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Baroness Bennett of Manor Castle
To ask Her Majesty’s Government what assessment they have made of the number of people who will be (1) living in poverty, or (2) unable to meet their basic needs, as a result of COVID-19; and what steps they are taking to support such people.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank everyone who has put their name down to speak in this debate and apologise that the time available is so short. I hope this is something that the Procedure Committee will look at.
In the two weeks since we have returned from recess, your Lordships’ House has heard many times about the massive, far-reaching schemes that the Government have introduced in response to the Covid-19 epidemic, as we did in this morning’s government response to my Oral Question about growth dependency. Most of these schemes were introduced when both Houses were in recess, but we have now had opportunities to subject them to scrutiny and to share concerns that noble Lords and MPs have been hearing from members of the public, many of them desperate and frightened, who have pointed to the holes that the rules of the schemes have left many in. I am sure that in this debate we will hear many more case studies.
In the other place, my honourable friend Caroline Lucas has been pointing out how the scheme for the self-employed has left out those who took pay in the form of dividends, those whose self-employment was recent, and those who were self-employed part-time. I have been contacted by many—identified by #newstartersfurlough —who started a job after 28 February, and so their employers are not able to apply for the 80% wage subsidy for them. Can the Minister tell me how many people the Government know, or estimate, are in those two groups that are missing out on help?
There are also, no doubt, huge numbers of people who were on the minimum wage—which is not sufficient to live on, as the Living Wage Foundation makes clear—and are now on 80% of an already inadequate income, their employer failing to top up the Government’s furlough payments even if, as in the case of giant multinational companies, they could well afford to do so. Can the Minister tell me how many are so affected?
I acknowledge that gaps, such as those in the self-employed and new starter schemes, were inevitable, particularly given the speed with which these schemes had to be established. However, we might want to think about having prepared schemes for times of crisis in future. Perhaps, rather than abolishing these schemes when possible, the Minister could commit the Government to look at mothballing them and having the computer systems and legal frameworks held on standby. We live in an age of shocks—climatic, financial and health; we cannot know when the next one will strike, only that it will. Putting resilience—the ability to deal with them and to ensure that households are able to deal with them—at the centre of every government policy is essential.
For the immediate future, it is important that we know how large the gaps are—something that only the Government can establish. I hope the Government already have plans to adapt the existing schemes and slash the numbers falling through the gaps. That is one way in which the Minister could perhaps answer the second part of my Question, about how they plan to help those now without adequate, or even any, income. However many patches are laid over the gaps in these schemes, some people will always fall through; that is the nature of conditionality. If one of the conditions is having to apply, that is one way in which significant numbers will always miss out. I cite the example of pension credit, for which it is estimated that 15% of eligible pensioners do not apply, leaving them living—by definition—on tiny incomes.
I can already safely speculate that the Minister will say, “Ah, but there’s universal credit”—and yes, there is. On other occasions, your Lordships’ House has heard of its many limits, horrors and inadequacies, and I am not aiming to restart that debate today. At least with all sanctions suspended—as I understand it; perhaps the Minister can confirm that—some of its worst horrors, of people being left absolutely penniless through no avoidable fault of their own, are not currently occurring. I hope the Minister will also acknowledge that its level will not meet the commitments of many people who, suddenly and entirely unpredictably, have only it to rely on. I hope that the Minister will tell us today that the Government plan to make the ending of universal credit sanctions a permanent state of affairs. Taking away an already inadequate level of income and leaving people penniless for months or years is no way for a society to treat anybody.
Again, we have the problem of conditionality—rules being applied that some are unable to meet. In recent years, we have seen the level of conditionality in social security tightened, and tightened again. We have seen our politics dominated by the disgraceful and false distinction between so-called strivers and skivers, perhaps falling to its greatest depths with a former Chancellor’s obsession with the setting of people’s window blinds. That conditionality has led many to miss out on money they desperately need and should have a right to. In the age of Covid-19, that cannot be allowed to continue. That is why, as I pre-warned the Minister, I ask her whether the Government are considering a universal basic income—a payment going to every member of this society as part of the answer to the second part of my Question. Only an unconditional, universal payment can ensure that no member of our society is left penniless, in a Dickensian world of want and misery.
