Social Security and Pensions

Beth Winter Excerpts

Monday 7th February 2022 Commons Chamber

[Beth Winter (Cynon Valley) (Lab)]

I rise to express my grave concern at the likely impact of these orders on the living standards of millions of people up and down the country. The draft Social Security Benefits Up-rating Order 2022 sets the increase in social security payments at September’s CPI rate of 3.1%, and the draft Guaranteed Minimum Pensions Increase Order 2022 sets the guaranteed minimum pensions increase around 3%. Yet the Bank of England warned last week that households faced the worst squeeze on disposable incomes for 30 years, and predicted that CPI inflation for April 2022, when the uprating will come into effect, is likely to be 7.25%.

That squeeze on incomes has come about because decisions by successive Tory Governments, including this one, have driven more and more people into poverty and hardship—policies such as the introduction of the household benefit cap in 2013 and the overall welfare cap in 2014. We have had freezes on child benefit and jobseeker’s allowance, and more recently the appalling decision to cut back the £20-a-week universal credit uplift. We have also had many, many public sector pay freezes.

The cost of living crisis facing our country means that things are about to get much worse, with petrol, food and energy bills skyrocketing. New figures from the Office for National Statistics show that the poorest households are spending a third of their budgets on food and household bills, while the richest spend only a fifth of their money on those items. Research by the Joseph Rowntree Foundation has found that for single adult households on low incomes, their energy bills after April will rise a shocking 54%, which is an increase of 21 percentage points since 2019-20.

The reality for so many people, including my constituents, is far removed from the rhetoric of this Government, and the impact on people in my constituency of Cynon Valley will be devastating. I have spoken about this many times. Over a third of people in Cynon Valley are living in poverty, and in some areas 50%—yes, 50%—of children are living in poverty. That is well above the UK national average. Unemployment rates are very high, and we have the highest rate of economic inactivity in the whole country.

Before coming into this place, I worked for many years for Shelter Cymru, for Citizens Advice and with food banks, so I know the real cost of what lies behind these statistics and what families and pensioners face day in, day out.

We cannot forget the human stories behind these figures. I want to give one example that has stayed with me for many years. I will refer to them as Mr and Mrs Davies. They had been extremely well-off and had owned their own business, but they had hit hard times. They came to me for advice when I worked for the homelessness charity Shelter Cymru. They could not make ends meet and were at serious risk of losing their home. Finding themselves in this situation was a devastating shock for them and the paltry level of benefits meant that they could not make ends meet or pay their bills. This could happen to any one of us, including many on the Conservative Benches.

It is not as though the country cannot afford to provide for everyone. We are the fifth richest nation in the world. For instance, it has been estimated that reforming capital gains tax and taxing dividends regimes could raise an additional £19 billion a year, while a wealth tax could raise in excess of £260 billion a year. There has been £350 billion in tax avoidance since 2010. A one-off windfall tax on oil and gas profits, which we talked about last week, would put an extra £600 in the pockets of households on the lowest incomes, compared with the Conservatives’ paltry £350.

But instead the Government continue to choose to punish the most vulnerable and those in need in our society. As others have said, this is a political choice. As usual with the Conservatives, their policies ensure that it is the poorest who pay the most while the gap between the poorest and the wealthiest continues to grow. These are families, pensioners and households who cannot afford to have their benefits cut again, but that is what is being proposed today—a 3% increase when costs are going up by 5%, 6% or 7%. This order is therefore a proposal to increase the level of poverty in this country.

That is why I am backing the JRF and other organisations such as CPAG and the Trussell Trust in calling for a larger increase of 6%. The Government must withdraw this order and come back urgently with a new offer that ensures that social security recipients are no longer scapegoated and exploited as they have been over the past 10 years by this Conservative Government.