Social Security (Additional Payments) (No. 2) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 21st February 2023
(1 year, 10 months ago)
Commons ChamberSocial Security (Additional Payments) Act 2023 Read Hansard Text Watch Debate
This text is a record of ministerial contributions to a debate held as part of the Social Security (Additional Payments) Act 2023 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Secretary of State for Work and Pensions (Mel Stride)
I beg to move, That the Bill be now read a Second time.
A hallmark of a civilised society is that it looks after the most vulnerable and those who are most in need. That lies at the centre of this Bill. The House will be aware of the challenges that inflation has presented to millions of our fellow citizens up and down the country—inflation that was there before the Ukraine-Russia conflict but that has been substantially exacerbated by it.
As a newly appointed Secretary of State, some of the first actions that I took were to increase and uprate pensions by 10.1%, to respect and uphold the triple lock, to increase benefits by 10.1% and to increase the benefit cap by the same percentage. Those actions, along with measures such as the increase in the national living wage by more than 9%, which will come into effect in April, have done a great deal to underscore this Government’s approach to looking after those who are most in need.
In 2022 alone, 30 million support payments were made by my Department. Eight million low-income households received £650. Eight million pensioners received a £300 payment along with their winter fuel payment, and 6 million disabled people received a payment of £150. That was alongside various other measures from the recent past, such as the reduction in the taper rate for universal credit, which provided 1.7 million families with, on average, an additional £1,000 per year.
Hywel Williams (Arfon) (PC)
There is a substantial lag between the announcement of the uprating and April when it will be brought in. What steps can be taken to reduce that lag so that people benefit earlier?
Mel Stride
The hon. Gentleman will be aware that a series of payments were made last year right up until the autumn. The energy price guarantee and various other payments of which he will be aware will help millions of our fellow citizens come through what is a difficult period. The household support fund administered by local authorities is available, particularly for those who have not benefited from the assistance that I am setting out.
Dr Luke Evans (Bosworth) (Con)
The third iteration of the household support fund has come through. I went down to the Hinckley hub to see how people there were getting on. They expressed their thanks to the Government for this important fund. They have the accountability to be able to give funding to people in extreme circumstances when they need it. It is not heavily red-taped and regulated, so they can use it how they see best to help their clients. Is that something that the Department for Work and Pensions will take forward?
Mel Stride
My hon. Friend is entirely right, and I am pleased to hear his personal experience of the measure. He is right to point out that there is great flexibility in how it can be administered by local authorities. We place a particular emphasis on making sure that that assistance goes to those who may not have benefited from the measures I am outlining, but who are still in need.
In addition to the taper, we recognise that pensioners need additional support where it is appropriate. My Department has thrown itself into promoting the uptake of pension credit. The Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman), did such sterling work as the Pensions Minister and, more recently, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott), has promoted pension credit with such vigour on social media and radio that there has been a 73% increase in applications for pension credit compared with this time last year.
My Department has an excellent record on unemployment. Disabled employment is up by 1.3 million since 2017. We have arrived at our target for the employment of disabled people a full five years earlier than originally planned.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I just wonder whether the Secretary of State would like to comment on the disability employment gap.
Mel Stride
As the hon. Lady will know, the disability employment gap is a key measure on which we are focused. It has more recently increased a little, which I think is the point that she is alluding to, but generally, prior to that it was on a downward trend. The Department is very focused on making sure that we get it as low as we possibly can.
In the last year we also had the energy price guarantee, which ensured that average energy bills came in at £2,500 on average, and £400 off energy bills directly paid to bill payers. In England, we had the council tax discounts for bands A to D. We had two further extensions to the household support fund, as was just referred to by my hon. Friend the Member for Bosworth (Dr Evans). For the devolved Administrations, there have been Barnett consequentials of £1.5 billion since October 2021. I am very proud of our record and the wide package that has already been deployed, which is valued at £37 billion.
That brings me to this year, when we intend to go still further. As the Prime Minister has stated, one of our key aims as a Government is to reduce inflation by 50% by the end of this year. I am confident that we will achieve that, but we recognise that, despite the relief that that will provide to millions up and down the country, we need to provide further support payments. There will be three payments totalling £900 for around 8 million low-income households. Like last year, there will be a £300 payment alongside the winter fuel payment of £300 to pensioners, and a £150 payment to disabled people. The delivery of the support for pensioners will be via regulation and is not the subject of the Bill, but the other payments will be delivered through this legislation.
The Bill sets out the basis of qualification for the payments and who makes the payments, whether that is me and the DWP or His Majesty’s Revenue and Customs in the case of, for example, tax credits. It makes provision as to how the timing of the payments will be set out and it exempts the payments from charges to taxation. It sets out the arrangements that will ensure that data can be transferred and shared between my Department and HMRC, so that all the payments run smoothly and we avoid duplication and minimise fraud.
Sir Stephen Timms
As I understand it, the eligibility for the payments is based on being in receipt of benefit—at least 1p—in a specific month. There will be people who, for example, are paid every four weeks instead of every month and may get two payments in a particular month, so they do not get any benefit in that month. Would it not work better to base eligibility on a two-month period to reduce the likelihood of that problem arising?
Mel Stride
The right hon. Gentleman raises a valid point and we looked at instances where anomalies can occur in what is known in the legislation as the “qualifying period”. The reality is that we cannot iron out all the possible hard edges, but we did break the payments into three for this financial year, rather than the two that we had last year, so that in the event that the circumstances he described were to occur, there would at least be other periods in which someone could qualify. There is also the household support fund, which has already been referred to and is for just the kind of circumstances that he described.
Dr Luke Evans
I am glad that the Secretary of State has looked at how to break up the payments. Will he ensure that people who find themselves with an anomaly can swiftly speak to someone to make sure that such issues are resolved quickly? When someone is struggling with their finances, one of the biggest sources of heartache and stress can be trying to get some of these payments.
Mel Stride
My hon. Friend makes a characteristically excellent point. Anybody will be able to go on to the gov.uk website for further information, and we will have additional resources in place to ensure that people are manning telephones to answer the type of queries that he and the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), have raised.
The Government are on the side of the most needy. We demonstrated that first in the pandemic, through the furlough scheme and the support that we provided for businesses; and secondly, as I have outlined, with the £36 billion of direct payments last year to support those most in need. As I have set out, this Bill will bring forward yet further support in the coming year to help millions.
The Government will always stand alongside those most in need; the Bill is yet another example of just that. Let the record show that this Government, more than any other, understand that the hallmark of a civilised society is that it looks after those most in need.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
We will not divide the House this afternoon, because it is clear that our constituents need extra support. Families, poorer people and pensioners in our communities need help and support not simply because of the inflationary impact of the world unlocking from covid and the spikes in wholesale gas prices on the back of Putin’s heinous invasion of Ukraine, but because for 12 years—coming up to 13 years—we have seen mediocre economic growth under Conservative Governments and a failure to make our economy more productive or sustainably raise living standards.
After five Conservative Prime Ministers, six Conservative Chancellors and nine Conservative Work and Pensions Secretaries, families have been asked to endure the most brutal cuts and freezes to social security that have rendered out-of-work benefits at their lowest level for 30 years. Children have been punished by the pernicious two-child limit and there has been a 25% cut in the value of child benefit. Of course, universal credit was cut by £20—
Jonathan Ashworth
Mr Bumptious needs to calm down. That is the reality of the policies that he supports, which have put more children into poverty on his watch as a Work and Pensions Minister.
