Social Security and Pensions
Debate between Luke Evans and David Linden(1 year, 10 months ago)
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David Linden (Glasgow East) (SNP)
It is a pleasure to follow the hon. Member for Amber Valley (Nigel Mills), who is always incredibly thoughtful on these issues, and it is certainly a pleasure to serve alongside him on the Work and Pensions Committee.
As we debate today’s annual uprating orders, we do so against a grim economic backdrop and at a time when some of the most vulnerable people in our communities are battling literally to survive this cost of living crisis and make it through the winter. However, I think it is important to recognise that the cost of living crisis is not a new thing. Yes, the war in Ukraine has had a profound impact on the global economy, and I do not think anybody in this House would deny that; and nor is anyone denying that the coronavirus pandemic has left serious scarring on the economy. But the inescapable fact is that poverty in all its forms was in a dire situation pre-pandemic. Let us take child poverty as just one example. Figures from the Child Poverty Action Group show that, pre-covid, there were 700,000 more children in poverty than at the start of 2010. Rising child poverty coupled with a cost of living crisis demands radical action from a British Government who must do more—so much more—to end the scourge of child poverty.
Today’s uprating orders are certainly a step in the right direction. The orders for the financial year 2023-24 are welcome, and we certainly will not oppose them. However, Ministers should be under no illusion that these will make up for four very long years of benefit freeze prior to the pandemic. Data from the Joseph Rowntree Foundation’s cost of living tracker in October paints a horrendous picture that should shame every single one of us. About six in 10 low-income households are not able to afford an unexpected expense, over half are in arrears and about a quarter use credit to pay essential bills, resulting in over seven in 10 families going without essentials. That, I am afraid, is the stark reality of Tory Britain in 2023, and no alternative facts in the Minister’s red folder can seek to deny that.
I thought it might be a good idea to have a look a bit closer to home—indeed, in the Minister’s own constituency —and see what Tory Britain really looks like in Hexham, so I had a look at the latest available annual report for the West Northumberland food bank, based in the Minister’s own constituency. Page 3 of its latest published annual report—again, I am quoting from the Minister’s own local food bank—states:
“Listening to people’s concerns on the helpline we became increasingly aware of rising child poverty, the two-child policy has plunged hundreds of thousands of children into poverty across the UK, since 6 April 2017. Parents having a third or subsequent child are no longer eligible for support for that child through benefits worth up to £2,830 per child per year”.
It goes on, remarkably, to cite statistics from the Minister’s own Department—this is his own food bank—saying that
“DWP…statistics show that in 2019-20 24% of children in the Hexham constituency were growing up in poverty, that’s almost 3,000 children and it’s increased by 6% since 2015, that’s 738 more children born into poverty in just 4 years.”
They are not my words, but the words of the Minister’s own local food bank’s annual report.
The red folder that the Minister walks about with may contain all sorts of distorted statistics and soundbites, but the problem is that statistics and soundbites do not put food on the tables of people in Hexham, or indeed anywhere on these islands. For example, instead of increasing the benefit cap, which has been frozen since 2016, the British Government should, in my view, just abolish it entirely, because it is pushing more and more people into poverty, and those of us who have surgeries on a Friday morning can see that clear as day.
If history teaches us anything, it is that trying to govern simply to appease headline writers in comics such as the Daily Mail and the Express does nothing other than further cement inequality and poverty, which is rife in Britain today. The reality is that too many households have now been left behind and will not benefit adequately from uprating because the Tories keep refusing to fix known policy failures. For example, the continued refusal of Ministers to fix the extensive known problems with universal credit is unacceptable and is subjecting vulnerable people to additional unnecessary hardship.
Instead of keeping additional pressures on low-income families, Ministers need to urgently address the fundamental issues with universal credit. A recent report by the Commissioner for Human Rights at the Council of Europe found that the level of support provided under UC was
“a key contributing factor to child poverty.”
