Social Security (Up-rating of Benefits) Bill Consideration of Lords
amendments Madam Deputy Speaker (Dame Eleanor Laing) I must draw
the House’s attention to the fact that financial privilege is
engaged by both Lords amendments. If the House agrees to either
Lords amendment, I shall ensure that the appropriate entry is made
in the Journal. Clause 1 Up-rating of state pension and certain
other benefits following review in tax year 2021-22
17:52:00...Request free trial
Social Security
(Up-rating of Benefits) Bill
Consideration of Lords amendments
Madam Deputy Speaker ( )
I must draw the House’s attention to the fact that financial
privilege is engaged by both Lords amendments. If the House
agrees to either Lords amendment, I shall ensure that the
appropriate entry is made in the Journal.
Clause 1
Up-rating of state pension and certain other benefits following
review in tax year 2021-22
17:52:00
The Parliamentary Under-Secretary of State for Work and Pensions
()
I beg to move, That this House disagrees with Lords amendment
1.
Madam Deputy Speaker
With this it will be convenient to consider the Government motion
to disagree with Lords amendment 2.
The Social Security (Up-rating of Benefits) Bill is a one-year
Bill by reason of the pandemic. Last year, as you will be aware,
Madam Deputy Speaker, we changed the law for one year to increase
state pensions by 2.5% at a time when average earnings had fallen
and consumer price inflation had increased by half a percentage
point. If we had not taken this action, state pensions would have
been frozen.
This year, average earnings growth is estimated to be unusually
high, distorted by the cumulative effects of a natural economic
reaction to the coronavirus pandemic and the response to the
supportive measures introduced by the Government to protect
livelihoods. The figure for average weekly earnings from May to
July—the measure used for uprating earnings-linked benefits—has
grown at 8.3%, which is over two percentage points higher than at
any time over the past two decades. Recognising this
covid-related distortion, the Government are setting aside the
earnings link for one more year, 2022-23, and continuing the
double lock of at least inflation or 2.5%. The triple lock will
be applied again in the usual way for the basic and new state
pensions from the following year.
(East Ham) (Lab)
Of course I understand why the Government have decided not to
increase the state pension by 8%, but is it still their intention
that the value of the state pension should, over time, at least
keep track with earnings?
The right hon. Gentleman will be aware that we remain committed
to the triple lock. This is a one-year-only Bill. This will be a
continuation of the policy that the Government introduced as part
of the coalition in 2010 and have continued to pursue on an
ongoing basis since then. There is no intention to change
that.
rose—
I will make some progress.
It is right that I address these Lords amendments, Madam Deputy
Speaker, because, as you rightly outlined, they engage financial
privilege in that they interfere with the financial arrangements
made by the elected House of Commons. That alone, I respectfully
submit, is sufficient reason to disagree with the Lords
amendments. However, it is also right that I address directly the
point that was made by the House of Lords that invites the
Secretary of State to measure earnings as if they were not
actually growing by 8.3%. I assure the House that there is no
robust way of calculating them as if they were not.
The independent Office for National Statistics has responsibility
for producing economic statistics to the highest possible
standards. ONS experts investigated whether it was possible to
produce a single robust figure for underlying earnings growth
that stripped out impacts from the pandemic, and concluded that
it was not possible. Alongside the actual earnings growth
figures, the ONS suggested a possible indicative range of 3.6% to
5.1%. These figures do not have national statistics status.
Indeed, the ONS itself includes heavy caveats on the issue and
advises caution in approaching it. The Bank of England also cast
doubt on identifying a figure that could be relied on. The ONS
said:
“There are a number of ways you can try to strip out these base
effects, but no single method everyone would agree on. We have
tried a couple of simple approaches…Neither approach is
perfect…Our calculations of an underlying rate are there to help
users understand base and compositional effects, but…there
remains a lot of uncertainty about how best to control for these
effects.”
It said that the statistics therefore “need to be” treated “with
caution”.
We believe it would be reckless in procedure and in law for this
or any other Government to set a precedent for uprating benefits
or pensions using a methodology that is not robust and for which
there is no consensus. That is why the Government have decided to
suspend the earnings link in this year of exceptional and
anomalous earnings growth. Instead, we decided to apply a double
lock underpinned by the established consumer prices index
published and approved by the ONS. This approach was also
recommended by the Social Market Foundation and other
commentators, and very strongly by this House on Second Reading,
Report and Third Reading. That is the legislation that this House
passed to the Lords, and that is the legislation I would urge
this House to send back to the Lords.
I remind the House that over the two years of the pandemic the
Government will have ensured that the pensions covered by this
Bill will have increased by much more than prices, by reason of
the 2.5% increase last year and the link to CPI this year. In
those circumstances, I commend this House to reject the House of
Lords amendments and agree that we proceed with this one-year
Bill by reason of the pandemic.
