Pension Schemes Bill [Lords]

Pete Wishart Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Monday 16th November 2020 Commons Chamber

On resuming—

[Pete Wishart (Perth and North Perthshire) (SNP)]

On a point of order, Madam Deputy Speaker. I wonder if you could tell the House why there was the necessity for the further cleaning of the Chamber. I understand that this is the first time that this has ever happened. Is there anything in particular that the House needs to be informed about because of that arrangement?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Gentleman for that point of order. We were asked to suspend the House just to ensure that there was a little bit of extra cleaning. I do not have any further information other than that, but I am sure that it is precautionary, and if there is anything further that Members need to be informed of, I am sure that they will be.

--- Later in debate ---

[Aaron Bell]

I thank the hon. Lady for that intervention. Yes, I think Mr Golding successfully pushed the Telecommunications Bill to the other side of the 1983 general election, but that election, as she may well remember, did not go well for her party.

This Bill makes pensions safer, better and greener. I will briefly turn to some amendments on each of those three topics. Amendments 2 to 5 are on scams. The right hon. Member for East Ham (Stephen Timms) acknowledged that those are probing amendments. I will not repeat the story that I told on Second Reading of my constituents who suffered from a pension scam—all hon. Members will have similar stories—but those scams are extremely destructive. As my hon. Friend the Member for West Bromwich West (Shaun Bailey) said, they often affect people who have no real experience of financial matters. At a vulnerable point in their lives, they can be taken advantage of, so I welcome the work that has been done, and I welcome the commitments that the Minister has made to work further in this area.

On the greener side of things, like my hon. Friend the Member for West Bromwich West, I cannot add much to the excellent speech by my hon. Friend the Member for Grantham and Stamford (Gareth Davies), who set out the reasons why the Government disagree with the amendment 16. It is an inappropriate use of the legislation. As my hon. Friend the Member for Amber Valley (Nigel Mills), on whom I intervened, said, the Government have other ways to make sure that companies meet those targets. We cannot ask pension trustees to make those fine decisions. I firmly believe that the Bill is a real step forward, but engagement, not divestment, is the way to proceed.

I turn principally to dashboards which, for me, are the most exciting part of the Bill, enabling the same sort of transparency, flexibility and, crucially, easy tracking of our pensions as we have all come to expect of our current accounts, credit cards and mortgages. We are in the information age, and we need to make that information accessible to people, particularly with all the stuff that we have heard in Committee and on Second Reading about the number of jobs and pension schemes that people have. Auto enrolment, in particular, enables people to bring their pensions into one place and perhaps to consolidate them, which is a real step forward, as it empowers people. As my hon. Friend the Member for Delyn (Rob Roberts), who cannot be here today, said in Committee, the key principle is informed choices. When we inform people about their choices, that can drive sensible decision making on, for example, consolidation.

The amendments that seem to circumscribe dashboards —for example, amendment 15, 8, 14 and others—are not necessary. More than that, they would be frustrated by the market. The Which? report that I quoted on Second Reading said:

“It is clear that even if the government was to decide that there should only be a single government-run dashboard, other private sector dashboards would continue to develop outside of the regulated market. These may rely on screen-scraping or other potentially unsecure forms of transmitting customer data.”

Alternative products are already springing up, and we cannot hold back the tide like Canute. We have to go where the customer is, as the Minister said when intervening on the hon. Member for Wallasey.

I do not think that we should try to buck the market in regulation. Instead, we should regulate effectively, and that is what the Bill does. I urge the House to reject the amendments, although I accept that they are well meaning. As many hon. Members have said, there is real agreement among us about how we should proceed, but I do not think that any of the amendments are necessary. I congratulate the Minister on the Bill, and I look forward to the safer, better and greener pensions that we all deserve.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I support new clauses 4 and 5, which I tabled with my hon. Friends. It is a pleasure to follow the hon. Member for Newcastle-under-Lyme (Aaron Bell). This has been a good-natured debate. We all have particular issues we want to raise in relation to the Bill, but everything has been presented in a compelling, interesting and mainly consensual way.

The pernicious impact of section 75 of the Pensions Act 1995 on multi-employer pension schemes, particularly plumbers’ pensions, must rate as one of the biggest pension injustices of recent years. The litany of devastating stories of honest, hard-working men and women who face crippling debts and liabilities, sometimes of hundreds of thousands of pounds, is simply heartbreaking. We heard another example today from the hon. Member for North East Fife (Wendy Chamberlain), who is not in the Chamber. I have had plumbers, including some in their 60s or even 70s, who have been forced to continue to work because of the effects of the scheme. They have been in tears describing to me what that will do to them and the impact on their life and health. They are on all sorts of support to try and get through the real concerns and anxieties about possibly losing everything, from their home and bank balance to their livelihood and sense of self. It has been a dreadful experience for anyone who has been caught up in it. These are people who have worked all their lives, earnestly and honestly paying into their pension scheme, believing that their retirement was safe, secure and something to look forward to, only for it to become a living nightmare.

I have been trying to get justice for these plumbers for some five years now. I formed the all-party parliamentary group on plumbers’ pensions in an attempt to get this addressed and resolved. Over the years, we have met successive Pensions Ministers, including the current Minister, with colleagues from all parties, we have secured debates in Westminster Hall and on the Floor of the House, and we have brought in a private Member’s Bill from my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown). We have even facilitated brainstorming sessions involving officials from the DWP, the pension providers, SNIPEF—the Scottish and Northern Ireland Plumbing Employers Federation—and some of the trustees, all without being able to address the fundamental problems associated with section 75 of the 1995 Act. Here we are, years later, with this still unresolved, and some plumbers facing the possibility of ruin for doing exactly nothing wrong.

I appreciate that the Government have addressed this responsibly, and even helpfully. I congratulate and thank them for the easements that have been introduced in the course of the past few years. But there has been no resolution to the central issue, and today there are still plumbers in all our constituencies who will be facing crippling debts and their retirement being made an absolute misery. We know that this is difficult to resolve. We know that the best brains in pensions across the country have looked at it to try to find a solution. My plea to the Minister is that we cannot give up: we cannot simply desert these people who have done absolutely nothing wrong. If we have not found the solution yet, we must keep on looking for it. We will keep on trying to ensure that we do get justice for these people, We cannot leave a certain section of our constituents in such a hellish limbo in being faced with these demanding constraints and pressures.

If I could find a couple of words that would adequately describe section 75 of the Pensions Act 1995, they would be “unintended consequences”. There is nothing wrong with section 75. It is designed to meet a few demands and requirements, and it is actually quite a sensible and elegant inclusion in the Bill, but the unintended consequences for these multi-employer pension schemes have been absolutely and utterly devastating. Since 2005, any employer who has left the scheme or prompted a trigger event is required to pay the section 75 debt. That debt is calculated on a buy-out basis that assumes that the whole scheme has been bought out by an insurance company, but more than that, the accrual value that the insurance companies would put on to it is real testament to that value. They are then required to pay part of the orphan liabilities of past employers who may have become insolvent or left the scheme before 2005 and who did not pay their own section 75 debts. This means that those who remain in the scheme are required to pick up the debt of others who have been able to leave it without that burden being placed on them. Under no circumstances can this be thought to be right.

Some Pensions Ministers—I give credit to the Department, which has looked at this very seriously—have gone the extra mile to try to have this resolved, but I want to mention one of them who was getting to the heart of it—Richard Harrington. Richard did a huge amount of work on this. He worked diligently on it, putting energy, resource and commitment into trying to find a solution. I am pretty certain that if Richard was still in government he would be closer to finding some sort of resolution. I have only had one meeting on this with the current Minister, but I detected an enthusiasm from him to try to get this resolved. I will overlook some of the comments that he made in Committee in response to the excellent speech by my hon. Friend the Member for Gordon (Richard Thomson). I hope that the Minister may take a generous view of some of our amendments, because they are actually very modest amendments that would at least start to improve the situation of those who are facing the biggest liabilities. There are only about 30 of them.