Those policies meant that poorer working families entered the crisis with less resilience, less protection and less to fall back on than they otherwise would have. Before the pandemic, the lowest-income households were four times as likely to have no savings as the highest-income households. Today, we face a situation where not only child poverty has increased in relative terms under the Government, but child destitution—where children’s families do not have the means to properly heat their homes, put food on the table, buy toiletries or even provide a decent bed to sleep in at night—is now at half a million. In all our constituencies, demand for food banks has exploded, and there are now also bedding banks, baby banks and even 13,000 so-called warm banks where the vulnerable gather so they do not need to shiver in their homes.
We have all heard stories from our constituencies, such as at the Wesley Hall food bank in my constituency, of fresh food being turned down because mothers in work cannot afford the electricity bill associated with keeping the fridge running. We have heard stories of families saying no to fresh vegetables, because they cannot afford to boil them on the cooker hob. We have heard stories of pensioners using tea lights to try in vain to heat tins of beans.
None of that, by the way, is because people cannot add up or run a household budget, as some headline-chasing Tory MPs lecture us—not the Secretary of State, I concede, but some of his colleagues. In my constituency, the poorest people are some of the best at arithmetic. They go up and down the supermarket aisles, constantly adding up the cost of everything and taking items out of their basket to avoid the indignity of having insufficient funds available when they get to the checkout.
People are turning to food banks because, after 13 years, wages have become so inadequate, housing costs so severe, childcare bills so impossible, social security cuts so deep, and debts chased by the DWP so crushing that, combined with the price of shopping and energy bills going up, families simply cannot afford to survive on the income that they have. The safety net is now so threadbare that in food bank Britain, hunger, the cold and the constant dread of the bailiffs have become a way of life. That should not be a way to live.
Yesterday, the Office for National Statistics reported that 21.9 million people are spending less on food and essentials because of the increase in the cost of living. It said that 50% of disabled people and 50% of parents with a dependent child are cutting back. That is reality of the crisis and of the dismal, devastating poverty that many of our constituents face.
Let me deal with the specific measures that the Government are proposing. First, the Secretary of State rightly mentioned the inflation-proofing of benefits this year, although it is not in the Bill. We welcome that and we pushed him on it—as did, in fairness, many hon. Members on both sides of the House. To be frank, to have done anything else would have been unconscionable. He did not outline, however, that the Government are again freezing the housing allowance rates and the cap on childcare allowances in universal credit. We will see whether that changes in the Budget; I understand that the Government may be looking at that. If they make that change, we will welcome it as another example of them pinching one of our policies—I look forward to it. However, the impact of not inflation-proofing some of these allowances will be to hold families further in poverty.
Secondly—though not in the Bill, but again connected to it and mentioned by the Secretary of State—there are the energy price cap and the universal energy bills support scheme. However, the £400 discount on energy bills of course ends from April, and the Government are reducing the generosity of the energy cap from April, costing the average household an extra £500 on their energy bills. So there we have £900 extra on energy bills that households will have to find. Talk about giving with one hand and taking away with the other. Of course, not every household has been covered by the energy cap—
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
I begin by thanking all those who have contributed to this debate, which has been, as the hon. Member for Westminster North (Ms Buck) said, short but important. As my right hon. Friend the Secretary of State for Work and Pensions has said, the Bill legislates for two key elements of the £26 billion package of further support announced by the Chancellor in November. It builds on last year’s £37 billion package of support to help with the cost of living, and demonstrates our continued commitment to ensuring that people continue to get the help that they need throughout these challenging times.
The Bill plays a vital role in ensuring that, over the next financial year, we can continue to help the most vulnerable to cope with the increased cost of living brought about by global pressures. We look forward to and welcome continued support from hon. Members across the House, including from Front Benchers, to ensure that the legislation progresses quickly. That ensures that we can begin to make the first payments to those people on means-tested benefits in the spring.
The focus of the debate is on the provisions in the Bill that will give additional support of up to £900 to households on means-tested benefits, and on the separate payment of £150 for people on disability extra costs benefits. The Secretary of State already noted that last year we successfully, at unparalleled pace, delivered tens of millions of payments to people across the UK. That was in addition to our normal benefit processing operations. I pay tribute to my officials at the Department for Work and Pensions and all the civil service teams across Government who worked tirelessly to ensure that happened.
We were able to achieve that delivery because we deliberately kept the eligibility criteria for the payments as simple as possible. Let me respond to hon. Members who asked why. We were keen to avoid introducing complexity, which could ultimately lead to delays and unacceptable levels of error or fraud.
Dean Russell (Watford) (Con)
I applaud the additional benefits, but how can my constituents in Watford find out about them? Will there be a communications campaign?
Mims Davies
I thank my hon. Friend, who is standing up as ever for his constituents. There is a cost of living website, there will be details on gov.uk and of course there is the benefits calculator on gov.uk. Those who are entitled will not need to do anything, because payment will be made to them. I hope that reiterates the point. There will be a rounded communications campaign on that. In fact, I made a video just this morning. I hope that is helpful—I promise the video was on this issue.
The key principle that has guided our approach to the Bill this time is to make those further payments to millions of vulnerable people over the coming year. Keeping the rules simple means that people on a qualifying benefit will receive the cost of living payment. That is why we are introducing the Bill. I reassure hon. Members across the House, including on the Opposition Benches, that we did take our time to look at addressing some of the hard edges. Ultimately, we concluded that introducing any significant policy changes would risk delaying payments to millions of people and introducing unacceptable levels of fraud and error. I will go into detail on that shortly, if I may.
We will be delivering the means-tested cost of living payments in three separate payments in 2023-24, as discussed, reducing the chances of someone’s missing out altogether. For those who miss out on a cost of living payment, and for others who may need further support with the costs of essentials on top of our statutory provision, we are extending the household support fund throughout the next financial year. The details have been confirmed today.
The extension allows local authorities in England to continue to provide discretionary support with the cost of essentials, particularly energy and food. The devolved Administrations will receive consequential funding, as usual, to spend at their discretion and with their expert local knowledge—[Interruption.] Sorry, I thought someone was interrupting there. The household support fund guidance and outlines have been released today. It is our expectation that local authorities will prioritise those in particular need and consider supporting those who may, through no fault of their own, have missed out on those cost of living payments but nevertheless are in need.
There have been a number of contributions to the debate and I will to try to respond to some of the points made in turn. The right hon. Member for Leicester South (Jonathan Ashworth) talked about the energy price cap. He welcomed our uprating, which is significant. I remind him that childcare on universal credit is more generous than on legacy benefits and the way we have drawn the household support fund will cover many of the points he raised; I hope he will have a chance to look at those interventions. The personalised support with the Help to Claim service, working with the supporting families programme from the Department for Levelling Up, Housing and Communities, will help the families with complex needs that the right hon. Gentleman spoke about.
The hon. Member for Glasgow East (David Linden) called this “substandard legislation”, which I take severe issue with, but he took the opportunity to make wider points about social security and talked about the “punitive sanctions regime”. I think we will always beg to differ on that. I make the point very strongly that this is a reserved matter. We are delighted to be making the payments for Scotland and today providing the Barnett consequentials in relation to the household support fund and further assistance—[Interruption.] I am sure he cannot resist intervening, so I will let him.
David Linden
Indeed not. I very much enjoyed being told to eat my cereal today. On the question of sanctions, how many people in Mid Sussex tell the Minister how wonderful the sanctions regime is? It is clearly increasing.
Mims Davies
I will come onto the point about sanctions shortly. I know there is confusion among those on the Opposition Benches about whether they support sanctions, but this is about a safety net; it is about progressing and supporting people and helping them to go forward. In reality, when people are sanctioned, it does not just happen. There are processes to go through where work coaches try to engage and support people. If people are disconnected and they fail to attend, that is why they are sanctioned, which is often the reason they then re-engage, talk to their work coach and get involved with what is going on. That helps us to get under the skin of what is holding them back, and I think that is important. I assume from his question that there is a fundamental disagreement, but I will not hold it against him.
