Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021
(3 years, 9 months ago)
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16:45 - Division conducted remotely on Baroness Sherlock’s Motion - Ayes: 303 / Noes: 248 - Motion agreed.
Baroness Sherlock
That this House regrets that the Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021 (SI 2021/4) will result in claimants in receipt of the Severe Disability Premium in legacy benefits moving on to Universal Credit without ensuring that all will be fully compensated for the loss of the Premium; and calls on Her Majesty’s Government to extend to legacy benefits the same uplift given to Universal Credit in response to the COVID-19 pandemic, and to ensure that claimants are advised before moving from legacy benefits to Universal Credit that they could suffer financially as a consequence.
Relevant document: 42nd Report from the Secondary Legislation Scrutiny Committee
Baroness Sherlock (Lab) [V]
My Lords, I am pleased to move this Motion standing in my name. These regulations are the latest twist in a long-running saga that concerns the severe disability premium, or SDP, which provides support for the extra costs of care incurred by severely disabled people living alone without a carer. It is worth about £67 a week and is paid on various means-tested benefits.
The latest government figures I could find suggest that over 500,000 working-age households get SDP. But when the Government created universal credit to replace legacy benefits, they chose not to include an equivalent of the SDP. As a result, although some disabled people are better off, many of the severely disabled people getting this premium will be much worse off on universal credit. That is a wider pattern: some people are better off on universal credit than legacy benefits and some much worse off.
To deal with that, the Government pledged a system of transitional protection, so that, at the point of transfer, no one would lose out in cash terms. But they will apply this only during what they call mass migration, the point when the DWP closes down legacy benefit claims en masse and tells people they have to claim universal credit instead. If someone moves on to UC before that point, which is called natural migration, they get no transitional protection.
Unfortunately, many people have no choice. You cannot make new claims for legacy benefits, and if you are already getting them but your circumstances change—say you lose your job, have a baby or move house—you are forced on to universal credit. Two people getting the SDP found themselves in this position when they moved home. They were forced on to UC and were much worse off. They went to court and in 2018 the High Court ruled that this was unlawful discrimination. So the DWP created something called the SDP gateway to stop those getting the premium naturally migrating to universal credit and losing out. Those who had already crossed over were given compensation for the lost premium, although that was originally set arbitrarily low, so that was challenged in court again, and it is now based on the lost SDP.
These regulations remove that gateway and give some compensation to those who will then be moving over to universal credit. But it is not full compensation; it does not compensate for the loss of the enhanced disability premium, only the severe disability premium. Nothing is paid where the SDP is attached only to housing benefit. And it is a fixed sum, which is reduced when any part of your universal credit rises, even if that is only because your rent has gone up. So claimants will see the support they receive fall in real terms, year on year.
If someone moved on to universal credit during a managed migration, they would have transitional protection based on all their legacy benefits, not just the SDP. That managed migration process has been paused. Can the Minister tell us what the new target date is for completing it? Zacchaeus 2000 points out that Covid-19 has increased rates of redundancy and caused changes in working hours, increasing the number of people on legacy benefits experiencing a change in circumstances. More claims will therefore end up moving on to universal credit with no transitional protection or with just the transitional SDP element.
Some vulnerable people risk losing a lot of money. Marie Curie, in its excellent briefing, points out the impact on people with terminal illnesses or life-limiting conditions. It says that the loss of the two disability premiums could leave new claimants up to £84 a week worse off. Then there is the related issue of the £20 uplift to universal credit. That was not applied to legacy benefits, many recipients of which are disabled people or carers. This is incomprehensible, as well as unfair. Since there is meant to be a pandemic measure, many sick or disabled people have spent the last year shielding at home, with spiralling energy costs and lots of additional costs such as home deliveries, PPE and much more.
Astonishingly, the Secretary of State for Work and Pensions, Thérèse Coffey, suggests that claimants should simply claim universal credit if they want the £20. This is terrible advice. Some people will be worse off on universal credit than they were on legacy benefits, even with that extra £20. Others, who would be better off on universal credit because of the £20 uplift, will be worse off if it is taken away. How will they know? It is really complicated. The DWP says that it cannot advise individual claimants, so why on earth is the Secretary of State for Work and Pensions telling people to switch?
If someone applies for universal credit, there is no going back. Noble Lords may have seen cases of people in the news of people getting tax credits who then applied for universal credit and were rejected because they had savings; UC has a savings threshold, unlike tax credits. But then they were not allowed to go back to tax credits, so they got nothing. We surely cannot have that apply across all kinds of other categories of claimant.
What should be done? First, the Government should urgently address the flaws in their strategy for dealing with people in receipt of severe disability premium who are going to be forced on to universal credit. The House of Lords Economic Affairs Committee said:
“The DWP should introduce an equivalent to the Severe Disability Premium. This should be a self-care element for any disabled person who does not have someone assisting them and claiming the carer element of Universal Credit.”
Many charities agree. What is the Government’s response to this?
Secondly, the DWP should address the process of claimants moving from legacy benefits on to universal credit. We need an urgent update on managed migration. We need mass communication, and we need personalised advice for anyone thinking of moving so that they know the consequences before they make that jump.
Thirdly, the Government should extend the £20 uplift to legacy benefits. They should do the right thing and make that uplift permanent. The Economic Affairs Committee put the case simply:
“We believe that the increase shows the original rate was not adequate … The Government should commit to making the increase in the standard allowance permanent.”