(Stalybridge and Hyde)
(Lab/Co-op)
Whatever else could be said about the House of Lords, it is a
place that genuinely contains a great deal of expertise on the
subject of pensions. We are fortunate to have that expertise in
Parliament and we should be prepared to listen to it. Having
studied the exchanges in the Lords, I feel that the Government’s
positions on this matter have not held up well under scrutiny,
and the debate has moved on considerably since we last discussed
it here.
Labour will therefore vote to accept the amendment put forward by
the former Conservative Pensions Minister , which was well argued
and handsomely carried, but which also most closely reflects our
own position on these matters. That is to say, we accept, as I
have said clearly and repeatedly, the Government’s case that the
true figure of earnings growth in the UK is not 8.3%. It would be
absurd to maintain that that is what is happening to our
constituents’ wages right now. Labour supports the triple lock.
We believe the Government’s manifesto commitment should be
binding and that the connection to earnings in the uprating
decision for this year should remain.
In her remarks, made it clear that she
was not proposing a specific uprating figure by proposing this
amendment. That is important. It seems to me that all
Conservative MPs could vote for this amendment, honour their own
manifesto commitment, and still address the problem of how the
pandemic has distorted the earnings data. It would just require
the Government to effectively make an assessment of whether real
wage growth is higher or lower than CPI inflation, and, if
higher, use that figure.
When we last held a debate on this in the Commons, the Government
said that that would not be legally sound, but the Lords debate
knocked that down fairly easily. As said, for a judicial
review to occur, the figure the Government used would have to be
found to have been brought about by the Government acting
irrationally. That is something we can never rule out with this
Government, but it should be more than possible to avoid that. If
I may say so, one of the reasons the Government lost this vote so
badly in the Lords was their tendency to rely on short-term,
inconsistent arguments to bounce from one day’s headlines to
another’s.
The hon. Gentleman criticises the Government for not coming up
with a solution, when he is unable in any way to come up with a
solution or figure himself, as are the Office for National
Statistics, the Bank of England and all other reputable
organisations. In fact, the House of Lords did not come up with a
figure, so what, pray, if he would enlighten the House, is the
precise figure that he would see pensions increase by?
18:00:00
I am grateful for the Minister’s intervention. I am about to
explain why he has got himself and the Government into this
position.
What figure?
With respect, the Minister just needs to listen to this point. He
stands at the Dispatch Box and, like all Ministers, tells us that
black is white. For instance, when the Government reacted to the
crisis of their own making—when we saw the pumps run dry and the
shelves go sparse—they claimed to the country that this was a
secret masterplan towards a high-wage economy that they had had
all along. Now, we are having to see the Minister and the
Government tie themselves in knots again, because he has been
sent here to make the case, which we have heard him put very
well, that the figure is too distorted and therefore we need this
primary legislation, yet—and this is the problem,
Minister—according to the Prime Minister, wages are up, workers
have never had it so good and that is why the Government can cut
£20 a week from universal credit. They are making two completely
opposing arguments. We do not even know whether the Government
believe that wages are rising faster than inflation. I politely
say to the Minister that they cannot expect to have it both
ways.
I will repeat a number of points that colleagues may have heard
me say before, but I feel they need to be repeated in light of
some of the media comments on the Bill. The uprating of the state
pension is relevant to millions of pensioners in this country,
but it is wrong to present it as an issue of intergenerational
unfairness. That is because these decisions are also
fundamentally about how we ensure that the state pension is
indexed and retains real value for people who are in work today
when they come to retire. This Government have been grossly
unfair on people of working age, but frankly that is due to the
burden of taxes they have inflicted on workers, rather than
through the operation of policies such as the triple lock.
I hope the Minister took on board the comments made about
pensioner poverty in this House and the other place. The
Government’s use of what they call absolute poverty, which in
reality is a measure of poverty relative to a fixed line in 2010,
is unsatisfactory because not only does it ignore the statistical
evidence, which is that pensioner poverty is now rising after it
fell considerably under Labour, it also limits a serious debate
on the drivers of that rise. The big picture is that the OBR
predicts that as a country we will be spending an extra £6
billion a year, year-on-year, on pension-age benefits every year
up until 2024-25. That is the year that the forecasts in the
welfare trends report go up to, so it will likely continue to
rise after that. Pensioner poverty is going up as spending rises
substantially. We should be having a much more substantive debate
about that, looking at housing costs, energy prices, food and
access to good financial and investment advice. The way in which
the Government present their own progress means that any real
wage growth over the last decade allows them to claim that
poverty has declined, so when the Minister says that 200,000
pensioners have been lifted out of poverty since 2010, the
reality is that that is a very poor level of performance compared
with all previous Governments. Poverty is always relative,
because it is a measure of whether someone has the means to live
a fulfilling life in the society of which they are a member. That
is not just a left-of-centre viewpoint, but one that until
recently was accepted by Conservatives, too.
