Social Security

I beg to move,

That the draft Social Security Benefits Up-rating Order 2024, which was laid before this House on 15 January, be approved.

The draft order will increase relevant state pension rates by 8.5%, in line with the growth in average earnings in the year to July 2023. It will also increase most other benefit rates by 6.7%, in line with the rise in the consumer prices index in the year to September 2023. Subject to parliamentary approval, the changes will take effect from 8 April and will apply for the tax year 2024-25. [Interruption.]

Order. May I ask those not participating in the debate to leave quietly? It is difficult to hear the Minister.

The Government’s commitment—

Order. Minister, I have just been asked to clarify that you are moving motion 3 on social security.

Yes, that is the one I am talking about.

Thank you for clarifying that.

For the information of the House, this order covers state pensions. Motion 4 covers the guaranteed minimum pension, which is a sub-element of the pensions issue. As I will explain, the different elements—

On a point of order, Madam Deputy Speaker. Can I clarify whether we are taking motion 3 on social security and motion 4 in one debate, or will we scrutinise the orders separately? It would be helpful for the House to have clarity on exactly what is happening.

We are debating motion 3 on social security. We will then debate motion 4 on pensions.

Two debates or one debate?

Two separate debates.

Indeed, a few days ago I was asking those questions about whether to take the motions separately or together. They are being taken separately.

I am very relieved that we are getting a proper uprating this year, but the current headline rate of benefits is the lowest it has been in real terms for 40 years. Why have Ministers set benefits at a level so much lower in real terms than was chosen by Margaret Thatcher, Peter Lilley, John Major or Norman Fowler? Why is it so much lower?

There is always a lively debate about the adequacy of the overall benefits system. I think Beveridge had the debate under the Labour Government in 1945 on how to understand the concept of adequacy within the benefit system. What we are doing is ensuring that the purchasing power of benefits is maintained and that we are adhering to the triple lock. The right hon. Gentleman’s intervention allows me to restate, I think for the fifth time, the Government’s commitment to the triple lock, meaning that the basic and state pension will be uprated by the highest of growth in earnings or in prices, or by 2.5%.

This year that will mean an 8.5% rise from 2024-25, taking the basic state pension from £156.20 to £169.50 a week, and the full rate of the new state pension from £203.85 to £221.20 a week. Additional state pensions, such as the state earnings-related pension schemes and protected payments of the new state pension, will rise by 6.7%. The Government are committed to supporting pensioners on the lowest incomes, and accordingly the safety net provided by the pension credit standard minimum guarantee will increase by 8.5%. For single pensioners it will increase by £201.05 to £218.15, and for couples it will increase from £306.85 to £332.95 per week.

When it comes to support for those in the labour market, such as universal credit and the means-tested benefits it replaces, there is always a need to take into account work incentives as well as financial support for those in low-paid work, who are looking for work or who are unable to work. The Government announced a range of employment and conditionality measures at the autumn statement to maintain and improve work incentives. However, in striking a balance it is also right to increase the rate of those benefits by 6.7%, in line with the increase in CPI in the year to September 2023. That 6.7% increase means that universal credit will retain its purchasing power in the broader context of the Prime Minister’s delivered commitment to halving the rate of inflation.

I thank the Minister for clarifying the way we are taking these orders today. We welcome the social security uprating, because we want to see social security keep pace with prices, particularly at a time of spiking inflation and economic instability. However, it is worth pointing out that before 2010, uprating in the manner we are doing it today was the norm for both Labour and Conservative Governments, but the past decade and a half has seen a change, and a variable approach to uprating from this Government. The debate about uprating has become almost farcical. Year by year there is speculation—I presume from some part of Government—that the uprating that was standard year in, year out under previous Governments may or may not happen.

That speculation does not come out of thin air. It causes immense amounts of distress and worry for people. It is almost as though there has to be a campaign for the status quo, which is not acceptable. I wonder why we are in what seems to be a policy roundabout where every time we have this debate about uprating, only for the Government to do it. That is a problematic way to do what is a normal function of social security: to keep pace with the cost of living.

We have to be honest about the reality of the situation we face. We have had universal credit for a decade or more, and I have been in this House long enough to have heard promise after promise that it would radically improve people’s work incentives, and that people’s position in life would be made much better by universal credit reforms. The DWP has many talented civil servants, who I am sure have worked hard to try to make the customer service elements function better, but we have to look at reality: 400,000 more children are now in poverty than when Labour left office in 2010. That is not acceptable to me.

Most people in poverty today are in work, so the idea that we hear again and again in this Chamber, that the best route out of poverty is work, is simply not true. Two thirds of children in poverty live in a house where someone goes out to work. I would like the Government to recognise that fact. We have had a decade and a half of so-called reform, and all we have done is get back to the situation where children are growing up dealing with the stress of not having enough money in the family home to give them a proper childhood. That is not acceptable. We see the consequences of a decade and a half of Tory rule all around us, whether the food bank parcels in the school office, the nurses who do a 12-hour shift but cannot make ends meet or, in the worst case, the man curled up in a sleeping bag in Westminster tube station as we leave this House. We see the consequences of Conservative Government all around us.