My hon. Friend the Member for Broadland (Jerome Mayhew) very kindly turned the focus on to employment. Having been Employment Minister for three years, how can I resist responding to that? A dynamic labour market is important, including the work around furlough, the plan for jobs, and the kickstart and restart schemes—I designed many of those programmes, so it is always nice to have a compliment. In reality, our talented new work coaches—those who we found, recruited and brought into the DWP because of the impact of the pandemic—have been transformational. The other side of this debate is important—it is jobs, it is livelihoods, it is careers, it is opportunities, and it is making sure that people, when at their most vulnerable, know that they have that safety net. I wish my hon. Friend good luck with his jobs fair on 10 March. I have my second in Burgess Hill—this is a great opportunity to mention it.
The right hon. Member for Hayes and Harlington (John McDonnell) spoke up for his constituents and their fuel requirements. Of course, the energy price guarantee will be key to protecting customers and our constituents, and the household support fund will be a key driver as well. It is absolutely right to focus on our constituents. I have worked very strongly on the household support fund to complement this piece of legislation, working with the Local Government Association, to ensure that we support everyone who comes to us in any situation. I was pleased to hear him talk about the rewards of work and why they matter too. We know that it is more than just a pay packet that we are looking for.
My hon. Friend the Member for Guildford (Angela Richardson) spoke about households being squeezed, the cost of living website, and, of course, the fact that the help-to-claim service is there and that all constituencies—no matter how leafy and lovely they may seem—have pockets of challenge. It is absolutely right that we act when we see the impact of a global squeeze. That is absolutely the mark of what we stand for at the DWP. There is the £10 million going to Surrey, and the almost £10 million going to West Sussex just next door to my constituency. What has come out of this and the work that we have done during covid? It is our work with local authorities, which I must commend for stepping up and doing a magnificent job in helping people. They know where those pockets of support are needed. I thank those local offices.
I will quickly whip through some of the challenges made about the legislation. On the adequacy point, inflation is forecast to remain high over the next few months, meaning that many people will need this additional support, but it is important to remember that these payments are just one element announced by the Chancellor back in November. The broader uprating will make a difference.
On the points about housing support, I am working with colleagues at the Department for Levelling Up, Housing and Communities on quality and provision. My party strongly continues to focus on opening up the benefits and freedom of home ownership and all that it gives. The 2020 local housing allowance rates were raised to the 30th percentile—a significant investment of £30 billion—and we have since maintained that increase. Of course, we know that housing costs are incredibly challenging, particularly for renters. That is something that we are working on and taking forward in through the housing taskforce.
Debbie Abrahams
Can the Minister say to what extent the measures in the Bill will replace or add to the £34 billion that has been taken out of support for working-age people since 2010?
Mims Davies
I understand the hon. Lady’s point, but it is not necessarily this Bill that will answer the challenges that some of our constituents face. It deals with issues that they face in skills, progression and other areas that have been holding them back. Tax credits, for example, quite often trap people in 16-hour contracts when they would be much better off moving on to universal credit and taking more hours, training and opportunities. I say to anybody listening: “Take the opportunities to see what is out there.”
The hon. Member for Glasgow East talked about the disability cost of living payments in the Bill. They are not disability benefits themselves, but rather payments relating to the cost of living increases that a disabled person may face. I hope that answers his point. I have covered some of the issues regarding Scotland, so I will move on swiftly, if I may.
In regard to the point from my hon. Friend the Member for Amber Valley (Nigel Mills) about the 1p payment, we successfully delivered tens of millions of payments in 2022 by keeping the rules simple. That included a simple and clear rule that the person must have been entitled to a payment of at least 1p, as he pointed out. That ensures that those with other income sources are not eligible for means-tested benefits and are not included, nor are suspended benefit claims that include risk of fraud.
I reiterate the point around the household support fund and the three payments. They hopefully mean that if people have fluctuating payments, they have a chance to be eligible once again. That was pointed out by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), who is not in his place, in terms of how we address those hard edges. Extending the eligibility dates would involve making more payments to those who had permanently increased their earnings, and that is the challenge. That is not the intention of the cost of living payments, which are deliberately targeted at those on the lowest incomes.
My hon. Friend the Member for Amber Valley also mentioned making more payments, and I would like to address that these payments are being made outside our usual benefit processing systems, using our ad hoc payment system. That system has a limit on the number of payments it can make each day, and it can only make one type of payment at one time. That means a team of specialists have to extract and clean the data to make the payments. Having three means-tested cost of living payments and a single disability cost of living payment balances the spread of support throughout the year, but it does not compromise the core benefit delivery, and I hope that answers my hon. Friend’s questions.
I will just quickly answer the question on larger families and then conclude. In regard to how we look at supporting larger families, as I hopefully have outlined, families on means-tested benefits will benefit from our planned uprating of 10.1% from April, meaning that families subject to the benefit cap will also see an increase of 10.1%. In reality, for families who need additional help, we are extending the support through the household support fund. Again, that is linked to the issues around the ad hoc payment system.
I think I have covered most of the points in the debate, but I just quickly mention the sanctions point and reiterate my earlier point to the hon. Member for Glasgow East that sanctioned claimants who re-engage will be supported.
I will conclude, because I feel that people are desperate to be in the Lobbies. This Government demonstrate our commitment to supporting those in the greatest need and going through the greatest challenge with the increased cost of living. It is vital that we move ahead quickly with the legislation, so that we can begin to make those first payments in the spring. I look forward to further discussion as the Bill proceeds through its next stages, and I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Social Security (Additional Payments) (No. 2) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Social Security (Additional Payments) (No. 2) Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and on Third Reading
(2) Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.
Other proceedings
(5) Any other proceedings on the Bill may be programmed.—(Mike Wood.)
Question agreed to.
SOCIAL SECURITY (ADDITIONAL PAYMENTS) (NO. 2) BILL (MONEY)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Social Security (Additional Payments) (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(1) a sum not exceeding £301 to anyone who is entitled, in respect of a day (the “first qualifying day”) not later than 30 April 2023, to–
(a) universal credit or state pension credit,
(b) an income-based jobseeker’s allowance, an income-related employment and support allowance or income support, or
(c) working tax credit or child tax credit;
(2) a sum not exceeding £300 to anyone who is entitled, in respect of a day (the “second qualifying day”) after the first qualifying day but not later than 31 October 2023, to a benefit mentioned in paragraph (1);
(3) a sum not exceeding £299 to anyone who is entitled, in respect of a day after the second qualifying day but not later than 29 February 2024, to a benefit mentioned in paragraph (1);
(4) a sum not exceeding £150 to anyone who is entitled, in respect of a day not later than 30 June 2023, to–
(a) a disability living allowance,
(b) a personal independence payment,
(c) an attendance allowance or a constant attendance allowance,
(d) an adult or child disability payment,
(e) an armed forces independence payment, or
(f) a mobility supplement.—(Mike Wood.)
Question agreed to.
Social Security (Additional Payments) (No. 2) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateMonday 6th March 2023
(1 year, 9 months ago)
Commons ChamberSocial Security (Additional Payments) Act 2023 Read Hansard Text Watch Debate Amendment Paper: Committee of the whole House Amendments as at 6 March 2023 - (6 Mar 2023)
20:14 - divided: - Ayes: 9 / Noes: 281 - Question accordingly negatived.
20:30 - The Committee divided: - Ayes: 154 / Noes: 283 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Social Security (Additional Payments) Act 2023 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Wendy Chamberlain
It is a pleasure to move amendment 4 on behalf of my party.
