Social Security

Heidi Allen Excerpts

Monday 4th March 2019 Commons Chamber

[Margaret Greenwood]

Thank you, Madam Deputy Speaker.

To put this in perspective, destitution in this context means that a person has lacked two or more of the six essentials in the last month—shelter, food, heating, lighting, clothing and basic toiletries. It is truly shocking that 1.5 million are going without basic essentials in modern Britain.

The Social Metrics Commission, whose members are drawn from the left and the right of the political spectrum, has found that 14.2 million people in the UK are in poverty, including over 4 million children. More than one in 10 of the UK population live in persistent poverty. This is a shocking indictment of a country that has the fifth biggest economy in the world.

[Heidi Allen (South Cambridgeshire) (Ind)]

I want to put on the record that I have visited some of the poorest parts of the country in recent weeks with the right hon. Member for Birkenhead (Frank Field), and I can confirm that I have seen this destitution with my own eyes. I have spoken to individuals who have literally £5 a week to live on for a variety of reasons, including their inability to access universal credit, but the overriding fact is that people can no longer afford to live on the subsistence level that universal credit and working-age benefits are set at—they cannot.

[Margaret Greenwood]

I thank the hon. Lady for making the point so powerfully.

The benefit freeze increases poverty. According to the Joseph Rowntree Foundation, the freeze is set to drive almost 500,000 more people into poverty by 2020. In 2018, a couple with children claiming universal credit were up to £500 worse off, and a lone parent with children was up to £400 worse off, due to the benefit freeze. The JRF says that the freeze is the single biggest policy driver behind rising poverty levels. Before the freeze was introduced in the Welfare Reform and Work Act, working-age benefits were capped at 1%, yet living costs are rising. In the 12 months to September last year, prices grew by 2.4%, according to the CPI inflation measure. The Joseph Rowntree Foundation says that between the introduction of the benefits freeze in April 2016 and November 2018, the annual cost of living for people on low incomes rose by £900.

Rising living costs and frozen social security mean that the value of benefits is increasingly inadequate to protect people from poverty. A recent report by the National Audit Office shows how the real value of the basic rate of jobseeker’s allowance and income support has fallen nearly every year since 2012-13, and it is now below its value in 2009-10. Overall, the real cut to many benefits from the four-year freeze is over 6%. According to the Resolution Foundation, child benefit is now already worth less than it was in April 1999. Beyond a family’s first child, child benefit in April 2019 will be worth 14% less than it was when it was fully introduced in April 1979. This is compounded by the Conservatives’ broken economy: low wage growth and the rise of insecure and zero-hours contracts mean that incomes are failing to meet the rising cost of living.

--- Later in debate ---

[Heidi Allen (South Cambridgeshire) (Ind)]

Setting aside my concerns about the direction of the Conservative party, one of the motivations behind those of us determined to build a new centre ground party is the opportunity to develop policy based on evidence and to reflect on and amend our policy when that evidence changes. The motion in front of us today is one that this House debates annually. Its purpose is to increase welfare benefits in line with the economy—in other words, the consumer prices index. Those benefits include the state pension, disability living allowance, the personal independence payment, widows’ and bereavement benefits, the employment and support allowance support group premium, and the maternity allowance. However, as we have heard across the Chamber tonight, there is one glaring omission. The order excludes working-age benefits. Within this exclusion also sit standard allowances in ESA and income support, child tax credit and the child element of universal credit—in other words, benefits paid to those struggling to make ends meet but who are doing the right thing and working, as well as those too ill to work and those families with children who are also struggling to make ends meet. Our fair-minded constituents would be right to think that there must be some mistake here, but there is not. Individuals are being subjected to the final year of the four-year benefit freeze.

In the 2016 Budget, the Treasury announced the four-year year freeze with the aspiration of saving £3.5 billion by 2019-20. Everyone understood the need to reduce spending right across Government, but policy cannot be static and must be regularly reviewed, particularly when the policy so directly affects the most vulnerable people in society. Estimates recently published by the Resolution Foundation, which excels at statistical analysis in this space, indicate that the Government will have already exceeded their target by £900 million by the end of year three. Owing to inflation, the Resolution Foundation further estimates that while wages, the cost of living and pensioner incomes have risen over the period—everything has risen—these in-work benefits have seen a 6% real-terms decrease. The policy can no longer be right. The context within which the four-year benefit freeze policy was developed has changed. What kind of Government can think that it is morally acceptable to maintain this policy?

My recent visits with the right hon. Member for Birkenhead (Frank Field) to the parts of the UK struggling most with poverty have provided me with clear quantitative evidence, too. Society is responding with compassion and the strength of human kindness. Beneath the Government’s welfare safety net, society is providing three further layers: the established and now almost “normalised” food bank network; third sector charities and faith groups who open their doors when food banks are closed; and, most movingly, individual families helping those around them. The motion before us today therefore brings into sharp focus the damaging impact of the benefit freeze on the most vulnerable in society. With the recent news that tax income in January outstripped public spending by £14.9 billion—the biggest January surplus since records began in 1993—there is simply no reason to persist with the final year of the benefit freeze. We can afford it.

Working-age benefits must be uprated in line with all benefits from April 2019. As we have heard, ending the freeze would lift 200,000 people out of poverty. It is now almost universally understood that working-age benefits are insufficient for claimants to even maintain subsistence living. Claimants at the lowest point in their lives cannot afford to live on the current welfare safety net. The Secretary of State for Work and Pensions herself has spoken out about the need for the freeze to end, and I can see the discomfort among those on the Front Bench, because I know that it is not within their gift to change things, but it is not too late for the Treasury to change course and end the four-year freeze. I have also been disappointed not to hear any suggestion from Ministers that the matter will be dealt with at the spring statement on 13 March. This Government must look again at the evidence: their benefit freeze is no longer morally nor economically viable and must end in April this year.