Support for Pensioners
Torsten Bell Excerpts(1 week, 3 days ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
It is a pleasure to serve under you, Dame Siobhain, in a debate on such an important topic. We owe thanks to the hon. Member for Mid Bedfordshire (Blake Stephenson) for securing it, and I thank everybody who has contributed to it.
Recent years have been difficult for pensioners. They, along with the rest of Britain, have had to wrestle with a cost of living crisis, inflation in double digits for the first time in four decades, food prices rising even faster, and energy bills that have shot up—as the hon. Member for Strangford (Jim Shannon) mentioned, before he mentioned that he is approaching a significant birthday. The debate is focused on whether it is 40 or 50, but we will celebrate whatever it is, as well as celebrating his form-filling success.
Everyone who has spoken in the debate will have spoken to constituents about the challenges posed by the cost of living crisis. I have certainly spoken to some of the 17,000 pensioners in Swansea West. This is an important debate and, as well as responding to the points that Members have raised, I will cover: what lessons we can learn from the past, celebrating some things that have worked and recognising where they have not; what the Government are doing today to support pensioners, covering lots of the points raised by Members; and, briefly, our future priorities, as requested by the shadow Minister, the hon. Member for South West Devon (Rebecca Smith).
First, I will address the good news. In the 1990s, pensioner poverty was rampant. Almost 30% of UK pensioners were living in relative poverty. The old and the young—children—bore the brunt of the rise in poverty in the 1980s and early 1990s, but under the last Labour Government, not only did rates of pensioner poverty fall, but they had halved by the 2010 election. That did not happen by accident. Policy—including the introduction of pension credit, which we have discussed today—drove lots of that change, especially for women and older pensioners, and higher private pensions and employment rates further boosted pension incomes. But no one, of any party, thought that it was job done at that point, and I am sure that none of us thinks that today, not least because, in recent years, progress on pensioner poverty has stalled and relative pensioner poverty has risen by 300,000 since 2010.
Even though today the UK has a lower rate of relative poverty among pensioners than the OECD average, the fact remains that, as Members have said, pensioner poverty is still too high. It is 16% in Wales, and it is especially high for renters. Almost 40% of all pensioners in poverty are renters, and with growing numbers of private renters, the challenge looks likely to grow, reinforcing the point that the hon. Members for South West Devon and for Mid Bedfordshire made about the need for long-term planning.
There is another lesson from the last decade and a half: when growth stalls, the reductions in absolute pensioner poverty that we all used to take for granted slow or even grind to a halt, so growth matters for pensioners as it does for workers.
Rebecca Smith
Does the Minister not agree that, from 2010, the previous Government secured a 200,000 reduction in the number of pensioners in absolute poverty? I do not have details of what the figure might have been otherwise, but it is important to put that on the record, because nearly a quarter of a million is still a significant number.
Torsten Bell
I am loath to do this, but the honest answer is no—it is far too small a reduction. Absolutely poverty should be falling every year, very significantly. We should really only need to debate relative poverty measures because, in a growing economy, we should all be taking it for granted that absolute poverty is falling.
I hope that we can agree on two things: first—I think we do agree on this—that we must do better, and secondly, and more positively, that there are lessons to learn from what has worked over the last quarter of a century. While we are on a positive note, I can agree with the hon. Member for West Worcestershire (Dame Harriett Baldwin) about the importance of community groups that support our pensioners, through Ageing Well in Swansea and, I am sure, lots of other devices around the country.
I am not under any illusions—even if I was, I could no longer be after the last hour and a quarter—about hon. Members’ views on the Government’s decision to target winter fuel payments at those on the lowest incomes. I will not rehearse all the arguments for that policy, but our dire fiscal inheritance is no secret. We owe it to the country—to all generations, young and old—to put that right, and that has involved wider tough decisions on tax and spending. I say gently to Members who oppose not just the targeting of winter fuel payments, but every tax rise proposed, that that has consequences. If they oppose every tough choice, they propose leaving our public finances on an unsustainable footing, and leaving our public services in a state that far too often lets down those who rely on them, not least pensioners.
Although we can no longer justify paying winter fuel payments to all pensioners, it is, as all Members have said, important that we do more to make sure pensioners receive the support they are entitled to. In recent months, we have run the biggest ever pension credit take-up campaign, because, although around 1.4 million pensioners currently receive pension credit, too many are missing out. I urge all pensioners to check whether they are entitled to support.
The right hon. Member for Aldridge-Brownhills (Wendy Morton) mentioned the complexity of the pension credit form. I have considered that, and there is more that we can do to simplify it. All I would say is that in our messaging to pensioners, we should be clear that most of the questions do not need to be answered by the people filling in the form. Currently, 90% fill in the form online or over the phone, and the average time taken to fill it in online is 16 minutes.
Wendy Morton
I am grateful to the Minister for providing that clarity, but it took me longer than 16 minutes, so perhaps I am not as articulate as others.
Wendy Morton
Does he agree, though, that the 10% who cannot do it themselves in that way are potentially really losing out? There is also a group of pensioners who have worked hard all their lives and done the right things, but are too proud to apply for pension credit, let alone to go online to fill in a form.
Torsten Bell
The right hon. Member is absolutely right to raise the case of those who might need support to complete the form. That is why one of the elements of the campaign we have run this year is targeting not pensioners directly, but friends and family, to encourage them to help people to apply for pension credit themselves.
Torsten Bell
I want to make a bit progress, and then I will take some more interventions.
I will be updating Members later this month on the impact of the campaign so far. The hon. Member for South West Devon asked about constituency-level data on winter fuel payments. We will be publishing that in the usual way in September. The hon. Member for Wokingham (Clive Jones) asked about the DWP and councils working closely together to drive pension credit uptake. He was completely right to do so. I will write to him on the specific point he raised, because it is not true, but on the generality, he is completely right that the onus is on the DWP to work with councils, and on councils to work with the DWP.
