Social Security Benefits

Nusrat Ghani Excerpts

Tuesday 4th February 2025 Commons Chamber

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I beg to move,

That the draft Social Security Benefits Up-rating Order 2025, which was laid before this House on 15 January, be approved.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

With this it will be convenient to discuss the following motion:

That the draft Guaranteed Minimum Pensions Increase Order 2025, which was laid before this House on 16 January, be approved.

[Sir Stephen Timms]

In my view, the instruments are compatible with the European convention on human rights.

The draft Social Security Benefits Up-rating Order 2025 will increase relevant state pension rates by 4.1%, in line with the growth in average earnings in the year to May to July 2024. It will increase most other benefit rates by 1.7%, in line with the rise in the consumer prices index in the year to September 2024. The Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by whichever is highest out of the growth in earnings, the growth in prices, or 2.5%. That will mean 4.1% for 2025-26. From April this year, the basic state pension will increase from £169.50 per week to £176.45, and the full rate of the new state pension will increase from £221.20 to £230.25.

We are fully committed to maintaining the pension triple lock. There is some confusion about the position of the Conservative party, and I hope that the shadow Minister will clarify the position when he speaks.

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[Sir Stephen Timms]

On the two-child limit, as the right hon. Member knows, we very quickly set up after the general election the child poverty taskforce, which is looking in a very ambitious way at the whole range of levers that the Government have at their disposal for tackling the problem of child poverty. We would very much like to repeat the success of the last Labour Government in reducing child poverty so dramatically in when in office. I say that with particularly strong feeling, having taken the Child Poverty Act 2010 through the House towards the end of that Government’s term. Under consideration certainly will be social security changes—we will look at what changes might be appropriate. We are not able to say whether the two-child limit will be removed, but all those things will be considered carefully during production of the report, which the taskforce will bring forward.

We are not looking, I do not think, at changing the arrangements around the overall welfare cap. Of course, there is always some confusion between the individual benefit cap and the overall welfare cap. As the right hon. Member said, there was a debate last week on the overall cap. There is certainly scope for debate about that and, indeed, the benefit cap as well, but we are not proposing any changes to those arrangements in the short term.

The draft Guaranteed Minimum Pensions Increase Order sets out the yearly amount by which the GMP part of an individual’s contracted-out occupational pension earned between April 1988 and April 1997 must be increased if it is in payment. The increases paid by occupational pension schemes help to provide a measure of inflation protection to people who are in receipt of GMPs earned between those two years. Legislation requires that GMPs earned between those two dates must be increased by the percentage increase in the general level of prices, as measured the previous September, capped at 3%. This year, it means that the order will increase the relevant part of the GMP by the September 2024 consumer prices index figure, which is 1.7%.

The draft Social Security Benefits Up-rating Order, if Parliament approves it this afternoon, commits the Government to increased expenditure of £6.9 billion in 2025-26. The changes will mainly come into effect from 7 April and will apply for the tax year 2025-26. The order maintains the triple lock, benefiting pensioners who are in receipt of the basic and new state pensions; raises the level of the safety net in pension credit beyond the increase in prices; increases the rate of benefits for people in the labour market; and increases the rate of carer’s benefits and support to help with additional costs arising from disability or health impairment.

The draft Guaranteed Minimum Pensions Increase Order requires formerly contracted-out occupational pension schemes to pay an increase of 1.7% on GMPs in payment earned between April 1988 and April 1997, providing people with a measure of protection against inflation, paid for by their scheme. I commend to the House the draft Social Security Benefits Up-rating Order 2025 and the draft Guaranteed Minimum Pensions Increase Order 2025.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

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[Danny Kruger]

The hon. Gentleman reflects the experience that many of us have had in our surgeries. Nevertheless, I do not think that health reform on its own will do the job. As I mentioned, the House of Lords Economic Affairs Committee has looked into the matter and reported last week, pointing out that the increase in welfare claims cannot be attributed to longer waiting lists or, indeed, to worsening health conditions. The welfare problem is outstripping the problems we see in the nation’s health, so we have to do more in the DWP. We wait with bated breath to see some movement on that front.

In fact, it was in this debate last year when we were uprating benefits that the hon. Member for Birkenhead (Alison McGovern), now a ministerial colleague of the right hon. Member for East Ham, said that, “Labour has a plan”. That was a year ago. Seven months ago, Labour won the election. She did not say that the plan was oven-ready, but she implied it. I know the Minister says that the delay is because of a court case that happened two weeks ago, but I do not quite understand how that explains the delay that has been going on for seven months.