However, to return to the matter at hand, the House of Lords has
sent us an amendment that should genuinely command the support of
the whole House. It requires the Government to maintain the
earnings link in their manifesto promise, while still making
allowance for the pandemic. This Government have dragged politics
through the gutter in recent weeks, with stories of sleaze,
corruption, contracts for donors and second jobs from Caribbean
islands. I could go on, but the point is that public trust in
this place matters. When the Government muddy our democracy in
the way that they have, they cannot then turn to the public and
ask voters to simply take them at their word. For public trust to
return, the first step has to be for the Government to keep their
promises. Today, Labour will therefore support the amendment that
would allow the Government to keep their promise on the pensions
triple lock.
The Lords have sent us a very reasonable set of measures, and
frankly I see no logical reason not to support them if we want to
protect the link between earnings and pensions. If the Government
are unable to do so, they should admit what is really going on:
they are using the pandemic as a smokescreen to scrap the triple
lock and pocket the savings. They should cut the obfuscation,
keep their promises and vote for the Lords amendments.
(North Norfolk) (Con)
As the MP for North Norfolk, which has some of the highest
numbers of older people in the country, you can understand, Madam
Deputy Speaker, why I want to speak briefly in this debate.
First, we have come back to basics. I was a finance director and
a chartered accountant before I came into this place, so I have a
reasonable grasp of statistics, and it is fair to say that this
Government have, to the tune of around £400 billion, safeguarded
the country through a pandemic that no one ever expected. Not
only that, but the national debt sits at some £2.2 trillion, so
it is understandable that we are sitting here this evening being
extremely careful and prudent about what we do with our public
finances.
The electorate, as we have seen many times before, will forgive a
Government many things, but they will not forgive a Government
being reckless with the public finances. We have to understand
that, much as we would like to increase pensioners’ pay, every 1%
increase costs the Exchequer a billion pounds. To put that in
perspective, with an increase of some 8% to 9%, we are looking at
an increase of some £8 billion to £9 billion. I can therefore see
entirely how that would sit when we have to look in the eye of a
prison officer, a police officer, a teacher, a firefighter or any
other public sector worker who has seen their pay frozen for the
past year. That is the real context. It is about fairness and a
statistical anomaly caused by the dip, coming off furlough on to
100% pay and when the ONS statistics were taken. It has given
rise to this one-off statistical anomaly.
What the House of Lords has proposed is sensible, and I took that
to the Secretary of State to ask whether we could do something to
still honour the framework of the triple lock, while ensuring
that we have a sensible parameter to measure it by. The answer
that came back was exactly the same as the one the excellent
Minister just gave: we need a robust metric. We cannot just move
the goalposts and cherry-pick a point in time because the
argument does not fit at the moment. Many of my constituents have
written to me about this issue, and when a detailed reply has
gone back to them, a great number understand why we have this
one-off double lock.
In summing up, I say two things to the Minister. First, woe
betide us if we do not honour the triple lock next year. We have
some of the best public finances recovery in the G7, as the
Chancellor said the other week, so we must get back to giving our
pensioners the pay increases they absolutely deserve, because
they have paid in all their lives. Secondly, it would be
wonderful to go into the next election with the resounding
message that our pensions are good, honest pensions that people
have earned all their lives, at a level that people can be proud
of compared with Europe. Too often, our pensioners feel that is
not necessarily the case. I would like the Minister to ensure
that we put our pensioners at the front of the queue as we come
out of this pandemic. I wholly understand what he has said this
evening. I will be rejecting the Lords amendment, because it is
sensible to maintain the public purse in the best possible way at
a time like this, so that our country can rebound from where we
are at the moment.
(Glasgow East) (SNP)
It is a pleasure to follow the hon. Member for North Norfolk
(), who spoke about the risks
of throwing a billion pounds about here and there. I know he was
not in the previous Parliament, when the Government were propped
up by the Democratic Unionist party, but I recall them having no
great difficulty finding a billion pounds down the back of the
sofa. Indeed, I think the hon. Member for Strangford () was worth about £100 million, which is probably more
than Messi.
Unlike the Minister, I am glad to see the Bill back in the House
this evening, because the amendments passed by their lordships
give the Government an opportunity to perform a U-turn with
ermine grace and charm. Before it went back to the other place,
the Bill as originally drafted facilitated the British Government
breaking yet another manifesto commitment, namely the pensions
triple lock, which I remind the House all parties in this Chamber
committed to at the election fewer than two years ago.
Thankfully, the Bill was amended in the other place, and I am
grateful to for Lords amendments 1
and 2, which seek to restore the earnings link.
