The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)
I beg to move,
That the draft Social Security Benefits Up-rating Order 2024, which was laid before this House on 15 January, be approved.
The draft order will increase relevant state pension rates by 8.5%, in line with the growth in average earnings in the year to July 2023. It will also increase most other benefit rates by 6.7%, in line with the rise in the consumer prices index in the year to September 2023. Subject to parliamentary approval, the changes will take effect from 8 April and will apply for the tax year 2024-25. [Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. May I ask those not participating in the debate to leave quietly? It is difficult to hear the Minister.
Madam Deputy Speaker
Order. Minister, I have just been asked to clarify that you are moving motion 3 on social security.
Paul Maynard
For the information of the House, this order covers state pensions. Motion 4 covers the guaranteed minimum pension, which is a sub-element of the pensions issue. As I will explain, the different elements—
David Linden (Glasgow East) (SNP)
On a point of order, Madam Deputy Speaker. Can I clarify whether we are taking motion 3 on social security and motion 4 in one debate, or will we scrutinise the orders separately? It would be helpful for the House to have clarity on exactly what is happening.
Paul Maynard
Indeed, a few days ago I was asking those questions about whether to take the motions separately or together. They are being taken separately.
Sir Stephen Timms (East Ham) (Lab)
I am very relieved that we are getting a proper uprating this year, but the current headline rate of benefits is the lowest it has been in real terms for 40 years. Why have Ministers set benefits at a level so much lower in real terms than was chosen by Margaret Thatcher, Peter Lilley, John Major or Norman Fowler? Why is it so much lower?
Paul Maynard
There is always a lively debate about the adequacy of the overall benefits system. I think Beveridge had the debate under the Labour Government in 1945 on how to understand the concept of adequacy within the benefit system. What we are doing is ensuring that the purchasing power of benefits is maintained and that we are adhering to the triple lock. The right hon. Gentleman’s intervention allows me to restate, I think for the fifth time, the Government’s commitment to the triple lock, meaning that the basic and state pension will be uprated by the highest of growth in earnings or in prices, or by 2.5%.
This year that will mean an 8.5% rise from 2024-25, taking the basic state pension from £156.20 to £169.50 a week, and the full rate of the new state pension from £203.85 to £221.20 a week. Additional state pensions, such as the state earnings-related pension schemes and protected payments of the new state pension, will rise by 6.7%. The Government are committed to supporting pensioners on the lowest incomes, and accordingly the safety net provided by the pension credit standard minimum guarantee will increase by 8.5%. For single pensioners it will increase by £201.05 to £218.15, and for couples it will increase from £306.85 to £332.95 per week.
When it comes to support for those in the labour market, such as universal credit and the means-tested benefits it replaces, there is always a need to take into account work incentives as well as financial support for those in low-paid work, who are looking for work or who are unable to work. The Government announced a range of employment and conditionality measures at the autumn statement to maintain and improve work incentives. However, in striking a balance it is also right to increase the rate of those benefits by 6.7%, in line with the increase in CPI in the year to September 2023. That 6.7% increase means that universal credit will retain its purchasing power in the broader context of the Prime Minister’s delivered commitment to halving the rate of inflation.
The Government remain mindful of work incentives in the benefit system, and accordingly this order also increases the universal credit work allowance by 6.7%. They will increase from £379 to £404 per month for those also receiving support with housing costs, and from £631 to £673 per month for those not receiving support with housing costs. That 6.7% increase will also apply to the rates for contributory jobseeker’s allowance, contributory employment and support allowance, additional needs disability benefits such as the personal independence payment, carer’s allowance and statutory payments such as statutory maternity pay, statutory paternity pay and statutory sick pay.
