Social Security and Pensions

Jeremy Corbyn Excerpts

Monday 6th February 2023 Commons Chamber

[Ms Buck]

The fact of the matter is that poverty is rising —pensioner poverty is rising, child poverty is rising, and the local housing allowance and the childcare element are not keeping up with costs. That is simply a fact.

[Jeremy Corbyn (Islington North) (Ind)]

If I may, I will just take my hon. Friend back to the point she was making about rent levels, which have gone up extraordinarily in the past six months. London now has the highest rents of any city in Europe, and many people on benefits living in the private rented sector are paying well over £100 a month out of their remaining benefit. Does she not think that there is also a case for looking at local housing allowance levels?

[Ms Buck]

This freeze in local housing allowance, which is such a critical element of people’s income, is causing such hardship for hundreds of thousands of families. That is not only undermining living standards in the middle of a cost of living crisis, but leading to utterly perverse disparities between areas due to differences in rent inflation. The 30th percentile of rents in Bristol is £100 more than in Newbury, but the amount of housing support that those who live in Bristol can receive is £12.50 less than those who live in Newbury. To quote the Institute of Fiscal Studies again:

“the current approach makes little sense. It permanently bakes in historic information about differences in rents across the country, while entirely ignoring current information about those differences.”

We can see the real-world consequences playing out on our streets as rough sleeping soars and council homelessness units are stretched to breaking point.

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[David Linden]

The triple lock the hon. Gentleman refers to is the one that he and his party broke a manifesto commitment on recently, resulting in many pensioners being diddled.

[Jeremy Corbyn]

I am interested in what the hon. Gentleman is saying about the huge problem of pensioner poverty, particularly for those who are unable, or do not understand how to access the minimum income guarantee. Does he accept there is also a huge problem for women of a certain age, the WASPI women, who are living in great poverty and great stress through no fault of their own, due to a change they were unaware of?

[David Linden]

The right hon. Gentleman is spot on. Several of us are looking with great interest at the ombudsman process, which has just finished stage two and will now move to stage three. I hope that the Government will change their tune on their approach to the issue of 1950s born women, because thus far many of those women in my constituency and, I am sure, in Islington North would suggest that the Government are not doing enough on that issue. He is right to put that on the record.

Before the hon. Member for Broadland (Jerome Mayhew) intervened, I was making the point that the DWP has identified a further 100,000 potential underpayments during its ongoing correction exercise, which will now take an extra year to complete. I would argue that that demonstrates that the British Government are unable to effectively run a state pension system, and makes the case for pensions being administered in an independent Scotland, and not by Tory Ministers who are increasingly using pensioners to penny-pinch.

It would be remiss of me not to touch on retirement age, which has been the subject of huge media speculation recently. It appears to be the worst kept secret in Whitehall that Ministers are expected to announce that the retirement age will be increased to 68 at some point in the 2030s, not in 2046 as previously expected. To be crystal clear, my party opposes any further increase in the state pension retirement age. Indeed, the Scottish Government, when they responded to the British Government’s review of the state pension age restated their opposition to any changes to the current timelines for increasing the state pension age. This might seem like an abstract debate, but these things have real-life effects. Recent analysis by Age UK shows that 1.5 million pre-state pension age households have no savings at all. We must therefore avoid the situation faced by the WASPI women, mentioned by the right hon. Member for Islington North (Jeremy Corbyn), who faced having to work longer with little time to replan for retirement. On the subject of WASPI women, I again make clear my support for their cause.

It is incumbent on the British Government to look at other areas of pension injustice, such as frozen pensions for those living overseas, many of whom are veterans. It is my party’s belief that that is not a sustainable situation and, though complex, it cannot be allowed to just go unchecked while pensioners languish in poverty overseas. That is certainly a unique take for global Britain.

The British Government’s decision to decline a request from the Government of Canada for a reciprocal social security agreement was a peculiar one and I would appreciate the Minister saying more about that during his wind-up speech.

The reality is that tonight’s orders will pass without a vote but this annual debate shines a spotlight on the major holes in our social security system. The UK is blessed with the sixth largest economy in the world, yet —remarkably—soup kitchens up and down these islands will throw open their doors tonight, in record number, to feed people who cannot afford to get by on state support. That poses a much bigger question which this Government have thus far been unable to answer. It is a question which many people in Scotland are concluding can only be answered with independence, because Westminster is not working and Scotland can do better—so much better—than this crumbling Union.

