Social Security and Pensions — House of Commons, 2017-02-21
Topic: Social Welfare
Deborah Angela Elspeth Marie Abrahams (Labour, Centre-left): The former Minister shakes his head, but these are the Government’s own figures. If we look at spending across Europe as a percentage of GDP, we see that we are below the EU average when it comes to social security spending, just as we are on health spending Let us start with rising costs. Traditionally, the link between social security and inflation has ensured that some of the most vulnerable households in our country are not made worse off, year on year, by inflation in the cost of basic goods and services. The adequacy of social security has been heavily eroded over the past seven years. Research by the Joseph Rowntree Foundation demonstrates that the price of essentials has risen three times faster than wages over the past 10 years. When that is combined with the coalition’s initial 1% freeze on uprating, introduced in the Welfare Reform Act 2012, and the complete social security freeze put in place in last year’s Act, it means that low-income households have seen a significant deterioration in the adequacy of social security support since 2010 Clearly, the historic drop in oil prices and subsequent slow-down in inflation of the price of household goods provided some respite to low-income households, but we know that the impact of the EU referendum on, for example, food and fuel prices is only just starting. People on low incomes spend a much larger proportion of their household budgets on the essential goods and services that have been so prone to inflation, so they are likely to have felt the effects of spiralling prices long after they have slowed down The costs of basic household items are beginning to rise again, with last month’s official figures showing inflation at a two-year high of 1.8%. I understand that the actual increase in food prices has been approximately 20%, but that has only just started to be passed on to consumers, so it is going to get worse. That puts real pressure on households that are trying to provide for their basic needs. Indeed, last week the Joseph Rowntree Foundation published a report showing that 19 million people are now struggling to make ends meet and get the basics required for a socially acceptable standard of living In the context I have set out, a 1% uprating to some social security entitlements is unlikely to do much for those who are struggling to get by. If the Prime Minister is really serious about helping those people, I urge that there be some reconsideration. As a matter of principle, it seems only fair that social security should rise in line with inflation and should apply to all entitlements, not just the ones that the Government have cherry-picked. Although the economic arguments for a freeze may once have been founded on the slow-down in the prices of the basics that every household needs, now that prices are predicted to rise by 10% by 2020 even that weak economic justification no longer stands up. That is before we even get to the social argument for protecting the incomes of the poorest people in our society, whom this Government have set out to punish over the past seven years In last year’s inquiry by the all-party group on health into the effect of the Welfare Reform and Work Act 2016 on child poverty and child health, the freeze on social security support payments was singled out as the most damaging. I remind Members that the Institute for Fiscal Studies estimates that child poverty will increase by around 1 million as a direct result of social security and tax changes, and that will impact on those children’s health and futures. I make an impassioned plea to the Government and the Minister: we are approaching April, when several other disability benefits will be cut; I urge the Government to reconsider I shall not detain the House any longer. I urge the Government to review the cap before price inflation begins to pick up again. If they really cared about those struggling to make ends meet, that is exactly what they would do. In the meantime, although we regret the limit on the groups who will benefit from the uprating, we will support the order.