Additional support for struggling families is much welcomed, and I am pretty sure that no one in the Committee would oppose the provision of more help through the Bill. What my amendment seeks to do is ensure that those struggling families receive that support now, rather than having to wait. It has been a long cold winter, and we are expecting another cold snap this week, so it certainly is not over yet.
While the energy price guarantee has protected families from the worst increases, some households have seen their bills increase two, three or possibly even four times in the past year. We know from the scandal of the forced instalment of prepayment meters that many people have been unable to keep up with those bills, and that for many of them the debts continue to mount up. Hundreds of thousands, if not millions, of others are walking a tightrope—just managing payments, sometimes late, by making other cutbacks: being cold, eating less, or reducing travel. If we are not just to get those families back on an even keel but to help them to stay there, it is vital for the full cost of living payment that the Government wish to make to be made immediately—especially, I would argue, in the face of the impending increase in the energy price guarantee. We have all seen reports in the media over the last few days that the Government may well choose to extend that guarantee. I am sure you might have some thoughts, Dame Rosie, on whether that announcement ought to be made here before being briefed to the press. We cannot fully assess the impact of this Bill, given that we do not know for definite what is happening with the energy price guarantee, so we are left to make assumptions accordingly.
In any case, whether the guarantee lasts for another month or as, my party wants, for more months than that along with a reduction in the energy price guarantee to the Ofgem cap of £1,971 last April, cost of living support payments must be made now to have any impact. We are seeing a reduction in wholesale gas costs, which is why we argue that the Government can do more than they are outlining because they have the headroom to do so. What is the point in people paying some or even all of their bills, only to start struggling all over again? For people to get all the other benefits of affording the basics—being warm enough and fed enough to work, go to school and stay healthy—support needs to be geared to preventing them from falling below that line in the first place.
Moving on from my amendment 4 to the remainder of the Bill, I am left wondering if this really is it. You do not need to be a politician to know that this country is in crisis, although if you are a politician and have a modicum of responsibility or power, it is critical that you realise the severity of the situation. Just turning on the TV, opening a newspaper, speaking to parents at the school gate or spending any time out and about in our communities makes it very clear what is happening.
The difficulties felt by different communities vary, and that is what the Liberal Democrats’ new clause 8, and to some extent new clause 3, seek to address. For a lot of my constituents living in relatively rural North East Fife, the crisis is exacerbated by their countryside location, without easy access to local services and battling against unrelenting fuel costs. What I hear from them time and again is that they feel they are being let down. Farmers, for example, work long days seven days a week, without let-up and never taking a holiday, to provide the rest of us with the food that goes on our plates, but they are being left with next to no support for their fuel costs, no protection against foreign imports and no ability to plan for the future under the Government’s funding streams.
As has been mentioned many times in this House, many rural households rely on heating oil. I have discussed the price guarantee already, but heating oil is not even covered by that. Costs have almost doubled, yet those households have received just one £200 payment—that is if they have managed to receive it at all. We know that the system has been beset by practical difficulties. We have also seen the continued delays in the roll-out of the alternative fuel payment scheme. Applications are now open, but despite reassurances there has been no support for many until now. And when the shop—or too often now, the food bank—is not just around the corner for those in rural communities, they need to travel just for the basics. They cannot avoid getting into the car and paying for petrol, and although petrol and diesel prices have gone up everywhere this year, we always see much faster increases in rural areas.
Those in rural households are not the only group to suffer because of rising energy costs and fuel poverty. As has been discussed in this place before, disabled people have much higher living costs. I recently met representatives of Disability Rights UK, one of the organisations leading the Disability Poverty Campaign Group, as well as representatives from the Liberal Democrat Disability Association, and their message was clear: the additional £150 payment for people on disability benefits is so lacklustre as to be grotesquely offensive. It shows that the Government are taking no interest in, and making no effort to understand, the reality of the lives and expenses of disabled people.
Disabled people are not all the same: they have a wide variety of unique needs, which I cannot cover here, but I shall give just a few examples. Imagine someone needing a hoist to safely manoeuvre between their bed and their wheelchair, but being unable to charge that hoist and having to watch their family risk their own health by lifting them unsafely. Or perhaps think about someone being unable to charge their electric wheelchair and becoming unable to mobilise even around their home to get to the toilet or to fetch a cup of tea.
Perhaps someone’s partner has a spinal injury and is incontinent, but they cannot afford to run their washing machine every day or to properly heat their water, so they find themselves washing dirty clothes by hand in lukewarm water. Perhaps someone’s child has cystic fibrosis and needs a nutritious high-calorie diet, but with 10% inflation—we know it is worse for food inflation —and shortages, they themselves are having to skip meals to let their child eat instead. It should not take a donation from an international celebrity to reassure families of the disabled that they can keep their homes warm and essential equipment functioning. There are many ways in which disabled people incur additional costs, all of which are incredibly important and all of which demand support additional to what the Government are offering in this Bill.
Unpaid carers, on the other hand, are not even explicitly considered in this package of support. I will not labour the point, as I have said all this before, but not all unpaid carers receive means-tested benefits, and given that the vast majority of them live on or close to the poverty line, they are also badly in need of cost of living support. I would like to say that they are unsung heroes, but I have been singing their praises and calling for more support since the start of the crisis and I am starting to think that the Government do not want to hear it.
Dame Eleanor, it is a pleasure to see you in the Chair, and I am sure that everybody in the Chamber will welcome you back.
Overall, my concern about the Bill, as we consider it clause by clause, is that it is just a sticking plaster that will not truly keep our communities afloat during this crisis. Fuel poverty is widening and deepening; meanwhile, energy companies continue to rake in record profits. The Government must make suppliers act responsibly towards consumers. I acknowledge that it is not just the political response that is causing trouble for my constituents, as an astounding number of them have come to me with problems including being charged incorrectly, often more than they should be, and sometimes by companies that they are not even with. Electricity is a vital service, so surely this type of predatory behaviour cannot be allowed.
Food poverty continues to soar. As early as last April to September, before the worst of this crisis and before winter took hold, the Trussell Trust reported its busiest ever spring and summer, with a 45% increase in the number of families needing its support. The figures will only have gone up since then, and I am not convinced that this package will help, especially with the payments spread out so far. We know that when the £20 universal credit uplift was in place during covid, food bank use went down. How we stop families going hungry or relying on food packages is a vital conversation, and one that needs more time for discussion, so I encourage all Members present to come to the report launch of the all-party parliamentary group on ending the need for food banks on 22 March to hear more on the outcome of our “Cash or Food?” inquiry.
In the long term, to end the need for additional cost of living payments we need economic growth, we need more people able to work and we need a healthier society. Poverty is the enemy of all those things. Poverty breeds worse health outcomes, it makes people cold and hungry and it drives away hope and drive. That is nobody’s fault except those who choose to look away and do nothing, and that is why we need the Government to review reinstating the uplift to universal credit and extending it to legacy benefits. It is why carer’s allowance needs reforming, and it is why we need all the cost of living payments at once, now, as a circuit breaker.
I want to end by reflecting on the words of one of my constituents who got in touch with me over the winter. He is a 79-year-old gentleman who struggles to heat his home and who has a mixture of health difficulties. He said:
“Maybe it would be better if I wasn’t alive, for everyone else’s benefit.”
He cannot wait for April to October and then again for months for additional support, so with him in mind, I urge Members to support amendment 4.
The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)
It is a pleasure to see you chairing the Committee this afternoon, Dame Eleanor.
I thank hon. Members for the useful debate on Second Reading and I welcome this opportunity for a more detailed examination of the Bill in Committee. Clause 1 enables the Government to make three separate cost of living payments of £301, £300 and £299 to individuals or couples with a qualifying entitlement to an income-related social security benefit or tax credit. I have listened carefully to the hon. Member for North East Fife (Wendy Chamberlain). We have looked in the round at what we have done before, and I want to set out strongly to the Committee that we have worked very hard, whether on the household support fund or on this Bill, to support the most vulnerable through the really tough times that she described. I hope to give the Committee answers that will show that.
