I beg to move,
That the draft Social Security Benefits Up-rating Order 2023, which was laid before this House on 16 January, be approved.
With this we shall discuss the following motions:
That the draft Benefit Cap (Annual Limit) (Amendment) Regulations 2023, which were laid before this House on 16 January, be approved.
That the draft Guaranteed Minimum Pensions Increase Order 2023, which was laid before this House on 16 January, be approved.
This set of orders will increase state pensions and benefits and statutory payments by 10.1%, and the draft benefit cap regulations will increase each of the four benefit cap levels by the same 10.1% in April 2023. Lastly, the Guaranteed Minimum Pensions Increase Order sets out the yearly amount by which the GMP, part of an individual’s contracted-out occupational private pension earned by 1988 and 1997, must be increased.
We continue to protect the poorest pensioners through the pension credit standard minimum guarantee. There is also the basic state pension in place, which will increase to £156.20 for a single person, and the full rate of the new state pension will increase to £203.85. The pension credit standard minimum guarantee will increase by 10.1%. The Government understand the pressures people are facing with the cost of living, which is why, in addition to the £37 billion of support last year, we have provided support given the cost of living pressures in 2023 and are now acting to ensure that support continues between 2023 and 2024.
Is it not the case that the Government introduced the order to target the most vulnerable—those on fixed incomes, who really need the support at this time?
My hon. Friend is right: these are difficult times for everyone, but the Government have decided to provide the maximum amount of support to the most vulnerable. That is why we are uprating the benefits on an ongoing basis. We also provided a £37 billion cost of living support package last spring and an energy price support package last September, and in 2023-24 we will provide a package that includes uprated support for the most vulnerable and a further winter fuel payment.
The order increases the personal and standard allowance of universal credit by 10.1%. The monthly universal credit work allowance—the amount that a person can earn before their universal credit payment is affected—will also increase in April by 10.1% to £379 for those also receiving support for housing costs, and to £631 per month for those not receiving support for housing costs. The order also increases by 10.1% statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory shared parental bereavement pay, and statutory sick pay. In addition, in April, the carer’s allowance will increase by 10.1% to £76.75 per week. Unpaid carers also have access to support through universal credit, pension credit and housing benefit, all of which include amounts for carers. For a single person, the carer’s element in universal credit will increase to £185.86 a month from April, and the carer’s premium in pension credit and other income-related benefits will increase to £42.75 a week.
Can the Minister explain to the House—not right now, but perhaps a little later—the interaction between the changes in carer’s allowance and the number of hours that carers can work, particularly in the light of the very welcome increases in the national living wage? What has been the Government’s thinking on that in recent times?
My hon. Friend asks a legitimate question: how can we improve the situation for carers who wish to work more hours, long term? It would be wrong to give full disclosure of all discussions, but I will work out what I can say about that in my closing remarks, and I am happy to engage with him privately on the subject as well.
Under the benefit cap regulations, there will be an increase to the benefit cap of 10.1%. That will ensure that all households see an increase in their benefit following uprating. The national benefit cap will be £22,020 a year for couples and lone parents, and £14,753 for single people. For households living in Greater London, it will be £25,323 a year for couples and lone parents, and £16,967 for single people.
Under the Guaranteed Minimum Pensions Increase Order 2023, there will be an increase of 3% paid by occupational pension schemes, which means that that part of the GMP will increase by 3% from April 2023. The 3% cap strikes a balance, I suggest, between providing members with some protection against inflation and not increasing scheme costs beyond what can be afforded. I commend the regulations to the House.
I call the shadow Minister.
In a few weeks’ time, we will have the latest figures on households below average income. They are likely to confirm what we already know: that poverty will soar as the measures taken during the covid pandemic fall out of the adjustment. The figures will confirm what we see every day, and what the Trussell Trust and others see at their food banks, which is that the cost of living crisis is hurting millions. For those with the least, soaring inflation means hunger, cold, and the fearful wait for the bailiffs, for debt recovery, or for the forced imposition of a prepayment meter. It has meant families being unable to put a school uniform on their child’s back.
There are 4 million children already in poverty; 700,000 more children were in poverty than in 2010 even before the pandemic, and the Joseph Rowntree Foundation report of a few weeks ago estimated that one in seven families was going without essentials. One fifth of pensioners are in poverty, with older and disabled pensioners being most seriously affected—and there, too, the figures are going up.
In a report published last week, the Institute for Fiscal Studies said:
“Although it never sounds the most exciting part of benefits policy, the default indexation of benefits —what happens to their value each year if the government takes no deliberate action—is a first-order issue over the long term, and even over the short term when inflation is high.”
The IFS is right to make the important point that indexation and uprating are assumed to happen if the Government take no deliberate action. The annual uprating of working-age benefits with prices has long been the default in this country. When Governments fail to uprate benefits, that is a deliberate action, although they like to pretend otherwise.
Over the last couple of years, a new ritual seems to have been established in the run-up to the autumn statement: rumours circulate that the Government have not decided what to do, or whether they will uprate; think-tanks work out the implications of a freeze on rates of poverty and living standards; and charities and civil rights organisations urge the Government not to allow the real-terms value of benefits to fall. Uprating becomes a hot topic in the media speculation that attends any fiscal event. Then, at the last moment, we learn that the Government have decided to uprate after all. The Government expect praise for doing the right thing, and nobody considers for a moment what an extraordinary state of affairs this has become. However, it is an extraordinary state of affairs.
How can a social security system carry out its most basic functions if the value of basic entitlements is being eroded by inflation? Previous Governments did not need to spend weeks deciding whether to uprate; uprating was just what happened if they took no deliberate action. The sorry truth is that since 2010, Governments have increasingly treated the annual uprating of working-age benefits as a policy choice rather than a norm—a policy choice driven by short-term considerations, but with permanent effects that they prefer to ignore.
The hon. Lady is missing the key point that the universal credit taper was changed from 63p to 55p. That is new, and it makes a huge difference; those who are earning have more money in their pocket.
The hon. Gentleman should go back to the original plans for universal credit, and to what the taper rate was intended to be at the very beginning, before a former Chancellor got his hands on it.
There is criticism that this Government are different, but the process has not changed since 1987. It has been exactly the same under 13 years of a Labour Government, under the coalition Government since 2010, and under this Government.
I am slightly baffled by that. Although we have heard confirmation of the uprating this year, the point is that it comes on the back of years and years of that annual uprating simply not happening. The failure—[Interruption.] It is not a question of process; what matters is the outcome of the process. Over a number of years, the freeze on benefits and the failure to uprate has left us with a rise in poverty, as I have said.
I do not want to get too much into a tit for tat, but will the hon. Lady accept that there are 400,000 fewer pensioners in absolute poverty, that absolute poverty has declined by 1.2 million people, and that the living wage is going up?
The Government have decided to refer to the absolute poverty figures only, which we would expect to go down as the years go by. However, under the standard measure of poverty, the relative measure, there is an increase in poverty. Indeed, if we want to get into the details, the Government’s preferred measure also shows an increase in poverty among families, including families with more children. This year’s uprating will at best serve to maintain the value of benefits, which has been severely reduced over the last decades. The resulting inadequacy of the safety net has played out exactly as one might expect; it contributes to increased numbers of children in poverty, to deepening poverty, and to increased need for food banks.
My hon. Friend is making an excellent speech. Does she agree that the last Labour Government took 1 million children out of poverty, and that we could do with having a Labour Government immediately to take further action?
I could not agree more. The Labour Government demonstrated what could be done with will, policy and investment; they brought about a dramatic reduction in pensioner poverty and child poverty. A future Labour Government will do exactly the same. Of course we will support the motion, but the Government deserve no praise—
Will the hon. Lady give way?
I have given away enough for the moment. The Government deserve no praise for refraining from a deliberate action that they should never have contemplated taking in the first place.
It is important to recognise the limitations to the uprating order. Although the nominal value of most working-age benefits will increase by 10.1%, there will be no change to the eligible cost limits of two crucial benefits: the childcare element of universal credit and tax credits, and the local housing allowance. Do the Government think that childcare and housing costs are immune to inflation? How does allowing the erosion of the value of childcare support fit with their stated aims of encouraging work progression and helping working parents to increase their hours of work?
Yesterday, the deputy political editor of The Sunday Times reported that:
“Sunak and Hunt want a new benefits crackdown, including”
“threshold under which people must attend regular job centre interviews/meet work coaches to be raised to 18 hours”.
If the Government are serious about helping parents to progress, they should ensure that parents are better off working more hours, rather than using the crude and unproven instruments of conditionality. As the IFS has shown, parents in the lower thirds of the earning distribution already stand to lose 58% of their additional earnings when moving from 20 to 40 hours of work a week.
Incentives to progress are already weak, so allowing inflation to erode the value of childcare support makes absolutely no sense. As evidence to the Work and Pensions Committee stated recently,
“The childcare support provided with UC is only sufficient to cover part-time hours, because the cap it is subject to has been frozen for six years”,
“A fixed cap amid rising childcare costs means fewer hours are eligible for reimbursement under UC today compared to Working Tax Credit in 2005—potentially restricting parents’ employment options.”
While I am on the subject, we hardly need reminding that the requirement for parents who claim childcare support to pay up front heaps the burden on to low-income parents, and contributes to the nightmare of overpayments and deductions, which contribute to the debt and destitution crisis.
The local housing allowance remains frozen for the third year in a row—at least, that is how everybody apart from the Secretary of State sees it. He said in his written statement of 17 November:
“I can also confirm that the local housing allowance rates for 2023-24 will be maintained in cash terms at the elevated rates agreed for 2020-21.”—[Official Report, 17 November 2022; Vol. 722, c. 24WS.]
Perhaps the Minister can explain how those rates, which are based simply on the 30th percentile of local rents in 2019—since when rents have risen by 8% overall according to the Institute for Fiscal Studies, and vastly more in some parts of the country—can seriously be described as elevated.
I thank my hon. Friend for giving way—she is being very generous. According to the Institute for Fiscal Studies, freezing local housing allowance, as opposed to uprating it to match local rents, will reduce support for nearly 1.1 million households by an average of £50 per month. Does she agree that that is an utterly impossible situation for people to face, and that we need action from the Government on it?
It is absolutely impossible. Rents are such a major component of people’s expenditure. For that shortfall to first be fixed, and then to grow, is inexplicable. It absolutely eats into people’s residual income.
Nearly 1.5 million universal credit households receive the housing allowance. Of those, 844,000, or 58%, have rents above the maximum that local housing allowance will support. On average, they face a shortfall of £100 a month, which has to come out of their residual income.
I am grateful to the hon. Lady, with whom I served on the Work and Pensions Committee a long time ago, for giving way. Have this Government not increased benefits by more than inflation, which is something that Labour never did in the 13 years it was in power? Secondly, will those on universal credit not be £1,000 better off as a result of the further reduction of the taper in the universal credit system, which she and the right hon. Member for East Ham (Sir Stephen Timms) continue to insist should be scrapped completely? Where does she think the social justice is in her party’s proposals?
The fact of the matter is that poverty is rising —pensioner poverty is rising, child poverty is rising, and the local housing allowance and the childcare element are not keeping up with costs. That is simply a fact.
If I may, I will just take my hon. Friend back to the point she was making about rent levels, which have gone up extraordinarily in the past six months. London now has the highest rents of any city in Europe, and many people on benefits living in the private rented sector are paying well over £100 a month out of their remaining benefit. Does she not think that there is also a case for looking at local housing allowance levels?
This freeze in local housing allowance, which is such a critical element of people’s income, is causing such hardship for hundreds of thousands of families. That is not only undermining living standards in the middle of a cost of living crisis, but leading to utterly perverse disparities between areas due to differences in rent inflation. The 30th percentile of rents in Bristol is £100 more than in Newbury, but the amount of housing support that those who live in Bristol can receive is £12.50 less than those who live in Newbury. To quote the Institute of Fiscal Studies again:
“the current approach makes little sense. It permanently bakes in historic information about differences in rents across the country, while entirely ignoring current information about those differences.”
We can see the real-world consequences playing out on our streets as rough sleeping soars and council homelessness units are stretched to breaking point.