I have to tell the House that I am not co-ordinating this call with the First Minister of Scotland, Nicola Sturgeon, who yesterday told her House that Covid-19 makes
“the case for a universal basic income stronger than ever”
and that she would be putting that to our Prime Minister. That coincidence reflects calls from an increasing number of directions, party political and not, for a universal basic income. An unconditional regular payment at an adequate level, going to every woman, man and child in our society, could ensure that no one is left in poverty or unable to meet their basic needs. Surely, in a society that has the capacity to deliver it, that is a basic condition to call it decent and to fit the categorisation of a human rights-respecting society.
I hope that no Member of your Lordships’ House would deny the right to life, yet we do not currently guarantee the means to deliver life: for people to put food on the table and keep a roof over their head. Charity, particularly in the form of food banks, has increasingly been left to struggle to provide that most fundamental human necessity. In the age of Covid-19, of course, that is even more difficult.
Finally, today, much of the debate around Covid-19 is about ways out of the lockdown and this debate must look forward to that period. Initial government schemes to provide people with cash have been extended and are likely to be extended again but, at some time in the not too distant future, they will start to be unwound. Inevitably, that will mean that more gaps appear in the safety net, more people will not meet the changed criteria, or their circumstances will change, and they will be left in poverty without the means to meet their basic needs.
I am, and will remain, a proponent of a permanent universal basic income. One possibility for the intermediate period, to ensure that no one is left to the vagaries of conditionality and needing to rely on the stretched resources of charity and voluntary help, is a “recovery basic income”. I am aware of two such worked-through proposals, one from the UBI Lab Network, the other from Malcolm Torry of the Citizen’s Basic Income Trust and the London School of Economics. Again, I have shared these with the noble Baroness and, time allowing, I hope she might offer some thoughts on both the principle of a recovery basic income and the proposals—and maybe even on a general universal basic income. I also look forward to hearing the thoughts of the many other noble Lords taking part in this debate.
Baroness Drake (Lab)
My Lords, as millions experience their employers’ struggle to keep businesses afloat and workers employed, the state has deployed radical measures on a scale unimaginable a few weeks ago. But Governments will continue to face difficult decisions, even when the virus is under control—trade-offs and ethical choices of lasting importance. As Paul Johnson of the IFS observed:
“We are not all in this together when it comes to the social and economic consequences of the virus and our response to it.”
This QSD poses the ethical choices in addressing poverty going forward. This crisis provides compelling evidence for mutual insurance, an effective welfare system and collective economic security. As a country, we will have to reappraise our values and reflect on what we expect from private and public institutions as we rebuild our economy. We need a clear framework for decision-making, not only opinions about the right decision. I ask the Minister: do the Government accept the need for such reflection and will they publish a framework for such decision-making?
Lord Oates (LD)
My Lords, it is unlikely that we will know the full scale of the economic impact of Covid-19 for some time, but it is already clear that its consequences will be felt most profoundly by those on the lowest incomes and that many who have hitherto led relatively comfortable lives will be pushed into hardship and poverty.
It makes a mockery of parliamentary scrutiny that we have just one minute to speak on such an important subject, and it shows great disrespect on the part of the Government to those facing the most challenging circumstances in our country that they have not granted the time needed for a debate of this sort.
Given my limited time, I will focus on universal credit. Does the Minister recognise that, unless UC advance payments are shifted from loans to grants, a debt crisis will be imposed on already impoverished families? Will she urge her colleagues to announce that they will write off all advance payment loans during this period? Finally, will the Minister commit the Government to urgently scheduling a substantive debate on these issues, where they can be considered with the seriousness that they deserve?
Lord Young of Cookham (Con)
My Lords, it is difficult to find any silver lining in this corona-cloud, but the response to Louise Casey’s request for help for some of the poorest in our society, namely the rough sleepers, is one such example. The target to end rough sleeping has been reduced from five years to five days. Some 5,400 rough sleepers have been rehoused, thanks to heroic efforts by voluntary organisations and local authorities, including St Mungo’s, Thames Reach, Look Ahead and the Passage, with Crisis providing logistical support, provisions and volunteers.