Wider support is also available for pensioners: direct financial help through cold weather payments in England and Wales, and help with energy bills through the warm home discount, which we expect to benefit over 3 million households, including over 1 million pensioners, this winter. The right hon. Member for North East Cambridgeshire (Steve Barclay) and several others raised the need for energy efficiency in homes. They were completely right to do so, but I note very gently that there was a 90% fall in energy efficiency installations in the early years of the previous Government. Someone wanted to “cut the green”—and that was the result. We are trying to do better than the previous Government did on that front.
We are committed to maintaining the triple lock on the state pension throughout this Parliament. The hon. Member for South West Devon rightly noted that that was introduced under the previous Government.
Seamus Logan
The Minister promises to maintain the triple lock, but the Government have broken promises on WASPI women and on farmers, so how can anybody believe that they are going to keep their promise on this?
Torsten Bell
We will be maintaining the triple lock throughout this Parliament, as promised in our manifesto. In April, the basic and new state pensions will increase by 4.1% and 12 million pensioners will see a concrete increase—whether Members believe it or not—of up to £470.
Several Members mentioned the need for long-term planning. That commitment to the triple lock means that spending on the state pension is forecast to rise by over £31 billion this Parliament. At the individual level, that translates into the new state pension being on track to rise by up to £1,900 a year, and the basic state pension —the pension that is relevant to those who hit the state pension age before 2016—by £1,500. But the last 15 years tell us that we need to do more for pensioners.
Jim Shannon
In my contribution I hinted that attendance allowance might be another method of giving benefit entitlements to qualifying pensioners. Not every pensioner would qualify, but many would. I suggest a concerted campaign by the Government to make every pensioner aware of all the benefits. As the right hon. Member for Aldridge-Brownhills (Wendy Morton) said, sometimes they are shy, sometimes they are independent, and sometimes they do not know they are entitled to things.
Torsten Bell
The hon. Member raises an important point. Attendance allowance would entitle a pensioner to extra income to pay for extra costs, including heating if required, but it would also lead to a higher threshold for qualification for pension credit. However, he is right that we need to see people applying for those benefits.
As I was saying, the last 15 years tell us that we need to do more for pensioners, and that returns on private pension savings matter too. We are undertaking a comprehensive pensions review to ensure that the pensions system is fit for the future, building on the success of auto-enrolment, which was introduced under the last Government and has seen over 11 million employees saving into a workplace pension. That is one of the big areas of progress in the pensions landscape in the last 25 years.
The Government are committed to further reforming our pensions landscape, so that it drives up both economic growth and returns to savers, via the upcoming pension schemes Bill. We need bigger and better pension funds investing in productive assets such as infrastructure. We need to help individuals consolidate small pension pots and have sight of them via the pensions dashboard, so that they can plan for security in retirement. The measures in the Bill could help the average earner who saves over their lifetime have over £11,000 more in their pension pot when they come to retire.
Steve Barclay
The central justification that the Government give for taking away winter fuel payments is the fiscal position, but then they say that they want people to take up pension credit, which comes at a cost. Could the Minister say how many people would need to take up pension credit to cancel out the fiscal benefit? If that were to happen, it would undermine the central premise on which he is putting forward the policy.
Torsten Bell
That argument is made a lot. All I would say is that all of us should want all pensioners to receive the benefits they are entitled to and to drive pension credit take-up. We are confident that this policy will deliver significant savings, and the costings put into the Budget in the autumn take into account an increase in pension credit take-up.
For most pensioners I speak to, concerns about the state of the health service are front of mind. The biggest betrayal of pensioners today is the state of our NHS—run down in England and undermined in Wales, with the capital budgets handed down by the UK Government to the Welsh Government not remotely sufficient to maintain the NHS estate or to invest in badly needed diagnostic equipment.
Torsten Bell
No.
That is why this Government are investing £22 billion in the English NHS this year and next, with consequentials for the Welsh and Scottish Governments. The hon. Member for Aberdeenshire North and Moray East (Seamus Logan)—
Torsten Bell
No.
The hon. Member for Aberdeenshire North and Moray East rightly says that society will be judged on how it treats its pensioners, particularly with regard to the NHS, but in Scotland we have now seen five new NHS recovery plans announced in four years. That is not a tribute to our older generations. Supporting pensioners in the 2020s is about more than opposing every tough choice—
Dame Harriett Baldwin
On a point of order, Dame Siobhain. Is it orderly for me to point out that the NHS is suffering from a number of over-65s who sadly have a high level of mortality—
Dame Siobhain McDonagh (in the Chair)
Order. I do apologise to the hon. Member, but that is not a point of order, and she knows it. I call the Minister.
Torsten Bell
Thank you, Dame Siobhain.
Supporting pensioners in the 2020s is about more than opposing every tough choice that the Government have to make. It means directly raising pensioner incomes via the state pension and pension credit, but it also requires us to reform our private pension system, grow our economy and rescue our public services—
Dame Siobhain McDonagh (in the Chair)
Order. We are out of time, but I want to make a public apology to the hon. Member for Epsom and Ewell (Helen Maguire). I should have allowed her to intervene, and I certainly meant no discourtesy to her.
Motion lapsed (Standing Order No. 10(6)).
Work and Pensions
Torsten Bell Excerpts(1 week, 5 days ago)
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Sir Ashley Fox
What assessment she has made of the potential impact of means-testing the winter fuel payment on levels of pensioner poverty.
Torsten Bell
This Government have run the biggest ever take-up campaign on pension credit, which is worth around £400 on average to those eligible.