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[Sir Stephen Timms]

There is a strong case for that. At the time when the benefit cap was introduced, we were told that it was to prevent people from receiving more in benefits than they would if they were working, but any relationship with wage levels has long since disappeared.

In its briefing for this debate, the Child Poverty Action Group makes the point that the increase does not undo the damage of the cap having been frozen since 2016, but

“pushes families who would be in poverty anyway into even deeper poverty.”

It points out that 123,000 households are currently affected by the cap, including 107,000 households with children. That is one reason why, before the pandemic, when the data was most recently updated, 700,000 more children were in poverty than in 2010. The case for the cap needs to be reconsidered.

I want to pick up a point that my hon. Friend the Member for Westminster North (Ms Buck) made about the absence of an uprating to the local housing allowance, which is a very big problem. The LHA will be frozen for the coming year at the level at which it was set in 2020, even though rents are rising fast. When I raised the matter with the Prime Minister at the Liaison Committee in December, he replied that the uprating in 2020 represented

“a very significant cash uplift at the time, which it is appropriate to have maintained”,

echoing the wording of the ministerial statement from which my hon. Friend the Member for Westminster North quoted.

[Jeremy Corbyn]

I agree with the Chair of the Select Committee about the rapid increase in rents, particularly in the private sector—it is huge in the big cities. Does he think that the Government should at least reflect on the need for a freeze on private sector rents, and for some serious legislation to protect the now huge proportion of our country’s population who live in the private rented sector?

[Sir Stephen Timms]

The right hon. Gentleman makes a very powerful argument that the rate at which rents are now rising is devastating household finances in many parts of the country. All the 2020 increase—the much-vaunted “generous uplift”—did was raise the local housing allowance back to the level at which it had been set at the beginning of the decade: at the 30th percentile of local rents. In other words, it was raised to a level at which it covered three in 10 of the homes of that size in each local area, so even in 2020 it was not enough to cover the rent for seven out of 10 of the homes available. Since then, it has been frozen; by the end of the coming financial year it will have been frozen for four full years.

The consequences are becoming clear. Last week, the Combined Homelessness and Information Network reported that up to 3,570 people were sleeping rough in London from October to December 2022—a 21% rise on the same period in the previous year, with a 29% increase in the number of new rough sleepers. The chief executive of Crisis said:

“It is simply disgraceful that the numbers of people forced to sleep on the capital’s streets is very nearly back to the record levels we were seeing before the pandemic.”

Zoopla data shows large shortfalls for the cheapest properties by the end of last year: the shortfall for a one-bedroom home in Southwark had almost doubled in five months to £2,630 a year, while the shortfall for a three-bedroom home in Bromley had increased by more than £1,000 in five months to £3,555. At the start of 2022, some 1.7 million people—more than one in three renters in the private rented sector—were dependent on housing support to help them with their rent. Fewer than one in 12 private homes listed last year were affordable within the local housing allowance level; that figure reduced by a third in just five months last year.

The level of support is now being frozen in cash terms for a further year. Crisis said last week that it was

“particularly concerned that the lack of social housing and the growing gap between overheating rents and the frozen Local Housing Allowance is pushing people towards homelessness.”

That is the reality of the impact of the policy, which should urgently be reconsidered. Ministers say that they are committed to ending rough sleeping, but the policy is driving an increase in rough sleeping.

I am grateful to my hon. Friend the Member for Westminster North for drawing attention to the Select Committee’s recommendation about the cap on the level of childcare support in universal credit. It is regrettable that there is nothing in the present measures that will address that, but I hope we might see something in the Budget on that front, given the cross-party concern about the inadequacy of childcare support at a time when we want to encourage people back into work.

It is a relief that a catch-up uprating is being delivered to the main rates of benefit, but we are a very long way from providing an adequate social security safety net. A large-scale repair job will be needed in the near future. There is growing evidence that disabled people are facing an especially tough time in the current cost of living crisis. Their situation, to which the hon. Member for Blackpool North and Cleveleys was right to draw attention, has to be addressed.

Most immediately, however, I urge the Minister to take another look at the local housing allowance level. Ministers say that they are committed to eradicating rough sleeping, but it does not look as though they mean it. Keeping the local housing allowance frozen for a fourth year will drive a further surge in the number of rough sleepers, as well as very serious problems for hundreds of thousands of others.

