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

Karen Buck Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

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

These continue to be some of the hardest times in recent living memory for so many of our fellow citizens. Few have been entirely immune. Millions are struggling, but for far too many, these hard times have brought them close to, or even into, destitution.

Given the importance of energy prices to the cost of living crisis, the fall in the price of wholesale gas futures over recent months is immensely welcome, but let us not imagine that this crisis is about to come to an end. Forecasts consistently suggest that this is, at best, the end of the beginning, not the beginning of the end, not least as consumers face a rise in their costs as the energy price guarantee gap is raised this year, with no continuing energy bills support scheme to cushion the blow.

The Resolution Foundation estimates that working-age household incomes have fallen by an average of 3% this year, but will fall by an average of 4% next year—the biggest single fall since 1975. As food inflation hits 16.7%, food banks, such as those run by the Trussell Trust and the Independent Food Aid Network, are overwhelmed by demand. This week, IFAN said:

“Our fasted growing client group are working people on low wages who cannot make ends meet.”

We have had references today from several Members, including my right hon. Friend the Member for Hayes and Harlington (John McDonnell), about the rise of in-work poverty. IFAN went on to say:

“The majority have always managed on a low income.”

It said that they

“know how to budget and to live frugally, but, with costs rising, there simply isn’t enough money in their pockets. It’s soul destroying.”

This weekend, we heard that the Co-op store group has resorted to putting packets of formula milk behind the counter as a security measure, as though they were precious stones in a Mayfair jeweller’s. We have seen the impact of these price rises devastating families and pensioners. We have seen that a quarter of people on means tested benefits now report food insecurity, even with the special payments that were made last year—that compares with just 4% in food insecurity before covid. We have seen how costs have risen this year, driven by energy costs, but we have seen them being felt in the weekly food shop just as acutely.

We understand how much of this is attributable to factors beyond our control. We know that the catastrophic shocks that the economy experienced, first from covid and then from the energy price spike, were felt most severely by those least able to withstand them. As we debated just two weeks ago in this House, most working age benefits where uprating was not fixed by statute were not fully uprated over a period of seven years from 2013 to 2020, with nominal increases limited to 1%. or with rates frozen altogether.

Child benefit, which was uprated only once between 2010 and 2019, lost a fifth of its value between 2010 and 2022. The value of jobseeker’s allowance and employment and support allowance fell by 12.5% in real terms. The value of universal credit, the Government’s flagship benefit, fell by 12% in value between 2013 and 2022.

However, the extreme vulnerability experienced by so many of our fellow citizens is not just because of what has happened within the social security system. It is because of sluggish wage growth and the failure to protect workers in insecure employment. It is because of the failure to prepare this country for energy price rises by investing in home insulation and renewable energy, or by extending the energy price guarantee into the summer when prices may actually be falling. It is because of the failure to build new homes—especially affordable homes—and to protect those who are being hit by spiralling private sector rents. It is because of over a decade’s neglect of the childcare sector, which is seeing providers fold, costs escalate and too many parents forced to consider whether work is even a realistic option in the face of their childcare bills.

Of course, we do not oppose the payments; they are welcome so far as they go, but one-off provision of that kind is not, and can never be, the answer to the deep cost of living crisis stalking the country, with in-work poverty at record levels and destitution wrecking the physical and mental health of far too many people. Emergency responses, inevitably somewhat rough and ready, are never going to be able to take into account the full range of individual circumstances, not least household size, which determines additional need. In this short but important debate, we have also had reference to how people with nil awards are treated, the impact of cliff edges on incomes, and anomalies linked to qualifying periods.

The additional payments policy, a flat-rate payment triggered simply by whether people are in receipt of means-tested benefits, is cruder than it needs to be. When this was discussed last year, it would not have been beyond the capability of Government to take into account actual household size in setting entitlements, or to sort out some of the other anomalies—all of which were debated when we discussed special payments a few months ago. Let us speed this essential help to households in need, of which there are so many, but let us not pretend that this is the very best that could have been done.