To be clear, the clause sets out that the qualifying days for each of the cost of living payments will be specified in secondary regulations, which will help to minimise work disincentives and fraud risks. In response to amendments 4, 5 and 6, it might be helpful if I clarify for the hon. Lady that the dates set out in clause 1 are backstop dates, meaning the latest possible qualification dates that could be set out in regulations. Bringing those dates forward could not achieve the amendment’s desired effect, although I understand the sentiment.
In any event, making all cost of living payments by 1 April 2023 would not support our ambition to spread the support through 2023 and into 2024. In fact, we have increased the number of payments from those made in 2022, having listened and engaged with the feedback from MPs across the land. This ensures that as many people as possible will qualify for a payment at some point, including those who become entitled to a qualifying benefit later in the year and those whose earnings fluctuate from month to month. Making all the payments in one lump sum would mean that more people miss out.
I understand the hon. Lady’s point, but I must be robust in saying that we simply cannot do what she suggests, as it runs contrary to what we should be doing in spreading out support for the most vulnerable. It is also the total opposite of the Select Committee’s request for more payments. I hope she understands that and will withdraw her amendment.
The Chairman of Ways and Means (Dame Eleanor Laing)
I call the shadow Minister.
Hywel Williams
May I state my delight at seeing you back in the Chair, Madam Deputy Speaker? I support new clause 14. My constituency has a very high level of self-employment, as I indicated in my intervention on the hon. Member for Bromley and Chislehurst (Sir Robert Neill), but it also has a large and active television industry, surprisingly to some people, considering that it is at the far end of Welsh-speaking Wales. Most of the TV is in Welsh. The new clause is on an issue that has an impact on us.
I mainly want to speak in favour of new clause 2, which is in the name of my hon. Friends in the Scottish National party, and in favour of the amendments that they have proposed. I support the requirement for an assessment of the latest cost of living support package that the Government have announced. The hon. Member for North East Fife (Wendy Chamberlain) said that the cost of living payments, although necessary, are a sticking-plaster, and I would repeat that. The payments are inferior to ensuring that benefits keep up with the real cost of living. The Institute for Fiscal Studies has shown that almost half of all families with three or more children on means-tested benefits would have been better off if the Government had not introduced cost of living payments, but had instead just ensured that benefits kept pace with inflation.
Benefit-receiving households where people were in receipt of disability benefits, or were in paid work, were less likely to have been properly compensated for the failure to uprate flat-rate cost of living payments in good time. That is another matter that needs to be looked at. I understand that the cost of living payments will result in the Government spending around £2 billion more on recipients of means-tested or disability benefits in 2023-24 than would have been needed simply to raise ordinary benefits in line with inflation. We really do need a full, detailed analysis by the Government, showing why they think that these ad-hoc payments are an appropriate way to distribute support fairly.
When it comes to living standards and social security, it is important that we recognise the differential effect across the nations of the UK—a point I referred to earlier. The Bevan Foundation’s latest research shows that even before the pandemic, around one in eight people lived in deep poverty in Wales. Around one in 30 has such low income that they live in destitution. New clause 2, proposed by my hon. Friends in the SNP, would require an analysis of the cost of living payments that considered the differing policy contexts in Wales, Scotland and Northern Ireland.
In Wales, we have the shameful record of having the highest proportion of children living in poverty of any nation in the UK. An analysis of how the cost of living payments will play out in Wales might reveal significant differences between the system in my country and the partially devolved benefits systems in Scotland and Northern Ireland. For instance, the Scottish child payment of £25 was a bold step towards tackling child poverty. It was one of the wider reforms that the IFS said was part of a trend in which the Scottish Government are using their devolved income tax and benefits powers to increase the progressivity of the tax and benefit system. That is something that we dearly need in Wales. Had we a similar payment in Wales, our tragically high levels of child poverty would surely be reduced. We also have a higher proportion of disabled people in Wales. An analysis by the disability equality charity Scope estimates that the extra costs faced by disabled people average £583 a month.
These are just a few examples showing why we need a Wales-specific analysis of the cost of living payments and how they interact with wider social security policy. Such an analysis would most certainly strengthen the argument for devolution of social security to Wales, I believe—understandably so, as that is my party’s policy. I am told that new clause 2 will not be pushed to a vote tonight, but I hope that the Government accept its logic, and provide for a proper analysis of changes to social security—an analysis that specifically takes into account the impact in Wales.
Mims Davies
It is a pleasure to respond to points made this evening. I thank all hon. Members for their contributions and discussions. I take this opportunity to fully, strongly assure all Members that policy officials in my team at DWP and I have looked roundly at the cliff edges and the challenges in getting these payments out swiftly. This will very much link to the household support fund, and the learnings from that. I can reassure the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), that there will be strong communications and engagement with local authorities for anybody who may be missing out. I hope that reassures my hon. Friends and colleagues.
Clause 2 sets out in more detail the eligibility criteria and the means test for the cost of living payments. I have covered much of clause 1, but I will come back to that briefly, if I may. The eligibility criteria, as we have heard, are similar to those in the Social Security (Additional Payments) Act 2022. We know from making those tens of millions of payments last year that keeping the policy simple is essential to delivering the payments successfully and to those most in need.
Mims Davies
I will just make a little progress, and I am sure the hon. Gentleman will want to jump in again shortly.
Ultimately, this is about parity between taxpayers and those people who are seeking support. As I say, we have targeted communications in place to make it clear to customers that our work coaches are there to help, whatever their circumstances. Whether it is getting advice, boosting people’s skills, or identifying opportunities for progression, anybody looking for support should speak to their work coach to access all the help that the DWP can offer.
David Linden
On amendment 2, the fact of the matter is that people have already been punished once by being sanctioned. This is a cost of living payment in recognition of inflation and high energy bills. Why on earth does the Minister think it is appropriate for 6,600 households to have been sanctioned and punished twice last year, and why is she allowing legislation to go forward that allows people to be punished twice again? That is the simple question.
Mims Davies
I thank the hon. Gentleman for making his points, and I simply do not agree with the point about punishment. Conditionality works on both sides, and I think it is important that people play their part. I will come on to further comments about that shortly.
Sally-Ann Hart (Hastings and Rye) (Con)
I welcome the additional payments, but Conservative Members know that employment is the best way out of poverty, and part of getting people back into employment is the conditionality of universal credit. One key benefit of universal credit is that there is a clear incentive for claimants to get into work, preventing them from becoming trapped in welfare, which then creates a dependency. I know the Minister will explain this to the Committee, but I want to stress the importance of this in Hastings and Rye where, at the moment, one in five people—20%—are on out-of-work benefits by choice. I reiterate the importance of conditionality in gaining employment.
Mims Davies
I thank my hon. Friend, and she makes the point extremely eloquently. This is much more about getting people into work and progressing; it is not about some punitive sanctions regime. This is about individuals being supported to best progress. On those people who engage with us during the qualifying period, as long as they attend, we will be supporting them if there is any particular reason that they cannot engage with us, if they have good cause.
Amendment 3 would extend the qualifying period for universal credit over two months rather than one. I understand the point made by my hon. Friend the Member for Amber Valley. Keeping the eligibility dates as close as possible to payment reduces administrative challenges such as out-of-date contact or bank details, and including two assessment periods extends the amount of time between eligibility and payment. [Interruption.] Sorry, but the hon. Member for East Dunbartonshire (Amy Callaghan) was speaking. In this time, individuals will have the opportunity to—
Mims Davies
I will let the hon. Lady intervene, because she is making a racket.
