It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my hon. Friend the Member for Delyn (Rob Roberts) on securing this important debate, and I look forward
greatly to summing up about 35 different points, in copious detail, in exactly nine minutes, and I undertake to try to write to hon. Members where I am unable to do so.
Starting with one particular point, the hon. Member for East Dunbartonshire (Amy Callaghan) was mentioned; I also had a brain tumour and collapsed in the House of Commons in 2011, and I wish her tremendous good fortune in her recovery. We miss her, and I look forward to her coming back to this place, causing me difficulties and posing important and genuine questions, which I am sure she will continue to do. We all send her our best wishes.
My hon. Friend the Member for Delyn secured an important debate, the fundamental point of which is that pensions play a vital part in all our constituents’ lives, and it is right that we debate these matters and champion their causes on an ongoing basis. While the Government’s immediate priority is the conquering of covid and to build back better, and we have a plan for jobs taking things forward, we are also clear in our desire to ensure that we protect people’s pensions and support people in saving for their retirement. It is timely and right that my hon. Friend raises these points, and I will attempt to address them in a bit of detail.
I will first touch on the fundamentals of the state pension and the fact that we now spend £126 billion on pensioners—the highest that has ever been in this country—of which the state pension is £102 billion. The state pension has gone up by £1,900 in real terms since 2010, thanks to the triple lock and various other measures, and we are in a position that material deprivation for pensioners has fallen from 10% to 6% in 2018-19. Average pensioner incomes have grown significantly in real terms over the past two decades. Average weekly income in 1994-95 was £165 a week at 2018-19 prices, after housing costs, compared with £320 a week in 2018-19. Clearly, there is more to do, and my hon. Friend rightfully raises the issue of pension credit.
The policy was introduced by a previous Chancellor, Gordon Brown, under the Labour Government, and successive Governments have had a variety of strategies, advertising campaigns and initiatives to try to boost take-up. It is patently clear from the available statistics that, even with significant advertising campaigns, take-up of pension credit has been between 60% and 76%. For example, the Labour Government spent over £14 million after the launch of pension credit and the take-up went down, if not remained static, that particular year.
The reality is that we need to work with trusted partners, and that is what we are trying to do. We are trying to institute a variety of campaigns. We had a nationwide campaign in spring last year to boost pension credit. We also have the online pension credit claim facility, ensuring ease of access for anyone wishing to make a claim. A whole host of other matters are under way to take the pension credit take-up forward, but I would particularly inform the House that, following a cross-party meeting with the House of Lords, we have reached out to the BBC and to Tim Davie, its new chief executive, to see whether the BBC can do anything to improve and expand on that particular process. I will put on the record in the Library the letter that Baroness Stedman-Scott and I have written to Mr Davie to see to what extent we could significantly enhance the take-up of pension credit.
My hon. Friend the Member for Delyn raised the idea of an automatic entitlement to pension credit. I fear that is something that is simply not possible on the data available to the state at this stage. There may be a time in the future when such data and capability exist, but it is not possible at the present stage.
I turn to the point he raises on automatic enrolment. Many things were said not only in respect of the cross-party nature of this particular problem, but also the desire for a better outcome. Automatic enrolment has ensured that the participation of private-sector eligible women has increased from 40% to 86%. That is equal to men, I should say. For private-sector eligible 22 to 29-year-olds, it has gone up from 24% to 85%. In 2019-20, working people will save an extra £18 billion into workplace pensions as a result of those reforms. All Members of Parliament will find that there are many thousands of constituents and employers who are doing the right thing and providing the 8% automatic enrolment.
Of course there is more to do. We will be instituting the lower earnings threshold from the age of 18. The Government have made it crucially clear, following the 2017 review, that that is what we will do, and without a shadow of a doubt that will be brought forward. I hope it is at some stage in this Parliament, but obviously these matters are somewhat beyond my control.
Speaking of things that are beyond my control, my hon. Friend the Member for Delyn raised the very important issue of lifetime allowance on tax relief pension savings. He waxed lyrical about a point that I am delighted to say that I am going to raise with the Chancellor personally. I look forward to the Chancellor addressing it at the Budget statement in March if he feels so inclined. I hope my hon. Friend’s plea is taken on board, but clearly that is a matter entirely for the Chancellor.
On automatic enrolment, my hon. Friend raised a very interesting issue that I want to touch on: the idea of a 1% saving added on to the automatic enrolment in the future. There is no question but that we want to look at the possibly of having a rainy-day fund, whether it is a 1% add-on to whatever the future of automatic enrolment is. I am looking at that personally. Clearly, there are many decisions to be made about the future of automatic enrolment, but without a shadow of a doubt trying to improve the financial capability, resilience and inclusion of this country is massively important.
On that issue, we talked about the mid-life MOT, which we back totally. I met the new chief executive of the Financial Conduct Authority to discuss how we can improve the capability of individuals from the age of 47. Apparently that is when men are in their mid-life; for women, it is later. The reality is that we want tremendously to improve the mid-life MOT as an option so that we address wealth, work and wellbeing at an early stage.
I have about a minute left. Simpler statements will go forward on state pension age increases. As I indicated to the hon. Member for Feltham and Heston (Seema Malhotra), that is a Labour party policy that the coalition and Conservative Governments have continued to implement, and there are no plans to change that. We have an ongoing review of costs and charges, and clearly great work is going forward.
I am deeply grateful to the House for the opportunity to address pension policy. There is no question but that these are serious issues. The Government are absolutely
zeroed in on trying to make pension policy work. I totally dispute the claim that we are not doing anything on climate change. With COP26 coming up, we are leading the way. We are the first country to legislate for net zero and for the taskforce on climate-related financial disclosures. We lead the way on all matters, including green gilts. I believe very strongly that climate change and pensions will go hand in hand under this Prime Minister’s leadership. I thank my hon. Friend the Member for Delyn for this debate.
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