Access to Pension Credit

Patricia Gibson Excerpts

Wednesday 24th July 2019 Westminster Hall

[Chris Elmore]

I do agree with my hon. Friend. Her intervention re-emphasises the point that this issue affects pensioners right across the United Kingdom, and the Government need to deal with it, starting by better advertising what is available and making sure that pensioners are able to access the money that they need and that is rightly theirs.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Does the hon. Gentleman share my shock and disbelief that pensioners tell me that when they phone up the helpline or claim-line for pension credit, they find that it is not properly staffed? Indeed, some of my constituents have been left on hold on the phone for up to an hour, even though there is no option to apply for pension credit using an application form. Barriers are being put in the way of pensioners claiming this money, which might explain the lack of take-up.

[Chris Elmore]

I am grateful to the hon. Lady for that intervention. As I will set out later in my speech, the parliamentary service here has been able to have some interaction with constituents from across the UK, and I have some examples that will almost confirm her view that the Department for Work and Pensions is being deliberately unhelpful when it comes to allowing pensioners to claim pension credit. I will refer to those examples later.

The Government’s flagship policy to lift pensioners out of poverty—pension credit—is failing, and it has been for some time. Pension credit is not working for up to 1.3 million pensioner households that are eligible for this vital support, which could be the catalyst they need to lift them out of poverty, but they do not receive it. In my constituency, I find it completely staggering that there is £5.1 million of pension credit going unclaimed each year, and I know that there are many, many constituencies across the UK where the situation is even bleaker.

By the time the new TV licence rules come into force in 2020, pensioners across the UK will have endured 10 long years of Tory austerity—10 long years of austerity that none of them caused; 10 long years of austerity that many of these pensioners did not vote for. Indeed, 10 long years of austerity have had a devastating impact on the living standards and quality of life of hundreds of thousands of pensioners across the United Kingdom.

In 2003, pension credit was introduced under the new Labour Government. It was created to ensure that all older people received a minimum amount of income and has played a major role in previous reductions in poverty. Indeed, the last Labour Government lifted 2 million pensioners out of poverty as a result of policies such as pension credit.

What have we seen since? Over 400,000 more pensioners have been plunged into poverty, and two in five of the pensioner households that are entitled to pension credit currently do not claim it. That shows that it is not that the policy itself is not working; instead, it is that people who might need this money are not accessing it. The Government have to change that.

Parliament’s brilliant digital engagement team asked people on social media and on the MoneySavingExpert.com forum over the weekend about their experiences with pension credit. It was clear from that research that although many respondents were aware of pension credit, there was much more confusion about what the benefit actually was, who is eligible to it and how it can be accessed. Several of the respondents criticised the way that the DWP promotes pension credit to those who are eligible for it. For example, Joanne Stannard said that

“there are some over-75s who don’t even own a computer…make their lives easier”.

Susan Brady said:

“I worked for the DWP for over 30 years in operational delivery, so I am well aware how unfair our welfare system is. We seem to despise our older people in the UK. It’s wrong, totally wrong.”

I could go on, but what was clear from the responses is that the system is not fit for purpose. People do not know whether they are eligible for pension credit and many are struggling to get by, despite working hard throughout their lives.

I thank everyone who responded to the questions posted online or shared their views about them, and I pay tribute to the digital engagement team for again helping us to have as informed a debate as possible.

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I will speak briefly, because I know a lot of Members want to speak. I thank the hon. Member for Ogmore (Chris Elmore) for having secured this important debate.

It is a disgrace that pension credit—the support in place to help our poorest pensioners—has been under-claimed by £7 billion since June 2017 across the UK. In my constituency, that figure stands at £7.4 million. While many pensioners often have to choose between eating and heating, they are unaware that other support has been set aside for them. I have raised this issue on the Floor of the House, and asked what the Government were going to do to publicise that support and ensure that our poorest older people were aware of it. Predictably and disappointingly, the answer I received was rather dismissive.

It seems to me that unacceptable obstacles have been placed in the path of those who might claim and benefit from this support. In my constituency, as I said earlier, I have been told by old people that when they call the pension credit claim line, it is not properly staffed. After being kept on hold, sometimes for up to a full hour, the would-be claimant gives up and hangs up. On hearing that, I advised my constituents to apply for pension credit via post, but guess what? Only those living in Northern Ireland can do so. I wonder why that is; perhaps the Minister can explain why there is more concern for constituents in Northern Ireland than for those in North Ayrshire and Arran.