Amy Callaghan
On sanctions, I appreciate the Minister giving way, and I thought she might enjoy a second just to reflect on some of the guff that she has been spouting. [Interruption.] I would say “guff” is a suitable word. I am absolutely scunnered by what she is saying, and I know my constituents will be too, given the high rate of sanctions in my constituency.
Mims Davies
I thank the hon. Lady, and I think the point here is that this is not solely about sanctions. As we heard from my hon. Friend the Member for Peterborough (Paul Bristow), this is about getting cost of living payments to the people most in need at this challenging time. SNP Members are continually talking about sanctions, and never talking about getting people into work and progressing. It is a continual bleating, and I think it is right that the hon. Lady reassesses the word “guff” in relation to fairness between the taxpayer and those people who of course need to be engaging with work coaches. It is important that we know what is happening with our claimants. Leaving people to their own devices and not seeing what is going on is no way to support them, and I do hope that SNP Members will look at that.
I am going to talk a little more about sanction cases: 97.6% of sanctions in the quarter up to October 2022 were applied for failing to attend a mandatory appointment at a jobcentre. These cases can often be resolved quickly by engaging with claimants, so that they turn up to the next appointment. If someone with no universal credit award due to sanctions re-engages with us, they could get one of the later cost of living payments. That is why it was so important that we look at those hard edges, and as I have told the Committee, we did look at them.
Clause 3 sets out the eligibility criteria for each cost of living payment, based on the entitlement of child tax credit or working tax credit. This clause ensures that only individuals who have been paid tax credits by HMRC in respect of a day in the qualifying period will receive a cost of living payment. Clause 4 is applicable to those who are entitled to more than one social security benefit or tax credit, so that they do not get duplicate cost of living payments.
Clause 5, on the additional payment for disability, means that there is a cost of living payment of £150 for people who receive an eligible benefit, and this will enable us to make payments to up to 6 million people. I fully recognise that disabled people may be likely to face extra costs to deal with the impact of higher inflation, as we have heard in the Chamber this evening, so I am pleased that we can make this additional payment. I can also confirm that many will qualify for both the disability payment and means-tested benefits, to a maximum of £1,050 in total in what is covered by this Bill.
Let me make a little progress in trying to whip through the clauses. On the administration of the payments, clause 6 makes appropriate arrangements for the recovery of overpaid cost of living payments. This means that, where a cost of living payment is overpaid, including as a result of fraud, recovery rules that apply to its qualifying benefit will apply to the cost of living payment. Cost of living payments are paid automatically, without the need to claim, and there is no separate right of appeal against a decision on entitlement. Individuals can, of course, exercise their right of appeal against the decision on entitlement in relation to the relevant qualifying benefit.
Clause 7, on the co-operation between the Secretary of State and HMRC, allows for relevant data to be shared to ensure that cost of living payments reach the right people, and to avoid the duplication of payments. In the event that a payment is made by HMRC when it should have been made by the DWP, or the other way around, this clause allows us to treat the payment as if it was made by the correct Department, and it avoids the need for recovery of cost of living payments in these circumstances.
I am pleased to confirm to Members that clause 8—on payments to be disregarded for the purpose of tax and social security—ensures that any additional payments made are exempt from tax, will not affect a person’s entitlement to social security benefits or tax credits, and are not subject to the benefit cap. This means that every person who is entitled to a cost of living payment will receive every penny in their pockets.
Clause 9 amends the Social Security (Additional Payments) Act 2022 to ensure that provisions relating to overpayments and recovery of the qualifying disability benefit also apply to disability cost of living payments. This clause also amends regulations made by HMRC to simplify and clarify their position on the recovery of overpaid cost of living payments in the next financial year. These are essentially tidying-up provisions that modify existing legislation to clarify our policy intention.
Clause 10 sets out the definition and interpretation of certain terms used in the Bill. Clause 11 explains the procedure for the laying of regulations. Clause 12 defines the territorial extent of the Bill and specifies that its provisions extend to England, Wales, Scotland and now to Northern Ireland. These are standard clauses.
I will briefly respond to new clauses 1, 2, 3, 7, 8 and 14 laid respectively by the hon. Members for Glasgow East (David Linden), for Oldham East and Saddleworth (Debbie Abrahams) and for North East Fife (Wendy Chamberlain) and my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill).
New clause 1 appears to require the Government to publish analysis of the impact on household incomes of an earlier backstop date for the second and third qualifying day. New clauses 2, 3, 7, 8 and 14 require the Government to publish analysis on the impacts of the Bill on various groups, and I would point to a number of existing analytical publications. The Treasury has already published a distributional analysis of the autumn statement decisions; this shows the impact of the cost of living payments on households across the income distribution. Alongside this Bill, we have published an impact analysis which uses administrative data to look at the characteristics of those receiving the cost of living payments. This includes consideration of different characteristics such as age, gender and geographical location, including England, Scotland, Wales and Northern Ireland. My Department’s annual “Household below average income” publication looks at numbers in both relative and absolute low income and covers a wide range of characteristics, as I have mentioned.
I am pleased to say that my Department is planning an evaluation of the cost of living payments. In addition, we will consider what further information we can release in future. I hope, given the amount of data we are making available, hon. Members will withdraw these amendments.
Mims Davies
Finally, I would like to mention the minimum income floor, which I think my hon. Friend wants to raise. He has spoken this evening to the Minister for Employment about fluctuating earnings; I entirely understand the challenges that he has set forward in Committee and I know that he will be meeting the Minister. I worked in media where there are fluctuating earnings and fully understand the points he and others have made; we do not think, however, that it is right for the state to provide indefinite support through the welfare system for those who persistently declare low earnings from self-employment.
Sir Robert Neill
I am glad that the Minister recognises that that was not the point made in relation to creative industries. I am grateful for the constructive approach by her colleague the Minister for Employment towards a meeting. I hope that we can have a meeting with the relevant all-party groups so that Ministers can directly hear the views of those who work in the sector and, as suggested by the right hon. Member for Hayes and Harlington (John McDonnell), find a constructive way forward which we can all sign up to.
Mims Davies
I thank my hon. Friend and agree that it is right that we raise the situation of that sector. He has made his point and we have heard from other Members across the House about the same scenarios.
New clause 13 tabled by the hon. Member for North East Fife requires us to make all payments under this Act by 1 April. As I previously stated, we have deliberately staggered payments over the course of the next year to ensure that as many people as possible will qualify for a payment at some point. I therefore ask the hon. Member to withdraw the motion.
I think I have made all my points.
Wendy Chamberlain
I am grateful to the Minister for giving me a short time to reply. I accept that amendments 4, 5 and 6 are fairly blunt instruments, but during the debate I heard from both sides of the Committee, including the Government side, that we want to get money to people as soon as possible. The purpose of our amendments is to ensure we can do that. Giving people in need cash gives them dignity as well; it gives them choice, as I have heard in my role as co-chair of the all-party group on ending the need for food banks. The hon. Member for Glasgow East (David Linden) raised inflation, too, and giving people money now would help them ameliorate that. Amendment 4 merely asks the Government to make a payment at the start, rather than the end, of April, so I will not withdraw it.
Question put, That the amendment be made.
Mims Davies
I beg to move, That the Bill be now read the Third time.
The Bill legislates for two key elements of the substantial package of further support that the Chancellor announced in November. It builds on our £37 billion package to help with the cost of living last year, demonstrating our continued commitment to the most vulnerable during these challenging times. This hugely important legislation lays the foundations for cost of living payments to millions of households. It underpins the Government’s commitment to supporting people across the country who we know face increased financial pressures over the next year. We have legislated to uprate benefits and pensions by 10.1%, have extended the household support fund and are supporting people with energy costs.