[Official Report, 3 February 2025; Vol. 761, c. 534.]
Written correction submitted by the Under-Secretary of State for Work and Pensions, the hon. Member for Swansea West (Torsten Bell):
Torsten Bell
This Government have run the biggest ever take-up campaign on pension credit, which is worth around £4,200 a year on average to those eligible.
Oral Answers to Questions
Torsten Bell Excerpts(2 weeks, 5 days ago)
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Neil Duncan-Jordan (Poole) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
In recent months, the Department has run the biggest ever pension credit take-up campaign, across TV, radio and online. Some 150,000 pension credit claims were made in the 16 weeks following the winter fuel payment announcement, and the campaign continues. This week, new work to invite all pensioners newly receiving housing benefit to claim pension credit will begin.
Neil Duncan-Jordan
I thank the Minister. The latest figures show that at least 800,000 pensioners are eligible for pension credit but do not claim it, which means they have now also lost out on the winter fuel payment that they previously would have enjoyed. Does the Minister think that means-testing is working?
Torsten Bell
It is important that 1.5 million pensioners will receive the winter fuel payments this winter. The statistics my hon. Friend refers to relate to previous years, before the recent take-up campaign. However, he is right to highlight that under the Conservative Government, three in 10 eligible pensioners were missing out.
Tom Gordon (Harrogate and Knaresborough) (LD)
In recent days and weeks, household bills across my constituency have gone up and up and up. Many who miss out on pension credit because they are just above the cut-off will now be wondering where they will find that extra money. Will the Government think again about the removal of the winter fuel payment and ensure that pension credit is rolled out on a taper?
Torsten Bell
It is important that we keep driving up the take-up of pension credit, but that is not the only support available to pensioners: everyone will see the state pension rise by over 4% this April; the household support fund is very important and will be extended for another year; and the warm home discount is available to the poorest pensioners.
Rachael Maskell (York Central) (Lab/Co-op)
Government figures show that an additional 42,500 households have claimed pension credit, yet that is only about 5% of all those eligible who were not claiming it. As constituency MPs, we are having to support people who are really struggling with the cold and their financial balances. Will the Minister think about setting up a pensioner poverty taskforce, so we can really get underneath the issues facing older people?
Torsten Bell
I am sure that all Members, on both sides of the House, are providing support to their constituents—pensioners, those of working age and children—to ensure they can cope following a difficult few years for everyone because of the cost of living crisis. On pensioner poverty specifically, it is important that we update our understanding of how that has developed. If we look at the record, we see that pensioner poverty halved under the previous Labour Government, but rose by 300,000 under the Tory Government over the past 14 years.
Gideon Amos (Taunton and Wellington) (LD)
Those on the guaranteed element of pension credit receive the warm home discount, but many do not. Following the changes made a couple of years ago, linking the warm home discount to the age and size of a property, have the Government made any assessment of how many people have been affected the double whammy of losing the warm home discount and the winter fuel payment?
Torsten Bell
I have heard the hon. Gentleman’s comment and will raise it with the responsible Minister in the Department for Energy Security and Net Zero, but it is important that all pensioners who are entitled to support get it. That is what the Government are focused on.
Mr Andrew Snowden (Fylde) (Con)
Lincoln Jopp (Spelthorne) (Con)
The Parliamentary Secretary to the Treasury (Torsten Bell)
The Government are looking across the piece at how the important work of our regulators supports economic growth, and the Pensions Regulator, which oversees the third largest pension system in the world, is no exception to that.
Lincoln Jopp
The then pensions Minister, Guy Opperman, said that green-lighting defined benefit pension superfunds was his greatest achievement of lockdown. The unelected Governor of the Bank of England then unhelpfully intervened and said that superfunds would be a risk to financial stability, and as a result the Pensions Regulator has authorised only one pension superfund to come into existence. Can the Minister be a little more specific and tell us what exactly he is going to get the Pensions Regulator to do differently in order to support the growth mission?
Torsten Bell
That is an important question. The Pensions Regulator does recognise its important role in supporting growth; indeed, it has statutory duties not just to protect savers but to minimise the impact on the growth of employers. Superfunds have an important role to play in ensuring that we have larger pension funds that are able to invest in a wider range of assets. As the hon. Gentleman says, on an interim basis the Pensions Regulator has authorised one such fund, but we will take measures in the pension schemes Bill to make further progress in this regard.
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
Sir Ashley Fox (Bridgwater) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
This Government have run the biggest ever take-up campaign on pension credit, which is worth around £400 on average to those eligible. It also opens the door to extra support and means that 1.5 million pensioners will continue to receive the winter fuel payment. The modelled impact of the decision to target the winter fuel payment at those who need it most does not account for the measures that this Government are taking to raise pension credit take-up.
Patrick Spencer
There is no doubt that the cut to the winter fuel payment has hit Suffolk hard. NHS Suffolk reported that 97% of beds were occupied over the Christmas period due to a spike in cold, flu and pneumonia-like symptoms. Kesgrave community centre has set up warm rooms for impacted pensioners. The only good news is that the Suffolk Community Foundation has managed to raise £100,000 to support pensioners across our community who are impacted by the cut. Will the Minister join me in paying tribute to the Suffolk Community Foundation for being there for the most vulnerable people in our society when his Government were not?
Torsten Bell
This Government and the important charity that the hon. Gentleman mentions are here for the most vulnerable pensioners. That is why we are targeting the winter fuel payment at those who need it most, and why we will uprate all the state pension elements by over 4% this April. He raises the case of the national health service and how important it is to older generations, but it is his party that drove the NHS into the ground over the last 14 years.
