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Social Security

I will certainly not be scaremongering, but the Minister has acknowledged that he has taken a decision to break the earnings uprating policy that was introduced in the 1970s, under which there was a guarantee that pensions would never increase by less than inflation. The guarantee in the 1970s was that pension would never fall in real terms and that, if earnings were higher than inflation, it would go up faster. He is now saying that he will not include that guarantee in the Bill. He is saying that he wants to reserve the right to contemplate circumstances where the pension can fall in real terms. That is what we object to in relation to this aspect of the upratings. I have a couple of final issues. Housing benefit is the second biggest component of the benefits bill after pensions. This year’s uprating will increase the cost of housing benefit, which has risen from about £11 billion in 2000-01 to £15.3 billion in the latest year for which information is available. That increased cost, with the upratings, is quite surprising when one considers that 20 per cent. fewer people claim housing benefit now than in 2000-01. In other words, the cost has increased, despite a falling number of people using the benefit. One of the things that that indicates is that the Government need to put a lot more emphasis on increasing housing supply to take the pressure off housing benefit and to ensure that it is not being wasted because of having to increase the amount hugely in the future as a consequence of higher house prices. The final specific benefit that I want to comment on is the uprating of incapacity benefit and jobseeker’s allowance. We remain disappointed that, despite a fair degree of cross-party support, the Government have not decided to move more ambitiously to consolidate incapacity benefit and jobseeker’s allowance into a single working-age benefit, with one rate for the uprating. If the Government were willing to do that, it would ease some of the transitions from welfare into work and ensure the removal of the incentives in the system, which still exist to an extent, for people to remain on incapacity benefit rather than jobseeker’s allowance. We will not vote against the uprating order today, as we did not last year. We welcome, as far as they go, this year’s modest increases, but an overview of the benefits system and the uprating that has taken place this year would demonstrate that the standards that Beveridge and others who founded this element of the welfare state set in the 1940s and 1950s are not met in the benefit system that is delivered by this uprating. The element of security is not delivered for those people who are reliant on means-tested benefits that they do not end up claiming or for pensioners who get the basic state pension, which is below the poverty level. The element of incentive is not delivered by the reliance on means-testing, and the element of responsibility that Beveridge sought is not delivered by the rules and regulations for benefits, which has even now been acknowledged by the Secretary of State for Work and Pensions, who is due to make a statement on that matter in the next few weeks.