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Social Security System: Rising Cost of Living

Volume 822: debated on Tuesday 17 May 2022


Asked by

To ask Her Majesty’s Government what assessment they have made of the effectiveness of the social security system in the context of the rising cost of living.

My Lords, no specific assessment has been made. We are committed to supporting those on low incomes and will spend around £255 billion through the welfare system in 2022-23. We are supporting households with cost-of-living measures worth over £22 billion this year, including changes to universal credit to make work pay, the £9.1 billion energy package to help us with rising energy bills and an additional £500 million to help households with the costs of essentials.

My Lords, it is not enough. The welfare state was created to provide security in retirement and to make sure that life events did not result in destitution. Last month, the state pension went up by 3% for the year, as did benefits for children, disabled people and low-earners. In the real world, we all know that inflation is heading for 10% and energy prices have gone mad. The Governor of the Bank of England has just said that food prices will be rising apocalyptically. Does the Minister accept that growing numbers of both older and younger people literally do not have enough money to buy food and pay their bills? If so, will the Government bring forward benefit increases or find some other way to stop people falling into modern-day destitution?

The Government, of which I am a member, acknowledge that these are very difficult times, particularly for pensioners and young people with families. The uprating of benefits has been done in September; that is how the Secretary of State uses the CPI figure. However, I can confirm that the Government have convened a new cost of living ministerial committee and the PM has urged Ministers to go faster and be as creative as possible in ensuring that the Government are doing everything they can on this important issue. The Chancellor and Prime Minister are working extremely closely on this and will continue to do so because they are cognisant of the very communities that the noble Baroness is representing.

Is the Minister aware that 50% of people presenting in hospitals with cardiac arrest and so on are in food poverty?

I was not aware of that fact—that a lot of people who come to hospitals with cardiac arrest are in food poverty. That needs to be referred to the Department of Health to get a more detailed answer.

My Lords, the household support fund is an important resource for low-income families and the £500 million increase in the budget is very welcome, but the household support fund is due to run out in September, just when inflation is set to peak and before the winter fuel bills arrive. What consideration has been given to extending the fund beyond September?

The decision to extend the fund rests with my right honourable friend the Chancellor. Global inflationary forces are making life difficult for families. I take the point that my noble friend raises but I am assured from the Chancellor’s Statement today that we stand ready to do more as the situation evolves.

My Lords, one of the best ways of helping poorer pensioners is to increase the take-up of pension credit. What are the Government doing about the suggestions that many of us have made to increase take-up through a new campaign, including perhaps renaming the credit “pension boost” or “pension bonus” so that pensioners realise that it is theirs of right and will apply to get it?

I am always grateful to the noble Lord, Lord Foulkes, for keeping me on my toes with this; he has done an excellent job, along with other colleagues. I can tell him that we have undertaken a range of actions to raise awareness of pension credits and increase take-up. Initial internal management information suggests that new claims for pension credit in the 12 months to December 2021 were around 30% higher compared to the previous 12 months. Earlier this year, we directly targeted over 11 million pensioners with information about pension credit. We will have another awareness day, and the Minister with responsibility for pensions is working with the BBC. I can tell the noble Lord that we are doing everything we can to expand our efforts to increase take-up—but I have failed miserably in getting it rebranded.

My Lords, I am confident that the Minister, like me and many others in this House, does not want to see children suffer as a consequence of soaring food prices. She may have heard the same tales from families that I have heard, of the rising cost of the weekly food shop, with people unable to pay for the quality and quantity of food that their family needs. One of the best ways of dealing with that is to increase child benefit in line with inflation and bring it forward to September. Will the Minister please urge the Government to take that essential step?

I thank the noble Baroness for her contribution. I will reiterate what the Chancellor said:

“We stand ready to do more as the situation evolves.”

Child benefit does not sit with the DWP, but I will find the person it does sit with and pass on the noble Baroness’s message.

My Lords, would my noble friend help me with a problem I have? Could she explain why it was appropriate to increase universal credit by £20 a week during the Covid epidemic but not now, when people are faced with exponential increases in their food and energy bills? Will she tell the Chancellor that we cannot wait—we need the money now? He got enormous credit for what he did during Covid, but the need is greater and the Government need to act.

I assure my noble friend and the whole House that the Chancellor does understand and is working hard on the issue that many noble Lords have raised today. I can tell my noble friend and others who are impatient to get something going—I do not mean that lightly—that the £20 uplift was a success but it was a temporary measure, and I honestly cannot make any promises that it might be reintroduced.

How much time have Treasury Ministers and DWP Ministers spent sitting, listening and talking with people who are struggling either to eat or heat? It is first-hand evidence that really matters; do not get it just from reports.

I have no doubt at all that real case studies have been presented—they have certainly been presented to my Secretary of State. I know that everyone is impatient, and I understand that, but the Government stand ready to do what they can once a decision has been made. I understand that talking to real people is the best way to learn. I was in Brighton on Thursday, opening the new job centre. I met a lady there whose life had been absolutely chaotic, and now she has a job with G4S and she is cooking. We understand personal testimony.

My Lords, faced with the biggest fall in the real value of basic benefits for 50 years, according to the Joseph Rowntree Foundation, and the terrifying increase in the cost of basics, as my noble friend has said, what are struggling parents who have already cut back to the bone supposed to do when the Government refuse the uplift in benefits called for widely, including on the Government’s own Benches? What would the Minister herself do, if she was in their shoes?

I do not think I can answer on behalf of the people who make the decisions but I understand the point that the noble Baroness is raising. I know that there are families who are struggling. As I have said, a committee has been set up—I am sorry, but noble Lords know how government works. As I said, we stand ready.

My Lords, one quick solution would be to have automatic enrolment in Healthy Start vouchers. Despite the fact that the Government have put these up, we are still running at only about 60% to 65%. This money is there and it is doable—you could do it tonight.

The noble Baroness raises a good point. One of the things we can do, and must do more of, to help people in these situations is to make sure they are claiming everything they should.