Oral Answers to Questions

Steve McCabe Excerpts

Monday 6th June 2022 Commons Chamber

[Mims Davies]

My hon. Friend rightly highlights the success of the kickstart scheme. I know she has had personal involvement in supporting young people in her constituency. Building on that success is an important question. The Way to Work initiative is building on those key links with local employers, such as the Sussex NHS, that offer good-quality opportunities for young people. Meanwhile, our work coaches continue to support jobseekers of all ages in accessing those vacancies and opportunities that she mentions in all those in-demand sectors.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The kickstart scheme was supposed to generate 600,000 placements. In reality, it generated around 235,000, and of those 80,000 were unfilled at the time that it closed. Does the Minister really think we should describe that as a success? Would not most people be asking what went wrong?

[Mims Davies]

I will happily write to the hon. Gentleman with the correct numbers on this. Some 162,600 lives have been transformed at the most challenging time, with well over 200,000 vacancies created by employers who would never have looked at this way of recruiting and bringing young people into the labour market before. It is clear that many employers thought they were doing a favour by getting a young person in for six months. The scheme has transformed recruitment, young lives and opportunities, and employers have found that they are the ones who have had that favour done for them.

Working Tax Credit and Universal Credit: Two-Child Limit

Steve McCabe Excerpts

Thursday 21st April 2022 Westminster Hall

[Steve McCabe (in the Chair)]

Despite what might be happening elsewhere, we have a very important debate here. I call Alison Thewliss to move the motion.

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move,

That this House has considered the two child limit of working tax credits and universal credit.

It is a pleasure to see you in the Chair, Mr McCabe. You are quite right to point out that, while other debates might be happening, this debate is actually quite important. It has been six years, nine months and 13 days since the Budget in 2015, when the two-child limit appeared in the Red Book, and just over five years since it came into force. Some might be wondering why I am bothering to come here today to complain about this policy; it is because, for me, it is a fundamental injustice and deserves to be looked at seriously.

The Child Poverty Action Group and the Church of England estimate that 1.4 million children in 400,000 families are now affected by the two-child-limit policy. Unless it is abolished, the number of children affected will reach 3 million, as more children are born under the rules.

The two-child limit for child tax credits and universal credits broke the long-standing link between need and entitlement, on the basis that families in receipt of state support ought to face the same choices as those supporting themselves solely through work. This is a false narrative; it is the myth of the benefit queen. This policy has never been about fairness.

The majority of families affected by the policy are in work—low-paid jobs, working to support their families. In mentioning that fact, I do not seek to stigmatise those not able to work—many have caring responsibilities, disabilities or other reasons that prevent them from working. They ought to have the protection of the social security system, too.

In many cases, it is all but impossible for those who are working to take on more hours to make up the drop in income created by the two-child limit. The Work and Pensions Committee pointed out that the cost of childcare can also mean that families will not be able to make up the loss by working more hours. The two-child limit is a poverty trap.

Many people are just not aware of the policy, which is a significant issue. They do not know that it will apply to them. The Government intended to influence people’s choices to have children, but they have certainly not been influenced in any meaningful way by a piece of Department for Work and Pensions legislation.



The latest research by Mary Reader, Jonathan Portes and Ruth Patrick on whether cutting child benefits reduces fertility in larger families establishes that the two-child limit is not leading to any major reductions in fertility among those likely to claim benefits. All the policy does is punish people for their circumstances and drive up child poverty rates.

Oral Answers to Questions

Steve McCabe Excerpts

Monday 8th November 2021 Commons Chamber

[Mims Davies]

My daughter started her first job today, on £9.50 an hour. She is delighted and she is doing that alongside her studies. I understand the challenge on different wage rates, but the national minimum wage rise really helps people, alongside the taper rate and the skills and opportunities provided through youth hubs and more widely. So I do not think that young people should feel anything other than that there are great opportunities out there, with more than 1 million vacancies and seasonal work, which can be the first step on to the employment ladder and the next stage in their career.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I recently visited Selly Oak jobcentre and have to say that I was quite impressed by what I saw and what I heard about the kickstart scheme, but one thing that surprised me was the number of students who are taking places on the scheme. Does the Minister share my concern that there might be a slight displacement effect, with the students understandably seeking work experience but thereby taking places on a programme that was conceived for young people with fewer qualifications and less access to the job market? If that is the case, what might she do about it?

[Mims Davies]

I thank the hon. Gentleman for visiting that fantastic jobcentre. We have jobcentres doing that work up and down the country, and it is crucial that 100,000 young people are getting that first step on the employment ladder. He is right to point out that there should be no cherry-picking of the easiest people to move into employment. Kickstart is about getting young people on to the first rung on the employment ladder, which is why we have kickstart quick start and direct meetings with employers, so that nobody is left behind. The flexible support fund will address any barriers and we will make sure that everybody is job ready and nobody is left behind.