Sir Ashley Fox
Labour-controlled Bridgwater town council is increasing its council tax precept by 40%. That means that pensioners in my constituency are suffering from not only the loss of their winter fuel allowance, but an enormous tax rise. What advice does the Minister have for those of my constituents who do not qualify for pension credit, and who now face the loss of the winter fuel allowance from this Government and a huge tax rise from their Labour council?
Torsten Bell
I encourage all pensioners to consider whether they are eligible for pension credit, but also to look for the wider support that can be provided via the household support fund and the warm homes discount. I say gently to the hon. Member that the driving up of council tax bills is a direct result of the destruction of local government finances by the Conservative party over 14 years.
Helen Whately (Faversham and Mid Kent) (Con)
I welcome the Minister to his place. I have a simple question for him: how many people are still waiting for their winter fuel payment?
Torsten Bell
The largest campaign to drive up pension credit take-up is now under way, and it will continue in the years ahead. What we are seeing at present is that anyone who made their claim for pension credit before 21 December will receive their winter fuel payment when that claim is processed.
Helen Whately
So the answer is that the Minister does not know. He does not know how many people are waiting for their winter fuel payment. He does not know how many people are stuck in the pension credit backlog. He does not know when they will hear about their claims. He does not know who has had help from their local council. He does not know how many people who lost their winter fuel payment have ended up in hospital this winter. He and his Department have dodged or refused to answer every single one of those questions in recent weeks. Will he commit to a full review of the winter fuel payment cut so that we can get those answers?
Torsten Bell
I will commit to fighting every day to avoid a repeat of the exercise under the last Government whereby pensioner poverty rose by 300,000, having fallen by 1 million under the last Labour Government. We will make sure that we publish details of the take-up of pension credit by the end of February.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
Steve Darling (Torbay) (LD)
I was pleased to hear that Labour councillors on Hull city council have voted to condemn the Government’s shameful decision not to compensate WASPI women. Has that given the Minister pause for thought?
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
I recognise the strength of feeling on this issue right across the House. We carefully considered the ombudsman’s report, but as the hon. Member knows, we do not think it is fair to provide compensation costing up to £10 billion when 90% of affected pensioners knew that the state pension age was rising, and the evidence shows that letters being sent earlier would have made little difference.
Danny Beales (Uxbridge and South Ruislip) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
I thank the hon. Member for raising that case and I would be happy to meet her to go into a bit more detail. That is exactly why we make sure the pension credit threshold rises in line with the basic state pension through the triple lock.
Damien Egan (Bristol North East) (Lab)
During covid, assessments for personal independence payments were moved either online or to over the phone. Today less than 5% of those assessments have returned to face-to-face, so what assessment have Ministers made of that change and are there any links with the rise in fraud?
Agricultural Property Relief
Torsten Bell Excerpts(3 weeks, 4 days ago)
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Mr Carmichael
The Minister is shaking his head. I wonder whether the hon. Lady would join me in inviting him to intervene to explain why that fact is wrong.
Ann Davies
I do not know whether the Minister would like to do so now or at the end. It is up to him.
Torsten Bell
I will at some length explain why the remarks that the right hon. Gentleman just made—
Graham Stringer (in the Chair)
Order. If Members wish to make an intervention, they should stand to do so. It is up to the person who is speaking whether to accept an intervention.
I was going to say this at the end of Ann Davies’s speech, but I will say it now. This debate is oversubscribed, so I will put a time limit on speeches. Members should make short interventions, because interventions will mean less time for those people who have put in to speak.
The Parliamentary Secretary to the Treasury (Torsten Bell)
It is a pleasure to speak in this debate with you in the Chair, Mr Stringer. I congratulate the hon. Member for Caerfyrddin (Ann Davies) on securing this debate and for engaging with many different pronunciations of the name of her constituency over the course of the last hour and a half. She rightly makes a powerful case for Welsh farming, which all of us in south Wales would like to reinforce.
We will not all agree on the policy under discussion today, but we all agree that topics such as this are important to many and should be properly discussed in this place—ideally at a lower temperature than in this room. I have listened closely to the contributions to the debate, and I thank all hon. Members for setting out their views and for speaking on behalf of not only their constituents, but their acquaintances, friends and family members. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made a clear case about the emotional, not just economic, importance of land to farmers and farming families. Most of us will have someone close to us who farms, but even those who do not will recognise the huge contribution that our farmers make to our food security, our economy and our rural communities. None of us takes those contributions for granted, and we have heard that today.
Before I turn to the specific points raised by hon. Members, I will briefly—I promise it will be brief—set out the context for the Budget decisions we are debating. This Government’s inheritance matters, however much the hon. Member for Keighley and Ilkley (Robbie Moore) declines to mention it. We had unsustainable public finances, equally unsustainable and struggling public services, councils going bust and prisons overflowing, so tough decisions were unavoidable in the Budget if we were to restore economic stability, fix the public finances and support public service. That is the backdrop to the decision to reform agricultural property relief.
That decision was not taken lightly, but it was a necessary decision, not least because rural communities lose out more than most when health, transport and council services across the UK do not live up to the standards that any of us expect. It was the right decision, because the Government will maintain significant levels of inheritance tax relief for agricultural property, far beyond what is available for most assets, because we recognise the role that those reliefs play in supporting farmers.
The debate is really about how we balance the objectives of protecting family farms with the public finances and public services. The status quo—the full, unlimited exemption introduced in 1992—has become unsustainable. The benefits have become far too heavily skewed towards the wealthiest estates. Some 40% of agricultural property relief benefits the top 7% of estates making claims. The top 2% claim 22% of the relief, which means 37 estates are claiming £119 million in a single—
John Glen
The Minister is a serious economist with a serious track record in analysing public finances. With all due respect, given the significant uncertainty and the fact that numerous organisations representing farming interests outside the party political debate have asked serious questions about the deliverability of the scheme and the amount of money that will be raised, surely he must accept that there is time for people such as he to work with officials to find better ways of finding the sums that he says he needs—I am not disputing that—to do the right thing by the farming communities of this country and not cause the unintended damage that will clearly take effect.