That original rate is not adequate as a result of years of benefit cuts and freezes. The House of Commons Library figures show that, excluding Covid-related increases, most working-age benefits were between 9% and 17% lower last year than they would have been if the Government had simply uprated them by inflation since 2010. The OBR estimated that the 2015 Budget would cut over £9 billion from social security spending by the end of this financial year. No wonder that before that £20 uplift, unemployment support was at its lowest level in real terms since 1992.
We need action. Temporarily extending the uplift will simply temporarily extend the confusion and uncertainty. The Government should do the right thing, address the problem with SDP, extend the uplift to legacy benefits, make it permanent and announce it as soon as possible, so that people have certainty and can judge for themselves whether they will be better off on universal credit or legacy benefits. The case for taking action on this matter could not be clearer. I hope I do not have to press the Motion to a vote, because I hope the Government will realise what is at stake and do the right thing.
The Deputy Speaker (Baroness Watkins of Tavistock) (CB)
As the noble Baroness, Lady Bowles, has withdrawn, I call the next speaker: the noble Baroness, Lady Altmann.
Baroness Altmann (Con)
My Lords, it is a pleasure to follow the noble Baroness, Lady Sherlock. This is a most difficult issue and I have every sympathy with my noble friend the Minister and the Government in their efforts to support those who have been affected by the pandemic and urgently need help with living.
I recognise that there are calls for the £20 uplift to be extended to all legacy benefits. However, my suggestion to the Government is that, unless there is the appetite and the funding to extend the £20 to everybody, it seems unwise to commit to a further 12 months of the uplift, as has been called for, given that we are hopeful—I certainly am—that the impact of the pandemic will be behind us to a large degree in 12 months, and we will be into a recovery within the next few months. I would certainly not support any calls for a major one-off lump sum payment to offset the loss of the £20 uplift. I support the Government’s move to add £20 to the existing benefit as a temporary measure in light of the pandemic and its dreadful impacts.
However, I also believe that, in the context of this particular discussion on the severe disability premium and the loss of the EDP as well, it would be worth the Government considering whether a self-care element might be added, as recommended by the Economic Affairs Committee. Also, as the noble Baroness, Lady Sherlock, suggested, can my noble friend the Minister update the House on what is happening with managed migration? To what extent are we seeing success in the Government’s moves to help people back into work and ensure retraining —after all, this is the fundamental rationale for universal credit and the reorganisation of the benefits system? Those who are able to work and are helping people to get back into work are the ones we are trying most to assist in our social security system.
To what extent are we moving away from the extraordinarily complicated layers? Indeed, today’s debate and all the issues we are discussing highlight the extraordinary complexity of the regime, with a bit of benefit for this and a bit of benefit for that and one level of disability and another level of disability. The claimants themselves need financial advice to figure out what benefit they are better off on and what benefit they should be claiming. The noble Baroness, Lady Sherlock, is correct to identify this as a problem, but I hope that we can proceed with the aim of simplifying the benefits system through moving to one payment, with perhaps one or two additions, rather than one or two hundred additions, which can be the case over the entire benefits system.
I am unable to support the regret Motion moved by the noble Baroness. As I have said, I welcome the Government’s efforts—and, I know, those of my noble friend the Minister and the department—to really assist those who are struggling through the pandemic.
Baroness Donaghy (Lab) [V]
I support everything that my noble friend Lady Sherlock said in moving her regret Motion.
I have some experience of the grinding juggernaut of universal credit—a High Court reversal here, the occasional telling-off there by the Secondary Legislation Scrutiny Committee, on which I served for a couple of years—with the Government’s policy being that nothing will stop this managed migration. I think that it should be stopped. Remember, universal credit was never universal in the first place. It did not cover most disability benefits, it did not fit the needs of the self-employed, and the minimum income floor is a particular burden during the pandemic.
Some of the structural problems are coming home to roost. Even now, the Secondary Legislation Scrutiny Committee had to remind the Government that they should include in their Explanatory Memorandum the fact that, because the gateway closed last month, people moving to UC may face an erosion of their benefits. Independent advice is vital and will not be readily available to those people who receive the severe disability premium.
These allowances are not a luxury; they help to cover the extra costs that disabled people face—particularly during the pandemic, with extra heating costs and increased food costs. Many of us can afford broadband and take it for granted that we can do our grocery shopping online, with a minimum spend of £40. The Disability Benefits Consortium’s report on disabled people on legacy benefits found that
“82% of disabled claimants have had to spend more money than they normally would during the pandemic”—
mainly on food shopping and utility bills. Charities and campaigning groups on poverty issues have called for the extension of the uplift to legacy and related benefits. The disabled, carers and those with a long-term illness are in the poorest 10% of the population. Quite simply, it is not good enough for the Minister in the Commons to say that this will take several months to implement.
The £20-a-week uplift is due to end in April 2021, unless the Chancellor decides to extend it. The poorest households would lose 10% of their budget. Policy in Practice says that stopping the uplift would mean that
“683,000 households, including 824,000 children, would no longer be able to afford to meet their essential needs”.
Citizens Advice has said that this
“would push those just about managing into debt.”
Even more worryingly, BASW—the British Association of Social Workers—suggests that
“low income is a driver of children being investigated as part of child protection concerns.”
Support targeted at the lower half of wealth distribution in the UK or the unemployed is two to three times more effective at increasing spending in the economy than a universal stimulus, as low-income households spend a higher proportion of their budget on essentials. A case study provided by the Zacchaeus 2000 Trust, a small charity, outlined the experience of Lee, who was incorrectly moved on to universal credit despite being in receipt of the severe disability premium on a legacy benefit and the SDP gateway still being in place. She went into serious debt and rent arrears. She was moved back on to legacy benefits and she would not want to go back on to universal credit. The overworked DWP did not always acknowledge her inquiries, or looked only at the most recent correspondence rather than at her whole history.