The challenge now is, first, to find move-on accommodation for those rough sleepers, with appropriate support where necessary so that they do not return to the streets and, secondly, to support initiatives such as No Second Night Out to prevent a new generation taking to the streets. If we can achieve those two objectives, something good will have come from this pandemic.
Lord Best (CB)
Three other housing issues arise from the Covid-19 crisis. The first is design. We can see now the horrendous problems of living in overcrowded conditions without a garden or even a balcony. We need to look at again at space standards in new homes and the enforcement of habitable conditions in existing properties.
The second is debt, especially rent arrears. We must sustain extended debt advice services and end heavy-handed collection processes that make the situation worse.
The third is the dependency on a fragile and fragmented private rented sector, where the potential evictions of those with arrears could magnify homelessness and harm. A massive increase in social housing provision is essential to achieve real affordability and security. More immediately, the Government were right to introduce a ban on evictions, but that measure runs for only three months. Will the Government accelerate their commitment to increased security to prevent a devastating wave of precipitous evictions?
The Lord Bishop of Durham
My Lords, the Covid-19 crisis has amplified child poverty. The welcome measures that raised UC and increased LHA show that radical government action is possible, but they have highlighted two policies as unfair. The first is the two-child limit. Recent events demonstrate life’s unpredictability. It exposes the flawed view of how the two-child limit policy was set up. Children should not be penalised for changing circumstances. Up to 60,000 families may find themselves affected in the coming weeks. Next week, the Church of England and CPAG will publish a report exploring the policy’s impact on these families.
Secondly, many will not benefit from welfare increases because of the benefit cap. Current constraints mean that parents cannot escape by increasing working hours, finding a new job or moving into cheaper housing. Families are trapped in poverty. We must prioritise the poorest, with a compassionate, just safety net. Will Her Majesty’s Government consider suspending the two-child limit and benefit cap at least for the duration of the pandemic?
Baroness Warwick of Undercliffe (Lab)
My Lords, I declare my interest as chair of the National Housing Federation, representing not-for-profit housing associations in England. This crisis cannot be allowed to entrench inequalities for generations to come. The OBR predicts that the crisis will cause the UK economy to shrink by 35%, with 2 million job losses—a potential economic disaster.
There are so many examples of organisations, including housing associations, working flat out to provide immediate support to soften the financial impact of this pandemic, but some people will still be in dire hardship. The Government have acted swiftly to secure incomes in the short term, but Ministers must do more to support people on the very lowest incomes.
I have two questions: will the Minister commit to suspending the housing benefit cap, and, echoing the noble Lord, Lord Young of Cookham, to ensuring that all rough sleepers have a permanent home once social distancing is ended?
Baroness Randerson (LD)
My Lords, a lot of attention has been paid to reduced incomes, but little attention has been given to the likelihood of increases to the cost of living. There will be supply interruptions as the virus hits countries around the world and shortages lead to price rises. We import more than half our food, so my plea to the Government is that ferry companies and the haulage industry need better and dependable support so that goods keep flowing.
Even food produced here is affected because of the traditional reliance on foreign labour to harvest crops. We already faced a shortage of pickers this season but, because of Brexit and now this pandemic, the situation is critical. I hope the Government’s pleas are answered and lots of British people come forward to help, but food prices are still likely to rise.
Baroness Verma (Con)
My Lords, my comments will focus on the plight of the low-paid or minimum-wage workers who have been furloughed and are in receipt of 80% of their monthly pay, as the businesses they work for are in government lockdown. As other noble Lords have said, these families face increased energy, electricity and food costs as they have to stay home during lockdown. The Government have made millions of pounds of extra funding available to local authorities. Will my noble friend the Minister consider whether those who are not in receipt of any benefit but who are in financial crisis could receive help with council tax payments, prescription and dental costs, and the educational tools that their children need while they are away from school?
Many small businesses are also facing severe difficulties and threats from bailiffs and yet are being denied grant support from their local authorities. Can my noble friend confirm that all authorities are having to provide audit trails to the Government for the extra funding they are receiving?
The Deputy Speaker (Lord Alderdice) (LD)
I call the noble Lord, Lord Bird. He is not there. The noble Baroness, Lady Ritchie of Downpatrick.
