Draft Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2020

Jonathan Reynolds Excerpts

Monday 9th March 2020 General Committees

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to serve with you in the Chair, Mr Pritchard. This statutory instrument will finally bring to an end, in April, the freeze on working-age benefits that has been in place for four years and in that time has caused significant hardship to families. It follows what was, in our view, a deeply politically motivated and unnecessary choice to freeze those benefits in 2015.

To offer some context, in 2017, the Joseph Rowntree Foundation said that it believed the benefits freeze was

“the single biggest policy driver behind rising poverty in the UK.”

As a result of the four-year freeze, families living in poverty have been left a total of £560 a year worse off on average—equivalent to three months’ food shopping for an average low-income family. It is no surprise that there has been a corresponding and shameful increase in the use of food banks throughout the country in that period. The cost of living has not been frozen for four years. Between 2016 and 2020, the benefits freeze will have affected more than 27 million people, including 11 million children.

The Opposition will not vote against the statutory instrument as to do so would be to oppose the uprating, but I state on the record our belief that the rise is long overdue and will not reverse the damage caused by this especially pernicious strand of austerity. That is not just our opinion. In 2019, Shelter said:

“While the Government may have finally called time on its benefits freeze, the proposed rise in support is so tiny it won’t make a dent in the damage already done.”

Have the Government have made any assessment of the overall impact of the benefits freeze over the last four years? If not, how will they help working-age families begin to recover from the last painful four-year period?

I conclude with an insight from the Resolution Foundation following research published in October last year. It said:

“the real value of basic out-of-work support in 2019-20 is lower than it was in 1991-92, despite GDP per capita having grown by more 50 per cent since then. Even more starkly, child benefit for a second child or beyond is worth less in 2019-20 than when it was (fully) introduced back in 1979.”

Those are astonishing figures and proof that, although the Government may talk of their intention to create a fair system, a rising tide no longer lifts all boats.