Social Security and Pensions

Debate between Andy McDonald and David Linden

Monday 7th February 2022 Commons Chamber

[David Linden (Glasgow East) (SNP)]

It is a pleasure, as always, to follow the hon. Member for Waveney (Peter Aldous) who, unlike most of his colleagues, makes quite a thoughtful contribution that is perhaps just slightly more in touch with what is happening on the ground in our constituencies.

Not to diverge from that moment of conciliation, I too pay tribute to our work coaches, as the shadow Minister—the hon. Member for Westminster North (Ms Buck)—and the Minister did. I am looking forward to yet another visit to Shettleston jobcentre in my constituency—I actually used to have more jobcentres in my constituency, but the UK Government in their infinite wisdom decided to shut three out of four jobcentres in Glasgow a few years ago. Although I have massive ideological differences with the Department for Work and Pensions, I have nothing but respect for the work coaches at the jobcentres, who do a phenomenal job, albeit implementing policy from Whitehall with which I profoundly disagree.

If a chain is only as strong as its weakest link, it is fair to say that our social security safety net is our society’s weakest link. We are debating the annual uprating orders against the unique backdrop of an ever-worsening cost of living crisis, with the very poorest in our constituencies consistently left behind by a Tory Government who are not focused on doing their day job. The cost of living crisis comes on the back of universal credit being slashed by £20 a week, which was the single biggest cut to social security since the formation of the modern welfare state. Those of us who do not sit in Caxton House’s ivory towers can see that millions of our fellow citizens are facing real hardship right now. The British Government must urgently reverse their universal credit cut and instead introduce an emergency package to support families and boost incomes.

Our economy has not recovered to where it was pre pandemic, yet we have soaring inflation on a scale not seen for decades, which shows no sign of going away any time soon. Consumer prices were 5.4% higher in December 2021 than they were a year before—the highest inflation rate in almost 30 years. In mid-December the Bank of England forecast that the CPI inflation rate would remain at around 5% over winter, before rising to 6% in April 2022. However, based on last week’s forecasts from the Bank of England, we can now safely expect inflation to rise to over 7% in just a couple of months. The rise in CPI inflation coincides with the perfect storm of a significant rise in energy bills, by 54%, to an average of £1,971 from April. Then we have to add to the mix the Tories’ regressive and deeply unpopular national insurance hike, which will clobber the very youngest and the lowest earners in the country.

It is not just the Opposition, and indeed the SNP, that are raising the alarm about the cost of living crisis. New analysis from Citizens Advice Scotland found that an estimated 640,000 people—around one and seven—are finding their household energy bills unaffordable due to low incomes, with the figure set to increase due to the energy price hike. Yes, I acknowledge that the autumn Budget made some modest adjustments to the taper rate for universal credit, but only for those who are in work. For context, that actually impacts only four in every 10 universal credit claimants.

Analysis from the House of Commons Library shows that over 340,000 households in Scotland are directly affected by the £20 a week cut to universal credit, with incomes slashed by £1,040 per year. To help the Minister understand, that is £1,040 a year less for people to spend in our communities on gas, electricity and the weekly food shop. I can tell the Minister that my low-income constituents in Parkhead, as I suspect is also the case for his in Macclesfield, will not be finding that extra £1,000 in their savings, because many of our constituents live month to month and hand to mouth. Instead, the Minister’s constituents, like mine, will be going without food or heat just to try to keep their heads above water this winter. That is why charities such as the respected Trussell Trust, whose food banks are in increased demand, want the Government to reinstate that £20 cut from universal credit. They want to stop families “spiralling into destitution” with steeply rising costs for heating and food.

Besides reversing cuts to universal credit, the British Government must urgently deliver a financial package to help families by delivering a low-income energy payment, matching the Scottish child payment UK-wide, introducing a real living wage and increasing statutory sick pay in line with a real living wage.

[Andy McDonald]

The hon. Gentleman is making an excellent contribution. Universal credit was uplifted in response to the covid crisis. The situation for the poorest in our society has not improved over this period, and in fact, going into this cost of living crisis, it is getting worse and worse. Does he therefore agree that it is a completely unsustainable position to remove that £20 uplift in universal credit, and that the correct response, among the many responses, should be to restore that with immediate effect?

[David Linden]

I am grateful to the hon. Gentleman for that intervention. I think we all welcomed the increase to universal credit at the beginning of the pandemic, but it was a clear admission by the UK Government that social security was inadequate in its current form. A lot of people were plunged into using universal credit, perhaps for the first time, and it was their only interaction with the social security system. Lo and behold, many of those people using the social security system for the first time ever realised that a lot of the stereotypes and nonsense that comes out of Whitehall about a life on benefits somehow being luxurious and about lying around watching “The Jeremy Kyle Show” were not actually the case, and that the social security system was so poor. It is only a suspicion of mine, but I think that is why Ministers at the time decided to put that £20 in place. I say to the hon. Gentleman and the Minister that if the Government could concede in March 2020 that universal credit was inadequate, surely they have to understand that it is inadequate now.

