Cost of Living Increases: Pensioners

Stephen Timms Excerpts

Monday 21st March 2022 Commons Chamber

[Jonathan Ashworth]

My hon. Friend makes a good point. The Pensions Minister, who will sum up the debate later, promised—these are his words—that the Government would preserve pensioners’ spending power and protect them from the higher cost of living. On the same day that the Government broke the triple lock, they introduced the national insurance increase, a proportion of which, for the first time, will be paid by working pensioners. Indeed, a working pensioner on average earnings will lose out by £1,400 over two years. That is not protecting pensioners’ spending power or protecting them from the higher cost of living.

Have pensioners been protected from the higher cost of living through energy bills? Next month, we will see energy bills rise by 54%—£700 on average. In October, there is likely to be another 25% rise. All the Government are offering is a £150 rebate this April—although it is not clear whether they will guarantee that for pensioners who do not pay council tax or who get council tax benefit—followed by a loan that has to be paid back through a £40 levy. That £350, £200 of which has to be paid back, will be totally wiped out by the £388 real-terms cut to the basic state pension. That is not protecting older people from the higher cost of living or preserving their spending power; I suggest it is more like daylight robbery.

We have already said that pensioners are going to be paying more in tax, but what about pension credit, which featured in the exchanges earlier? About 850,000 pensioners eligible for pension credit are going without it. That is £1.7 billion unclaimed—something like £1,900 for every qualifying household that is losing out. As Members across the House have pointed out, pension credit often unlocks other benefits, such as free TV licences—obviously, the Government cut those and changed their financing—council tax benefit and so on. Now Ministers are praying in aid the pension credit guarantee as justification for their real-terms cut in the value of the state pension. They do not mention very often that pension credit was a Labour policy, which they criticised when we introduced it. Indeed, if my memory serves me correctly, they also opposed its precursor, the minimum income guarantee, and even voted against it. They do not mention that, but given that pension credit uptake is so poor, if they drove it up they could lift 440,000 older people out of poverty.

[Stephen Timms (East Ham) (Lab)]

I very much agree with the point that my right hon. Friend is making. Pension credit, introduced in 2003, has been a powerful lever for tackling pensioner poverty. Does he agree that the Government should set an ambitious target for increasing the take-up of pension credit so that the number of people who benefit substantially increases?

[Jonathan Ashworth]

Yes, I do. My right hon. Friend, who was a first-class Pensions Minister and Chief Secretary to the Treasury, will remember being at the Government Dispatch Box when shadow Secretaries of State for Work and Pensions from the Tory party criticised pension credit and opposed the minimum income guarantee, saying that it was an extension of means-testing and undermined the universal basic state pension. Now, today, they are using pension credit to justify a £388 real-terms cut in the value of the basic state pension. I hope that the very sensible recommendation by my right hon. Friend, the Chair of the Work and Pensions Committee, is taken up by the Secretary of State, and that she responds to him when she speaks.

Of course, Ministers should be moving heaven and earth to drive up take-up, but the Pensions Minister revealed earlier this afternoon that, instead, we have a letter writing campaign. Writing to local newspapers—that is his plan to drive up uptake of pension credit. When pensioners cannot afford their heating bills and cannot afford to eat—when pensioners cannot afford the basic necessities of life—rather than taking action, all he does is write to local newspapers. What is he doing? Is he expecting pensioners to burn the papers to keep themselves warm? I am told he has written to the Leicester Mercury. Well, I have been looking at his local paper, the Hexham Courant. I cannot actually see his letter in it, but I can see that it is warning that

“Thousands in the North East to miss out on automatic £150 rebate…MORE than 320,000 households across the North-East will not automatically receive a £150 council tax rebate…and 40,000 in Northumberland”.

Many of them will be pensioners. May I suggest that he sorts out his own backyard before gracing the pages of my paper, the Leicester Mercury?

There is one other area where I think the Minister needs to show greater urgency in supporting the United Kingdom’s pensioners and I would be grateful if the Secretary of State responded in detail to the points I have made. She will know that the underpayment of the basic state pension to around 135,000 pensioners, the vast majority of whom are women, has been a scandal. I pay tribute to the former Liberal Democrat Pensions Minister, Sir Steve Webb, the Chair of the Work and Pensions Committee, my right hon. Friend the Member for East Ham (Stephen Timms) and the Chair of the Public Accounts Committee, my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), who have all shone a light on that.

The Department has allocated £1 billion and estimates that approximately 118,000 pensioners will be traced and could receive around £8,900 by the time the payments are made. So far, so good. But the last time Ministers provided updated figures, in autumn, they had paid out just £60 million to just under 10,000 people, so £900 million is outstanding. When we are in a cost of living crisis, should not the Department be showing greater urgency? When will the other £900 million be paid? The Secretary of State will know that there are stories of the DWP helpline giving inaccurate information and false assurances, forcing pensioners to keep living on less. There is no information available as far as I can see on how lump sums will impact on capital limits and the consequent impact on other entitlements, such as to social care. Divorced women have been excluded from the whole exercise on the basis that it does not think there are enough errors to be worth doing, even though there are cases of divorced women where errors have been made and it has had to pay out thousands in back payments.

