Cost of Living Increases: Pensioners — House of Commons, 2022-03-21
Topic: Social Welfare
Emma Ann Hardy (Labour, Centre-left): When I was little, I grew up next door to a wonderful couple called Marg and Ray. Marg was like a grandma to me. Sometimes when Mum was busy with my younger sister, she used to send me with a box of toys through the hole in the fence to Marg and Ray’s for the day to be looked after by Marg. I remember very distinctly a few times walking with her to the post office where she would go and get her pension, in cash, then coming back and sitting chatting to her in the room where we spent most of our time. There was a big sideboard in there and she would put different parts of cash into different areas of it. When I asked what she was doing, she would say, "That’s the money for my electric bill and that’s the money for this other bill", separating out all the cash into the different compartments. She was terrified of getting into debt. Although she did not have much money, she never owed anybody anything, and she was fiercely proud of that When I was out recently talking to residents in the Pickering ward in Hull, I met some people who reminded me exactly of her. I talked to one elderly lady who told me the same thing about how she had never owed anyone anything. She was fiercely proud of the fact that she would never owe anyone a penny. I was trying to talk her into setting up a direct debit. I said, "If you set up a direct debit for your council tax and your bills, you get them cheaper." She said, "No, I’m not setting up a direct debit. I couldn’t be owing them that money—I wouldn’t know what was going out each week or each month." She was absolutely opposed to the idea of having a direct debit even though I was saying that she was paying more for her energy bills because she had a prepayment meter I have brought to the Minister’s attention before the issue of people with the least money paying the most—the poverty premium—and I will talk about it briefly now. I have spoken to many elderly people who have prepayment meters because they have a traditional and, I have to say, probably quite right idea that people should not owe money and should pay for what they want up front. It is not a fair system, however, as I have discussed with the Minister in the Treasury Committee; I hope that those conversations will be ongoing about how we can fully address the poverty premium A study by Fair By Design has shown that the poverty premium costs the average low-income household an extra £490 a year—that is how expensive it is to be poor. For more than one in 10 of those households, however, it costs an extra £780 a year. It is not a fair system. To give other examples of the poverty premium, it is why people end up paying more for car insurance or life insurance in areas of greater deprivation and why people pay more for credit and for all financial services when they have the least money. Our system is set up at the moment so that the poorer someone is, the more they pay. That is not fair and it is a huge contributing factor to the cost of living issues that pensioners face The highest poverty premium in Hull West and Hessle is area-based insurance. Constituents currently pay in total £1.3 million more for their insurance if their postcode is considered higher risk. As I say, I have mentioned that to the Minister before and he acknowledged that there is more to be done. When he comes to the Dispatch Box, I hope that he will talk more about what exactly will take place I intervened on the Secretary of State earlier to draw attention to concerns around the prepayment meter and how exactly people will get the £200 back, but there is also an issue with the direct debit. We have a situation in Hull where the money back on council tax was meant to be paid to people through reductions in their direct debit, but, of course, families who are in insecure work—not just pensioners—will face problems: they do not set up direct debits because they cannot guarantee how much money they will have each month Although I believe that the Minister is trying to take some actions to address the issue, there is a failure to really understand what life is like for many people who do not have direct debits and who are still scared of debt and use prepayment meters. The failure to design policies that address the poverty premium mean that, once again, the poorest pay the most.