles between 2010-11 and 2020. I also say to him that it is a bit rich that the Scottish Nationalists, who are in Government in Scotland and who now face a £15 billion deficit, which would have racked them had they gone for independence, have not once referred to the tough choices that they might have to make to reduce that deficit.

[Owen Smith (Pontypridd) (Lab)]

Politics is always about choices, about priorities and about values. This past weekend, we saw the values and priorities of the current Government laid bare in their decision to implement a so-called welfare reform that will see £1.2 billion cut from the incomes of disabled people to pay for—we are told—a tax cut for top-rate taxpayers. Will the Secretary of State come back to the Dispatch Box and honestly describe that as a welfare reform, and then justify those choices?

[Mr Duncan Smith]

The changes that have been announced on personal independence payment are about changing, reforming and improving what goes to those who most need it in this disability allowance. The key point about this, which has been made by the Under-Secretary of State for Disabled People, my hon. Friend the Member for North Swindon (Justin Tomlinson), is that we put out a consultation long before the Christmas period. The Opposition had an opportunity to make their submissions, which they did, and we listened to all the submissions that came back. As a result, we are not implementing any of the first four options. It is right to continue to recognise aids and appliances and all the activities, as we previously did, but with a change to activities 5 and 6, changing the points numbers from two to one. That brings them into line with activity 3, in which one point has always been awarded for aids and appliances. Finally, activities 5 and 6 are less reliable indicators of additional cost. This all came on the back of an independent review published just after the last election, asking us to look again at the way those indicators are used. We have done that and, in fairness, this is the right way to go and will improve the lot of the worst off.

[Owen Smith]

For the benefit of the House, may I translate what the Secretary of State has just said? What he means is that he will take away £1.2 billion, completely eroding access to personal independence payment for 200,000 people, and cutting it by a third, from £70 to £50, for a further 450,000 people—people who are quite often unable to use the toilet or get dressed unaided. That comes on top of the cuts to ESA that went through the House last week. Before I came to the Chamber this afternoon, I asked disabled people what question they would like to put to the Secretary of State. One answer stood out. It was quite simply, “How does he sleep at night?”

[Mr Duncan Smith]

I remind the hon. Gentleman that, under this Government, spending on sickness and disability benefits has risen every year. We spend more than £50 billion, which is more than any other OECD country of equivalent size, such as Germany. I am proud of that, and, even with these changes, we will continue to see spending on PIP rise every year all the way to the end of this Parliament. As I have said, I am proud of that, because our reforms ensure that those most in need get full support and that the way that we do it is fair to everybody. I am also proud of the fact that this represents 6% of all Government spending, because, by reforming the economy and reforming welfare, we can get the money to those who most need it. By contrast, when Labour was in Government, we had a lot of promises, a broken economy and cuts all round.

State Pension Age

Debate between Owen Smith and Iain Duncan Smith

Wednesday 2nd March 2016 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

(Urgent Question): To ask the Secretary of State for Work and Pensions to make a statement on the Government’s review of the state pension age.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Yesterday we announced the appointment of John Cridland to lead an independent review of the state pension age. The review will make recommendations for the Government to consider, to ensure the future state pension age is fair and affordable in the long term.

The review will report by May 2017. I want to stress that the review is independently led and evidence led. Evidence will be put forward for Sir John to consider in his important considerations about the future of the state pension. The review will consider changes in life expectancy, as well as wider changes in society.

It is useful at this point to remind the House why this kind of review is necessary. In 1945, a man expecting to retire at 65 had a life expectancy of between 60 and 63. Men’s life expectancy rose from 14.27 years in retirement after their pension age to 27 years under the present forecast and existing timescales. Women have gone from 18 years in retirement after their pensionable age to 29.5 years in retirement.

Future generations, therefore, would rightly expect that we reflect those changes in how we set the pension. They would not thank us—we very rarely hear anybody talk about future generations—if we did not take the right decisions at the right time and did not have the courage to ensure pensions are sustainable, to avoid people having to pick up an increasing bill, which would make their lives even more difficult.

