Social Security Benefits Up-rating Order 2019

Baroness Sherlock Excerpts

Tuesday 5th March 2019 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her introduction to this order and both noble Baronesses who have spoken. As we have heard, the purpose of the order is to make changes to the rates of those benefits which have been fortunate enough to escape the Government’s freeze, which is causing so much damage, as we have heard from the noble Baronesses. We now have a series of different categories of benefit which get treated in different ways when it comes to uprating time.

We have a category which is going to be uprated by at least the increase in earnings: the state pension because of the triple lock; the standard minimum guarantee of pension credit; and some aspects of widows’ and widowers’ pensions in industrial death benefit. They all get to go up by 2.6%, which is the increase in earnings.

Then we have a category which will have to be increased by at least the increase in prices. This includes attendance allowance, carer’s allowance, DLA, PIP, severe disablement allowance, other aspects of widows’ benefits, the additional state pension, graduated retirement benefit and increments to the state pension. They all get to go up by CPI—inflation.

Then there is a category over which the Secretary of State has discretion. She has decided to use that discretion by uprating some benefits by CPI—by inflation—including statutory sick pay, maternity and paternity pay, adoption and parental leave pay, the support group components of ESA, disability and carer premiums, the carer element of universal credit and the limited capability for work and work-related activity element of universal credit. They go up by 2.4%.

Then there are the benefits which are not being uprated at all. These include all the main means-tested working-age benefits, including: the personal allowance elements of income support; jobseeker’s allowance; the personal allowances and work-related activity components of ESA and housing benefit; and the standard allowance, limited capacity for work element and the lower disabled child addition of universal credit. Those are the main things on which most of our poorest fellow citizens depend. However, they have been frozen at the 2015-16 cash levels, having previously been increased by only 1%. Now, as we have heard, we have to add to the list bereavement support payment. It will be paid at the same cash rate as it was last year, which means that, like all those benefits, its value is being cut yet again. There is no triple lock for anybody except pensioners.

--- Later in debate ---

[Baroness Buscombe]

Yes, I noted somewhere in my papers and will say now that of course it is right that we look at every way to incentivise the second earner to go back into the workplace; that is very much our thinking at the moment. We are looking to find different ways to help and incentivise people. We also have to think about affordability. We touched on that when we debated these uprating measures a year ago; it has to be taken into account as well. The noble Baroness, Lady Janke, talked about how much was spent at the last Budget, but actually quite a large proportion of that—£4.5 billion—went towards the work that we are doing at the Department for Work and Pensions in supporting people, so we have to ensure—

[Baroness Sherlock]

On the affordability question, will the Minister address the point that I and another noble Lord made: the Government are likely to save half a billion pounds more on this freeze than they did from the 2014-15 Budget, so why could that money not be put to this purpose? While she is at it, her comments about work are very interesting, but if I could bring her back to the order under discussion, if the aim of this freeze is to incentivise work, why are the Government freezing payments made to some of the people on employment and support allowance whom they have deemed not fit to work? Why does the freeze include benefits paid to mothers of very young children, whom the Government do not require to work? Why does it apply to in-work benefits designed to make work pay?

[Baroness Buscombe]

Because of the issue of affordability, we have to make some difficult choices. I will not pretend that we are not constantly looking at this; indeed, the Secretary of State for Work and Pensions made a speech only today amplifying the fact that we are looking at different ways of supporting people with disabilities. They may not attract a price tag, if I may put it that way, but they are going to help transform the lives particularly of people with severe disabilities, because the reality is that we cannot simply take that difficult leap and say that we are going to lift the benefit freeze. As my noble friend said last night in another place, we have to face the fact that under the previous Labour Government, welfare spending increased by £84 billion—the equivalent of £3,000 additional cost for every working household in this country. We have to strike a fair balance between those who are funding the welfare system and those who are in receipt of it. It is always a difficult balance, but again, I thank noble Lords who are making suggestions and encouraging me to amplify the fact that we have a particular interest in supporting those who may not have been in work for a number of years, or who may never have worked, to have the confidence to do so.