Oral Answers to Questions

Steve McCabe Excerpts

Monday 17th May 2021 Commons Chamber

[Justin Tomlinson]

My hon. Friend is absolutely right. The SRTI—special rules for terminal illness—evaluation has been completed and will not need to be rerun through the forthcoming Green Paper.

[Steve McCabe (Birmingham, Selly Oak) (Lab) [V]]

Will the Minister recommend that his colleagues purchase and read the recently released e-book, “The Brown Envelope Book”, which contains more than 200 poems, pieces of prose and short plays about disabled people who say they have been“brutalised by the bureaucracy of the Department for Work and Pensions”?

[Justin Tomlinson]

The Government are rightly proud of providing record amounts of support for people with disabilities and long-term health conditions. Through our forthcoming health and disability Green Paper, we will work with stakeholders and those with real lived experience to make sure that we improve the services and support we provide.

Income Tax (Charge)

Steve McCabe Excerpts

Thursday 4th March 2021 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab) [V]]

I am not sure that people will think the Chancellor is being straight about stealth taxes, resulting in the largest tax burden since 1969; that they will applaud pension taxes, as doctors leave the NHS or cut their hours; or that they will support a 50p rise for statutory sick pay. Almost 2.5 million excluded self-employed are still going to be left high and dry. In response to my survey, 85% of constituents said that they wanted help for those excluded.

The support schemes sound impressive, but they involve complex applications and administration. The fear is that they will not reach the right people in time. Small businesses need easy access and affordable help, especially with rent and cash flow, which are real impediments to survival.

My constituency has large numbers of young unemployed and many self-employed people at risk. Some 94% of my Selly Oak constituents said in response to my Budget survey that they wanted action on unemployment to be a priority. How will that happen unless programmes are simplified and better targeted? We need training for the young unemployed—not sluggish, dead-end schemes—as well as rapid reskilling for those who lose their livelihoods and joined-up training.

Why does the super deduction policy take no account of whether investment would have occurred anyway, the areas that will benefit, or if it might end up costing rather than saving jobs? It would be better to tie it to research and development. We could have a targeted plan to shift support to parts of the country other than Oxford, Cambridge, London and the south-east. The number of R&D jobs in London and the south-east is already three times greater than in the midlands, not because it is more creative, but because it has access to greater funding. If the Chancellor wants electric cars built in the midlands, new jobs in climate change adaptation, machine learning in medical technology and food security, he needs to direct resources to those areas that can deliver. If the uplift in public R&D was linked to a targeted policy and focused on projects outside the golden triangle, that could mean a further £9 billion boost.

The Chancellor could also establish a fresh round of technology institutes, build on the Catapult network by announcing long-term funding, and expand university enterprise zones. That is how to level up, and that is how to create new jobs and a thriving economy.

Social Security

Steve McCabe Excerpts

Tuesday 9th February 2021 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab) [V]]

The number of people claiming universal credit has doubled to around 6 million, while job vacancies remain far below the pre-pandemic levels and unemployment is set to reach a five-year high. It hardly seems a propitious moment to be reducing any benefits. I have to say that, much as I like the Minister, it sounds to me a little like doublespeak for him to claim that calling the reduction of an existing payment a cut is somehow fraudulent and a terribly unacceptable use of emotive language.

The latest Trussell Trust survey of 1,000 people in receipt of universal credit shows that one in five people think it is very likely that they will need support from a food bank if the uplift is removed. Nearly a quarter of a million parents fear not being able to properly feed their children if the uplift is removed, and seven in 10 people on universal credit since early 2020 say that they use the uplift to buy absolute essentials. It is for those reasons that I support the Work and Pensions Committee’s call to maintain the uplift for a further year at the very least.

It has been estimated that keeping the increase could cost around £6.4 billion, but as the Select Committee argues, that should be seen in the context of the Treasury’s own claim that it has spent £280 billion on coronavirus support measures this year. In that context, 2% is hardly outrageous. The expenditure that the Minister announced today needs to be viewed against the 2019 Office for Budget Responsibility report on the impact of the 2015 Budget, which cut £9.1 billion from welfare spending.

It is worth repeating that the £20 a week uplift was never extended to those on legacy benefits, and therefore it excluded many carers and disabled people and those on jobseeker’s allowance. Apparently, the justification is that it would have taken too long to update the legacy systems. I have heard some excuses in my time, but I doubt many people will find that a persuasive reason for excluding quite so many people. It would be helpful to hear how the Minister thinks the Government are helping carers and the disabled to meet the additional costs incurred through no fault of their own, such as the cost of PPE.

There are aspects of today’s announcement that I welcome. I particularly support the decision to honour the triple lock and the increase in the guaranteed minimum pension credit, but it would be so much better if the Minister could address the elephant in the room, rather than risk undermining the positive steps he is attempting to take.