Baroness Ritchie of Downpatrick (Non-Afl)
My Lords, this debate presents an opportunity, with all the challenges of the Covid pandemic, for the Government to reshape the debate around welfare with a view to reducing poverty. There is no doubt that poverty will be deepened by the Covid pandemic, but it is important that the language and the legislation are changed from those of austerity to those of compassion, fairness, equality and social justice. Can the Minister say what plans the Government have to change and reformulate the policy to one of fairness, equality and compassion, which ensures that there is a reduction in poverty?
Baroness Falkner of Margravine (Non-Afl)
My Lords, universal basic income has been mentioned, but it is a panacea which is at best inadequate to meet people’s needs, and in the current financial state in which we find ourselves, with a forecast deficit of 20% of GDP and debt rising to more than 100% of GDP this year, it is completely unaffordable. Therefore, the immediate answer must necessarily be to raise taxes. I urge the Government to look at the experience of the German solidarity tax, which was brought in in 1991 to pay for unification. The only caveat is that if the Government bring in a tax, it must be short-term and time-limited as a solidarity tax, and it must be progressive: the burden must fall on those with the broadest shoulders—in other words, the higher-rate taxpayers. Will the Minister therefore agree to look beyond Treasury orthodoxy to see what other countries are doing successfully to pay for this kind of enormous fiscal and monetary shock?
Baroness Bowles of Berkhamsted (LD)
My Lords, we went into this crisis with a chronic savings deficit, many households having no savings at all, and the poorest are unable to make cutbacks, with the shopping basket for essentials having already risen by some 5%. Universal credit is the backstop for more than 1 million people left out of other measures. For them and generally, encouragement to work is an impossible mantra right now, with lost jobs, lost hours and no childcare. This crucial backstop deserves more changes: raising or removing the benefit cap so that everyone can get the increases already announced; removing the two-child limit while children are at home missing school meals; suspending repayment of past overpayment—now is not the time for that; a quick “silver hello” initial payment; and recognising the need for forbearance periods longer than three months for arrears.
Lord Woolley of Woodford (CB)
My Lords, according to the Government’s data and ethnicity facts and figures, Asian and black households are more likely to live in poverty and most likely to live in persistent poverty. During 10 years of austerity, BAME groups were particularly hard hit by high levels of unemployment and deprivation. Can we have a Covid-19 race equality strategy to ensure that this disproportionate impact does not occur this time round?
Baroness Stroud (Con)
My Lords, we know that, even before the Covid-19 crisis, families across the UK were struggling to make ends meet, with 14.3 million people living in poverty, around half of whom were living in persistent poverty. We also know that those most likely to be in poverty are disabled families, families in which no one works and families in which those in work are in low-paid, insecure work, or work with relatively few hours.
Research on the impact of the Covid-19 crisis shows that these are the very people who could be hit hardest by the economic crisis that has accompanied the personal and social impacts of coronavirus. For example, overall, more than one in four households say that the coronavirus crisis is impacting their finances. Those on the lowest pay are often the least able to work from home. Compared with high earners, low earners are seven times more likely to have worked in a sector that is now shut down.
Despite the Government’s best efforts through support for businesses, which have been heroic, many hundreds of thousands of people have lost their jobs and begun to claim benefits. That is why I encourage the Government to develop a comprehensive anti-poverty strategy that would of course look at finances but also more broadly at the lived experience. Will my noble friend the Minister comment on whether she believes that a comprehensive anti-poverty strategy would amplify and cement the positive steps forward that could be taken post crisis?
Lord Liddle (Lab)
My Lords, the noble Baroness, Lady Bennett, is right to ask the questions that she has, but there are far deeper questions about this crisis. We will not see a quick recovery, but rather a lot of firms going bust and, unfortunately, a rising and probably quite high level of unemployment. This calls into question the philosophy of universal credit. I remember that George Osborne justified his toughness on welfare payments on the grounds that work was booming and people would benefit from the higher national living wage. Conditionality is justified only when there is a booming labour market, but we will not have that.
We should look at a full-scale comprehensive review, a new Beveridge, for our social welfare safety net. The Minister has an exemplary record of helping the vulnerable and young unemployed, but at this moment, we need to open up a much bigger debate.
