Social Security

Ruth George Excerpts

Monday 4th March 2019 Commons Chamber

[Justin Tomlinson]

There are two elements to that. First, it depends on individual circumstances and the impact of factors such as different arrangements in whether people are working, their caring responsibilities, and their health conditions. Secondly, it is about the principle of fairness, in that those of working age should not be accessing pension-related benefits. We should not be taking people of working age out of the workplace. Pensioner poverty continues to stand at one of the lowest rates since comparable records began, and we intend to keep it that way.

[Ruth George (High Peak) (Lab)]

Will the Minister give way?

[Justin Tomlinson]

I will come back to the hon. Lady.

Turning to universal credit, in the 2018 autumn Budget statement the Chancellor announced additional assistance for those on universal credit. As such, the universal credit work allowance will increase by £1,000 after they have been increased by prices, helping 2.4 million working families. This measure raises the amount someone can earn before their universal credit payment is reduced and directs additional support to some of the most vulnerable low-paid working families.

Finally, let me turn to disability benefits. This year the Government will continue to make sure that carers and people who face additional costs as a result of their disability will get the additional support they need.

[Justin Tomlinson]

With this uprating order, I am bringing forward plans to increase support for some of the most vulnerable people in society to the tune of £3.5 billion, with £3 billion alone to help those with disabilities and long-term health conditions, and pensioners—key people who the Government, as we share the proceeds of growth, will continue to target support towards. That is why the incomes of the lowest-paid have risen by over £400 in real terms since 2010 while the wealthiest fifth of society have seen their income fall by £800. We recognise the right places to target support through additional measures, including the introduction of the national living wage, worth £2,000 a year, and the increase to the income tax threshold of £1,200.

[Ruth George]

rose—

[Justin Tomlinson]

I will make some more progress.

These increases will cover disability living allowance, attendance allowance, carer’s allowance, incapacity benefit and personal independence payment. They will all rise by 2.4%, in line with prices, from April 2019.

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[Justin Tomlinson]

But we know from announcements in the last two Budgets that spending on working-age benefits will be £2 billion higher than it would have been under the legacy benefits. That is why we now see 300,000 fewer children in absolute poverty, as we continue to target support at the most vulnerable in society.

[Ruth George]

Will the Minister give way?

[Justin Tomlinson]

I am going to make some progress.

In addition, the carer and disability premiums paid with pension credit and working-age benefits, the employment and support allowance support component and the limited capability for work and work-related activity elements of universal credit will increase by 2.4%. Those increases will ensure that our welfare system continues to provide the most support for the people who need it.

In conclusion, in this order the Government propose to spend an extra £3.7 billion in 2019-20 on increasing benefit and pension rates. With this spending, we are upholding our commitment to the country’s pensioners by maintaining the triple lock, helping the poorest pensioners who count on pension credit, ensuring that working people can earn more before their universal credit payment is reduced and providing essential support to disabled people and carers. I commend this order to the House.

[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.

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[Ruth George (High Peak) (Lab)]

The benefits freeze affects 10.7 million of the lowest-paid and most vulnerable people in our society. It comes on top of not just two years of a benefit cap, but a three-year freeze on tax credits from 2011 that saw them lose over £1,000 in value for ordinary, low-paid families. That came on top of VAT rising to 20%, the end of the education maintenance allowance and health in pregnancy grants, changes to the statutory maternity allowance and the £500 grant, and the bedroom tax. Families have lost a further £900 a year under the benefit freeze since 2016. It is therefore unsurprising that child poverty has risen since 2011-12, as the Joseph Rowntree Foundation set out. We have seen the number of children living in poverty increase by half a million, almost all of them in working families supported by working-age benefits. Nearly half of children in lone parent families are in poverty. That number will sharply rise when maintenance is included in universal credit, and the up-front costs of childcare mean that lone parents struggle to escape poverty.

Work is no longer a route out of poverty. Four million working people, a record number, are still living in poverty—half a million higher than five years ago. This benefits freeze will cost families another £210 a year. When this Prime Minister took office, she promised to support people who are just about managing. What are these 10.7 million people on working-age benefits if not just about managing?

Instead, we see that six in 10—over half—of the poorest fifth of the population are now in problem debt, which is contributing to the huge rise in mental health difficulties and emotional anxiety. The biggest problem, as I said earlier, is housing costs. Since 2010, housing costs have fallen for the richest three fifths of the country, but they have risen for the poorest two fifths. Of those on full housing benefit, 43% of single parents and 37% of couples still have to top up their rent from already inadequate other benefits. It is no wonder that people are having to make a choice between heating and eating.

We are seeing the number of pensioners in poverty rising: 330,000 more pensioners are now in poverty than five years ago, and most of them are in rented property, according to the annual poverty report from the Joseph Rowntree Foundation, which is not disputed by any other organisation.

The costs for people on the lowest incomes rise even more than CPI inflation: food, heating, energy, public transport, council tax rises of 5% this year—4% in my area of Derbyshire—and rising care costs. Yes, charities can step in, and we are seeing some fantastic work by communities across the country, but this Government must not go back to a Victorian age in which struggling people are forced to rely on charity. With the best will in the world, charities cannot be expected to cover the whole country, especially in sparse rural areas like mine.

We also see people who are too proud to want to approach charities—people like Chris, whom I met on Saturday. Chris is living on the streets of my hometown of Buxton and unable to access support, and not wanting to because of the conditions placed upon it. It is not right that we have people living on our streets in this day and age, in the fifth richest country in the world.

This is a political choice that this Government have made at a time when corporation tax is due to fall again, the highest rate of income tax is also falling and the main rate of corporation tax for companies with profits of more than £1.5 million a year has almost halved, and will have halved over the next 10 years. That is where this Government’s choices are being made: not for the people who are visiting food banks, not for the people who are living on our streets but for the people who have the most.

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[Justin Tomlinson]

What we know is that every region of the UK is seeing more people working. Youth unemployment increased by 45% under the last Labour Government, but it has almost halved under this Conservative Government, and that will continue.

[Ruth George]

I assume that in claiming that I am attacking policies aimed at job creation, the Minister is referring to the huge cuts in mainstream corporation tax, which I analysed at the Union of Shop, Distributive and Allied Workers when working on some of the major supermarkets. They actually took their corporation tax reduction and refused to even put that amount into wage growth, let alone into jobs. This is not a job creation scheme; it has made profits for shareholders, not for workers.

[Justin Tomlinson]

It is delivering record employment in every single region. Increased corporation tax receipts are the folly of the hard-left failed economic policies that deliver higher unemployment every single time, which is why voters repeatedly reject failing Labour Governments.