Torsten Bell
I thank the right hon. Member for his kind words, even though I cannot agree with everything that followed. I will come on to some of the points that he raised shortly. I think this will come up several times in the course of what remains of the debate, but we cannot use farm valuation data to make claims about inheritance tax claims. On the latter, we have the actual data for the claims made, which is what we rely on.
Several hon. Members rose—
Torsten Bell
I will make some progress and then I will give way.
We see a similar picture for business property relief. It is in large part these reliefs that mean the largest estates pay materially lower rates of inheritance tax than more modest estates. That undermines faith in the fairness of our tax system more generally. Given the pressures we face, it cannot be right to leave this system unreformed, which is a point the hon. Member for Waveney Valley (Adrian Ramsay) made well.
That is the context and the rationale for the changes to how we will target agricultural property relief and business property relief from April 2026. Contrary to the claims that these reliefs are being scrapped, which I am afraid to say were repeated by the hon. Member for Strangford (Jim Shannon) just now, we will continue to provide significant tax relief, including for small farms and businesses. Individuals will still benefit from 100% relief for the first £1 million of combined business and agricultural assets. Importantly, the relief sits on top of all the other spousal exemption and nil-rate bands. Depending on people’s circumstances, up to £3 million can be passed on by a couple to their children or grandchildren free of inheritance tax.
Jim Shannon
I will try to be brief. On the rateable value, which the Minister mentioned earlier, my understanding after talking to the legal person of the Ulster Farmers’ Union is that the rateable value is based on whether the farm was handed over in the 1970s, in the 1980s, in the 1990s or even in the 2000s, but the rateable value does not show the real value of the land. Therefore, it is a flawed system. If it is a flawed system, the Minister needs to go back to the very beginning and look at it. I say that respectfully; I am not trying to catch anybody out. I am just saying that if something is not right, then get it right.
Torsten Bell
The point I was making was about the hon. Member’s point that the relief had been scrapped; I was just making the point that the reliefs have certainly not been scrapped and that they remain very generous indeed.
Beyond the thresholds I mentioned, the 50% relief will continue and there will be a reduced marginal inheritance tax rate of 20%, rather than the standard 40%. Furthermore, in response to the points raised by several Members today about the cash-flow challenges that some farms face, particularly after bad years like last year, I will point out that heirs can spread the payments over 10 years interest-free, which is a benefit that is not seen anywhere else in the inheritance tax system.
Mr Carmichael
If people are looking at a £400,000 bill, which is what they would pay on a £3 million farm, and they earn £25,000 a year, they will still struggle to make that payment in 10 years; in fact, it would be downright impossible. That is how the land gets sold.
Torsten Bell
I will not comment on the individual example the right hon. Gentleman gave, but in general he is right to say that there can be large variations in the profits of farms between years and between farms. That is partly why the tax system already allows us—uniquely for farmers—to average profits over periods of time. Obviously, our advice to all farmers who think they will be affected by the change is that they should seek advice in turn.
I turn to the impact that these reforms will have, as that has been the central focus of most comments today.
Torsten Bell
I will make some progress.
In 2026-27, up to 520 estates claiming agricultural property relief, including those that also claim business property relief, are expected to pay more as a result of this change. That means that around three quarters of estates claiming agricultural property relief will not pay any more than they do now.
The hon. Member for Keighley and Ilkley and the right hon. Member for Orkney and Shetland (Mr Carmichael) asked questions about business property relief and specifically about claims that are not covered by agricultural property relief. Around three quarters of estates claiming business property relief alone—that is, the same proportion that have agricultural property relief, once we exclude those only holding alternative investment market or AIM shares, which are often held for the purpose of avoiding inheritance tax—will not pay any more inheritance tax in 2026-27. All estates making claims for these reliefs will continue to receive generous support, at a total cost of £1.1 billion to the Exchequer. The system will remain more generous than it was before 1992, when inheritance tax was applied at a maximum rate of 50%, including on the first £1 million that was passed on.
Several Members have implied that the change will end the passing-down of farms between generations. I gently point out in response that farmers, agricultural landowners and small business owners did not receive 100% relief on inheritance tax for almost all of the 20th century, yet farms and businesses were very much passed down between generations. Indeed, the tax system will continue to support that process. As the Institute of Fiscal Studies has said, our reforms will:
“still leave…land much more lightly taxed than most other assets”.
These changes should also be seen in the wider context of support we are providing for farmers and rural communities. The hon. Member for Aberdeenshire North and Moray East (Seamus Logan) was wrong in his comments about the Office for Budget Responsibility, as the document produced this week provides no new information. However, he was right about the importance of food security, as was the hon. Member for Great Yarmouth (Rupert Lowe). That is why the Budget committed £5 billion to farming over the next two years, including the biggest budget for sustainable food production in our history. It also committed £60 million to help farmers affected by the unprecedented wet weather last winter. The wider tax system will also continue to support farming—tenants as well as owners—including through exemptions from business rates, the use of rebated diesel and the ability, as I said, to average tax affairs over a number of years.
As we have heard today, the reforms to inheritance tax generate strong views. I understand that. I recognise that a small number of estates will have to pay more. I have not hidden from that today, nor in conversations—
Robbie Moore
Will the Minister confirm when he and the Government will start listening to the points being made by everybody outside this place—different stakeholders, banks, accountants—
Robbie Moore
And supermarkets. The Minister and Government are, dare I say it, alone on this point.
Secondly, as he did not allow my intervention earlier, will the Minister confirm why the Government are not taking into account the value and the size of agricultural units when projecting the impact the changes will have on family farming businesses and farming businesses?