Baroness Scott of Bybrook (Con)
My Lords, we are slipping on the time. Could noble Lords please keep to time?
Baroness Meacher (CB)
My Lords, a vast, hidden nightmare has developed for those who have suddenly found themselves penniless. I have five questions for the Minister.
First, what is the average waiting time for the very first advances to arrive from the date of application? Secondly, in these exceptional times, does the Minister agree that entitlement to universal credit should apply from day one of the application? Thirdly, in her letter, the Minister referred to the DWP addressing “system bottlenecks”. Will these simplifications of the system continue after Covid-19? Fourthly, the Digidentity system was identified by the Commons Select Committee as an absolute disaster that is delaying everything. Can the Minister assure the House that the issues will be addressed? Fifthly and finally, will she please inform officials that tax credit recipients who suddenly have no income should nevertheless continue to claim tax credits, or they could finish up with nothing?
Lord Randall of Uxbridge (Con)
My Lords, I declare my interest as a vice-chairman of trustees of the Human Trafficking Foundation.
Some of the most vulnerable people in our communities are the victims of modern slavery, not only in shelters but in outreach accommodation. Many will have little or no working knowledge of English or access to the internet, which is so vital throughout this crisis, so they are at heightened risk of contracting this disease.
Asylum seekers also fall into this highly vulnerable category. These are people who feel extremely isolated and scared. Charities have been at the forefront in helping during these unprecedented times. I heard of one house in which eight asylum seekers were sharing one bar of soap. I am pleased to say that through the generosity of Unilever, 3,500 bars of soap and a large quantity of disinfectant are being distributed imminently to virtually all asylum seekers in Liverpool, with the help of Asylum Link Merseyside and Liverpool City Council, all of it co-ordinated by the indefatigable Anthony Steen, who was a Member of the other place for 36 years. He is currently chairman of Task Force Trust and the Human Trafficking Foundation. This emergency is not going away soon, so I urge the Minister to consider what further help can be given to both these extremely vulnerable categories.
Lord Adonis (Lab)
My Lords, nothing intensifies poverty and passes it from one generation to the next more than poor education. One of the acutely concerning aspects of this crisis is the suspension of the physical presence of all our schools. Evidence is already emerging of big disparities of class in the online education that is being provided as the crisis passes from week to week. Obviously, to some extent this is inevitable, given the emergency that has developed, but the Government should be putting in place arrangements to ensure that proper education is being provided during this crisis.
Can I ask the Minister two specific questions? First, what advice and regulations are being put in place on the minimum provisions that state schools are expected to make in respect of education? There is evidence that a lot of state schools are not even providing day-by-day online classes. That is unacceptable. Secondly, what monitoring is taking place? Can the Government make available statistics on what is happening with regard to education? Ofsted has suspended all its school inspections. Is it being applied to the task of monitoring and supporting schools in the provision of a basic education during this crisis?
Baroness Coussins (CB)
My Lords, I declare my interest as president of the Money Advice Trust, the charity that runs National Debtline.
One concern is council tax. Even before Covid-19, 30% of callers to National Debtline were in arrears. Some councils have announced help for people who are struggling to pay, but it varies enormously between councils. The Government have told councils to use the £500 million hardship funding primarily to knock £150 off the bill this year for those on council tax support, but the problem is that many people who have lost their job or had their income hit in other ways by the pandemic were not on council tax support in the first place. Without extra central government funding, I fear that we will see a significant rise in the number of people falling into arrears and facing unreasonable pressure to pay. Will the Minister please undertake to look at what more the Government can do, so that local authorities can give payment breaks to all those who need them?
Baroness Lister of Burtersett (Lab)
My Lords, children already face the greatest risk of poverty. Both the rate and depth of child poverty are growing, yet the welcome measures announced to protect incomes include nothing for children, the group who have suffered the most from social security cuts since 2010. The Government have the means to act now to address the growing child poverty crisis through the social security system. As a Daily Telegraph article observed, social security will serve a similarly vital role to the NHS as the health crisis unfolds, and I applaud DWP staff for their valiant efforts to fulfil that role.
