Social Security

I am very glad that my hon. Friend has raised that point. He is right to do so: people on very low incomes, such as pensioners and others, are extremely vulnerable to unscrupulous people charging very high rates of interest. Indeed, that was why the former shadow Secretary of State was right to raise concerns that people on benefits were going to be charged rates of up to 27 per cent. in the White Paper brought forward by the Department. However, the broader important point has to do with the lack of availability of affordable credit for very large numbers of constituents around the country. We need to be a lot more innovative about involving credit unions and perhaps many other players who are not in the field to meet what is a very real need. This is a serious point, and my hon. Friend is right to raise it. The Rossi index is the other main index used to uprate the different allowances and benefits—jobseeker's allowance, council tax benefit, housing benefit and income support—covered by the order. It is compiled in the same way as the retail prices index, except that it excludes rent, mortgages, interest payments and housing depreciation costs. It is higher than the RPI this year because housing costs were falling over the year to September to 2008. It is also important to remember that the Rossi index is different from the consumer price index which, confusingly, is the main inflation index used by the Government and the Bank of England. Later in my remarks, I shall refer to the Government Actuary's report accompanying the two orders before us. It looks at the orders' effect on the national insurance fund that is used to pay out benefits and pensions for which national insurance contributions are a necessary qualifying condition. They include state retirement pension, contributory jobseeker's allowance and contributory employment and support allowance. There are concerns about the assumptions being used by the Government Actuary and the Chancellor in the pre-Budget report, and the use to which the fund may be put. That is an important subject, and I shall deal with it later in my remarks. The benefits and pensions that are uprated by these orders are vital elements in combating child, adult and pensioner poverty, but by no means are they the whole solution. We want to help the workless get back into work, where appropriate, and we want to find the best possible ways of enabling people to avoid poverty, including poverty later in life. We recognise the strong connection between worklessness and children growing up in poverty, and that it leads to fewer life chances for those children. As for the effect of the order on the child-related benefits, we support the Government's aim to end child poverty by 2020, and we will support them if they produce sensible legislation to make that target binding. On its own, however, uprating the benefits in this order will not be enough, as the Department's figures show that the number of children in poverty has risen by 100,000 for the second year in a row. On current progress, the Government will miss by 500,000 children their target of halving child poverty by 2010. We believe that a broader approach is needed, one that does not just involved the benefits uprated by the order. They are vital, of course, but there needs to be serious engagement with schools, family life, local authorities and registered social landlords. I turn now to the working age benefits, which of course are of immense significance after yesterday's greatly heavily increased unemployment figures. In December, 1.97 million people were declared as unemployed, a total that was 146,000 up from the three months to September 2008. Not all of them are entitled to claim the benefits uprated in the order, and not all of those entitled to claim choose to do so. The order increases jobseeker's allowance for those under 25 to £50.95 a week. That is relevant, as unemployment among 18 to 24-year-olds sadly increased by 38,000 in the three months to December to 616,000.