Torsten Bell
The hon. Gentleman raises the question of supermarkets. Supermarkets can talk but there is a lot they could do directly to support our farmers—
Torsten Bell
I listened to the question and I will make more progress. I have not hidden from what I have heard from individuals across the country about this issue in recent months, including from talking to farmers in mid-Wales and East Anglia. Reform of the reliefs is necessary if we are serious about putting our public finances on a stable footing and repairing our broken public services, including the schools, hospitals and roads that communities across the UK—
Torsten Bell
No, I am going to finish. Communities across the UK, including in rural areas, rely on those things every single day. We have taken these decisions to make the system fairer and more sustainable and the decisions come alongside significant new investments in farming and support for small business.
Thank you, Mr Stringer, and all those who have spoken today, in particular the hon. Member for Caerfyrddin for securing the debate. I look forward to her concluding remarks.
Automatic Enrolment: Earnings Trigger and Qualifying Earnings Band Review 2025-26
Torsten Bell Excerpts(1 month ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
Automatic enrolment into workplace pensions has transformed workplace pension saving for millions of workers. The Government are committed to looking at long-term steps we can take to further improve pension outcomes.
I have completed this year’s annual statutory review of the thresholds within automatic enrolment. The main focus of this year’s annual statutory review of the AE earnings trigger and lower and upper earnings limits of the qualifying earnings band—the AE thresholds—has been to ensure the continued stability of AE for employers and individuals. It is important that AE works for individuals, supporting those for whom it makes economic sense to save towards their pensions while also ensuring affordability for employers and taxpayers.
The thresholds review has therefore concluded that all AE thresholds for 2025-26 will be maintained at their 2024-25 levels.
The 2025-26 annual thresholds
The automatic enrolment earnings trigger will remain at £10,000.
The lower earnings limit of the qualifying earnings band will remain at £6,240.
The upper earnings limit of the qualifying earnings band will remain at £50,270.
The analysis supporting the review will be published and a copy will be placed in the Library of the House. It will be available on the www.gov.uk website, following publication.
[HCWS376]
Women’s Changed State Pension Age: Compensation
Torsten Bell Excerpts(1 month, 1 week ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Secretary to the Treasury (Torsten Bell)
It is a pleasure to serve under you today, Dr Murrison.
I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for securing a debate on this important topic. I also thank him, if slightly less enthusiastically, for its timing, which is on my first day in office. That fact also explains the delay in answering the named day question put by the hon. Member for Torbay (Steve Darling), which he referred to in his contribution to the debate.
I am under no illusion that everyone in this Chamber, or almost everyone in this Chamber, will agree with everything that I am about to say. However, all of us who have listened to this debate and to the important points made by right hon. and hon. Members have benefited from it, and we all recognise the context of this debate, which is the squeeze on living standards that has affected women born in the 1950s just as it has the entire country.
The issues that we are discussing today are important to many women, including my aunt in west Wales, who was born in 1955 and who pays particularly close attention to these issues. I spoke to her last night as part of my preparation for this debate and she would agree with the points made by the hon. Member for Lagan Valley (Sorcha Eastwood), and by my hon. Friend the Member for Clapham and Brixton Hill (Bell Ribeiro-Addy), that women of her generation have faced many difficulties and particular discrimination. People have spoken powerfully about that.
It is therefore right that this debate gives the long-held concerns of those women the consideration they deserve, just as it was right that the Government considered those concerns in making the decision that we are debating today. That is also why my predecessor, my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq), was the first Minister in eight years to meet WASPI Ltd, why the Government considered the ombudsman’s investigations and reports in detail, and why we look closely at what Parliament has said on this subject. Although I understand that the outcome was disappointing for many, the decision was based on the evidence.
Before I set out how we reached that decision, as the hon. Member for East Wiltshire (Danny Kruger) requested, it is worth reiterating the point that several Members have made: the ombudsman’s report was not about the decision in 1995 to increase the state pension age for women, or the decision in 2011 to accelerate that increase. Those decisions were the focus of remarks by many Members, including my hon. Friend the Member for South Shields (Mrs Lewell-Buck). They were taken by Parliament, including by many Members who are here today, and they were upheld by the Court of Appeal in 2020.
Sir John Hayes
I welcome the Minister to his place; I appreciate that this debate is his first outing and his comments about the timing are well made. However, the WASPI campaigners have never made that case; they have never said that they were against the equalisation. What they said, and rightly so, is that they were not properly informed and that is precisely what the then ombudsman confirmed in his report. Will the Minister just answer this simple question? The ombudsman said that he felt it was unlikely the DWP would respond to his report—it was sad that he should have to say that. The ombudsman proposed—unusually, in his words—that the matter be laid before Parliament. Will the Minister use his endeavours to ensure Parliament gets to vote on the ombudsman’s recommendations?
Torsten Bell
We have already had a long statement in the main Chamber. The point of debates like this one today is to make sure that the Government are held accountable for their decisions.
Torsten Bell
I will make some progress and give way later on. There has also been, as has been raised, the opportunity for all parties to call for more time and for votes in the main Chamber. I am sure the right hon. Member for South Holland and The Deepings will take that up with his party in the months ahead. I will make some progress and take more interventions as we proceed.
The ombudsman’s investigation concerned the more specific question of how changes in the state pension age were communicated to women, like my aunt, born in the 1950s. The Government started sending personalised letters in April 2009, but the ombudsman concluded we should have started 28 months earlier. My right hon. Friend the Secretary of State has apologised for that delay. We are determined to learn the lessons so that we avoid similar mistakes happening again. First, we will work with the ombudsman to develop a detailed action plan, identifying and addressing lessons from this and other PHSO investigations. Secondly, we are committed to providing clear and sufficient notice of any changes in the state pension age so that people can plan for their retirement. Thirdly, the Secretary of State has directed the Department to develop a clear and transparent communication strategy for state pension changes; work on that has already begun. This will build on changes that are already under way, such as our online “Check your State Pension forecast” service, which provides a forecast of the level of state pension, but also information about when people can take it.