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[Jeremy Corbyn (Islington North) (Ind)]

I am pleased that we are having this debate and that, for once, it is fully subscribed to, which is very welcome. We are dealing with issues of terrible poverty in this country, brought about by a combination of low wages, insufficiency of benefits, very high rents, and inflation driven largely by the greed of the energy companies, which are making so much money. This House needs to reflect seriously on how the fifth-richest country in the world can have more and more people sleeping rough, begging on our streets and trying to eke out an existence.

[Guy Opperman]

I am listening very closely to the right hon. Gentleman’s speech. Does he attribute any blame for the fiscal difficulties that the country faces to what Mr Putin has done in Ukraine—yes or no?

[Jeremy Corbyn]

I have not mentioned anything to do with Ukraine.

[Guy Opperman]

That’s the point!

[Jeremy Corbyn]

Could the Minister hold in his excitement for one moment? He is the Minister responsible for the inadequacy of benefits; perhaps he should reflect on that. Yes, the war in Ukraine has had an effect on global energy prices, although the effect has been bigger in some countries than others. Countries such as France deal with that by taking energy companies into public ownership to protect their citizens from the grotesque energy price increases that his Government are quite happy to mete out to the people of this country.

[Jerome Mayhew]

rose—

[Jeremy Corbyn]

No, I will carry on with my speech. The 10% benefit rise is obviously better than no rise at all. During the Budget statement, the previous Chancellor would not even answer the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), on whether there would be any increase whatsoever to benefits. A 10% increase is obviously an improvement on what was provided by the last Chancellor, but it does not even meet inflation. It comes nowhere near to meeting the rate of food inflation, which is running at around 15% to 16% per year. Families or individuals who rely on benefits spend a wholly disproportionate amount of their income on food and energy; better-off people spend a much lower proportion on those things. The rate of inflation for the poorest 10% of our country is far greater than the 10% or 11% figure that the Bank of England puts forward.

Many issues could be raised, and I will raise a few very quickly so that all Members who wish to speak can do so. Some years ago, a two-child benefit cap policy was introduced, which many of us were, and remain, concerned about. Those of us who represent constituencies with a considerable number of large families know that they suffer very badly. The two-child benefit cap obviously has a disproportionate effect on the largest and poorest families in our society. I would be grateful if the Minister could tell us where the morality is in saying that the third, fourth or fifth child of a family is less important than the first or second. It is a simple moral question. If we want to look after all the people in our society—I like to think that we all do—that should include all children, irrespective of the size of the family. The third, fourth, fifth or sixth child is completely unaware of where they lie in the pecking order when they are born. They find out later that their presence and that of subsequent siblings reduces income for their family. It does not seem morally right that we should pursue that policy.

The question of the benefit cap and its effect on people in our society is massive, as the Chair of the Select Committee pointed out, as did the hon. Member for Glasgow East (David Linden) and others. The disproportionate effect on people living in the private rented sector is huge. My constituency is inner-city and has a fairly large number of council and housing association properties in it. Their rents are obviously within the local housing allowance, but the vast majority of private rents are nowhere near within the local housing allowance. I was talking to someone in a hostel who was trying to find a private rented flat to move into. They tried every agency they could find; they walked the streets and scoured the newspapers and goodness knows how many websites to try to find a flat within the local housing allowance in inner London, near their school and support network, but they could not get anywhere near it.

Unless we raise or abolish the benefit cap, we have to intervene in the housing market and freeze private sector rents, so that living in the private rented sector is at least sustainable, and those living there do not have to pay part of their rent out of the benefit that they receive. What is going on is simply unfair. I would hope that the Minister would understand the issue with the cap, and the poverty that it brings for so many people in our society. In my constituency, probably more than a third of the community live in the private rented sector—there are probably more in other constituencies—and they are suffering as a result of this issue.

Another issue that I would like to raise is that of people with no recourse to public funds, and the difficulties that they face in our society. It is a bold, dramatic and strong statement when a Government announce that someone is allowed to enter the country but is not allowed any recourse to public funds whatsoever. This issue was raised two weeks ago at the Parliamentary Assembly of the Council of Europe in the context of our adherence to the Istanbul convention on the protection of women, of which the Minister will be aware. The report that we received raised concerns that in some member countries in which there is no recourse to public funds—the problem is not exclusive to the UK—women in an abusive relationship might not have settled status when their partner does. Those women are unable to gain independent security and safety, and often are unaware of the domestic violence provisions that they might be able to call on. Will the Minister look seriously at the very well thought-out report from the Council of Europe about our adherence to the Istanbul convention, which I am sure he supports? Will he recognise that no recourse to public funds affects not only the individual concerned but the wider family, if there is one?