I simply want to respond briefly to the intervention of the hon. Member for Gloucester (Richard Graham), who mentioned me in passing—inaccurately, I must say. He was wrong to say that benefits have been uprated in line with inflation. At the moment, the headline rate of benefits is the lowest in real terms for 40 years, following the repeated freezes we have had. Does my hon. Friend agree that the hon. Member for Gloucester ought to check the record?
I totally agree with my right hon. Friend, who speaks with expertise on this issue.
The fact is that we have seen the implications of freezes in benefits. We are seeing it in soaring poverty, and we are seeing support for housing and childcare costs failing. Those things need to be based on real-world prices, not those obtained in the past. Universal credit and legacy benefits need to be uprated with general inflation—not just once in a while, but every year—if their value is not to be permanently eroded. It would be welcome if the Minister could commit to those basic principles at least.
It is a pleasure to speak in this debate, and it is a bit of a pleasure that we are in a better position than we were a year ago, when we were looking at a welfare increase of 3% as we saw inflation forecast to hit 7% by April. We have—perhaps more by chance than judgment—a rise of 10% while inflation is actually 10%, so we at least have an uprating that looks to be the right number. However, the fact is that that is still a bit by chance, because we are still having to use information that will be six months out of date by the time we get there. It shows how strange the system we have is. When the Minister winds up, can they say whether any progress at all has been made in trying to get the systems in a position where we can use a more recent number, so that we do not end up with a repeat of last year, using an out-of-date number that is way below the level of inflation by the time we get into the year?
A 10% rise in benefits and the state pension is extremely welcome, and we should pay tribute to the Secretary of State and the ministerial team for getting that amount of money out of the Treasury, but I suspect that when the Chancellor sat down to do his emergency Budget, or several Budgets back in the autumn, he probably was not overly excited by having to find this amount of money. It was, however, clearly the right thing to do. The idea of putting up the incomes of people on fixed incomes or earning the lowest levels in the country by less than inflation would have been completely ridiculous. I think we have got to the right answer, and I welcome it. The timing of the changes has an unfortunate impact; by the time we get to April we will have had increases of just over 13% for the last two years, while inflation will have risen by about 17%, so people will still be 4% down on where they were before the crisis.
And it is worse than that. The basket of goods and services bought by most people on these benefits tends not to relate well to the consumer prices index. For example, food price inflation is much higher—more like 19%. There is no doubt that the Government have been extraordinarily generous with energy support, but if we factor in the changes to energy price support, what do we see for the coming year? The inflation figure that has been used is from September—before the move to the energy price cap, which started in October—and the price cap that drove that figure was an annual bill of £1,971. We are currently at £2,500, and the Government’s cap will mean that that number will rise to £3,000 from April, so the average household may well be £1,000 worse off on their energy bills. The rise in the state pension of about 10% is a little under that, so will only cover the rise in energy bills from the current financial year to the next.
The support will drop off quite considerably. If we add up the cost of living support, the £400 from the energy company and the £150 via council tax, the average household on the lowest incomes has had £1,200 of support this year. That will go down to £900, and the pensioner support will go down from £850 to £300. Although there will be a rise in the main benefits and pensions income, a cut to the other support and a rise in energy bills will mean that that is all gone, and most households will actually be worse off as we go into the next financial year. I am not sure that is what the Government intend.
The idea that we have to taper off the extra support for households that are earning money is right in principle, but the Government may need to keep a watching brief throughout the year on whether people living on a fixed income in retirement, on out-of-work benefits or on the very lowest incomes, can really absorb a change that could mean—by the time all the extra bills and the reduction in support have been factored in—that they are £1,000 worse off next year than they are this year. Is that what we really intend? Are we in danger of unravelling the incredibly generous support we have given in this financial year by taking it away next year, perhaps a bit too soon?
We all hope that inflation will fall considerably, and we see encouraging signs from the energy markets that prices are coming down. Perhaps by the time we get to April, the energy price forecasts for households for the next year will be a long way below the £3,000 or even below the current £2,500 cap, and this problem will go away. Perhaps the Government will be proven right in taking a more cautious approach to support for next year. Having gone to the effort to create a brand-new benefit for cost of living support, which I think is unprecedented, I hope the Minister can confirm that the Government will keep reviewing that rate to see whether we are giving households enough to get through the next financial year.
I wholeheartedly welcome today’s increases, which are clearly the right thing to do, but there are two things that the Government need to do on top of monitoring the situation. The first is to try to get this decision made on more recent, more relevant data. I accept that the systems are so old and steam-driven that we have to start doing the work in October based on the September number, and that if we do not start that early we cannot get the rises through, but it is a bit bizarre to bring to the House in February an order that we had to start programming the computer to do in November or October, and that we cannot change. If the House voted for something different tonight, it would be too late; this is plumbed into the system. We should either have this debate in November, when we can actually change it, or we should try to move the rise to a more relevant date. Given that we managed to get the £20 universal credit uplift through in a matter of weeks, I really cannot see why we could not be using more modern data. Now that we know that more of the legacy benefits will be continued on late into this decade, surely it is time to try to get a system that means we can do an uprating that reflects the real cost of living at the time that income comes in.
There is a second thing the Government should do, which the Select Committee recommended previously. We have had a slightly haphazard journey of welfare increases in the last 13 years, so it would be quite unlikely to have ended up in the right position, whereby the amount we are giving people in various household scenarios is equivalent to what they need in order to buy the goods and services that we think they ought to be able to buy. It is time to have a rebasing exercise: to go away and do the work, and work out whether we are giving the households of a single person, a couple, a couple with one child or two children, and so on, the amount of money we expect they need to live on—to be able to pay for all the essentials they ought to have. In some cases, perhaps we are. In some cases, we are probably not. But if we are, it is by fluke rather than any sort of planning, and if we are not, we are putting people in a really difficult position.
I hope Ministers can accept that there really needs to be a rebasing at the end of this crisis. If we have been through 17% or more inflation in the space of two years, that must suggest that the cost of living is in a very different position from where it was. Let us do the work. I will be very happy to find out that the benefits are in the right place and there is no need for any further increases. If they are too high—well, that is very generous, although I think it is very unlikely that they are too high. If they are too low, we need a plan to fix that. That would be the right thing to do. Let us do the work and find the evidence, and I hope we will then all be able to take an informed view when it comes to the uprating next year.
I call the SNP spokesperson.
It is a pleasure to follow the hon. Member for Amber Valley (Nigel Mills), who is always incredibly thoughtful on these issues, and it is certainly a pleasure to serve alongside him on the Work and Pensions Committee.
As we debate today’s annual uprating orders, we do so against a grim economic backdrop and at a time when some of the most vulnerable people in our communities are battling literally to survive this cost of living crisis and make it through the winter. However, I think it is important to recognise that the cost of living crisis is not a new thing. Yes, the war in Ukraine has had a profound impact on the global economy, and I do not think anybody in this House would deny that; and nor is anyone denying that the coronavirus pandemic has left serious scarring on the economy. But the inescapable fact is that poverty in all its forms was in a dire situation pre-pandemic. Let us take child poverty as just one example. Figures from the Child Poverty Action Group show that, pre-covid, there were 700,000 more children in poverty than at the start of 2010. Rising child poverty coupled with a cost of living crisis demands radical action from a British Government who must do more—so much more—to end the scourge of child poverty.
Today’s uprating orders are certainly a step in the right direction. The orders for the financial year 2023-24 are welcome, and we certainly will not oppose them. However, Ministers should be under no illusion that these will make up for four very long years of benefit freeze prior to the pandemic. Data from the Joseph Rowntree Foundation’s cost of living tracker in October paints a horrendous picture that should shame every single one of us. About six in 10 low-income households are not able to afford an unexpected expense, over half are in arrears and about a quarter use credit to pay essential bills, resulting in over seven in 10 families going without essentials. That, I am afraid, is the stark reality of Tory Britain in 2023, and no alternative facts in the Minister’s red folder can seek to deny that.
I thought it might be a good idea to have a look a bit closer to home—indeed, in the Minister’s own constituency —and see what Tory Britain really looks like in Hexham, so I had a look at the latest available annual report for the West Northumberland food bank, based in the Minister’s own constituency. Page 3 of its latest published annual report—again, I am quoting from the Minister’s own local food bank—states:
“Listening to people’s concerns on the helpline we became increasingly aware of rising child poverty, the two-child policy has plunged hundreds of thousands of children into poverty across the UK, since 6 April 2017. Parents having a third or subsequent child are no longer eligible for support for that child through benefits worth up to £2,830 per child per year”.
It goes on, remarkably, to cite statistics from the Minister’s own Department—this is his own food bank—saying that
“DWP…statistics show that in 2019-20 24% of children in the Hexham constituency were growing up in poverty, that’s almost 3,000 children and it’s increased by 6% since 2015, that’s 738 more children born into poverty in just 4 years.”
They are not my words, but the words of the Minister’s own local food bank’s annual report.
The red folder that the Minister walks about with may contain all sorts of distorted statistics and soundbites, but the problem is that statistics and soundbites do not put food on the tables of people in Hexham, or indeed anywhere on these islands. For example, instead of increasing the benefit cap, which has been frozen since 2016, the British Government should, in my view, just abolish it entirely, because it is pushing more and more people into poverty, and those of us who have surgeries on a Friday morning can see that clear as day.
If history teaches us anything, it is that trying to govern simply to appease headline writers in comics such as the Daily Mail and the Express does nothing other than further cement inequality and poverty, which is rife in Britain today. The reality is that too many households have now been left behind and will not benefit adequately from uprating because the Tories keep refusing to fix known policy failures. For example, the continued refusal of Ministers to fix the extensive known problems with universal credit is unacceptable and is subjecting vulnerable people to additional unnecessary hardship.
Instead of keeping additional pressures on low-income families, Ministers need to urgently address the fundamental issues with universal credit. A recent report by the Commissioner for Human Rights at the Council of Europe found that the level of support provided under UC was
“a key contributing factor to child poverty.”
The report stated that policies like
“the two-child limit and the benefit cap restrict the amount of benefits that households can receive, regardless of their specific needs, and thereby continue to exacerbate child poverty.”
Therefore, my party stands by its calls to the British Government to reinstate the uplift to UC, and indeed to increase it by £25 a week, and to extend it to means-tested legacy benefits, as well as to extend the benefit cap.
Has the hon. Gentleman or his party calculated how much that would actually cost the taxpayer?
Given the ability of the Government to crash the economy in the mini-Budget by the now elusive right hon. Member for South West Norfolk (Elizabeth Truss)—[Interruption.] Hon. Members have managed to wake up just in time to debate economics. They had nothing to say on food banks or child poverty, but when it comes to money, they are excited. The hon. Member for Bosworth (Dr Evans), who is a parliamentary private secretary, must do better with his interventions if he wants to get into the Government.
Last April, Ministers in Edinburgh called on the British Government to reverse those policy changes. That would have put £780 million into the pockets of Scottish households and it would lift 70,000 people, including 30,000 children, out of poverty in 2023-24.
In its recent submission to the United Nations Committee on Economic, Social and Cultural Rights, Human Rights Watch also gave a damning review of the British Government’s restrictive social security policies, such as the two-child limit and the failure to reduce the cut to universal credit. It set out the negative impacts on the right to an adequate standard of living, to food, and to housing for families with children. It is a depressing state of affairs that thousands of families with children will be pushed into poverty simply because the British Government refuse to scrap the two-child limit on child tax credits and universal credit. In April 2022, 1.3 million children here in these islands were affected by the two-child limit—that is 8.7%, or one in 12 children—and that number will, sadly, continue to rise as nearly all low-income families with three or more children eventually become subject to the limit.
Does my hon. Friend agree that Conservative Members may jeer from a sedentary position, but they have the poverty of people right across Scotland on their hands?
My hon. Friend is absolutely right. I understand that political ideology will separate us, but in the five years that I have been a Member of this House I have struggled to get my head around the fact that, while the hon. Gentlemen who do their surgeries on a Friday morning see the same people as we do in our surgeries, who come and say that the social security system is inadequate and has left them in dire straits, there is no conviction to come into this Chamber and say to the Government, perhaps as the hon. Member for Amber Valley has done, that this is wrong.
I am sure the hon. Gentleman is about to tell us what the Government could do better.
In the same spirit of trying to help those most in need, why do the Scottish Government not mirror our proposed changes to the terminal illness rules within disability benefits?
