Poverty and Welfare Policies

Tuesday 6th January 2026 Westminster Hall

11:00

[Neil Duncan-Jordan (Poole) (Lab)]

I beg to move,

That this House has considered poverty and Government welfare policies.

It is a pleasure to serve with you in the Chair, Mr Efford. One of the most important legacies this Labour Government could achieve would be the massive reduction in poverty and the widening of opportunities for millions of people currently struggling to get by. The title of the debate mentions poverty, but that does not begin to capture the depth of the crisis facing millions of people today. The phrase “the cost of living crisis” is now so common, we would think it was a fact of life. But we must be clear: poverty does not have to exist; it is a political choice.

Today, more than 14 million live in poverty, and that overall figure has barely changed over the past 14 years of austerity. That is why we now have 8.1 million working-age adults, 4.8 million disabled people, 4.3 million children and 1.9 million pensioners living in poverty. Of course, it is easy to talk about poverty in terms of statistics, but it is the real-world impact where it really matters. Living in poverty means people not being able to heat their home, pay their rent or buy essential items such as food for them and their family. It also means waking up every day facing insecurity, uncertainty and impossible decisions.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing this issue forward. I wish to bring to the Minister’s attention the fact that 4,400 people in Northern Ireland have been diagnosed with Parkinson’s disease and other conditions that are not fully understood by the personal independence payment assessors, due to their complex nature, and those people are at significantly higher risk of poverty because of how the welfare system handles their needs. Does the hon. Gentleman agree that disability support through welfare must reflect real-life situations and that people must not be made to suffer financially because of a lack of understanding from welfare support?

[Neil Duncan-Jordan]

I will come later to the debate we had about PIP. I absolutely agree, and all the evidence shows, that disabled people are much more likely to face poverty and hardship than able-bodied people.

At its core, poverty prevents people from playing a full and meaningful role in our society. That is why there is both a moral and an economic case for taking action, and why tackling poverty should be central to any serious strategy for economic growth, as well as a key part of a progressive Government’s agenda. According to the Equality Trust, reducing income inequality to the level found in more equal OECD nations would save the UK up to £128 billion annually in reduced costs in areas such as crime, imprisonment rates, tackling poor mental health and welfare.

However, none of that will be possible if we continue to use the same austerity-driven measures we have used in the past. For example, the proposal to means-test the winter fuel allowance was based on the ill-judged view that a pensioner living on little more than £12,000 a year was well off. The attempt last year to reduce disability benefits by £7 billion was based not on people’s needs, but on the Treasury’s demand for cuts. Even the very welcome and long overdue decision to lift the two-child limit still leaves the overall benefit cap in place, and fails to uprate the threshold in line with universal credit. As a consequence, an estimated one in 12 children will still be caught in deep poverty.

[John Milne (Horsham) (LD)]

We keep hearing that disability spending, and welfare spending in general, is spiralling out of control, but the truth is that, as a percentage of GDP, it has barely moved since the mid-1980s, under Margaret Thatcher—that famous supporter of welfare. Does the hon. Member agree that if we are going to reform welfare, we should at least start from the right place, with the right figures?

[Neil Duncan-Jordan]

I absolutely agree—in fact, the hon. Member must have read part of my speech, because I will come on to that point a bit later.

There is now a wealth of evidence showing that there is a growing gap between what people have and what they need for a decent standard of living. Millions in the UK are falling well short of that standard, as costs continue to rise and our social security system fails to provide adequate and appropriate support.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am grateful to my hon. Friend for today’s debate. The Joseph Rowntree Foundation’s essentials guarantee sets a minimum that people should receive through the social security system. For a single person, it is £120, which is £28 more than they are receiving; for a couple, it is £205, which is £60 more than they are receiving. That is to achieve a minimum standard. Does my hon. Friend agree that the Government should be looking at the work of the Joseph Rowntree Foundation to ensure that people are lifted out of poverty?

[Neil Duncan-Jordan]

Yes, and I cover the JRF’s demands for an essentials guarantee a bit later in my speech—it will be one of the key points I make when I sum up.

Short-term support measures are of course vital for people in need, but they will only go so far. What we need is a social security system that is fit for the future. As the hon. Member for Horsham (John Milne) pointed out, some have argued that our benefits system is too generous, compared with those in other European countries. However, the rate of our benefits, such as unemployment benefit and the basic state pension, is incredibly low. According to a recent report from the Public and Commercial Services Union, unemployed workers in countries such as Ireland, France and Germany are entitled to more than double what UK workers get if they lose their job. It is no wonder, then, that almost a third of adults say they are unable to keep their home at the recommended minimum temperature of 18°C; that more than one in 10 UK households experienced food insecurity last year; and that the amount the poorest households have left after the bills have been paid has fallen by 2.1% in the last 18 months.