If hon. Members talk to people who are sleeping rough on our streets, turning up at food banks in our communities or begging on tubes and elsewhere, they should ask them what their situation is. Many have been unsuccessful in their initial asylum application, but may ultimately win on appeal, and they have no access to any benefits whatsoever. They live in the most desperate poverty, are prey to crime and abuse, and can be abused and exploited by those with criminal intent in our society. Through this policy, we are creating an incomeless underclass in the major cities of this country. I know the Minister would not want that to be the case, but unfortunately the implementation of this policy leads to that.

The last point I want to raise is to follow on from what the hon. Member for Glasgow East and others have been saying about the pension level in our society, and the numbers of pensioners who are entitled to support beyond the level of the state pension but are simply unaware of it, do not know how to apply for it and do not get it. I also want to mention the women who were duped by the way in which the state pension retirement age was raised and are now living in desperate poverty—colloquially known as the WASPI women. I think they deserve justice. They were very badly treated and my friend, the right hon. Member for Hayes and Harlington (John McDonnell), certainly took their case up when he was shadow Chancellor of the Exchequer.

Pensioner households, like everyone else, are facing terrible stress at the moment from food and energy price rises. I heard from the media yesterday that the Government have no intention of continuing the energy price limitation after April, but if I am wrong on that I am happy to be corrected. The protection that exists now is only a protection relating to the 100% increase in energy prices that we have already had. If you go down any street in any poorer part of this country in the evening, you see darkness; you do not see people with their lights on. You see people going to bed early because they cannot afford to heat their home. This is real. Children in the poorest households are underfed and they are cold because their homes cannot be properly heated. Many elderly people are huddling in libraries during the day just to try and keep warm. Is this really a sensible or fair way of going on? Other Governments, including the French Government, have intervened to try to control the energy market and ensure that energy price rises do not get to the levels they are in this country. Our Government are not prepared to do that.

This benefit uprating will no doubt go through this evening, but all it does is meet the headline of inflation that the consumer prices index set last year. What we need is something much more bold, with much more intervention, that recognises energy price rises, food price rises and the enormous rent rises in the private rented sector. Those are the biggest drivers of poverty in our society.

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[John McDonnell (Hayes and Harlington) (Lab)]

I want to raise three issues briefly; some of this has been covered already but I want to reiterate some of it and go into more detail. The first is the benefit cap. The second is the triple lock. The third is the carer’s allowance, where I follow on from the hon. Member for North East Fife (Wendy Chamberlain).

This debate is primarily about the increase, but in the past these debates have been used to try to shape the debate on social security for the future. Much of what I say, therefore, may be aimed at the Government, but now that the Select Committee has announced its inquiry, part of it is aimed at the agenda for that inquiry.

Those of us who were in the House when the benefit cap was introduced will know that it was born in an era when the debate on poverty had descended into definitions of “skivers” and “strivers”; it was almost a reversion to the language of the Poor Law. We knew what impact it would have and we knew the numbers affected would increase rapidly. Just over 70,000 were being impacted at the start but, as my right hon. Friend the Member for East Ham (Sir Stephen Timms) said, this rose to 120,000 and above. The cap hit some areas in particular, including London constituencies. I am a London MP and I know that 44% of those affected are in London. It hit the black, Asian and minority ethnic community in particular; it has hit eight out of 20 from the BAME community, yet they represent three out of 20 in the population overall, so this was discriminatory.

[Jeremy Corbyn]

My right hon. Friend is making a strong point. Does he agree that the cap has also been a major driver in forcing working-class communities out of inner-city areas, where there are now huge levels of private landlord speculations going on?

[John McDonnell]

I hope that Conservative Members and others who may not have had the experience of this recognise how it has affected our communities. I do not use the word lightly, but some of us have experienced what are almost forms of social “apartheid” within our communities, where certain sections of housing are no longer available to working-class people. In some instances, fenced communities have developed as a result. I highlight reports of what happened in my constituency as regards the Ballymore housing development.