[Guy Opperman]

The hon. Gentleman knows that we have looked at this repeatedly, and I have met many of the individual plumbers, from Perthshire to Angus, Lancashire and beyond. He refers to my esteemed colleague Richard Harrington, who is no longer in this place. He put forward the Green Paper that looked specifically at this point and applied the full force of Government, and all the consultations on section 75. There were 853 responses, including 70 specific responses to the question regarding legislative changes on employer debt. Regrettably, as the hon. Gentleman knows, the vast majority sought no change to the employer debt position. That is the reason we are in the situation we are in.

[Pete Wishart]

I am grateful to the Minister for reminding the House of the work that has been done. I am fully aware of what was discussed in that Green Paper, and I am aware of the responses. I want to come on to some of the longer-term issues, because those were not really addressed in how this was looked at, but that was a decent attempt by the previous Minister to get to the heart of this and pull it together. I encourage the current Minister not to give up and to look again at our amendments—I am going to try to convince him of this; we will see how we get on—because they are modest amendments that would help people who are caught in this nightmare. They are not a total solution, but our new clauses would considerably help those who have been caught up in all this.

New clause 5 would simply permit employers in a pension scheme closed to future accrual to apply for a deferred debt arrangement provided that they meet all the other tests. It would support those who are still trading prior to section 75 being triggered to use the easements before the closure of the scheme to be included. New clause 4 would allow the flexibility to waive a debt in certain circumstances to allow an employer to exit from a pension scheme where the debt is below a de minimis threshold, which the new clause would set at 0.5% of the fund value.

Those are sensible and modest proposals that would not cost the world to enact and would leave the integrity of these pension schemes intact. We know that the Minister is likely to oppose them, but I hope that he has a think about it, and perhaps there are things that he can do in subsequent legislation based on what is proposed. I know that he recognises the difficulty in all this, but he will offer no further easements beyond those already provided for in legislation. He also says that the

“current employer debt system is intended to be equitable to all employers”––[Official Report, Pension Schemes Public Bill Committee, 5 November 2020; c. 122.]

and insists that schemes must be fully funded, but setting a de minimis write-off at 0.5% will have a negligible impact on any of these arrangements.

There are other multi-employer schemes where there may be issues. It is staggering that there have been so few issues with these multi-employer schemes outside the plumbers’ pension, but I say to the Minister that this is more of a ticking time-bomb than a sleeping lion. There are consequences to come. Government failure to get this resolved when they had the opportunity with plumbers’ pensions will come back to haunt them at some point in the future. Introducing easements and partial solutions is all very well, but if the central issue remains unaddressed, there will be consequences for everyone involved in these schemes.

I will never forget the meeting when I was first made aware of this issue. I was utterly horrified that this level of debt was stalking plumbers like some sort of malicious apparition. I said to them then that I would do everything possible to ensure that this was addressed. Five years later, we have not been able to do that. It is now all down to the Minister. He can do something to lessen this burden on honest, hard-working men and women, or we can come back here in a few years with this misery still in place and this injustice still not put right. I still hope that he will consider the amendments that we have tabled this evening.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I rise to address a number of issues. First, let me say that I fully support the amendments tabled by my hon. Friends—amendment 16 and others—on climate change. With respect to some of the comments that were made earlier, we need much more radical thinking on this if we are to see the types of fundamental shifts that we need in our economy, not just in this country but globally—recognising, of course, that pensions are invested globally—to achieve the kind of action that is needed to deal with the scale of the climate emergency. That will affect the generations to come, just as, if we do not get pensions right, the generations to come will not have the resources they thought they would receive.

I want to focus my remarks on new clause 1 and amendment 14, which show the importance of improved guidance and consumer protections, and the clauses in the Bill that relate to the valuations of pensions schemes. These issues all matter and the protections—many introduced on a cross-party basis—are so crucial because of the scandals and scams that many right hon. and hon. Members from across the House have referred to. A range of measures are needed to clear up the weaknesses in our pensions systems and pensions regulation, which have led to huge injustices.

I want to talk briefly about two injustices that have affected people in my constituency over many years: the Allied Steel and Wire pensioners and the Roadchef employees. I thank my hon. Friend the Member for Neath (Christina Rees), and my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Oxford East (Anneliese Dodds) and for Stalybridge and Hyde (Jonathan Reynolds) on the Front Bench, for their work to support action on these issues, in particular the meeting that we had recently with Allied Steel and Wire pensioners from my constituency. I also thank the Minister, who has been in conversations about this case with my hon. Friend the Member for Birmingham, Erdington. I am grateful to him for agreeing to meet us to discuss it further. I hope we can find the time for that in the weeks to come, because it needs to be looked at. It is a historic injustice that has affected many, many people who have waited many years for it to be resolved. The Secretary of State said on Second Reading that we need to tackle all those who try to plunder the pension pots of hard-working employees, which was very much what happened in both cases.

The campaigners and members of the Pensions Action Group, which include many former Allied Steel and Wire employees, have explained clearly—I am sure it has been spoken of many times in this House—how they lost the pensions they put into and expected to receive in retirement. This has affected workers from across the country: not only former workers at the Allied Steel and Wire plant in my constituency, but in locations such as Sheerness in Kent and in other businesses, such as the shelving giant Dexion, which were also hit. Those workers were helped and supported by the financial assistance scheme set up by the Labour Government in the early 2000s. That was followed by the establishment of the Pension Protection Fund, which still exists today to step in to ensure workers’ accrued defined benefit pensions are safeguarded when employers collapse. A fundamental issue, however, is that under the terms of the protection scheme, pension income based on service prior to 1997 is not eligible to be increased in line with inflation, unlike post-1997 service. The pension income of 140,000 workers who built their pension pre-1997 has not been protected from rising consumer prices.

I want to name the individuals who have campaigned resolutely on this issue for many years: John Benson, Phil Jones and many others. Alongside other Members, I have been with them to Downing Street and elsewhere to take their case. Essentially, they have devoted their lives to making steel, making this country great and supporting our infrastructure projects, yet they have been denied dignity in their retirement. Tragically, many are sadly passing away without having received what they were entitled to. They point out, quite rightly, that the type of restrictive legislation that has existed around their circumstances does not apply to, for example, the pensions of Members of Parliament who were elected prior to 1997, many of whom have moved on to the other place. We need to think about justice and equity in all these matters, particularly as we enjoy very generous pension settlements.

Many financial assistance scheme members currently receive only 90% of their restricted pension. That was what was achieved by the scheme and the agreement under the previous Labour Government. Unfortunately, because of the lack of indexation many are seeing their actual income drop below the 50% redress required under Hampshire v. PPF in September 2018. I recently spoke to a number of them and asked them to explain how the situation had affected them and their families. We have heard today of many other such instances, which not only have financial implications but cause emotional and family strain. I want to quote some of their own words, because they bear strong witness to the reality. One worker, who left school in 1961, aged 15, and started working at the steel company, told me, “For some years, the company paid into the pension scheme. I myself in those early years did not contribute, but then the ASW pension scheme was formed.” The workforce were called to the canteen on a number of occasions for meetings with the company’s directors and told of the plan regarding the new pension scheme, which they were told had the backing of the UK Government. The workforce were given all sorts of assurances that “it would secure a comfortable retirement for themselves and their families, and everyone to my knowledge agreed this was the right thing to do.”

We then fast-forward to 2002 when shift teams were called to the conference room and told by one of the receivers that the company would close and they would lose their jobs. One colleague had tears rolling down their face. The receiver told them, “The pensions we had saved and worked for were safe as they were not touching those funds”. One worker said, “I went home after my shift had finished and told my wife I had lost my job but the pension was safe, only to find out days later that there was a shortfall and that we could lose in the region of 85% of the pension. It put me on the verge of a nervous breakdown, and at one point I thought I would go over the edge. After all those years working in heavy industry with noise, dust, fumes and unsociable hours, I have nothing to look forward to.”

Unfortunately, I could recount case after case from Allied Steel and Wire pensioners. It is only a matter of natural justice that, as well as ensuring that such scandals never happen again, as measures in the Bill seek to do —and as much reform since that time has attempted to do, to ensure guidance and protections—we must remember those who did not and will not benefit from these changes. I look forward to discussing that case with the Minister.