I want to make clear what this review is not about. It does not cover the existing state pension age timetable—it picks up from April 2028. We have already provided legislation for this, and the review will not look to change the state pension age up to that point.

It is worth reminding the Opposition at this point that when the Labour Government were last in power, they first legislated for state pension age rises beyond 65, but without any commitment to a special independent review, which we have undertaken. When we brought forward the Pensions Bill in 2013, the then Opposition seemed to have had a change of heart, and they—quite legitimately and reasonably, I thought at the time—agreed with us on the need for a regular independent review of the state pension age. Let me quote what the then shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), said during the course of the Bill’s passage:

“The Secretary of State and I have no difference of opinion on the need regularly to review the state pension age.”—[Official Report, 17 June 2013; Vol. 564, c. 661.]

It is worth reminding everybody that in that Bill was a statutory provision for a regular set of reviews of the pension age. Yesterday’s announcement is simply in line with that statutory requirement. That is what we are now doing, and that is what the then shadow Secretary of State said in agreement. I also remind the hon. Member for Pontypridd (Owen Smith) that at the time Labour made no amendment to change the nature or scope of the review; nor, I recall, did it have anything in its manifesto to do with that.

Under the legislation, we are required to appoint an independent reviewer who will make recommendations on future state pension age requirements. We have appointed Sir John Cridland to lead this work. The legislation also requires us to report on this in 2017. I can assure the House that we will report back to the House in an oral statement and a written statement on whatever comes forward from that review.

This review is part of the Government’s reforms to pensions to ensure that they are affordable for the long term. It is right that we recognise those who have reached their pension age and who have worked hard, done the right thing, and provided for their families. I believe that this Government are delivering for those very people. As a result of our triple lock, pensioners will receive a basic state pension over £1,000 a year higher than at the start of the previous Parliament and under the previous Government. We have provided greater security and more choice and dignity for people in retirement, while also ensuring that the system is sustainable for future generations.

[Owen Smith]

May I start by welcoming the Secretary of State back to the Dispatch Box? We have missed him in recent months and are grateful that he is gracing us with his rare presence today.

Despite the statement we have just heard, I think that people travelling to work this morning will have been shocked to learn that the Government are planning yet another review of the retirement age and, in the immediate future, of when they can claim their state pension, with a clear implication that, as was the case with the women’s state pension, they intend to increase it further and faster than we, or the people of Britain, were expecting. People will also have been shocked to read this morning the Pensions Minister’s statement in another place, in response to the news of this review, that under the Tories the state pension age should no longer be considered as “a retirement age”. In other words, people will be able to retire only if they are rich enough or have a fat private pension; otherwise they will have to keep working—working until they drop, as one pensions professor warns this morning.

So could the Secretary of State try to clarify exactly what his Government’s long-term economic plan is for pensioners? Is it, as was the case with the botched reforms of women’s pensions, and as was implied in the terms of reference for this review, that people can expect the Government to ratchet up the retirement age much faster than expected? Can he guarantee that even if this review is not considering the planned increase to 67 by 2028, his Government will not bring forward that change? If that promise is not ratted on, can he confirm that his Government are considering speeding up subsequent rises, with increases to 69 or 70 being considered for people currently in their mid-40s? Could he also confirm that this will be a double whammy for those pension savers, as under his reforms everyone aged under 43 will have a worse state pension? Does he agree with his pensions colleague in the Lords that in the light of his reforms, the state pension age should no longer be considered as the retirement age, and so in future only the wealthy will have the luxury of retiring, while the rest will just have to keep on working?

Finally, what does the Secretary of State think is the upper limit for the state pension age? Is it 75, 76 or 77—or is it 80, as his former Pensions Minister colleague warned today? Is not the truth that the new pension promise is not the 75p that the Tories are always banging on about, but the 75 years that people will have to work and wait under this Tory Government before they get their state pension?

