Social Security and Pensions

Hywel Williams Excerpts

Monday 6th February 2023 Commons Chamber

[Hywel Williams (Arfon) (PC)]

It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell). When he was talking about the invalid care allowance, which was the predecessor to the carer’s allowance, I recalled meeting people at that time—I was dealing with these matters professionally then—who were working 60, 70, 80, or 100 hours a week and were in absolutely no position to take on paid work to supplement the meagre level of their allowance.

On behalf of my own party, I welcome the decision to uprate most benefits in line with inflation. However, given the desperate situation facing millions of people on benefits, this is simply not enough. Reference has already been made a number of times to reports by the Child Poverty Action Group that costs for low-income families have risen by 21% in the past two years, which is more than the 14% rise in benefits. This gets to the heart of what I wish to say in my contribution, which is about the inadequacy of benefits.

Since 2010, austerity has caused huge increases in child poverty. The CPAG estimates that, pre-covid, 700,000 more children were in poverty than at the start of the 2010s. Wales currently has the highest level of child poverty, at a shocking 34% of all children. There needs to be urgent investment into the system, far above what is being proposed at present.

Looking at what life is really like for those claiming universal credit, it is plain that current benefit levels, even those matching inflation, will not be enough. A snapshot of poverty in Wales this winter produced by the independent and impartial Bevan Foundation revealed some shocking findings—I have a report here that I can recommend to anyone who is interested in the situation in Wales. In Wales, people on universal credit are five times more likely than the general population to report that, sometimes, often or always, they struggle to afford the basics. Furthermore, 52% of disabled people whose condition limits them severely have gone without heating in their home over the past three months.

It is no wonder that Public Health Wales recently said that the current cost of living crisis is not a short-term economic squeeze. It is having, and will continue to have, wide-ranging and long-term impacts on the health and well-being of the people of Wales. Those impacts have the potential at least to be on the same scale as those of the covid-19 pandemic, which has already exacerbated existing inequalities in Wales. The Government must meet this challenge, go beyond treading water and implement at least a substantial uplift to universal credit and legacy benefits.

Universal credit may not meet a claimant’s needs in full due to the barriers and restrictions on entitlement built up over the years. This has been referred to already by a number of Members. The Government should scrap these restrictions, starting with the pernicious two-child limit, which has also been mentioned today. The benefit cap is being uprated, but it should not exist in the first place. There is, quite obviously, a differential effect on communities that place a high value on having more children, perhaps because of their particular religious or cultural beliefs. Those people are being scapegoated, and they are the poorest in society.

As the right hon. Member for Hayes and Harlington mentioned, removing the benefit cap would cost 0.2% of all social security spending. That is a flea bite, given the beneficial effect that it would have. It would be a price well worth paying to remove this vicious and unfair penalty on ordinary families. Sometimes I reflect on my own family’s experience. I am one of six, brought up after the war when the benefits of the post-war settlement meant that we had so many advantages when it came to health, universal benefits, family allowance and education. Looking at the situation now, the deterioration since the post-war settlement is clear.

Deductions in benefits are also a huge problem facing claimants. It has been estimated that more than four in 10 households receiving universal credit had money automatically taken off their benefit entitlement. The average amount deducted was £61 a month, or £14 a week. As with many social and economic matters, there are no statistics published for Wales, but estimates suggest that 88,000 households in Wales do not receive their full universal credit entitlement because of automatic deductions.

Turning to the local housing allowance, which has already been mentioned, the autumn statement is clearly a driving factor in the growing gap between rents and housing benefit. In my own county of Gwynedd, 35% of households receiving housing benefit face a shortfall in rent. Clearly, although there is an urban element to this, as has been mentioned already, there is a particularly acute and real problem in rural areas of Wales. Estimates suggest that the shortfall is higher than in Wales’s cities, where local housing allowance better reflects local rent levels and there is also a wider range of housing stock to meet people’s bedroom requirements. I join the calls on the UK Government to unfreeze local housing allowance and uprate it annually, so that it keeps pace with rising rents.

There is far more that the Government could be doing to help those on social security. For example, will they commit to looking at the adequacy of benefits? The all-party group on poverty is currently running an inquiry into the adequacy of benefit levels, so will the Government engage with the findings at all? The Resolution Foundation has highlighted the lag in the uprating mechanism and has suggested ways in which it could be more responsive, such as multiple upratings per year or bringing forward the uprating month. Those are just two of the possibilities. There is also an inconsistency as to why certain benefits are enshrined in law to rise with prices and others are not. What is the Government’s rationale behind that?

Finally, I ask the Government to bring forward the cost of living payments. Although they are, at best, a sticking plaster approach, as highlighted by the Work and Pensions Committee, they should none the less be brought forward so that poor claimants, particularly disabled people, are prevented from falling into debt and destitution, as many cannot wait until spring for more support.