Many Members across the House have signed early-day motion 802 on the Roadchef scandal, which has been going on for nearly 30 years and has involved 4,000 low-paid workers who saw millions illegally transferred from their funds and then £10 million taken in taxes. I express my sadness at the recent death of my constituent Tim Warwick, who was the company secretary who exposed the Roadchef shares scandal perpetrated by the former chief executive. I pay tribute to the former Member of Parliament for Monmouth, Huw Edwards, and the GMB trade union—I declare an interest as a member of the GMB—who have campaigned on this issue for many years. Sadly—and as we saw with the Allied Steel and Wire pension scandal—Tim Warwick and others died waiting for clarity from HMRC about what tax they or the trust should be liable for, despite Parliament’s clear intention that such employee benefit schemes should be tax free. Will the Minister therefore give us an update—either in his wind-up, or perhaps he could write to me—on the latest position of the DWP and HMRC on this matter, which has been of great concern to Members across the House? That is one of the injustices that led us to the point of needing to make the types of changes outlined in the Bill and the many amendments to it.

Many of the amendments and proposals put forward are about increasing the transparency, safety and security of our pensions, which we all want to see, as well as tackling scams and injustices in the pensions system. I add my support to the amendments tabled by my colleagues on the Front Bench and by my right hon. Friend the Member for East Ham (Stephen Timms), the Chair of the Work and Pensions Committee. In that spirit of tackling injustice, we need to recognise the damage done by robbing people of their life savings and of their and their family’s future. They paid in, they expected to get something out, and they have not. I mentioned two examples, but there are still far too many injustices for many pensioners. I hope that, in a spirit of cross-party working, the Minister and others will continue to try to find justice for all those affected, and particularly those affected by the ASW and Roadchef scandals.

Universal Credit Roll-out

Pete Wishart Excerpts

Wednesday 18th October 2017 Commons Chamber

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. My response is twofold. First, I do not cavil—I have known him a long time—but I have not been corrected. I have been corrected many times in my life—I make no complaint about that—but I require no correction on this occasion. [Interruption.] Oh, there is a suggestion that somebody else was being corrected. Well, I will not get into that nether region.

[Pete Wishart (Perth and North Perthshire) (SNP)]

rose—

[Mr Speaker]

We will come to the hon. Gentleman. I am saving him up; I would not want to waste him.

What I said was correct. This was the expressed will of the House. If people choose not to take part in a Division, they cannot suddenly say, “Well, we didn’t lose”. We are elected to come to this place to debate and decide what our position is on motions. If people choose not to vote, that is perfectly in order, as I have explained, but the motion was carried. That is not an expression of opinion on my part. It is not an indication of bias, a display of partisanship, a siding with one party or another; it is a statement of fact. The motion was passed. End of subject.

Secondly, I strongly agree with the hon. Gentleman, who has been utterly consistent with what he said the other day. I think it highly desirable that the Government, in the light of the result, should come to the House and show respect for the institution by indicating what they intend to do. It may be that a Minister would wish to do that or the Leader of the House. As we all know in this place, the Leader of the House is not merely the Government’s representative in the House; the Leader of the House has to be the House’s representative in the Government. What I have said is extremely clear, and we will await events patiently, as always.

[Pete Wishart]

Further to that point of order, Mr Speaker. It is quite clear that the Government’s behaviour is bringing the working arrangements of the House into disrepute. A Minister is not going to come to the House to explain why they did not turn up to vote, but what can you do to help the House compel the Leader of the House to come to the House and make a statement about the Government’s behaviour and refusal to participate in the democratic arrangements of the House?

[Mr Speaker]

I must be absolutely explicit in response to the hon. Gentleman, for his benefit and that of the House, and the short answer is that it is not within the powers of the Speaker to compel a Minister, including the Leader of the House, to do anything in this situation. We very much depend in this House, this institution, this great place, on conventions, precedent and a sense of respect for the will of the House. He is a very experienced Member of this place and will know that mechanisms are available to him and others, on both sides of the House, to try to secure a governmental response, if they wish. If they do, they will certainly not find the Speaker an obstacle to their endeavours.

Plumbers’ Pensions

Pete Wishart Excerpts

Tuesday 25th October 2016 Westminster Hall

[Pete Wishart (Perth and North Perthshire) (SNP)]

I beg to move,

That this House has considered the future of plumbers’ pensions.

It is a pleasure to serve under your chairmanship, Mr Bailey, for what will be a short but hopefully considered debate about the future of plumbers’ pensions. I want to bring the issue to the attention of the House to ensure that we acknowledge the complicated concerns that plumbers have right across the country. I plead with the Government and everybody involved that we all work together to try to resolve the difficult and technical issues that are having a quite grievous impact on plumbers not just in my constituency but throughout the whole of the United Kingdom.

I first became aware of the difficulties with plumbers’ pensions when I was invited to attend a meeting of Perthshire plumbers by a Conservative councillor colleague who was associated with the trade, so that I could listen to some of the concerns that were starting to emerge from plumbers right across Scotland. I was totally shocked when I heard the scale of the difficulties, the sheer numbers involved and the concerns and anxieties presented to me by plumbers that evening. Theirs are businesses that have been serving communities such as mine, the Minister’s and yours, Mr Bailey, for decades. They are family businesses, run by people we all know and are familiar with, that do a fantastic service on behalf of the people they look after.

Plumbers have been blissfully unaware of the ticking time bomb that has been waiting for them at the end of their careers and working lives, because they have been busy getting on with their work, developing their businesses and ensuring that our pipes are fixed and our washing machines are repaired. Now they find, at the end of their careers, that life savings and family homes are at risk. These people have done absolutely nothing wrong. They have conscientiously contributed to their pension pot and ensured they have done the right thing for all the people they have employed throughout the years.

This is a technical issue, so if Members will bear with me, I will try to explain and define it as simply as I can. It seems that many plumbers are caught up in a living nightmare of huge liabilities and potential debts upon retirement because of unintended consequences associated with section 75 of the Pensions Act 1995. I have had a good look at the Pensions Act and the provisions associated with section 75. It seems to me, on paper, a perfectly legitimate and reasonable inclusion in the Act, to ensure that pension scheme integrity is retained and pension benefits are protected. It is, though, that measure that has had unintended consequences for plumbers’ pension schemes.

The simple fact is that pension schemes for small, non-associated multi-employer businesses such as those designed by plumbers are a potential disaster, with huge consequences for plumbers simply wanting to retire or wind up their businesses. That is because under section 75, employers can become liable for what is known as a section 75 employer debt, which is triggered when plumbers seek to retire or wind up their business or if their business becomes insolvent. Section 75 employer debt is calculated on the departing employer’s share of the shortfall in the scheme on a buy-out basis, based on the hypothetical situation that the whole scheme is wound up and annuities are to be paid to all existing members.

That debt is also calculated on securing the scheme’s benefits with an insurance company, which will inevitably lead to a greater figure than if the scheme deficit was determined on the ongoing basis that would normally apply in such situations. The calculation produces a significantly higher scheme deficit than if it was calculated on an ongoing or technical provisions basis. It also ignores the fact that a scheme had no deficit on a technical provisions basis at its last actuarial valuation. That has led to some plumbers facing potential liabilities of millions of pounds.

The scheme that most Scottish plumbers buy into is run and administered by the Scottish and Northern Ireland Plumbing Employers Federation—SNIPEF. It is a fantastic scheme that plumbers have enjoyed, and it is actually more than fully funded. The last actuarial valuation was carried out in 2014, and the actuary found that the assets were enough to cover 101% of the scheme’s liability. That calculation was assumed on the ongoing basis, which assumes that the scheme would continue to pay out to members.

Probably the most invidious part of the calculation is the inclusion of what is called orphan liabilities—liabilities that cannot be identified from people who have already left the scheme. Those account for something like 60% of the liabilities included in the whole scheme, and a shortfall of £453 million. It is totally unfair and almost absurd that plumbers who have conscientiously paid into the scheme are exposed to such huge liabilities.

