Cost of Living Support

Jonathan Ashworth Excerpts

Tuesday 20th June 2023 Commons Chamber

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

I thank the Minister for advance sight of his statement, but let us be clear: he has come to the House today and is asking us to congratulate him on this payment when, after 13 years, the number of disabled people living in poverty is up by over 1 million. He is asking us to congratulate him on this payment when, almost every day now, we hear stories of disabled people cutting back on hot meals, showers and washing their clothes, because otherwise they would not be able to afford to use the equipment that helps them get by in life. He is asking us to congratulate him when, after 13 years of Conservative Government, child poverty is up by 600,000 and pensioner poverty is up by 400,000. He is asking us to congratulate him when we have a cost of living crisis now so severe that the Joseph Rowntree Foundation today reports that nearly 6 million of the poorest households are forced to skip meals and 7 million of the poorest families are going without food, heating or even basic toiletries.

The Minister talks about employment, but there are 2.5 million people out of work for reasons of sickness or disability. The working-age disability benefit bill is going to go up to around £25 billion, but many people out of work want to work. That is why we proposed an “into work guarantee” welfare reform to help people to move off sickness benefits and into work. Instead of offering help now to people out of work, the Government are actually cutting disability employment advisers by 10%. Because the Government are failing to do their part in helping to tame inflation, disabled people in work and families are seeing the value of their wages ravaged by inflation. In fact, the value of this disability payment is worth £5 less in real terms than when the Chancellor announced it in the autumn statement because of inflation.

The Government are failing to play their part in helping to tame inflation. When combined with them running the economy off the cliff last autumn, policies that led to turmoil on the markets and a run on pension funds, that means that thousands of disabled people, thousands of working families and even pensioners are living in fear of the letter they will soon be getting this year telling them it is time to remortgage. Disabled people and families are facing hundreds or indeed thousands of pounds more on their refinanced mortgage over the coming years, with 1.3 million homes this year collectively paying £10 billion extra on mortgages—a Tory mortgage premium. Disabled homeowners and families are paying the price—literally paying the price—for 13 years of Tory economic failure. So my question is very simple: when so many disabled people and so many families are facing more on their mortgage because of decisions taken by this Government, how on earth does the Minister expect them to cope?

[Tom Pursglove]

I obviously appreciate the shadow Secretary of State taking the time to come to respond to this statement today. On the fundamental point of supporting people properly, I do not think that there is disagreement between us. We disagree on the detail of this and I think it is substantial and significant that, as I set out earlier, we are providing £94 billion of comprehensive cost of living support to people over 2022-23 and into 2023-24. That is structured support that is hitting people’s bank accounts in the way I have described, including the latest tranche of support through the disability cost of living payment, but there is also the discretionary support that can be provided through local authorities to meet the needs that exist, where they do not necessarily neatly fit into those structured support packages. That is significant support and he should welcome it.

I was very interested to hear what the shadow Secretary of State had to say about our employment-related measures. I would be absolutely delighted if he were to come forward and welcome the structural reform that this Government are determined to make to help to support more disabled people and people with health conditions into work, removing the jeopardy they feel around the benefit system to smooth that journey.

There is also the tailored support that we want to provide alongside that to improve the journey through the system and to unlock people’s aspirations—namely, universal support, that tried and tested supported employment model through individual placement and support in primary care in the first year, but growing beyond that. That is welcome support that will identify people’s needs and support them on a case-by-case basis to meet those objectives, with of course all the benefits that that brings, as well as keeping people well in work.

The Work Well partnerships are building capacity alongside NHS services. They are meaningful interventions on the supply side that this Government are making, and I think they are to be welcomed. It would have been nice for him to welcome the structured and more permanent support that we want to provide to help people to live more fulfilling lives, with employment at the heart of that.

The shadow Secretary of State also said, effectively, that the United Kingdom stands alone in these challenges. That is absolutely not the case. I was at the United Nations last week representing our country and it is fair to say, from many of the conversations I had with others, that the challenges we are facing are repeated in their countries—not just in Europe, but much further afield. For example, in the US, the Federal Reserve has increased rates at the fastest pace since the 1980s and in Europe interest rates are at their highest level in more than two decades. What we will do is take a responsible approach. The Chancellor of the Exchequer set that out in questions just now. What we will not be doing is making unaffordable spending pledges that will simply lead to higher rates in the long term. That is not the way to address these issues effectively.

On the specific issue of mortgages, again, we must not do anything that only fuels the challenges that households face. We have made a number of changes, including through support for mortgage interest and the scheme around that. For example, from April this year, claimants can be eligible for SMI from three months instead of nine. We have also abolished the zero earnings rule to allow claimants to continue receiving support while in work and on UC. The interest rate we pay is based on the Bank of England-published average mortgage rate, which increased from 2.09% to 2.65% on 10 May 2023. We of course continue to have important and receptive engagement with lenders about that support.

What is clear is that the Opposition have either no plan or an uncosted plan. The latter would simply fuel inflation and make matters worse. In contrast, what we will get on and do is provide the support that we have outlined, which is comprehensive and is meeting people’s needs, but of course we keep that package under constant review. We are also focused on our fundamental mission, which is to bring inflation down in the way we have described.