Seriously unwell and disabled people such as Lee do not need the added stress of UC’s failing system, especially during a pandemic. The Government must look at this again.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady Donaghy. Her outline of the structural problems of universal credit was excellent and her testimony of the suffering in our communities was powerful.
I congratulate the noble Baroness, Lady Sherlock, on her regret Motion and offer the Green group’s strong support for it. I also endorse all her asks in providing a basic, decent level of benefits.
Many noble Lords may have seen a photo that was shared widely on social media yesterday. It showed a queue for a food bank in the snow in Glasgow. People were so desperate to get the basics of life that they endured those conditions. It is very clear that our economic and welfare systems have utterly failed.
The Minister may be aware of the McKinsey & Co report that came out this week. It made an interesting international comparison and showed that countries with minimal welfare provision, such as the US and the UK, have had to pay out huge amounts more in the conditions of the pandemic. We are, of course, in an age of shock and can only expect more shocks. Not providing basic, decent benefits on a regular basis ends up costing a great deal indeed.
I thank the noble Baroness, Lady Altmann, for making the case for a simpler benefits system. She highlighted the difficulties in what you might call the “old regime” of a mix of benefits. We also heard from the noble Baroness, Lady Sherlock, about the incredible complexity that disabled people face with the severe disability premium, which we are addressing today. The noble Baroness, Lady Altmann, laid out very clearly the case for a universal basic income. I have one direct question for the Minister, to which I would really appreciate an answer: are the Government finally considering this obvious, simple, clear, fair solution that means that no one falls through the gaps?
The noble Baroness, Lady Donaghy, referred to some personal accounts and experiences and I should like to do the same. I have an account from someone who suffered a traumatic brain injury and spent a year in hospital. It is posted on the North Staffordshire Green Party website—I will tweet out the link. This is a long story, but it is the kind of experience that many people with a severe disability premium payment would have gone through. This man received the disability living allowance in 2004, not after the original application but after being forced to go through an appeal process. The payment was awarded for life. A decade later, that was replaced by the personal independence payment and the man had to reapply. I will now quote a few of his own words because we should listen to these experts from experience. He said:
“We entered a small dimly lit room with a young male assessor. He told me he had worked in mental health for several years to which I replied—good, you’ll be able to understand my brain injury. I left the assessment extremely tired but rather dazed … It was only a few weeks later when the award letter arrived, I realised why I was feeling dazed—everything in the assessment conclusion letter was a blatant lie—I wasn’t bothered that I had been declined—I felt demoralised and degraded. I revealed to the assessor some of my most intimate moments. As I was reading the assessment I felt as though I had been contradicted with some of the information being made up. It was this moment I realised I had been interrogated not assessed. This sent my mental state of mind tumbling into an abyss of depression—you can appeal, I was told. How can you appeal blatant lies, I thought; and did not appeal.”
Many Members of your Lordships’ House will be well aware that recipients of the severe disability premium have been through experiences such as that, often again and again. Yet we are subjecting them to the level of complexity that the noble Baroness, Lady Sherlock, outlined.
The payments exist because our society is discriminatory, as it does not exist in ways that meet peoples’ needs without their requiring the special extra payments because of their disability. As I pointed out at Second Reading of the Financial Services Bill, if we make a society that works for those who are vulnerable, we make a society that works well for everybody. All of us are only one accident, one medical emergency, one crisis away from needing payments like this. Knowing that those payments are there—reliably, certainly and sufficient—is vital to us all.
Baroness Thomas of Winchester (LD) [V]
My Lords, I declare that I receive DLA. I applaud the noble Baroness, Lady Sherlock, for tabling this Regret Motion and speaking so lucidly about the issues that we are concerned with.
The interaction of universal credit with the severe disability premium is not for the fainthearted, as noble Lords will understand. It is a fiendishly difficult subject. What is clear and absolutely shocking is that disabled people on the legacy benefits, including SDP, have received no £20-a-week uplift in response to the pandemic, unlike those on universal credit, as we heard. Unless this particular cohort of claimants gets good advice on whether to migrate to UC, they are likely to lose out over time, as we know that there is no SDP in universal credit. It is very much thanks to our committee, the Secondary Legislation Scrutiny Committee, that the Explanatory Memorandum makes clear what is happening over time.
Some people would argue that it does not matter because of the disability benefits of PIP and DLA, which are regularly uprated. But we are talking about working-age severely disabled people who will have a great deal of expenditure in their lives, such as installing and regularly servicing appliances, paying for care, extra heating, transport, food and all kinds of things. Being disabled is extremely expensive and we are hearing from many people that they are really struggling. As for the jobs market, it was difficult for disabled people before the pandemic and will be even harder now, with so many people unemployed. People will therefore need all the help that they can get. The Regret Motion should be supported.
Baroness Browning (Con) [V]
My Lords, it is a great pleasure to follow the noble Baroness and to hear from her first-hand experience.
The severe disability benefit, as we have heard, awarded to people with existing disability benefits such as ESA and PIP, is by definition for the most complex disabilities, including physical and learning disabilities, autism, mental health challenges and, as we have heard, for people who are terminally ill. The excellent Motion of the noble Baroness, Lady Sherlock, states that when moving to universal credit claimants should be,
“advised before moving from legacy benefits … that they could suffer financially”.