[Alison Thewliss (Glasgow Central) (SNP)]

Eric Cuthill, who runs Hugh Stirling Ltd in my constituency, has raised concerns about this issue. He has been paying in for his employees for 34 years, meaning that his employer debt liability could run into the tens of thousands. Does my hon. Friend agree that that kind of liability is quite unfair when small businesses such as my constituent’s have done so much to support their employees through occupational schemes?

[Pete Wishart]

Absolutely. These people are not city spivs. They have not malevolently tried to get out of paying their contributions. They are people like my hon. Friend’s constituent, who have conscientiously paid into schemes and never knew they would face a potential issue at the end of their working careers. It is so unfair that they are being exposed to issues such as this. These are the people who fix our central heating, get the washing machine working again, fix our broken pipes and repair the boiler.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Is it not strange that last year in the Budget, the Government found £6 billion to make cuts in inheritance tax and capital gains tax? This issue is actually about inheritance. I have a constituent who is unwilling or unable to pass on his business to his son, because of its liabilities. My hon. Friend has touched on a very simple solution, which is a change in the method of valuation of the pension liabilities.

[Pete Wishart]

I want to come up with a few suggestions for the Government about how they can resolve some of these real and difficult situations. My hon. Friend is right; it is incumbent upon the Government to work with us. This is not about having a go at the Government. We were all unaware of these unintended consequences. My plea today is that the Government do two things: first, acknowledge that there is a serious difficulty here, and secondly, work with us and the sector to resolve it.

I want to give a couple of examples that show how invidious the situation is for many of our constituents right across the country. One is a guy called Mike. Mike’s business was established in 1985 by his father. He joined the business a few years later as an apprentice plumber. Mike and his dad built a business like so many family plumber businesses that we are familiar with, which provided a professional service to customers and tried to ensure that its employees were looked after. Their business grew, and by 1990 they had a pension scheme for their employees and were paying sick pay and holiday pay through a scheme operated by SNIPEF. Over the years they have had many apprentices, and they currently employ 14 staff. Their employees have all been trained to the highest possible standard.

Over the past 26 years, Mike has paid something approaching £400,000 in employer pension contributions to the scheme. Mike’s father is now retired and seriously ill, and Mike cannot bear to share his worries about the business with him, despite the fact that they have worked so closely together over the years. Mike, like so many employers including the plumbers I met in my constituency, has only just been able fully to understand the magnitude and significance of section 75 and cannot believe its implications for responsible employers. Mike’s business is unincorporated and he now realises that by triggering the debt he will lose his home, his life savings and other assets that he has spent all his working life securing. In his words, he is faced with continuing to work and accruing a section 75 debt until he dies, because he fears the effect of triggering the debt.

I have loads of example, which I might send to the Minister for his reflection and views, but I will give one more. Kyle’s business—another family business—was started by his father in 1982. Until recently he was a 50% shareholder, but in 2015 he bought out his partner for more than £100,000 and, at 52, he now owns 100% of the business. He currently has one plumber in the scheme and has contributed £242,000 to it over the past 37 years. Kyle has a young family and is worried sick about his potential liability. He has made all but one of his employees redundant and is now working for another company. He would like to close his business completely and sell off his business property, but he knows that doing so would trigger a huge debt. His time is now split between running his own company and working as an employee for another.

Kyle has contacted SNIPEF and has been told that his liability is an incredible £1.7 million. He is worried beyond belief, he cannot sleep at night and he feels totally destroyed and depressed. He says he just wants to curl up in a ball and die. Plumbers in our constituencies have done nothing wrong, but they are left in that condition. I have given real-life examples that we must address. I have many other examples, and I will pass them on to the Minister.

I want the Government to do a couple of things. I know the matter is difficult and technical—I have looked at it and understand the Minister’s difficulty in resolving it, but resolve it he must. First, let us agree today that the issue is huge and acknowledge that something must be done to resolve it. The Minister could make a start by considering the problem of the debt being triggered by the departure of the last active scheme member working in a business. The Pension and Lifetime Savings Association has said that employers are artificially retaining a single active member so as not to trigger the scheme.

The Government could also look at how the debt is calculated. It is based on an insurance assessment of the scheme’s value, which will obviously inflate its value. Surely it could be calculated by technical measures looking at the way the scheme operates and the actual membership. The phantom liabilities, or orphan liabilities, must be dealt with, because they inflate the scheme’s value. No one knows where the people to whom those liabilities relate are, and they no longer participate in the scheme, yet the valuation is kept artificially high. To enable us to move forward, there should be exceptions for small and micro non-associated family businesses. The Minister has an army of civil servants available to try to resolve the matter, and a pensions Bill is going to be introduced, which will allow him to look at it. I hope very much that he will do that.

I want to allow my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) a few minutes to speak, as she has been looking at the matter and SNIPEF is based in her constituency, but I have a plea for the Minister. We know that something is going on, and he has acknowledged that—I have seen some of his helpful responses to hon. Members who have raised these concerns. Will he please work with us? These people have done absolutely nothing wrong. They are the cornerstone of our community and provide a service to it. My appeal is that MPs, the Government and the sector work together to resolve some of these issues.

--- Later in debate ---

[Richard Harrington]

That is a whole different argument, as the hon. Gentleman knows. I would be very happy if we could have another debate on that and I am happy to check with him informally about it because it is something that has been proposed, particularly by his party. Respectfully, however, as far as this issue is concerned, that is irrelevant. I am not saying that the argument has merits or does not, but as far as this issue is concerned, we do not have a standing commission. The Government are here to try to deal with the issue and it is our intention to do so. We will produce a Green Paper very soon. We have said that that will be in the winter, which will certainly be before the leaves reappear, even in Scotland. We will do it as quickly as we possibly can.

[Pete Wishart]

The Minister is very reassuring today, and I am grateful for the very generous responses given to the concerns. I get the sense that we are trying to resolve this, and the Green Paper is a great opportunity to do that. May I just make this plea to the Minister and seek clarity from him? Will there be retrospection to ensure that any plumber or anyone who is caught up in this situation before the change is enacted is not left out and left high and dry with the huge debts that may have accrued?

[Richard Harrington]

I cannot give the hon. Gentleman that undertaking, precisely because it is exactly the sort of thing that we will be discussing in the Green Paper, but I would like to state that there is not a plan to ensure that these people do not get what is very logical and right. I am very conscious of the fact that we are not dealing with some offshore hedge fund, but with people who did not really want to be in the pensions business and did not want the liability—they just wanted themselves or their employees to have an ordinary pension. There is a difference, and it is right that Members of Parliament represent their constituents in this way, although I will just say that as far as the pensions industry is concerned, some of the bodies, such as the Pensions and Lifetime Savings Association and others, are also very knowledgeable on these subjects.

My door is open. We want to get this right. I ask the hon. Member for Perth and North Perthshire and his colleagues, who have made such passionate and decent contributions, to be a little more patient, but I would be very happy to be summoned back here or to the Floor of the House if they feel progress is too slow.

Question put and agreed to.

Welfare Reform and Work Bill

Pete Wishart Excerpts

Monday 20th July 2015 Commons Chamber

Bill read a Second time.

[Pete Wishart (Perth and North Perthshire) (SNP)]

On a point of order, Mr Speaker. As the neutral arbiter of this House, is there any way in which you could help and advise me on how we can achieve this? Can we rearrange the furniture of this House so that the SNP becomes the official Opposition while the Labour party abstains on the Back Benches?

[Mr Speaker]

Notwithstanding the earnest expression on the face of the hon. Gentleman, his point of order was cheeky and tendentious, as he well knows.

Welfare Reform and Work Bill: Programme

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

That the following provisions shall apply to the Welfare Reform and Work Bill:

Committal

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

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 15 October.

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

Consideration and Third Reading

(4) Proceedings on Consideration 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.

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

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

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—( Guy Opperman.)

Question agreed to.

Welfare Reform And Work Bill: Money

Queen’s recommendation signified.

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

That, for the purposes of any Act resulting from the Welfare Reform and Work Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by the Secretary of State; and

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

(2) the payment of sums into the Consolidated Fund.—(Guy Opperman.)

Question agreed to.

