Social Security Support for Children

Karen Buck Excerpts

Wednesday 23rd November 2022 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to respond for the Opposition under your chairmanship, Sir Christopher. I congratulate the hon. Member for Airdrie and Shotts (Ms Qaisar) on securing this debate. We have heard a small number of contributions, but powerful ones, in which people have reflected not just on the strategic issues of poverty but on the impact of hardship on their constituents. Everybody has said that we are going into a hard winter; for millions, it will be the hardest winter in my 30 years in politics. I commend my hon. Friend the Member for Birkenhead (Mick Whitley) for making the point that we are going into the festive season, which many look forward to, but this year people will dread it because of the hardship that they face.

[Margaret Ferrier]

Even with the energy cap announced by the Government, all families will be spending a significant amount on their energy bills. It will be a cold and grim Christmas for many. Does the shadow Minister agree that support for families—and therefore for children—needs to be reviewed as a whole, not just single benefits?

[Ms Buck]

I will come to that later, but it is obvious that we need to look at the system as a whole. Indeed, we have to look at the issue of hardship and poverty not just in terms of the social security system, although that is the subject of today’s debate and money is crucial, and lies at the heart of tackling poverty; I have never had any doubt about that. We also know that the conditions in which people live and the conditions in which children are brought up reflect poverty in a wider sense.

Only this week, we have been discussing in particular the terrible tragedy of Awaab Ishak, who died in a cold and mouldy flat. That coroner’s report should be mandatory reading for anybody with an interest in poverty, because the issue of growing up in a damp and cold home is an issue of poverty. If people are not able to heat their homes or access half-decent accommodation in which to live, that is a matter of poverty, as is not being able to secure food and not being able to go to school in a uniform—not being properly clothed, shod and so forth.

I do not think that this is a theme that has particularly emerged in this debate, but all of these issues of poverty cost money—they cost the state billions and billions of pounds. Bad housing alone, which is a condition of poverty, costs the national health service at least £1.4 billion.

The issue of mental health has been referred to. Poverty drives poor mental health; worry and anxiety about money is known to do that. It costs the national health service millions and millions of pounds to respond to it. It also feeds into educational underachievement and impacts on our criminal justice system. We could go right across the issue of state spending, at a local level and a national level, and we would see that money is poured into the costs of poverty. Therefore, when we consider how much we spend on social security, we also need to consider what we will save in the medium and longer term.

The debate is timely, because this time last week we were waiting anxiously to see whether the Government would do the right thing in the middle of a cost of living crisis—something that would, only a few years ago, have gone without saying—which is to uprate social security benefits in line with inflation. As much as we all welcome what happened last week, because we were all very anxious to know what the Government were going to do about uprating, we should not allow the Government to normalise the idea that simply maintaining the real-terms value of social security benefits is an optional extra. If routine uprating of benefits with inflation is evidence of a turn towards compassionate Conservatism, I fear that the bar for compassion has been set very low indeed.

We have been through 12 years in which the Government, as a matter of policy, have repeatedly and permanently reduced the value of social security for working-age adults and children—and, yes, it is a permanent reduction, because the impact of below-inflation uprating in one year does not wash away if benefits are uprated from a reduced baseline the following year. The period of austerity for social security did not end with George Osborne’s four-year benefit freeze in 2019 and it did not end last week.

Let us take child benefit alone. It has been uprated this week—again, that is welcome—but it has lost 30% of its real-terms value since 2010. All the Government did last week, welcome though it is, was to decide not to erode the social minimum even further than they already have, and that is before we consider the many ways in which Governments since 2010 have sought to reduce payments even below the social minimum.

The social security infrastructure around children who live in families—whatever shape those families come in—is tough and has been getting tougher. We have heard about debt and deductions for debt repayments being built into the universal credit system through the five-week wait for the first payment. On top of that, we have benefit caps, the bedroom tax and the two-child limit, and crucially, let us not forget, we have a system of support for housing costs that has been frozen since 2020 and remained frozen in the autumn statement. The failure to uprate the local housing allowance with inflation undoes a great deal of the good that the uprating of social security payments elsewhere achieves, because people live in homes and they have to pay for those homes.

Let me give an indication of how far entitlements can fall below what might be expected to be the social minimum. There are 325,000 households in the private rented sector alone that face a shortfall between their rent and their universal credit housing support and also have a deduction for an advance payment or an overpayment. The median rent shortfall that they have to make up is £100 a month and the median deduction is £65 a month. We congratulate ourselves on the rate of payment of social security, but hundreds of thousands of people are trying to survive on less than even that minimum.

