But when does the crisis end? The figures produced by the Office for Budget Responsibility estimate that in three years’ time, wages will exceed CPI. One has to examine the matter over a much longer period. The Conservatives paid for some posters a couple of weeks ago to make the point that it was unacceptable for benefits to rise faster than wages, and the amendment would deal with that issue.
I said earlier that one big weakness of the Government’s proposal, and the reason why I opposed it, was the inflexibility of the 1% uprating. It takes no account of what may happen to food prices, for example, by 2015-16. It is all very well having a Bill that takes a clairvoyant view that a 1% increase will not press large numbers of working families, as well as out-of-work families, into severe and extreme hardship. However, we have experienced this year in the UK the impact of significant volatility in our climate. There has been significant climate change,
which is having an impact on the food baskets of the world, including those in many developing countries and here. We therefore need to ask ourselves whether we can confidently say that there will not be food price spikes such as we saw only a few years ago. I suggest that we may see such spikes again. There is also tremendous concern about the potential volatility of energy prices. The 1% uprating figure is inflexible and somewhat arbitrary, and we cannot say with confidence that we will not need to introduce further primary legislation to revise that figure in 2016.
We must also consider the impact of the 1% uprating on housing. In their emergency Budget, the Government proposed to cut housing benefit from the 50th percentile of rents to the 30th percentile. Whether or not we like the fact that only 30% of the private rental market might be available to people in receipt of housing benefit, rather than half of it, it is essential that the rate is linked to the variation in private sector rents. The 1% uprating will break the link with what is available in the market and instead peg housing benefit back. In my area, and I know in many others, the Government’s attempt to peg it back by cutting the rate to the 30th per- centile of rents has failed to constrain private sector rents, so it has not had not the desired impact. Maybe it has in some areas, but certainly not in mine or many others.
The measures that the Government have brought forward in the Bill have been ill thought through, and I fear that we will have to reconsider the figure set out in it next year or the year after. On that basis, we will listen to what the Minister says in response to the debate before we have the opportunity to divide the Committee on the amendment.