--- Later in debate ---

[Dr Coffey]

Any uplift in the national living wage is welcome to anybody still working. Our normal practice on standard national insurance for employees is that once someone reaches pension age, their take-home pay will be automatically higher than somebody else under the age of retirement, if they are doing the same job on the same salary. However, this levy is important to make sure that we get the funding for the NHS backlogs and for the future stability of the social care system.

Let me turn to pension credit. We have heard about the success of the private pensions sector and some of the uplift for people who are still working. It is good for those still saving for their futures, but understandably, the House wants to know what we are doing for the poorest pensioners now. We had a bit of a history lesson about how pension credit was introduced under the Labour Government in 2003, as the right hon. Member for Leicester South said. Let us go back a bit earlier in history: it was only a few years beforehand that the Labour Administration raised pensions by 75p. I think the House will probably recognise that pension credit was introduced directly as a consequence of the impact of what happened with that very modest increase in pensions.

Various funds have been open to pensioners in the past year, including the household support fund, and I encourage people to approach their local council for support.

[Stephen Timms]

As the Secretary of State knows, about a third of those who are eligible for pension credit do not receive it at the moment. She told us earlier that there is an action plan to improve that. Will she publish that action plan and include in it an ambitious target for increasing the take-up of pension credit?

[Dr Coffey]

The Chair of the Work and Pensions Committee slightly pre-empts where I am heading with pension credit in my speech.

On the household support fund, within the lifetime of the Government, we have introduced a higher basic state pension so that, increasingly, pensioners are not required to resort to applying for pension credit. However, pension credit, the pension financial safety net, is helping to support those with the lowest retirement incomes. Worth on average over £3,000 a year, some 1.4 million pensioners already claim it, receiving collectively an extra £5 billion in support. As I mentioned, given that pension credit is a passport to other financial help, we want to make sure that everyone who is entitled to it claims it.

Our estimate of pension credit take-up is based on a combination of what information we have on pensioner income and analysis from the family resources survey. That suggests that more people can claim than is the case now, particularly for those eligible for the savings credit element, where we have the lowest take-up. The Minister responsible for pensions, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), and my noble Friend the Minister in the Lords—Baroness Stedman-Scott—have been striving to increase take-up. They undertook a big awareness day last year and they are continuing that work. This is the plan, I say to hon. Gentlemen.

We will continue to promote the take-up of pension credit. As has been highlighted, the Minister responsible for pensions, my hon. Friend the Member for Hexham, has raised awareness through local newspapers. We will send 11 million leaflets to pensioners with their annual state pension uprating letter and we will continue to work with the BBC, financial institutions, Age UK and many other organisations to raise awareness. The latest estimates show that uptake is increasing. We know from internal management information that the number of new applications last year is estimated to have been 30% higher than in 2019, so our efforts are working. I hope that this latest effort will also bear fruit.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 21st March 2022 Commons Chamber

[Mr Speaker]

We now come to the Chair of the Select Committee Stephen Timms.

[Stephen Timms (East Ham) (Lab)]

The Minister could have a busy summer ahead. Take-up of pension credit remains low: an estimated 850,000 pensioner households across the country are not receiving the help that they are entitled to. The Department could feasibly work out who those households are and simply make them an award of pension credit. Given the scale of the current cost of living crisis, will the Department commit to an ambitious target for increasing the take-up of pension credit across the country and to a much more ambitious campaign to promote it?

[Guy Opperman]

I hate to disagree with the Chair of the Select Committee but he is wrong. As he knows, because he did this job in 2007-08, the Department does not know the exact numbers of a means-tested benefit that was set up by Gordon Brown specifically for circumstances where there is not the capability of saying exactly who can apply. The right hon. Gentleman is also wrong, however, that the stats are going up, not down, because they are up on the main income element.

[Stephen Timms]

indicated dissent.

[Guy Opperman]

The right hon. Gentleman is shaking his head, but he is wrong: they have gone up from 70% to 73%.

Huge efforts are also being made by the Department in the form of the work with the BBC and the utility companies, the pension credit taskforce, and all the letters that were written only this morning. I wrote to the right hon. Gentleman’s local paper and to that of the shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth), to set out what we are doing to try to get people to take up pension credit and why we want everybody to do so.

--- Later in debate ---

[Dr Coffey]

I was in my hon. Friend’s constituency on Thursday night and Friday morning, and was at the jobs fair held at the Pleasure Beach, which was a great success, as has already been referred to. It is important that we continue to have that relationship with claimants through the intensive work search regime. They are expected to look for work and take work that is available that they are capable of doing. We will continue not only to enforce that regime but to bring employers and claimants together to try to make sure that those interviews are successful and we get people into work, because that will always be the best way of getting out of poverty.

[Stephen Timms (East Ham) (Lab)]

The Minister referred earlier to the modest reported percentage increase in take-up of pension credit. Does he recognise that that increase is a consequence of the removal of mixed-age pensioner couples from eligibility for pension credit, rather than of any actual increase in take-up? Is it not high time that the Department set an ambitious take-up target and published an action plan to deliver it?

