Social Security (Up-rating of Benefits) Bill

Patrick Grady Excerpts

2nd reading
Monday 20th September 2021 Commons Chamber

[David Linden]

If the hon. Lady pays attention to the rest of my speech, she will understand that I am developing my argument because the UK state pension is so pitiful. That is the point I am addressing and I am sure she will make it in her speech, too.

The rise in the proportion of pensioners on relative low income followed a period of more than a decade during which the measure had been trending downwards from a high of 29% in 1998-99. The passing of the Bill will undo all that work.

Although the state pension is the biggest source of income for pensioners, House of Commons Library analysis shows that UK state pensions are the lowest as a proportion of pre-retirement wages of all our European neighbours. Pensioners throughout these islands receive around just a quarter of the average wage when they retire, whereas pensioners in Luxembourg and Austria receive 90% of the average working wage. According to the OECD’s latest analysis, the UK has an overall net replacement rate of 28.4% from mandatory pensions for an average earner. That is well below the OECD average of 58.6% and the EU average of 63.5%. It is simply not right that the UK devotes a smaller percentage of its GDP to state pensions and pensioner benefits than most other advanced economies.

The triple lock betrayal is yet another Tory-imposed austerity cut. The Commons Library briefing for this debate estimates that the British Government will take away £5 billion from pensioners in 2022-23 if the triple-lock elements of the state pension are uprated by 2.5% rather than 8.3%. Investment in the state pension is crucial, especially as many are still excluded from automatic enrolment in workplace pensions—although I acknowledge that some, but nowhere near enough, progress has been made on auto-enrolment.

Let me briefly develop that point a little further. The British Government’s failure to extend automatic enrolment to low-income earners and young people disproportionately impacts women, thereby worsening the already massive gender pension gap on these islands. That is before we even come to the issue of the Department for Work and Pensions’ maladministration with regard to 1950s-born women who, quite rightly, await to see what stage 2 of the ombudsman’s process will conclude. I very much hope it will do so soon.

[Patrick Grady (Glasgow North) (SNP)]

I echo what my hon. Friend is saying about 1950s-born women. Is the decision to abandon the triple lock not a double injustice to those women—and to the Women Against State Pension Inequality campaign—because not only are they now being denied the rise in their pension that they might have expected, but they were denied a pension at all at the time they originally expected their pension?

[David Linden]

I am grateful to my hon. Friend for that intervention, and he is right. I am sure that, like me, he receives regular representations on that matter from Rosie Dickson from WASPI Scotland. I am glad that he has put that on the record on Rosie’s behalf.

Before I move on, let me touch on frozen pensions, to which the Father of the House made reference when we were considering the business of the House motion. Members will be aware that the UK has a series of historical reciprocal arrangements to provide for the uprating of state pensions in certain countries. Most recently, the Government committed in the Brexit trade deal to uprating the state pensions of UK pensioners in the European economic area. UK pensioners in other countries such as the USA, Philippines, Israel and Jamaica continue to receive their full payments. However, the arbitrary system means that pensioners in other countries—and, indeed, even in British overseas territories such as the Falkland Islands—have their pensions frozen, despite their having paid in the same dues. More than 90% of affected pensioners live in Commonwealth countries with close cultural ties to the UK. The UK is the only country in the OECD to take this two-tier approach to state pensions; I ask the Minister to reflect on that.

There is opposition to the Bill from various parts of the House, but that opposition does not stop in this Chamber. TUC general secretary Frances O’Grady has said:

“The UK has one of the least generous state pensions in the developed world. The triple lock was introduced to close this gap and lift pensioners out of poverty. Suspending it will only halt our progress. This is a dangerous precedent. If the government is allowed to pick and choose when to apply the triple lock, the result will be lower state pensions for future generations and more pensioners experiencing hardship. This decision will hit old and young alike. A race to the bottom on pensions helps no one.”

She is absolutely right.

