Social Security

Margaret Greenwood Excerpts

Monday 4th March 2019 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

This uprating order increases a range of social security entitlements. However, it does not uprate those included in the Government’s freeze to working-age benefits enacted in the Welfare Reform and Work Act 2016—a freeze that is causing real hardship to some of the poorest people in our country. The Minister set out the range of benefits to be uprated in line with the consumer prices index. The order also increases the state pension in line with the triple lock—a measure that the Opposition fully support—and increases universal credit work allowances by £1,000, in line with the announcement in the last autumn Budget.

While we welcome measures to increase those payments, we are deeply concerned that most working-age benefits remain frozen. The fact is that austerity continues under this Government, and it is pushing individuals, families and children into poverty. This order fails to uprate a long list of social security benefits: child benefit, jobseeker’s allowance, employment and support allowance, income support, housing benefit, local housing allowance rates, child tax credit, working tax credit and the equivalent elements in universal credit. None of those are uprated by this order.

Let us think for a moment about who that failure affects. It is the person who has just lost their job after working for 20 years in the same firm. It is the parents struggling to feed their children. It is the sick or disabled person who is looking for work. These are vital social security payments that should lift people out of poverty and ensure that they do not become destitute.

[Ruth George]

I thank my hon. Friend for being prepared to give way to me, which the Minister was not. Does she agree that the freeze on housing benefit and local housing allowance is driving not only people of working age but more pensioners into poverty? Contrary to what the Government claim, pensioner poverty has risen by 0.3 million, and we are seeing more and more elderly people who have to rent houses suffering because of it.

[Margaret Greenwood]

My hon. Friend makes an absolutely pertinent point, and she does so with her usual alacrity and attention to detail.

These vital social security payments should lift people out of poverty and ensure that they do not become destitute, but under this Government that aim is not being met. Last year, research by the Joseph Rowntree Foundation found that more than 1.5 million have experienced destitution in the UK, and the social security freeze is a key reason for that. To put this in perspective, destitution in this context—[Interruption.] Yes, destitution. I do not know why the Whip on the Government Front Bench finds destitution such a matter for mirth.

[The Lord Commissioner of Her Majesty’s Treasury (Craig Whittaker)]

You don’t know the meaning of the word.

[Margaret Greenwood]

Well, let me explain. In this context, destitution means that a person has lacked two or more of the six essentials in the last month—[Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order.

[Margaret Greenwood]

Thank you, Madam Deputy Speaker.

To put this in perspective, destitution in this context means that a person has lacked two or more of the six essentials in the last month—shelter, food, heating, lighting, clothing and basic toiletries. It is truly shocking that 1.5 million are going without basic essentials in modern Britain.

The Social Metrics Commission, whose members are drawn from the left and the right of the political spectrum, has found that 14.2 million people in the UK are in poverty, including over 4 million children. More than one in 10 of the UK population live in persistent poverty. This is a shocking indictment of a country that has the fifth biggest economy in the world.

[Heidi Allen (South Cambridgeshire) (Ind)]

I want to put on the record that I have visited some of the poorest parts of the country in recent weeks with the right hon. Member for Birkenhead (Frank Field), and I can confirm that I have seen this destitution with my own eyes. I have spoken to individuals who have literally £5 a week to live on for a variety of reasons, including their inability to access universal credit, but the overriding fact is that people can no longer afford to live on the subsistence level that universal credit and working-age benefits are set at—they cannot.

[Margaret Greenwood]

I thank the hon. Lady for making the point so powerfully.

The benefit freeze increases poverty. According to the Joseph Rowntree Foundation, the freeze is set to drive almost 500,000 more people into poverty by 2020. In 2018, a couple with children claiming universal credit were up to £500 worse off, and a lone parent with children was up to £400 worse off, due to the benefit freeze. The JRF says that the freeze is the single biggest policy driver behind rising poverty levels. Before the freeze was introduced in the Welfare Reform and Work Act, working-age benefits were capped at 1%, yet living costs are rising. In the 12 months to September last year, prices grew by 2.4%, according to the CPI inflation measure. The Joseph Rowntree Foundation says that between the introduction of the benefits freeze in April 2016 and November 2018, the annual cost of living for people on low incomes rose by £900.

Rising living costs and frozen social security mean that the value of benefits is increasingly inadequate to protect people from poverty. A recent report by the National Audit Office shows how the real value of the basic rate of jobseeker’s allowance and income support has fallen nearly every year since 2012-13, and it is now below its value in 2009-10. Overall, the real cut to many benefits from the four-year freeze is over 6%. According to the Resolution Foundation, child benefit is now already worth less than it was in April 1999. Beyond a family’s first child, child benefit in April 2019 will be worth 14% less than it was when it was fully introduced in April 1979. This is compounded by the Conservatives’ broken economy: low wage growth and the rise of insecure and zero-hours contracts mean that incomes are failing to meet the rising cost of living.

[Alison McGovern]

Simply, child benefit is easy to claim and has wide support in society, so are not the statistics my hon. Friend has laid out absolutely terrible for working families?

[Margaret Greenwood]

My hon. Friend makes an absolutely pertinent point, and I thank her for it.

[Mr Philip Hollobone (Kettering) (Con)]

The hon. Lady has concerns about working-age benefits—we all understand that, and she is right to highlight them—but at the beginning of her speech, she spent about five seconds on the £3 billion extra going to pensioners. Does she recognise that never in our country’s history have we ever spent more on the state pension than now, and the average pensioner is getting £1,600 a year more now than they were when Labour left office?

