Social Security

I beg to move,"That the draft Social Security Benefits Up-rating Order 2010, which was laid before this House on 27 January, be approved." The Social Security Benefits Up-rating Order 2010 supports the action the Government have taken to help people through the unprecedented economic challenges that we are facing. It increases support for people on pensions and benefits by more than £2 billion, at a time when it is important that we protect the most vulnerable. The latest official data show that the UK economy returned to growth in the last quarter of 2009. While cautious, the Government remain confident about the future prospects for the economy. We shall therefore continue to support long-term sustainable growth and provide targeted economic support, as to withdraw this now could put the recovery at risk before it is properly established. By responding positively and proactively during the downturn, the Government have helped more people to keep their jobs than many commentators expected and helped others to return to work quickly. Unemployment is 450,000 lower than forecast at the last Budget, which shows that active Government support works. Prospects for the UK and global economy are better than 12 months ago, as Governments across the world have stepped in to support their economies. As forecast in the pre-Budget report, UK GDP growth returned at the end of 2009 and, supported by measures to stabilise the financial system, growth is expected to pick up through 2010 and 2011. The latest Office for National Statistics employment figures show that falls in employment continue to slow and that unemployment looks to be levelling out. While it was disappointing to see the claimant count rise last month, after having fallen in the previous two months, the number of new claims for jobseeker's allowance has fallen again, and more than 50 per cent. of people move off claims in less than three months. This order provides real help for people entering or returning to the job market, and will help to support the recovery. People of working age who claim income-related benefits will have their benefits up-rated in line with the Rossi index—the retail prices index less housing costs. So those who receive benefits such as jobseeker's allowance, employment and support allowance, and incapacity benefit will see the support that they receive increase by 1.8 per cent. from April 2010. It is usual to increase state pension and some other social security benefits in line with the September inflation figures. As a consequence of the credit crunch, which began in the US sub-prime mortgage market, we have been experiencing extraordinary global conditions. The retail prices index moved into negative territory for the first time in around 50 years, and in September 2009 it stood at minus 1.4 per cent. That means that those who rely on benefits being uprated by the retail prices index could have expected their benefits to be frozen in cash terms, with no increase at all from April. However, as the Government remain committed to helping the most vulnerable in society, my right hon. Friend the Chancellor used his pre-Budget report last year to announce an increase for key carers and disability benefits by 1.5 per cent. this April to help people now, when they need it the most. As a result, we shall be uprating benefits for disabled people and carers, along with statutory payments for parents and others who receive national insurance-linked benefits, by 1.5 per cent. from April. We shall uprate attendance allowance, carer's allowance, disability living allowance and maternity allowance, to ensure that they do not fall behind. As Members in all parts of the House will no doubt be aware, since September inflation has increased. The retail prices index for the year to January 2010 stood at 3.7 per cent. The main drivers behind that increase are the return from 15 to 17.5 per cent. for value added tax, the continued increase in oil prices and an increase in housing costs. Although inflation is now positive again, it is important to keep in mind the cyclical nature of the uprating process and the fact that inflation between October last year and March this year will be taken into account when benefits are uprated next year. In particular, when it comes to uprating in 2011, annual inflation to September 2010 will include the return to positive RPI inflation from November last year.