[Guy Opperman]

With great respect to the right hon. Gentleman, with whom I have repeatedly debated this matter, we already have an action plan. We are already engaging with all the key organisations, whether that is the energy companies, television companies or media in the normal way. I respectfully say to him that pension credit take-up is increasing. It is up by 3%, which is definitely not for the reason he asserts, and we continue to make the case for pension credit to the wider population. We want not just individuals to claim; we want carers or people on behalf of their mum or dad to put in a claim.

DWP Estate: Office Closures

Stephen Timms Excerpts

Thursday 17th March 2022 Commons Chamber

[Mr Speaker]

I call the Chair of the Select Committee, Stephen Timms.

[Stephen Timms (East Ham) (Lab)]

This week’s employment figures show that there are 580,000 fewer people in work now than there were before the pandemic. In particular, there seem to be several hundred thousand older workers now choosing not to work nor to claim benefit. We all want a full labour market recovery. Does the Minister recognise that this is going to require major Government investment rather than the disinvestment that I think he is announcing this morning?

Pensions Guidance and Advice

Stephen Timms Excerpts

Tuesday 1st March 2022 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I start by congratulating the hon. Member for Amber Valley (Nigel Mills) on securing the debate and on his opening speech.

There was a serious flaw in implementing the pension freedoms. They were announced by George Osborne in his Budget speech in 2014 and implemented the following year. He said in his announcement that

“no one will have to buy an annuity. We are going to introduce a new guarantee, enforced by law, that everyone who retires on these defined contribution schemes will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have.”—[Official Report, 19 March 2014; Vol. 577, c. 793.]

It was a very clear recognition of the risks involved in people having much more latitude over their pension savings—often the largest sum of money they will ever have access to—and that the Government needed to ensure that everyone had guidance to help them make sound decisions. However, that guarantee has never materialised, and the hon. Member for Amber Valley was absolutely right to say that hundreds of thousands are accessing their pension pots without understanding what they are trying to do.

We do have the Pension Wise service, which is excellent. It is free and impartial, as George Osborne promised, and as the hon. Member for Amber Valley said, it gets very good ratings from those who use it—the problem is that very few people do. As my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) rightly said—I apologise to her for being absent for some of her speech—one of the reasons why Pension Wise is important is so that people can avoid being scammed. In June 2015, I received from the Treasury the answer to parliamentary written question 2227, which said that

“Pension Wise was launched to help people understand their options when taking advantage of the pension freedoms, including how to spot and avoid scams.”

Over the past seven years, there has been a very big phenomenon of pension scams that it is in everybody’s interest to prevent. So the default should be that people get a Pension Wise appointment.

[Chris Stephens (Glasgow South West) (SNP)]

Is the Chair of the Select Committee as concerned as I am that, despite Pension Wise being an excellent service, the number of Pension Wise appointments is actually falling? There is real concern here, which is why many of us want to see auto-appointments.

[Stephen Timms]

The hon. Gentleman is absolutely right.

The importance of guaranteeing guidance was stressed repeatedly, not just in George Osborne’s announcement but by the Government in the couple of years afterwards. The Treasury’s public financial guidance review, published for consultation in March 2016, said:

“Guidance is vital to ensure that individuals are fully aware of their options before they make a decision on what to do with their retirement savings”.

The hon. Member for West Worcestershire (Harriett Baldwin), who was then Economic Secretary, said in April 2016 that the Government were introducing

“a requirement that, in effect, ensures that consumers with a high-value annuity receive appropriate financial advice before making the decision to sell their annuity”.—[Official Report, 19 April 2016; Vol. 608, c. 876.]

In April 2018, her successor—the current Economic Secretary—the hon. Member for Salisbury (John Glen), said that before proceeding with an access or transfer application,

“subject to any exceptions, schemes must ensure that individuals have either received Pension Wise guidance or have opted out.”—[Official Report, 24 April 2018; Vol. 639, c. 831.]

That commitment, which the Minister appeared to believe he was delivering four years ago, has never been delivered.

The Treasury has very good reason to be concerned that people should make sound decisions in this area, but so does the Minister’s Department. Baroness Buscombe, when she was a Minister at the Department for Work and Pensions, said in May 2018 that

“We all want people to make more informed decisions and to make it the norm to use Pension Wise before accessing their pension.”—[Official Report, House of Lords, 1 May 2018; Vol. 790, c. 1995.]

Let me quote back to the Minister what he said in a debate on the Pension Schemes Act 2021, that Pension Wise should become the norm. He has since distanced himself a bit from that view, but he did express it: on Third Reading, I said that I was sorry he had not followed Baroness Buscombe and expressed the view that Pension Wise should become the norm, and he intervened on me to correct me. He said:

“I do—I said so.”—[Official Report, 16 November 2020; Vol. 684, c. 136.]