This is perhaps, in many cases, one of the groups who find it most difficult to obtain advice. For many, access to, or even ability to use, IT will be a challenge in itself when the benefit system is becoming almost exclusively an IT facility.
The Secondary Legislation Scrutiny Committee of this House examined the Explanatory Memorandum and discovered that it did not make clear that transitional payments would erode over time. The Government responded to that point and revised it to include further information at the request of the committee. However, if it takes a scrutiny committee of the House of Lords to identify that people are going to be worse off under a system, what hope is there for many people outside this House who do not have that expertise, knowledge or understanding? There is a responsibility on the Government to be absolutely transparent and make sure that before people make the move to universal credit, which, as has been said, is a one-way system—there is no going back, once people are in it—they do not erroneously put themselves at a financial disadvantage.
I know that my noble friend the Minister understands these things. She, of all people, with her experience of work before she came into the Lords, understands only too well how disadvantaged people live. I have a high regard and respect for that knowledge and I am glad that she is there to bring it to her department.
I mention one thing in passing and I hope that noble Lords will not think that it is too sexist. This debate has predominantly been contributed to by women. I sometimes wonder whether that is because it is women who take the responsibility in the family for the benefits of relatives and dependants. Maybe that is why women have a more instinctive understanding—I have no doubt that people will complain about this—of the real impact of these issues on day-to-day lives.
A lot of the disability groups have made their case about the financial impact this will have, including Disability Rights UK, among others. Disability Rights UK has made very strong statements, which I am sure the Government are aware of. But on the question of managed migration, my experience is that this group, who are the most severely disadvantaged because of the level of their disability, have been subject to all sorts of changes and disadvantages. But we have not had this spelt out in debate in either House.
My noble friend will know that last year, after 30 years of experience in Parliament of personally dealing with casework—I cannot imagine how many I have dealt with—I actually struggled to engage with the Government’s website to apply for ESA for a young woman in a very difficult situation with an advancing degenerative disease. In order to apply for ESA, the computer made me keep going to universal credit. This woman was married to a man in receipt of the support level of ESA, and the only way the computer would allow me to apply for even universal credit for her was if that man agreed to forfeit the right to his ESA. I know my noble friend has taken this up, and I hope she has made some progress with it. But this is what people are facing. They deserve a lot better than this.
Viscount Chandos (Lab) [V]
My Lords, I shall speak briefly but vehemently in wholehearted support of my noble friend Lady Sherlock’s regret Motion.
I was privileged to be a member of the Economic Affairs Committee when it conducted its inquiry into universal credit. It began in January last year, before it became clear that Covid-19 would indeed spread from China and have such a devastating impact on British society and the economy, although our resulting report was published in July. It was therefore able to reflect and comment on the action taken by the Government in response to the pandemic crisis. The chronology is important because we set out to review the workings of universal credit quite independently of the pandemic and to make recommendations for times in the future which, even if they will be inescapably affected by the pandemic, will be more normal and comparable to circumstances before that crisis.
The specific issue of the severe disability premium, which this Motion is about, should be seen in the broader context of universal credit, its design and its agonising phased introduction over the past 10 years against the background of the Conservative-led Government’s premeditated reduction in welfare spending. Professor Jonathan Portes, who was, inter alia, chief economist at the DWP between 2002 and 2008, recently wrote:
“The overwhelming case against cutting Universal Credit: not the pandemic, but the extraordinary cuts to unemployment-related benefits over the last four decades.”
The majority of these cuts, which took benefits from 25% of average earnings in 1979 to under 15% in 2019, were implemented by Conservative Governments. However, disappointingly, I have to acknowledge that the Labour Government of 1997 to 2010 did not do anything to reverse that trend.
What is true broadly of the inadequacy of universal credit is even more so in relation to its failure for so many of those with disabilities. The Joseph Rowntree Foundation calculates that 31% of disabled people live in poverty, compared to around 20% of the population as a whole. Half of all those in poverty are disabled or live with a disabled person.
The Economic Affairs Committee was advised that the introduction of an equivalent to the severe disability premium would cost approximately £1 billion per annum. If 10 Downing Street can employ three times as many official photographers as the White House, surely it would agree that the sum of £1 billion to alleviate the poverty suffered by 50% of all disabled people would represent extraordinary value for money. Can the Minister give us the comfort that this will be addressed, allowing my noble friend to withdraw her Motion? In the absence of that comfort, I would have no hesitation in supporting my noble friend’s Motion if she chooses to press it.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to follow the noble Viscount, Lord Chandos. I congratulate the noble Baroness, Lady Sherlock, on her regret Motion and particularly on its content. I support that Motion because I am of the view that these new measures will result in claimants who are in receipt of the severe disability premium on legacy benefits moving on to universal credit without ensuring that they will all be fully compensated for the loss of the premium. That is the fear of many of the disabled organisations, as well as of Marie Curie, which has supplied many of us with a briefing paper on this particular issue.
When universal credit was introduced, I was a Member in the other place and opposed it at that particular stage. I saw and viewed it as a benefit measure that would heap further misery on people and push individuals towards food banks. With the pandemic, that has become a greater reality, and permanent financial measures are now required to help people who are increasingly in financial need.
As other noble Lords have referred to, it is worthy of note that the House of Lords Secondary Legislation Scrutiny Committee drew attention to the erosion rules, stating that:
“The Explanatory Memorandum did not make clear that these transitional payments will erode over time”.