As we are relatively short on time, I will not go over some of
the meatier issues that I outlined on Second Reading, including
the Government’s repeated breach of their manifesto commitments,
the worrying trends in pensioner poverty, pension comparisons
with OECD countries and the—at best—disappointing lack of action
on pre-existing equalities that are baked into our pension
system. In speaking in favour of the Lords amendments, I will
outline why the SNP continues to vote to respect its 2019
election manifesto commitment and why the Budget has changed
things, which may result in more Opposition Members voting
tonight than on Second Reading.
The Minister will have familiarised himself with the House of
Lords Official Report, but in the interests of completeness and
for the benefit of Hansard, I remind the House of what said on the cost of
living crisis, which affects all the constituents we seek to
represent in this House. She reminded the other place of the
Government’s view that
“the 3.1% figure would still protect against rises in the cost of
living.”—[Official Report, House of Lords, 2 November 2021; Vol.
815, c. 1140.]
She quoted the Under-Secretary of State for Work and Pensions,
the hon. Member for Hexham () who said that that figure
“will ensure that pensioners’ spending power is preserved and
that they are protected from the higher cost of
living”.—[Official Report, 20 September 2021; Vol. 701, c.
86.]
However, the goalposts have moved, and the fiscal outlook is much
bleaker. The Chancellor conceded in the Budget that inflation in
September was already at 3.1% and would rise further. The Office
for Budget Responsibility has gone further, predicting that
consumer prices index inflation will reach 4.4% next year. It
went on to say that inflation
“could hit the highest rate seen in the UK for three
decades”,
which the House will know is about 7.5%. In reality, the Bank of
England’s chief economist is forecasting 5%. To be blunt, the
facts have changed and the Government must now change their
position at least to reflect the fiscal outlook, if not to
respect their manifesto commitment.
Pensioners across these islands are not immune from rising energy
and food costs, and we know that inflation is biting hard for
some of the most vulnerable people in our constituencies as we
approach a harsh winter. Last month, energy bills rose by 12%,
and food bills have also risen, so the Government must think
again.
(Strangford) (DUP)
The 12% figure is not reflected in Northern Ireland, where energy
prices have risen by some 30%, and the cost of living has also
risen by 20%. Does the hon. Gentleman agree that, for that
reason, we must support the Lords amendments for the
pensioners?
I will avoid going into energy policy in Northern Ireland, given
previous actions, but the hon. Member is right to place that on
the record. His constituents in Strangford should be grateful to
him not just for making that point but for backing the Lords
amendments when we come to the Division.
The Red Book suggests that, by scrapping the triple lock, the
Treasury will save £5.4 billion in 2022-23, £5.8 billion in
2023-24 and £6.1 billion in 2024-25. The Chancellor is clearly
balancing the books on the backs of pensioners who continue to
get a raw deal from a pensions system that they have paid into
their whole lives. I caution the Minister that that is an
electorally courageous move for a party that has generally
enjoyed higher levels of support among pensioners. Indeed, I will
be particularly interested to see how our Scottish Conservative
colleagues try to sell this latest broken promise to the
electorate north of Coldstream.
The SNP wholeheartedly opposes the British Government’s triple
lock betrayal and urges the House to support the Lords
amendments. There may be a couple of hundred extra MPs in the
Division Lobby with us tonight compared with the last time the
House looked at this in September, but we know that the Tory
Government will use their majority to plough ahead and vote down
their lordships’ amendments regardless. My constituents in
Glasgow East will therefore conclude once again that the House
does not work for pensioners and it certainly does not work for
Scotland. The only way to do things differently is with the
normal powers of independence, and I suspect that this tawdry
Bill will only hasten that cause further.
In my intervention on the Minister, I asked if it remained the
Government’s intention that the value of the state pension
should, over time, at least keep track with earnings. He declined
to confirm that it did, so it may be that the Government’s policy
has changed. Ever since Adair Turner’s pensions report was
published in 2006, Government policy has been that the state
pension should keep track with earnings, not just with prices as
was previously the case. I suppose we must conclude that there
has been a change in approach.
18:15:00
rose—
I will gladly give way to the Minister. Hopefully he will clarify
the position.
I think the right hon. Member misheard or misunderstood me. This
is a one-year-only Bill; after that, we revert to the current
legislation and state pensions will increase at least in line
with earnings. That is what I thought I made clear.
The Minister did indeed say that in response to my intervention,
but that does not answer the question. The question was: do the
Government intend the value of the state pension, over time, at
least to keep track with earnings? I was hoping that he would
reaffirm that. I do not think that is controversial—it is a
policy long held by the Labour Government, the coalition
Government and this Government—and I hoped that he would say that
that was still their intention, even though in the current year,
for reasons that we all understand, the value of the state
pension will fall significantly behind the increase in
earnings.
As I hope I made clear in my intervention, I think it is entirely
reasonable not to increase the state pension by 8% this year; I
completely understand the case for not doing that. It looks as
though we will get an increase of around 3%, in line with CPI.
