Social Security (Additional Payments) Bill — House of Commons, 2022-06-22
Topic: Social Welfare
Stephen Creswell Timms (Labour, Centre-left): It certainly does need to be done. I am pleased to tell the hon. Lady that on Monday the Select Committee will visit Social Security Scotland and that our vice-chair, the hon. Member for Amber Valley (Nigel Mills), who is in his place, will be part of that group. We look forward to that visit The reason why benefit uprating has not worked this year is, of course, the six-month gap between September, when the inflation figure forms the basis of uprating for the following year, and April, when increases take effect. In response to our call for evidence on the cost of living, the Joseph Rowntree Foundation called on the Government to "commit to a much shorter timeframe for annual uprating between measuring inflation and uprating accordingly, to ensure benefit uprating genuinely reflects inflation for the year in question." Lloyds Bank Foundation told us that the Government should "consider uprating benefits in line with inflation in the autumn to ensure they more accurately reflect the true cost of living." That sounds like what was done in the 1970s. The Legatum Institute also suggested reducing the delay between CPI measurement and the application of uprating as well as introducing a mid-year uprating review. Citizens Advice called for a more sustainable, responsive uprating approach, which means "addressing the lag between benefit uprating decision-making and implementation and the exclusion of the benefit cap from wider uprating." It says that while the one-off payments to be made under the Bill "are more generous…for some households than if uprating had been brought forward", there are problems. For example, as we were reminded by my right hon. Friend the shadow Secretary of State, the one-off payments are the same amount regardless of family size. They also have cut-off dates, which risks arbitrarily excluding people from support Flat-rate payments being irrespective of family size appears to be pretty unfair to larger families. Overall, the package is somewhat more generous than early benefit uprating would have been, but it is less generous for larger families. The justification for that is not clear. The North East Child Poverty Committee told us that "a flat-rate £650 payment for all households on means-tested benefits, regardless of household size, additionally fails to recognise the clear link between family size and essential outgoings, with many larger families (already at much greater risk of poverty, a situation compounded by the two-child limit) facing intolerable financial pressures as a result of rising household bills." I will make one final point. One great advantage of the Chancellor’s package for low-income families, compared with a straightforward benefit uprating—I was grateful to the Secretary of State for confirming this—is that the benefit cap does not apply. It is striking that when it appears that the headline rate of social security benefits is likely to be raised by perhaps 10-plus per cent. next year, there is no indication at all about the benefit cap being lifted at all. That means that the growing number of families whose benefit has been capped will receive no increase in their income at all at a time when inflation is likely to be over 10% In evidence to the Select Committee, the Child Poverty Action Group Told us that "the Government has made a welcome commitment to increase benefits in April 2023 in line with prices. However, not all price-related elements of the system are included in the annual uprating exercise and the benefit cap means a substantial minority of claimants—an estimated 150,000—will see no increase at all and face another real terms cut to their benefits." At a time when inflation is so high, surely at least the level of the benefit cap must be reviewed. Will the Minister give us any encouragement that it will be, ahead of April next year? For now, and in the context of the Bill, it is welcome, and quite a significant precedent, that the benefit cap will not apply to these additional payments.