The other point that I am sure the hon. Member for Middlesbrough (Andy McDonald) would have made is that the uplift was not extended to those on legacy benefits. People in receipt of legacy benefits had increased costs as a result of the pandemic and having a disability. Some 2.5 million people in these islands were denied that £20 uplift by the Government. That is subject to action in the High Court, and the Government would have done well to realise that they should not have had to be taken to a legal court on that, and that the policy was morally wrong in the court of public opinion.

The orders before the House do not do any of the things I have suggested need to be done in reforming social security, and it cannot always be left to the devolved Governments of these islands to try to alleviate bad social security policy from a heartless and callous Westminster Government for which Scotland did not vote. Indeed, we have not voted for a Conservative Government since the 1950s. While the SNP is doubling the Scottish child payment in April, the Tories at Westminster have cut £20 a week in universal credit from some of the very same families, knowingly pushing thousands of families into poverty.

Scotland’s SNP Government are already spending £71 million to mitigate in full the bedroom tax and an additional £10.9 million to mitigate other welfare cuts, including the benefit cap and changes to local housing allowance rates. As the former UN special rapporteur on extreme poverty and human rights, Philip Alston, pointed out,

“mitigation comes at a price and is not sustainable.”

I guess the question I would pose not just to the Government, but to all parties in the House, is this: is the sum total of their ambition for devolution simply to be a sticking plaster for Westminster’s ever-weakening social security net?

Far too many households have been left behind and will not benefit from this uprating, because the Tories are refusing to fix known policy failures. It is not just universal credit that needs fixing. When it comes to the benefit cap, thousands of households have seen their incomes hit hard because the Government have refused to extend the grace period that gives claimants nine months’ exemption from the benefit cap. As the Poverty Alliance points out, how the benefit cap is designed means that those who require the highest level of support from the benefit system are the most likely to be affected. That is simply unjust and it is having a brutal and real impact on low-income families.

Based on the DWP’s latest figures, 180,000 households have had their benefits capped, including more than 6,400 households in Scotland. The benefit cap disproportionately impacts lone-parent families—the majority of whom are women—as well as larger families and black and minority ethnic families.

While we are at it, we need to address the two-child limit and the associated rape clause. Quite simply, thousands of families with children are being pushed into poverty because the British Government refuse to scrap the two-child limit on child tax credit and universal credit. I do not know how the two-child limit and the associated rape clause ever got past the Government’s family test, but I am sure the Minister will reflect on that in his winding-up speech.

Research by the Child Poverty Action Group shows that the majority of those affected by the two-child limit are families with three children and, indeed, the majority are working families. In April last year, 1.1 million children were affected by the two-child limit—237,000 more than the previous year. That number will continue to grow, as nearly all low-income families with three or more children eventually become subject to the limit.

The five-week wait for the first payment is also needlessly pushing people into hardship. That could be easily fixed by implementing our proposal to turn advance payment loans into non-repayable grants after the claimant is deemed eligible.

I will turn to sanctions, because far too many households face destitution because DWP rules push them into debt through sanctions and deductions. The Minister will recall that last week I tagged him in a tweet about the fact that it took his Department 151 days to reply to my letter about a constituency case. If the DWP can sanction my constituents for failure to attend a jobcentre or for turning up late, I wonder whether we would do well to sanction the Minister for not keeping up with his correspondence pile or for failing to reply to Members of this House. I am reminded of the old saying that what is sauce for the goose is sauce for the gander.

The SNP has long called for the UK Government to fix these utterly fundamental flaws in the UK’s social security system. We need to deliver a system that actively tackles poverty and inequality, and that empowers people. Put bluntly, Scotland’s Government, though they wish to, cannot change these policies, as 85% of welfare expenditure and income replacement benefits remain reserved to this place and to UK Ministers. That includes universal credit, which is a reserved benefit.

My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) will touch on the pensions aspects of the orders, so I will draw my remarks to a close with what is becoming an annual comment from me on uprating. The Westminster austerity agenda continues to punish and to make life a misery for some of the most vulnerable people in all our constituencies. I know that the orders we are debating tonight are an annual formality for the House, but so long as Scotland remains bound to Westminster, I and my party will always speak up for the most vulnerable and make the case for a decent, robust and generous social security system. There is no escaping the fact that, until Scotland is independent, we are forced to accept the majority of social security policy from a Westminster Government we did not vote for and whose support can, at best, be described as meagre.