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The Minister for Employment (Guy Opperman)
It is a pleasure to serve under your chairmanship, Mr Pritchard, and I congratulate the hon. Member for Liverpool, Riverside (Kim Johnson) on securing the debate and on the passionate way that she put her argument today. That passion cannot be doubted in any way whatsoever and due respect is due to her for that.
The Government believe that the best way to support people’s living standards is through work, better skills and higher wages. I regret to say that I will rely on an answer similar to the one that the Prime Minister gave to the hon. Lady at Prime Minister’s questions. Whether she agrees or disagrees with that answer, I hope that she will bear with me as I give it.
In 2021-22, children living in a household in which all the adults were in work were five times less likely to be in absolute poverty after housing costs than children living in workless households. We believe that we have made progress. In 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than there were in 2009-10, including, as has been made clear, 400,000 fewer children. There are also nearly 1 million fewer workless households now than there were in 2010.
Following the review of the benefit cap levels by the Secretary of State for Work and Pensions in November 2022, those levels were increased by 10.1% from April 2023. Let us not forget that households can still receive benefits from the taxpayer up to the equivalent of a salary of £26,500 nationally or £31,300 in London, allowing for London weighting. Also, we uprated the national living wage by 9.7%, increasing our support for both those who are in work and those who are out of work, as well as uprating all benefits by 10.1% in April. That is the largest cash increase ever to the national living wage, which is now up to £10.42 an hour, providing extra support for workers.
Clearly, there are over 1 million vacancies across the UK and our focus is firmly on supporting people into work and helping them to progress in work. That approach is based on clear evidence about the importance of parental employment, particularly where it is full time, in substantially reducing the risks of child poverty.
Nadia Whittome (Nottingham East) (Lab)
Is the Minister aware of the recent study by the London School of Economics, published last month, that found that the two-child benefit cap policy has not increased employment levels? We can only conclude from that that even on its own terms, the policy is failing while hundreds of thousands of families have been pushed into poverty.
Guy Opperman
As I think I have made clear, I do not accept the arguments about poverty. I am not aware of the specific LSE paper that the hon. Lady mentions, but I would make the simple point that in this country we have never given more welfare support or paid higher figures for pensioner support or disability support. Without a shadow of a doubt, there has been massive cost of living support, as I will outline, to the most vulnerable.
Ian Lavery
The Minister makes the case for how good this Government have been on benefits, support and work funds. Minister, that is 4.2 million children living in poverty. He cannot be happy with that; he has to admit it is far too high. Secondly, does the Minister think kids sitting round the tea table at night are worried about whether they are in abject poverty, absolute poverty or relative poverty? If you have an empty belly, you have an empty belly, and this Government should be totally ashamed of themselves because of the high statistics and figures that are rising week in, week out.
Guy Opperman
With respect, I do not accept that the figures are rising week in, week out. The simple point is surely this: over the past two years, the taxpayer has contributed £94 billion of support to vulnerable households, and that support is ongoing. For example, the energy price guarantee will remain in place as a safety net and a support for households until March 2024. The cost of living payment, which I can go into more detail on, features a further £150 payment to 6 million people, over and above existing benefits, which have gone up by 10%. Over £900 will go to 8 million households on means-tested benefits over the course of the year. The first £301 payment to those on means-tested benefits was made in April.
For pensioners, an additional £300 on top of the winter fuel payment is being paid to over 8 million pensioner households. Such a degree of support has never been provided before, and whatever people’s views are of this Government—positive or otherwise—they have stepped in to the tune of £94 billion with cost of living support over the past two years. As I say, the first £301 payment was recently issued to local people up and down the country.
Guy Opperman
I will for the last time—I am attempting to answer some of the points.
Kim Johnson
Although I appreciate that £94 billion has been issued to the most vulnerable, we are in a crisis. Energy, rent and food are spiralling, so the money people have in their pockets is not going far enough. Does the Minister agree?
Guy Opperman
The Government have stepped forward and provided £94 billion of support, worth on average approximately £3,300 per household, because they wish to address those particular problems. We are trying to help individuals on an ongoing basis for that reason.
I will try to make some progress. The hon. Member for Liverpool, Riverside made much of the question of tax. She will know that the richest 1% pay a massive proportion of UK tax and effectively have never paid as much as they presently do. Changes to taxable thresholds were a coalition policy, to be fair to the Liberal Democrats. When we started in government in 2010, low earners paid tax on low earnings as well as trying to take their money home. The taxable thresholds have risen repeatedly so that low earners no longer pay tax in that way; in other words, we have a very progressive policy that assists people who are struggling. Between 2016 and 2023, the number of couples in employment with children increased by 713,000, which is a 3.4% increase in the employment rate for that groups. In the circumstances outlined, child benefit continues to be paid for all children in eligible families, with an additional amount for any qualifying disabled child or qualifying disabled young person also payable regardless of the number of children in the household.
Universal credit offers additional help with eligible childcare costs and is also available regardless of the total number of children in the household. We believe we have a balanced system that provides strong work incentives and support for those who need it—all benefits have been uprated by more than 10%—while ensuring fairness to the taxpayer and the many working families who not only pay the bills we are talking about but do not see their incomes rise when they have more children.
The Government believe the policy to support a maximum of two children is a proportionate way to achieve these objectives. Similarly, the benefit cap provides both a strong work incentive and fairness for hard-working tax-paying households. It encourages people to move into work wherever possible. The work incentive introduced by the Government will also support people to move into work and increase their earnings, which will significantly increase the likelihood of a household not being affected by the cap. Universal credit households with earnings of £722 a month are also exempt from the cap.
I finish on a couple of key points. Clearly, there is a massive amount of cost of living support. However, I respectfully say that universal credit should be lauded and supported. I do not believe it is Labour party policy to scrap the two-child policy, but whatever happens there is no question that the legacy system that could not in any way cope with variable earnings and allow people to progress in work has been rightly replaced by universal credit, which allows people to work while also being constantly supported and in a position wherein they are never worse off under universal credit.
In conclusion, I welcome the contribution of the hon. Member for Liverpool, Riverside to the debate and I share her concern that children should be supported by the social security system. I respectfully suggest that there is ample evidence showing that that is the case. We are very much of the view that—whether it is through the 10% benefits increase, the £94 billion of support to vulnerable households, the uprating of the national living wage or the work of jobcentres up and down the country to support in-work progression—there is support out there.
Question put and agreed to.