I am delighted by the spirit in which the Bill has been received, for which I thank Members across the House. Frankly, I do not agree with the hon. Member for Glasgow East (David Linden) about sanctions and conditionality, but I appreciate his arguments; I can promise him that we always look at individual circumstances and are fully focused on positive engagement with our claimants and on always being fair to the taxpayer. Despite the spirit in which the hon. Member for North East Fife (Wendy Chamberlain) pressed her amendments in Committee, it simply was not possible to deliver what she asked, so I think we are absolutely right to have moved forward in a different way this evening.
I thank the hon. Member for Westminster North (Ms Buck) for raising issues around larger families. She feels that perhaps there could be a better solution. I can say honestly that we looked very strongly at whether there were any better solutions, but unfortunately we could not find them. I take her point, however, and fully appreciate the points about the flat rate with respect to larger families.
Let me reiterate that these payments are being made through the DWP’s ad hoc payments system, which does have some limitations. For instance, it can only make one type of payment of a single value at a time. However, for the families whom the hon. Lady describes who need additional help, we are extending the household support fund in England throughout 2023-24, while the devolved Administrations will receive Barnett consequentials to spend at their discretion, with the benefit of their local knowledge. I know that Opposition Members feel strongly about that. I ask all Members to look at the benefits calculator on gov.uk and at the Help for Households website, which can help all their constituents.
My right hon. Friend the Prime Minister has set out the Government’s priority, which is to see inflation halved this year. It is, of course, good news that we have already seen small decreases, with greater decreases forecast for later this year. However, we have recognised the need to act to support people now, which is why, through this Bill alone, we are providing additional support of up to £1,050 for low-income and vulnerable households across the UK. Last year we delivered, successfully and at an unparalleled pace, tens of millions of payments to people throughout the country. We were able to achieve that because we deliberately kept the eligibility criteria for the payments as simple as possible, avoiding the complexity that could lead to delays and unacceptable levels of fraud or, indeed, error. These are the key principles that have guided our approach to the Bill.
I thank all Members for their contributions to, and engagement with, today’s debate and the Second Reading debate last month. I am grateful to Opposition Members who do not agree with the finer detail of the Bill for supporting the overall package that the Government have presented to Parliament. We have looked at all the feedback about how people can best be supported through difficult times. I am grateful, in particular, to the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), for his measured interventions and his scrutiny of the Bill. I pay tribute to my policy officials—the Bill team—for making all these key payments possible, and for all the other work that they have done.
Let me end by underlining the point made earlier by my hon. Friend the Member for Peterborough (Paul Bristow), who is not currently in the Chamber. The Bill will enable the Government to start making additional payments soon to millions of families throughout the country to help them to become better off, and I commend it to the House.
Social Security (Additional Payments) (No. 2) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateMonday 20th March 2023
(1 year, 9 months ago)
Lords ChamberSocial Security (Additional Payments) Act 2023 Read Hansard Text Watch Debate Amendment Paper: Committee of the whole House Amendments as at 6 March 2023 - (6 Mar 2023)
This text is a record of ministerial contributions to a debate held as part of the Social Security (Additional Payments) Act 2023 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
I am delighted that we have the opportunity today to discuss this important legislation, which will make a huge difference to millions of families. This Government fully understand the pressures that households across the UK are experiencing as we continue to face the challenges of high inflation brought about by global issues such as the war in Ukraine and the legacy of Covid. The Prime Minister has set out our ambition to see inflation halved this year, easing cost of living pressures and increasing financial security for families. The Office for Budget Responsibility is now forecasting that CPI inflation will fall to 2.9% by the end of 2023.
Nevertheless, short-term challenges remain, so it is vital that the Government continue to take a responsible and disciplined approach to public spending while supporting vulnerable people and protecting vital public services. This is why we are taking this further decisive action, as announced by the Chancellor last November, to help families through this difficult period. The measures we have taken over the last year demonstrate that this is a Government who will always protect those who are the most vulnerable to changing economic conditions.
To give some context before I turn to the specific provisions of the Bill, it is our firm belief that the best way to help people to improve their family’s financial circumstances is to support them to move into and progress in work. The measures we took to protect millions of jobs over the pandemic are just one example of the extraordinary interventions by this Government to maintain a strong labour market. There are almost 1 million fewer workless households compared with 2010, and unemployment is close to a 50-year low at 3.7%. But with 1.12 million vacancies, our focus remains firmly on helping people take advantage of these opportunities. The core support provided in our jobcentres, including the new in-work progression offer, builds on these priorities.
Noble Lords will have heard the Chancellor announce a range of employment measures in last week’s Budget that will provide further support to help people enter work and increase their working hours. This includes extending childcare support so that eligible working parents in England will be able to access 30 hours of free childcare per week for 38 weeks of the year from when their child is nine months old. For those on universal credit, childcare costs will be paid in advance when parents move into work or increase their hours, with an increase to the childcare cap to £951 for one child and £1,630 for two children.
To further support low-paid workers, we are making the largest ever cash increase to the national living wage from April: an increase of 9.7% to £10.42 an hour. This represents an increase of over £1,600 in the annual earnings of a full-time worker. Also, from April more than 10 million working-age families will see their benefit payments rise by 10.1%, nearly 12 million pensioners will see a 10.1% increase to their state pension, and we will increase the benefit cap levels by 10.1%. Helping people to improve their living standards through work will always be our overriding priority, but it is also right in these challenging times for the Government to step in and provide additional support, especially for our most vulnerable citizens.
In 2022-23 our substantial package of cost of living support provided help through the energy price guarantee, the household support fund and the initial tranche of cost of living payments for those on eligible means-tested and disability benefits. The energy price guarantee offered much-needed support for rising energy bills. As noble Lords will have heard last week, the Chancellor announced that we will maintain the energy price guarantee at £2,500 for a further three months from April 2023. We made over 30 million cost of living payments to those who needed them most in 2022: £650 was made available to households on means-tested benefits; £150 payments were made available to those on eligible disability benefits; and there was a £300 top-up to winter fuel payments to more than 8 million pensioner households.
The household support fund, distributed by local authorities in England to help households with the cost of essentials, has been providing support since 2021. We have announced a further extension for the next financial year. Local authorities have accountability for supporting households in the most need, particularly those who may not be eligible for the other support the Government have recently made available. The devolved Administrations will receive Barnett consequentials to spend at their discretion and with their local knowledge.
I turn now to the specific details of the Bill. Noble Lords will note that this is a narrowly defined Bill with one very simple aim: to get financial support to those most in need. It gives the Government powers to make vital cost of living payments of up to £900 for more than 8 million households on eligible means-tested benefits and £150 payments for more than 6 million people on qualifying disability benefits—worth around £8.6 billion in 2023-24. These are tax free and not subject to the benefit cap, so people will receive every penny of these payments, which will be made automatically, so no one will need to apply.
These payments will be made across the UK. We are legislating on behalf of Northern Ireland, as we did with the 2022 payments; this approach has been noted in an exchange of letter by the respective Permanent Secretaries. The Secretary of State has obtained formal Cabinet clearance to legislate without the consent of the Northern Ireland Assembly, given that there is currently no sitting Assembly or caretaker Minister for Communities.
This Bill replicates the successful and straightforward approach that enabled the Government to make cost of living payments this financial year while maintaining core benefit delivery. We recognise that keeping the policy simple means that some people may miss out. This is one of the reasons for making three separate payments: to reduce the chance of somebody missing out completely. There is also the wider package of support that I have touched on already, including the household support fund.
