Social Security (Additional Payments) (No. 2) Bill

Jonathan Ashworth Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[Jonathan Ashworth (Leicester South) (Lab/Co-op)]

We will not divide the House this afternoon, because it is clear that our constituents need extra support. Families, poorer people and pensioners in our communities need help and support not simply because of the inflationary impact of the world unlocking from covid and the spikes in wholesale gas prices on the back of Putin’s heinous invasion of Ukraine, but because for 12 years—coming up to 13 years—we have seen mediocre economic growth under Conservative Governments and a failure to make our economy more productive or sustainably raise living standards.

After five Conservative Prime Ministers, six Conservative Chancellors and nine Conservative Work and Pensions Secretaries, families have been asked to endure the most brutal cuts and freezes to social security that have rendered out-of-work benefits at their lowest level for 30 years. Children have been punished by the pernicious two-child limit and there has been a 25% cut in the value of child benefit. Of course, universal credit was cut by £20—

[The Minister for Employment (Guy Opperman)]

No, it was not!

[Jonathan Ashworth]

Mr Bumptious needs to calm down. That is the reality of the policies that he supports, which have put more children into poverty on his watch as a Work and Pensions Minister.

Those policies meant that poorer working families entered the crisis with less resilience, less protection and less to fall back on than they otherwise would have. Before the pandemic, the lowest-income households were four times as likely to have no savings as the highest-income households. Today, we face a situation where not only child poverty has increased in relative terms under the Government, but child destitution—where children’s families do not have the means to properly heat their homes, put food on the table, buy toiletries or even provide a decent bed to sleep in at night—is now at half a million. In all our constituencies, demand for food banks has exploded, and there are now also bedding banks, baby banks and even 13,000 so-called warm banks where the vulnerable gather so they do not need to shiver in their homes.

We have all heard stories from our constituencies, such as at the Wesley Hall food bank in my constituency, of fresh food being turned down because mothers in work cannot afford the electricity bill associated with keeping the fridge running. We have heard stories of families saying no to fresh vegetables, because they cannot afford to boil them on the cooker hob. We have heard stories of pensioners using tea lights to try in vain to heat tins of beans.

None of that, by the way, is because people cannot add up or run a household budget, as some headline-chasing Tory MPs lecture us—not the Secretary of State, I concede, but some of his colleagues. In my constituency, the poorest people are some of the best at arithmetic. They go up and down the supermarket aisles, constantly adding up the cost of everything and taking items out of their basket to avoid the indignity of having insufficient funds available when they get to the checkout.

People are turning to food banks because, after 13 years, wages have become so inadequate, housing costs so severe, childcare bills so impossible, social security cuts so deep, and debts chased by the DWP so crushing that, combined with the price of shopping and energy bills going up, families simply cannot afford to survive on the income that they have. The safety net is now so threadbare that in food bank Britain, hunger, the cold and the constant dread of the bailiffs have become a way of life. That should not be a way to live.

Yesterday, the Office for National Statistics reported that 21.9 million people are spending less on food and essentials because of the increase in the cost of living. It said that 50% of disabled people and 50% of parents with a dependent child are cutting back. That is reality of the crisis and of the dismal, devastating poverty that many of our constituents face.

Let me deal with the specific measures that the Government are proposing. First, the Secretary of State rightly mentioned the inflation-proofing of benefits this year, although it is not in the Bill. We welcome that and we pushed him on it—as did, in fairness, many hon. Members on both sides of the House. To be frank, to have done anything else would have been unconscionable. He did not outline, however, that the Government are again freezing the housing allowance rates and the cap on childcare allowances in universal credit. We will see whether that changes in the Budget; I understand that the Government may be looking at that. If they make that change, we will welcome it as another example of them pinching one of our policies—I look forward to it. However, the impact of not inflation-proofing some of these allowances will be to hold families further in poverty.

Secondly—though not in the Bill, but again connected to it and mentioned by the Secretary of State—there are the energy price cap and the universal energy bills support scheme. However, the £400 discount on energy bills of course ends from April, and the Government are reducing the generosity of the energy cap from April, costing the average household an extra £500 on their energy bills. So there we have £900 extra on energy bills that households will have to find. Talk about giving with one hand and taking away with the other. Of course, not every household has been covered by the energy cap—

[Dr Luke Evans]

Will the right hon. Gentleman give way?

