Baroness Lister of Burtersett (Lab)

My Lords, I thank my noble friend the Minister for introducing the uprating order so clearly, and I welcome the opportunity to discuss the social security that it provides. It is a shame that it is tucked away in Grand Committee, with only a few dogged noble Lords present, given how important social security is to our society. As the impact assessment for the removal of the two-child limit Bill notes: “Social security is the Government’s most direct lever” to reduce child poverty, including the shockingly high level of deep poverty. To quote the recent Joseph Rowntree Foundation report: “Our social security system is one of the surest routes to tackling poverty and destitution that the government has at its disposal”— so that a well-resourced and effective social security system is “the bedrock of a strong society”. At present, after a decade or so of cuts, our social security system is neither sufficiently well-resourced nor effective, but we are starting to turn the tide. Should anyone complain that doing so will contribute to the so-called ballooning welfare bill, I point out that spending on working-age social security is projected to flatline as a share of GDP over this Parliament. Although it is not part of the uprating, we cannot ignore the significant impact that the very welcome abolition of the “vicious”—to quote the noble Lord, Lord Freud —two-child limit will have on the numbers of children in poverty and on the depths of the poverty experienced by those who will remain below the poverty line. I use this opportunity to ask the spokesperson for the Opposition, who is a decent lady, to dissociate the Opposition from the xenophobic Reform-echoing message of the Oral Question on this asked by one of their Back-Benchers last week, with its pejorative reference to foreign-born children receiving benefits, which I know disturbed a number of noble Lords across the House. A particularly welcome aspect of the uprating itself, which I admit I did not realise until yesterday would be legislated for separately in a negative instrument just laid, mentioned by my noble friend, is the real increase in the value of the standard universal credit allowance, which will be repeated for the rest of this Parliament. I hope noble Lords will indulge me if I mention it now, given that we do not know whether or when the negative instrument will be debated. The uprating has to be understood in the context of the eight out of the 10 upratings between 2013-14 and 2022-23 that produced a reduction in its real value, leaving the basic level of support at a 40-year low, according to the JRF. A companion evidence pack of the child poverty strategy spells out how these cuts mean that basic benefit levels are worth “significantly less” than how the last Labour Government left them. Nevertheless, as the Government themselves acknowledge, the real increase is only modest, especially when we bear in mind the differential inflation rate, which has hurt those on low incomes in recent years. The impact of this was emphasised at a Resolution Foundation conference on “Unsung Britain” this morning. There is a long way to go if universal credit is adequately to protect recipients against poverty and hardship. What this means was brought home to some of us by Jo, a member of Changing Realities, who spoke at a meeting here last autumn. She said: “We are often exhausted parents trying hard to hide from our kids the mental gymnastics of managing tiny budgets in a big-cost world”. She said that the effects are “immense and enduring”. The JRF and Trussell, and also previously the then APPG on Poverty, of which I am co-chair, have recommended the establishment of an independent body to advise Governments on the benefit levels needed to meet essentials, as benefit levels have never been based on recipients’ actual needs. Of course, it would be for the Government and Parliament to decide on the actual levels, but they would do so on the basis of empirical evidence. Is this something my noble friend might take back for consideration? The need for benefit levels to reflect actual needs brings me to some buts—my noble friend the Minister knows me too well to think there would not be any. First and perhaps foremost is the fact that retention of the overall benefit cap means that about one in 12 children who escape the frying pan of the two-child limit will be no better off, because they will be burned by the fire of the cap. Although the cap affects only a relatively small number, it is a key driver of deep poverty. According to the impact assessment for the removal of the two-child benefit limit Bill, 20,000 more households will be capped as a result. One way that this effect could at least be mitigated would be if the threshold limits were uprated annually, in line with the UC standard allowance. As it is, they have only been uprated once since 2016, when they were cut. A Written Answer to me spelled out the effect on the threshold’s value: those for couples or lone parents would now be increased by £4,702—or £5,409 in Greater London—a year, had they been uprated in line with the UC standard allowance since 2016. Secondly, it is disappointing that the local housing allowance freeze is being continued. IFS has criticised this approach to LHA as incoherent policy design. As the JRF has shown, one consequence is that four in 10 private renters in poverty are so only after housing costs are factored in, more than any other tenure group. Given that housing costs are identified as a key driver of poverty, there is no justification for a Government committed to reducing poverty and homelessness continuing the LHA freeze. Although the PIP cuts were thankfully withdrawn, some cuts are still affecting those claiming social security for health or disability reasons. The health element of UC will be halved for new recipients from April. Although not yet confirmed, the proposal to replace the contributory new-style JSA and ESA with a new unemployment insurance scheme, while certainly improving the situation of the newly unemployed, would mean a new time limit after six or 12 months for those who currently qualify indefinitely for new-style ESA. This could have particularly serious implications for the autonomy and security of affected women in couples, for whom the new-style ESA represents an important source of income in their own right. Can my noble friend update us on the thinking on this, as there have been rather contradictory reports in the media? Returning to child poverty, the latest projections produced by the DWP suggest that, despite the welcome reduction of half a million children in poverty as a result of the abolition of the two-child limit, the largest reduction in a single Parliament since records began, there will still be around four million children—29% of all children—in poverty at the end of this Parliament. This depressing fact is a measure of how dire the situation inherited from the previous Government was. However, it must also act as a spur for further action now, including the setting of targets and milestones in the baseline report promised for this summer, and a prioritisation of further action to improve social security in future Budgets. The child poverty strategy document itself described it as just “the first step on our road to ending child poverty”. Who better to quote than the Chancellor of the Exchequer, who, while expressing her pride in abolishing the two-child limit, last week wrote: “I know that our work cannot stop here. We must keep building a country where every child has a fair start in life and where every parent is treated with dignity, respect, and the support they deserve”. We still have some way to go before that country is built.