The hon. Gentleman is missing what is happening, given the limited social security powers that the Scottish Government have. Bearing in mind that 85% of welfare spending is reserved to this place, he will see that we are doing an awful lot to try to help people with social security, but if the Minister wants to back up my calls to devolve all social security to the Scottish Government, that will certainly be welcome.
Research from the Child Poverty Action Group shows that the majority, some 59%, of those affected by the two-child limit are working families. Perversely, some of those families work for the Minister’s own Department, which administers said benefits; that would be funny if it wasn’t so tragic. The fact that a few weeks ago the Lords Minister, Viscount Younger, could not justify to the Work and Pensions Committee how the two-child limit is compatible with the Government’s own family test is a damning indictment of a Minister who is not over his brief and whose policies do not even comply with the family test for which he is responsible.
I turn now to universal credit, which should be topical, given Labour’s significant change in stance. That change provides an opportunity to seek cross-party agreement on reform of universal credit, because all three main parties in this Chamber now agree with the broad principles and the aims of universal credit. The challenge for us now is to make it work and to iron out the creases, which are by no means insurmountable. We know, for example, that the five-week wait for a first payment is needlessly pushing people into hardship. That could be relatively easily fixed by implementing proposals to turn advance payment loans into non-repayable grants after a claimant has been deemed eligible.
On sanctions and conditionality, far too many households face destitution, largely because DWP rules are pushing them into debt through sanctions and deductions. Recent changes to the universal credit administrative earnings threshold mean that even more people will risk having their vital universal credit payments sanctioned. These 600,000 people are already working, and there is clear evidence that sanctions do not work in getting people into work or to increase their hours or earnings. To that end, I have tabled early-day motion 715 to annul the relevant regulations, which I hope the Government will grant us time to debate and vote on, and I certainly hope we can count on Labour support in that.
However, there are other problems with sanctions and conditionality. For example, individuals who have had a sanction applied have also been denied the vital cost of living payments the Minister was rightly trumpeting earlier. That demonstrates a fundamental issue with the DWP’s attitude to those on low incomes, because preventing vulnerable families from receiving the social security they are entitled to when they need it most strikes me as somewhat back to front.
I will turn now to the UC childcare offer. If the Tories actually cared about working people, they would want to improve childcare support for UC claimants by supporting them with childcare costs up front and in full. The SNP continues to call on the Government to increase payments for those aged under 25 in line with increases for older claimants. We also continue to call for local housing allowance to cover the average cost of rents and for the shared accommodation rate for those under 35 to be suspended—that age range has always struck me as somewhat arbitrary.
The SNP has called for the British Government to fix these fundamental flaws in social security and to deliver a system that actively tackles poverty and empowers people. However, it is an inescapable and undeniable fact that the Scottish Government cannot change these policies while 85% of welfare expenditure and income-related benefits remain reserved to this institution here in London, and that includes universal credit, which is of course a reserved benefit. The only way to ensure that Scotland has a decent social security system is for us to take all legislative and fiscal responsibility for these issues by way of independence and to no longer hope that the full-fat Tories, or the diet Tories on the Labour Benches, will one day reform the social security system, which is clearly broken beyond repair.
I turn now to the order on pensions, and I start by genuinely welcoming the Pensions Minister to her place. I respect her enormously, and although we will doubtless disagree on aspects of policy, I have no doubt as to her motivations. Where we have common cause and we can agree—for example, on pension credit—she can be assured of SNP support. However, I am afraid that that is probably where the warm words and cross-party consensus will come to a halt for this evening, because the British Government have a serious job of work to do if they are to rebuild credibility among pensioners. Time and again, we have seen the Tory Government short-change pensioners, who are getting a raw deal from a pension system that they have paid into their entire lives.
Pensioners on low incomes are among those hardest hit by the cost of living crisis, and the British Government must do much more to ensure that they are properly supported, so let us start with the state pension. Westminster already provides a lower state pension relative to average earnings than most other advanced economies. Last year’s breaking of the triple lock will cost each pensioner £520 on average during the course of living crisis. The Government’s own Red Book shows that that will take £30 billion in total from pensioners by the 2026-27 financial year. Retaining the triple lock is the bare minimum I would expect, but I rather fear that that policy pledge will not survive the rigours of manifesto writing when it comes to both main parties in this House. However, I would like to be assured on that issue in the winding-up speeches.
A recent report from the Pensions and Lifetime Savings Association found that the annual income required to maintain a basic standard of living in retirement has massively outstripped the rise in the state pension. For a single person, the minimum income now sits at £12,800, while the state pension will rise to only £10,600 in April for those on the full flat rate. Indisputably, the state pension remains an important source of income for pensioners living in, or at risk of moving into, poverty because of the very low take-up of pension credit, which I accept is the Minister’s biggest priority and one I am certainly willing her on to succeed with. However, Independent Age highlights that 5% of pensioner couples and 19% of single pensioners have no source of income other than the state pension and benefits.
The Joseph Rowntree Foundation’s “UK Poverty 2023” report revealed that 1.7 million pensioners were living in poverty in the UK in 2020-21, the poverty rate for single pensioners is almost double that of couple pensioners, and almost one in seven pensioners overall are living in poverty—something I can see in its rawest form in communities such as Sandyhills, Carmyle and Baillieston in my constituency. We know that pension credit is a vital support for many older people, but only around seven in 10 of those who are entitled to it actually claim it, and up to £1.7 billion of available pension credit is, I am afraid, going unclaimed. In crude terms, that amounts to £1,900 a year for each family in the east end of Glasgow entitled to receive pension credit.
Will the hon. Gentleman give way?
The hon. Gentleman is obviously on overtime tonight.
I am grateful to the hon. Gentleman for giving way. Is that not a point that all of us in this House can take away? Pension credit is going unclaimed and all 650 of us could go back to our constituents and encourage them to make sure they check the website and use the phone to get, potentially, that gateway option to £3,000.
Yes, I think we are going to have a political “Lady and the Tramp” moment where we actually agree on this. There will be spaghetti across the House. The hon. Gentleman is absolutely right. We need to be in a situation where we encourage all our constituents to take up pension credit. Having met the Minister fairly recently—
I will give way to my very honourable Friend.
I thank the hon. Gentleman for giving way. In my constituency, my staff and I encourage all the pensioners we meet every week to look at pension credit. Some will qualify and some will not. Today, Citizens Advice came to me to say it is going to start a project in Newtownards in my constituency and I look forward to that unfolding. Does he feel that the Government should focus attention specifically on pension credit, because there are many people out there who would apply if they knew more about it?
I am grateful to the hon. Gentleman for his intervention. I think I am unique in that I am one of the few people who serve as a Member of this House who has been in his constituency office and spoken to his constituency staff—some of us go on holiday to places like Newtownards. He is absolutely right. I ask the Government to put just as much effort into advertising things like pension credit take-up as they do into propaganda-like billboards in our constituencies about levelling up. If that amount of resource were put into advertising pension credit, perhaps we would see it go further.
The British Government’s assault on pensioners does not just extend to the pitiful state pension. Let us not forget that the Tories also scrapped free TV licences for over-75s, including in Broadland. People who watch on and see the Westminster incompetence of this place will know that pensioners across these islands have already been short-changed by £6,500 on average due to state pension underpayments. Peter Schofield, the permanent secretary at the DWP, recently told our Select Committee that—
Will the hon. Gentleman give way?
I am happy to give way.
The hon. Gentleman mentions Broadland and says that pensioners are being short-changed by the Government. How can he reconcile that statement with the triple lock on pensions, which raises pensions year on year by 2.5%, the rate of inflation or average earnings—a ratchet effect increasing the value of pensions when compared with the economy at large?
The triple lock the hon. Gentleman refers to is the one that he and his party broke a manifesto commitment on recently, resulting in many pensioners being diddled.
I am interested in what the hon. Gentleman is saying about the huge problem of pensioner poverty, particularly for those who are unable, or do not understand how to access the minimum income guarantee. Does he accept there is also a huge problem for women of a certain age, the WASPI women, who are living in great poverty and great stress through no fault of their own, due to a change they were unaware of?
The right hon. Gentleman is spot on. Several of us are looking with great interest at the ombudsman process, which has just finished stage two and will now move to stage three. I hope that the Government will change their tune on their approach to the issue of 1950s born women, because thus far many of those women in my constituency and, I am sure, in Islington North would suggest that the Government are not doing enough on that issue. He is right to put that on the record.
Before the hon. Member for Broadland (Jerome Mayhew) intervened, I was making the point that the DWP has identified a further 100,000 potential underpayments during its ongoing correction exercise, which will now take an extra year to complete. I would argue that that demonstrates that the British Government are unable to effectively run a state pension system, and makes the case for pensions being administered in an independent Scotland, and not by Tory Ministers who are increasingly using pensioners to penny-pinch.
It would be remiss of me not to touch on retirement age, which has been the subject of huge media speculation recently. It appears to be the worst kept secret in Whitehall that Ministers are expected to announce that the retirement age will be increased to 68 at some point in the 2030s, not in 2046 as previously expected. To be crystal clear, my party opposes any further increase in the state pension retirement age. Indeed, the Scottish Government, when they responded to the British Government’s review of the state pension age restated their opposition to any changes to the current timelines for increasing the state pension age. This might seem like an abstract debate, but these things have real-life effects. Recent analysis by Age UK shows that 1.5 million pre-state pension age households have no savings at all. We must therefore avoid the situation faced by the WASPI women, mentioned by the right hon. Member for Islington North (Jeremy Corbyn), who faced having to work longer with little time to replan for retirement. On the subject of WASPI women, I again make clear my support for their cause.
It is incumbent on the British Government to look at other areas of pension injustice, such as frozen pensions for those living overseas, many of whom are veterans. It is my party’s belief that that is not a sustainable situation and, though complex, it cannot be allowed to just go unchecked while pensioners languish in poverty overseas. That is certainly a unique take for global Britain.
The British Government’s decision to decline a request from the Government of Canada for a reciprocal social security agreement was a peculiar one and I would appreciate the Minister saying more about that during his wind-up speech.
The reality is that tonight’s orders will pass without a vote but this annual debate shines a spotlight on the major holes in our social security system. The UK is blessed with the sixth largest economy in the world, yet —remarkably—soup kitchens up and down these islands will throw open their doors tonight, in record number, to feed people who cannot afford to get by on state support. That poses a much bigger question which this Government have thus far been unable to answer. It is a question which many people in Scotland are concluding can only be answered with independence, because Westminster is not working and Scotland can do better—so much better—than this crumbling Union.
It is a pleasure to follow the hon. Member for Glasgow East (David Linden) and I pay tribute to his encyclopaedic survey of the landscape of the Department. It is fair to say that no stone was left unturned, and we are grateful to him for that. It is also always a pleasure to come to the Chamber to support the Minister when he does the right thing—indeed, it is perhaps a pleasure to listen to him here when he does the wrong thing.
I speak today to express my satisfaction—indeed, my relief—at the Government’s decision to uplift benefits by CPI. Over the summer, my most disadvantaged constituents faced real fear from the sudden increases in the cost of living and what was coming down the track towards them. They were perturbed, confused and daunted by the confusion in public messaging from both our leadership contest and the “interim” Government, as I should perhaps call it. They were very worried, so the news that we will update benefits by CPI was a great relief for them, not least because we know that inflation always hits the poorest in society worst, so protecting those in receipt of benefits from inflation is the most important duty of Government. Indeed, it was Milton Friedman no less who said inflation is a tax on the poorest in society. So the Government did the right thing. Inflation does matter. It is not an economic sideshow, and we should always remember that.
I listened carefully to the hon. Member for Westminster North (Ms Buck), the shadow Minister. She may not be aware that a shadow Front-Bench reshuffle is due, but I can only assume that that was the reason for some of her comments—she may get a surprise in a few days—because she was praising the previous Labour Government. It was like an exercise in nostalgia. Her opposition to conditionality leapt out at me. My constituents remember the something-for-nothing welfare state that Labour created in that era, and by refusing to accept the role of conditionality in our welfare system, she is committing the Labour party to that agenda once more; I was very surprised to hear it.
