Social Security (Up-rating of Benefits) Bill — House of Commons, 2020-10-01
Topic: Labor
Jonathan Neil Reynolds (Labour, Centre-left): Thank you very much, Madam Deputy Speaker, for calling me to speak on Second Reading of the Bill today. I would like to express my thanks to the Secretary of State and to the hon. Member for Glasgow South West (Chris Stephens) for the discussions the three Front Benchers have had in relation to this legislation As with so many things during the coronavirus pandemic, we find ourselves in an unusual situation that calls for an unusual course of action. It is an extremely sad and regrettable consequence of the pandemic that we expect that national earnings will be negative this year. That statistic tells its own story about the hardship many families are facing at the moment. However, the added complication this brings, as the Secretary of State explained, is that when earnings are negative, there is no legal power to increase state pensions at all, and this also affects the standard minimum guarantee in pension credit and some survivors’ benefits in industrial death benefit This is due to the drafting of the Social Security Administration Act 1992, and we need to correct that with the legislation before us today. As the Secretary of State said, there is a precedent for this. The previous Labour Government encountered a similar problem following the global financial crisis and brought forward similar legislation. I therefore believe that the correct and constructive course of action today is to ensure the passage of these powers through the House of Commons. It is clearly in the national interest and in the interests of Britain’s pensioners to address this problem The Bill is extremely limited in length and in scope, applying only to this financial year. However, I believe this is an appropriate opportunity to seek some information regarding the Department’s intentions in this area. I was pleased to see in the explanatory notes to the Bill that the Government stated they wanted the Bill passed "to meet its commitment to the Triple Lock." In the comments the Secretary of State has made, she has reiterated that commitment, which I very much welcome. Labour believes that everyone deserves financial security in retirement, and we believe the cornerstone of that is a decent state pension, properly indexed to ensure it keeps its value for future generations of pensioners. That is why we will hold the Government to account to ensure that they keep their manifesto promises One of the things I find so frustrating in the national conversation about pensions is the way that rising longevity is sometimes presented as a public policy problem, rather than something to be celebrated. For many of us in the Chamber today, our grandparents worked very hard lives, yet had very little by way of retirement. My grandfather, for instance, worked 51 years down the same coalmine, yet never owned his own home or was able to travel abroad. So we should celebrate, as a country, that in a relatively short space of time our expectations of retirement have been transformed, and we should thank those who came before us who founded the national health service, raised the school leaving age and improved health and safety in the workplace, because that increased longevity. It is their legacy, and it is an achievement, rather than a problem We know and appreciate that the pandemic poses additional problems for the way in which we calculate how we should uprate pensions. The volatility of earnings in the crisis means that we are likely to be faced by the opposite problem when we are discussing this in future years—when it comes to the calculation, for instance, for 2022. Distortion in the earnings statistics as wages bounce back from their 2020 fall due to furlough and unemployment could create a significant one-off jump in earnings in 2021. I would like to know from the Secretary of State how her Department is planning for this eventuality when calculating the triple lock One suggestion, as outlined in a recent report by Lane Clark & Peacock, is that the disruption in earnings statistics could be smoothed by applying the principles of the triple lock over two years instead of one. Its conclusion is that, if this is applied, the most likely outcome would be that the triple lock could be delivered over two years by subsequent increases of 2.5% in both April 2021 and April 2022. I know many people are anxious to know what the Government are planning to do in this scenario. I wonder if the Government could elaborate on what options are being considered, and if there is an intention to continue the triple lock across future years of this Parliament in line with the manifesto commitment from the Government in December last year Finally, I would appreciate it if the Minister, when summing up, confirmed the Government’s intentions on the timeline for bringing forward proposals for the annual uprating of all social security benefits. At a time of such significant national economic insecurity, there is understandable anxiety about this. That is the point at which we will be able to have a full and involved debate on the Floor of the House on what is being proposed I would say, on behalf of myself and my hon. Friends, that when the Government themselves admit that a further 4 million jobs could be lost, any suggestion that benefits for unemployed people could be cut in April would be met with the strongest opposition from these Benches. Today, however, I welcome this Bill to ensure that the Government can fulfil their promise to pensioners. We want to make Britain the best country in the world for people to grow up and a place where retirement is a time of leisure, dignity and fulfilment, however that may come. There is no doubt that this legislation is a requirement of a pension system that can deliver that.