However, I also urge the Government to act on civil society calls for an immediate increase in child benefit of at least £10 as the simplest, surest and most effective way of protecting children during the crisis, and to end, or at least suspend, the benefit cap and two-child limit. Looking ahead, I also support the call for a recovery basic-income floor. The majority of children live in households with little or no savings to fall back on. Food bank use is soaring. Children are going hungry. Can the Government please act now to minimise further suffering?
The Earl of Clancarty (CB)
My Lords, in normal times it is the duty of a Government to provide an adequate safety net for the poorest in society. There is no clearer indication of the Government’s failure to do so since the financial crash than the rise in the demand for food banks, the use of which last year was the highest ever recorded. Behind the help currently being given to some, we are nevertheless still “austerity Britain” with a level of welfare provision that is wholly inadequate for those being left with little or no income.
The effect of Covid on top of continuing austerity is a double whammy. The Government need to recognise this, otherwise why would 1.5 million UK citizens not be eating for a whole day, and why would already struggling councils be handing out emergency grants? The welfare system should cover those needs, even in a crisis, although better still would be a basic income. Welfare needs to be reformed to speed up payments, remove the restrictive conditionality and, significantly, raise the level of payments far beyond the current modest increases. When food banks are a thing of the past, we can start to stop talking about poverty.
Baroness Crawley (Lab)
My Lords, for most of us the Covid-19 lockdown is an uncomfortable inconvenience, but for the more than 4 million children living in relative poverty in the UK it is a time of heightened anxiety and possibly even hunger. Will the Minister tell us the Government’s response to the jolting statistic that only 4% to 5% of vulnerable children who should be in school during the pandemic are turning up? Where are they and how are they doing? I am sure that she shares my concern. What is the Government’s response to the more than 1 million people who have claimed universal credit and are still waiting for payments? Are the Government confident that the National Voucher Scheme is now working properly after the initial delays and that the vouchers are now being accepted by all eligible supermarkets? We cannot look back on this time and have to say, “Most of us got through it, but the poor paid the price.”
Lord Balfe (Con)
My Lords, I thank the Minister for all the hard work that she has been doing. I note that her team of civil servants have dealt with 1.5 million claims and 250,000 claims for other benefits. They must have been working around the clock and they are to be commended.
I have been interested to hear that virtually everyone who has spoken wants to spend yet more money. We realise that a huge amount has already been spent. I note one comment made by the noble Baroness, Lady Falkner of Margravine, who pointed out that we need to look at abroad and to start thinking now not only about how to lift the lockdown, but about how we will pay for what it has cost. This is almost as vital as spreading the money around. There are many things to be done, but we have to pay for them, so we should start looking at how our European colleagues are doing it.
Baroness Janke (LD)
My Lords, poor and disadvantaged have been deprived of vital services and rights in recent times. Some 1.8 million single parents have been struck hard by the consequences of the pandemic. Half are living in poverty, even though 70% of them are working. However, with their children home from school, many cannot work. Almost 3 million children are living in one-parent families, and 72% of these households are being hit by the benefit cap as they do not earn enough for exemption.
To protect single-parent families, the Government should suspend the benefit cap for a minimum of three months, protect the children by filling in the short form for child maintenance service arrangements where parents are not receiving any maintenance, and provide cash instead of vouchers for single parents with children who are entitled to free school meals. This debate has shown that the poorest stand to suffer the most in the current crisis, so the Government can and must make sure that that does not happen.
Baroness Sherlock (Lab)
My Lords, that there have been 1.5 million universal credit claims in a month shows a loss of income on a massive scale in our country. Our social security system needs a response on that scale. I will make some suggestions from the beginning.
The Government added £20 a week to universal credit and tax credits. Extend that to legacy benefits. Remove the ceilings threshold in universal credit. Crucially, scrap the five-week wait. If they cannot do that overnight, convert the advance to a grant immediately, not a loan. Abolish the two-child limit, as recommended by the right reverend Prelate the Bishop of Durham.