I responded to his intervention by welcoming the apparently universal agreement that taking up Pension Wise guidance should be the norm. Everyone agreed, but in October 2020, the Department published the “Stronger Nudge to pensions guidance” statement of policy intent, which said that the new nudges that would be introduced would increase take-up from one in 33 to one in nine. The most recent figures quoted by the Social Market Foundation last week suggest that take-up now stands at about one in seven.

As the hon. Member for Amber Valley said, the expectations at the start were way higher than that. Michelle Cracknell, the then head of the Pensions Advisory Service, which was subsequently absorbed into the Money and Pensions Service, said in evidence in October 2014 that

“ambition is that the take-up rate will be very high, with over 75% of people taking the guidance”,

but that it might only be 25% to start with. In fact, it has never got anywhere near 25%, let alone 75%.

The Committee’s concern about Pension Wise take-up is long-standing and goes back well before I became Chair, to the period years ago when the hon. Member for Amber Valley was a member of the Committee. The Committee’s 2017 report stated:

“Free and impartial Pension Wise guidance, provided by telephone or face-to-face appointment, is greatly valued by those who use it. Take up, however, is not high enough.”

The report went on to point out that

“the existing Pension Wise promotion regime”

had

“proved insufficient.”

It is a very good service: nine out of 10 of those who use it report high or very high satisfaction—that is a pretty impressive—but it is hidden away from most people. The default ought to be that people get an appointment. That is why the Committee has recommended at least trialling automatic Pension Wise appointments.

Sir Hector Sants, the chair of the Money and Pensions Service, told the Committee in March that 72% of people change their mind about what they will do with their pensions savings as a result of talking to Pension Wise. As he pointed out,

“that tells you that the vast majority of people, left to their own devices, will probably make a poor decision.”

As far as I can see, the Government’s current policy will leave the great majority of savers in exactly that position.

We need to do more. Government and regulators need to end their indifference on this. We need at least a trial of auto-enrolment into a service that enables better outcomes from pensions savings. There will no doubt be difficulties, but let us at least try it out. The Money and Pensions Service has told the Committee that it would be very happy to support a trial.

The Committee recommended that

“the Government sets a goal for the Money and Pensions Service for the combined use of Pension Wise and paid-for advice when accessing pension pots for the first time”

of

“at least 60 per cent”.

The Minister suggested in his intervention that he thinks use might not be far from that level at the moment, so let us use that as a clear goal. The Committee also recommended

“that automatic Pension Wise appointments are trialled.”

We suggested

“two trials: one with an appointment when a person accesses their pension for the first time and another at the age of 50, before they can access their pension savings.”

I commend those proposals and recommendations to the Minister.

Social Security and Pensions

Stephen Timms Excerpts

Monday 7th February 2022 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I am pleased to follow the hon. Member for Amber Valley (Nigel Mills), who makes an important contribution to the work of the Select Committee. I agree with much of what he says.

May I start by acknowledging—as the shadow Secretary of State, my right hon. Friend the Member for Leicester South (Jonathan Ashworth), did at Question Time—the generous tribute that the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), gave in this House to our late colleague Jack Dromey? I often heard each of them privately singing the praises of the other when Jack was the Pensions Minister’s shadow, perhaps particularly when they were both working on the plans from Royal Mail and the Communication Workers Union for the combined defined contribution pension scheme that I think is due to be launched later this year. Jointly, they have set a great example to the House. I would be grateful if the Minister present communicated that point to his hon. Friend.

This is a very singular year for social security uprating. Households, as we have been reminded, are feeling acutely the pressures of rising food and energy prices. From 2016 to 2020, as my hon. Friend the Member for Westminster North (Ms Buck) pointed out, about half the benefits covered by the draft order were frozen. Benefit incomes became completely disconnected from the real cost of living. Last September, as we have been reminded, the temporary increase of £20 a week to universal credit and working tax credit ended. Last February, a year ago, the Select Committee unanimously called on the Chancellor to extend that increase for at least a year—that view has been expressed this afternoon by the hon. Member for Waveney (Peter Aldous), too—but the call was rejected. For some people in work, the loss was mitigated, in part, by the welcome changes to work allowances and the universal credit taper rate, but others who are struggling with rapidly rising prices and with an income just from universal credit have a much lower income than a year ago.

The chief executive of the Resolution Foundation told the Treasury Committee a week ago that, taking into account the removal of the £20 a week uplift and the improvements to the taper rate and work allowances

“around three quarters of Universal Credit claimants will lose out”.

The other quarter will have a higher income, but they

“will probably have that all taken away from them in higher energy bills and in the national insurance rise… It will be particularly grim for those who did not benefit from the change because they are out of work or on very low earnings”.

Benefits are uprated each April in line with the CPI rate of the previous September, which this year is 3.1%, but, as we have been reminded, the Bank of England expects inflation to be over 7% by April. As the hon. Member for Waveney said, inflation will not be far short of the 8% by which pensions would have risen if the triple lock had been left in place last year.

Robert Joyce, the deputy director of the Institute for Fiscal Studies, argues that increasing benefits each April based on inflation in the previous September—this point was powerfully made by the hon. Member for Amber Valley—is

“not fit for the period of high and rising inflation we now face…the poorest are heading for a 3% year-on-year cut in their real benefit levels and living standards.”

