Work and Pensions

Monday 22nd October 2018 Ministerial Corrections

Employment and Support Allowance Underpayments

The following is an extract from the Urgent Question on Employment and Support Allowance Underpayments on Thursday 18 October 2018.

[Ruth George (High Peak) (Lab)]

I apologise, Mr Deputy Speaker, for having to head off to the Select Committee meeting in a moment.

Will the Minister confirm how much of the £1 billion underpayment now being cited is due to payments made before October 2014, thanks to the Child Poverty Action Group’s successful court action, and thanks only to that? When Her Majesty’s Revenue and Customs makes someone overpay tax going back years due to official error, they are paid interest and often compensation. Will the Minister confirm that these ESA recipients, who are often in a much worse position than taxpayers, will receive similar interest payments backdated to when their payments should have been made?

[Sarah Newton]

I thank the hon. Lady for that question. I know that she does fantastic work on the Work and Pensions Committee, and no doubt we will discuss this further at the Committee.

Let us be really clear about what happened. The advice that the Department got was that section 27 of the Social Security Act 1998 applied. That was why we felt we had to make the decision to back-pay to 2014. When additional information came forward from the National Audit Office and the Child Poverty Action Group about official error, the Secretary of State took the decision that, of course, we must do what the law says and go right back to the point of conversion. It was not in any way that the Government were trying not to do the right thing. We have proactively been utterly transparent and open with the House about this error, and we want to fix it as soon as possible.

The hon. Lady asked about the two phases. The first group of people that we are looking at date back to pre-2014 and the second group are from 2014. We have started to make payments to both groups of people, and so far we have paid out £420 million to the pre-2014 group. [Official Report, 18 October 2018, Vol. 647, c.793.]

Letter of correction from the Minister for Disabled People, Health and Work, the hon. Member for Truro and Falmouth (Sarah Newton):

An error has been identified in my response to the hon. Member for High Peak (Ruth George).

The correct response should have been:

[Sarah Newton]

The hon. Lady asked about the two phases. The first group of people that we are looking at date back to pre-2014 and the second group are from 2014. We have started to make payments to both groups of people, and we will pay out £420 million to the pre-2014 group.