I represent an area that sadly still has high levels of pensioner poverty, so I particularly welcome the Government’s decision to extend CPI protection to those who rely on the standard minimum guarantee in pension credit. It will cost some £700 million above the statutory minimum requirement, so I welcome the Government’s commitment to supporting the poorest pensioners at this time of high inflation. However, like any Back Bencher, I will urge them to do more. Despite the best efforts of many, my constituency still saw a slight dip in the number of pension credit claimants last year, so I urge the Pensions Minister, who has done so much to get people claiming pension credit, to continue those efforts; the battle is not yet won.
I also urge the Government to consider the need for flexibility in our pension system. My favourite statistic of the month is that the old age dependency ratio currently shows 28 people over 65 for every 100 of working age, some of whom are probably not in work. The ratio will rise to almost 50:100 by 2050, causing fundamental challenges for any Government. All those who flatly oppose raising the state pension age need to engage with that, not take cheap positions that involve no thought at all—however encyclopaedic their speeches might be. Raising the state pension age clearly makes sense on one level, but many of my poorest pensioners dropped out of the labour market well before the state pension age. Indeed, my constituency has the lowest healthy life expectancy in the country. Given that people can defer the receipt of state pension in return for higher payments, could those claiming early, whether down to ill-health or physically intensive work, not have a slightly reduced payment? That would strike a fair balance.
The Government are doing an immense amount to support those facing sharp increases in energy bills. I welcome the extra £150 for personal independence payment claimants, and the uprated PIP being discussed today. However, will the Minister please take away from this debate the numerous emails I have had from those reliant on electronic beds, electronic wheelchairs, oxygen concentrators, sleep apnoea machines—all manner of electricity-reliant equipment—to keep them alive? They have seen their bills go up by £150 a month, not £150 a year, and they are deeply concerned at the energy price trajectory not coming down sharp enough.
Our benefits system remains generous, but it could go so much further. Too often it is being asked to bear the weight of other structural inadequacies in the system, where other Departments could or should be doing more, or where the private sector is allowed to shirk some of its moral responsibilities as players in what we ought to call responsible capitalism. The consequence is that people continually ask for more money to be spent by the welfare state, when the solution should be to make that money go further by ensuring that we have better value and a fairer system in which people can spend that money.
The cost of energy for those with complex medical equipment is just one example of the purple pound, where the disabled pay hidden costs over and above what PIP could ever meet, despite its being there to meet the extra costs of disability. The poverty premium is another area where the DWP and the wider state can ensure that the benefits system does not allow and reinforce poor practice elsewhere. For example, inflation is at its highest in the food and retail sector, but it is higher still in the smaller neighbourhood supermarket stores in the most deprived parts of my constituency. Residents relying upon a local One Stop, Tesco or whatever may not be able to afford to go to the large out-of-town supermarket for better-value food. The private sector is obliging the benefits system to take up the slack of the dysfunctional market in which my constituents are trapped.
My hon. Friend makes a powerful point. He highlights the fact that everyone has individual circumstances, which is why the Government brought forward the £2 billion local welfare assistance scheme. Has he had any success in his casework in getting that additional support for people with additional individual challenges?
I am grateful to my hon. Friend for that intervention. He used the phrase “local welfare assistance scheme” which, sadly, could provoke me to speak for even longer than the hon. Member for Glasgow East (David Linden), because it is my specialist topic, but I ought not to go there—[Hon. Members: “More!”] Perhaps Members should wait for me and the hon. Member for North East Fife (Wendy Chamberlain) to finalise our report into emergency food aid, where they will be able to see exactly what I think.
To finish on perhaps a more fundamental point, one strength of our benefits system is that sufficient incentives are built into the structures of in-work benefits, along with conditionality—I am sorry to say that to the shadow Minister—to ensure that, as far as possible, work is seen to pay. However, that has been distorted through the more complex pattern of financial support that has emerged during covid and the wider cost of living crisis. Those living just below a particular threshold that qualifies them for extra state support get large payouts, but those just above the threshold feel greatly aggrieved. They regard it as unfair because they are being punished for being seen to do the right thing. The bedrock of our benefits system is a belief in its fairness, not just to those who need support at any one time, but to those who have to fund the system and may one day, of course, require it. Although I strongly welcome the Government’s decision to uprate benefits, we must bear in mind the needs of, and treat fairly and responsibly, not just those who are in receipt of benefits, but those who fund the system and are in work, day in, day out. They are two sides of the same coin.
I call the Chair of the Work and Pensions Committee.
I echo the relief expressed by the hon. Member for Blackpool North and Cleveleys (Paul Maynard) about the uprating decision, and I am pleased to follow his speech. I will begin with some points about the way we uprate benefits and echo some of the important points made by the hon. Member for Amber Valley (Nigel Mills), whose contribution to the Select Committee I appreciate.
We now know that legacy benefits will be claimed by some people until at least 2028. The Select Committee, in its report last July, called on the Department to improve its IT systems and increase the speed with which changes can be made to legacy benefit and state pension rates, and the lack of progress has been disappointing. Annual uprating based on the previous September’s inflation is perfectly reasonable when inflation is stable, but it is not reasonable in the current volatile circumstances. The Committee called for a shorter gap—the hon. Gentleman echoed this—between the inflation reference period and the uprating date, preferably using inflation data from the previous quarter, or possibly more recent still.
In the past year, the lag has caused real hardship. Benefits were uprated last April by the inflation rate of the previous September: 3.1%. By the time the uprating took effect, inflation was nearly 10%. The result has been benefits at the lowest real-terms level for 40 years, and a big surge in food bank demand. Like the hon. Member for Blackpool North and Cleveleys, I applaud the fact that the Government are honouring their obligations this year, and that the uprating will be 10% in time for the new financial year. That should prevent things becoming substantially worse for many in the coming year.
But it is not going to make things much better. Trussell Trust food banks gave out 1.3 million food parcels from April to September last year—more than in any previous six-month period, and 50% more than before the pandemic. At the Liaison Committee in December, the Prime Minister said that he would
“work very hard to deliver”
lower food bank demand by the end of this Parliament. I warmly welcome his adoption of that goal, but it will be achieved only if social security support is increased in real terms. What is the right level for the social security safety net? The Work and Pensions Committee plans in the near future to launch an inquiry into the adequacy of benefit levels, a subject that the hon. Member for Amber Valley spoke about. It seems to me that the safety net is now so inadequate that it is damaging the economic recovery: it is too low to do its job properly.
The Chair of the Select Committee cites some damning statistics from the Trussell Trust. For all that food bank use is increasing overall, the inquiry by the all-party parliamentary group on ending the need for food banks, which the hon. Member for Blackpool North and Cleveleys (Paul Maynard) mentioned, has demonstrated that it went down when the £20 universal credit uplift was in place. Does the right hon. Gentleman agree that we should look at that?
I absolutely agree. That was the one point at which food bank demand fell, and of course it went straight back up once the £20 uplift was removed.
The level of the safety net is now too low for it to do its job properly from the standpoint of economic efficiency. People are being forced to accept unsuitable jobs, with no prospect of training or advancement, simply in order to subsist. That is one reason why the UK’s productivity record is so poor, and we will not deliver economic growth until we tackle that productivity failing. Interesting cross-party thinking on the matter is under way, for example in the work of the Poverty Strategy Commission set up and chaired by the noble Baroness, Lady Stroud. Our Committee’s inquiry will be able to draw on that and other work.
It is clear that the immediately preceding Administration —the interim Government, as the hon. Member for Blackpool North and Cleveleys described it—would not have honoured those obligations. The right hon. Member for South West Norfolk (Elizabeth Truss) told us yesterday that her Administration was brought down by a left-wing conspiracy in the financial markets. It is not clear whether she regards my right hon. Friend the Member for Hayes and Harlington (John McDonnell) as having been responsible for organising that.
I knew I’d get the blame somehow.
Actually, of course, it was brought down by economic reality. But I do not think that that Administration would have delivered an inflation uprating, so it is to the credit of the current Administration that they have done so.
I also welcome the increase in the benefit cap. The cap was introduced in 2013 and then reduced in 2016; it has never been increased at all. At the beginning of April it finally will be, thank goodness, but only by the overall rate of benefit uprating, which means that in effect it is a standstill increase. The impact of the benefit cap will not get worse in the coming year, but that will not affect the worsening impact of the cap’s falling in real terms every year since it was introduced.
Will the right hon. Gentleman go one step further and join those of us who want the benefit cap not merely raised, but scrapped in its entirety because it is having such a detrimental impact on families across these islands?
There is a strong case for that. At the time when the benefit cap was introduced, we were told that it was to prevent people from receiving more in benefits than they would if they were working, but any relationship with wage levels has long since disappeared.
In its briefing for this debate, the Child Poverty Action Group makes the point that the increase does not undo the damage of the cap having been frozen since 2016, but
“pushes families who would be in poverty anyway into even deeper poverty.”
It points out that 123,000 households are currently affected by the cap, including 107,000 households with children. That is one reason why, before the pandemic, when the data was most recently updated, 700,000 more children were in poverty than in 2010. The case for the cap needs to be reconsidered.
I want to pick up a point that my hon. Friend the Member for Westminster North (Ms Buck) made about the absence of an uprating to the local housing allowance, which is a very big problem. The LHA will be frozen for the coming year at the level at which it was set in 2020, even though rents are rising fast. When I raised the matter with the Prime Minister at the Liaison Committee in December, he replied that the uprating in 2020 represented
“a very significant cash uplift at the time, which it is appropriate to have maintained”,
echoing the wording of the ministerial statement from which my hon. Friend the Member for Westminster North quoted.
I agree with the Chair of the Select Committee about the rapid increase in rents, particularly in the private sector—it is huge in the big cities. Does he think that the Government should at least reflect on the need for a freeze on private sector rents, and for some serious legislation to protect the now huge proportion of our country’s population who live in the private rented sector?
The right hon. Gentleman makes a very powerful argument that the rate at which rents are now rising is devastating household finances in many parts of the country. All the 2020 increase—the much-vaunted “generous uplift”—did was raise the local housing allowance back to the level at which it had been set at the beginning of the decade: at the 30th percentile of local rents. In other words, it was raised to a level at which it covered three in 10 of the homes of that size in each local area, so even in 2020 it was not enough to cover the rent for seven out of 10 of the homes available. Since then, it has been frozen; by the end of the coming financial year it will have been frozen for four full years.
The consequences are becoming clear. Last week, the Combined Homelessness and Information Network reported that up to 3,570 people were sleeping rough in London from October to December 2022—a 21% rise on the same period in the previous year, with a 29% increase in the number of new rough sleepers. The chief executive of Crisis said:
“It is simply disgraceful that the numbers of people forced to sleep on the capital’s streets is very nearly back to the record levels we were seeing before the pandemic.”
Zoopla data shows large shortfalls for the cheapest properties by the end of last year: the shortfall for a one-bedroom home in Southwark had almost doubled in five months to £2,630 a year, while the shortfall for a three-bedroom home in Bromley had increased by more than £1,000 in five months to £3,555. At the start of 2022, some 1.7 million people—more than one in three renters in the private rented sector—were dependent on housing support to help them with their rent. Fewer than one in 12 private homes listed last year were affordable within the local housing allowance level; that figure reduced by a third in just five months last year.
The level of support is now being frozen in cash terms for a further year. Crisis said last week that it was
“particularly concerned that the lack of social housing and the growing gap between overheating rents and the frozen Local Housing Allowance is pushing people towards homelessness.”
That is the reality of the impact of the policy, which should urgently be reconsidered. Ministers say that they are committed to ending rough sleeping, but the policy is driving an increase in rough sleeping.
I am grateful to my hon. Friend the Member for Westminster North for drawing attention to the Select Committee’s recommendation about the cap on the level of childcare support in universal credit. It is regrettable that there is nothing in the present measures that will address that, but I hope we might see something in the Budget on that front, given the cross-party concern about the inadequacy of childcare support at a time when we want to encourage people back into work.
It is a relief that a catch-up uprating is being delivered to the main rates of benefit, but we are a very long way from providing an adequate social security safety net. A large-scale repair job will be needed in the near future. There is growing evidence that disabled people are facing an especially tough time in the current cost of living crisis. Their situation, to which the hon. Member for Blackpool North and Cleveleys was right to draw attention, has to be addressed.
Most immediately, however, I urge the Minister to take another look at the local housing allowance level. Ministers say that they are committed to eradicating rough sleeping, but it does not look as though they mean it. Keeping the local housing allowance frozen for a fourth year will drive a further surge in the number of rough sleepers, as well as very serious problems for hundreds of thousands of others.