The Government’s protocol on social research requires that commissioned social research should be published within 12 weeks of being received. The DWP refused to publish the NatCen report on disabled people’s experience of the benefits system. Not only did they not publish it within 12 weeks; they did not publish it at all. That is completely in breach of the clear requirement of the Government’s protocol on social research, which was adopted in 2015.

Instead the Work and Pensions Committee had to obtain the report and publish it, as we did last week. The report says that disabled people

“reported that they were often unable to meet essential day to day living costs”.

These include food, rent and heating. This 3% real-terms cut in their income will make it a great deal worse.

The IFS also points out that universal credit, as we saw in the pandemic—again, the hon. Member for Amber Valley made this point—can be changed at short notice and could be uprated at more recent inflation rates. I hope the Department will also reconsider our 2020 recommendation to

“increase the speed with which changes can be made to legacy benefit rates.”

At the start of the pandemic, local housing allowance was reset to the 30th percentile of local rents, but it has now been frozen again, as my hon. Friend the Member for Westminster North said. In our report on the five-week wait for the first payment of universal credit, we recommended keeping it at the 30th percentile, with an annual review to keep rates appropriate for each area. That has not been done, which, as my hon. Friend said, will make things progressively harder for people who depend on the local housing allowance rate.

The standard minimum guarantee in pension credit will be increased by only 3.1%, but pension credit take-up remains low. On the most recent figures: six in 10 of those entitled to pension credit actually claimed it; 76% of the total amount of pension credit that could have been claimed was claimed; and up to £1.8 billion of pension credit was unclaimed. Independent Age, the charity, has called on the Government to research who is not claiming pension credit—I hope the Government will publish the research this time—and to draw up an ambitious plan for much higher take-up over five years. Researchers at Loughborough University found that maximising pension credit take-up could lift three in 10 pensioners out of poverty and reduce the number in severe poverty by half. In July I asked the Secretary of State whether the Department would bring forward an action plan. She replied:

“I am not anticipating a big action plan, no.”

Given that pensioners on low incomes are being particularly hard hit by rising energy costs—as we will be reminded more and more frequently in the next few weeks—will the Minister reconsider?

The Guaranteed Minimum Pensions Increase Order gives pension schemes the percentage by which they need to uprate GMPs built up between 1988 and 1997. This year, as the Minister has explained, it is 3%. Some people with long periods of contracting out—and therefore large GMPs—lost out under the new state pension in 2016. The ombudsman concluded in August 2019 that

“when communicating this change, DWP did not explain that people with long periods of contracting out could be significantly worse off. It instead chose to focus only on the benefits of the new State Pension and other separate pension changes.”

It recommended that the DWP should

“review and report back its learning from our investigations…In particular, it should ensure that its literature clearly and appropriately points out that some individuals who have large GMPs and reach State Pension Age in the early years may be negatively affected by the changes. It should explicitly tell people to check their circumstances and should provide details to the public about how they can do this.”

In response—it responded rather reluctantly, but it did respond in the end—the Department produced a factsheet last August, entitled “Guaranteed Minimum Pension (GMP) and the effect of the new State Pension”. That falls a long way short of the Committee’s call in 2016 for the Government to

“focus on identifying the individuals affected, assessing their potential losses, and communicating with them”,

but at least it was something.

The Department said that it would review the factsheet after six months. The Committee wrote to the permanent secretary recently, setting out points that we would like to be covered in the review, including what steps had been taken to promote the factsheet and how many people had contacted DWP as a result. In a response last month, the permanent secretary said that nobody had so far applied for compensation as a result of reading the factsheet, and that the Department had received only four letters in response to it.

I am puzzled by that, because I received two emails just last week about this very issue. Let me read one of them to the Minister:

“I had personally been searching unsuccessfully for the GMP factsheet for months on gov.uk using a range of search terms since you spoke in parliament about this issue in February 2021…How anyone affected was expected to know it was there I will never know. There was no press release or other publicity to encourage the large numbers of people affected to look at the gov.uk site factsheet.

I was shocked to read the factsheet. It completely failed to properly inform people about the Ombudsman’s ruling that there had been maladministration or that they could claim compensation.”

The other emailer complained that the information on his company pension scheme website was misleading: that it made no reference to the factsheet so he had no way of knowing about it, and it gave him no hint that he could apply for compensation. The fact that few people have referred to the factsheet may well mean that they do not know about it, and I hope that a serious effort will now be made to draw attention to it.

I very much welcome the debate we have had this afternoon about what is the appropriate level for increasing benefits at this very difficult time. Like others, I say to the Government. “You are going to have to go further.”

Oral Answers to Questions

Stephen Timms Excerpts

Monday 7th February 2022 Commons Chamber

[Mims Davies]

I thank my hon. Friend for such warm, generous feedback. That work happens up and down the land in our jobcentres and I hear similar good news stories every day. I invite those on the Opposition Front Bench to actually step into a jobcentre, see what is really going on, meet the kickstarters and see what this has meant to their lives. In fact, at BAE, not far from my hon. Friend’s constituency, one young man has moved into an apprenticeship and is now inspiring people through our youth hubs to do exactly the same by talking about his work journey.