The ombudsman looked at six cases and concluded that DWP provided adequate and accurate information on changes to the state pension age between 1995 and 2004. However, they also found that decisions made between 2005 and 2007 led to a 28-month delay in sending out letters to women born in the 1950s, many of whom are here with us today. The ombudsman said that those delays did not result in women suffering from direct financial loss, but that there was maladministration, and we agree.
Ayoub Khan
In spite of what the ombudsman has recommended, it is clear that the current Prime Minister recognised and advocated throughout the country that WASPI women were dealt an enormous injustice. It is a principle of democracy where we advocate for something when we want power, we ought to deliver once we get power to maintain trust and confidence. In spite of what the ombudsman recommends, does the Minister agree that the Prime Minister should honour what he advocated?
Torsten Bell
I thank the hon. Member for his intervention. The Labour party did oppose the acceleration of the state pension age in the early part of the last decade, but he and many other Members will have noticed very viscerally that the Labour party lost many elections since then. Parliament made a decision and the courts have since endorsed that decision. There was maladministration and we must learn the lessons.
Grahame Morris
I appreciate that being newly in post is difficult, but can I clarify something? The Opposition spokesman, the hon. Member for East Wiltshire (Danny Kruger), said that the changes were introduced in 1995—I believe under John Major—but the acceleration of the changes was in 2011-12, under the coalition Government. I think Steve Webb was the pensions Minister. My hon. Friend the Minister says that there was no financial loss, but there must be a financial loss for the women affected. We could argue whether that is justified. We certainly cannot argue that a majority in Parliament passed it. The women must have suffered a financial loss because of having to wait another six years before getting their pension.
Torsten Bell
I thank my hon. Friend on two fronts for his intervention. First, because he has reinforced the point that I just made, which was that we are struggling to distinguish between the rights and wrongs of the original decision about the state pension age, the equalisation in 1995, the acceleration in 2011 and the ombudsman’s report, which is focused narrowly on the communication of those decisions. On a second front, he reminds us that it was in fact George Osborne who said that the acceleration of the state pension rises was the single biggest saving that he made. He boasted about it, but that is a separate issue.
Torsten Bell
I think I should make some progress and give way later. I want to get on to the bit that most Members might not agree with, but at least will explain what we are doing, because we do not agree with the ombudsman’s approach to injustice or indeed to remedy. The right hon. Member for New Forest East (Sir Julian Lewis) and the hon. Member for Salford (Rebecca Long Bailey) rightly noted that is unusual, and it should be unusual. However it is also not unprecedented.
The decision not to introduce a compensation scheme was difficult and complex. The ombudsman assumed, despite evidence to the contrary, that sending letters earlier would have fundamentally changed what women knew and how they acted. However research from 2014 shows that only one in four people who are sent unsolicited letters actually remembers receiving and reading them. The ombudsman does not address this evidence.
Neil Duncan-Jordan (Poole) (Lab)
I am grateful to the Minister for giving way. Will he confirm whether the Government’s decision and their claim that only 10% of women affected were unaware of the state pension change is based on a survey from 2006 involving just 210 respondents?
Torsten Bell
If my hon. Friend will allow me to make some progress, I will come to exactly that point shortly.
There was considerable awareness that the state pension age was increasing. I think everyone agrees on that even if they do not agree about the research itself. The research used by the ombudsman, from 2004, shows that 73% of people then aged 45 to 54 were aware that the state pension age was going up. Further research shows that, by 2006—when the ombudsman finds that the direct mailing should have begun—90% of women aged 45 to 54 were aware that the state pension age was increasing. We therefore cannot accept that, in the vast majority of cases—and I appreciate it is in the vast majority of cases—sending letters earlier would have affected whether women knew their state pension age was rising or increased their opportunities to make an informed decision. It would not be reasonable—
Sir John Hayes
I am extremely grateful to the hon. Gentleman for giving way to me for a second time. To be clear about this: there are two issues at stake here—how many women knew, and how communications would have affected that. The fact of the matter is that the ombudsman’s report—I have it in my hand—says
“Research reported in 2004 showed that only 43% of all women affected by the 1995 Pensions Act knew their State Pension age was 65, or between 60 and 65.”
That is a clear majority of women who did not know. Therefore the only debate is whether communicating with them would have been effective. As my hon. Friend the Member for East Wiltshire (Danny Kruger) said, if it would not have been effective, what is the point in Government communicating at all?
Torsten Bell
I was not going to go into this detail, but the right hon. Member for South Holland and The Deepings is inviting me to return to some of my past lives with the details of surveys. The 43% figure that he is referring to refers to all women. What the ombudsman did not do is look at the same survey and look at the women who were affected by this change, who were obviously slightly later in life and much more likely to know about their state pension age. That is where the higher figures I am quoting come from. It is from the same survey as used by the ombudsman, but it is focused on the women who are actually affected by the change.
Richard Burgon
I thank the Minister for giving way and I congratulate him on his appointment. However, to get to the crux of this: when the decision our Government have made on this was announced—and there is much to be proud of in what it has done since the general election—my jaw hit the floor. I was flabbergasted. It is my belief that the vast majority of Labour MPs could not believe it when it was announced. That pales into insignificance compared to the reaction of the WASPI women who I and others have been proud to support in my Leeds East constituency and elsewhere. My last point is that, before this decision was made, I said to the WASPI women outside Parliament that justice delayed is justice denied. This is worse than that. I thought I was just trying to compel our Government to hurry up and make a decision. This is not justice delayed is justice denied. As it stands, unless we do something, this is justice denied full stop.