However, the weight of the cost of living crisis will not be lifted by boxing clever on single policies. One of the major structural changes we need in order to move beyond sticking-plasters and towards lasting change is the introduction of a protective minimum floor in our social security system, as supported by the Joseph Rowntree Foundation, the Trussell Trust and others. The principle is simple: if our welfare state is meant to be relied on when people need it, it has to cover the essentials they need to survive. Right now, five in six low-income households on universal credit are going without essentials, and nearly 90% of people referred to food banks are receiving a means-tested social security payment.

[Ian Byrne (Liverpool West Derby) (Lab)]

I thank my hon. Friend for his hugely important speech. He has touched on some of the horrific stats around food. Does he support the work we are doing with the Right to Food Commission, which is travelling the country over the next six months, to create a road map to introduce a right to food into legislation and end what we are seeing regarding hunger in the UK?

[Neil Duncan-Jordan]

I pay tribute to my hon. Friend for his work on food poverty and the need for a proper food policy that gives people the right to food. It is an important issue, which we need to address.

We all know that circumstances can change overnight. One day, someone is working and getting by; the next, they need support. There is a health scare, they are caring for a loved one, or they have lost their job and possibly their home. That risk and insecurity should not be part of everyday life for our constituents.

During a debate on the future of personal independence payments, a number of Members, as the hon. Member for Horsham said earlier, claimed that welfare spending was out of control. However, for the last 15 years, UK spending on social security has consistently been between 10% and 12% of GDP, and we regularly spend less on social security than comparable countries in Europe.

Improving the support available through our social security system should be seen as a key part of our economic growth agenda, but we need to recognise that growth that fails to tackle social inequality will mean that all the economic gains remain at the top. In fact, between 2010 and 2019 the UK’s GDP grew by 1.9% every year, but at the same time the wealth gap widened by nearly 50%. As a result, we now have the second highest wealth inequality in the OECD, after the US.

That brings us to the important issue of how we raise revenue. There is a genuine concern that if the Government fail to tax wealth effectively, they will lack sufficient resources to uphold the social contract under which strong public services, an effective social safety net and a healthy economy provide people with a decent standard of living. Failure to uphold that contract will inevitably further undermine trust in our current political system and ultimately lead to support for those with simple answers to complex questions.

In conclusion, there are some key principles that I hope the Government will accept. First, restricting welfare does not reduce poverty; it simply shifts costs on to charities, councils and the NHS as people try to find support elsewhere.

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

I thank my hon. Friend for securing the debate. One of the most important ways to support people is to help them back into work, and we have seen that in my constituency—as my hon. Friend knows, I have worked closely with disabled people and carers. Locally in Bexleyheath, we have seen specialist support for neuro- divergent people to assist them back into work, sometimes with the involvement of clubs and organisations. Would he welcome that kind of support for disabled people and carers to assist them back into work and give them the specialist support they require?

[Neil Duncan-Jordan]

Yes, absolutely. It is important that those who can work have the opportunity and the support to do so. The issue we discussed during the PIP debate last year was those individuals who would never be able to find work of any kind, and the support they would still need to enable them to live a decent and prosperous life.

There should be a commitment to benefit adequacy as a core anti-poverty measure, with reportable targets for reducing poverty over a parliamentary cycle.

[Ian Lavery (Blyth and Ashington) (Lab)]

I thank my hon. Friend for his powerful contribution with regard to poverty. What concerns me greatly is families sitting around a table on a cold night—as cold as it is today—and not being able to put the heating on or to feed themselves. They are not bothered whether it is abject poverty or whatever type of poverty. I hope that one of the commitments my hon. Friend will ask the Minister for will be to get rid of the definitions and descriptors and to just say, “We want to get rid of poverty in the UK.”

[Neil Duncan-Jordan]

I absolutely agree with my hon. Friend’s contribution. Whether it is fuel poverty, food poverty or various other types of poverty, at the end of the day it is poverty that we need to address—full stop.

It is time to enact the socioeconomic duty in the Equality Act 2010, which requires all public bodies to address inequalities when making strategic decisions. We should not be allowed to make decisions that will make people poorer. That was mentioned in one of the debates we had on welfare last year.

Finally, we need to reshape our social security system, with objectives that go beyond traditional anti-poverty policies and that incorporate a rights-based approach that includes providing dignity to those within the system. Last year a food parcel was handed out every 11 seconds. Ultimately, our Labour Government will be judged on whether people feel better off. That is our moral crusade and our economic mission, and that is what we should be doing.