Scotland Bill

Pete Wishart Excerpts

Tuesday 30th June 2015 Commons Chamber

[The Minister for Employment (Priti Patel)]

This has been a full debate on a range of important issues in which there is a great deal of interest from Members of this House, Members of the Scottish Parliament and people throughout Scotland. As my right hon. Friend the Secretary of State for Scotland has made clear on many occasions during the Bill’s passage, the Government are committed to implementing the Smith commission agreement in full, and we believe the provisions of the Bill meet the spirit and substance of the agreement.

I will explain the Government’s approach as I respond to the proposed amendments in turn. Before I do so, however, I want to reflect on the fact that the Bill will give the Scottish Parliament very extensive new powers on welfare. Benefits for which powers are being devolved accounted for £2.5 billion of spending last year, which is about a quarter of all welfare spending in Scotland outside the state pension.

The clauses on welfare provide tremendous opportunities for the Scottish Government and Scottish Parliament to design, implement and structure welfare in Scotland. Such a huge change should not be underestimated. If the Scottish Government and Scottish National party want to spend more on welfare, they will of course be able to do so. The consequence of the Smith agreement is that the UK and Scottish Governments will in future work together to provide welfare systems for people in Scotland, and we need to co-operate in doing that. Scotland’s two Governments already work together well and achieve a great deal, and I am confident that that will continue as we seek to implement the devolution of these significant welfare powers.

[Pete Wishart (Perth and North Perthshire) (SNP)]

This is now day three in Committee on the Scotland Bill, and thus far the Government have refused to accept any amendments. The Scottish Parliament’s Devolution (Further Powers) Committee has said that the Bill does not meet Smith, and the House of Commons Library says that it does not meet Smith.

[The Secretary of State for Scotland (David Mundell)]

It does not say that.

[Pete Wishart]

Will the Government now agree to accept some of the amendments? I tell the right hon. Lady that she had better not even be thinking of amending the Bill in the House of Lords, out of sight of democratic scrutiny by this House. Will she assure me today that the Government will not table amendments in the House of Lords, but will do so on the Floor of the House of Commons?

[Priti Patel]

As the hon. Gentleman will have heard the Secretary of State say, the Library simply does not say that at all. I will go through the specific amendments that we are debating, and it is important for the hon. Gentleman to hear the points I will make by way of clarification. We have only just started day three, and I think he should give the Government the benefit of the doubt and listen to the arguments that we will advance.

Amendments 128 and 112 relate to the disability benefits aspects of clause 19. The clause, and specifically the interpretation of what is meant by “disability benefit”, is intended to allow the Scottish Parliament to legislate in areas currently covered by attendance allowance, disability living allowance and personal independence payment. There are a number of common features to these disability benefits. The key ones are, first, that they are usually intended to contribute towards additional costs that people with physical or mental health conditions or disabilities can incur; secondly, that they should primarily be directed at people with long-term physical or mental health conditions or disabilities, rather than conditions of a transient nature; and, thirdly, that disability is by reference to the significant effects or needs arising, rather than the fact of being disabled.

I want to focus on the third aim. Clearly, disability and long-term health issues affect many people across the UK. In fact, they affect more than 12 million people under the Equality Act 2010 definition, and disability has an impact on each of those 12 million people in an individual and very specific way. We know that many disabled people can fully participate in society and can work, and that they have no or very modest additional costs, but we also know that others of course experience great barriers that some disabled people or non-disabled people simply do not have. Let us be clear: it is right that support through the social security system is targeted. That targeted support is there to help them, and it is provided by targeting needs and effects, rather than diagnoses or conditions primarily. That is the approach taken for all disability benefits.

It is in that context that the Government have approached their commitment to devolving disability benefits to the Scottish Parliament. By setting out the broad parameters to the benefits, we can confer legislative competence for a defined policy area in such a way that allows the Scottish Parliament to determine how it achieves that and does not tie it to using existing rules and criteria. In that spirit, our approach has not been to take the seemingly more obvious route of somehow mimicking the existing legislative provisions or providing a formulation that sets absolute boundaries; our view is that either of those approaches could place unnecessary restrictions on the Scottish Parliament. Our approach must reflect the benefits as they stand, including, importantly, the fact that they contain exceptions both to allow entitlement and to restrict payment where necessary. I emphasise that the Bill will provide ample flexibility and allow the Scottish Parliament to legislate for myriad outcomes for people who would not meet the more general requirements.

Compulsory Jobs Guarantee

Pete Wishart Excerpts

Wednesday 11th February 2015 Commons Chamber

[Stephen Timms]

The number of long-term unemployed young people—those claiming for more than a year—is a lot higher now than it was at the time of the election. As we are talking about apologies, I would hope the Secretary of State would apologise to the House and to the country for the fact that the Government allowed unemployment to soar to 2.67 million after the general election, allowed youth unemployment to soar to more than 1 million and allowed long-term unemployment to hit historic highs at the end of 2013. Those are the failures and the legacy we must now address.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I note that Labour’s motion talks about taking benefits away from under-25s if they do not take an offer of a job. How does the policy of the right hon. Gentleman and the Labour party to take benefits away from young people differ from the Tory party’s policy on taking benefits away from young people?

[Stephen Timms]

Young people want a job. That is what they are asking for and that is what we will provide under the jobs guarantee, and I hope the hon. Gentleman will support us.

--- Later in debate ---

[Dr Whiteford]

The hon. Gentleman makes an important point. Obviously, young people who lack skills and qualifications are more likely to struggle in the labour market, but our black and minority ethnic young people are also experiencing disproportionately high rates of unemployment. Our looked-after young people have the poorest job prospects of all. Just one in three care leavers is likely to be employed nine months after leaving school.

The point is that many of the young people furthest from the labour market, and certainly those at greatest risk of long-term unemployment, face complex barriers. It is not just a case of, “Here’s a job, get on with it.” The compulsory jobs guarantee does not address these complexities at all. Indeed, it would make unemployed young people wait a year before they get an offer of a work opportunity, and that offer would be made with the threat of benefit sanctions held over their heads like the sword of Damocles. I do not think anyone objects to sanctions that are proportionate and fair—everyone who is fit for work should be willing to take a job if it is offered—but that is not going to overcome the challenges facing many of the people at the greatest risk of long-term unemployment.

We have seen the impact of poorly applied sanctions in the food banks in all our communities. The young people I have met in my constituency—kids with learning disabilities, literacy problems, impaired speech or movement or chronic health issues, or kids who have just had wretched early lives—all want to work, but it is not always straightforward to help them to find work, to make themselves attractive to employers or even to understand that they have something valuable to offer. In that regard, I pay tribute to the teachers in our schools and to voluntary organisations such as the Prince’s Trust and Theatre Modo, which are working in my constituency to help vulnerable young people.

We were talking earlier about the failure of the Work programme in Scotland and the need for that responsibility to be devolved as soon as possible. The same applies to other aspects of employment support, as was recommended by the Smith commission.

[Pete Wishart]

Is it the case that the more powers the Scottish Parliament has, the more we can do for the people of Scotland?

[Dr Whiteford]

That is right. The commission has shown that the opportunity for joined-up working between public, private and voluntary sector employers—our schools, colleges and local authorities working in partnership with the Government and being empowered by Government initiatives—is there already and has been shown to work in providing opportunities for all. We need the powers to tackle youth unemployment, and we need them now. The sooner they are devolved, the better.

Bedroom Tax (Scotland)

Pete Wishart Excerpts

Thursday 8th May 2014 Westminster Hall

[Mr Davidson]

I am glad to hear that. That could have been done throughout the whole of Scotland. The Scottish Government could have said to social housing providers, “Any arrears you have, you write them off, and we will refund you the money.” That is perfectly legal and could have been done, but they deliberately chose not to do so.

We had a Scottish Government resolutely seeking to make a political point by refusing to fund mitigation of the difficulties caused by the bedroom tax in any way other than by getting the cap on DHPs lifted, and a Conservative and Liberal Government who were, at that stage, resolute in saying that they would not move because the Scottish Government already had powers to deal with the issue if they so desired, and the people of Scotland were potentially caught between the two. In those circumstances, it is difficult for either side to find a way to change their position without appearing weak, or making it look as though they had the wrong solution in the first place, or suggesting that anything they say at any particular moment may be merely transitory and can be changed.