[Margaret Greenwood]

I will come on to pensions further on in my speech, if the hon. Gentleman will wait for that.

Some 8 million people are in poverty and live in families where at least one person is working. According to Shelter, more than half of homeless families in England are in work. Under the Conservatives, having a job is not even a guarantee that someone can avoid homelessness. The benefit freeze cannot be seen in isolation. It is just one part of the Conservative austerity programme that has seen billions cut from public services around the country and taken the core out of our communities. The Conservatives have targeted social security with devastating cuts, taking vital support from poor and disabled people. According to figures produced by the Library, measures announced in the June 2010 Budget onwards are forecast to cut social security by £36 billion in 2020-21. Nearly £5 billion is forecast to be taken from disability benefits, including employment and support allowance and incapacity benefit; £4.6 billion from tax credits; and £3.4 billion from child benefit. These cuts have had a devastating impact on the incomes of millions of people. The freeze should be seen in the context of the chaotic roll-out of the Government’s failing flagship social security programme, universal credit.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

I congratulate my hon. Friend on the points that she is making, many of which will resonate with my constituents. Does she agree that in-work poverty is a modern-day scourge on British society, and it exposes the lie that if someone is willing to work hard and make their own luck they can get on in life? Absolutely the opposite is true for too many people under this Government.

[Margaret Greenwood]

My hon. Friend is absolutely right, and there is a real sense of betrayal that that myth has been perpetrated by Government Members.

It is clear that universal credit is not working. It is driving many people into poverty, debt and rent arrears. One of its key defects is the inbuilt and unrealistic five-week wait. Originally it was even worse—a six-week wait. It seems that that senseless policy was devised by the Government without any thought for how people are supposed to survive for five or six weeks without any payment at all. The Secretary of State herself has spoken of the link between universal credit and the significant rise in food bank use. Why then have the Government failed to tackle this issue and why do they offer people a loan, rather than solving the problem?

The Secretary of State has said that the benefits freeze will not be extended beyond next year, but families cannot afford another year of the freeze. Next year alone, the benefits freeze is expected to cut £1.5 billion from the value of working-age benefits. We have called on the Government repeatedly to end the benefits freeze. It is not too late for them to stop the freeze. Ending it a year early would lift 200,000 people out of poverty altogether and boost the incomes of 13.7 million people on low incomes by an average of £270. The Government might be reluctant to do that now because the next financial year is only weeks away. However, when there is a desire to get a short Bill through and general agreement that it is non-contentious, Parliament can move primary legislation along quickly. As we saw in the recent work and pensions estimates debate, there is a cross-party desire to remove the damaging benefits freeze.

Part of the Government’s concern might be that the passage of such a Bill would be slowed down by amendments, so we will lay down a challenge to them: if they introduce a short Bill to end the benefit freeze one year early, Labour would support it and do whatever is possible to ensure its smooth passage before the next financial year. Will the Government agree to this measure, which would take hundreds of thousands of people out of poverty?

The increase in universal credit work allowances was introduced after considerable pressure from the House and Labour Members in the autumn statement. We welcome the increase, but we question why the Government cut the work allowances in the first place only to partially reinstate them a few years later. The 2015 cuts to work allowances dealt a major blow to the work incentives of universal credit and took money out of the pockets of working families. According to the Resolution Foundation, the increase to work allowances announced in the autumn restores only half the original cut overall. There are no work allowances for single people and couples who do not have a disability. Will the Government revisit this decision?

Turning to the uprating of the state pension in line with the triple lock, we are pleased that the Government have kept to this, despite the Conservatives’ plan to scrap the triple lock, which they announced in their manifesto. Presumably, the pressure from Labour Members made them think about that again. The latest figures show that pensioner poverty, as my hon. Friend the Member for High Peak (Ruth George) said, is rising again, with more than 300,000 additional pensioners living in poverty compared with 2012-13. That could be made worse by the news, slipped out on the eve of an all-important Brexit vote, that mixed-age couples will no longer be able to claim pension credit. They will instead be forced into making a universal credit claim, and some couples may lose as much as £7,000 a year as a result. Cumulatively, the cut amounts to £1 billion over the next five years. What assessment have the Government made of the effect this cut will have on pensioner poverty?

As the Government are still recklessly failing to rule out a no-deal Brexit, the threat of no deal and the effect it would have on the state pensions of UK citizens living abroad looms ever greater. As has been mentioned, the Government already withhold the pension uprating from pensioners living abroad in many countries outside the EU, an injustice Labour has pledged to reverse. In their no-deal planning, the Government have failed to commit to uprating the state pension across the EU beyond 2019-20. I have met pensioners who are very worried about this scenario and the effect it will have on pensioner poverty abroad. People who previously moved to the EU did so on the understanding that their pensions would be uprated. Why will the Government not give assurances to protect UK pensioners living abroad, whatever the outcome of the Brexit negotiations?

The Government have failed to address the financial hardship faced by millions of women born in the 1950s due to changes in pensions policy. Why, despite constant lobbying raising awareness of the issue, have the Government failed to take action? The Conservatives’ austerity agenda has inflicted real hardship on many of the poorest and most vulnerable people in our society. It has also drastically undermined our social security system.

We on the Labour Benches believe that we need a social security system that is valued as highly as our NHS and is there for any one of us should we need it. The Government are failing to deliver. If the Prime Minister was really serious about austerity being over, the Government should take action to tackle the rising poverty we are seeing throughout our country.