Stephen Timms (East Ham) (Lab)
I beg to move,
That this House notes the First Report of the Work and Pensions Committee, “DWP’s response to the coronavirus outbreak”, HC 178; and calls on the Government to increase relevant legacy benefits in line with increases to universal credit, to take steps to return people who have been inadvertently left worse off under universal credit compared with their previous benefits, and to suspend the no recourse to public funds visa condition for the duration of the coronavirus outbreak.
I thank the Backbench Business Committee for this opportunity. The new Work and Pensions Committee had an ambitious programme. Our first meeting in March was with the Health and Safety Executive, but in no time we were in lockdown and our programme was set aside. The Department for Work and Pensions has been key in this crisis as so many have lost the means to earn a living, and universal credit has delivered. I have been a frequent critic. I repeatedly pointed out that transition to universal credit could not be completed by October 2017, but the system that we now have has passed the test of this year. It is a national asset, which we should make the most of.
DWP staff have been on the frontline, with many redeployed to handle the tidal wave of claims. They have withstood enormous pressure. In our report, the Committee expresses thanks to them for their dedication and hard work, and that does need to be reflected in their pay; yesterday’s announcement was a heavy blow.
Ministers made good decisions at the start. After a decade of cuts, the £20 increase in universal credit and working tax credit, and the reconnecting of local housing allowance with actual rents, were key for many to surviving the crisis. I had understood that local housing allowance would be kept in line with local rents, so I was dismayed yesterday to hear that it will be frozen—decoupling it once again. My Committee agreed unanimously that the £20 increase should stay and many others have taken that view, including the Joseph Rowntree Foundation’s “Keep the lifeline” campaign. The campaign wrote an open letter to the Chancellor on 30 September with Citizens Advice, the Child Poverty Action Group, Feeding Britain, Oxfam, the Trussell Trust, disability charities and bishops. The Resolution Foundation says that otherwise:
“The basic level of support for an out-of-work single adult would fall to the level it was at when Margaret Thatcher left office”.
The Institute for Fiscal Studies warned of a significant decline in the incomes of 4 million families. The Chair of the Welsh Affairs Committee, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), a former Work and Pensions Secretary, called the £20 a lifeline and urged its retention. I very much regret that the Chancellor rejected those calls yesterday.
The spending projections show universal credit being cut by £20 in April, and people claiming universal credit are left fearing the worst. Our motion calls for the £20 uplift to be extended to legacy benefits. Yesterday, an increase of 37p per week was announced; Ministers must reconsider.
Not increasing jobseeker’s allowance and employment and support allowance for those out of work for ill health was done on the grounds, we were told, that computer systems were slow to change, but they certainly could have been changed by now, and it is absurd that people in otherwise identical circumstances, claiming different benefits because of universal credit roll-out sequencing, are receiving such different support. It is legally questionable. People should not face extended hardship because their benefits are run on out-of-date systems. Ministers were absolutely right to introduce the increase; it should be extended to legacy benefits, too
Our report last month, “Universal credit: the wait for a first payment”, calls for other much-needed changes. The five-week delay between applying and the first regular payment causes great hardship; we called for non-repayable starter payments to tide people over. We also called for “advances” to be renamed “loans”, to make it clear they have to be repaid, because calling them “advances” obscures that.
The motion also highlights the people made worse off by claiming universal credit. Government online advice says: “Apply online for universal credit to get financial support if you’ve lost your job.” For most people, that was sound advice, but not for everyone: if someone on tax credits claims universal credit, their tax credits stop.
We surveyed experiences of the benefits system in the pandemic; 6,000 people responded, and I thank all of them. Some had not realised that claiming universal credit meant losing tax credits. For some, their universal credit entitlement then turned out to be zero—for example, one of my constituents with £16,000 saved. That person was left, as many were, with no support at all. That is benefit mis-selling; Government should put it right.
In May, answering the right hon. Member for North Shropshire (Mr Paterson) here in the Chamber, the Secretary of State said that she would look “very carefully” at whether people should be able to return to previous benefits. That held out some hope, but now she says that allowing it would threaten to unravel the roll-out of universal credit; that is a very poor excuse.
Today’s motion highlights our call, also made by the Home Affairs Committee, for the no recourse to public funds immigration condition to be suspended for the pandemic. Some 3 million extra people have had to claim universal credit this year, but families working legally, with no recourse to public funds on their immigration status, do not have that safety net. They may get discretionary council help, but provision varies immensely. Indeed, Andy Jolly at the University of Wolverhampton has found that many families refused council help, so our report made this call:
“The Government should publish or at least clarify existing guidance for local authorities on what support they can provide for people with NRPF, including…whether measures such as the hardship fund are classed as public funds or not.”
At the Liaison Committee in May the Prime Minister said that people in this situation should get “help” of one kind or another. I agree, but unfortunately they do not. Families facing destitution can apply for exemption, but it is extremely hard. The all-party group on immigration law and policy heard this week from the Unity Project that it takes about 100 pages of evidence; many people cannot provide that. The Home Office takes a month, on average, to determine an application. No destitute family should have to wait a month for Government to decide whether they can claim benefit.
Our report in May also called for an impact analysis of the benefit cap in the pandemic. UC and the local housing allowance were rightly raised, but the benefit cap was not, so many families crashed into the cap for the first time. The Department told our inquiry that the number of people affected by that would be “very small”. We asked for a full analysis of the numbers and the characteristics of households newly subject to the cap, and of the impact on hardship. We now know that far from a very small impact, the number affected by the benefit cap has almost doubled in the pandemic.
In London, with high rents pushing up LHA, many have crashed into the benefit cap for the first time. People claiming benefit after losing their job have a nine-month grace period when the benefit cap does not apply. The employment Minister says that 160,000 households have a grace period due to end next month—the benefit cap will apply for the first time. I wrote to the Secretary of State yesterday, with the Committee’s agreement, about this issue. The Government were right to increase support for struggling families at the start of the pandemic and there should be a cap easement for those about to be hit.
Our report in May pointed out that the future jobs fund did a great job of supporting young people in the last financial crisis. I welcome the kickstart scheme, with its identical structure, that was announced the month after our report. It was disappointing to see yesterday that spending on kickstart will be much lower than planned. That seems to be because employers have to offer at least 30 places, thus shutting out small firms. That should surely be fixed. The Committee will take evidence on the Restart scheme, which was announced yesterday. An evaluation of the Work programme was published on Tuesday. Major commitment to employment support is absolutely right, but we need it—this is unlike what happened with the Work programme—to do a good job with, for example, disabled people.
The importance of dependable social security has never been clearer. The UC system and Department for Work and Pensions staff have passed an extraordinary test, and they have our congratulations and our thanks. The changes outlined in our report are needed now to minimise damage from the crisis, and to look forward and build back better in the months ahead.