Here we are approving a measure that will increase expenditure by nearly £7 billion, as the right hon. Gentleman said, and we have no idea how the bill will be brought down over time. But after much head scratching in the DWP—and, we are told, people pulling their hair out in No. 10—we are getting closer to the big reveal. We hear exciting hints in the media that the Government might scrap the limited capacity for work category altogether, scrap the work capability assessment, merge employment and support allowance into the personal independence payment system, or require people on sickness benefits to engage with work coaches. I am encouraged by all that pitch-rolling.

If the Government are softening up their Back Benchers for serious reform, I applaud them for it, but I will believe it when I see it, because Labour opposed every step towards tougher conditions, more assessments and more incentives to work. They opposed reforms that we were introducing to the fit note system. In fact, I see from a written answer to a question in the other place that the Government say they have no plans to reform the fit note system, which I regret. I wonder whether the Minister could help clarify if that is the case.

On universal credit, it appears that the sinner repenteth, or sort of repenteth. The Government are on some kind of journey. In the last Parliament, they said they would scrap universal credit, then they said they would replace it, and now, as we have heard, they are reviewing it. I am glad to hear that, although the right hon. Gentleman just said that they are reviewing it over the course of this year, so that seems to be unrelated to the Green Paper process, which we are expecting in the spring. I would like to understand how those two processes are aligned.

Rather than scrapping, replacing or reviewing universal credit, I invite the Government simply to use it. It is a flexible system, as we saw during the pandemic, and it works; it just needs to be adapted to the new challenge. In conclusion, let me make a few suggestions for the right hon. Gentleman to consider as he prepares his Green Paper and his universal credit review.

The back to work plan that we announced before the general election would have got 1.1 million people into work, using more support and tougher conditions—“more support” meaning more of the WorkWell pilots that my hon. Friend the Member for Faversham and Mid Kent (Helen Whately) introduced. I was glad to hear the Secretary of State praising those pilots yesterday, although sadly without attribution. In our view, the work capability assessment should be face to face, and it should be asset-based, not deficit-based; it should be asking what a claimant can do, not what they cannot do. The claimant should begin the journey of recovery—the journey back towards work—then and there. Rather than budgeting for ever higher welfare, as we are doing today, we should be investing in a universal support system to run alongside universal credit.

We also need tougher conditions. We simply cannot have people with a bad back or anxiety being signed off sick for the rest of their lives; they need to know that we believe in them, and that believing in them means having high expectations of them. In exchange for benefits paid for by working people, claimants should take active steps, when they can, to address their physical and mental health needs, and they should work meaningfully on their own health and wellbeing. That will not look the same for everyone and it must not be a tick-box exercise. That is why we need the help of civil society, not just coaches and therapists, providing the human touch and the range of help and opportunities that people need.

Most of all, we need a clear message to go out from the Government that unless a person is so severely disabled or ill that they genuinely can never work at all, they will not have a life on benefits. That clear message, enacted through reform that the right hon. Gentleman’s Department must bring forward urgently, is the only way to get our exorbitant welfare bills under control, and to get our workforce and our economy moving again.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Work and Pensions Committee.

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[Debbie Abrahams]

No, I am not going to give way. [Interruption.] I am not going to give way.

I welcome the social security order and, in particular, what my right hon. Friend the Minister has said about it. It was an absolute pleasure to serve on the Select Committee when he was its Chair, and in this respect I agree with the shadow Minister: my right hon. Friend’s transfer from the Select Committee to his ministerial position is very welcome. We all appreciate his gravitas and experience, but also his common decency in the role.

I want to talk about the context of this uprating order and the importance of our social security system in providing, at the very least, a safety net for people when they need it, and from cradle to grave, like the NHS. Unfortunately, though, over the past 14 to 15 years, the adequacy of support for people on low incomes has been dramatically eroded, particularly for people of working age—again, contrary to what the shadow Minister has said. Between 2010 and 2012, the uprating was about 1.5%; between 2012 and 2016, it was 1%; and between 2016 and 2020, it was zero. The average annual consumer prices index increase for each of those years was about 3%.

There has been a steady and consistent erosion in the value of social security support, which has affected the value of universal credit, jobseeker’s allowance, employment and support allowance, income support, housing benefit, child tax credit, working tax credit and child benefit. The Resolution Foundation has estimated that this erosion was equivalent to a cut of £20 billion a year from social security support for working-age people. That is clearly not well understood by the Conservative party.

Something else that is not well understood is that these are predominantly people in low-paid work. The vast majority of people in receipt of working-age social security support are, or have been, working people—that is something for us all to consider. Only a tiny proportion of DWP spending is spent on jobseeker’s allowance, for example—it is 0.001% of the current budget. As is evidenced in the Work and Pensions Committee’s report from last year, which I invite shadow Ministers to read, out-of-work support is at the lowest level in real terms since 1912. This is not a generous system; according to OECD comparisons, we are not supporting people in the way that a civilised society as well off as we are should do.