[Stephen Timms (East Ham) (Lab)]

8. What steps she is taking to build trust in her Department among disabled people.

[The Minister of State, Department for Work and Pensions (Chloe Smith)]

As we said in our Green Paper, and as I discussed with the right hon. Gentleman last week, we recognise the need to improve disabled people’s experience of our services. In response to feedback, we have already committed to changes for the special rules on terminal illness. In the British Sign Language Bill and its supporting work, we also show that we are listening to disabled people with an advisory board of BSL users.

[Stephen Timms]

DWP’s social security advisory committee highlighted just over a year ago the serious problem that disabled people do not trust the Department. Burying the NatCen report, in breach of the cross-Government social research protocol, has made matters worse. The failure to consult properly on the national disability strategy has also now been found to be in breach of the law. As a first step, should the Minister not accept the social security advisory committee’s recommendation to establish a protocol for engagement to do the job properly with disabled people?

[Chloe Smith]

I do want to engage more with disabled people and continue all the work that is going on to listen to disabled people and disabled people’s organisations. That is a priority across a number of areas of work for all the Ministers on the Front Bench. I take issue with the right hon. Gentleman’s point about the NatCen research and the use of the protocol. As has been the habit of successive Governments, including the one that he served in, protecting a private space for policy development has always been a relevant factor and is a permissible technique for ensuring that we can bring research out at the right time, as we undertook to do in this case.

Disability Benefits Assessments

Stephen Timms Excerpts

Tuesday 1st February 2022 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I congratulate my hon. Friend the Member for Battersea (Marsha De Cordova) on securing this important debate.

The Green Paper’s commitment to reforming assessments is welcome. Every MP knows of awful problems with them. At the start of the Parliament, the Select Committee on Work and Pensions agreed on an inquiry on the issue. That was put on hold while face-to-face assessments were suspended, but we are now taking evidence. We want disabled people to be at the heart of the inquiry, so we have launched a survey of personal experiences of assessments, to which we have so far had more than 3,500 responses. The survey is on the Committee’s website, including in an easy-read version, and we would welcome further responses.

A key problem is that disabled people just do not trust DWP, and the Department keeps making things worse. As my hon. Friend the Member for Battersea mentioned, last week the Department lost the judicial review brought by disabled people regarding the national disability strategy consultation. The Department’s defence in court was that it had not set out to consult disabled people properly and therefore was not guilty of not having done so. As you have reminded us, Sir Gary, the Department is now, absurdly, appealing against that defeat. The Green Paper consultation was launched after the summer recess began. Calls from disabled people’s organisations to extend the deadline were rejected. The Department also rejected the call of its own social security advisory committee for a protocol for engaging with disabled people to try to overcome the problems.

In September 2020, the Department received from the National Centre for Social Research a report that it had commissioned on the uses of health and disability benefits. Some 120 people were interviewed for that research and were told, in a letter approved by the Department, that the resulting report would be published.

The Government have a protocol on social research, adopted in 2015, which requires the publication of all such research within 12 weeks of receipt. The Secretary of State confirmed to the Select Committee that the protocol applied to that research, but told us that, nevertheless, she was not going to publish it. The Committee agreed, unanimously, that it should be published. We asked the Department again and made it clear that if it was not published, we would use our powers to order NatCen to provide us with a copy.

I am pleased that NatCen has complied with our order; the Committee now has that report. We will meet tomorrow morning, and my view is that we should publish it. Ministers seem to think that their interests are best served by hiding and covering up, but every botched attempt means that disabled people trust them even less. I hope that this Minister will usher in a new openness.

Our inquiry has already heard, extensively, about problems with assessors who lack basic understanding, assessment reports that seem to relate to a different person, and forms that cannot be read by the assistive technology that blind people use. The Department has been very slow to make sensible changes. In 2018, the previous Work and Pensions Committee produced—unanimously, on a cross-party basis—a series of recommendations. Some of those that were accepted have still not been implemented. Dr Paul Litchfield, the former independent assessor of the work capability assessment, told us in December:

“Then you look at things seven years down the road and as far as I can see things have not been taken forward.”

We have already heard many sensible points in our inquiry, and I very much hope that the Department will accept and implement the recommendations that will be made in our report later this year.

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[Chloe Smith]

I do not think that is likely to be in the White Paper. The hon. Gentleman might have heard that it is not our intention to further devolve welfare to the Welsh Government. None the less, I look forward to more conversations on that with him and with colleagues in the Welsh Government. I take a great interest in devolution affairs in the Department and will be able to have those conversations, just as I do with colleagues in the Scottish Government. I note what SNP Members have said today, which I will come to shortly.