The hon. Member for Glasgow East (), who spoke for the SNP,
talked about the likely rates of inflation, and, depending on
increases in prices and earnings next year, it is quite likely
that the state pension will never catch up with earnings unless
there is a catch-up initiative of some kind. The Lords amendments
would provide such a mechanism. If there is not a catch-up at
some point, that would be contrary to the Government’s long-held
intention that the state pension should at least keep track with
earnings. The fact that—as the Minister has now told the House
twice—it will get back in line with the triple lock next year
does not solve the problem, because there is a significant
backwards move this year. Will there be a catch-up initiative at
some point? It looks and sounds as though there will not.
Keeping the value of the state pension going up in line with
earnings was a key pillar of the new pensions framework set out
in the report by Adair Turner and his fellow commissioners John
Hills and Jeannie Drake, published in 2005 and 2006. The
settlement’s key elements were that the state pension should keep
track with the increase in earnings over time, and
auto-enrolment. It was accepted by the Government then and by
every Government since.
The importance of that needs to be spelled out. It is not just
about being more generous to pensioners and helpful to older
people. It is important because it ensures a sound foundation for
pension saving, so that people auto-enrolled into pension saving
through that successful initiative, which we have all celebrated,
are not being encouraged by the state into a bad deal. If the
value of the state pension will no longer at least keep track
over time with earnings, some people will be better off spending
their money now, rather than saving into the pension pot that
they are being auto-enrolled into, and later relying on the
means-tested safety net of pension credit.
If the state pension slips behind earnings, modest pensions
accrued through auto-enrolment will become worthless, because
those who claim them in due course will not get above the
means-tested threshold and they will still have to depend on
pension credit for their income in retirement, and the fact that
they have saved into a pension will do them no good at all. That
will be a growing problem if the level of the state pension is
allowed to slip behind the increase in earnings.
If that does happen, people who are looking forward and saving
but are going to end up with fairly modest pensions should
instead spend the money at the time they earn it, rather than
save it in a pension that, in the end, is not going to take them
above the means-tested threshold and so will not give them any
additional income. That is why what the Minister is arguing for
is such a threat to the success of auto-enrolment. Auto-enrolment
will no longer be a sound basis for pension saving if the level
of the state pension is allowed to drift below the level of
earnings.
People must be able to trust in the state pension under the
policies of the Government. They have been able to do so up to
now, and now they will not. That raises a pretty fundamental
question about the future of the Government’s pensions policy.
There is a real danger in allowing, almost by sleight of hand
albeit for reasons that we all understand and sympathise with,
the state pension to fall permanently behind the increase in
earnings and weakening the pension framework that, as far as we
all know, is still the basis of the Minister’s policy.
We should not allow that to happen. We need either a measure, and
the Minister needs to reassure us that there will be, such as a
catch-up initiative to make sure that the state pension over
time—not this year, but by next year or the year after—will keep
track with the increase in earnings, or the House needs to accept
the amendment agreed with a significant majority in the other
place, because that keeps the pension framework in place and
keeps it effective. There is a real worry if there is a
significant falling behind. If there is a 3% increase in the
state pension at a time when earnings have gone up by 8%, that
will be a one-off 5% fall in the state pension behind the level
of earnings. Depending on what happens to earnings growth, which
will certainly not carry on at 8%, and on inflation rises next
year, that fall could well be locked in for good and the pension
framework will have been weakened.
I hope that I have made it clear why this is actually quite
important. It is not just about whether we are being generous
enough to pensioners. The question is: are we keeping in place a
robust and reliable framework for pension saving based on which
people can plan with confidence for the future?
(Hayes and Harlington)
(Lab)
May I say that we in the Opposition, and I think Members on both
sides of the House, take pride in the expertise of my right hon.
Friend the Member for East Ham ()? Time and again, as Chair of
the Work and Pensions Committee, he has warned the House —both
sides of the House, at times—about the approach that needs to be
taken if we are to have a stable social security and pensions
regime. I pay tribute to the work he does.
I am an ardent advocate of the coalition Government’s policy on
the triple lock. That seems somewhat ironic, given the history of
this policy, but I am. The historical background is that I was a
total opponent of Mrs Thatcher’s breaking of the link between
pensions and earnings. To be frank, the state pension still has
not recovered from breaking that link. I was elected in 1997, and
at the end of Conservative rule in 1997 the basic state pension
would have been 50% higher in value if Mrs Thatcher had not
broken the earnings link in 1980.
From 1997, I prepared alternative Budgets to the new Labour
Budgets. had a sense of humour about
that, and when I was on a platform with him recently—when I was
the shadow Chancellor—he said, “Actually, he’s always been the
shadow Chancellor,” because I was producing alternatives to his
Budgets. In every alternative Budget, I put forward the
restoration of the link between earnings and pensions. I did so
because the breaking of that link had undermined the progress we
had seen until then in improving the state pension and lifting
pensioners out of poverty. That is why I was a strong supporter
of the triple lock when the coalition Government introduced it.
