Cost of Living in Wales

Debate between Carolyn Harris and Jessica Morden

Tuesday 22nd February 2022 Westminster Hall

[Jessica Morden]

I thank my hon. Friend for that intervention. She is absolutely right: the levels of in-work poverty are really terrifying, and it is those on the lowest incomes who are feeling the squeeze most acutely. As she said, that is made worse by the Government’s £20 cut to universal credit in the autumn, which impacted 8,630 households in my constituency. Research from Wales TUC and the Bevan Foundation suggests that Wales was particularly hard hit by the cuts to universal credit and working tax credit, especially when it comes to the in-work poverty that she mentions.

Of the 280,000 individuals in receipt of universal credit in Wales, around 104,000, or 37%, are in work—the highest proportion of any nation or region in the UK. In April, universal credit will increase by 3.1%, just as inflation is predicted to peak at 7.25%. As the Child Poverty Action Group has highlighted, that means that the real value of universal credit for families with children will fall by around £570 a year on average.

[Carolyn Harris (Swansea East) (Lab)]

Citizens Advice tells us that, heading into the winter, one in 10 families were already facing financial crisis. With food prices going up, utility bills going up and the extra burden of the national insurance payments, families are having to decide between heating and eating.

[Jessica Morden]

I thank my hon. Friend for that intervention. She is absolutely right. The experiences of her constituents that she relays were borne out in the comments from my constituents that I read earlier on. The average fall of £570 will affect 3,355 families and 6,272 children in Newport East alone. Meanwhile, families across the UK hit by the benefit cap will experience an even greater fall.

Increases in other benefits are totally insufficient in the face of the inflation juggernaut. Carers allowance has increased by only £2 a week, statutory sick pay by £3 a week and the severe disability premium by £2.10 a month. Local housing allowance rates were also frozen again until 2023, meaning that help for housing costs through universal credit and housing benefit have not kept pace with inflation.

Pensioners are also hit hard. Comparing state pension increases to inflation projections, there is a real-terms cut of £355 for a couple on the basic state pension and £222 for an individual. That is not to mention the hundreds of thousands whose pensions have been underpaid because of admin errors and the 1 million pensioner households still missing out on pension credit.