Lords told of need for ‘tangible and immediate’ increase in benefits

House hears that an above-inflation rise is required to offset lower-income freeze losses.

Westminster in London next to the Thames

An end to the benefits freeze in April “will do nothing” to restore the significant losses suffered by millions in poverty, The House of Lords has heard.

Debating the freeze, Labour peer Baroness Lister said the losses, on average, were nearly £400 each this year for families with children.

DWP minister Baroness Stedman-Scott was urged to press the Chancellor for an above-inflation increase as a “tangible and immediate” way of making good the prime minister’s one nation election pledges to level up society.

Baroness Stedman-Scott said assessments at the time the freeze was imposed estimated that 30% of households would be affected by the policy – but that no one should take a direct cash loss as a result of the freeze.

“We have continued to monitor the impact of our policies through publications such as the annual release on households below average income,” she said.

“Latest available stats show that the number of people in absolute poverty in 2017 and 2018 was lower than in 2010.”

But Baroness Stedman-Scott acknowledged one of the major contributing factors to the losses was inflation twice what the government thought it was going to be.

“It is no excuse, but that was it,” she said.

Asking how the government was following the evidence on the root causes of child poverty, Tory peer Lord Farmer referenced Joseph Rowntree Foundation findings from 10 years ago that proved the tax credits approach to child poverty “had run out of steam”.

Baroness Stedman-Scott conceded that some of the ramifications of tax credits caused difficulty.

She said: “We had an annual rather than a monthly reconciliation, as we are trying to have under Universal Credit (UC).

“I believe that the monthly reconciliation under UC, while not perfect, is much better than waiting until the end of the year,” said Baroness Stedman-Scott.

“On child poverty and family breakdown, obviously there are families who have great difficulty fiscally, and we have to try to help them, but the evidence shows that helping parents to move into and remain in work is the best option for moving them out of poverty.

“We want to see child poverty fall and remain determined to tackle it – I will do anything I can to move things forward,” she said.

Lib-Dem peer Baroness Janke cited stats from August 2018 she said showed two-thirds of those who had benefits cut were single parents – with single parents in the bottom 20% income bracket losing 25% of their 2010 income by 2021-22.

“Ending the benefit freeze will not restore this, and half of the total number in single- parent families are in poverty,” said Baroness Janke.

These stats, she said, showed single-parent families are doubly disadvantaged as a result of government policies – a “glaring injustice” in need of government address.

Baroness Stedman-Scott said the benefit-cap levels were put in place to try to restore some “fairness” to the system.

“Due to the election taking place, the levels were not reviewed in the last Parliament, but there remains a statutory duty to look at them, which will be done at an appropriate time,” said Baroness Stedman-Scott.

Labour peer Baroness Sherlock said the benefit freeze was not a reform but a straightforward cut.

She said: “It simply cuts the value of certain benefits every single year, year on year, for five years.

“The result is that the welfare state, the point of which is to support children and families when the parents cannot earn money, is now providing a record low level of benefits compared to average wages.”

She referenced resolution Foundation figures showing the basic JSA of £73 a week is just 14% of average earnings.

She said: “When Beveridge started his system, the figure was 27%.

“We cannot have a welfare state in which, if you find yourself unable to work, you are literally thrown on to the scrapheap and become dependent on food banks.”

Baroness Stedman-Scott maintained that, in the eight years following the financial crisis and leading up to the benefits freeze, jobseeker’s allowance grew by 21%, whereas median earnings grew by only 12%.

“We want a welfare state that works for people and enables them to have a decent way of life, but the legacy benefit system was unsustainable, and I am afraid we have taken very difficult decisions to try to balance it out and to make work pay for people,” she said.

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