[Jonathan Ashworth]

Let me just finish this point.

Not every household has been covered by the energy cap because, for example, the thousands of people who live in social housing with district heating schemes were not covered by the energy cap. That means that some of the very poorest people, social tenants and private renters, many of whom are on the means-tested benefits that are the subject of this debate, are facing increases in their energy bills this April of sometimes even as high as 400%. It means that residents on the St Matthews estate, the St Peters estate and the St Marks estate in Leicester—places where there is already deep hardship and deprivation—could see huge increases in their gas bills, because the Conservative Government refused to include district heating in the energy price cap. That omission will push many more children into poverty in Leicester, London and across the country.

I give way to my fellow Leicestershire MP.

[Dr Evans]

I am grateful to my near constituency neighbour. On his point about the changing of the dates, could I ask what Labour’s plan is? Would it therefore keep the cap in place, and if so, how much would that cost and for how long would they do so?

[Jonathan Ashworth]

My right hon. Friend the Member for Doncaster North (Edward Miliband) has outlined how we would impose a windfall tax to maintain an energy price cap in place, and the hon. Member knows that full well.

The Government’s answer to rising energy bills, rising food prices and inflation outstripping wages is the Bill before us. Of course, the £900 in itself is welcome, and we concede that it is more than last year, but it is again a flat payment for disabled people and pensioners at a time when inflation has been running at 10%, so in real terms the payments this year are worth less than last year’s for pensioners and disabled people.

The point about this being a flat payment was put to the Secretary of State’s predecessor last year, and there are still a number of problems that we raised last year and that we hoped would have been rectified this year. The point is that the cost of living payment does not distinguish between large families and single-person households. The payment is the same regardless of household size, even though we know that larger households have higher spending needs—particularly those with children—which is why universal credit payments are higher for couples than for single people, and children are recognised in that system. In fact, larger households with children are likely to have 50% higher energy costs. All in all, that means that a couple with children will be £400 worse off, even after the cost of living payment.

There are also cliff edges involved with the cost of living payment being tied to receipt of means-tested benefits, meaning that somebody who earns just £1 above the limit could lose out on £900. This is at a time when the Government are saying they want to incentivise people to increase their hours or move into well-paid work to lift them off receiving universal credit, yet they have built into the system for next year a disincentive, even though they are telling people they will have to go for more interviews with their work coaches or face their benefits being cut. That is why the Treasury Committee recommended that to reduce the cliff edge, the DWP should consider spreading out the payments into more than the three payments and looking to look at a tapering scheme if they do this again. Perhaps the Minister, in summing up, could offer us her opinions on that Treasury Committee report.

Thirdly, and this is again related to the interaction of means-tested benefits, there is the point made by the Chair of the Work and Pensions Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms). Households with a nil award for their UC could, because of the way in which UC is calculated, lose out. The Secretary of State said that the Government have tried to iron out some of these harder edges, but they could not iron out all of them. Is he really telling us, “Computer says no”? Surely, he can look at that again. This problem impacted about a million households last year with the cost of living payment, 7,000 of which were impacted because they were sanctioned at the time. Are we really saying that many families could be impoverished because of the cold bureaucracy of the universal credit IT system?

Again, as with last year, not all low-income households will be eligible. Resolution Foundation analysis has found that four in 10 of the poorest fifth of households—2.4 million households—do not receive means-tested benefits, so they are ineligible for the cost of living payment. Very similar points were made in the relevant debate last year, and it is disappointing that many of the points that were put from across the House have not been rectified in this Bill. The justification from the then Secretary of State last year was that the Government needed to get on with it quickly, and we accepted that justification, so it is just a shame that they have not been able to find solutions this year.

None the less, we are not going to divide the House. The cost of living payments are welcome as far as they go, but let us be clear that they are not a long-term solution to years of social security freezes and cuts or to a systematic failure to grow our economy inclusively, make our economy more productive and sustainably raise living standards. They are not a solution for the thousands of families who rely on district heating schemes in many cities, such as London or my own Leicester constituency. Today, we are living in food bank Britain, with more children in poverty. Tory politicians can tell Britain’s families just to live on 30p dinners, but this is set to be the worst Parliament on record for living standards and all of our constituents know it.