Oral Answers to Questions

Steve McCabe Excerpts

Monday 30th November 2020 Commons Chamber

[Will Quince]

First, I do not recognise those figures and certainly nobody is making that case. The Chancellor of the Exchequer has confirmed the universal credit uplift until March 2021, and it is right that we wait for more clarity on the national economic and social picture before assessing the best way to support low-income families moving forward. I would just gently say to the hon. Lady that the uplift is just one part of a comprehensive package that we have put in place to support people through this most difficult of periods.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

If she will make a statement on her departmental responsibilities.

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

Last week I announced the outcome of my annual uprating review. It delivers on our manifesto commitment for the pensions triple lock, thus providing financial peace of mind for pensioners across the UK. The basic and new state pension will be increased by 2.5% as that is the highest of the increases—inflation, earnings or 2.5%—and it means that from April 2021 the yearly basic state pension will be worth around £2,050 more in cash terms than in 2010.

[Steve McCabe]

With Birmingham set for an extended period in tier 3, does the Secretary of State have any plans to revisit the plight of pregnant mothers who are eligible for universal credit but ineligible for statutory maternity pay and therefore at a considerable financial disadvantage?

[Dr Coffey]

Of course, being in tier 3 has been put forward by the Government, and I am very conscious of the efforts that were being made right across Birmingham and other areas of the west midlands to get out of that tier. As regards matters such as statutory maternity pay, a lot of these things continue to be under consideration, but I will consider the points the hon. Gentleman has made.

Pension Schemes Bill [Lords]

Steve McCabe Excerpts

2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons
Wednesday 7th October 2020 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

This is the first time that I have seen the Pensions Minister since his sad loss. I just want to say that it is very good to see him back in the Chamber.

I start with clause 123. Like others, I think that schemes that remain open to new members should be treated differently from those that are closed. It is important that this is reflected in the legislation and in the Pensions Regulator’s codes of practice. Schemes that are open to new members have different needs and I hope the Minister will consider supporting the amendment that was put forward in the other place.

If these defined benefit schemes are treated the same as closed schemes, they will simply become unaffordable. They do not have the same de-risk needs that the regulator is seeking to tackle for closed schemes. In fact, the White Paper itself acknowledged this, as it acknowledged that they would have reasonably longer-term objectives. One very good example—in fact, an almost perfect example—is the railway pension scheme, which is a shared cost arrangement, with a 60:40 split between employer and member. Huge hikes in contributions would simply make this scheme unaffordable for both employers and members and it is worth remembering that, however much we think that defined benefit schemes may be on the way out, they still account for over 20% of the UK pension sector, so it is important that we try to look after them.

There is another unintended consequence. There is a danger that, if we go down this route, we could end up with the Pensions Regulator virtually setting pension policy, rather than simply regulating it, because it would be their actions that would determine how pension policy unfolds in the year ahead. I am not against the regulator, but everyone here will know that it is a body that has in the past come in for criticism. There is a danger here that, if it were to adopt too cautious an approach, partly through a desire to protect its own interests, it may well end up acting against the interests of people who are investing in pension schemes. I do not think that the regulator is seeking to do that or that the Government are seeking to do that: it may be an unintended consequence of giving this power to the regulator to treat these schemes as if they are the same thing. It will end up directly influencing policy in relation to defined benefits schemes in a way that I do not think anybody here really wants. My point is simple: we should do everything that we can to ensure that one of the consequences of the Bill is not to dismantle and effectively force the closure of perfectly viable existing open defined benefit schemes. I hope the Minister will reflect on that.

I welcome part 4 of the Bill relating to the dashboard. I agree that the first dashboard should be a single non-commercial product, hopefully hosted by MaPS, but I also welcome a choice of platforms with the establishment of commercial dashboards, which need to be properly regulated. I am not so sure about the timescale—about whether there should be an absolute timescale before one is established and others can come along. It seems to me that that might be an issue about personal choice and demand to some extent. There does seem to be some evidence that particular age factors will influence who will use what type of dashboard. There may be other characteristics that would influence that. There is a possibility that a relatively small number of people might use a MaPS dashboard, which is a persuasive argument for at least encouraging some sort of choice and variety in the field. It is also important that the state pension is included in the dashboard. That, for me, is a given.

In terms of the green agenda, I welcome what the Bill offers, but there is a persuasive argument for saying that default pension funds should support Government net zero targets. There is about £3 trillion invested in UK pensions, and that could make a real difference in achieving low-carbon investment. The Economist Intelligence Unit estimates that climate change could wipe $43 trillion off the global economy—about 30% of the world’s manageable assets. So trustees pursuing net zero targets would inevitably be respecting their fiduciary duty to protect members’ interests if they were to go down that road. It is not about a choice between being green and their members’ interests: it is about recognising what the green challenge is and how we could use those assets to get much closer to what the Government are seeking.