I note that the Government revised those to include further information at the request of that committee. In addition, this committee noted the widening
“eligibility to the transitional SDP element to both ex-partners after a couple receiving SDP separate”,
and observed that the Department for Work and Pensions had estimated
“that this eligibility change will benefit a few hundred claimants overall.”
It is worthy of note that Disability Rights UK stated that, from October 2020, these transitional payments were no longer ring-fenced and separate from other universal credit elements. Under the new rules they were classed as a “transitional element” only. In such circumstances, a claimant will not, in fact, receive an increase. Disability Rights UK has stated that the new regulations will mean that,
“after transitional help is eroded after time, UC for disabled people will be significantly less generous than ESA and the other legacy benefits it has replaced.”
Marie Curie, which provides such strong support for cancer sufferers, believes that everyone nearing the end of their life should have the financial support they need for a decent quality of life. No one should spend the end of their life facing poverty or material deprivation. Marie Curie has particular concerns regarding the move to universal credit for people with terminal illness who live alone without a carer, and the impact that the loss of severe disability premium will have on that group. In that regard, will the Minister provide assurance that the disability Green Paper planned for publication this spring will review the financial support available to disabled people living alone and without a carer to look after them? What discussions have the Government had with the Ministry of Housing, Communities and Local Government to ensure that any new claimants for universal credit who would have been entitled to SDP under the legacy benefits scheme are able to afford all the care and support they need and are not left more socially isolated by the abolition of this component?
In summary, I support the regret Motion. I urge the Minister, as I urged her yesterday, to urge her colleague to undertake a root and branch policy review of the social security system to ensure that it is fit for the needs of this era, with all the accompanying problems that have been challenging us with the pandemic.
Baroness Primarolo (Lab) [V]
My Lords, I support the regret Motion that my noble friend Lady Sherlock has tabled. I congratulate her on a brilliant introduction to what is a very complex area.
The brutal consequences of the pandemic, added to the trend of increasing levels of poverty under benefit cuts and the growth of inequality, have left families trapped, with no prospect of improving their situation. Millions of people on legacy and related benefits did not receive the £20 uplift applied to universal credit and working tax credits. As many speakers have said in this debate, this is particularly important, as most people on legacy and related benefits are disabled, carers or have a long-term illness. The majority of these fall within the poorest 10% of the population and are the very people who are likely to have been unable to work for an extended period and are less likely to have any savings to fall back on. As the Disability Benefits Consortium has said, they still face higher costs as a result of the pandemic, due to increased food, fuel and phone costs and needing extra support from paid carers.
Into this situation, the Government now intend that people on legacy and related benefits should move to universal credit. Therein lies a very big problem, so eloquently explained by my noble friend Lady Sherlock. I am grateful, as other speakers were, to the briefing from Marie Curie, which makes a compelling case, outlining the difficulties for people living with terminal illness who are living alone and do not have a carer in receipt of carer’s allowance to look after them. They will face terrible consequences from the change that is being proposed. As has been said, under universal credit the severe disability premium and the employment support allowance are both being scrapped. That leaves many of those who would otherwise have been entitled to severe disability premium much worse off.
Although the Government try to make compensation arrangements, Marie Curie provides the example of a gentleman who is 55, who has applied for ESA and has a life-threatening illness. As a result of these changes, if he were moved to universal credit he would be more than £44 a week worse off, on an income that is already very small indeed. It cannot possibly be the Government’s intention to severely undermine the financial position of those in receipt of these benefits, particularly at a time of pandemic. As has already been made clear, claimants in receipt of transitional payments will not receive the annual uplift in universal credit; their support will therefore fall, in real terms, year on year. As the Explanatory Memorandum on transitional protection puts very clearly, the Government’s policy is to gradually eradicate the additional income received by former severe disability premium recipients—in other words, to cut their benefits.
The noble Baroness, Lady Ritchie, asked two very important questions to add to the questions asked by my noble friend Lady Sherlock. The Minister must tell us how, in discussion with other departments, the Government will ensure that those affected by this change will still get the care and support they need and will not be left socially isolated as a result of these changes. She also needs to tell your Lordships’ House when the Government will bring forward the special rules for people living with terminal illnesses. Better still, she should tell the House today that these poorly timed changes, which will only increase anxiety and uncertainty for disabled people, will be withdrawn and that the Government will think again.
Baroness Fookes (Con) [V]
My Lords, I want to make a general point about universal credit, because nobody, as far as I can see, has had a good word to say for it in this debate. I believe that, as a general system, it is a great improvement on the old system. I remember, as a local MP, trying to help constituents with all kinds of welfare problems through the maze of different regulations. It was almost impossible to find the exit from the maze and I suspect that, on many occasions, DWP staff were almost as bewildered as I was. I welcomed the change to a much simpler system of universal credit. I accept that it suffered from cuts made in the amount available to it, and that I much regret, but I do not regret the simplification.
On the severe disability premium, other noble Lords have spoken very eloquently of the importance of this to people at the lowest end of the scale, and I have every sympathy with that, but my understanding is that it is not immediately being withdrawn. I should be interested to hear from my noble friend the Minister what sort of erosion is likely to take place and over what timescale. Is it to be months, years? That makes a great deal of difference to how people are being treated. I should also be interested to know the numbers of people who are enjoying this severe disability premium. Again, it would be very helpful to have some idea of the scale of this.