Torsten Bell
I thank my hon. Friend for his intervention and for his brief congratulations on my appointment prior to his wider comments. I would say gently that he and I both stood on the same manifesto which did not promise to provide compensation, and lots of Members have talked about trust in this Chamber. There was a clear choice not to make that promise in the manifesto.
Torsten Bell
I really must make some progress because we are about to run out of time.
It would not be a reasonable or fair use of taxpayer money to pay compensation to people whose circumstances would be the same today even if the maladministration had never occurred. A compensation scheme would cost up to £10.5 billion, less than the scheme previously proposed by the right hon. Member for Hayes and Harlington (John McDonnell) but still a significant amount.
The ombudsman is clear that, as a matter of principle, redress and compensation should normally reflect individual impact. The Department considered at length whether a tailored scheme could be delivered, but it was simply not a viable option. The ombudsman’s report acknowledges the cost and administrative burden of assessing the individual circumstances of 3.5 million women born in the 1950s. Indeed, it took the ombudsman nearly six years to investigate just the six sample cases. To set up a scheme and invite 3.5 million women to set out their detailed personal circumstances would take years and thousands of staff.
Jeremy Corbyn (Islington North) (Ind)
Will the Minister give way on that point?
Torsten Bell
I must make some progress.
We also do not believe that paying a flat rate to all women would be a fair or proportionate use of taxpayers’ money. I want to address the questions asked by several hon. Members about the specific research findings. It is important to say that the evidence on what women knew about the state pension age changes is robust. The same research was used by the ombudsman, who clearly did not have concerns about its validity.
I have heard hon. Members make powerful speeches today and I understand the strength of feeling on this issue, not least from my aunt. Many women born in the 1950s worked hard in paid jobs, often balancing that with raising a family. The Government have a responsibility to take their concerns seriously, which is why Ministers listened, reflected and carefully considered this complex decision. As custodians of the public purse, however, we must also ensure that decisions are rooted in evidence and are fair to everyone.
The fact remains that the vast majority of women knew that the state pension age was increasing. Even for those who did not, we know that sending letters earlier would not have made a difference in most cases. [Interruption.] Although I know that that decision will be disappointing, as we are hearing, and many have been frustrated by watching this debate drag on for years, we believe it is the right course of action. Of course, it is also right that the Government should be held to account for that decision, as is happening today.
Jeremy Corbyn
I congratulate the Minister on his appointment. I think I am right in saying that it is unprecedented for the Government to reject in its entirety an ombudsman’s report and offer absolutely nothing. Those women were led up the garden path in the last election, and before that, by people saying that compensation was going to be paid. The Minister needs to explain why the Government are simply ignoring the plight of those women.
Torsten Bell
It is an important issue, and we have been listening to the plight of those women for many years—and rightly so. Important and powerful cases have been made by many hon. Members, but I have set out why the Government have made that decision.
We will continue to help women born in the 1950s and pensioners across the UK by investing a crucial £22 billion into NHS England this year and next, with consequentials for the Welsh and Scottish Governments.
Torsten Bell
No, I will not.
The biggest betrayal of our older generations is the state of our health service. We will also boost the state pension by up to £1,900 by the end of this Parliament. As the new Pensions Minister, I know that nothing is more important than providing a foundation for the secure retirement that everyone deserves after a lifetime of work.
Oral Answers to Questions
Torsten Bell Excerpts(3 months, 1 week ago)
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Sir Stephen Timms
As I mentioned earlier, we are committed to reviewing universal credit. The way it works means that in each assessment period—each month—there is a new calculation based on the income that the person has received, as reported by His Majesty’s Revenue and Customs. However, I would be very happy to meet the hon. Gentleman to talk about how the system needs to be improved further.
Torsten Bell (Swansea West) (Lab)
Sir Stephen Timms
My hon. Friend is absolutely right. The threshold will increase on 7 April next year, and all current claimants will receive an annual uprating letter in the spring that will set out the new limit. As I mentioned a moment ago, 60,000 new unpaid carers will also become eligible for the allowance at that point.
Oral Answers to Questions
Torsten Bell Excerpts(4 months, 2 weeks ago)
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Sir Stephen Timms
I am grateful to the hon. Gentleman. I am not familiar with the arrangements in Northern Ireland, but certainly in the rest of the UK it is very clear that contractors ideally need to pay up-front, buy tickets and give them to the jobseeker before they embark on their journey, or, if not, reimburse them very quickly on production of a receipt.
Torsten Bell (Swansea West) (Lab)
The Secretary of State for Work and Pensions (Liz Kendall)
Tackling child poverty is a top priority for the new Government, and a personal priority for me. Children cannot fulfil their potential without food in their belly or a decent roof over their head, and we cannot fulfil our potential as a country when the talents of so many are left behind. That is why our new child poverty taskforce will drive action across every area of government to drive up family income, drive down family costs and give every child the best start in life.
Torsten Bell
I welcome the establishment of the child poverty taskforce. How will the taskforce ensure that lessons, including on the role of housing costs in driving up relative poverty and the necessity of growth to drive down absolute poverty, will be learnt from previous attempts to drive down child poverty in Wales and across the UK?
Liz Kendall
My hon. Friend makes a very important point about learning the lessons from the last time we were in government and lifted more than 600,000 children out of poverty, and looking at similarities and differences, not least that there are more children growing up in poverty in households, whether in the private rented sector or in social housing, and that there are more children growing up poor in a household where somebody works. Getting and creating more good quality jobs, and helping families into those jobs, is absolutely a crucial part of our child poverty plan.