These payments are a crucial measure of support, demonstrating this Government’s commitment to helping those most in need. This Bill gives much-needed financial security and support for the most vulnerable during this period of higher inflation, through hundreds of pounds given directly to millions of families around the United Kingdom, and I commend it the House.
Viscount Younger of Leckie (Con)
My Lords, I thank all noble Lords for their contribution to today’s debate. This is significant legislation that will provide support to low-income and vulnerable households across the country, and I am delighted at the progress we have made today to move this Bill forward. I start by echoing the words of the noble Baroness, Lady Thornton, about the noble Baroness, Lady Sherlock; I too wish her a very swift return.
I am grateful for the support—perhaps qualified support would be a better way of putting it—from Peers for today’s Bill. The cost of living payments we are providing for will make a significant difference to the lives of low-income families across the country. Millions of people on means-tested benefits will soon gain from the first payment, in the spring. I will pick up on the point made by the noble Lord, Lord Shipley, and the noble Baroness, Lady Lister, as to when the first payments will be made. They will both be disappointed because, although I cannot give more detail today, I can assure both Peers that we will release details of when we plan to make payments to the vast majority of recipients on GOV.UK when these are available. Perhaps I can be helpful by saying that we aim to do this very soon.
I recognise that we may not always agree on the detailed design of the payments, but I know that we are united on the need to take action to support people with the increased costs of living. Our priority has always been to safeguard the swift and accurate delivery of these payments to those who need them. I will pick up on some points made by several Peers, in particular the noble Baroness, Lady Thornton, who asked about the adequacy of what we are doing. She will know that inflation is forecast to remain high in the next few months, which means that many people will continue to need additional support with the cost of essentials. The Bill will enable the delivery of very significant additional support worth almost £9 billion in 2023-24.
It is important to remember that these payments are just one element of the measures announced by the Chancellor in November and in the Budget last week. We intend to uprate benefits and the state pension by 10.1% from April and to increase the benefit cap by 10.1%, as the House will know. In the Spring Budget the Chancellor set out a package of measures designed to support people to enter work and increase their working hours, including an increase in childcare support and doing more to close the disability employment gap, which I alluded to earlier this afternoon.
The noble Baroness, Lady Thornton, raised the £900 payment, and I want to follow up on that. The cost of living payments are one part of the package of support, as I have mentioned, which includes, as I have not said yet, maintaining the energy price guarantee at £2,500 for a further three months from April, and the extension, as mentioned earlier, of the household support fund.
The noble Lord, Lord Shipley, asked an important question about those with fluctuating earnings and who are assessed monthly. Whichever eligibility period is chosen, there will always be some people who will not qualify during that period. That is why we decided to deliver the cost of living payments for means-tested benefit claimants in three separate payments over the 2023-24 period, to reduce the chance of households missing out altogether, which is a theme I may well return to.
We have carefully considered the position of those with fluctuating earnings. Unfortunately, it is not feasible to distinguish between people with permanent changes to their earnings and those with temporary fluctuations due to non-monthly earnings; for example, those who are paid on a four-weekly basis.
My noble friend Lord Dundee and the noble Baroness, Lady Thornton, raised a number of issues relating to the payments. On the flat-rate payments, it may be helpful for me to explain that these payments are being made using the department’s ad hoc payment system, which has some limitations, including that it can make only one payment “type” at a time, of a single value. In practice, staggering payments according to household size would be administratively challenging and would delay making payments to millions of vulnerable people. Of course, families on means-tested benefits will gain from our planned uprating by 10.1% from April. This includes families who are subject to the benefit cap, which is also increasing by 10.1%, as I mentioned earlier. As I have said, for families who need additional help, we are extending the household support fund in England throughout 2023-24.
I will touch briefly on carers, raised, I believe, by the noble Baroness, Lady Lister. I, too, recognise the vital contribution made by those who care for some of the most vulnerable in our society. We are focusing support on those carers who need it most. Around 480,000 carer households on universal credit already receive around an extra £2,000 a year through the carer element. I therefore encourage all carers on a low income to check that they have applied for all the benefits they are entitled to, including means-tested support. Although carer’s allowance is not a means-tested benefit, we know that 60% of working-age carers who receive carer’s allowance also claim an income-related benefit; this means that they should also be eligible for the cost of living payment.
The noble Baroness, Lady Lister, raised the issue of communication. The household support fund guidance makes it mandatory for local authorities to make public their plans for the scheme, including how and when they will deliver the application-based element of their provision. As she may know already, it is also mandatory for local authorities to establish a dedicated and accessible webpage on their main authority website which sets out the details of their local scheme. I hope this helps the noble Baroness.
On the point raised by the noble Baroness, Lady Lister, and alluded to by the noble Baroness, Lady Thornton, about addressing the so-called hard edges, noble Lords said that we have had plenty of time. They will know that in 2022, we delivered tens of millions of payments successfully by keeping the rules for these payments as simple as possible. Although we have carefully considered our position on these issues for 2023-24, any major changes would introduce complexity, risking delays to payments, or introduce unacceptable levels of fraud or error. That is a really important point to make.
The noble Baroness, Lady Lister, stated that our support is too late. I acknowledge that many families have struggled this financial year with the 3.1% uprating, but the Government have made substantial support available to households this winter. This includes, as mentioned earlier: the energy price guarantee, which has been extended; the £400 discount provided through the energy bills support scheme; the £324 means-tested cost of living payment made in November; the £300 top-up to winter fuel payments; and, as mentioned—I will mention it once more—the household support fund.
The noble Baroness, Lady Lister, raised some other points about the payments. I think I have answered this point, but there is a very good reason why we are splitting the three payments for people on means-tested benefits, which is—as I mentioned to the noble Lord, Lord Shipley—to ensure that we cover those who are missing out. That is an incredibly important point to make.
The noble Baroness, Lady Lister, asked about extending the eligibility period. Extending the window extends the amount of time between eligibility and payment. In this period, some people will experience changes of circumstance, including some who will permanently increase their earnings and will now be ineligible for means-tested benefits unless they are in need of support. That is the answer I would give to her.
I have answered the question on flat-rate payments.
The noble Baroness, Lady Lister, asked why we are excluding those with no universal credit award due to a sanction; I think that the noble Lord, Lord Shipley, also raised this issue. They will both know that people are sanctioned only if they fail, without good reason, to meet the conditions that they agreed to. These sanctions can often be resolved quickly by claimants getting in touch and attending their next appointment. If someone with no universal credit award due to a sanction re-engages with us, they may get one of the later cost of living payments. I should make the case, however, that it is down to individuals to be in touch on a regular basis and to make sure that they can keep their appointments.
The noble Baroness, Lady Lister, asked about the evaluation. I know that she has asked about it before in previous debates in this House; I note her eagerness to see it. We are still in the planning stages of our evaluation. We will come back to the House as soon as possible with further detail; I am afraid that that is the very best I can do this evening.
My noble friend Lord Dundee and the noble Baroness, Lady Lister, asked about splitting the payments; my noble friend indicated that this was suggested by the Treasury Select Committee. I may have covered this earlier, but we need to balance spreading support across the year with ensuring that we have enough time to deliver each payment without compromising core benefit delivery. As mentioned earlier, these payments are being made using our ad hoc payment system; that is perhaps a different way of saying the same thing, but I appreciate noble Lords’ questions.
I hope that I have covered the majority of the questions that were asked. As ever, I will look closely at Hansard to make sure, as I always like to do, that answers have been given to all the points that were raised.
To conclude, let me say that, as I said at the outset, I believe that this Bill provides substantial cost of living support, as announced by the Government over the past year, and the additional support announced at the Budget. It demonstrates our ongoing commitment to supporting the most vulnerable in our society. I am very pleased that we can now move quickly to start making these vital payments. Once again, I commend this Bill to the House.