It is a real pleasure to follow the right hon. Member for East Ham (Sir Stephen Timms). I was proud to serve under his chairmanship for a whole three weeks or so on the Committee, and then to reappear as a Minister some weeks later. He has a formidable knowledge of a broad spectrum of issues, and always chairs the Committee’s meetings in the right spirit to tease out what needs to be done to help some of the most vulnerable people in society.
I warmly welcome the various increases being announced by the Minister this evening, in what must be his 20th of these debates: they seem to come round more quickly every year. Having been a Minister for disabled people, I am pleased that we are delivering record amounts in disability benefits to some of the most vulnerable, and that we are getting better at providing support for those most in need. For example, those with mental health conditions who are receiving personal independence payments are six times more likely to receive the highest level of support than they were under the old legacy benefits.
However, welcome though the additional funds have been, we should also—with one eye on the forthcoming White Paper—think about the wraparound support that is provided. For the purpose of disability benefits, people are assessed before being awarded, for a fixed period, a level of financial support, but we do nothing to signpost the additional help that is available. We are all committed to providing additional support for people with mental health conditions, and the Government receive cross-party backing for that, but it is often difficult to target the support provided by either the NHS or associated organisations because we cannot identify the people who need it. However, having now identified them through the personal independence payment system, we should be signposting claimants to the wide range of support—support from charities or the Government, whether formal or informal—so that they know what is available in their postcode areas. My office hosts monthly Parkinson’s coffee mornings, mainly for carers so that they can share their experiences and discuss where they are able to find support, and they are of huge benefit to those people, but we could be using the data we have to share that best practice.
Let me now say something about the support for those who are receiving unemployment benefit, predominantly through universal credit. I welcome the Government’s moves this year to increase that support, but—again, with one eye on the White Paper—we must not lose sight of the need wherever possible to localise and target the support that is available. We spend billions of pounds on work support programmes, but they involve national contracts covering various regions, which means that only generic offerings are available. We need to set aside some of that money to empower the work coaches in jobcentres to commission support in localities where smaller organisations can unlock people’s undoubted potential to put them on the first step of their careers.
We should also bear in mind that we lose about 300,000 people a year from the workplace as a result of changing health conditions. Our Government have a fantastic record of delivering disability employment, having exceeded the target of 1 million more disabled people in work—the figure is about 1.4 million now—but there are misconceptions surrounding it. For instance, the vast majority of people who have either a disability or a long-term health condition will develop it while they are of working age, and we must get better at providing earlier intervention to keep those people out of the benefits system.
There is nothing worse than a deteriorating health condition, with the added pressure and challenges that it causes, for those whose confidence is then shattered because they have crashed out of work and must suddenly present themselves at a jobcentre. A big business should be investing in access to additional support and healthcare. I had the pleasure of visiting some that paid attention to the welfare of their staff, and that was not just because of corporate responsibility. Recruiting and retaining employees, particularly when there are skill shortages, is a win-win situation. Many small and medium-sized enterprises would not necessarily be able to do that, but again, the Government need to get better at signposting advice and support.
Let me give the example of the Health and Safety Executive. We are world leaders when it comes to safety—the HSE is respected across the board, and commands huge fees from international companies to provide best practice from the United Kingdom—but we need to get the health side right as well, so that fewer people have to rely on annual upratings and counting the pennies because being in work will give them the best chance of improving their lot.
Finally, let me pick up a point made by the shadow Minister about pensioner poverty. Twenty-three years ago, at the beginning of my political journey, I was proud to be elected as a councillor in Swindon, and here I am now as the Member of Parliament for North Swindon. My first election was on the back of a 75p rise in pensions, which is a light year away from the triple lock that has delivered some £2,400 more, in cash terms, for pensioners on fixed incomes.
It is a pleasure to follow the hon. Member for North Swindon (Justin Tomlinson). Let me begin by saying that 1.7 million people in Scotland are turning down or turning off their heating as their bills rise. More than 70% of the poorest 20% of families are going without essentials, more than 300,000 Scots are cutting back on toiletries and sanitary products, and 42% of adults in Scotland are showering or bathing less. That is only a snapshot of a very bleak situation. Why is it happening? Because of 13 years of Tory rule. Tories are more interested in inciting a culture war than food on tables in Scotland. Scottish National party Members welcome an inflation-related increase in benefits, but why the delay? Why do our constituents need to wait until April? This should have happened immediately, because energy bills, food prices and mortgages have already risen.
Then there is the benefit cap, a grossly unkind policy that is illustrative of this Government—a Government who have removed the cap on bankers’ bonuses but will not scrap the cap on benefits, which has been frozen since 2016 and which dictates the amount of social security that our constituents can claim: meagre, tiny amounts in comparison with the billions that the Government are playing with. They continue to inflict even more hardship on the most vulnerable of families, 70% of whom are single-parent families. Even a glance at the welfare system over which this Government preside shows that people must bargain to access welfare, and they are bargaining with their dignity.
Let us contrast that with the social security system established by the Scottish Government. They introduced the Scottish child payment, which, despite being a brand-new benefit, has already been increased by 25%. That has brought the payments to £25 a week, a rise of 150% in less than eight months.
May I point out that the Scottish child payment is not dependent on a family’s having two children, but is per child? Unlike the UK Government and the People’s Republic of China, we care about all children, not just the first two.
My very good friend has made an excellent point. There is no limit on the Scottish child payment, whereas this Government have imposed an abhorrent two-child cap.
Pensioners have been abandoned continually by successive Tory Governments who have broken the triple lock, abandoned the WASPI women, provided a lower state pension relative to average earnings than most other advanced economies, and ended the free television licence. According to the Joseph Rowntree Foundation’s recent UK Poverty 2023 report, 1.7 million pensioners in the UK were living in poverty in 2020-21.
How does my hon. Friend think her constituents who are in that position—people who are struggling on social security payments—must feel when they see all the blatant tax evasion that is going on, depriving Government coffers of money that could go towards providing them with a decent standard of living?
I thank my hon. Friend for making that excellent point. On Friday, in my constituency, I met representatives of Pensioners for Independence, who cannot not understand why the UK Government are contributing such measly sums to our state pensions and our welfare system, and who see independence as a shining light and a way out of this despicable system. The people who have paid into the pension system their whole life are being completely short-changed by this UK Government.
We welcome an inflationary increase to benefits, which is entirely necessary given that inflation rates have soared due to economic mismanagement by this Government and the four preceding ones. But the welfare system in this place is fundamentally broken, potentially beyond repair. Worse yet, this Government are unwilling even to try to fix it. It would be remiss of me not to mention the light at the end of the tunnel for the people of Scotland: an independent Scotland, delivering fairness, equality and a complete social security system that is entirely fit for purpose.
I am pleased that we are having this debate and that, for once, it is fully subscribed to, which is very welcome. We are dealing with issues of terrible poverty in this country, brought about by a combination of low wages, insufficiency of benefits, very high rents, and inflation driven largely by the greed of the energy companies, which are making so much money. This House needs to reflect seriously on how the fifth-richest country in the world can have more and more people sleeping rough, begging on our streets and trying to eke out an existence.
I am listening very closely to the right hon. Gentleman’s speech. Does he attribute any blame for the fiscal difficulties that the country faces to what Mr Putin has done in Ukraine—yes or no?
I have not mentioned anything to do with Ukraine.
That’s the point!
Could the Minister hold in his excitement for one moment? He is the Minister responsible for the inadequacy of benefits; perhaps he should reflect on that. Yes, the war in Ukraine has had an effect on global energy prices, although the effect has been bigger in some countries than others. Countries such as France deal with that by taking energy companies into public ownership to protect their citizens from the grotesque energy price increases that his Government are quite happy to mete out to the people of this country.
No, I will carry on with my speech. The 10% benefit rise is obviously better than no rise at all. During the Budget statement, the previous Chancellor would not even answer the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), on whether there would be any increase whatsoever to benefits. A 10% increase is obviously an improvement on what was provided by the last Chancellor, but it does not even meet inflation. It comes nowhere near to meeting the rate of food inflation, which is running at around 15% to 16% per year. Families or individuals who rely on benefits spend a wholly disproportionate amount of their income on food and energy; better-off people spend a much lower proportion on those things. The rate of inflation for the poorest 10% of our country is far greater than the 10% or 11% figure that the Bank of England puts forward.
Many issues could be raised, and I will raise a few very quickly so that all Members who wish to speak can do so. Some years ago, a two-child benefit cap policy was introduced, which many of us were, and remain, concerned about. Those of us who represent constituencies with a considerable number of large families know that they suffer very badly. The two-child benefit cap obviously has a disproportionate effect on the largest and poorest families in our society. I would be grateful if the Minister could tell us where the morality is in saying that the third, fourth or fifth child of a family is less important than the first or second. It is a simple moral question. If we want to look after all the people in our society—I like to think that we all do—that should include all children, irrespective of the size of the family. The third, fourth, fifth or sixth child is completely unaware of where they lie in the pecking order when they are born. They find out later that their presence and that of subsequent siblings reduces income for their family. It does not seem morally right that we should pursue that policy.
The question of the benefit cap and its effect on people in our society is massive, as the Chair of the Select Committee pointed out, as did the hon. Member for Glasgow East (David Linden) and others. The disproportionate effect on people living in the private rented sector is huge. My constituency is inner-city and has a fairly large number of council and housing association properties in it. Their rents are obviously within the local housing allowance, but the vast majority of private rents are nowhere near within the local housing allowance. I was talking to someone in a hostel who was trying to find a private rented flat to move into. They tried every agency they could find; they walked the streets and scoured the newspapers and goodness knows how many websites to try to find a flat within the local housing allowance in inner London, near their school and support network, but they could not get anywhere near it.
Unless we raise or abolish the benefit cap, we have to intervene in the housing market and freeze private sector rents, so that living in the private rented sector is at least sustainable, and those living there do not have to pay part of their rent out of the benefit that they receive. What is going on is simply unfair. I would hope that the Minister would understand the issue with the cap, and the poverty that it brings for so many people in our society. In my constituency, probably more than a third of the community live in the private rented sector—there are probably more in other constituencies—and they are suffering as a result of this issue.
Another issue that I would like to raise is that of people with no recourse to public funds, and the difficulties that they face in our society. It is a bold, dramatic and strong statement when a Government announce that someone is allowed to enter the country but is not allowed any recourse to public funds whatsoever. This issue was raised two weeks ago at the Parliamentary Assembly of the Council of Europe in the context of our adherence to the Istanbul convention on the protection of women, of which the Minister will be aware. The report that we received raised concerns that in some member countries in which there is no recourse to public funds—the problem is not exclusive to the UK—women in an abusive relationship might not have settled status when their partner does. Those women are unable to gain independent security and safety, and often are unaware of the domestic violence provisions that they might be able to call on. Will the Minister look seriously at the very well thought-out report from the Council of Europe about our adherence to the Istanbul convention, which I am sure he supports? Will he recognise that no recourse to public funds affects not only the individual concerned but the wider family, if there is one?
If hon. Members talk to people who are sleeping rough on our streets, turning up at food banks in our communities or begging on tubes and elsewhere, they should ask them what their situation is. Many have been unsuccessful in their initial asylum application, but may ultimately win on appeal, and they have no access to any benefits whatsoever. They live in the most desperate poverty, are prey to crime and abuse, and can be abused and exploited by those with criminal intent in our society. Through this policy, we are creating an incomeless underclass in the major cities of this country. I know the Minister would not want that to be the case, but unfortunately the implementation of this policy leads to that.
The last point I want to raise is to follow on from what the hon. Member for Glasgow East and others have been saying about the pension level in our society, and the numbers of pensioners who are entitled to support beyond the level of the state pension but are simply unaware of it, do not know how to apply for it and do not get it. I also want to mention the women who were duped by the way in which the state pension retirement age was raised and are now living in desperate poverty—colloquially known as the WASPI women. I think they deserve justice. They were very badly treated and my friend, the right hon. Member for Hayes and Harlington (John McDonnell), certainly took their case up when he was shadow Chancellor of the Exchequer.