11:15

[The Minister of State, Department for Work and Pensions (Dame Diana Johnson)]

It is a pleasure, as ever, to serve under your chairmanship, Mr Efford. I congratulate my hon. Friend the Member for Poole (Neil Duncan-Jordan) on securing the debate. He spoke with great passion and knowledge about how poverty affects the individual, the family and society at large. The real-world impact is where that really matters, as he just said.

My hon. Friend spoke in his maiden speech about the nearly 7,000 residents of Poole who struggle to cover essential costs from their monthly income. In his career in Parliament, he has continued to be a strong advocate for his constituents and for the disadvantaged in our society. He has rightly pointed out that poverty is both unfair and economically reckless, and that one of the most important legacies that we could achieve as a Labour Government is a massive reduction in poverty. My hon. Friend highlighted the devastation caused by 14 years of Tory Governments to the fabric of our society and the rising levels of poverty, in particular the cost of living that we inherited from the previous Government.

To start, I refer to the child poverty strategy, which was published only last month. Under the previous Government, a shocking 900,000 more children were added to the statistics for those living in poverty. The aim of our strategy is to lift 550,0000 children out of poverty by the end of this Parliament. It is rightly a cross-Government strategy, but welfare policies clearly play a crucial part, not least the lifting of the two-child limit. I am proud that we are getting rid of that cruel policy, which affects nearly 2,000 children in Poole, 6,000 children in the Poole, Bournemouth and Christchurch local authority area, and 1.5 million children in Great Britain overall.

I was touched when I spoke with several stakeholders, including the Trussell Trust, following the announcement of the removal of the two-child limit on Budget day, because they gave me the breadth and depth of insight that comes from working with those families day in, day out. Hearing their views of how the change will be felt on the ground was humbling and hugely helpful to me.

Our strategy builds on the urgent action that we have taken already to help families since we first entered Government, which has included expanding free school meals to reach half a million more families on universal credit, our new £842 million crisis and resilience fund to reform crisis support in England, expanding free breakfast clubs, and investing in Best Start family hubs to deliver early intervention and support for new parents. We recognise that tackling the causes of poverty and delivering an enduring reduction to child poverty will take time. That is why we have been clear from the start that this will be a long-term, 10-year strategy. We have put in place structures, including a monitoring and evaluation framework, and cross-Government ministerial oversight to ensure that the strategy will deliver and that we can build on its success in future.

We know that the welfare system needs continuous reform to ensure that it supports the people who need it and is a platform for opportunity. Our welfare system is not a museum; since its creation, it has adapted and changed as society has adapted and changed, in recognition of the new challenges we face.

I want to address some of the points that my hon. Friend made. As the Minister for employment, I will say a few words about employment. We know that employment plays a vital role in lifting families out of poverty and in securing better long-term outcomes for children. That is why supporting good work will always be the foundation of our approach, and it is backed by increasing investment for employment support to £3.8 billion by 2028-29, so that people have the help they need to move into and to get on in work. That includes our plans to reform Jobcentre Plus and create a new service across Great Britain that will enable everyone to access good, meaningful work, and support them to progress in work, including through an enhanced focus on skills and careers.

My hon. Friend also talked a little about in-work poverty, and we know that low pay is a key factor. Our plan to make work pay will help more people to stay in work and will improve job security and boost living standards. From April this year, the national living wage will increase to £12.71 an hour for workers aged 21 and over—an increase of £900 a year for a full-time worker on the national living wage.

Access to suitable childcare has for too long been a barrier to progression for many parents. That is why we will invest £9 billion next year in policies such as creating new school-based nurseries and, as I have just said, rolling out free breakfast clubs. A cross-Government review of childcare is also under way, because we recognise that the current system is very complex for parents to navigate.

We also want to go further, so that every parent who can work will be able to enjoy the benefit of rewarding, secure jobs that enable them to support their families. Our ambitious labour market interventions include our inactivity trailblazers in England and Wales, skills bootcamps and the adult skills fund, which will provide a step change in the support that parents receive to help them progress in—as well as move into—work.

[Alison Bennett (Mid Sussex) (LD)]

The Carer’s Leave Act 2023, introduced by my hon. Friend the Member for North East Fife (Wendy Chamberlain), was passed in the last Parliament. At the moment, carers in work are entitled to unpaid leave from work, which helps them to stay in employment. Does the Minister agree that making that leave paid would tackle the much higher levels of poverty among family carers and further help those people, particularly those on lower wages?