With the debates we are having at the moment about the referendum, I understand that it is much more difficult for anyone to change their adopted stance on any issue. In those circumstances, I think it is to the credit of the Secretary of State for Scotland and the Under-Secretary of State that they have persuaded their colleagues in the Westminster Government to change the line and to give powers to the Scottish Parliament to extend or to increase the amount of money spent on DHPs. We have to recognise that that has been a change in the Government’s policy, and one that I welcome. However, there are still difficulties with it.

First, there will be a delay in the transfer of powers. I hope that the Minister will tell us that every possible step will be taken to make that transfer as speedy as possible. Secondly, the Scottish Affairs Committee does not believe that DHPs are the best way to address the problem because an application is required, and in the categories of people I described earlier, we found many who were either unable or unwilling to make an application. We therefore want to discuss at some stage—I will recommend to the Committee that we explore these issues further—whether the methodologies that local authorities have at the moment are adequate.

In our view, it is legally possible for local authorities to abandon the system of application and simply ask someone whether they want a DHP. If the principle is that everyone who applies for one gets one, presumably the sort of 95-page forms that some local authorities are using are not needed. If the payment is going to be automatic, the equivalent of the Chinese general baptising his troops with a hose could be adopted and anyone who was simply asked whether they wanted DHP could be given one, but that approach has yet to be tested.

We also want to clarify what the position will be regarding last year. If the bedroom tax is evil, malignant, cruel and unfair this year, and the Scottish Government are prepared to make money available to mitigate its effects this year, what are they prepared to do about last year’s effects? Something that is wrong this year was surely equally wrong last year. There are people with arrears of the bedroom tax as a result of non-payment last year. The Committee’s view is clear: those debts should be written off. We believe that the Scottish Government should take steps to write off the arrears of bedroom tax accumulated by Scots last year. They have the power and they have the money; what they possibly lack is the will, but we will no doubt hear about that later on.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Will the hon. Gentleman give way?

[Mr Davidson]

Oh, I am glad to see that a Member from the Scottish National party is not only here, but prepared to intervene in a debate on the Scottish Affairs Committee’s work.

[Pete Wishart]

I am not going to go into the reasons why we do not participate in the hon. Gentleman’s Committee.

I accept the Labour party’s sincerity about scrapping the bedroom tax—it has said that it will do so at the earliest opportunity—but will the hon. Gentleman direct me to the Labour shadow Minister’s comment that Labour will pay in full any arrears of the bedroom tax built up in the rest of the UK? How much would it cost the rest of the UK? How would the UK Government pay for it?

[Mr Davidson]

Regrettably, we are not in power at the moment. We do not have the power either in Scotland or in the UK to take such decisions. However, the SNP is in power in Scotland, and it could do that tomorrow—well, not tomorrow actually, because the Scottish Parliament is closed tomorrow, but it could do so next week. Indeed, I am particularly glad that the hon. Gentleman asked me that question, because yesterday in the Scottish Parliament, Jackie Baillie asked whether the Scottish Government would support a proposal that they cancel out any bedroom tax for 2013-14, but answer from Nicola Sturgeon came there none.

I understand the point being made. The hon. Gentleman wants to play political games, saying, “We are not going to do this, because what have you said about it?” Let us lay aside these games. The question is—

[Mr Davidson]

I apologise, Mr Bone. I know that you have opinions on a whole range of matters, some of which I agree with, but this is not one I would want to draw you into.

The Scottish Government have a responsibility to act now, because they have the powers. To do nothing is a choice. The question is whether they will take up the exhortation from the Scottish Affairs Committee and Labour in the Scottish Parliament to pay off arrears now.

A second, related issue—I understand that this point is more difficult, but it is one on which I think we have to agree—is that of moral hazard: that if we write off arrears, we will send out a message that, in many ways, not paying rent is a lifestyle choice or is acceptable. I do not take that view. If we write off bedroom tax arrears, we also have to recognise the position of those who scrimped and scraped, who in many cases used their savings if they have them, or who borrowed from friends and family, in order to pay their bedroom tax. It is simply unfair that some people might have their bedroom tax written off, and others might also have the situation—[Interruption.] The SNP has chosen not to participate in the Committee’s deliberations, and then the hon. Member for Perth and North Perthshire wants to come along and heckle. I am quite prepared to take interventions. He should stand up like a man and give us his view.

[Pete Wishart]

Will the hon. Gentleman either say yes or no to this? I accept that the Labour party will scrap the bedroom tax if it comes to power, but does he believe in principle that a Labour Government should recompense every victim of the bedroom tax? Does he believe that that is what a Labour Government should do?

[Mr Davidson]

I do. That is absolutely and completely my view. I cannot be any clearer than that. I persuaded the Committee of that in our report and I hope in due course to persuade the Labour party of it. That is my view, and it is the view of all the bedroom tax campaigners that I have met and of local authorities. It is also the view of the SNP chair of the Dundee housing committee. He wanted to see the Scottish Government not only writing off the arrears, but refunding the amount of money that had already been paid.

Let me be clear about what the Committee is recommending and what it believes. If the bedroom tax is going to be dealt with this year, however inadequately—we have difficulties with the methodology that the SNP Government insist on using—we hope that in the spirit of unity and harmony that so often characterises political debate in Scotland, there will be an understanding that if the DHP methodology does not work successfully, other routes and channels will be found, so that the objective we share can be achieved, which is to have all the effects of the bedroom tax written off for the current year. However, we have to be absolutely clear that what we want is the arrears written off for last year and full refunds for the years coming, as a prelude to the next Labour Government abolishing the bedroom tax altogether, not in 2016 or at some mythical date after independence in the event of a yes vote in the referendum, but when a Labour Government come to power.

--- Later in debate ---

[Graeme Morrice (Livingston) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Glasgow South West (Mr Davidson), the Chair of the Select Committee on Scottish Affairs, of which I, too, am a member, on securing this debate on one of the most important but depressing subjects that I have had to consider since my election to the House.

The bedroom tax—I will refer to it as a tax, because our evidence has shown that the vast majority of those who are affected have absolutely no option but to pay it, and are totally unable to change their circumstances to avoid it—is one of the worst pieces of legislation that I have ever encountered. I therefore fully endorse the conclusions of the Committee’s report. As a member of the Committee, I have heard overwhelming evidence from every corner of Scotland that the policy is completely failing our constituents, our housing providers and even each of the Government’s stated outcomes. It does not make the social housing system fairer or more efficient, and it will not save the Government money in the long run. The bedroom tax succeeds only in punishing those with the smallest stake in society at a time when they are being assaulted from multiple directions by the Government, who refuse to prioritise their day-to-day struggle.

Ironically, the policy came into effect in the same month that the Prime Minister announced tax cuts for the privileged few who earn in excess of £150,000 a year. Nothing that I heard in evidence to the Committee came close to justifying why, although ripping off some of the poorest and most vulnerable citizens is an absolute necessity, somehow it is economically and morally proper to pay for tax breaks for the super-rich.

When we took evidence in West Lothian, where my constituency is located, we were told by the local authority that more than 50% of tenants are now in arrears, and that 500 households have tried to downsize to avoid the bedroom tax, but that because of pressures on the housing stock, only a small number have been successfully rehoused. To put the problem into perspective, West Lothian council estimates that at the present rate of transfer, it could take between 10 and 15 years to allow all the tenants who want to downsize to do so. That does not take into account new applicants who join the waiting list over that period. Alison Kerr, chair of the West Lothian council tenants’ panel, told the Committee of the urgency of acting now, saying that the longer the bedroom tax was allowed to exist unmitigated, the greater the number of West Lothian tenants who would have to make the impossible choice between eating and heating.

Of course, it is not only the UK Government who are to blame for the debacle. The Scottish Government could have acted much sooner to mitigate fully the effects of the bedroom tax in Scotland. I find it strange that the Scottish Government have not once approached the Committee to challenge statements made in evidence that they have had the powers necessary to mitigate those effects from the start.

[Pete Wishart]

We have just committed to mitigating fully the impact of the bedroom tax. While the hon. Gentleman is going on his tour of Governments throughout the UK, what does he make of his Welsh Labour colleagues in the Welsh Government, who have done absolutely nothing to mitigate the impact of the bedroom tax in their jurisdiction?

