Allen: It is not too late for the Treasury to change course and end the four year benefit freeze now

4 March 2019

Heidi Allen MP, The Independent Group spokesperson for welfare and pensions, has today written to all Members of Parliament to urge them to do all that they can to convince the Government to do more to support the most vulnerable people in society, and end the benefit freeze at the Spring Statement.

Today a motion on the Draft Social Security Benefits Up Rating Order will be debated. This annual motion, if passed, will uprate a wide range of benefits in line with the consumer price index. However, it excludes working-age benefits, which remain subject to the final year of the four-year benefit freeze – including standard allowances in ESA and Income Support, Child Tax Credit and the Child Element of Universal Credit.

The Group accepts that today’s motion will not be redrafted, but insists that Parliament must hear reassurances from the Government at the Despatch Box, that this matter will be dealt with at the Spring Statement on the 13 March.

Commenting on today’s Commons motion Heidi Allen MP, The Independent Group spokesperson for welfare and pensions, said:

“It is almost universally understood now that working age benefits are insufficient for claimants to even maintain subsistence living. The Secretary of State for Work and Pensions has herself said that the benefit freeze must end.

“The motion before us today brings into sharp focus the damaging impact of the benefit freeze on the most vulnerable in our society. The Work and Pensions Select Committee has compiled evidence that shows that ending the benefits freeze would lift 200,000 people out of poverty.

“There is simply no need to persist with this final year of the benefits freeze. It is not too late for the Treasury to change course and end the four year freeze now.”

ENDS

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Notes to editors

  1. Heidi Allen MP is the Member of Parliament for South Cambridgeshire and The Independent Group spokesperson on welfare and pensions. Heidi is a member of the House of Commons Work and Pensions Select Committee. She came to politics from business, having worked for 18 years in a variety of industries.
  2. More information on The Independent Group is available at our website: https://www.theindependent.group/
  3. You can follow The Independent Group on Twitter: @TheIndGroup
  4. The full text of Heidi’s letter is below:

Dear Members of Parliament,

As you will be aware, this afternoon, a motion on the Draft Social Security Benefits Up Rating Order will be debated. This annual motion will uprate a wide range of benefits including the State Pension, DLA/PIP, Widow's/Bereavement benefits, ESA Support group premium and Maternity Allowance in line with the consumer price index.

However, there is one glaring omission.

It excludes up rating working-age benefits which remain subject to the final year of the four-year benefit freeze. This includes standard allowances in ESA and Income Support, Child Tax Credit and the Child Element of Universal Credit.

It is almost universally understood now that working age benefits are insufficient for claimants to even maintain subsistence living. The Secretary of State for Work and Pensions has herself said that this freeze must end.

In the 2016 Budget, the Treasury announced a four-year benefit freeze with the aspiration of saving £3.5 billion by 2019/20. According to new estimates recently published by the Resolution Foundation, due to the second and third years of the freeze, which set expenditure on a permanently lower trajectory than expected, the Government will have exceeded their initial aim by £900 million. This means in-work benefits alone will have produced a total in-year saving by 2019/20 of £4.4 billion.

Because of inflation, the Resolution Foundation estimates that in-work benefits have been subject to a 6% real terms decrease.

The motion before us today brings into sharp focus the damaging impact of the benefit freeze on the most vulnerable in our society. With the recent news that tax revenue in January outstripped public spending by £14.9bn, the biggest January surplus since records began in 1993, there is simply no need to persist with this final year of benefits freeze. It must be uprated in line with all benefits from April 2019.

The Work and Pensions Select Committee has compiled evidence that shows that ending the benefits freeze would lift 200,000 people out of poverty. As things stand, in 2019/20 child poverty is on course to hit a record high of 34.8%. It is further projected to reach 37% by 2023/24, a 1.1 million rise of children in poverty from 2016/17.

New House of Commons Library analysis shows that, if the Government proceeds with this final year, affected households will see their incomes reduced by between a further £888 and £1,845 in real terms, than without the freeze.

But it is not too late for the Treasury to change course and end the four year freeze now. We accept that today’s motion will not be redrafted, but we must hear reassurances from the Minister at the Despatch Box today, that this matter will be dealt with at the Spring Statement on the 13th March.

I urge you to do what you can to convince Ministers that the Government must do more to support the most vulnerable people in society and to end the benefit freeze in April 2019.

Yours sincerely,

Heidi Allen MP