The draft order, if Parliament approves it, commits the Government to increased expenditure of £19 billion in 2024-25. We believe it is right to make such a commitment because it maintains the triple lock, which benefits both pensioners already in receipt of the basic and new state pensions and younger people who are building up future entitlements as a foundation for private saving. It raises the level of the safety net in pension credit beyond the increase in prices and is part of a package of support for those in the labour market, which protects the value of benefits at a time of high, if falling, inflation while maintaining and increasing work incentives.
The draft order maintains the purchasing power of benefits to help with additional costs arising from disability. It also provides protection against inflation for people who are currently unable to participate in the labour market, such as full-time carers, who provide such an essential service to those they care for. On that basis, I commend this order to the House.
Paul Maynard
I thank everyone who has participated in this debate. I am very disappointed in the hon. Member for Glasgow East (David Linden), who seems to think that I do not write my own material. He should know that my private office staff are sitting in trepidation, as I write across every speech they give me in blue and red ink. They never know what will emerge from my mouth. I can assure him that it is all my own work, and he can criticise it all the more for that reason.
I am also disappointed that people think this order is just a technical necessity. I do not call £19 billion of Government spending a technical necessity. It is one of the largest amounts of extra spending in which the Government engage in any particular year, and it will make a considerable difference to the lives of people across the country.
Paul Maynard
No, I certainly do not, but I would want to think that those of us in this Chamber did not dismiss the order as a technical measure.
My hon. Friend the Member for Amber Valley (Nigel Mills) repeated a point that I think he made this time last year—I also made this point when I was sitting in the far corner of the Chamber as a Back Bencher—on the timely application of these measures and whether we ought to make them more promptly after inflation is measured. As a member of the Work and Pensions Committee, he will know that this issue is often discussed, with the discussion often revolving around the robustness of universal credit’s IT system compared with the IT systems for legacy benefits. I am told the hopefully promising news that state pension benefits, in particular, will be moving to a more modern IT platform by 2025, followed by disability benefits, contributory benefits and carer’s allowance, so there is a pathway towards getting all our benefits on to modern IT systems that are more agile in responding to economic situations. I hear his point, and work is under way.
The hon. Members for Glasgow East and for Oldham East and Saddleworth (Debbie Abrahams) both talked about the Joseph Rowntree Foundation, and I am a great admirer of its work. As a Back Bencher, I sat on many Zoom meetings and Teams meetings to listen to its briefings. The hon. Member for North East Fife (Wendy Chamberlain) and I have discussed the essentials guarantee many times, so I take a personal interest in what the Joseph Rowntree Foundation says. Since the period covered by its report, the Government have provided over £104 billion of extra support to help households with the high cost of living. Although I understand that the Joseph Rowntree Foundation will stick to the broad themes of its argument, we need to recognise that Government support has moved on.
I do not want to pre-empt the meeting of the hon. Member for North East Fife with the Chief Secretary to the Treasury, which I hope will bring better news than I am able to deliver from the Dispatch Box. I have heard about her letter. My favourite episode of “Fawlty Towers” is “Communication Problems”, which is a comic classic, and the tale she tells is such an example. I am sure my officials have made a note, and we will hopefully follow up with a clarifying letter.
Finally, I turn to the right hon. Member for Islington North (Jeremy Corbyn). Not being the Minister in charge of local housing allowance, I am a little cautious about giving him a more definitive answer at this stage—[Interruption.] Nothing annoys me more than when other Ministers intrude on my brief without telling me, so it is a courtesy to them, nothing more.
The draft Social Security Benefits Up-rating Order will increase the state pension by 8.5%, in line with the rise in average earnings, and it will increase most other benefit rates by 6.7%, in line with the rise in consumer prices. These changes commit the Government to increased expenditure of £19 billion in 2024-25. They maintain the triple lock, protect pensioners on the lowest incomes and support those in the labour market, while maintaining work incentives and protecting the value of benefits for those who cannot work and who have additional disability needs.
I commend this statutory instrument to the House.
Question put and agreed to.
Resolved,
That the draft Social Security Benefits Up-rating Order 2024, which was laid before this House on 15 January, be approved.