[Graeme Morrice]

I am not qualified to respond on the situation in Wales. Today’s debate is about Scotland, so if the hon. Gentleman does not mind, I will continue to focus on that.

The point that I was making before the hon. Gentleman intervened was confirmed by the Under-Secretary of State for Scotland in oral evidence to the Committee on Tuesday, and by the Chief Secretary to the Treasury in the past. After months of posturing, the Scottish Government this week ended their ridiculous game of brinkmanship with the UK Government when an agreement was finally reached to lift the spending cap, allowing the bedroom tax to be effectively ended in Scotland. I think I speak for many when I say that that should have happened much earlier. It is thanks to the Labour Members of the Scottish Parliament that a solution has finally been arrived at, after a year of attempts by Scottish Labour to drag the SNP into accepting that action could be taken in Scotland to bin this iniquitous tax. Late action is better than no action, and it will come as a relief to many Scots that the bedroom tax can and, I hope, will be fully mitigated.

I find it incredible that the Scottish Government did not even contact the UK Government until recently to try to find a way to end the bedroom tax in Scotland, just over a year before it was introduced and more than two years since the law was first enacted. People can draw their own conclusions about the reason why, but political posturing and blaming others hardly demonstrates responsibility or maturity; moreover, it lets down those who need our help the most.

To return to the report, witness after witness from London to the Western Isles told the Committee that they wanted the tax to be scrapped. Many felt abandoned by both Governments, who have had the power but not, until the eleventh hour, the political will or inclination to do something about it. However, although I welcome yesterday’s announcement on Scotland, more must be done throughout the rest of the UK. We have heard in several testimonies that the fail-safes to protect the most vulnerable are inadequate and largely do not reach those most in need, to the despair of housing providers. We heard from those on the front line that, despite repeated contact, a sizeable number of affected tenants do not engage, or are unable to engage sufficiently, with housing suppliers in order even to apply for a discretionary housing payment.

When the Select Committee visited my Livingston constituency, Donald Forrest, head of finance and estates at West Lothian council, told us that, despite considerable efforts since April last year to contact and engage with 2,195 tenants who are affected by the bedroom tax, between 500 and 600 tenants had still not applied. Craig Martin, leader of Falkirk council, told the Select Committee that 50% of tenants applying for DHPs in his locality had some form of recognised mental health problem. Such responses were not untypical of the evidence we heard from a range of witnesses from across Scotland and beyond. If DHPs are not reaching those most in need, then simply expanding the scheme’s eligibility to catch everyone is no guarantee of protecting anyone. The simplest way to protect all tenants is to either alter the scheme drastically or scrap it altogether, which is the Select Committee’s preferred option.

Simply put, at the heart of the bedroom tax debate is the worst kind of politics, with Scottish social tenants finding themselves stuck between two Governments: one distracted by a referendum on separation, who acted only when forced to do so by the Scottish Labour party and grass-roots campaigners; and another who want to look tough on welfare and spending, despite every indicator telling them that they are failing. The Scottish local authority body, the Convention of Scottish Local Authorities, has released figures showing that this year alone the bedroom tax will actually cost an additional £60 million to implement in Scotland.

Even after yesterday’s announcement, my message to the decision makers in both the Scottish and UK Governments is simple: they must stop the bickering, stop the finger-pointing, stop using some of the most vulnerable people in society as political pawns and stand behind the Select Committee to sort out the problem using the power that the Scottish people have granted them. The Labour party in Scotland has forced the SNP Scottish Government to this point, and has offered bipartisan support to help to find the money in the Scottish budget to sort things out. I sincerely hope that, now that we have a clear course of action and offers of help from almost every side, we will be able to get on with our day job of helping our constituents.

Of course, whatever happens, in May next year, Labour will repeal the bedroom tax as one of its first acts of national Government.

--- Later in debate ---

[Pamela Nash (Airdrie and Shotts) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone.

It is good for Scottish Members of Parliament to have an opportunity to debate the bedroom tax and its impact on Scottish constituents and constituencies. As well as examining the specific problems and effects in Scotland, the report considers what should be done to mitigate those problems. We were inspired to produce our report by the policy’s impact on our constituents and the constituents of colleagues across Scotland—across parties, Members were concerned. I was delighted to welcome the Committee to my hometown of Airdrie to see the impact of the bedroom tax and what is being done in Airdrie and throughout north Lanarkshire.

Before the inquiry started, I campaigned on the bedroom tax in my constituency. At the beginning of my campaign I started a joint campaign with the local Scottish National party. That had not been done before, but we came together as two local political parties because we were united in our anger at the UK Government—the Tories and the Lib Dems—for introducing the policy, which was doing so much harm in our local area. Unfortunately, it quickly became clear to us in Scotland that the Scottish Government were not doing everything they could have done, and with regret the happy partnership ended rather quickly.

When the Chair of the Select Committee, my hon. Friend the Member for Glasgow South West (Mr Davidson), spoke earlier, the hon. Member for Perth and North Perthshire (Pete Wishart) was chuntering as usual, and I want to get it on the record. What he said—please correct me if I am wrong—is that it was ridiculous that the Chair of the Select Committee dared to mention that the Scottish Government had played politics on this issue by announcing that the bedroom tax has now been fully mitigated.

The Scottish Government let people suffer for more than a year. Some 82,000 households across Scotland have suffered, losing, on average, £50 a week. By definition, those are the poorest households: they are claiming housing benefit because they are low-income families and low-income households, and 80% of those households have a disabled member. Perhaps the Scottish National party should have spent more time considering what it could do, rather than pointing the finger at us and at the Labour party as a whole.

I was not going to spend time on this, but I feel that I have to defend myself and the Labour party. The hon. Member for Banff and Buchan (Dr Whiteford) mentioned the Opposition day vote on the bedroom tax. I asked to intervene, but she was in full flow. I agree that that number of Labour MPs should not have been paired, and I am already on the record as having said that—I have said it publicly and I have said it locally. But it is misleading to say, I assume accidentally, that those pairings changed the outcome of the vote. Every single Labour MP was paired with a Government MP, as was confirmed by the parties at the time. It is not true that there would have been a difference in the outcome of the vote. We have to put that on the record, and it is nothing short of hypocritical for the SNP to say that when every single SNP Member of Parliament has missed a vote on bedroom tax legislation.

[Pete Wishart]

That isn’t true.

[Pamela Nash]

I have had it checked by the House of Commons Library. I voted against the bedroom tax seven times, which is all the votes on legislation, and I supported a private Member’s Bill, yet the SNP choose continually to mention the Opposition day debate on which some Labour MPs were paired and therefore did not attend. I am sorry to labour that point, but it is important to get on the record the facts of who represented Scotland by voting against the bedroom tax and who did not.

I unequivocally agree with all Members who have said today that, as the report clearly states, the bedroom tax should never have come into fruition and should never have been introduced by this UK Government. I think the bedroom tax should be abolished immediately, but that does not let the Scottish Government off the hook. In my hometown, people still remember the impact that Strathclyde regional council made during the miners’ strikes. That was part of the inspiration for devolution and for the Scottish Parliament: when a local authority could protect its local people, imagine what we could do for all of Scotland. That has been used as an argument for independence, too, but it is an argument for devolution. Devolution was designed to get the best out of the UK and to protect it when something goes wrong and there is a policy with which we do not agree. The SNP has remained anti-devolution and uses the Scottish Parliament only when it suits the SNP.

I hope the Minister will announce the abolition of the bedroom tax today. I will not hold my breath, but I hope she will at least tell us whether the Government are doing an analysis. If that analysis shows that the Government’s aims for the policy are not coming to fruition, will they consider abolishing the bedroom tax not just for Scotland but for all the UK? I am relieved that my constituents will not have to suffer from the bedroom tax in future, although they have already incurred debts. I look forward to a Labour Government abolishing the bedroom tax for the entire UK in 2015.

--- Later in debate ---

[Pete Wishart]

Will the Minister bring her remarks back to Scotland, which is what this debate is about? There are legitimacy issues here. We did not vote for any of this. Why should Scotland put up with it?