Despite a decade of the triple lock, however, the basic state
pension would still be 37% higher if the earnings link had been
maintained. That means that today a single pensioner on the basic
state pension would be £2,662 a year better off, and a pensioner
couple would be £4,277 a year better off, if the link had not
been broken by Mrs Thatcher all those years ago.
According to figures on pensioner poverty from Age UK, there are
2.1 million pensioners living in poverty in our country at the
moment, up from 1.6 million in 2014—a 30% increase. What is
interesting about this, and not shocking to some in this House,
is that the majority of pensioners living in poverty are women.
In addition, pensioners from black and Asian communities are
about twice as likely to be living in poverty.
What I find interesting are some of the individual examples we
can bring to the House about what this means. I remember that,
the last time energy prices rose, I had a constituent who used
her bus pass to stay on the bus all day to keep warm. Such
stories about the reasons why people were living in such fuel
poverty were not uncommon. I remind the House that this year fuel
bills are increasing on average by £139 and they are expected to
rise again next year, so I predict that we will have more of our
pensioner constituents going cold this winter and, if we are not
careful, in future winters as well, especially as, as has been
said, inflation is now likely to be 4% and some are even
predicting 5%.
I just wonder what this row is all about, because I support the
amendments. I would have given the 8%, because I do not believe
that people should break the principle of a manifesto commitment
in such circumstances and I believe the additional top-up would
have worked. However, the Altmann amendment is moving towards a
5% increase and the Government will award a 3% increase, so the
difference we are talking about—this is the argument—is about
£2.75 a week. Even if we went to the full amount of the 8%, there
would only be an additional £7 a week between the 3% and the 8%.
Are we really having a row in this House about robbing pensioners
of £2.75 a week? I just find it unbelievable that we can even
contemplate that.
I have seen the range of costings, but I have examined the DWP
estimates on the effect of the Altmann amendment. They said it
would cost £1.3 billion in ’22-23; that was in comparison with
the uprating with prices. I was in the House a few weeks ago. We
are arguing about an additional £1.3 billion for pensioners.
Actually, a £25 billion corporate tax break was given away by the
Chancellor in the Budget. It will be £12.5 billion next year.
18:30:00
On the issue about calculations, the Office for National
Statistics estimate of earnings growth in the period from May to
July was, as the Minister said, anything between 3.6% to 5.1%.
The argument now is that these figures are not robust enough. We
have had example after example in this House of the Government
plucking figures out of the air.
The Minister also said there is not sufficient consensus, but if
the Conservative party agrees, we can build consensus. When I was
in local government, we always looked for a rational decision. We
always used the Wednesbury principles: take into account all
relevant factors and dismiss all irrelevant ones. If we were to
come to a decision tonight in terms of the Wednesbury principles
of rational behaviour, it would be on the basis of a choice
between arriving at a statistic that is completely agreed by
everyone, and leaving pensioners in poverty next year and not
being able to afford their energy bills.
It just does not cut the mustard. The hon. Member for Glasgow
East () referred to the calculation
when the Government wanted to buy off the Unionists in Northern
Ireland. Figures were just plucked out of the air. The level at
which pay awards are being imposed at the moment across
Departments has no rational basis in the work or productivity of
the individual workers.
This is a question of whether we are in favour of pensioners
living in dignity in this coming period; whether we can ensure
they can turn on the heating and have some decent quality of
life; and whether we can, not lift more pensioners out of
poverty, but prevent more from falling into poverty. That is what
this decision is all about and that is why I support these
amendments. It cannot be right that we are cutting taxes to
corporations and introducing tax breaks, yet at the same time we
are preventing pensioners from having a basic decent pension.
I hear the Minister’s reassurances that this is for one year
only. I have been in this House too long though. We have been
promised something for one year only and then suddenly it has
become permanent. That is the big fear out there—that actually
there will be another special circumstance next year and the year
after, and, as my right hon. Friend the Member for East Ham
pointed out, we will lose the commitment given a number of years
ago that there would be the continuous link with earnings so the
pensioners of this country would share more equitably in the
wealth within our country. That is why I support these
amendments.
(North East Fife)
(LD)
rose—
(North Ayrshire and Arran)
(SNP)
rose—
Madam Deputy Speaker ( )
Order. This debate has to finish at 6.51 pm and I intend to bring
the Minister in at about 6.46, so I ask the two remaining
speakers to take about six minutes each.
When we first debated the changes to the triple lock in
September, the Secretary of State suggested we take advice from
my friend the former Pensions Minister, Steve Webb—with whom I
speak from time to time, the Secretary of State, who is now in
her place, and the Minister will be happy to know. We usually do
so when he is highlighting cases of people having lost out on
entitlements due to failures in DWP systems.