Last year we published the health and disability Green Paper—the main subject of today’s debate—and the national disability strategy, which set out a wide-ranging set of practical actions to improve the lives of disabled people and affirmed our commitment to put disabled people at the heart of policy making. Support for the British Sign Language Bill, which was debated last Friday, is the latest example of such action. The health and disability Green Paper explored what changes we can make to the system, for three reasons—so that we better enable independent living, improve employment outcomes and improve the experience of people using the DWP’s services.

Both the national strategy and the Green Paper were informed by the views of disabled people, who told us in enormous numbers about their experiences and their priorities for change. Although it is not the main subject of today’s debate, I can confirm that we are disappointed at the judgment on the UK disability survey and intend to appeal. Of course, the Chamber will be aware that the court dismissed the claimants’ claims that the Secretary of State had been subject to a duty to consult.

We remain focused on delivering the contents of the strategy, which is broad and important. Ensuring that everyone has the same opportunity for a fulfilling working life is a key part of levelling up the country, on which I am sure I agree with the Chair of the Select Committee.

[Stephen Timms]

As was said in the debate, the grounds on which the Government resisted that case was that they were not properly consulting people in the first place. That is surely a hopeless position for the Government to be in. They should consult people properly from the start.

[Chloe Smith]

We certainly do have confidence in our consultation and our listening. I will not go into further detail on the strategy because there is so much else that I want to respond to today.

We have made progress, including significant progress towards our commitment to see an additional 1 million more disabled people in work by 2027. As my hon. Friend the Member for Watford (Dean Russell) explained, supported employment is very significant within that, but there is much more still to do, and I welcome the point made by the hon. Member for Strangford (Jim Shannon) that employers also need to rise and play their part in supporting disabled people or people with ill health in the workplace.

There is also more to do to improve people’s experiences of our services and to build their trust in the system. I have heard the comments made today, and that is why our aim in the Green Paper was to improve the experience of disabled people and people with health conditions by listening, learning and improving. We want to make our services easier to access and our processes simpler where we can. We want to make improvements that will help build people’s trust and explore ways to offer more and better support for the people who need it most.

Turning to the economy, which is important for the context of this debate, the last two years have been really tough. However, because of our focus on getting people into work, we had the highest level of employment that this country had ever seen when covid hit, and we have succeeded in supporting jobs and livelihoods throughout the pandemic. The economy continues to rebound. With around 1.2 million vacancies currently available, including in many sectors vital for our recovery, we want to get people into jobs that they can do right now. The jobs market presents huge opportunities for all jobseekers. I want to ensure that those opportunities and the world of work are accessible and inclusive for disabled people and those with health conditions.

The hon. Member for Motherwell and Wishaw (Marion Fellows) mentioned the Way to Work campaign. I can reassure her that for those who are unable to take up employment due to their health conditions or personal circumstances, we tailor their requirements to their capability and situation to ensure that all that we ask of them is realistic and achievable.

We understand the pressures that people are facing with the cost of living, and we will continue to listen to people’s concerns, as we have done throughout the pandemic. That is why we are providing support of around £12 billion this year and next to help families with the cost of living.

Many important points were made during the debate about the assessment system and the benefits system. The benefits system considers the impact that a health condition or disability has on an individual’s ability to work and carry out day-to-day activities. As all hon. Members know, decisions are based on an assessment of an individual’s functional ability, not their diagnosed health conditions. Claimants are of course encouraged at the outset of their claim to provide all evidence that is relevant to their case, including medical evidence supplied by their GP or other professionals such as support workers, carers or community mental health nurses. We recognise that attending a health assessment can be a stressful experience, which is why, whenever we are able to assess somebody solely on the available paper evidence, we do so.

It is of course important that the benefits system is fair to both benefit recipients and taxpayers. We think that our health assessments are a fair and robust approach to managing the gateway to benefits, with our decisions based on evidence and objective criteria.

DWP Risk Review Team

Stephen Timms Excerpts

Wednesday 26th January 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

It is a pleasure to serve under your chairmanship, Mr Twigg. I have had an opportunity to work with you in the House, but also on various hills—with mixed results, but it is always a pleasure to be in your company.

I congratulate the hon. Member for Edmonton (Kate Osamor) on securing this important debate. My Department faces a huge responsibility, day in and day out, to pay benefits to millions of households, ensuring they have the help and support they need and wherever possible helping them into sustainable employment. We do everything we can to make sure that happens in a timely way. That was proven when covid-19 hit. We paid out to over 3 million more households at a time of global crisis. Universal credit in particular is a very resilient system, because it has been stress-tested in such an environment. Our latest public statistics show that around 90% of new universal credit claims are paid in full and on time.

Alongside that, we have another responsibility: to ensure that we are using taxpayer money properly and that funding is going to those who need it. Unfortunately, there are those who think it is acceptable to commit fraud against the welfare system. Those people cost the taxpayer—in fact, stole from them—an estimated £6.3 billion last year. That is £6.3 billion of taxpayer’s money—an absolutely staggering sum. I can just imagine what any Member in this House would want to do with that money to help not only their constituents but thousands of others. It is money that could be going to fund other vital Government services. Those who fraudulently claim that money clearly have no right to it.