[Dame Diana Johnson]

I am grateful to the hon. Lady for raising that point. I will take the opportunity to reflect on what she has said and write to her with a response. I will move on because I have only limited time, and there are quite a few other things I want to say.

My hon. Friend the Member for Poole also referred to welfare reform more generally. I reassure him that the “Pathways to Work” Green Paper builds on the principle that Government should support those who can work to do so, while protecting those who cannot. We have already made significant progress in bringing forward proposals from the Green Paper to transform the support that we offer. We are taking action to get the basics right and improve the experience for people who use the system of health and disability benefits, as set out in the Green Paper.

That includes exploring ways to improve trust and transparency in the personal independence payment and the work capability assessments, by reviewing our approach to safeguarding, recording assessments to increase trust in the process and moving back to more face-to-face assessments, while continuing to meet the needs of people who may require different methods of assessment. Of course, we also have the Timms review under way. As a result of our changes, there will be 50,000 fewer individuals in relative poverty after housing costs in 2029-30. That includes a reduction in poverty for both children and working-age individuals.

I want to mention universal credit and its adequacy, as well as the essentials guarantee that a number of Members have spoken about. We know that people are struggling, and we understand the critical role of universal credit in tackling poverty and maintaining work incentives. Since April 2025, our fair repayment rate has reduced the overall deductions cap from 25% to 15% of a customer’s standard allowance, allowing approximately 1.2 million universal credit households to retain more of their award for essential living costs.

We have also gone further by taking decisive action to address the basic adequacy of the universal credit standard allowance through the first sustained above-inflation rise in the basic rate of universal credit since it was introduced. That change will benefit millions of people when it is introduced in April, while maintaining the right balance between supporting those who need it, incentivising work and providing value for the taxpayer.

My hon. Friend also referred to the benefit cap. Removing the two-child limit is the fastest and most cost-effective way to reduce child poverty and will, on its own, lift 450,000 children out of poverty by the end of this Parliament. However, it is absolutely right that we balance maintaining a strong safety net for those who need it with encouraging personal responsibility and incentivising work wherever possible. Working people are much less likely to be affected by the benefit cap, which we will review at the appropriate time and as determined by the Secretary of State, in line with the statutory obligation to review the levels at least once every five years.

My hon. Friend gave the shocking statistic about a food parcel being handed out every 11 seconds. This Government absolutely agree that the number of people having to rely on food parcels is far too high, which is why we made a manifesto commitment to end mass dependency on emergency food parcels. As I have already said, our child poverty strategy and the crisis and resilience fund, along with renewed funding of £600 million for the holiday activities and food programme, will be a vital contribution to tackling such an important issue.

I am also working closely with the Department for Environment Food and Rural Affairs on this matter, and will meet with my ministerial counterpart at DEFRA tomorrow to discuss shared priorities. I would also be very happy to meet with my hon. Friend the Member for Liverpool West Derby (Ian Byrne) to discuss the work he is doing. I know he has a long-standing interest in food poverty.

In the few minutes I have left, I will talk about international comparators, particularly around state pensions. It is difficult to make meaningful comparisons between state pension schemes in different countries because there are many fundamental differences in the way they are run and operated. There are many factors to take into account, such as different tax systems, the cost of living, access to occupational pensions, the availability of other social security benefits and the provision of services and goods, either free to pensioners or available at a concessionary rate.

The UK pension system balances sustainability and adequacy with the foundation of a contributory state pension, on which private retirement savings can be built, as well as an income-related safety net for those most in need. Workers can choose to make voluntary contributions to private or occupational pension schemes to increase their retirement income.

Data from the OECD’s “Pensions at a Glance 2025” report shows that the UK’s public expenditure on pensions is lower than the average of other OECD countries. Furthermore, when Full Fact investigated the claim that the UK state pension is the lowest in the EU, it concluded that the comparison is not fair because of the differences between pension systems.

In closing, our manifesto committed to building on the legacy of the last Labour Government, which lifted more than 600,000 children and more than a million pensioners out of poverty. It promised to put good work at the heart of our approach. We are building a welfare system that is much more active in giving people opportunities not just to get by, but to get on in life.

Importantly, we are making sure these reforms are accompanied by our wider efforts to put in place the right opportunities, incentives and support—by creating good jobs, by making work pay, including through our landmark Employment Rights Act 2025, which will benefit more than 15 million people, and by overhauling employment support, so that people get personalised support to overcome the individual barriers they face getting into work. Through all those changes, we can turn the tide on poverty, making a real, lasting difference to people’s lives and building a fairer, more prosperous country.

Question put and agreed to.

11:28

Sitting suspended.