In addition, I feel very strongly about the £20 addition, both for people in general and for those getting the severe disability premium. I am at one with others in the Chamber who feel that they should be receiving it, and I hope this will be possible. I imagine that it rests with the Chancellor of Exchequer, and I hope my noble friend will make very clear to him the strong feelings in this House, which I warmly share, about the value of keeping the £20 premium in the present circumstances, and in making sure that those on the severe disability premium are included. I feel very strongly about it.
None the less, I understand the difficulties my noble friend faces. As I think my noble friend Lady Browning pointed out, we know that her heart is very much in favour of the underdog and, from her previous work as a leading member of a charity trying to improve people’s lot, she will have a full understanding and knowledge of what is at stake. I hope very much that she will use all her persuasive powers on those in government who want to see that people at the bottom end of the scale are well and fairly treated. I look forward very much to hearing what my noble friend has to say.
Baroness Drake (Lab) [V]
My Lords, I congratulate my noble friend Lady Sherlock on bringing clarity to the dauntingly complex in expressing her regret. We should be clear, to quote Scope, that this change affects a group with some of the highest support needs and extra costs. These are the people we are putting at risk, many of whom are shielding at home and facing spiralling energy costs. I, too, quote Marie Curie, because it is such a reputable organisation, about those living alone with lifetime illnesses and the cut in SDP. It says that without this money available, many more people are likely to struggle to afford the costs of care. That is likely to reduce social contact, increase their social isolation and have a devastating effect on many people nearing the end of their lives.
I have absolutely no doubt that the Minister is committed to enhancing the well-being of those with serious disabilities, but regrettably, as so powerfully articulated by my noble friend and reputable voices on behalf of those with disabilities, the new regulations will give rise to detriment for some severely disabled claimants. The loss of SDP under universal credit leaves new claimants worse off. Vulnerable claimants might not understand that they could suffer financially by moving from legacy benefits to universal credit. Not all existing claimants will be fully compensated for the loss of the severe disability premium when moving on to universal credit, and the transitional compensation that is made available has limitations. Claimants on those payments will not receive any annual uplift in their universal credit, so the support erodes away. The payments are insufficient to match the combined losses under universal credit. The payment could be lost through certain changes of circumstance, and the managed migration has been paused.
The Explanatory Memorandum did not initially make it clear that these transitional payments will erode over time. That is ironic, because these regulations present one of the harshest examples demonstrating why legacy benefits should be uplifted in line with universal credit throughout the pandemic and that the £20 weekly uplift should be retained after April.
In February, the Disability Benefits Consortium reported that over 2.5 million people are claiming legacy benefits, the majority of whom are disabled. Pre-pandemic, nearly half the people in poverty were disabled or living with disabled people. The pandemic has compounded their difficulties.
On 8 February, I received the letter that the Minister issued to all Peers, highlighting the great efforts made by DWP staff during the pandemic, which I completely endorse; I am full of admiration for the effort they have put in during the pandemic. However, she went on to refer to public expenditure on job protection, sustaining the welfare safety net and interventions to get people back into work. That and other public expenditure has to be assessed against the economic costs of not undertaking such state intervention. Yes, the Chancellor has challenging judgment calls to make, but the efficacy of those judgments does not hang on cutting the income of those with the severest disabilities. He has far more powerful fiscal measures in his armoury. Nothing about the saving, which targets such a vulnerable group of people, will seriously contribute to the challenges he has to deal with.
The complexity and downsides of these new provisions will make them very difficult, if not impossible, for some severely disabled claimants to understand. As Citizens Advice said:
“Everyone’s situation is different. That’s why it’s important to seek independent advice before making a voluntary move to Universal Credit from another benefit which includes a severe disability premium. You won’t be able to reverse your decision … you could end up worse off, despite the temporary uplift to Universal Credit.”
I add to the compelling questions posed by other noble Lords: where can claimants go for this advice? Where will they find the sources of this advice and will the DWP pay charities to assist with advice provision? As I said on opening, this is a sad tale.
Baroness Janke (LD) [V]
I also add my thanks to the noble Baroness, Lady Sherlock, for tabling this Motion, which we will support. Many have highlighted the evidence of the severe impact of the pandemic on people with disabilities. Scope’s disability report highlights many of these difficulties, such as accessing food and essentials. Many disabled people feel forgotten and isolated, beset with anxieties about their future. Buying food and accessing essential services has been problematic for many who live alone. Difficulties in accessing benefits and delays in payments have often left disabled people financially insecure. The crisis has further highlighted existing flaws in the system, as other noble Lords have said, and the introduction of temporary changes has introduced uncertainty.
Scope calculates that the cost of the pandemic to people with disabilities is as much as £583 a month related to their impairment or condition, even factoring in benefits designed to meet these costs. For those still on legacy benefits, as others have drawn attention to, there has been no temporary uplift, despite the increasing costs and the worsening circumstances of those still on legacy benefits.
Severe disability premium is received by people who are severely disabled and living alone without a carer to look after them. They often have life-limiting illnesses, as the Marie Curie briefing tells us. I congratulate the noble Baroness, Lady Sherlock, on her explanation of how the new circumstances have come about. These are complicated and detailed. I certainly note the comments of the noble Baroness, Lady Browning, who has highlighted the inaccessibility of these to the people they most affect.
However, as legacy benefits are gradually being absorbed into universal credit, new rules provide the criteria for a flat-rate transitional payment to those currently in receipt of SDP who make a claim for universal credit after that date. However, this payment, as has been explained by many noble Lords, will gradually erode due to lack of uprating and deductions for changing circumstances, leaving people formerly receiving SDP significantly worse off over time. This is quite shocking, as many noble Lords have said. Has an impact assessment been conducted and what are the results? I would also like to know the numbers of people who have now gone on to universal credit through their changed circumstances but will not be eligible for the transitional payment.
