Social Security (Up-rating of Benefits) Bill

Matt Rodda Excerpts

2nd reading
Monday 20th September 2021 Commons Chamber

[Matt Rodda (Reading East) (Lab)]

While this Bill seems to be a technical piece of legislation, it raises fundamental questions about this Government and the trust that they enjoy among people across the country. I want to address a number of issues today: the substance of the Bill; how it is part of a pattern of behaviour; the changes we would like to see to protect pensioners; and the context of wider Government policy towards the most vulnerable in our society.

Turning first to the substance of the Bill, we are being asked to vote today for a change in the law to suspend the earnings-related part of the triple lock for one year while retaining the link to prices and the commitment to raise the state pension by a minimum of 2.5%. This is an important issue that directly affects millions of people today as well as the value of state pensions for future generations. Labour supports the triple lock. Indeed, all the major parties committed to maintaining it in the 2019 general election. I should add that it was a Labour Government in 2002 who committed to raising the state pension by the higher of 2.5% and inflation. It is also important to note that, taking inflation into account, state pensions rose more on average under the last Labour Government than they have under the coalition or the Conservative Governments.

Of course, the covid-19 pandemic distorted the earnings growth figures for this year, and the impact of the furlough scheme and the distribution of jobs lost in the crisis has artificially inflated the headline earnings growth figure. The Government have said that they expect earnings to be above 8% as a result of this anomaly. We have been clear that the Government cannot be allowed to use the current crisis as a smokescreen to break their word to pensioners and to abolish the triple lock by the back door. We accept that the pandemic has distorted the earnings data, but we knew that this problem was coming and it was surely not beyond the wit of the Treasury to find a solution to the anomaly in wage data that maintained the link to earnings and offered certainty to pensioners.

I am afraid that the Government have failed to be open about the earnings data they are using. They have also failed to show that they are concerned about low-income pensioners. They are asking us to vote on trust alone, but that is something I am afraid this Government do not enjoy much of. By downgrading the triple lock, they are breaking a manifesto promise. Trust in the Government has been badly damaged. I should not have to say this, but given the history of the Prime Minister and his Government, I want to set out what the House and the public have a right to expect. Over the last months we have seen a series of actions that show that the Government do not understand, and that in some cases they just do not seem to care. This should be obvious, but sadly it does not seem to be, to the Prime Minister and his Administration.

Today’s broken promise is the third breach of trust in just a few months. This is starting to become a pattern of behaviour. First, there was the cut in overseas aid that the Government made despite a wide range of opposition. We are the only G7 country to cut aid, breaking a manifesto commitment to support the world’s poorest and most vulnerable people, and this Conservative Government are retreating from our moral duty. This has already weakened the UK’s position at the G7 summit and it will continue to do so at the upcoming summit on education and COP26. Parliament has repeatedly made it clear that it does not support aid cuts and that Britain must not turn its back on the world’s poorest. I would add that a Labour Government will build partnerships with other Governments, civil society groups and communities to overcome global challenges by using the aid budget to tackle poverty and inequality.

Secondly, there was the breach of trust we saw last week when the Government broke their promise not to raise national insurance. The Government had already weakened social care and our NHS, cutting £8 billion and leaving us with long accident and emergency, cancer and mental health waiting lists even before the pandemic. Their solution, when finally pushed to act by the coronavirus pandemic, is an unfair tax on jobs—the biggest tax rise on families in over 50 years.

With a cut to universal credit in the Government’s sights, it seems that they are going after the same people time and time again. A tax rise that hits less well-off areas—so much for levelling up. The CBI, the Federation of Small Businesses and the British Chambers of Commerce have all criticised the national insurance rise as illogical and harmful to businesses and our recovery.

Now we face the third broken promise, on the triple lock, which Ministers have consistently said they would protect. I repeat that the Government must not use this crisis to leave the door open to scrapping the triple lock altogether. We recognise that the pandemic has caused an anomaly in the earnings data and, crucially, we are not calling for an 8% rise in the state pension, but the Government must come clean and show why they cannot calculate underlying earnings growth over a longer period of time. They have not adequately made the case for why an earnings link, with this year’s anomaly resolved, cannot be maintained.

At the very least, Ministers should maintain an earnings link, explain their decisions, offer binding commitments to protect the triple lock and protect the incomes of less well-off pensioners. There is nothing in the Bill that seeks to increase the uptake of tax credits or, indeed, to set out other steps the Government will take to protect low-income pensioners.

The public, and we as the Opposition, expect the Government to look at this thoroughly, to be diligent and to treat people fairly. When the Secretary of State first informed the House of her decision, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) asked the Government to publish their reasons. That is the least pensioners could expect. Governments should explain the evidence used to make key policy decisions, as evidence-based policy making has been a central plank of good governance for a very long time. Sadly, no answers were forthcoming, but perhaps we will see some actual evidence in this debate. The Government’s track record on the use of evidence, however, does not offer much hope.

Finally, I pay tribute to the right hon. Members for Chingford and Woodford Green (Sir Iain Duncan Smith) and for Ashford (Damian Green) for tabling their amendment. Opposition Members are deeply concerned about the cut to universal credit and the devastating impact it could have. It will hit thousands of families and many people in work, including nurses, teaching assistants and supermarket workers. I know from experience that 9,000 people in my constituency will be affected. Like colleagues on both sides of the House, I have spoken to residents who are desperate and who do not know how they will cope.

[Justin Tomlinson (North Swindon) (Con)]

Although the temporary increase in universal credit has come to an end, surely the hon. Gentleman would welcome the permanent increases to the local housing allowance and the work allowance, the above-inflation increase to the national living wage and the changes to income tax thresholds. Does he welcome those?

[Matt Rodda]

I am grateful for the hon. Gentleman’s intervention, as I understood that the Government had frozen the housing allowance. I look forward to discussing that further in this debate.

The Government have left it late to do the right thing and end the cut, but it is not too late. There is clearly a strength of feeling on both sides of the House on the universal credit cut and the state pension uplift. I think we agree that trust is important and is the basis of good government. The Government will be letting down pensioners and the country if they plough on with these unfair changes without any explanation or reassurance about the future and without any assessment of the impact on many pensioners. We have now seen three successive breaches of trust in just a few weeks, and the last two were only days apart. Trust in this Government has fallen dramatically, and it will fall even further if they fail to listen.

We are making a very important decision today, but the Government can still correct some of their mistakes if they listen to their own Back Benchers as well as to the advice of the Opposition.