Social Security Benefits Up-rating Order 2022 — House of Lords, 2022-03-23
Topic: Social Welfare
Deborah Wilcox (Labour, Centre-left): My Lords, for the second time today I am substituting for my noble friend Lady Sherlock, whose expertise in these matters is well known to the House. I will do my best to convey our position When the Social Security (Uprating of Benefits) Bill, now Act, was debated in this place last year by my noble friend Lady Sherlock, she highlighted how the suspension of the earnings element of the triple lock for the upcoming tax year would impact millions. This point has been made several times since. I share her concerns, those of my noble friend Lord Davies, and the concerns of others who have spoken in tonight’s debate Over the last decade, this Government have failed pensioners. The last Labour Government reduced pensioner poverty by over a million people. In the 12 years since, the number and rate of pensioners living in poverty has soared. In 2010, 14% of pensioners, totalling 1.6 million, lived in poverty. In the year before the pandemic, it was 18%. Some areas are far worse than others. Here in London, over one in four pensioners lives in poverty, totalling almost 300,000 people. Other regions, such as the East Midlands, the north-east, the north-west and the West Midlands, have poverty rates of over 19% among the over-65s. Therefore, of course, the number of pensioners in debt has risen too, by over half a million since 2010, so far. Things have got harder since these pre-pandemic numbers, and pensions are one part of this. Following the uprating order being made last week, the increase to state pensions and benefits signed into law is 3.1% from next month. The basic pension rises from £141.85 a week for a single pension or £226.85 for a couple. The full rate of the new state pension will rise to £185.15 a week but, with earnings rising at 8.3%, the Government keeping their manifesto promise and maintaining the triple lock would have meant that the basic state pension would instead be rising to £149 for individuals, £238.30 for couples, and the full rate of the new state pension to £194.50. For an individual on the basic state pension, this is a difference of approximately £370, almost £600 for a couple, and close to £485 for those on the full rate of the new state pension—even higher than the difference with the Bank of England’s CPI uplift that my noble friend has highlighted already, which is expected to peak around 7.25% in April 2022 when the uprating takes effect What is undeniable is that the cost of living has increased by far more than 3.1%, and the Government breaking their promise has made it harder for pensioners. This hit for pensioners comes on top of several other factors, either caused or not addressed by this Government, that have made life harder for those struggling to get by On a related note, the Government continue to act too slowly to repay state pension underpayments to over 100,000 older women, leaving many thousands of them without the pension they deserve and barely enough to live on. At any time, pensioners who have worked hard their entire life should expect to be paid what they are owed at the right time but, with compounding difficulties, the impact is even more severe The main thing making things harder for pensioners at this time is the cost of living crisis and energy prices. Age UK warned that rising energy prices will lead to some of the poorest pensioners, for whom the cold could be particularly dangerous, rationing their heating. There was no mention today by the Chancellor of energy prices for heating oil, for example, in the spring Statement—but then it is an unregulated sector of the energy market. Cold weather payments and the warm home discount scheme fail to reach those who need them because they are not claiming pension credit As a result, three-quarters of older people in the UK—almost 10 million people—are worried about this cost of living crisis. Over half of those surveyed by Age UK said they will have to heat their home less, a quarter said they would have to choose between heating their home and the food they buy if their energy bills continue to go up, and two in five are having to cut back. What can they do other than go into debt or simply not pay their bill What is more, the £20 uplift to universal credit being stopped will continue to impact couples where only one is at state pension age. There are around 1.3 million working pensioners who will be asked to pay the poorly thought-out health and social care levy. Pension credit is another area of concern, with 850,000 eligible families missing out on almost £2,000 per year on average, and the number of eligible couples falling dramatically between 2019 and 2020 from the number the Government told us to expect. While I have drifted away from the pensions uprating, my point is that the Government’s broken promise is not just a broken promise but one more burden on millions of pensioners at a time when it is simply the last thing that they need. The consequences will not be small; they will be pensioners unable to heat their homes, struggling to put food on the table, and managing increased debt in their efforts to prevent that. While this order has already passed, this does not have to be the fate for pensioners. I recognise the Minister’s sincerity, as noted by my noble friend Lady Lister, but I hope she will follow by setting out the steps the Government will be taking to avoid these outcomes.