[Mr Duncan Smith]

Well, all I can assume from that rather pathetic response is that the hon. Member for Pontypridd (Owen Smith) did not think that his urgent question would be granted and that, after he heard that it had been granted, he scribbled away massively, because it was utter idiocy. I want to be kind to him, because he has made a career out of being Mr Angry at the drop of a hat. I remind him—[Interruption.] Labour Members do not want to hear this, but I am going to answer the hon. Gentleman’s question. Let me remind him of exactly what his party was about before he took over as the Opposition spokesman. Let me—[Interruption.]

Universal Credit Work Allowance

Debate between Owen Smith and Iain Duncan Smith

Wednesday 6th January 2016 Commons Chamber

[Owen Smith]

I did not make a mistake in any way, shape or form.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

You said it was cut.

[Owen Smith]

No I did not. I referred to the original document commissioned and chaired by the Secretary of State, in which it was recommended that there be a 55% taper rate. I might also refer to the social mobility commission, which is telling him to go into reverse. It argues that he needs to get back to a 55% taper rate.

[Mr Duncan Smith]

You said it was a cut.

Welfare Cap

Debate between Owen Smith and Iain Duncan Smith

Wednesday 16th December 2015 Commons Chamber

[Owen Smith]

I am sure that the shadow Chancellor is up to some extremely important business. Ostensibly, the Secretary of State for Work and Pensions is meant to account for this on behalf of the Chancellor—talk about adding insult to injury or rubbing salt in the wounds, not only has his budget been raided to pay for the embarrassing reversal on tax credits and the breach of the welfare cap, but he was asked to come here to explain it to the House. I do not blame him for one minute for deciding to attend a really important Cabinet Committee instead of coming to the House to explain about the welfare cap.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

rose—

[Owen Smith]

Oh, I am delighted.

[Mr Duncan Smith]

As it is Christmas and I want to help the hon. Gentleman out as much as I can, because he is clearly floundering—[Interruption.] Well, he is floundering, and I do not want him to, because it would be bad for his reputation. I actually trust and support my Ministers. I believe that every one of them is capable of doing the debate better than the hon. Gentleman. Perhaps he would like to trust his shadow Ministers as well sometime.

[Owen Smith]

I would trust my shadow Ministers with my life. However, I thought that this was a very important subject. I thought that the welfare cap was one of those things that—what did I say earlier on?—was a great step forward in the British welfare state. I thought that the shadow Secretary of State for Work and Pensions should respond, and I cannot understand for a minute why the right hon. Gentleman wanted his junior Minister to do this belittling debate. The shadow Chancellor is not here. He has disappeared, much like the Cheshire cat—better than that, like Macavity the cat.

Oral Answers to Questions

Debate between Owen Smith and Iain Duncan Smith

Monday 7th December 2015 Commons Chamber

[Mr Duncan Smith]

I know how hard my hon. Friend campaigns to get employment up in her constituency. I am more than happy to come and support her to show that more people are getting jobs as a result of our welfare changes. Unlike the previous Government who spent money and changed very few lives, we are spending less money but changing more lives for the better.

[Owen Smith (Pontypridd) (Lab)]

The Secretary of State said yesterday that “nobody will lose a penny” under his changes to universal credit, which was a surprise to me. On Friday, the Office for Budget Responsibility published a report showing that the Government intend to cut £100 million from the universal credit work allowance next year, £1.2 billion the year after that, and then £2.2 billion, £2.9 billion and £3.2 billion by 2020. By my count, that is a trillion pennies. Will the Secretary of State clarify his remarks and tell us precisely which workers are going to lose them?

[Mr Duncan Smith]

I just wish the hon. Gentleman would actually go and visit a universal credit site to see the huge difference it is making. In answer to his question, as the IFS said

“no family will take an immediate…hit”

from being moved on to universal credit. [Interruption.] Hold on a second. I remember that it was the Labour party that got rid of the 10p tax starting rate and did not cash protect anybody at all. We are transitionally protecting those who are moving on to universal credit. Maybe the hon. Gentleman is against that. If so, would he like to say why?