[Gareth Davies]

The hon. Gentleman is making some very good points that I would like to add to as someone who has dealt with many of our country’s pension funds. There is a disconnect between what the pensioners and the trustees believe: they would like to see much more investment in climate change initiatives and funds, but most of our pension funds are advised by a handful of consultants who are often a blockage to investment in, for example, ESG—environmental, social and governance—funds. Does he have any thoughts as to how we unblock the consultants aspect of this?

[Steve McCabe]

That is a good point. I think surveys have been undertaken that show that younger people from the 25-plus age group—there is an age divide in this—are much more concerned about where their pension investments go. As with most other things, if you are putting the money in, you should have a voice in where it is directed. That seems perfectly reasonable.

[Guy Opperman]

Let me try to clarify the legitimate point raised by the hon. Gentleman and also the flipside in terms of the argument by my hon. Friend the Member for Grantham and Stamford (Gareth Davies). The Department for Work and Pensions has driven pension trustees forward to embrace ESG and the path of net zero, and asset managers have been lagging behind. I want to put on record the good work done by the FCA, which I accept has been criticised legitimately in the past. Only last week, Chris Woolard and his team specifically issued guidance that accelerates the asset managers to put them on a parallel path to the pension trustees so that we basically ensure that the original investor, and then the actual manager of the money, are working off the same hymn sheet.

[Steve McCabe]

I am grateful to the Minister and acknowledge the points that he has made. I just think that there may be permission to go a bit further in this regard, and that is the point that I want to emphasise.

I support directed advice, particularly where there is any question of a scam. I welcome a power for trustees to intervene. I am happy to support the proposal from my right hon. Friend the Member for East Ham (Stephen Timms). In my view, it might be better to give the Money and Pensions Service a role in offering limited advice rather than just the guidance so that we try to bridge the gap between guidance and advice. The fundamental difficulty seems to be that, unless people have a particularly big pot and can afford advice, they are denied it, and guidance is not sufficient to protect them or steer them in the right direction. There is an argument for something to bridge that gap, and it might be worth looking at a role for the Money and Pensions Service in doing that.

Finally, I want to go back to where I started and share my concerns that the Bill might be giving too much power to the Pensions Regulator. I was not entirely convinced by the Secretary of State’s comments at the outset. There is a legitimate fear that clause 107 has the potential to criminalise a much wider group of people than can possibly be necessary or sensible. I ask the Minister to look at that again and see if we can be absolutely certain that the net has not been cast too wide.

Oral Answers to Questions

Steve McCabe Excerpts

Monday 14th September 2020 Commons Chamber

[Mims Davies]

I thank my hon. Friend for raising kickstart. This is a huge programme for young people, providing 25 hours a week and an opportunity to get their first foot on the employment ladder. We do not want our young people to be left behind because of the impact of the pandemic—we know that the scarring can affect them most. Kickstart will change that, and I ask all employers to get involved and be part of it.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I have constituents who have been waiting more than six months for a decision following a work capability assessment. Is that not a bit ridiculous?

[Justin Tomlinson]

We rightly took a decision to suspend face-to-face assessments following Public Health England’s guidance. We continue to keep this under review, but wherever possible, we are either doing a paper-based review or a telephone assessment, and we are automatically renewing reassessments that are due within three months by six months, and we review that on a regular basis.

Universal Credit: Court of Appeal Judgment

Steve McCabe Excerpts

Thursday 25th June 2020 Commons Chamber

[Will Quince]

That is probably a letter that has gone to the Secretary of State, as opposed to me, and is well above my pay grade. I gently suggest to the hon. Gentleman that UC is good news for the whole UK, including, of course, Wales. I remind him that, once fully rolled out, it will be £2 billion more generous a year than the legacy benefits system it replaces. About 1 million disabled households will be £100 per calendar month better off, and claimants will have access to about £2.4 billion in benefits that previously went unclaimed under the confusing and clunky Labour legacy benefits system.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The Minister is right to say that this judgment did not rely on an interpretation of regulation 54, as did the earlier one, but will his solution necessitate an interpretation based on the real income that people earn, as opposed to the false one that the Department has been assuming because of the technical judgment it has made about the assessment period and earned income?

[Will Quince]

The assessment period is fundamental to the design. [Interruption.] It is not fundamentally flawed. A small number of people do have fluctuations, which is why we are looking to take action in this area. We recognise that there is an issue, but it is important that it is kept in the context of 5.2 million UC claimants. I would hazard a guess, because this is certainly the case for my inbox, that despite there being more than 3.2 million new UC claimants, Members’ postbags are not full of complaints about UC. That is because the system is working very well.