The report stated that policies like
“the two-child limit and the benefit cap restrict the amount of benefits that households can receive, regardless of their specific needs, and thereby continue to exacerbate child poverty.”
Therefore, my party stands by its calls to the British Government to reinstate the uplift to UC, and indeed to increase it by £25 a week, and to extend it to means-tested legacy benefits, as well as to extend the benefit cap.
Dr Luke Evans
Has the hon. Gentleman or his party calculated how much that would actually cost the taxpayer?
David Linden
Given the ability of the Government to crash the economy in the mini-Budget by the now elusive right hon. Member for South West Norfolk (Elizabeth Truss)—[Interruption.] Hon. Members have managed to wake up just in time to debate economics. They had nothing to say on food banks or child poverty, but when it comes to money, they are excited. The hon. Member for Bosworth (Dr Evans), who is a parliamentary private secretary, must do better with his interventions if he wants to get into the Government.
Last April, Ministers in Edinburgh called on the British Government to reverse those policy changes. That would have put £780 million into the pockets of Scottish households and it would lift 70,000 people, including 30,000 children, out of poverty in 2023-24.
In its recent submission to the United Nations Committee on Economic, Social and Cultural Rights, Human Rights Watch also gave a damning review of the British Government’s restrictive social security policies, such as the two-child limit and the failure to reduce the cut to universal credit. It set out the negative impacts on the right to an adequate standard of living, to food, and to housing for families with children. It is a depressing state of affairs that thousands of families with children will be pushed into poverty simply because the British Government refuse to scrap the two-child limit on child tax credits and universal credit. In April 2022, 1.3 million children here in these islands were affected by the two-child limit—that is 8.7%, or one in 12 children—and that number will, sadly, continue to rise as nearly all low-income families with three or more children eventually become subject to the limit.
David Linden
The hon. Gentleman is missing what is happening, given the limited social security powers that the Scottish Government have. Bearing in mind that 85% of welfare spending is reserved to this place, he will see that we are doing an awful lot to try to help people with social security, but if the Minister wants to back up my calls to devolve all social security to the Scottish Government, that will certainly be welcome.
Research from the Child Poverty Action Group shows that the majority, some 59%, of those affected by the two-child limit are working families. Perversely, some of those families work for the Minister’s own Department, which administers said benefits; that would be funny if it wasn’t so tragic. The fact that a few weeks ago the Lords Minister, Viscount Younger, could not justify to the Work and Pensions Committee how the two-child limit is compatible with the Government’s own family test is a damning indictment of a Minister who is not over his brief and whose policies do not even comply with the family test for which he is responsible.
I turn now to universal credit, which should be topical, given Labour’s significant change in stance. That change provides an opportunity to seek cross-party agreement on reform of universal credit, because all three main parties in this Chamber now agree with the broad principles and the aims of universal credit. The challenge for us now is to make it work and to iron out the creases, which are by no means insurmountable. We know, for example, that the five-week wait for a first payment is needlessly pushing people into hardship. That could be relatively easily fixed by implementing proposals to turn advance payment loans into non-repayable grants after a claimant has been deemed eligible.
On sanctions and conditionality, far too many households face destitution, largely because DWP rules are pushing them into debt through sanctions and deductions. Recent changes to the universal credit administrative earnings threshold mean that even more people will risk having their vital universal credit payments sanctioned. These 600,000 people are already working, and there is clear evidence that sanctions do not work in getting people into work or to increase their hours or earnings. To that end, I have tabled early-day motion 715 to annul the relevant regulations, which I hope the Government will grant us time to debate and vote on, and I certainly hope we can count on Labour support in that.
However, there are other problems with sanctions and conditionality. For example, individuals who have had a sanction applied have also been denied the vital cost of living payments the Minister was rightly trumpeting earlier. That demonstrates a fundamental issue with the DWP’s attitude to those on low incomes, because preventing vulnerable families from receiving the social security they are entitled to when they need it most strikes me as somewhat back to front.