Why does this matter? It seems to me that by not informing older people that pension credit exists, and then making it as hard as possible for them to claim, the less it costs and the more can be clawed back by the Treasury. Meanwhile, tens of thousands of pensioners in my constituency and across the UK are robbed of vital support that could make a material difference to their circumstances. That is before we talk about those who may miss out on pension credit and, as a further blow, will lose their right to a free TV licence when those are cut by the Government, not to mention the fact that pension credit is often a gateway benefit to other support.

The cuts in pension credit for mixed-age couples were sneaked out under the cover of the Brexit chaos. Add to that the betrayal of women born in the 1950s, who have been robbed of their state pension, and we have a UK Government breaking their manifesto pledge to protect pensioner benefits.

[Alex Chalk (Cheltenham) (Con)]

The hon. Lady is not the first representative from her party to complain on behalf of the Women Against State Pension Inequality campaign. However, there is devolution in Scotland. If she really cared about the issue, should the Scottish National party Government not put their money where their mouth is?

[Patricia Gibson]

The WASPI women are not stupid, and they have heard that myth peddled repeatedly. There is a particular section in the Scotland Act 2016, which I recommend the hon. Gentleman reads, that forbids the Scottish Government from providing benefits

“by reason of old age.”

If he were to read the Act, he might learn a thing or two before peddling that myth. I also remind him that the Scottish Parliament does not exist to clear up a Tory mess.

It is clear that the Government are no friend, supporter or protector of our older people. It is time for the Government to get a grip, stop punishing our older people, stop punishing people for being poor, get on with the day job and properly address pensioner poverty.

--- Later in debate ---

[Guy Opperman]

Much though I am urged to do so by the hon. Gentleman. The hon. Member for Glasgow South West (Chris Stephens) asked if my phone was turned on, but it is most definitely turned off—with respect and due deference to the Chair—and it is not for me to make new tax or incentives policy.

A perfectly legitimate point, however, can be made in two ways in answer to my hon. Friend the Member for Cheltenham (Alex Chalk) and several other speakers. Voluntary organisations do a fantastic job of explaining to our older community—some of whom are digitally challenged and some fully up to speed online—the opportunities to claim and the things out there that the Government will provide, and that applies to any Government down the years. Basically, those organisations should have all our support, and anything that individual Members of Parliament, local authorities and local organisations can do to assist their efforts is entirely right. In my constituency, I have visited the Men’s Shed in Hexham and various support organisations, such as Age Concern in Corbridge. I fully accept that they do a fantastic job, as similar organisations do in Cheltenham and as does my hon. Friend. If we have the ability to use them more, I am happy to take any suggestions on board.

I accept that Government actions are criticised and I understand that it is for us to make our case, but I make a further point that the pension credit toolkit that we reissued in April, with two versions this year, provides copious advice not only to the individual who wishes to claim but to the voluntary organisations out there. I urge any voluntary organisations without access to the pension credit toolkit—which gives guidance, advice, assistance and recommendations of how to disseminate vital information to our constituents—to take it up, because it is of great importance.

All those things having been said, I want to make it clear that part of our case is that we would love pension credit take-up levels to be higher. The benefit is specifically intended to provide support to some of the poorest and most vulnerable pensioners in our community, and there is no question but that we are already committed to ensuring economic security for people at every stage of their life, especially when they reach retirement.

We are forecast to spend more than £120 billion on benefits for pensioners in 2019-20, which includes £99 billion on the state pension. As a result of the triple lock, from April 2019 the full yearly amount of the basic state pension is about £675 higher than if it had been uprated just by earnings since April 2010. That is a rise of more than £1,600 in cash terms.

In respect of pension credit, the value of the standard minimum guarantee this year is the equivalent of more than £1,800 per year higher in cash terms for single people, and more than £2,700 for couples, than it was in 2010. As a Government, we also spend £2 billion a year on winter fuel payments, which are payable to all pensioners, including those on pension credit.

The overall trend in the percentage of pensioners living in poverty has been a dramatic fall over recent decades. Rates of material deprivation for pensioners are at a record low. In fact, between 2009-10 and 2017-18, material deprivation for pensioners has fallen from 10% to 7%, and rates of relative pensioner poverty before housing costs have halved since 1990. We want to maintain that achievement. It is important that hon. Members understand that more than 1.6 million people already claim pension credit. That equates to £5.4 billion of claims. Indeed, as of November 2018, there were 2,450 pension credit claimants in the constituency of the hon. Member for Ogmore, and over 100,000 in Wales as a whole.

Moving on to the point about the BBC—

[Patricia Gibson]

Will the Minister give way?

[Guy Opperman]

I am going to answer several of the hon. Lady’s points, but I will give way.

[Patricia Gibson]

Before the Minister talks about TV licences, will he tell us whether he will investigate the concerns brought to me by constituents about the claim line not being properly staffed?

