Department for Work and Pensions

Chris Stephens Excerpts

Tuesday 4th July 2023 Commons Chamber

[David Linden (Glasgow East) (SNP)]

May I start, as others have, by sending my thanks to the Chair of our Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), for securing today’s debate and for setting the scene so well? The debate takes place against the backdrop of an ongoing Westminster-made cost of living crisis that affects the livelihoods and lives of people across Scotland and these islands. The harsh, yet inescapable reality is that people in Scotland can no longer afford to pay the price for the economic mismanagement of a Westminster Government they did not elect. Indeed, we have not voted by majority for the Conservatives since 1955.

In May, CPI was still at 8.7%. Prices are still soaring and the cost of living under Westminster control is still far too high for many families who were already struggling to get by after 13 long, brutal years of Tory cuts, Brexit and economic mismanagement. We know that inflation disproportionately impacts lower-income groups such as single parents, who spend a relatively high proportion of their income on food and fuel. Indeed, new Trussell Trust research shows that families are going hungry as a result of the Westminster-made cost of living crisis, with one in seven people in the UK facing hunger in the last year due to a lack of money. Ministers often tell us that the reasons for food bank usage are complex. It is not complex—it is because people do not have enough money.

The Joseph Rowntree Foundation’s latest cost of living tracker found that 5.7 million low-income households are having to cut down or skip meals because they do not have enough money for food, while the number going without items such as food, heating and basic toiletries has remained at about 7 million for more than a year—all of that in the sixth largest economy in the world.

The average interest rate for a two-year fixed-term mortgage has risen to 6%. The Resolution Foundation has said that average annual mortgage repayments are set to rise by £2,900 for those renewing next year. In short, that is the eye-watering Westminster mortgage premium that Scots are paying for the pleasure of a Tory Government they did not elect.

What is more, analysis by the consumer group Which? shows that the prices of popular family meals have risen by 27% in the last year. The Irish and French Governments have reached agreements with major supermarket retailers to reduce food prices, while the Tory Government are sitting on their hands. It is those low-income families I represent in Parkhead, Shettleston and Baillieston who are paying the price for the sheer intransigence of Conservative Ministers here in London. Even at this late hour in the cost of living crisis, I urge the British Government to use all the powers at their disposal to tackle that crisis on the scale that is required. That does mean that they will have to be bold and radical, and the same is true of the pro-Brexit Labour party.

I turn specifically to universal credit, which is obviously the main focus of the debate. In short, the British Government’s continual refusal to fix the extensive and known-about problems with universal credit is unacceptable, and it is without doubt subjecting some of the most vulnerable people in our communities to additional and unnecessary hardship. With the three main parties in this place now agreeing on the principles of universal credit, there is an opportunity, so we should put our heads together to look at what we can do to fix it.

I will start with the level of universal credit. JRF research shows that support has eroded over decades and that the basic rate of universal credit is now at its lowest level as a proportion of average earnings. Indeed, the JRF’s latest cost of living tracker warns that about nine in 10 low-income households on UC have gone without at least one essential for the third survey in over a year.

For most people referred to food banks in the Trussell Trust network, the design and delivery of the social security system are major contributors to their inability to afford the essentials. The majority of people—indeed, some 89%—referred to food banks in the Trussell Trust network receive a means-tested benefit such as universal credit, but that did not provide them with enough to cover the cost of the essentials. As the right hon. Member for East Ham said, JRF and the Trussell Trust are together calling on Ministers to implement that essentials guarantee to ensure that, at a minimum, the basic rate of universal credit covers life’s essentials and that support can never be pulled below that level.

[Chris Stephens (Glasgow South West) (SNP)]

Is not another problem the insane part of the system where people pay back money because of advances and the level of deductions—more than £60 a month is being deducted from my hon. Friend’s constituents’ and my constituents’ universal credit? That envelops that cycle of poverty.

[David Linden]

I am grateful to my hon. Friend for putting that point on the record. He was my predecessor on the Select Committee and follows this work well. I will come to debt and deductions, because that is one of the big issues raised in the evidence that the Select Committee receives, certainly by the stakeholders that we meet. He is spot-on to draw attention to the £60 from each of our constituents that is paid back to the Government when it could be spent in our local economies.

New CPAG research finds that the digital aspects of universal credit routinely lead to wrong amounts being awarded to claimants—often those who are most vulnerable—and to breaches of rule of law principles. That is why I have repeatedly called on the Government to reverse their cuts to universal credit and working tax credits. Let us not forget that this was the biggest overnight cut to welfare in 70 years, inflicting hardship on people who were already struggling. To have done that as we came out of the teeth of the pandemic was particularly cruel.

Rather than offering one-off payments to shore up struggling families’ incomes, the DWP should reverse the damaging policies that are impacting on the most vulnerable people. It should reinstate the UC uplift at £25 per week and, of course, extend it to legacy benefits. Let us not forget the 2.5 million disabled people, so ably advocated for by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who were cruelly left behind without that uplift during the pandemic. The Government also need to remove the benefit cap and the two-child limit with its associated rape clause. They also need to halt the punitive sanctions regime so that all households are lifted out of poverty now and in future.

I turn to the benefit cap. As the Poverty Alliance points out, the cap’s design means that those who require the highest level of support from the benefit system are the most likely to be affected. That is simply unjust. Based on the latest departmental figures, 114,000 UK households have had their benefit capped and 86% of those are families with children. The benefit cap disproportionately impacts lone-parent families, the majority of whom are women—a point made by the hon. Member for North East Fife (Wendy Chamberlain) —as well as larger and ethnic minority families.

The same is true of the two-child limit. Thousands of families with children will be pushed into poverty because Ministers on the Treasury Bench refuse to scrap the two-child limit on child tax credits and universal credit. A new London School of Economics study found that the policy’s impoverishment of larger low-income households has helped few parents get a job. Instead, its main function has been to push families further into poverty and to damage their mental health.

I wonder why Ministers are so furled to the two-child limit. The vast majority of them are actually quite embarrassed by it, and that is before we get to the associated rape clause, or as the Government like to call it, the “non-consensual sex exemption”. When this Government go around lecturing people about the values of global Britain, I am pretty sure they do not tell folk that the state will only support the first two children in the family, but if someone can prove that their child was born as a result of rape, that is okay.