Let me finish with a quote from even closer to home: something I found on the Better Together website, which advocated Scotland voting against independence in 2014. The Better Together campaign said:

“Our pensions are safer as part of the UK…We are living longer and working longer than ever before. People want to know that their pensions are safe. The UK State Pension means that everyone in the UK can get the same basic State Pension. It is a great example of how we share good things across the UK.”

Social Security (Up-rating of Benefits) Bill

Patrick Grady Excerpts

Consideration of Lords amendments
Monday 15th November 2021 Commons Chamber

[Patricia Gibson]

I rise to support Lords amendments 1 and 2. The Tory Government’s abandonment of the link between earnings and pensions, smashing the triple-lock manifesto commitment, is truly disgraceful. We are told this is necessary because this year’s earnings measure is “skewed and distorted”. There are many things swirling around Westminster that are skewed and distorted, but the triple lock is not one of them. The UK Government commitment to the triple lock remains, we have been told today by the Minister, but he will understand that that assurance is met with widespread scepticism because today he is here to tell us why their breaking the triple lock must proceed.

We in the SNP tabled an amendment to this Bill requiring the Secretary of State to assess, and be held accountable on, the impact that the legislation would have on levels of poverty among pensioners in each of the devolved nations. It was shamefully voted down by the Tories, and Labour abstained, which it will have to justify to pensioners across the UK. Pensioners across the UK, and certainly in Scotland, have been watching carefully and will not easily forgive that betrayal.

This Government have not listened to pensioners and they have not listened to Members of this House who have defended the triple lock. I doubt they will listen to the Lords either, but I sincerely hope the Minister will prove me wrong.

We have been told today by the hon. Member for North Norfolk (Duncan Baker) that this would be “reckless” with taxpayers’ money. I find that insulting and wrong-headed, as will many of my constituents. What we have heard shows that the fiscal restraint we are told is necessary is being balanced on the back of pensioners, such as those in my constituency. We have heard from my hon. Friend the Member for Glasgow East (David Linden) about how money can always be found, and we need only look at the DUP deal to see that. Money can be found when it is considered necessary.

Politics is about choices and choosing to break promises. Hard commitments made to pensioners about the triple lock are being broken. We are watching and our constituents are watching and they do not approve. The Government tell us that wages are rising, as we have heard, and we know that inflation is rising, so what justification is there to break the triple lock—to change the goalposts in the middle of the game?

[Patrick Grady (Glasgow North) (SNP)]

Not only are the Government breaking their manifesto commitment and doing away with the triple lock, but already pensioners—our constituents—are in receipt of one of the lowest state pensions in the whole of Europe. Does my hon. Friend share my confusion that Conservative Members often seem to think that the current state pension is an argument for the Union, as if, if Scotland were independent, it would be even worse?

[Patricia Gibson]

I absolutely agree with my hon. Friend that one of the so-called Union dividends is a pension that is a pithy amount compared with those in other developed nations.

There is genuine fear that this abandonment of the triple lock will lead to permanent and more damaging actions against pensioner incomes. The state pension is by far the largest source of income for millions of UK pensioners, and the triple lock has kept that secure throughout the pandemic. To break it now, as inflation creeps up and the cost of living becomes increasingly challenging, is a shocking attack on pensioner incomes, and it is part of a wider and increasingly obvious narrative from this Government. It is crystal clear, because we have the evidence. We know that women born in the 1950s had their pension age increased with little or no notice; we have seen unacceptable state pension payment delays for new retirees, causing genuine financial hardship and suffering; we have more than 2 million older people living in poverty; and with the triple lock abandoned, many pensioners are set to be £520 less well off next year. All of that will do untold damage to pensioners.

I again urge the Government to stop attacking pensioner incomes and at least keep one of their promises to the electorate by retaining the triple lock and preventing more of our pensioners from suffering hardship in old age. There is an opportunity today to do the right thing. The Government must take this opportunity, and they must take it with good grace.