How can it be right to penalise people already suffering from debilitating disabilities, including those living with life-limiting illnesses? It means that many new claimants who would have been entitled to SDP under the legacy benefits system will be unable to afford the care and support they need and will be even more socially isolated as a result. It is important to recognise the very high extra costs faced by those without a carer, who have to pay for almost every job or service they need.
We have heard just what a severe impact the pandemic has had on many people with disabilities and their families. It seems particularly unfair that no uplift has been made to legacy benefits to provide support for those in such severe need. It is particularly shocking that measures to further disadvantage people with severe disabilities have been introduced under the auspices of migration to universal credit. I very much hope that the Minister will raise the very many serious issues that have been discussed in this debate and urge the Government to work with the disability charities to make much better arrangements for people with disabilities.
I support the Motion. I support the aim of extending the uplift of the £20 a week to legacy benefits, and I would certainly support the provision of extra advice about migration to universal credit. However, as we have heard from other noble Lords today, I also believe that the system needs a review, to be able to support those with the most severe needs.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)
My Lords, I thank the noble Baroness, Lady Sherlock, for bringing this Motion to the House, and I thank all noble Lords for their valuable and heartfelt contributions to the debate, which I am extremely grateful for.
Let me say first that we are committed to supporting the most vulnerable in society and in this financial year alone we will spend £55 billion on benefits to support disabled people and people with health conditions in Great Britain. Since this awful virus attacked, that commitment has been shown in the way we have mobilised our welfare system like never before to protect vulnerable people and those who are affected by the pandemic. I hope briefly to provide some reassurance about the protections and support that are in place for those moving from the severe disability premium to UC.
On the question of whether claimants migrating to universal credit will be worse off, importantly, it is not true that everyone who moves to UC who was entitled to the SDP loses money. The regulations ensure that the arrangements for providing financial support to those previously entitled to the SDP continue from 27 January this year. We are not reducing the levels of the SDP-related transitional payment; they remain the same as now. Additionally, through universal credit, disabled people in receipt of the limited capability for work and work-related activity addition receive more than double the equivalent monthly rate available to those in the same circumstances on legacy benefits. Those who are moved to UC by the department and have no change of circumstances will benefit from transitional protection if their UC entitlement is less than what they were receiving on their legacy benefit.
I also take this opportunity to bring to your Lordships’ attention new regulations that will also take effect from 27 January 2021. This is a positive change to existing regulations and will ensure that, in circumstances where a couple who are entitled to the SDP separate and make a new UC claim, both ex-partners will be eligible to be considered for the transitional SDP element in UC.
We have already introduced transitional payments worth up to £405 a month for people previously entitled to the SDP who are eligible. By September 2020, we had paid transitional payments to more than 16,000 people, and by 2024-25, approximately 25,000 claimants will benefit from the total package of support provided by the SDP gateway and the SDP transitional payments, worth an estimated £300 million over six years.
The SDP group is the only one to receive a form of protection after moving to UC following a change of circumstances, because we recognise that it is a distinct group, with people frequently seeing a reduction in award when moving to UC and who are less likely to be able to work. The SDP-related transitional payments are set at levels which broadly reflect the amounts for SDP only, with an adjustment made for people who are receiving the UC limited capability for work and work-related activity addition.
Many, if not all, noble Lords in the debate raised the UC uplift. We will continue to keep everything under review as the situation evolves. The Secretary of State, the Chancellor of the Exchequer and the Prime Minister meet regularly to discuss all these issues and will consider the economic and health context before making any decisions. The Government will continue to assess how best to support low-income families and a decision on the uplift will be made in due course.
Noble Lords also raised the issue of extending the uplift to legacy benefits. I have to be straight and truthful: there are no plans to do that. It has always been the case that claimants on legacy benefits can make a claim for UC if they believe that they will be better off. On the important point that noble Lords raised about advice to be given to people before they make that decision, I would encourage those contemplating such a move to go to GOV.UK or contact the citizens advice bureau to determine, based on their household circumstances, whether they would be better off on UC. That is because of the point noble Lords raised already: claimants cannot return to their previous legacy benefits once they have claimed and been awarded UC. It is very important that they satisfy themselves that they will be better off financially in the new system.
From 22 July 2020, a two-week run-on of income support, employment and support allowance and jobseeker’s allowance is available for all claimants whose claim to UC ends entitlement to these benefits, to provide additional support for claimants moving to UC.
I will now deal with some of the points that noble Lords raised. I will do my best to fit all of them in; if not, I will write to noble Lords after the debate.
The noble Baroness, Lady Sherlock, raised the issue of what the Government are doing about bringing forward long-awaited changes to special rules for people with terminal illnesses. We take the issue of terminal illness very seriously and treat people in such circumstances with the utmost speed and sensitivity. Our processes for dealing with people who have a terminal illness with a life expectancy of six months or less have been designed specifically to enable decisions to be fast-tracked at all stages. The noble Baroness, Lady Ritchie of Downpatrick, also made a point about this issue. I can confirm that universal credit provides enhanced personalised support for those with a terminal illness, and that it is done in the most sensitive and appropriate way possible.
The noble Baroness, Lady Sherlock, asked about a decision on the uplift. I have already covered this; the decision will be made at the time the Chancellor has said, and all circumstances will be taken into account.
