My Lords, I add my congratulations to the noble Baroness, Lady Stuart of Edgbaston, and the noble Lord, Lord Field of Birkenhead, on their excellent maiden speeches. The latter in particular brings years of experience and expertise on social security issues to your Lordships’ House. Moreover, he gave me my first job at the Child Poverty Action Group just short of 50 years ago—I would probably not be here otherwise.
I realise that this is a technical Bill relating to pensions uprating, but given that it is entitled the Social Security (Up-rating of Benefits) Bill I wish to address the uprating of benefits more generally. The Minister ended Second Reading in the Commons with a claim that the Bill provides pensioners
“with financial peace of mind in the face of the … pandemic”.—[Official Report, Commons, 1/10/20; col. 571.].
This is of course welcome, but arguably people of working age, especially those with children, as referred to by the noble Lord, Lord Bourne of Aberystwyth, are in even greater need of such peace of mind. Children are already at greater risk of poverty, including deep poverty; many families face a very uncertain economic future and will be suffering acute insecurity and anxiety. At the very least, they need to be given some peace of mind through assurances about the social security support that will be available to them.
As a former Work and Pensions Secretary, Stephen Crabb observed in a “ConservativeHome” blog—I must admit that is not my usual bedtime reading:
“What was missing from the Chancellor’s”
Winter Statement
“was any mention of the crucial role being played by Universal Credit during this crisis and the bigger role it will inevitably need to play in the months ahead.”
Echoing organisations on the ground, in the early stages a Daily Telegraph article suggested that the social security system could come to play a similarly vital role to the NHS in seeing us through the pandemic.
It is thus essential that the system is adequate to the task, including a level of benefit that, to quote the Lords Economic Affairs Committee,
“provides claimants with dignity and security.”
The committee also warned:
“The significant cuts to the social security system over the last decade mean that a catch-up increase in funding is needed urgently”.
Those cuts included the freeze in most working-age and children’s benefits. Given that the Conservative manifesto proclaimed the ending of the freeze, I hope the Minister will be able to give a firm assurance that, rumours to the contrary notwithstanding, there will be no further freeze of benefit during this Parliament. Any further cuts would mean not just more extensive poverty, but more intensive poverty, as more families are pushed further below the poverty line.
The committee also called on the Government to
“commit to making the increase in the standard allowance permanent”,
given the evidence it had received about the inadequacy of UC. Indeed, the very fact of that welcome uplift was tacit admission that the level of benefit was too low if people who lost work because of the crisis were to cope. Despite the uplift, Joseph Rowntree Foundation calculations showed that the real value of out-of-work support is still well below what it was in 2011-12, especially for those with children. The Minister will be well aware of the widespread support for retaining the £20 uplift, expressed in a letter to the Chancellor from around 50 children’s charities and others, and by a number of noble Lords this afternoon. According to the IFS, its withdrawal could mean 4 million families losing an average 13% of their benefit overnight.
The Resolution Foundation argues that to withdraw the uplift risked undoing the valuable protection it had provided for some of the poorest families when they will need it most, given, it said:
“It is inconceivable that the labour market will be in full health by April”.
It calculates that it would mean support for unemployed people falling to its lowest level ever, relative to average weekly earnings. Research by Save the Children published last week and by Citizens Advice today underlines the vital role it has played and the devastating impact its removal would have on families struggling to stay afloat. Last week the Prime Minister thrice avoided giving a straight answer on this question. I hope that he and the Minister will read a letter sent to him by Davine Forde, written from lived experience and pleading with him to maintain the uplift. It is on the JRF website.
Those pressing for retaining the uplift argue also for its extension to legacy benefits, claimed in particular by sick and disabled people or carers. The original argument that this could not be done because it would take too long to implement is well past its sell-by date. I hope the Government will now listen to the case made by SSAC and the Work and Pensions Committee, among others, for ending what is tantamount to discrimination. As a lone mother on ESA told Save the Children, “Having an extra £20 sounds so little but it means a lot”.
There is growing evidence that low-income families with children are bearing a disproportionate burden of poverty and hardship during the crisis; this shows up in Trussell Trust data on increased food bank use. Studies by Save the Children, CPAG—of which I am honorary president—and the Church of England reveal a significant deterioration in families’ living standards,
aggravated in some cases by the benefit cap, referred to by my noble friend Lady Drake, which hurts children disproportionately. Yet last week when I asked the Minister—not for the first time, as she pointed out—why there has been no additional social security support for children, answer came there none. Calls for a real rise in children’s benefits, be it child benefit or means-tested support, are growing. I ask yet again: why are children, the age group at the greatest risk of poverty, being ignored and why is there still no review of the benefit cap?
I have emphasised the social case for protecting families through the social security system, but there is also an economic case, as made by organisations such as CPAG, JRF and the Resolution Foundation. It was expressed well in Stephen Crabb’s blog, which I referred to earlier. He said that
“investing in social security can be an effective stimulus, with those at the bottom end of the income distribution allocating more of their budget to core bills and essentials, and therefore being more likely to spend additional income than wealthier households”.
I would add that they are more likely to spend that income in the local economy. This needs to be understood as part of the levelling-up agenda. Indeed, according to the Resolution Foundation as many as one in three working-age families in so-called red wall constituencies stand to lose if the uplift is withdrawn.
I know that the Minister is sympathetic to this argument and that she listens to what we say on these matters. I therefore urge her to take the message back to her colleagues in the DWP and Treasury that if the Government are genuinely concerned to provide those least well placed to withstand the financial impact of the pandemic with “financial peace of mind”, they must commit now to maintain the £20 uplift, extend it to legacy benefits and improve support for children through a real increase in financial support and the suspension of the cap.
3.47 pm