As well as holding the DWP portfolio for my party, I am here to
serve the interests of my constituents and I can tell Members
that I have not received a single email or letter supporting the
suspension of the triple lock. I have, however, received email
after email asking me to fight to maintain it and pointing out
that our state pension is already the lowest in Europe, with
people worrying how they are going to make ends meet this coming
winter.
On Second Reading, the Secretary of State told us this suspension
was to deal with a one-off anomaly caused by the pandemic. I
wonder whether she or the Minister actually engaged with the
Prime Minister on this in advance of Second Reading, because his
comments on the subject do not align with that argument. The
Prime Minister has told a very different story, where quickly
rising wages are not just desirable but an intended outcome of
Brexit. So I have to ask: whose explanation should Parliament
believe on these wage increases? Do the Minister and the
Secretary of State align with the Prime Minister on this now and
if so why are the Government intent on leaving pensioners behind,
far too many of whom are already on or below the poverty
line?
I am happy to support the Bill as it has returned to us from the
other place, which has worked admirably across the Benches to
find this compromise. The Chair of the Select Committee, the
right hon. Member for East Ham (), reminded us in his
considered contribution that this is not just about pensioners
now; it is about the young, people who cannot get on to the
housing ladder and whose wages have been suppressed. We in this
place need to ensure that the decisions we make about pensions
now give people the reassurance in future that there will be a
sustainable state pension for them to live on. The Bill in its
current form acknowledges the distortions to the labour market
caused by the pandemic, but also acknowledges that inflation is
rising. Under that Bill, pensioners will be able to keep the heat
on and afford their weekly shop.
I acknowledge that the hon. Member for North Norfolk () at least tried to justify
the Government’s position this evening, but I note that no other
Conservative Back Bencher has had the appetite to do so. There is
a simple choice before the House today. I cannot support the
Government’s amendments, which will cause such harm to so
many.
I rise to support Lords amendments 1 and 2. The Tory Government’s
abandonment of the link between earnings and pensions, smashing
the triple-lock manifesto commitment, is truly disgraceful. We
are told this is necessary because this year’s earnings measure
is “skewed and distorted”. There are many things swirling around
Westminster that are skewed and distorted, but the triple lock is
not one of them. The UK Government commitment to the triple lock
remains, we have been told today by the Minister, but he will
understand that that assurance is met with widespread scepticism
because today he is here to tell us why their breaking the triple
lock must proceed.
We in the SNP tabled an amendment to this Bill requiring the
Secretary of State to assess, and be held accountable on, the
impact that the legislation would have on levels of poverty among
pensioners in each of the devolved nations. It was shamefully
voted down by the Tories, and Labour abstained, which it will
have to justify to pensioners across the UK. Pensioners across
the UK, and certainly in Scotland, have been watching carefully
and will not easily forgive that betrayal.
This Government have not listened to pensioners and they have not
listened to Members of this House who have defended the triple
lock. I doubt they will listen to the Lords either, but I
sincerely hope the Minister will prove me wrong.
We have been told today by the hon. Member for North Norfolk
() that this would be
“reckless” with taxpayers’ money. I find that insulting and
wrong-headed, as will many of my constituents. What we have heard
shows that the fiscal restraint we are told is necessary is being
balanced on the back of pensioners, such as those in my
constituency. We have heard from my hon. Friend the Member for
Glasgow East () about how money can always
be found, and we need only look at the DUP deal to see that.
Money can be found when it is considered necessary.
Politics is about choices and choosing to break promises. Hard
commitments made to pensioners about the triple lock are being
broken. We are watching and our constituents are watching and
they do not approve. The Government tell us that wages are
rising, as we have heard, and we know that inflation is rising,
so what justification is there to break the triple lock—to change
the goalposts in the middle of the game?
(Glasgow North) (SNP)
Not only are the Government breaking their manifesto commitment
and doing away with the triple lock, but already pensioners—our
constituents—are in receipt of one of the lowest state pensions
in the whole of Europe. Does my hon. Friend share my confusion
that Conservative Members often seem to think that the current
state pension is an argument for the Union, as if, if Scotland
were independent, it would be even worse?
I absolutely agree with my hon. Friend that one of the so-called
Union dividends is a pension that is a pithy amount compared with
those in other developed nations.
There is genuine fear that this abandonment of the triple lock
will lead to permanent and more damaging actions against
pensioner incomes. The state pension is by far the largest source
of income for millions of UK pensioners, and the triple lock has
kept that secure throughout the pandemic. To break it now, as
inflation creeps up and the cost of living becomes increasingly
challenging, is a shocking attack on pensioner incomes, and it is
part of a wider and increasingly obvious narrative from this
Government. It is crystal clear, because we have the evidence. We
know that women born in the 1950s had their pension age increased
with little or no notice; we have seen unacceptable state pension
payment delays for new retirees, causing genuine financial
hardship and suffering; we have more than 2 million older people
living in poverty; and with the triple lock abandoned, many
pensioners are set to be £520 less well off next year. All of
that will do untold damage to pensioners.
