Social Security Benefits
Debate between Stephen Timms and Luke Evans(3 weeks, 3 days ago)
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Sir Stephen Timms
In my view, the instruments are compatible with the European convention on human rights.
The draft Social Security Benefits Up-rating Order 2025 will increase relevant state pension rates by 4.1%, in line with the growth in average earnings in the year to May to July 2024. It will increase most other benefit rates by 1.7%, in line with the rise in the consumer prices index in the year to September 2024. The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by whichever is highest out of the growth in earnings, the growth in prices, or 2.5%. That will mean 4.1% for 2025-26. From April this year, the basic state pension will increase from £169.50 per week to £176.45, and the full rate of the new state pension will increase from £221.20 to £230.25.
We are fully committed to maintaining the pension triple lock. There is some confusion about the position of the Conservative party, and I hope that the shadow Minister will clarify the position when he speaks.
Dr Luke Evans (Hinckley and Bosworth) (Con)
On clarification, can the Minister clarify for how much longer the state pension will be taxed? The Conservative Government stood for election on a commitment to the triple lock plus. We lost the election, but we were going to take out that fiscal drag. Can the Minister explain how long that tax will stay in place?
Sir Stephen Timms
My understanding, from what the Leader of the Opposition has said, is that the Conservative party is no longer committed to the triple lock, let alone the triple lock plus. I can tell the hon. Member that we do not have any plans to do what he suggests.
Sir Stephen Timms
I simply point out to the hon. Gentleman that his party appears to no longer be committed to the triple lock. We look forward to clarification on that point from the shadow Minister.
Other components of state pension awards, such as those previously built up under earnings-related state pension schemes, including the additional state pension, will increase by 1.7% in line with prices. The Government are committed to supporting pensioners on the lowest incomes, so the safety net provided by the pension credit standard minimum guarantee will increase by 4.1%. For single pensioners, that means an increase from £218.15 to £227.10 per week; for couples, the increase is from £332.95 to £346.60 per week. We want everybody entitled to that support to receive it, which is why we launched the national pension credit campaign. We received around 150,000 pension credit applications in the 16 weeks after the winter fuel payment announcement.
Dr Evans
I am very grateful. We do indeed want more people to take up pension credit. However, one of the biggest problems is the processing time. The response to a written question that I tabled before Christmas showed that there was a 75% success rate in getting that done within 50 days, which means that that did not happen for one in four. I later re-tabled the same question, and it turned out that the standard had got worse. What work are the Government doing to make sure that applications are processed within 50 days? Especially when it is cold and people have had their winter fuel payment taken away, it is important that those who need that support get it as soon as they can.
Sir Stephen Timms
The hon. Gentleman is quite right; it is important that applications are processed speedily, and I am pleased with the number of applications. I can confirm—I think he knows this—that everybody who applied before 21 December will receive, if they are successful, their winter fuel payment. We have also moved extra staff on to pension credit processing. However, the hon. Gentleman is quite right to raise that point.
Universal credit and the legacy means-tested benefits that it replaces provide support for people of working age. We have committed in our manifesto to reviewing universal credit, so that it makes work pay and tackles poverty, and we will set out shortly how we plan to fulfil that commitment. For those below state pension age, the order increases the personal and standard allowances of working-age benefits, including universal credit, by 1.7%, in line with the increase in prices in the year to September 2024. In the Budget last November, the Chancellor announced that the maximum repayment deduction from universal credit payments will be reduced from April, from 25% of the universal credit standard allowance to 15%—the fair repayment rate—and 1.2 million households are expected to benefit from that change by an average of £420 per year.
In addition, the order increases statutory payments by 1.7%. That includes statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory sick pay. Benefits for those who have additional costs as a result of disability or health impairments will also increase by 1.7%. That includes disability living allowance, attendance allowance and personal independence payment. The order will also increase carer’s allowance by 1.7%. The Chancellor announced in the Budget that, from April, the weekly carer’s allowance earnings threshold will be pegged to the level of 16 hours’ work at the national living wage. That means that, from April, unpaid carers will be able to earn up to £196 per week net earnings and still receive carer’s allowance, compared with £151 now. I am pleased to say that that move has been very widely welcomed, and we expect it to bring an additional 60,000 unpaid carers into eligibility for the benefit, and, crucially, to reduce the likelihood that carers who manage to combine some work with their caring responsibilities will inadvertently fall foul of the earnings limit, because, in future, that threshold will keep up with changes in the national living wage.
On disability and carer’s benefits, we will continue to ensure that carers, and people who face additional costs because of disability or health impairment, get the support that they need, and we will set out proposals for reform of health and disability benefits in a Green Paper in the spring.
Sir Stephen Timms
I have already spoken in the debate about the two-child cap, and we will be coming forward with the report and strategy proposed by the child poverty taskforce. On pensioner poverty, I think that substantial measures will be needed, and we will come forward with those in due course.
Dr Luke Evans
I am grateful to the Minister for taking another intervention. He talked about planning for the future and people understanding what is going on with their pensions. We have the WASPI example where that was not seen to be the case. The new Government are making changes to inheritance tax and where pensions fall, but much of the public do not realise that that will have big implications for them as their pensions will be subject to tax and inheritance tax. Would he consider a campaign to let people know that that change is coming in the next year or so?
Sir Stephen Timms
I am not quite sure what change the hon. Gentleman is referring to, but I certainly agree that people need to be confident about what the arrangements will be in the future so that they can plan accordingly. That is the one of the reasons why the pensions triple lock is important, as it gives people confidence about how things will be in the future.
We are: increasing the basic state pension and the new state pension in line with earnings growth by 4.1%, meeting our commitment to the triple lock; increasing the pension credit standard minimum guarantee in line with earnings growth by 4.1%; increasing benefits to meet additional disability needs and carers’ benefits in line with prices; and increasing working-age benefits in line with prices as well, at 1.7%. This year, GMPs accrued between 1988 and 1997 must by law be increased by 1.7%, which is the increase in the consumer prices index in the year up to September 2024. The GMP is important in giving people assurance about a level below which their scheme pension cannot fall. I commend both orders to the House.
Question put and agreed to.
Resolved,
That the draft Social Security Benefits Up-rating Order 2025, which was laid before this House on 15 January, be approved.
Pensions
Resolved,
That the draft Guaranteed Minimum Pensions Increase Order 2025, which was laid before this House on 16 January, be approved.—(Martin McCluskey.)
Oral Answers to Questions
Debate between Stephen Timms and Luke Evans(3 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Social Security and Disability (Sir Stephen Timms)
That is good example of the kind of discussion we need among Ministers responsible for disability across Government. Department for Transport guidance on inclusive mobility and on tactile paving surfaces advises how design and layout can inform visually impaired people, including about hazards and directions. I am happy to pursue the subject further with my hon. Friend.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Sir Stephen Timms
We are working very closely with disability organisations, and I pay tribute to the work of those to which the hon. Gentleman referred. We will certainly ensure that barriers that too often confront disabled people are removed by this Government. That is the mission that we are on.