I thank my noble friend Lady Altmann for her thoughtful and considered contribution, and for raising the point that what we really want to do is get people back to work. All our energies and time are being spent doing this, because it is one of the best ways to help people in these circumstances.
The noble Baroness, Lady Sherlock, and my noble friend Lady Altmann asked about an update on managed migration. The move to the UC pilot was suspended following the outbreak of Covid-19 and currently no confirmed restart date has been set. The noble Baroness, Lady Donaghy, and my noble friend Lady Fookes raised other issues about universal credit. I understand that people have serious concerns about it, but I would ask all noble Lords to consider the fact that, as my noble friend Lady Fookes said, had the legacy system been in place, it would have buckled and would not have stood up in the robust way that universal credit has done.
The noble Baroness, Lady Bennett of Manor Castle, raised the issue of a universal basic income. I will say as politely and straightforwardly as I can that the Government have not changed their position on this and have no plans to introduce it. She also cited the case of a person who has obviously had great trauma and felt badly treated—that is probably an understatement. I will say to the noble Baroness again that, if she gives me the details of the case, I know that the Minister for Disabled People will want to look into it.
I turn to the questions put by the noble Baroness, Lady Thomas of Winchester, who I personally have the utmost respect for. First, as of 27 January, SDP claimants have been able to move to UC, should they wish to do so. Secondly, the transitional SDP element is treated in the same way as the transitional element for those who are required to move to UC by the department. It is eroded only if a claimant is awarded a new element in their UC or an existing element increases, with the exception of the childcare cost element. At this point, although the transitional element will reduce, the overall money will remain the same.
The noble Baronesses, Lady Thomas and Lady Primarolo, said that disabled people find it difficult to get work and that, in the current circumstances, that difficulty is all the more pronounced. I know that the Minister for Disabled People is absolutely committed to doing all he can. We are already helping disabled people stay in work and enter work through a range of programmes: Access to Work, Disability Confident, the Work and Health programme and the Intensive Personalised Employment Support programme.
My noble friend Lady Browning speaks from personal experience that has been very difficult for her. I can only say that the door is open to continue the dialogue and that I will make sure that that happens. I will get into hot water if I make any comments on the points she raised about women, but I do think that they have merit.
I am sorry, but as much as I am prepared to answer the questions put by noble Lords, time has eluded me, so I shall now hand over to the noble Baroness, Lady Sherlock.
Baroness Sherlock (Lab) [V]
My Lords, I am grateful to all noble Lords who have spoken and I thank the noble Baroness, Lady Janke, for her support in helping to make the case for this Motion. Likewise, I thank the noble Baroness, Lady Bennett, for supporting the Motion and for reminding us of the human face of suffering in that terrible picture of people queuing in the snow to access a food bank.
My noble friend Lady Drake described compellingly the damage these changes can do and why they sit poorly alongside the Government’s moves to support people in the pandemic. I know that the sums may not sound life-changing to some, but they really are. My noble friend Lady Primarolo reminded us of the poverty facing so many severely disabled people, which is being aggravated by the pandemic. She pointed out the severe losses that many will now face. As the noble Baroness, Lady Thomas, said, being disabled is extremely expensive. It is wonderful to see her taking part in this debate and I am grateful for her support and for sharing her experiences and expertise.
I am grateful too to the noble Baroness, Lady Browning, who has long been a champion for disabled people. I thank her for her support and for reminding us of the additional challenges facing so many people with complex disabilities as they contemplate a move to universal credit. I do not think that just going to GOV.UK and testing it out for themselves is the answer. I also note her celebration of the wisdom of women in this regard. That makes me thank in particular our sole male speaker, my noble friend Lord Chandos, for his well-informed reflections and for the work that he and his colleagues on the Economic Affairs Committee have done so well to take apart many issues around universal credit and to flag up the challenges that need to be addressed. The noble Baroness, Lady Ritchie, has once again given her strong support for the Motion and analysed the real problems that this move will pose to severely disabled people and those with life-limiting conditions. I am grateful to her for that.
The noble Baroness, Lady Fookes, spoke up for universal credit, but highlighted the problems caused by underfunding it. I am grateful to her for speaking out so strongly for the £20 uplift. The noble Baroness, Lady Altmann, does not want the £20 uplift to be extended to legacy benefits or made permanent and has argued that getting people into work is the answer. But, as I am sure she knows, universal credit is paid to people who are both in and out of work. Moving someone into work does not solve the problem at all; it simply relocates it.
This debate has highlighted the vital role played by the severe disability premium in enabling sick and disabled people to get critical care. As my noble friend Lady Donaghy pointed out, disability premiums are not a luxury; rather, they help cover the extra costs that disabled people face. The Minister said that if claimants can hold out until managed migration, they will get full transitional protection—but she could offer no information on when even the pilot would restart, never mind when the managed migration programme would be finished. She also said that some people will be better off. I acknowledge that, but the fact that some people will gain is not much help to those who will be much worse off.
I had hoped that the many powerful speeches today would have persuaded the Minister of the case for the changes set out in my Motion. Perhaps they did, really, but she is not in a position to concede them. I hope that, if the House were to endorse this Motion, it might add strength to her arm when she goes back to the Secretary of State and tries to persuade the Government to do the right thing. Again, I am grateful to everyone who has spoken but, to that end, I wish to test the opinion of the House.
Baroness Scott of Bybrook (Con)
My Lords, I beg to move that the House do now adjourn briefly until 5 o’clock.