[Guy Opperman]

I was going to come to that at a later stage, but I will address it now. I am told that there is no evidence that not enough people are manning the phone line, which is a freephone number. However, if the hon. Lady provides me with the specific information by letter, I will look into it and respond to her. She also raised the issue of the ability to communicate by post. Anybody can make an application by post; it is not restricted to Northern Ireland, as I think she seemed to suggest. There is a difference because Northern Ireland is a devolved Administration and is dealt with in a different way, but 20% of the population make a paper claim by post. As I understand, postal applications are possible—I will be corrected if I am wrong.

[Patricia Gibson]

rose—

[Guy Opperman]

I will not give way again, because I have a lot of points to cover.

I want to deal with the point that the hon. Lady and other Members made about the state pension age increase. The hon. Member for Birmingham, Erdington (Jack Dromey) is married to a former Minister, now Mother of House, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who was in favour of the state pension age in the dim distant past in 1997, when she was Secretary of State for Work and Pensions. Hon. Members will understand that I am the latest in a long line of Ministers who have continued the policy of successive Governments to increase the state pension age by reason of equality legislation and the increase in life expectancy, which is light years away from the three score years and ten of our grandparents.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) raised the situation of the Scottish Government in answer to my hon. Friend the Member for Cheltenham; I refer the House to the letter of 22 June 2017 from my opposite number Jeane Freeman to my hon. Friend the Member for Watford (Richard Harrington), in which she explains the section 26, 28 and 24 powers under the Scotland Act 1998, which provide opportunities for the Scottish Government to intervene should they so choose, particularly in respect of the section 26 discretionary payments.

I now turn to the issue of the BBC. Its decision to limit free TV licences only to those aged 75 and over and in receipt of pension credit is disappointing. We expected it to continue the concession, and we want it to look at other options to help more elderly people who rely on TV to stay connected to the world. The BBC has indicated that it will write to all existing TV licence holders, advising them of how the new policy will work and when they need to act.

The Government look forward to hearing more from the BBC about its detailed plans for communicating and implementing that change. That is clearly a matter for the Department for Digital, Culture, Media and Sport; Government officials continue to engage with the BBC, but it would be wrong not to point out that in 2015, when the decision was made, the director-general at the time stated:

“I think we have a deal here which is a strong deal for the BBC. It gives us financial stability...The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC…I think being in control of our income…is a very grown-up response for the BBC and a grown-up response for any organisation”.

The House can draw its own conclusions from what Lord Hall said in 2015 and the consequent decision that it has made. I hope that the BBC will think again once it has reflected on the comments that it made in 2015 and the nature of the pushback that there has been.

--- Later in debate ---

[Guy Opperman]

No; I was quoting what the BBC said about the fiscal settlement, which made it clear that it was a strong deal that gave the BBC financial stability, and that the decision to put the cost on the BBC had been

“more than matched by the deal coming back for the BBC”,

which it then decided to take a differing approach to. Officials will continue to monitor the position.

I want to talk briefly about historical activity. Successive Governments have tried to promote pension credit, yet the take-up has remained stubbornly at around 60% for some considerable time. When pension credit was launched in 2003 there were higher figures, of up to 74%, but the Office for Budget Responsibility’s fiscal risk report from May 2008 stated that

“experience from 2003 to 2008, suggests that very large increases in take-up are unlikely”.

The Department for Work and Pensions under the Labour Government commissioned and examined that report. Successive Governments have put forward a variety of innovative approaches, but research in 2010 indicated that the most common reason given by those identified as eligible, for not claiming pension credit was that they believed they would not be entitled, typically because they had savings or other sources of income.

[Patricia Gibson]

rose—

[Guy Opperman]

I will not give way because I only have a minute before the hon. Member for Ogmore will make his closing remarks. There are other reasons, and I urge hon. Members to publicise pension credit. I urge the voluntary organisations, which are the most trusted organisations in a community, to support the processes. We use a variety of channels to communicate information about benefits, whether pension credit or other benefits. People can check whether they are likely to be entitled using the online calculator on gov.uk, or they can make a claim by calling a freephone number.

We engage with people who may be eligible for benefits at pivotal stages, such as when they are approaching state pension age. An accompanying leaflet contains information about pension credit and advice on how to check eligibility, and a freephone telephone number if they wish to discuss their pension credit entitlement. We also target those who report a change of circumstances. We know that the best way to reach eligible customers is through trusted stakeholder organisations, which may be best placed to understand the local circumstances and needs in their communities. That is why I strongly recommend the online toolkit for the agencies and individuals, but I welcome the opportunity to discuss this matter.

The Government are committed to increasing the number if at all possible. I thank the hon. Gentleman for raising the debate, and I wish him very well in his future married life.