We have a permanently reduced baseline for the social minimum and a policy-driven multiplication of ways in which families can receive even less, and the Government expect to be praised for deciding not to drive down the minimum even further. They like to point to international factors beyond their control as drivers of the cost of living crisis, but they come on top of 12 years in which the social security system for working-age adults and children has been undermined not by the Ukraine war, not by the pandemic, not by international energy prices, but by domestic policy choices.

It suits the Government to pretend that social security policy affects only a minority of families. In fact, the family resources survey shows that, as of 2019-20, nearly 40%—four in 10—of all children in the UK were in families receiving universal credit or one of its legacy equivalents. The great majority—almost three quarters, at 72%—were in working families, and that is just at one point in time. The share of children whose families receive those benefits at some point during their childhood is now higher again.

It is, then, unrealistic to see universal credit and legacy benefits simply as a safety net for the most vulnerable. Of course, that is one of the purposes they serve, and they can serve it considerably less well now than they did before the Government embarked on permanently reducing the value of the safety net. They are also one of the instruments by which our society redistributes resources to families with dependent children, as any modern society needs to do under any economic circumstances.

It is only through social security that we can provide support on a basis that fully takes account of need by basing payment on family size and composition. That basic principle represents yet another way in which Governments since 2010 have broken with the approach of all modern UK Governments since the social security system was established in 1946. As the Child Poverty Action Group points out, the two-child limit already affects 1.3 million children, and cuts income by up to £2,935 a year.

Of course, it is welcome that flat-rate payments are addressing the energy crisis, but by definition they do not take account of family size and circumstances, so they are not a substitute for an adequate social security system. When YouGov surveyed universal credit claimants for the Trussell Trust this summer, it found that was exactly what was happening. Despite the survey being conducted in mid-August, almost 70% of people surveyed who had received a cost of living payment said that they had already had to spend all the £326 they received from the Government in mid to late July, and 64% had had to use the money to buy food.

We have entered into a cost of living crisis with a weakened social minimum, a system that seems designed to leave hundreds of thousands of families with even less than the minimum, and the principle of matching support to needs in shreds. However welcome the uprating was last year—sighs of relief were heard right across the country—families in their millions are dreading this winter because they will have to choose between feeding their children or heating their homes. It is well past time for the Government to recognise the damage that has been done since 2010 and set it right on a sustainable and permanent basis.

--- Later in debate ---

[Guy Opperman]

The hon. Lady and I spent nearly six months campaigning to ensure that there was a serious and legitimate change to women’s pensions entitlements in certain private sector pensions. I thank her for her work on the private Member’s Bill that she brought forward and that is now in law, having been signed by Her Majesty the Queen. I welcome the fact that she worked on a cross-party basis to ensure that happened. I will try to address the child poverty issue that was raised by several colleagues. I want to deal with it in a variety of ways. I will then segue on to the in-work progression point—namely, people who are working but also suffering from poverty.

Let me start with the background. The fundamental point is that the Government are committed to a sustainable, long-term approach to tackle child poverty in supporting low-income families. We spent £242 billion through the welfare system in the United Kingdom in 2022-23, including £108 billion on people of working age. We have made permanent changes to universal credit worth £1,000 a year on average to 1.7 million claimants, and have given the lowest earners a pay rise by increasing the national living wage by 6.6% to £9.50 from April 2022. From 1 April 2023, the national living wage will increase by 9.7% to £10.42 an hour for workers aged 23 and over. That is the largest ever cash increase to the national living wage. It represents an increase of more than £1,600 to the annual earnings of full-time workers on the national living wage, and is expected to benefit more than 2 million low-paid workers.

I will address the poverty statistics. The latest statistics show that poverty fell for nearly all measures in 2020-21 compared with 2019-20. In 2021 there were 1.2 million fewer people in absolute poverty, before housing costs, than in 2009-10, including 200,000 fewer children. We will come to workless households in a second, but since 2010 there are nearly 1 million fewer workless households in the United Kingdom. The number of children growing up in homes where no one works has fallen by 590,000 since 2010—

[Ms Buck]

rose—

[Ms Qaisar]

rose—

[Guy Opperman]

May I just finish? I will also come to the point made by the hon. Member for Airdrie and Shotts. That number has fallen by 590,000 since 2010, and 1.7 million more children are living in a home where at least one person is working. I give way first to the shadow Minister.

[Ms Buck]

On the issue of absolute poverty, in a previous debate I raised the fact that the absolute poverty figures for larger families—those affected by the two-child limit—have been worsening, rather than improving, as the Minister claims. Will he go away, have a look at that, and inform himself about it when thinking about where to go next on policy?