I will turn now to the UC childcare offer. If the Tories actually cared about working people, they would want to improve childcare support for UC claimants by supporting them with childcare costs up front and in full. The SNP continues to call on the Government to increase payments for those aged under 25 in line with increases for older claimants. We also continue to call for local housing allowance to cover the average cost of rents and for the shared accommodation rate for those under 35 to be suspended—that age range has always struck me as somewhat arbitrary.
The SNP has called for the British Government to fix these fundamental flaws in social security and to deliver a system that actively tackles poverty and empowers people. However, it is an inescapable and undeniable fact that the Scottish Government cannot change these policies while 85% of welfare expenditure and income-related benefits remain reserved to this institution here in London, and that includes universal credit, which is of course a reserved benefit. The only way to ensure that Scotland has a decent social security system is for us to take all legislative and fiscal responsibility for these issues by way of independence and to no longer hope that the full-fat Tories, or the diet Tories on the Labour Benches, will one day reform the social security system, which is clearly broken beyond repair.
I turn now to the order on pensions, and I start by genuinely welcoming the Pensions Minister to her place. I respect her enormously, and although we will doubtless disagree on aspects of policy, I have no doubt as to her motivations. Where we have common cause and we can agree—for example, on pension credit—she can be assured of SNP support. However, I am afraid that that is probably where the warm words and cross-party consensus will come to a halt for this evening, because the British Government have a serious job of work to do if they are to rebuild credibility among pensioners. Time and again, we have seen the Tory Government short-change pensioners, who are getting a raw deal from a pension system that they have paid into their entire lives.
Pensioners on low incomes are among those hardest hit by the cost of living crisis, and the British Government must do much more to ensure that they are properly supported, so let us start with the state pension. Westminster already provides a lower state pension relative to average earnings than most other advanced economies. Last year’s breaking of the triple lock will cost each pensioner £520 on average during the course of living crisis. The Government’s own Red Book shows that that will take £30 billion in total from pensioners by the 2026-27 financial year. Retaining the triple lock is the bare minimum I would expect, but I rather fear that that policy pledge will not survive the rigours of manifesto writing when it comes to both main parties in this House. However, I would like to be assured on that issue in the winding-up speeches.
A recent report from the Pensions and Lifetime Savings Association found that the annual income required to maintain a basic standard of living in retirement has massively outstripped the rise in the state pension. For a single person, the minimum income now sits at £12,800, while the state pension will rise to only £10,600 in April for those on the full flat rate. Indisputably, the state pension remains an important source of income for pensioners living in, or at risk of moving into, poverty because of the very low take-up of pension credit, which I accept is the Minister’s biggest priority and one I am certainly willing her on to succeed with. However, Independent Age highlights that 5% of pensioner couples and 19% of single pensioners have no source of income other than the state pension and benefits.
The Joseph Rowntree Foundation’s “UK Poverty 2023” report revealed that 1.7 million pensioners were living in poverty in the UK in 2020-21, the poverty rate for single pensioners is almost double that of couple pensioners, and almost one in seven pensioners overall are living in poverty—something I can see in its rawest form in communities such as Sandyhills, Carmyle and Baillieston in my constituency. We know that pension credit is a vital support for many older people, but only around seven in 10 of those who are entitled to it actually claim it, and up to £1.7 billion of available pension credit is, I am afraid, going unclaimed. In crude terms, that amounts to £1,900 a year for each family in the east end of Glasgow entitled to receive pension credit.
Dr Evans
I am grateful to the hon. Gentleman for giving way. Is that not a point that all of us in this House can take away? Pension credit is going unclaimed and all 650 of us could go back to our constituents and encourage them to make sure they check the website and use the phone to get, potentially, that gateway option to £3,000.
David Linden
Yes, I think we are going to have a political “Lady and the Tramp” moment where we actually agree on this. There will be spaghetti across the House. The hon. Gentleman is absolutely right. We need to be in a situation where we encourage all our constituents to take up pension credit. Having met the Minister fairly recently—