[Owen Smith]

Again, the Secretary of State says this Budget made no changes. He is right, because the changes had already been passed in the summer Budget and in the statutory instrument. The truth is that the Chancellor bailed himself out of the hole he dug on tax credits by raiding the universal credit system, creating a deeply unfair two-tier system. A working mother on universal credit will next year be £3,000 worse off than her equivalent on tax credits. In all, 2.6 million families will be £1,600 on average worse off. It is the new IDS postcode lottery: it is arbitrary, it is unfair, and if you are a low-wage working mother, it could be you.

[Mr Duncan Smith]

The hon. Gentleman’s party, which opposed universal credit from the outset, can hardly say that it is the slightest bit interested in how it works. The reality is that all those calculations for lone parents do not take into consideration—[Interruption.] No, they don’t. The childcare package that comes with universal credit is dramatic. Unlike tax credit—[Interruption.] Perhaps he would like to just keep quiet and listen for once to somebody who knows what they are talking about. I say to him very simply that the childcare package for universal credit gives parents with children childcare support every single hour while they are in work. Under tax credit, they got next to nothing.

Oral Answers to Questions

Debate between Owen Smith and Iain Duncan Smith

Monday 2nd November 2015 Commons Chamber

[Mr Duncan Smith]

Let me pick the hon. Gentleman up on a couple of points. First, since the Government came to power, the number of people living in working families and not in poverty is up by about 1.7 million, compared with 2009-10. The number of people in in-work poverty peaked in 2008-09 and the latest figures are 200,000 lower than that peak. On the IFS, it is worth reminding him that in a recent interview on tax credits its director said that the Chancellor had taken the decisions to protect some of the poorest people on tax credits. That is where we are. The Chancellor is clearly looking at the last vote and he will come forward with further measures.

[Owen Smith (Pontypridd) (Lab)]

In trying to deal with in-work poverty, the Living Wage Foundation today unveiled its new, very carefully calculated rates of £9.40 for London and £8.25 outside the capital. They are designed to reflect the realistic costs of living and average wages. Will the Secretary of State tell us why, therefore, he and his Government continue to describe their new rate, the minimum rate for the over-25s of £7.20, as a national living wage?

[Mr Duncan Smith]

I made the decision for my Department to pay the London living wage to all the cleaners and everybody else who works on contract. My right hon. Friend the Chancellor came forward with a very generous position in the Budget to raise the national wage to £9 by 2020. That is a huge increase. Perhaps the hon. Gentleman would like to tell me why, throughout the 13 years of the previous Labour Government, they never engaged with raising it to the national living wage either.

[Owen Smith]

The Labour Government introduced the minimum wage in the teeth of opposition from the Conservative party. I welcome the fact that the Secretary of State pays, in his Department, the London living wage, but continuing to describe the national living wage as just that undermines both the campaign and the concept of a real living wage that people can genuinely afford to live on. The under-25s, as we have heard, will not benefit from this. Is the reason for that, as the Minister for the Cabinet Office and Paymaster General, the right hon. Member for West Suffolk (Matthew Hancock) has told us, that young people are viewed by this Government as unproductive and therefore worth less money?

[Mr Duncan Smith]

For a moment, I forgot myself. I have been rather churlish. I did not welcome the hon. Gentleman to his post. I welcome him now to his post without reservation. [Interruption.] Well, that is not what he said on Second Reading of the welfare Bill, when he abstained, having decided since that he is really opposed to it. But never mind, the road to Damascus has a new route—I think it is called a career.

Moving on, it is this Government who increased the minimum wage to £6.70 and the living wage to £9 by 2020. Universal credit improves work incentives and supports childcare, with up to 85% of childcare costs covered. The lowest paid and the poorest will be best protected by what we are proposing, and not by leaving the minimum wage where it was under the previous Labour Government.