I believe it is right that my Department makes every effort to find and crack down on fraud, and to ensure that we have the fullest range of tools at our disposal to achieve that. Those committing fraud are clever, committed and constantly thinking of new ways to get around the systems that we have in place, and to turn new technological advances to their advantage. The job of the DWP is not just to keep up with that, but to try and get ahead of it. It is our job to keep innovating and finding new ways to identify fraud where it happens and to put a stop to it. It is our job to keep fraudsters guessing at how we might find them, so that they do not find new ways to evade us. The risk review team is one of those innovations, established as a direct response to new threats. Its role is to provide an operational response to threats that have been identified. It does this by suspending suspect cases, where specific intelligence provides evidence of fraud.

I would like to stress that we are talking about a relatively small number of claims. Of the 3.7 million claims made to universal credit since May 2020, less than 4%, approximately 149,000, have been suspended under the risk review process. Those are not run-of-the-mill cases, but ones where, based on our analysis, we believe there is a high level of risk. It is because of that level of risk that claims have been legitimately suspended. It is an approach that provides much needed capability to disrupt and respond to new and emerging threats at pace.

To give an example of one of the challenges that the DWP has faced, in May 2020 the cyber-resilience centre, working as part of the integrated risk and intelligence service—we are pretty good at coming up with snappy titles for teams—prevented an attack by organised criminals. That led to the suspension of thousands of universal credit claims and prevented £1.9 billion in benefits from being paid to people trying to scam the system in 2020 and 2021. That is just one example; those attacks continued and more cases had to be suspended to safeguard public funds.

[Stephen Timms (East Ham) (Lab)]

I am grateful to the Minister for giving way, and I congratulate my hon. Friend the Member for Edmonton (Kate Osamor) on securing this debate. I agree with the points that the Minister is making about the importance of tackling fraud, particularly as universal credit has the highest level of fraud of any DWP benefit in history. Does he agree that it is not acceptable to take somebody’s benefits away for 11 months, as in one of the cases that my hon. Friend mentioned, with no support available? That potentially completely ruins someone’s life.

[David Rutley]

I understand the point that the Chair of the Work and Pensions Committee makes, but the key thing is that claimants need to prove eligibility. We want to help them to prove eligibility for a benefit. The challenge, and the reason these cases take time, is often that claimants are not able or willing to provide that evidence. I will come on to that later.

Underpayment of Benefits: Compensation

Stephen Timms Excerpts

Thursday 13th January 2022 Commons Chamber

[Mr Speaker]

Order. May I just say to Members who were not present at the outset that they should not expect to be called, and ask them please not to try to take advantage? I call the Chair of the Work and Pensions Committee, Stephen Timms.

[Stephen Timms (East Ham) (Lab)]

I welcome this important report, and I thank you, Mr Speaker, for granting the urgent question.

What is the position relating to the payment of interest in cases such as this? The ombudsman found that these failings had had a severe effect on Ms U’s existing mental and physical health problems, and no doubt the same is true for quite a number of the other 118,000 people affected. Will the Department work out, proactively, who should be receiving compensation? One of the ombudsman’s recommendations is that the Department should report to the Select Committee on its progress in considering his report and the decisions that it makes on how to remedy its own failings. Will the Department accept the recommendation and report to the Committee, and if so, when can we expect that to happen?

[David Rutley]

Obviously the primary responsibility is to respond to the report, and we will do that, but I—and, no doubt, the Secretary of State—will note the right hon. Member’s point, and will make appropriate responses to his Committee. I have mentioned the 118,000 people who have received the arrears, and, as I said earlier to the Opposition spokesman, the right hon. Member for Leicester South (Jonathan Ashworth)—I am sorry, I should have said “the shadow Secretary of State”: I do not want to understate his importance—there are mechanisms for those who feel they have grounds for further compensation to get in touch with the Department and explore that further.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 13th December 2021 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

4. What steps her Department is taking to support benefit claimants in meeting increased living costs.

[Stephen Timms (East Ham) (Lab)]

6. What steps her Department is taking to support benefit claimants in meeting increased living costs.

[Kate Hollern (Blackburn) (Lab)]

7. What steps her Department is taking to support benefit claimants in meeting increased living costs.

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[David Rutley]

I think the hon. Member will welcome the fact that the vast majority of the nearly 6,000 claimants in work will gain from the reduction in the taper rate and the increase in work allowances in the Budget, which is terrific. For those who are vulnerable, £1.8 million has been made available to local authorities to help them through the household support fund.

[Stephen Timms]

A single father who is unable to work on health grounds told the Select Committee in September that removing the £20 a week uplift would force him to skip meals so that his children did not have to. Christians Against Poverty, which supports him, says that he now cannot afford the absolute basics: food, heating and bus fares to take his children to school. He certainly cannot afford to buy his children Christmas presents. With prices rising so fast, is not the social security safety net just too low?

[David Rutley]

As I just set out to the hon. Member for Luton South (Rachel Hopkins), we have introduced the household support fund. In Newham, £3.3 million is available to help people exactly like the right hon. Gentleman’s constituent with the challenges they are facing this winter.