I come back to the point that my right hon. Friend the Member for East Ham made, which is that the cap has had an impact on a large number of children, with the last calculation being 308,000; 70% of the people affected are single parents. As he said, this pushes people into deep poverty. I was looking at the figures and they show that the average capped household with two children is now £150 a week below the Government’s own poverty line. Scrapping the cap would increase benefits to them by an average of £65 a week; the cost would be £500 million, which is 0.2% of the total spending on social security. A marginal increase in the efficiency of tackling tax avoidance, an increase in national insurance beyond getting rid of some of the limits at the higher levels—that would easily pay for this marginal improvement but would have a dramatic effect on the living standards of so many people.

I campaigned against the breaking of the link between pensions and earnings when Mrs Thatcher introduced it, so I wholeheartedly welcomed the triple lock when it was introduced by a Conservative Government and I made that point in this House. I regretted bitterly, however, that the Government broke their pledge last year, because once the link was broken, a debate was opened up among some Members about the triple lock being no longer necessary. I am hoping that the statement about social security and pensions today reaffirms the message across the House that the triple lock is here to stay.

When we look at the figures, we see that one in five pensioners is in poverty; 2.1 million older people are in poverty; they get £40 a week less than the Government’s own poverty threshold; 1.3 million older people are now categorised as suffering forms of malnutrition; and we have always had a high level of excess deaths in winter among older people, with on average between 25,000 and 30,000 dying unnecessarily. I looked at the figures showing what has happened since the break with earnings. The proportion of those people living in severe poverty is five times higher than it was in 1986—we have had the largest increase in western European countries. So I make an appeal to Members from across the House. The triple lock was a major reform, and I thought we had built consensus on it. It should not be in any way undermined in the future.

I think the triple lock should apply to all benefits, and I hope the Select Committee will have that debate. I asked the House of Commons Library to give me the figures on what would have happened to carer’s allowance if the link had been kept since the 1980s. It is now at £76.75 but it would have been £146.42. Invalidity benefit is now £130.20, but it would have been £233.55. If we look at unemployment, we see that jobseeker’s allowance is now £84.80 but it would have been £185.49. There is a moral argument for maintaining the protection of benefits over time and trying to build consensus across the House on that, in the same way in which it was eventually built on the triple lock for pensions.

Finally, let me touch on carer’s allowance. I have been chairing meetings of unpaid carers or informal carers, as they describe themselves, over the past 18 months, and I just want to get the stats on this out there. I pay tribute to what the hon. Member for North East Fife has done with her legislation and the campaign she has waged. Some 8% to 10% of the adult population are informal carers; two thirds of carers are in employment—that is the whole point here; six in 10 of those who are caring for 35 hours a week or more are workless, which is three times the rate of those caring for less than 20 hours a week; and about 25% of informal carers are living in poverty, according to the Joseph Rowntree Foundation’s latest figures. Another figure, which I believe she has quoted in the past, is that it is estimated that unpaid carers across the UK provide £135 billion-worth of caring in our society, and that largely falls upon the shoulders of women. It is now time to recognise the significance of the role that these carers play and the fact of the poverty they live in.

As for Northern Ireland, the Carer Poverty Commission was established last month and it is chaired by Helen Barnard of the Joseph Rowntree Foundation. Research from Carers Northern Ireland showed that nearly one in three unpaid carers in Northern Ireland were struggling to make ends meet, with one in four cutting back on essentials such as food or heating just to get by. I believe the situation is exactly the same across the UK for carers.

Let me make this suggestion: the unpaid carers I have met say that, like everybody else who works, they should be paid a living wage. They should at least get the minimum wage so that they can get by. At the very least, let us take the first step in that direction, which would be to recognise that maternity allowance is paid so that people can care for a child. Perhaps carer’s allowance should at least go up to the level of maternity allowance. If we can increase carer’s allowance in that way, it will enable at least some of those informal carers to be lifted out of poverty. I put that suggestion on the table for the Government to debate and for the Select Committee to look at as well.

As the WASPI women have been mentioned, I cannot help but do so too. This is an injustice that needs to be redressed, and it needs to be redressed soon, because many of the women who were affected are now late in life. We have already lost some of them, and many may not live long enough to see the recompense that they deserve. However, I fear that those who are placing their hope in the ombudsman’s assessment will be sorely disappointed by the levels that are recommended. If that is the case, I commit to returning to the matter on the Floor of this House to make sure that the campaign continues and succeeds.