Pensioner households, like everyone else, are facing terrible stress at the moment from food and energy price rises. I heard from the media yesterday that the Government have no intention of continuing the energy price limitation after April, but if I am wrong on that I am happy to be corrected. The protection that exists now is only a protection relating to the 100% increase in energy prices that we have already had. If you go down any street in any poorer part of this country in the evening, you see darkness; you do not see people with their lights on. You see people going to bed early because they cannot afford to heat their home. This is real. Children in the poorest households are underfed and they are cold because their homes cannot be properly heated. Many elderly people are huddling in libraries during the day just to try and keep warm. Is this really a sensible or fair way of going on? Other Governments, including the French Government, have intervened to try to control the energy market and ensure that energy price rises do not get to the levels they are in this country. Our Government are not prepared to do that.
This benefit uprating will no doubt go through this evening, but all it does is meet the headline of inflation that the consumer prices index set last year. What we need is something much more bold, with much more intervention, that recognises energy price rises, food price rises and the enormous rent rises in the private rented sector. Those are the biggest drivers of poverty in our society.
It is a pleasure to follow the right hon. Member for Islington North (Jeremy Corbyn). He refused to give way to me during his speech when he made reference to France being a particularly good example of a country that had reacted well to energy inflation. He forgot to mention that 80% of all French energy is generated by nuclear power and is therefore not affected by the Russian invasion of Ukraine. I look forward to his support for the roll-out of nuclear power stations across the United Kingdom.
Turning to the main body of the debate, I welcome the Government’s draft benefits uprating order, but I stand here to represent an argument that I do not think has yet been made in this debate but that has been raised many times by my constituents and those of other Members, certainly on the Conservative side of the House: is it fair, during a period of full employment, that we should increase benefits at the rate of inflation when those in employment are seeing their wages rise by about half as much? This has been raised multiple times, and forcefully, by constituents of mine. They say that it is simply not fair that people who are just about managing, who are working to support their own families and who are paying tax but also being self-reliant, should have wage rises of about 5% when benefits are being raised by double that.
Will the hon. Gentleman give way?
I will give way in a moment, because what I am about to say might answer the hon. Gentleman’s question.
I think the answer is: yes, it is fair. That is because it is morally right to protect the purchasing power of those very poorest families at an absolute level, even when other people in employment are suffering as well. I think it is right, because personal inflation is at its highest in the poorest families and food inflation is responsible for a higher percentage of their spending. It was mentioned earlier that food inflation might be running at about 19%, but I think it is about 17.1%. It is morally right for the Government to represent and look after the very poorest in society while at the same time, crucially, always making sure that work pays.
In my constituency we have 2% unemployment. We have a huge demand for staff. I have a very odd situation in a town that I represent called Fakenham. I visited a food bank there that is run by the Samaritans, and it is only a few yards away from a jobcentre where they told me that anyone who had two arms and two legs could get a job. There are lots of jobs available, and I have had meetings with frustrated employers in Fakenham who cannot get enough staff, at every level of the employment sector, including those with no specialist skills other than their natural talent. That jobcentre is 200 yards away from a food bank.
The hon. Gentleman and I could probably have a long drawn-out debate about why there are so many vacancies in the jobs market and how the UK Government’s immigration policy impacts on that. I would ask him to reflect on the misconception that food banks are used solely by people who are out of work. We are increasingly seeing people who are in work and suffering from in-work poverty using them. Has his local food bank told him how many of the people using it are experiencing in-work poverty?
That is an interesting question, and I have asked exactly the same of our food bank. I have asked it to give me the data on how many of the people are on benefits and whether they are in work or unemployed, because it is a mystery to me. It refused to give me that data, which I think is really surprising, because that is important to us as policymakers. We need to know whether people need to use food banks because benefits on their own are the cause or whether it is about in-work benefits and the low level of pay.
Further to the point made by my hon. Friend the Member for Glasgow East (David Linden), it would be interesting to know how many people working in that jobcentre are having to access that nearby food bank. It would be really useful if the hon. Gentleman could inquire about those figures.
That certainly has not been raised with me. That is not information that I can supply, because I simply do not know the answer, but I would be amazed if they were using it. The people working in the jobcentre are very optimistic about the local economy and the opportunities that are available in Fakenham and more widely.
The hon. Member for Glasgow East (David Linden) raised in passing the role of immigration in low pay. In my submission, this is one of the areas where the Government have been right to limit immigration, particular low-skilled immigration, because that gives increased bargaining power to the lowest paid. Anecdotally, I have seen hourly rates across my constituency going up in industries that are seeking to attract harder-to-find staff. The hourly rate is going up to £9, £10, £11 and even £12 an hour for unskilled work in order to attract new staff where they are harder to find. That is a key benefit and a good economic case for taking control of immigration in a way that the SNP would not like to see.
I am certainly very much in favour of people in Scotland having control of their own immigration system, because our problem has never been immigration; frankly, our problem has been emigration. The hon. Member talks about how successful the UK Government’s immigration policy has been. Can he explain why there are fields all across these islands where fruit is rotting because we do not have workers coming here to pick it?
The hon. Member should know that the seasonal agricultural workers scheme allowed, from memory, 40,000 seasonal workers to enter the country last year, and that its application was not fully taken up by the agricultural sector, so that is not the reason why fruit was left rotting in the fields.
Returning to my main point, the Government are right to protect the buying power of the poorest. At the same time, they are also right to ensure that work always pays. The reduction in the taper rate from 63% to 55% is crucial in raising the income of those in work so that they do not need to rely on food banks, as is increasing the work allowance by £500. Perhaps the difference between Government and Opposition Members on this is that we on the Government Benches think that the best solution to poverty is always work—allowing people to get back into work; encouraging them to grow their skills and employability, and the value of their employability, as they progress through their career. I think the Government have got the balance right, supporting the poorest families while ensuring that work continues to pay.
It is a pleasure to follow the hon. Member for Broadland (Jerome Mayhew), who made a thoughtful contribution, although obviously there are differences of opinion on some of the things he said.
I am pleased to contribute to this year’s debate. The Minister’s initial contribution was pretty factual and to the point, but these debates are always an opportunity for Members to comment generally on social security and uprating. I am pleased that this year’s debate is slightly less controversial than last year’s. Indeed, I think there has been relief on both sides of the House that the uprating will be in line with inflation. That means we have not seen the triple lock abandoned and benefits will be uprated in line with inflation. However, those conventions have been broken previously, so the challenge is that people are already behind as a result of previous commitments having been reneged on. But I am pleased to welcome this uprating.
In recent years it has become increasingly clear how important the social security safety net is as a public service. As I have said previously, covid has meant that some people who never expected to be supported by the state have had to access that support. That is the reality: we never know when we might need support. We might become injured or ill; the company that we work for might go under, maybe because it cannot get enough staff and cannot open its full hours, and therefore does not have the productivity it needs to keep going; or indeed, we might need to care for loved ones. Social security is, and should be, there to make sure that no one is left behind.
The hon. Member for Blackpool North and Cleveleys (Paul Maynard), who is no longer in his place, mentioned the all-party parliamentary group on ending the need for food banks. I co-chair that APPG, and have been very pleased to have the hon. Gentleman as part of our inquiry team. The final evidence session of our “Cash or Food?” inquiry is tomorrow, and I would be delighted if the Minister could attend our report launch on 22 March—I am grateful to the Under-Secretary of State for Work and Pensions, the hon. Member for Mid Sussex (Mims Davies), for her written response to our inquiry. We are looking at that issue because, as I said in my intervention on the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), the only time during the covid pandemic when we saw a decrease in food bank use was when universal credit had its £20 uplift. That suggests to me that people were using those additional moneys for the purpose of putting food on the table.
As I said, this debate is quite factual, but it gives us an opportunity to comment on Government policy and practice. I want to touch on something that the hon. Member for Glasgow East (David Linden) mentioned, which is universal credit for the under-25s. It may have been uprated by 10%, but it remains lower than for the over-25s, and I would argue that there is simply no good reason for that. Indeed, about 18 months ago I wrote to the Department for Work and Pensions on this topic in support of a campaign by One Parent Families Scotland. I was told, in terms that, frankly, I found quite patronising, that the reason for the policy is that the DWP believes young people are more likely to live at home—that was assumed even if they themselves are parents—and generally have lower earnings expectations.
That response totally ignores the experience of the majority of under-25s who claim universal credit. Of course, as parents we would hope to support our children as they take their first steps in the world, and to provide a safe haven to which they could return if necessary. However, that does not help the young people who need to leave home because they are looking for work and there are no jobs in their area; the young people who do not come from stable homes and need to support themselves; or the young parents who cannot stay in their family homes with their own children. I hardly want to deign to give a response to the statement about having lower earnings expectations, but I will say that no one who is out of work and receiving universal credit, or who, as has been pointed out, is in work and receiving universal credit, even at the full amount, is sitting idly by, wondering what to do with that excess income.
As many Members have said today, we are in a cost of living crisis. Universal credit is a safety net, and this Government policy assumes that young people deserve less safety than older people. That is the wrong message. Given the ministerial churn within the DWP and, indeed, elsewhere, I hope that we can review that misguided position. At the very least, I ask the Minister to review one aspect in his closing remarks: reinstating the higher rate for young parents, as it was under legacy benefits. Young parents are most likely to be struggling, and surely they and their children deserve the same support as a family where the parents are just a year or two older.
I will highlight a few other issues, starting with PIP. All of us in this place will have a caseworker who spends a lot of time providing support for PIP appeals, the vast majority of which are successful. It is a long, stressful application process, and we have assessors who simply do not understand the process or what applicants are experiencing, resulting in widespread mistakes that we as MPs end up dealing with. It costs the taxpayer more money to reverse those decisions than to get them right in the first place. The stress makes people who are already struggling even more ill, and as we know, very sadly, some people give up as a result. The system does not work. This issue is so important when the Government are currently looking at measures to deal with the economically inactive—I look forward to hearing their proposals. They want to get people back into work. Now is the time to bring those specialist assessors and the assessment process for PIP back in-house, and to stop lining the pockets of private providers with taxpayer money when they simply do not get the job right.
The hon. Lady raises a very important point about getting the job right. Thankfully, the vast majority of the millions of claims are right first time round, and for those where it sadly goes wrong, on the vast majority of occasions, that is because of missing additional supportive evidence. As such, will the hon. Lady join me in welcoming the Government’s move to a system where, at the mandatory reconsideration stage, rather than waiting for claimants, the assessors have now started proactively contacting them to identify the missing evidence and help them find it? That has seen the number of those able to be sorted quickly more than double.
I am happy to support any improvements to the process, but what the hon. Member has done is to point out just how complex these processes are and how difficult they can be for people to navigate. It is only when there is a proactive approach that we start to get things right.
Part of the problem is the run-down in recent years of advice centres and other agencies that can assist people to get the paperwork right, and to ensure representation at the appropriate stage.
I agree with the right hon. Gentleman. Scotland is not immune from that: with more and more ringfenced spending for Scottish Government priorities, local authorities have less and less discretionary spend to put into areas such as advice and support.
I want to touch on carer’s allowance. It will not surprise Members that I want to talk about carers; I am pleased to say that my private Member’s Bill, the Carer’s Leave Bill, passed its remaining stages in the Commons on Friday and is off to the other place. According to the Government, carer’s allowance aims to help carers keep a link with the workplace, but one challenge I had with my Bill was finding constituents who would benefit from carer’s leave, because so many of them had been forced to leave the workplace due to their caring responsibilities. Simply put, carer’s allowance does not work. Carers need to be allowed to work more before they lose that allowance—that would not cost the Government more, but it would get more people back into work. I would be very interested to hear the Minister’s response to the hon. Member for North East Bedfordshire (Richard Fuller): he is no longer in his place, but he raised that very point. At Prime Minister’s questions in December, I asked the Prime Minister how the Government can believe that £132 per week in earnings is sufficient to live on such that people lose their carer’s allowance, especially when the caring never stops.
The state pension was the subject of a general debate last week. I do not necessarily want to reiterate the points I made on that occasion, but we do know that pensioners face real challenges. In the past year, I have probably done about three letters—articles—to my local paper to encourage people to take up pension credit. As other Members have mentioned, I wish the Government would pledge to follow the ombudsman’s recommendations on compensation for WASPI women, which, as we move into stage 3, would provide some degree of comfort to those campaigners. I refer Members to my early-day motion 814 on that.
