Welfare Benefits Up-rating Bill

Nigel Evans Excerpts

Monday 21st January 2013 Commons Chamber

[The First Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Before I call the first group of amendments I must tell the Committee that the amendments to the schedule have been marshalled in error before the new clauses. The Committee will deal with the new clauses before it considers the schedule. I invite Members who wish to speak to clause 1 as a whole to do so in this debate, as I do not anticipate that there will be a separate debate on clause 1 stand part.

Clause 1

Up-rating of certain social security benefits for tax years 2014-15 and 2015-16

[Stephen Timms (East Ham) (Lab)]

I beg to move amendment 12, page 1, line 4, leave out ‘by 1%’.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Amendment 7, page 1, line 4, leave out ‘1%’ and insert

‘the Retail Prices Index measure of inflation.’.

Amendment 10, page 1, line 4, leave out ‘1%’ and insert

‘the percentage by which the general level of earnings is greater at the end of the period under review in that tax year under section 150(1) of the Social Security Administration Act 1992 than it was at the beginning of that period’.

Amendment 20, page 1, line 22, leave out subsection (5).

Clause stand part.

[Stephen Timms]

In this Bill the Government are punishing people who are already hard up for the failure of their economic policy. We were promised that the policy would lead to steady growth and falling unemployment, but it has failed. We have had a double-dip recession, and some predict that this week we will learn we are in a triple dip. Unemployment is now officially forecast to go up next year, so spending on unemployment benefits will go up, and borrowing will go up too.

The Chancellor’s policy has failed and the Government have decided to respond by forcing down the incomes of those whose incomes are already the lowest of all. Roughly speaking, the saving over the two years to which the Bill refers will be about the same as the increase in welfare spending resulting from the rise in unemployment forecast just between the Budget last year and the autumn statement.

The Government want to cut the incomes of the least well-off in real terms, not just for the coming year but, through this Bill, for the year after and the year after that. At the same time, in April they will give a tax cut to everybody earning more than £150,000 per year. That combination of policies will force up poverty in every part of the country, and it is a disgrace that Ministers are forcing this Committee stage into a single day.

This Bill is a bitter blow to large numbers of families—in work and out of work—who are on low incomes at the moment and struggling to make ends meet. Three new food banks open every week; last year a quarter of a million people received help from a food bank because they could not afford enough to eat, and this Bill will make matters significantly worse. It means that for three years, low-income families will get below-inflation increases. The number of people visiting a food bank will be higher this year and, because of this Bill, it will be higher still next year and higher again the year after that.

As Citizens Advice points out:

“The cumulative impact of capping the uprating of most benefits to no more than 1%”,

for the next three years, will lead to an exponential increase in net losses each year. Child Poverty Action Group stated that

“the poorer you are, the greater your loss.”