Social Security

Debate between Jim McMahon and Margaret Greenwood

Monday 4th March 2019 Commons Chamber

[Margaret Greenwood]

I will come on to pensions further on in my speech, if the hon. Gentleman will wait for that.

Some 8 million people are in poverty and live in families where at least one person is working. According to Shelter, more than half of homeless families in England are in work. Under the Conservatives, having a job is not even a guarantee that someone can avoid homelessness. The benefit freeze cannot be seen in isolation. It is just one part of the Conservative austerity programme that has seen billions cut from public services around the country and taken the core out of our communities. The Conservatives have targeted social security with devastating cuts, taking vital support from poor and disabled people. According to figures produced by the Library, measures announced in the June 2010 Budget onwards are forecast to cut social security by £36 billion in 2020-21. Nearly £5 billion is forecast to be taken from disability benefits, including employment and support allowance and incapacity benefit; £4.6 billion from tax credits; and £3.4 billion from child benefit. These cuts have had a devastating impact on the incomes of millions of people. The freeze should be seen in the context of the chaotic roll-out of the Government’s failing flagship social security programme, universal credit.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I congratulate my hon. Friend on the points that she is making, many of which will resonate with my constituents. Does she agree that in-work poverty is a modern-day scourge on British society, and it exposes the lie that if someone is willing to work hard and make their own luck they can get on in life? Absolutely the opposite is true for too many people under this Government.

[Margaret Greenwood]

My hon. Friend is absolutely right, and there is a real sense of betrayal that that myth has been perpetrated by Government Members.

It is clear that universal credit is not working. It is driving many people into poverty, debt and rent arrears. One of its key defects is the inbuilt and unrealistic five-week wait. Originally it was even worse—a six-week wait. It seems that that senseless policy was devised by the Government without any thought for how people are supposed to survive for five or six weeks without any payment at all. The Secretary of State herself has spoken of the link between universal credit and the significant rise in food bank use. Why then have the Government failed to tackle this issue and why do they offer people a loan, rather than solving the problem?

The Secretary of State has said that the benefits freeze will not be extended beyond next year, but families cannot afford another year of the freeze. Next year alone, the benefits freeze is expected to cut £1.5 billion from the value of working-age benefits. We have called on the Government repeatedly to end the benefits freeze. It is not too late for them to stop the freeze. Ending it a year early would lift 200,000 people out of poverty altogether and boost the incomes of 13.7 million people on low incomes by an average of £270. The Government might be reluctant to do that now because the next financial year is only weeks away. However, when there is a desire to get a short Bill through and general agreement that it is non-contentious, Parliament can move primary legislation along quickly. As we saw in the recent work and pensions estimates debate, there is a cross-party desire to remove the damaging benefits freeze.

Part of the Government’s concern might be that the passage of such a Bill would be slowed down by amendments, so we will lay down a challenge to them: if they introduce a short Bill to end the benefit freeze one year early, Labour would support it and do whatever is possible to ensure its smooth passage before the next financial year. Will the Government agree to this measure, which would take hundreds of thousands of people out of poverty?

The increase in universal credit work allowances was introduced after considerable pressure from the House and Labour Members in the autumn statement. We welcome the increase, but we question why the Government cut the work allowances in the first place only to partially reinstate them a few years later. The 2015 cuts to work allowances dealt a major blow to the work incentives of universal credit and took money out of the pockets of working families. According to the Resolution Foundation, the increase to work allowances announced in the autumn restores only half the original cut overall. There are no work allowances for single people and couples who do not have a disability. Will the Government revisit this decision?

Turning to the uprating of the state pension in line with the triple lock, we are pleased that the Government have kept to this, despite the Conservatives’ plan to scrap the triple lock, which they announced in their manifesto. Presumably, the pressure from Labour Members made them think about that again. The latest figures show that pensioner poverty, as my hon. Friend the Member for High Peak (Ruth George) said, is rising again, with more than 300,000 additional pensioners living in poverty compared with 2012-13. That could be made worse by the news, slipped out on the eve of an all-important Brexit vote, that mixed-age couples will no longer be able to claim pension credit. They will instead be forced into making a universal credit claim, and some couples may lose as much as £7,000 a year as a result. Cumulatively, the cut amounts to £1 billion over the next five years. What assessment have the Government made of the effect this cut will have on pensioner poverty?

As the Government are still recklessly failing to rule out a no-deal Brexit, the threat of no deal and the effect it would have on the state pensions of UK citizens living abroad looms ever greater. As has been mentioned, the Government already withhold the pension uprating from pensioners living abroad in many countries outside the EU, an injustice Labour has pledged to reverse. In their no-deal planning, the Government have failed to commit to uprating the state pension across the EU beyond 2019-20. I have met pensioners who are very worried about this scenario and the effect it will have on pensioner poverty abroad. People who previously moved to the EU did so on the understanding that their pensions would be uprated. Why will the Government not give assurances to protect UK pensioners living abroad, whatever the outcome of the Brexit negotiations?

The Government have failed to address the financial hardship faced by millions of women born in the 1950s due to changes in pensions policy. Why, despite constant lobbying raising awareness of the issue, have the Government failed to take action? The Conservatives’ austerity agenda has inflicted real hardship on many of the poorest and most vulnerable people in our society. It has also drastically undermined our social security system.

We on the Labour Benches believe that we need a social security system that is valued as highly as our NHS and is there for any one of us should we need it. The Government are failing to deliver. If the Prime Minister was really serious about austerity being over, the Government should take action to tackle the rising poverty we are seeing throughout our country.