I again urge the Government to stop attacking pensioner incomes
and at least keep one of their promises to the electorate by
retaining the triple lock and preventing more of our pensioners
from suffering hardship in old age. There is an opportunity today
to do the right thing. The Government must take this opportunity,
and they must take it with good grace.
I thank all colleagues for their contributions. The factual
reality of the situation is that this Government are spending
£129 billion on pensioners. That is £105 billion on the state
pension and £24 billion extra on the various add-ons for
pensioners, including winter fuel; free eye tests; bus passes;
free NHS, obviously; pension credit—I could go on in great
detail. My hon. Friend the Member for North Norfolk () asked whether the triple
lock will return. I can assure him that that is the case.
On that point, it is almost as though the state pension is a
charitable donation to pensioners. They paid for it, working
throughout their lives, through their taxes, their national
insurance—their contributions. Some of them served on our behalf
in the armed forces. They paid for this; it is not some
charitable donation by the Government.
There is so much that I could reply to; I could genuinely take
some considerable time replying to the right hon. Gentleman. Let
us start with this. During the last Labour Government, in which
time the right hon. Member for East Ham (), who is a former Pensions
Minister, another former Pensions Minister who is in the Chamber,
and the right hon. Member for Hayes and Harlington () were Members, did they in
any way link the state pension to earnings? Not on one single
occasion over 13 years. It is this Government—the coalition
Government and this Conservative Government—who have linked it to
earnings.
The right hon. Gentleman talks about the state pension. That is
paid for by the working taxpayer on an ongoing basis. The working
taxpayer is paying more for the state pension, and it is a larger
state pension than ever before; £129 billion is
spent—[Interruption.] A hundred and twenty-nine billion. He does
not want to hear it, because it is the largest state pension
there has ever been. Thirteen years of a Labour Government, and
what did they do? They never linked it to earnings. I remember
the 75p increase in state pension by . It is astonishing, the hubris
that the right hon. Gentleman comes up with.
The factual reality is that there was never a situation where the
Labour Government did anything like the coalition and
Conservative Governments did. I asked the hon. Member for
Stalybridge and Hyde (), who represents the
Opposition, to come up with a figure. You can search Hansard for
as long as you like, Madam Deputy Speaker; answer came there
none. There was not a single figure. The factual reality is that
the Opposition have no idea how they would approach this, they
have not come up with an individual figure, and they are not able
to do anything—
Will the Minister give way?
I will, for the last time.
With a view to trying to bring the heat down just a little, let
me ask the Minister this. He mentioned the commitment that the
triple lock would return next year. Would he be willing to put on
the record that, if the triple lock does not return next year, he
will resign from ministerial office?
It is in the Bill that it only lasts for one year. The hon.
Gentleman should really read the Bill. It is not that difficult;
it only runs to two pages and two clauses.
Will the Minister give way?
No. I have given way once already to the right hon. Gentleman,
and I have answered his point on two occasions.
The Bill is for one year only. After that, it will revert to the
current legislation, and state pension will increase at least in
line with earnings. The triple lock will, I confirm, be applied
in the usual way for the rest of the Parliament. I would point
out to the House that last year, earnings fell by 1% but we still
legislated to allow state pensions to be increased by 2.5%. As a
result of the triple lock, as I say, the full yearly basic state
pension is £875 more than if it had been uprated solely by
earnings. The increase is £2,050 in cash terms.
Will the Minister give way?
No. This is a two-clause Bill introduced by reason of the
pandemic. The law will last for only one year before reverting. I
commend the progress made by the Government on this issue, and I
invite the House to reject the Lords amendments.
Question put, That this House disagrees with Lords amendment
1.
Division 107
15/11/2021 18:45:00
The House divided:
Ayes: 300
Noes: 229
Question accordingly agreed to.
Lords amendment 1 disagreed to.
18:59:00
More than one hour having elapsed since the commencement of
proceedings on consideration of Lords amendments, the proceedings
were interrupted (Programme Order, 20 September).
The Deputy Speaker put forthwith the Question necessary for the
disposal of the business to be concluded at that time (Standing
Order No. 83F).
Motion made, and Question put, That this House disagrees with
Lords amendment 2.—(.)
Division 108
15/11/2021 18:59:00
The House divided:
Ayes: 299
Noes: 53
Question accordingly agreed to.
Lords amendment 2 disagreed to.
Motion made, and Question put forthwith (Standing Order No. 83H),
That a Committee be appointed to draw up Reasons to be assigned
to the Lords for disagreeing to their amendments 1 and 2;
That , , , , , and be members of the
Committee;
That be the Chair of the Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(.)
Question agreed to.
Committee to withdraw immediately; reasons to be reported and
communicated to the Lords.
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