This crisis has revealed how much we need the safety net of our welfare state and how badly it has been eroded in recent years. People who have paid in all their lives are shocked at how little they get. Let us patch up our system now, but then let us rebuild it properly. The future should not look like the past.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)
My Lords, I thank the noble Baroness, Lady Bennett, for securing this very important debate, and for giving us all an opportunity to put forward ideas and recommendations for things that need to be done. It is an important discussion and I am sure that it will continue. I am quite sure that I will not be able to answer everybody’s questions in such a short period, but I give an absolute guarantee that I will write to clarify our position on every question that noble Lords have asked.
This has been an extraordinarily difficult time. The Government are committed to a huge and unprecedented programme of support to mitigate the strain that Covid-19 is putting on households, livelihoods, business and our nation’s economy. The measures we have put in place will help to ensure that everyone, including those most at risk, can get the support they need to pay their bills and put food on the table.
Let me leave all noble Lords in absolutely no doubt that the Government are committed to helping, to doing what they can and to making sure that people do not fall through the net. We have taken swift action to strengthen the welfare safety net with a package of additional support worth £7 billion—one of the largest support packages in the world. The standard allowance of universal credit and working tax credit has been increased by £20 a week for the next 12 months, benefiting 4 million households. I am pleased to say that those who applied for universal credit on 16 March received their first payments last week, and around 93% of all applicants for universal credit are expected to receive their payments on time and in full. As my noble friend Lord Balfe said, that is thanks in large part to the tens of thousands of DWP staff who have been working around the clock to make sure that this happens. It is a great achievement in a very difficult time. The noble Baronesses, Lady Ritchie and Lady Sherlock, and my noble friend Lady Stroud said that whatever we do has to be fair, equal and compassionate. I can tell your Lordships that the Government have compassion by the bucketload. I would not say that if I did not believe it.
To support claimants through this difficult period, we have also suspended the recovery of various government debts, such as tax credit overpayments, benefit overpayments and social fund loans, for a three-month period. The Government continue to support and protect pensioners. The Government have made it clear that nobody should have to be worried about the threat of eviction during these times. We have increased the local housing allowance rates, meaning on average an extra £600 will go into the pockets of those who need it most. We are protecting tenants with almost £1 billion of additional support for renters and have banned rent evictions during the crisis. We have introduced mortgage holidays to protect homeowners and landlords.
We have introduced regulations already that disapply the minimum income floor to all self-employed universal credit claimants affected by the impact of Covid-19, whether they are ill or self-isolating, meaning that a drop in earnings will be reflected in their benefit award. New claim advances are of course available urgently to support those in immediate financial need until their first universal credit payment is made. I have to be straight with noble Lords: I know of no plans to convert an advance into a grant.
Although the benefit cap remains in place, for some of those who are new to benefits but have been employed for the previous 12 months, that cap will not apply for a nine-month period. This exemption will also apply to existing universal credit claimants who have sufficient earnings in the previous year to be exempt from the cap. Exemptions will continue to apply for the most vulnerable claimants, who are entitled to disability and carer benefits. Households are still able to receive benefits up to the equivalent salary of £24,000, or £28,000 in London.
We come now to the question of universal basic income. This Government have focused their measures on things which can be implemented as quickly as possible and target support to those who need it; a universal basic income would not achieve this. Providing a flat payment to everyone would fail to target those who need more support and may not meet the additional needs of those such as disabled people, lone parents and people further from the labour market. I understand that Finland trialled universal basic income and scrapped it early, because it was not working. As other noble Lords have pointed out, it is also far too expensive.
Defra has been undertaking a lot of work to support food banks, while other charitable organisations have worked within the sector and with the supermarkets to get as much food as possible to people who need it. The measures taken also include £3.25 million for food redistribution across England, including through food banks, allowing redistribution of up to 14,000 tonnes of surplus stock to the vulnerable. We have liaised with the food bank fraternity and will continue to do so.
The Government have announced a £500 million hardship fund, as part of the measures to support those affected by Covid-19, so that local authorities in England can support vulnerable people and households. This funding will enable local authorities to increase the local housing allowance for universal credit and housing benefit claims.
On the work that we have been able to do for rough sleepers—Dame Louise Casey has done outstanding work—I say to my noble friend Lord Young that, as well as bringing people off the streets and out of shared communal spaces, we are focused on ensuring that those with a history of rough sleeping who have been accommodated during the crisis have appropriate options for accommodation going forward. It is only responsible that we work with partners to consider how best to support those rough sleepers who have been moved into accommodation once the immediate crisis has been resolved.