The consequences of inadequate social security are clear. Last week’s Joseph Rowntree Foundation poverty report made for bleak reading—again, I invite people to read it. Over one in five people in the UK are in poverty; that is 21%, or 14.3 million people. Of those, 8.1 million are working-age adults. Some 4.3 million children are in poverty—three in 10 among the population as a whole, while in my constituency the figure is one in two—and 1.9 million of those in poverty are pensioners.

Disabled people are at greater risk of poverty, partly by virtue of the additional costs that they face due to their disability and ill health, and partly due to the barriers to work that disabled people face. Disability employment has flatlined; when it comes to being in work, the gap between people who are not disabled and those who are has been about 30% for the past 14 years or so. It went down by about 1%. Some 16 million people in the UK are disabled—nearly one in four—and almost four in 10 families have at least one person who is disabled. The poverty rate for disabled people, which is 30%, is 10 percentage points higher than it is for non-disabled people. The rate is even higher—50%—for those living with a long-term, limiting mental health condition, compared with 29% for people with a physical disability or another type of disability.

Other groups of people are also disproportionately more likely to live in poverty, including former carers, people from ethnic minority communities and lone parents, but given the media speculation there has been about the future of disability support, I want to focus on that. Last year’s Select Committee report on benefit levels set out a wide range of evidence suggesting that benefit levels are too low and that claimants are often unable to afford daily living costs and extra costs associated with having a health condition or disability. Although the Select Committee supports the Government’s ambition to get Britain working and a social security system that supports work, these ambitions are not achievable within a few months. Meanwhile, people are barely clinging on.

The DWP does not have an expressed objective for how it will support claimants with daily essential living costs. In the Select Committee’s report we recommended building a cross-party consensus to take this forward, and for the Government to outline and benchmark objectives linked to living costs to measure the effectiveness of benefit levels, and to make changes alongside annual uprating. I would welcome my right hon. Friend the Minister revisiting this Select Committee report, particularly our recommendations.

I would like to set out the consequences of our currently inadequate social security system. From peer-reviewed articles, we know that for every 1% increase in child poverty, six babies per 100,000 live births fail to reach their first birthday. That is the consequence of living in poverty for children. The hon. Member for Hinckley and Bosworth (Dr Evans), because of his medical training, will know much of this, but a rewiring of the brain of children living in poverty affects them for the rest of their lives.

In another peer-reviewed piece published in 2016 in a BMJ journal, entitled “First, do no harm”, a metadata analysis of the impacts of the changes to and reassessment of the work capability assessment between 2010 and 2013 in 149 local authority areas in England found that, for each additional 10,000 people who were reassessed, there were an additional six suicides, 2,700 additional cases of mental health problems and over 7,000 more antidepressant scripts. This is evidence.

Many Members will know of my previous campaigns, and I want to refer to the deaths we have seen of social security claimants whose benefits have been stopped. I mention again Errol Graham, a 52-year-old Nottingham man with a severe mental health condition, who basically starved to death after his social security support was stopped. There are so many others I could mention, and I pay tribute to the families who have campaigned on their behalf for justice, because it is quite horrific.

Talking about people surviving our social security system, there is the case of TP—I will use his initials—also a 52-year-old man, who had worked all his life. He was diagnosed with non-Hodgkin lymphoma and, sadly, his diagnosis was terminal. He was trying to be migrated from his particular incapacity support to universal credit, and he lost all his disability premiums. He was one of the litigants in a case about transitional protections when migrating from ESA and disability premiums to universal credit. This is an example of somebody who has worked all their life, and four out of five disabilities and health conditions are acquired—it could happen to any one of us, and I would just like us to consider that.

In another case, AB was born with congenital cerebral palsy and worked for 25 years, but then could not go on. If I read out the whole story, we would all be in tears, because it is just heartrending, describing the indignity of having to rely on such low-level support.

I will leave it there, but I know my right hon. Friend the Minister takes this very seriously, and I hope all of us here will work towards making the social security system more adequate for those people.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrats spokesperson.

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[Neil Duncan-Jordan (Poole) (Lab)]

You are making a very powerful case. Would you agree with me that—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I am sure the hon. Member is not intervening on me, so the word “you” is not appropriate. Interventions should be brief.

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[Shockat Adam]

I could not agree more; that would be vital for pensioners. Ever since I was elected, emails from pensioners on that issue have been in the top three issues—it is a real issue. If alongside increasing pensions we could reverse the cuts to the winter fuel payment, that would save lives.

[Madam Deputy Speaker]

That concludes the Back-Bench contributions. I believe that the Minister would like to do a short wind-up.