[Esther McVey]

We have, in our latest discussion—this is why we are here today—asked how we could best deal with this situation and what to do. We have put extra money on the table, and the Scottish Government were paying in as well. We have now allowed the matter to be devolved to Scotland, for it to consider what it can do. Although the proposal in Scotland might be an immediate answer to Scotland’s issues and problems in this regard, it does not solve the underlying problem about what people are doing, how Scotland will change its housing stock, how it will get the right people in the right houses, and how it will pay the bills, with an ageing population and more people going into social housing.

Although money might be put towards this issue, we are dealing with other issues too, not only in England but in Wales; we are looking at the stock and getting the right people in the right houses—something that Labour has kicked down the road. It is not dealing with those issues now, and did not deal with them in office.

Housing Benefit

Pete Wishart Excerpts

Tuesday 12th November 2013 Commons Chamber

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I have a very simple message for the Government in today’s debate. Six months after its introduction, their bedroom tax is driving up rent arrears across Scotland; it has caused immeasurable distress to low-income families; and it has created financial problems for local authorities and housing associations. What it has manifestly not done is meet its objectives: it has not tackled overcrowding; it has not delivered better use of housing stock; and it has not saved taxpayers any money at all. In Scotland, 82,500 households are affected by this policy, and 80% of them are the home of a disabled adult.

The Government seem to think that it is okay to take money out of the pockets of some of the most disadvantaged people in our communities—but it is not okay. It symbolises just how out of touch the Government are with the values of decent people in Scotland and elsewhere who recognise that this is a profoundly unfair and iniquitous measure.

Most social housing tenants have a lot less choice about where they live than the rest of us, and they are already living in the cheapest housing available to them. Across Scotland, 60% of tenants need a one-bedroom house, but only 27% of the social housing stock is one-bedroom accommodation, so there is a fundamental structural mismatch that cannot be fixed by crude social engineering. There are simply not enough smaller houses to go round, and I do not believe that it is right to punish the poorest tenants for the structural problems of our housing stock supply.

We have seen significant hikes in arrears over the past six months. According to the Convention of Scottish Local Authorities, all but one of Scotland’s local authorities have reported increases in arrears that are attributable to the introduction of the bedroom tax, yet relatively few tenants have moved house. Given that eight out of 10 households are affected by disability, that really should not surprise us, because people do not want to move away from their family and their support networks. More than that, they do not want to leave their home, as my hon. Friend the Member for Arfon (Hywel Williams) eloquently put it.

We have heard that the Government’s idea of fairness is to bring housing benefit in line with the local housing allowance available to private sector tenants. I put it to the Government that that is a flawed premise and a false comparison. Social housing is allocated not on a market basis, but is prioritised on the basis of need. Most social landlords operate systems that take account of a range of factors when allocating tenancies, so that the most vulnerable, disadvantaged and low-paid people in our society have a stable place to live. I understand that the Government want to cut the housing benefit bill, but squeezing half a billion pounds out of disabled tenants is the wrong way to achieve that.

[Pete Wishart (Perth and North Perthshire) (SNP)]

My hon. Friend, as usual, is making a powerful speech. Does she agree that Scotland has been hit particularly hard because of the sheer quantity of socially rented housing that we have in Scotland?

[Dr Whiteford]

That is true, and we also have a disproportionate number of disabled people in social housing. That suggests to me that social housing is going to the people who need it. Those are the people who find it hardest to access the labour market.

When we look closely at the increase in the housing benefit bill over the past decade, we see that 31% of it—almost a third of the whole UK increase—is attributable to the city of London alone. By contrast, in Scotland, the total housing benefit bill has increased by 22% in inflation-adjusted terms over the past 10 years, while in the social rented sector, the increase has been only 6%. A 6% increase in 10 years is hardly out of control, but we know that rents in London are out of control. Why should disabled tenants in Scotland pay for a rental system in the private sector here that is completely out of control and eye-watering for anybody who has to rent a home?

To illustrate the point, although Scotland and London are estimated to have about the same number of people affected by the bedroom tax—around 80,000 each—this year Scotland has received only £15.25 million in funding for discretionary housing payments. That includes the extra rural funding. I am glad that the Scottish Government have topped that up to the very peak of their allowance under the current terms of the Scotland Act 1998, by putting in £20 million this year and next year to mitigate some of the worst impacts; but fundamentally, we need to scrap the policy.

People in Scotland did not vote for the bedroom tax. It is a nasty policy from a nasty party that they did not elect. It has been propped up by Liberals, who should know better. The Scottish Government have made it clear that, with independence, the bedroom tax would be confined to history. I commend them not just for their efforts to mitigate this policy, but for the other aspects of welfare reform—the protection that they have given to my constituents and others from the effects of council tax benefit increases and the welfare fund that people can access to deal with the impact of the loss of crisis loans.

I urge the Government this evening to admit that they got it wrong, accept that this policy is not working and is not doing what they intended and do the decent thing by repealing this toxic piece of legislation.

Disabled People

Pete Wishart Excerpts

Wednesday 10th July 2013 Commons Chamber

[Mr Byrne]

Absolutely, and that is why the Secretary of State must produce the impact assessment. All of us are now meeting people who are under such pressure that they are creating more cost elsewhere in the system. I will probably remember for ever the man I met recently in Redcar. The great Anna Turley introduced us, and this is what was said: “Yes, he has a spare room, and do you know what he puts in it? He puts equipment to help him with renal failure.” Now, because he is having to move, that opportunity for home care is disappearing, and the NHS is saying to him “We’re going to have to take you to and from hospital in an ambulance every single day.” That is not a cost saving for the NHS. That is a new cost. It is a straight cost jump from a failure of policy from this Government.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I just wish to get this clear, so that there is no uncertainty: it is now the policy of a future Labour Government to reverse the bedroom tax. I, like the Secretary of State, was under the impression that the Leader of the Opposition had said that that was not the case. So will the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) provide clarification? Will the Labour party, if elected, abolish the bedroom tax?

[Mr Byrne]

We believe that the bedroom tax should be dropped, and dropped today, because the evidence is mounting that it is going to cost more than it saves. [Interruption.]

Jobseekers (Back to Work Schemes) Bill

Pete Wishart Excerpts

Tuesday 19th March 2013 Commons Chamber

[Mr Byrne]

The truth is that jobcentre staff have so little confidence in the Work programme that they are not referring people to Work programme contactors at anywhere near the rate the Department has estimated. That is the reality of how jobcentre staff feel.

We have had universal credit now beginning its descent into universal chaos, and now we have the news that the regulations designed to encourage jobseekers to take work were so badly drafted that the Court of Appeal struck them down and the Department may as a result be on the hook to repay £130 million in sanctions. The judges could not have been more unequivocal. Here is what they had to say:

“The 2011 Regulations must be quashed.”

I therefore put it to the Secretary of State that this is a day of shame for his Department. The House of Commons Library cannot find an instance of DWP legislation being struck down in this fashion since 1996, under the last Conservative Government. If the Secretary of State had delusions of adequacy, they have been swept away by today’s proposed legislation.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Will the right hon. Gentleman therefore explain to claimants, trade unions and everybody who has looked at this Bill why the Labour party will be abstaining today? If this Work programme is no better than no work programme at all, why on earth is the Labour party sitting on its hands?

[Mr Byrne]

I will address that point directly, as the answer is very simple: because this Bill restores the general legal power of the DWP to issue sanctions. It is a broad sui generis power that has been in place since 1911. I will be interested to hear later the hon. Gentleman’s argument on why he thinks the power to issue sanctions, which has been in place since 1911, should now be struck down for the period in question.

The worst aspect of all this is that the Secretary of State was warned that he was heading for a failure not simply in this House, not simply by commentators opposed to his plans, and not simply by people who had a profound disagreement with him, but by the very specialist Committee he set up to advise him on these questions. This is what the Social Security Advisory Committee said about the 2011 regulations:

“SSAC ask why the Department did not opt to narrow the scope of the original regulations”,

Indeed, it was, of course, their broad and unspecified content that the Court of Appeal objected to.