Regarding economic support and recovery, today our focus is rightly on helping the vulnerable. However, our ambition remains to build an economy which ensures that everyone, no matter their background, has the opportunities to enter work and progress, while being supported by the welfare system. My ministerial colleagues in the Department for Work and Pensions are already working to ensure that existing vacancies can be accessed easily by people who have lost their jobs, and that we do everything we can to keep those people in good shape while they are waiting for that commercial opportunity for them to work.
Let me try to answer some of the questions raised today. The noble Baroness, Lady Bennett, raised sanctions. UC and both legacy and new-style JSA work preparation for face-to-face interviews and related sanctions have been disapplied from 19 March. This will initially be for a three-month period and claimants will not be sanctioned for not attending interviews after this time.
The noble Baroness, Lady Bennett, made a good point about mothballing schemes so that they are ready to come out if we ever need them again. I will be sure to pass this on to my policy colleagues. The noble Baroness, Lady Drake, talked about reappraising values. I think everybody agrees that once we have passed the damage caused by this virus, things will not be the same again. I hope that we will hold on to and build on some of the values we have seen coming out in communities and in my Government.
The noble Baroness, Lady Bennett, asked for a framework on decision-making. I have no answer for her on that at the moment, but I will write to her. The noble Lord, Lord Oates, talked about grants and writing off advances. I am sorry to tell him that I do not have any information on this or know of any plans to do so. The noble Lord, Lord Best, raised the issue of debt—a major problem before this crisis, let alone now, and one to which the Government are giving serious attention.
The right reverend Prelate the Bishop of Durham and I have had many conversations about the support for a maximum of two children. The Government and I understand where he is coming from and I have no doubt that the campaign for this will continue. We recognise that some claimants cannot make the same choice about the number of children in their family. That is why exceptions are in place. However, I must reiterate that families on benefits should have to make the same financial decisions as families supporting themselves financially. We feel that this is really important.
The benefit cap was raised by the noble Baronesses, Lady Lister and Lady Bowles, and the right reverend Prelate the Bishop of Durham. It is to be reviewed once in each Parliament; I know that it was not done in the last Parliament and we are waiting for the Secretary of State to decide if and when to do it in this Parliament. However, existing and new claimants may benefit from a nine-month grace period when their universal credit will not be capped, if they have a sustained work record. Claimants can approach their local authority for discretionary housing payments if they need additional help.
The noble Baroness, Lady Warwick, raised the housing benefit cap. I will go away, find the answer to her question and write to her. The noble Baroness, Lady Randerson, talked about the ferry industry. Again, I will go to the relevant department and make sure that she gets a letter on that. I am sure that audit trails are in the Government’s plans and will be carried out. I think my time is nearly up. I am a bit lost without the Clock in the Chamber. Am I nearly up?
Baroness Stedman-Scott
Okay. I will just build on what was said by the noble Baroness, Lady Falkner, and the noble Lord, Lord Balfe. All of this will have to be paid for. There is no doubt about that. Our colleagues in the Treasury and BEIS will be looking around the world to see who has the best ideas. I will make sure that I write to the Chancellor with that suggestion and that the German example given by the noble Baroness is considered.
In response to the noble Lord, Lord Woolley, I do not know of any plans for a race equality strategy, but I will put the idea forward. I do not know about the idea of the noble Lord, Lord Liddle, of a new leverage, but this Government are open to all ideas that will improve the lives of the people we are in business to serve. If noble Lords have ideas, please let us have them.
Universal credit gets a lot of criticism—it also gets a lot of praise, which I am very pleased about. However, in this terrible time, let us take a moment to think: if the old system were in place, people would be applying for six benefits instead of one and they would be paper-based instead of automated. We are getting people paid on time and in full; at the moment it is at 93%. That is a great credit to the people working on it. As I have said, I will write to all noble Lords after this debate with the answers they are owed.
The Deputy Speaker
My Lords, the Virtual Proceeding will now adjourn until 6 pm for the government Statement.