When we talk about the pension increases, we need also to talk about errors that mean people do not necessarily get what they are entitled to. The LEAP—legal entitlements and administrative practices—exercise is looking at historical underpayments, and it seems to be forever increasing its remit and timescales. Perhaps one day it will finally look at underpayments to divorced women. Dividing pensions on divorce is incredibly complicated, and the Government have been deliberately blinded by not including that group. I know that the former Pensions Minister in the coalition, Steve Webb, has spoken out about this issue before. I urge the Government to listen to him, if not to me.
I raised this issue at business questions on Thursday: will the Government please tell the truth to the House about what is happening on universal credit national insurance credits? That is another issue where pensioners could go without because of internal DWP failures. Without honesty and openness, we cannot know the extent of the problem or how it will be fixed.
Every Member here knows—simply because of the number of constituents our caseworkers help every day —that there are fundamental problems with how the DWP functions. Sometimes it seems as though it has become a routine part of the process for DWP staff to send people to their MP, and that is simply not good enough. I welcome the uprating orders, but I hope that the Minister will give us some answers on everything else.
I want to raise three issues briefly; some of this has been covered already but I want to reiterate some of it and go into more detail. The first is the benefit cap. The second is the triple lock. The third is the carer’s allowance, where I follow on from the hon. Member for North East Fife (Wendy Chamberlain).
This debate is primarily about the increase, but in the past these debates have been used to try to shape the debate on social security for the future. Much of what I say, therefore, may be aimed at the Government, but now that the Select Committee has announced its inquiry, part of it is aimed at the agenda for that inquiry.
Those of us who were in the House when the benefit cap was introduced will know that it was born in an era when the debate on poverty had descended into definitions of “skivers” and “strivers”; it was almost a reversion to the language of the Poor Law. We knew what impact it would have and we knew the numbers affected would increase rapidly. Just over 70,000 were being impacted at the start but, as my right hon. Friend the Member for East Ham (Sir Stephen Timms) said, this rose to 120,000 and above. The cap hit some areas in particular, including London constituencies. I am a London MP and I know that 44% of those affected are in London. It hit the black, Asian and minority ethnic community in particular; it has hit eight out of 20 from the BAME community, yet they represent three out of 20 in the population overall, so this was discriminatory.
My right hon. Friend is making a strong point. Does he agree that the cap has also been a major driver in forcing working-class communities out of inner-city areas, where there are now huge levels of private landlord speculations going on?
I hope that Conservative Members and others who may not have had the experience of this recognise how it has affected our communities. I do not use the word lightly, but some of us have experienced what are almost forms of social “apartheid” within our communities, where certain sections of housing are no longer available to working-class people. In some instances, fenced communities have developed as a result. I highlight reports of what happened in my constituency as regards the Ballymore housing development.
I come back to the point that my right hon. Friend the Member for East Ham made, which is that the cap has had an impact on a large number of children, with the last calculation being 308,000; 70% of the people affected are single parents. As he said, this pushes people into deep poverty. I was looking at the figures and they show that the average capped household with two children is now £150 a week below the Government’s own poverty line. Scrapping the cap would increase benefits to them by an average of £65 a week; the cost would be £500 million, which is 0.2% of the total spending on social security. A marginal increase in the efficiency of tackling tax avoidance, an increase in national insurance beyond getting rid of some of the limits at the higher levels—that would easily pay for this marginal improvement but would have a dramatic effect on the living standards of so many people.
I campaigned against the breaking of the link between pensions and earnings when Mrs Thatcher introduced it, so I wholeheartedly welcomed the triple lock when it was introduced by a Conservative Government and I made that point in this House. I regretted bitterly, however, that the Government broke their pledge last year, because once the link was broken, a debate was opened up among some Members about the triple lock being no longer necessary. I am hoping that the statement about social security and pensions today reaffirms the message across the House that the triple lock is here to stay.
When we look at the figures, we see that one in five pensioners is in poverty; 2.1 million older people are in poverty; they get £40 a week less than the Government’s own poverty threshold; 1.3 million older people are now categorised as suffering forms of malnutrition; and we have always had a high level of excess deaths in winter among older people, with on average between 25,000 and 30,000 dying unnecessarily. I looked at the figures showing what has happened since the break with earnings. The proportion of those people living in severe poverty is five times higher than it was in 1986—we have had the largest increase in western European countries. So I make an appeal to Members from across the House. The triple lock was a major reform, and I thought we had built consensus on it. It should not be in any way undermined in the future.
I think the triple lock should apply to all benefits, and I hope the Select Committee will have that debate. I asked the House of Commons Library to give me the figures on what would have happened to carer’s allowance if the link had been kept since the 1980s. It is now at £76.75 but it would have been £146.42. Invalidity benefit is now £130.20, but it would have been £233.55. If we look at unemployment, we see that jobseeker’s allowance is now £84.80 but it would have been £185.49. There is a moral argument for maintaining the protection of benefits over time and trying to build consensus across the House on that, in the same way in which it was eventually built on the triple lock for pensions.
Finally, let me touch on carer’s allowance. I have been chairing meetings of unpaid carers or informal carers, as they describe themselves, over the past 18 months, and I just want to get the stats on this out there. I pay tribute to what the hon. Member for North East Fife has done with her legislation and the campaign she has waged. Some 8% to 10% of the adult population are informal carers; two thirds of carers are in employment—that is the whole point here; six in 10 of those who are caring for 35 hours a week or more are workless, which is three times the rate of those caring for less than 20 hours a week; and about 25% of informal carers are living in poverty, according to the Joseph Rowntree Foundation’s latest figures. Another figure, which I believe she has quoted in the past, is that it is estimated that unpaid carers across the UK provide £135 billion-worth of caring in our society, and that largely falls upon the shoulders of women. It is now time to recognise the significance of the role that these carers play and the fact of the poverty they live in.
As for Northern Ireland, the Carer Poverty Commission was established last month and it is chaired by Helen Barnard of the Joseph Rowntree Foundation. Research from Carers Northern Ireland showed that nearly one in three unpaid carers in Northern Ireland were struggling to make ends meet, with one in four cutting back on essentials such as food or heating just to get by. I believe the situation is exactly the same across the UK for carers.
Let me make this suggestion: the unpaid carers I have met say that, like everybody else who works, they should be paid a living wage. They should at least get the minimum wage so that they can get by. At the very least, let us take the first step in that direction, which would be to recognise that maternity allowance is paid so that people can care for a child. Perhaps carer’s allowance should at least go up to the level of maternity allowance. If we can increase carer’s allowance in that way, it will enable at least some of those informal carers to be lifted out of poverty. I put that suggestion on the table for the Government to debate and for the Select Committee to look at as well.
As the WASPI women have been mentioned, I cannot help but do so too. This is an injustice that needs to be redressed, and it needs to be redressed soon, because many of the women who were affected are now late in life. We have already lost some of them, and many may not live long enough to see the recompense that they deserve. However, I fear that those who are placing their hope in the ombudsman’s assessment will be sorely disappointed by the levels that are recommended. If that is the case, I commit to returning to the matter on the Floor of this House to make sure that the campaign continues and succeeds.
It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell). When he was talking about the invalid care allowance, which was the predecessor to the carer’s allowance, I recalled meeting people at that time—I was dealing with these matters professionally then—who were working 60, 70, 80, or 100 hours a week and were in absolutely no position to take on paid work to supplement the meagre level of their allowance.
On behalf of my own party, I welcome the decision to uprate most benefits in line with inflation. However, given the desperate situation facing millions of people on benefits, this is simply not enough. Reference has already been made a number of times to reports by the Child Poverty Action Group that costs for low-income families have risen by 21% in the past two years, which is more than the 14% rise in benefits. This gets to the heart of what I wish to say in my contribution, which is about the inadequacy of benefits.
Since 2010, austerity has caused huge increases in child poverty. The CPAG estimates that, pre-covid, 700,000 more children were in poverty than at the start of the 2010s. Wales currently has the highest level of child poverty, at a shocking 34% of all children. There needs to be urgent investment into the system, far above what is being proposed at present.
Looking at what life is really like for those claiming universal credit, it is plain that current benefit levels, even those matching inflation, will not be enough. A snapshot of poverty in Wales this winter produced by the independent and impartial Bevan Foundation revealed some shocking findings—I have a report here that I can recommend to anyone who is interested in the situation in Wales. In Wales, people on universal credit are five times more likely than the general population to report that, sometimes, often or always, they struggle to afford the basics. Furthermore, 52% of disabled people whose condition limits them severely have gone without heating in their home over the past three months.
It is no wonder that Public Health Wales recently said that the current cost of living crisis is not a short-term economic squeeze. It is having, and will continue to have, wide-ranging and long-term impacts on the health and well-being of the people of Wales. Those impacts have the potential at least to be on the same scale as those of the covid-19 pandemic, which has already exacerbated existing inequalities in Wales. The Government must meet this challenge, go beyond treading water and implement at least a substantial uplift to universal credit and legacy benefits.
Universal credit may not meet a claimant’s needs in full due to the barriers and restrictions on entitlement built up over the years. This has been referred to already by a number of Members. The Government should scrap these restrictions, starting with the pernicious two-child limit, which has also been mentioned today. The benefit cap is being uprated, but it should not exist in the first place. There is, quite obviously, a differential effect on communities that place a high value on having more children, perhaps because of their particular religious or cultural beliefs. Those people are being scapegoated, and they are the poorest in society.
As the right hon. Member for Hayes and Harlington mentioned, removing the benefit cap would cost 0.2% of all social security spending. That is a flea bite, given the beneficial effect that it would have. It would be a price well worth paying to remove this vicious and unfair penalty on ordinary families. Sometimes I reflect on my own family’s experience. I am one of six, brought up after the war when the benefits of the post-war settlement meant that we had so many advantages when it came to health, universal benefits, family allowance and education. Looking at the situation now, the deterioration since the post-war settlement is clear.
Deductions in benefits are also a huge problem facing claimants. It has been estimated that more than four in 10 households receiving universal credit had money automatically taken off their benefit entitlement. The average amount deducted was £61 a month, or £14 a week. As with many social and economic matters, there are no statistics published for Wales, but estimates suggest that 88,000 households in Wales do not receive their full universal credit entitlement because of automatic deductions.
Turning to the local housing allowance, which has already been mentioned, the autumn statement is clearly a driving factor in the growing gap between rents and housing benefit. In my own county of Gwynedd, 35% of households receiving housing benefit face a shortfall in rent. Clearly, although there is an urban element to this, as has been mentioned already, there is a particularly acute and real problem in rural areas of Wales. Estimates suggest that the shortfall is higher than in Wales’s cities, where local housing allowance better reflects local rent levels and there is also a wider range of housing stock to meet people’s bedroom requirements. I join the calls on the UK Government to unfreeze local housing allowance and uprate it annually, so that it keeps pace with rising rents.
There is far more that the Government could be doing to help those on social security. For example, will they commit to looking at the adequacy of benefits? The all-party group on poverty is currently running an inquiry into the adequacy of benefit levels, so will the Government engage with the findings at all? The Resolution Foundation has highlighted the lag in the uprating mechanism and has suggested ways in which it could be more responsive, such as multiple upratings per year or bringing forward the uprating month. Those are just two of the possibilities. There is also an inconsistency as to why certain benefits are enshrined in law to rise with prices and others are not. What is the Government’s rationale behind that?
Finally, I ask the Government to bring forward the cost of living payments. Although they are, at best, a sticking plaster approach, as highlighted by the Work and Pensions Committee, they should none the less be brought forward so that poor claimants, particularly disabled people, are prevented from falling into debt and destitution, as many cannot wait until spring for more support.
It is a pleasure to speak in this debate and add a Northern Ireland perspective, as I always try to do both here and in Westminster Hall. Right hon. and hon. Members have set out well the state of the country’s finances for many people. I wish to put on record, and I think it is right that I do so, my thanks to the Government, and the Minister in particular, for coming forward with proposals that help.
I want to make four points in my contribution. A Presbyterian sermon is three points, and I will make four; I am not sure whether that makes my speech a sermon, but it is Presbyterian plus one.
I think that makes you a Catholic, Jim!
You be careful, boy.
I am very pleased to add my contribution to the debate. Inflation and the cost of living are really hurting people in Northern Ireland. The right hon. Member for Hayes and Harlington (John McDonnell) set the scene when he referred to child poverty and adult poverty in Northern Ireland, and he was right. I have a staff member who deals with nothing else but benefits, five days a week, and other staff members fill in. That gives an idea of the poverty and disability issues in Northern Ireland and why it is important for me to sow into this debate.
