Working-age Benefits

Lord Kirkwood of Kirkhope Excerpts

Thursday 16th November 2017 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Beecham, who brings a wealth of valuable experience from his local government work. I am very grateful to the right reverend Prelate for this debate. It is something I was trying to get on the agenda myself, as it meets my intrinsic need to replace the now-gone annual uprating debates that we used to have on social security. I held the record for attending 27 years in a row without missing one. I wanted the box set until the Government went and did this dastardly act, and now I have to rely on the Church to give me the opportunity to go through the 37 means-tested benefits that are covered in this benefits freeze in my nine-minute speech.

I have a very simple point to make. I endorse what the right reverend Prelate said, but it seems to me that, in Parliament, one of the important defence mechanisms in our social protection network was that we accepted the principle that there would be a valorisation of the benefit levels—that the rates, which had to be considered by the Secretary of State for Social Security every year, were in some way linked to a cost of living measure. You could have arguments about whether RPI or CPI was right or wrong, but that for me was a cardinal protection for people. I would be prepared to go on any doorstep in the United Kingdom, however prejudiced the household might be, and argue with them that as wealth increases—or decreases—the people who are supported by our social network protections should both share in any increase and take the decrease if that is what the economy is facing. That seems to me to be an unanswerable proposition for securing annual rates for benefits.

It is a real disappointment to me that the Government set their face against making these cuts on an annual basis, because they had the power that enabled them to do that, through the existing uprating mechanism. They set their face against that, which suggested to me that they were prepared to coldly and calculatingly accept some of the rates of poverty that we now know exist. The right reverend Prelate set them out clearly, particularly in relation to child poverty. I agree with that. We know what we are doing and we are making children poorer.

It would have been a much better position for the Government to say, “We will look at this every year, and if adverse circumstances apply”—and they do—“we will justify the increase or decrease year by year”. That would give me more confidence that all these very competent people in the DWP doing the research and monitoring these things are not just doing other things, such as Brexit Bills or something. I would like an assurance from the Minister, if he can give it to me, that someone is actually doing that and looking at it. We may not have to do this work, because we are not covered by the annual uprating requirements, but somebody in the DWP should be doing it and making sure that a line is not crossed—because the circumstances have dramatically changed since 2016. We had an inflation rate of 0.3% and now we have a rate of 3%. I do not know that we expected that, although I thought it would happen—and it is important to remember as well that it is 4% for food and drink.

The noble Lord, Lord Beecham, knows about this better than I do, but as much as anything, the ability of local authorities to soak up some of the downstream consequences, which are inevitable in terms of public services, is diminished in a way that in 2015 and 2016 I did not expect to see. So for all these reasons, it is not safe just to say, “This is it for four years, and we’ll come back and look at it in 2020 or whenever”. I would be grateful for any comfort that the Minister can give me about how we are handling the interim period between now and then, and monitoring some of these issues.

The Resolution Foundation, the Joseph Rowntree Foundation, the IFS and CPAG are serious, well-respected organisations. We are extremely well served in the United Kingdom by these organisations, which are beyond reproach. Of course they are making forecasts and estimates, and they do not have a crystal ball, so you have to look at the assumptions carefully, but they are well respected across Europe for the work that they do, and they are all queueing up and showing the RAG lights on the risk analysis as amber going red on this. I am not sure that we can go through the four-year freeze without risking public disillusion, mistrust and misery. If we allow that to happen, it will be a great shame.

I could not say this in the earlier debate, because I was so generous to the Chief Whip with my time, but the seven-day waiting period applies to these benefits as well. We may be in the business between now and next week of making some mitigation to the seven-day period, which used to be three days—and there was a big row when it went to three days, although you can understand that when you are trying to deal with a situation that avoids churn in the labour market. Another ask from me would be whether, in gremio of the wider consideration of universal credit, the seven-day wait could not be looked at as well.

I say absolutely openly that I would much rather the Government considered postponing the increase in the personal tax allowance to £12,500. They can still get there by their manifesto commitment period if they miss a year. If the Minister is looking for money—and it would need big money to mitigate some of these benefit freezes—the £2 billion or £3 billion that you could save by not introducing that promised tax cut, which affects higher-income households disproportionately, would be a good place to start.

I do not know whether the Minister has had a chance to look at it, but I was very struck by the recent survey the Financial Conduct Authority published, which was based on a huge sample of 13,000 people, divided into families that are struggling, squeezed and cushioned. The fragility that that survey revealed surprised me. I look at these things as closely as anybody, and it is worrying that we are sitting on a level of household debt that is bound to increase. If that is the base from which we are starting, we really have significant problems—not to mention withdrawing from the European Union, because the economy is bound to take a hit from doing that.

I have a final ask. We have the Social Security Advisory Committee available to us. It is another gold-standard institution. It is very experienced in all of this. I think that the Government should ask SSAC to monitor the remainder of this four-year freeze because it is big enough and ugly enough at telling the truth to Ministers privately in a way that might cause the Government to change their mind. It has a busy agenda and does not have an awful lot of extra resources, but it would be money well spent. If that were to happen, I certainly would sleep slightly easier in my bed at night. I hope that the Minister will think about that carefully.