Autumn Statement Resolutions

Stephen Timms Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

I congratulate the hon. Member for Sevenoaks (Laura Trott) on her appointment as Chief Secretary to the Treasury. I am pleased to see a former Pensions Minister in that role, and I want to make some points about the pensions measures announced in the autumn statement.

First, on benefit uprating, I wrote on behalf of the Work and Pensions Committee to the Chancellor a month ago asking for two things: first, for working-age benefits to be uprated in line with the normal formula, which is September’s rate of inflation; and secondly, for local housing allowance to be rebased to the 30th percentile. I am relieved that both those points were in the Chancellor’s statement. The Joseph Rowntree Foundation reported last month that 3.8 million people were experiencing destitution in the UK last year. A fortnight ago, the Trussell Trust reported that food bank demand is 16% higher this year than it was last year, with 1.5 million emergency food bank parcels given out in the six months from April to September.

How is it that our economy is failing to meet the basic needs of so many in our society? We need the economy to start functioning properly again in a way that it clearly is not and has not been for a number of years. Spurious justifications were proposed for uprating working-age benefits by a lower amount in the autumn statement. Had those been adopted, they would simply have made things even worse, so I welcome the fact that the Treasury resisted those calls. I congratulate the Secretary of State for Work and Pensions on achieving the outcome that we have heard this afternoon.

I also welcome the rebasing of local housing allowance. By next April, it will have been frozen for four years, when rents have risen sharply. The freeze was causing widespread homelessness among working families who were doing perfectly decent jobs, but could no longer afford the rent. That was then imposing enormous costs on local councils for temporary accommodation, so I am pleased the allowance has been rebased, but I want to call for annual rebasing of the local housing allowance. It should be at the 30th percentile each year. I hope we will be told that it will. I am also glad that the temptation to water down the pension triple lock has been resisted.

Last week, the Work and Pensions Committee published a report on the Government’s cost of living support payments in which we identified a number of gaps in payments made. I was relieved that the Chancellor said in answer to my question that the household support fund is being maintained. There is a strong case for making it a permanent feature of our system so that local authorities know that they will have funds each year for providing local welfare support. That has been important in the crisis over the last few years. I hope that we can make it longer term and that its rules do not keep changing as they have over the last few years, making it difficult for local authorities to make a good job of administering it. I am glad that it will be there next year and I hope that the rules for it will not change next year as well.

The consultation on proposed changes to the work capability assessment, which were mentioned by the Chancellor, has been rushed and is inadequate—only eight weeks to consider major changes. Those changes that he said will go ahead will make things difficult for a significant number of people. We are told in a document that I think has been published since the Chancellor sat down that the vast majority of those who have already been assessed as having limited capability for work-related activity will not have to go through another work capability assessment, because that assessment is to be abolished. That, of course, will be of some relief for many, but it remains unclear what will replace it in the long term and when the promised legislation will come forward.

I am glad that the Chancellor is progressing the aims he set out at the Mansion House to increase pension fund investment in the economy to increase returns to pensioners, as he said, as well as to improve outcomes for investors and unlock capital for our growth businesses. There is a good deal of benefit in that approach, but where is the pensions Bill? I am genuinely mystified by that. In July, when the Chief Secretary was the Pensions Minister, her Department promised a “permanent regulated regime” for pension superfunds

“as soon as the parliamentary time allows”.

Evidence to our Committee has been clear that in the absence of a permanent statutory framework, superfunds will continue to struggle, undermining the Chancellor’s aims. I think the Chancellor reiterated his commitment to a regulated regime for pension superfunds, but there is no sign of legislation. I wonder if anyone can tell us what is proposed.

The Select Committee called on the Pensions Regulator to make changes to the new scheme funding regime—the Chief Secretary will be familiar with this from her previous role—to enable open defined-benefit schemes, like the railways pension scheme, to continue to invest in the economy, as the Chancellor rightly wants to happen. The Department has told us that concerns about the wellbeing of open defined-benefit schemes will be addressed, but they have not been yet, and the new code, which is causing a lot of anxiety, is, as the Chief Secretary knows, due to be introduced in April. Any clarification of the intention there will be gratefully received. I look forward to hearing more about the role in consolidation among smaller defined-benefit pension schemes that the Chancellor mentioned in his statement, and the role he envisages for the outstandingly successful Pension Protection Fund in taking on that task.

The Chancellor has talked about a consultation on a “pot for life” approach to pension saving. There are certainly benefits to that approach, and he referred to them, but there are problems as well. He said that there will be a consultation, and I think that is appropriate. In particular, there is the challenge for employers of having to manage lots of different pension funds among their different employees. There will be a significant increase in employer costs of handling that, and I hope that will be properly explored in the consultation.

I welcome the changes announced in Monday’s written statement to improve the support for people out of work on health grounds and with disabilities, including better employment support, plans for a severe disability group and, as the Select Committee recommended, trying out matching ill health benefit claimants with an assessor with experience of their primary health condition. There were ideas for assessing fluctuating health conditions, which I hope will be helpful. I wholeheartedly welcome the expansion that the Chancellor mentioned of integrated placement and support, which was recommended in the Committee’s report on the Government’s plan for jobs. The evidence is clear that it is helpful for people with mild to moderate mental health conditions to get back into work. The increased access to talking therapies is welcome too.

The Chancellor has announced an expansion of the restart scheme. We do not know how good that is because, until now, the Department has refused to published the outcome data for restart. I am glad that, in response to the Select Committee, it has said that it will start publishing that data, so we will see whether the scheme is doing a good job. The Committee took evidence this morning on the UK shared prosperity fund, which targets inactivity. One of the problems with the scheme is that the allocations were made in the middle of the year in which the money was supposed to be spent, so it is not surprising that people have not been able to set up the programmes that the funding supports. I hope that the Government will get their act together and ensure that the allocations are announced in good time for local authorities to award providers contracts to deliver the help that is needed.

The promised improvements for employment support have been matched by announcements of harsher sanctions. It is clear that sanctions are already high for people claiming universal credit and the other working-age benefits. There is no evidence at all that what is proposed will make people more likely to move into work. Particularly, where people are out of work because of a mental health problem, there is growing evidence that increasing sanctions makes matters worse. There has been a large response to the Government’s announcement, particularly for people out of work on mental health grounds, that the proposed increase in sanctions will make people less likely to get into work.

Yesterday, I received a letter with 70 signatures from single parent groups, children’s charities, domestic abuse charities and others, asking that the Select Committee look at the newly increased work obligations imposed on carers of young children. At the moment, carers of young children expect to work 16 hours a week—that is to be nearly doubled to 30 hours a week. The letter challenges those proposals for reasonableness and feasibility. If someone is looking after young children, is it appropriate to demand such large working weeks—far greater than the requirement until now?

After the misery of the past few years, we must all hope that the plan set out by my right hon. Friend the Member for Leeds West (Rachel Reeves) in answer to the Chancellor’s statement is put in place next year, finally, to reignite much needed growth in the UK economy.