While I thank the Government, and the Minister in particular, for what they have put forward, and it is good to have that, I must first make the point from a Northern Ireland perspective that—as has probably become accepted in this House after so many debates—the Northern Ireland protocol has increased our outgoings substantially more than those anywhere on the mainland UK. The haulage costs and the prices of covering payroll have lessened the numbers of suppliers who will ship to Northern Ireland. That being the case, it becomes much harder to source competitively priced items. While this debate is about how we can help people on social security and improve their standard of living, we must recognise that costs in Northern Ireland are higher than anywhere else.
I read an interesting report back in October in the Belfast Telegraph that stated:
“Average weekly grocery spend is the third highest in the UK for shoppers in Belfast and Derry, according to new research by financial hub Admirals Group.
Shoppers in Northern Ireland’s two biggest cities are reportedly paying £77.70 on average for their weekly grocery shop in 2022, forecast to rise to £179.06 by 2030”—
well over twice the price. The report added:
“Only shoppers in London and Southampton are said to be paying more for their weekly shopping”.
That illustrates clearly that we in Northern Ireland are paying more. When it comes to social security and the benefit cap, we must register our concern that it is more costly to live in Northern Ireland than in other parts of the United Kingdom.
The lowest prices were said to be in Leeds and Sheffield—so at least they will have some benefit—and the same report stated:
“In 2021 the average British household spent £69.20 on groceries each week…If inflation were to remain constant at 11%, by 2030, the average grocery shop for a UK household could cost £177.02 per week, £771.28 per month and £9,204.84 per year.”
Those on benefits in Northern Ireland face a real anomaly. It is dearer to live in Northern Ireland; it is dearer to warm our homes and it is dearer to buy our groceries. That means that someone on benefits in Northern Ireland cannot expect their money to go as far as someone in one of the other constituencies in the UK represented in this House today.
While it is right and proper that benefits are uplifted to enable people to buy the bare necessities, the protocol means that those are not even covered by this uplift. The girls in my office referred almost double the number of people to the food bank coming up to Christmas this year, an indication that for many people any additional pressure on finances, such as to buy a small gift or a special meal, just cannot be managed.
The first Trussell Trust food bank that ever came to Northern Ireland came to Newtownards in my Strangford constituency. It has found a place and it is doing excellent work, and I support it very much, as indeed does the community. I am one of the referral points, so when it comes to understanding why people are going to food banks I can categorically state that it is not just those on the minimum wage, but those in the middle class, who I refer to as the working poor. The extra referrals, and we have had somewhere in the region of 30% or 35% extra just this last Christmas, tell me not only that the work of the food bank is important, but that there are different people going there. Again, that comes down to the cost of living, especially for those on benefits in Northern Ireland.
I am thankful for the food bank and to the social supermarkets, which are also doing fantastic work in seeking to help people make their money stretch further by teaching budgeting and different ways of purchasing. However, money is not elastic—it can only stretch so far. It is clear that the Government must bridge the gap, and by the same token we must lower the threshold to allow more people to access the help they are entitled to.
Having posed my first question to the Minister on behalf of the citizens of Northern Ireland about how they are finding it harder to beat the inflation that makes foodstuffs and heating more expensive there, I have a second question for him. For example, someone who is £5 above the threshold for universal credit will have missed out on the cost of living payment and will need the same help to pay the same amount for groceries as someone who is just below that threshold. We often find people who fall between two stools, and clearly those people do, so I want to make the point, as others in have in this debate, that they need help. I know the Minister always tries to respond, so I look forward to his response.
My third point is that I will hopefully bring a ten-minute rule Bill to the Floor of this House at some stage in the near future to make meaningful change to the child benefit threshold. Those disingenuous thresholds, which bear no relation or relevance to the cost of living and life, must be reviewed, and the same consideration must be given to the benefits threshold. We had a debate in Westminster Hall last Thursday, led by the hon. Member for Linlithgow and East Falkirk (Martyn Day), in which he raised a clear issue: two people in one house can earn £49,000 each, or collectively £98,000, and their child benefit will not change. However, one person in another house who earns £52,000 and whose partner earns £10,000, so that they earn £62,000 collectively, will see their child benefit change. There is clearly an anomaly in the threshold, and there needs to be a change of direction and some clarity to ensure that those who find themselves disadvantaged in that way are taken care of.
I make a special request, as others have done. Last week, we had a Westminster Hall debate on cystic fibrosis and living costs. Those with disabilities, such as those with chronic obstructive pulmonary disease or those who need oxygen 24/7, have higher costs. I quote some figures from that debate:
“People with CF have higher food bills because they need a higher calorie intake to maintain a healthy weight, and higher energy bills because they need to keep their homes warm to stave off lung infections and they may need to power an additional fridge to store sterile medications or essential medical devices such as ventilators.”—[Official Report, 2 February 2023; Vol. 727, c. 169WH.]
While this 10% increase is welcome, I ask the Minister very respectfully what can be done for those people with disabilities who are feeling the pain more than most.
In my opinion, and I believe others agree, a society is always marked by how it looks after those who are less well off. Our job in this House is to ensure that those who are finding these times particularly difficult—there are many of them across the whole United Kingdom of Great Britain and Northern Ireland—are looked after. That is my fourth request of the Minister.
While I welcome the increase, we are missing out those middle-of-the-road working people who are struggling and scraping by, week to week. I ask the Government to make their next priority the squeezed middle class, and those who need help and just cannot get to the level they would expect.
I thank all hon. Members who have taken part in this debate on uprating benefits. Today, Members have the chance to vote on Government spending on supporting the vulnerable, and this debate takes place at a time when families and pensioners across the country face an unprecedented cost of living crisis. We have an important opportunity to debate the Government’s response. However, I am afraid that, based on the Government’s actions and what we have heard today, that response has let down both families and pensioners. As my hon. Friend the Member for Westminster North (Ms Buck) said, this year’s uprating will at best maintain the severely reduced real-terms value of benefits, which has been eroded over the last decade.
The inadequate safety net provided by the Government has, as expected, contributed to an increased number of children living in poverty, to a deepening poverty, and to an increasing need for food banks. It has also led to pensioners having to wait months for the state pension to be increased in line with inflation, and to those approaching retirement being placed under unnecessary stress and uncertainty as the Government have floated the idea of bringing forward the increase in the state pension age to 68. That has been suggested in the media but without proper consultation, breaking the long-standing convention that pension policy is developed by consensus.
The Government’s response to the cost of living crisis has been deeply disappointing. While I have the opportunity, I will ask the Minister a question about a particular aspect of policy. When one member of a couple is on universal credit and the other receives the state pension, the pensioner is not allowed to claim pension credit, which may have a significant impact on the couple’s income. Will the Minister explain that to me, and write to me about it? Will he also consider changing that harsh and unnecessary policy?
It was clear in contributions made by Members from across the House that there was a great deal of feeling about and interest in this matter. We have discussed the cost of living crisis, child and pensioner poverty, the prices of food and fuel rising faster than the uprating of benefits, and pensioners needing more support. Many speakers criticised the Government for disapplying the triple lock, and called on them to speed up the take-up of pension credit.
Let me be clear: we will, of course, support the motion, but the Government deserve no praise for their actions, as my hon. Friend the Member for Westminster North said. I urge the Minister to rethink the Government’s approach both to the annual uprating and more generally. The Government have let down some of the most vulnerable people in the country, at a time of great financial pressure. I hope that the Minister will reflect on that when he responds.
Notwithstanding Putin’s invasion and the war in Ukraine, the impact of the covid pandemic and the great efforts made by the Government to support this country through it, and any fiscal difficulties caused by those efforts, this Government are supporting the most vulnerable and uprating benefits by in excess of 10%. That is on top of the cost of living support to the tune of £37 billion provided last May, and what will be provided in this coming year. I am proud to make the case for universal credit, unlike the Labour party. We support people who are out of work, and as they progress in work, through reforms brought forward by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), which I believe were the right way forward.
On pensioners, it is rich of the Labour party to criticise. I continue to defend Labour’s actions during its 13 years in government in respect of the women’s state pension, but I was reminded of the 75p increase, which my hon. Friend the Member for North Swindon (Justin Tomlinson) highlighted in his outstanding speech. Bear in mind that in 2009-10, the state pension was worth less than £100, and that as of April this year, it will be worth in excess of £200. That is a massive increase under the coalition and Conservative Governments.
On pension credit, I put on record my thanks for the work of my the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott), and my thanks to Mr Len Goodman, who is not often cited in this House as a supporter of all matters to do with this Government, for his outstanding work in making the case for pension credit, which has, of course, seen a 177% increase in the take-up of claims —that is a fantastic success—[Interruption.] There are several sevens in there, as I am being reminded from behind.
My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) made an outstanding speech—it was a pleasure to listen to. I will write to him on a couple of issues. He is right to continue making the case for pension credit. The message is of course, “Don’t be shy: please apply”, and the freephone number is 0800 99 1234. We want people to continue applying.
It is right to make the case for the cost of living support—there is £37 billion of support in this financial year—including support for energy bills for all households and cost of living payments. We are now seeking to ensure support going forward. That will include up to £900 in cost of living payments, £300 in cost of living payments for pensioner households, an extra winter fuel payment on around 25 November of this year, and the £150 disability cost of living payment. We can also take funding and support from the household support fund, and there is also the flexible support fund and many other additional ways in which support can be provided.
We continue to provide support to all households with a domestic electricity connection through the energy price guarantee, which caps the price paid for each unit of energy. From April, the typical household will pay on average £3,000 a year, saving the average UK household £500 in 2023-24. From April 2023, the national living wage will increase by 9.7% to £10.42 an hour for workers aged 23 and over. Again, that is the largest ever cash increase for the living wage.
The Government believe that the best route out of poverty is through work. We are committed to a sustainable long-term approach to tackling child poverty and supporting people on lower incomes to progress in work. My hon. Friend the Member for North Swindon rightly made the case for the disability confident campaign, which has resulted in more than 1 million more people being in work in this country over the last few years, and he rightly made the case for additional medical and other support by private sector organisations for their staff.
I will briefly touch on the contributions from the Opposition parties. The Labour party had no answer for my hon. Friend the Member for Gloucester (Richard Graham) on whether it still supports universal credit. It is quite clear, as my hon. Friend the Member for Blackpool North and Cleveleys highlighted, that Labour now opposes any conditionality whatsoever in benefits. That is a startling admission. I believe that Labour Members will live to strongly regret that.
My hon. Friend the Member for Amber Valley (Nigel Mills) made a number of points. I would merely say that all fiscal decisions are made by the Chancellor—to whom I obviously bow on all matters—and I cannot change his policies in any way at the Dispatch Box. If my hon. Friend can wait, he will know more on 15 March.
The hon. Member for Glasgow East (David Linden) accused this Government of policy failures. Given the failings of the Scottish First Minister, and her recent about-turns, I do not think that the hon. Gentleman is any position to lecture us on any policy failings.
No. We listened with great humility to the hon. Gentleman’s 24-minute diatribe about this country. He had no answer to the argument from my hon. Friend the Member for Bosworth (Dr Evans) about funding; his inability to make any case or policy on pensions is well known; and his inability to answer any of the points made by my hon. Friend the Member for North Swindon also spoke volumes.
The reality of the situation is that the Government are doing a huge amount for the vulnerable, and are increasing support through the draft Guaranteed Minimum Pensions Increase Order 2023, the draft Social Security Benefits Up-rating Order 2023, the energy price guarantee and the draft Benefit Cap (Annual Limit) (Amendment) Regulations 2023. I commend the instruments to the House.
Question put and agreed to.
That the draft Social Security Benefits Up-rating Order 2023, which was laid before this House on 16 January, be approved.
Draft Benefit Cap (Annual Limit) (Amendment) Regulations 2023
That the draft Benefit Cap (Annual Limit) (Amendment) Regulations 2023, which were laid before this House on 16 January, be approved.—(Guy Opperman.)
draft Guaranteed Minimum Pensions Increase Order 2023
That the draft Guaranteed Minimum Pensions Increase Order 2023, which was laid before this House on 16 January, be approved.—(Guy Opperman.)