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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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The Minister for Employment (Guy Opperman)
It is a pleasure to serve under your chairmanship, Dame Maria. I congratulate the hon. Member for Glasgow South West (Chris Stephens)—my good friend, and I apologise for calling him that, as I realise he will get some opprobrium for it, but we are friends, albeit our views differ—on securing the debate. It is a pleasure to answer on behalf of the Government.
We recognise the importance of supporting claimants to manage their financial obligations, and the deductions policy in universal credit provides a co-ordinated approach to providing that support. There is much that I want to address today, but I will start with the basics: employment is up, vacancies are down, economic inactivity is down and we are pleased to see that inflation has fallen today.
The Government believe that we should continue to have a sustainable, long-term approach to tackling poverty and supporting people on lower incomes. The primary aim of the universal credit deductions policy is to protect claimants by providing a last resort repayment method for arrears of essential services, and to ensure obligations are enforced. It is important to strike the right balance between ensuring protections are in place and allowing claimants to retain as much of their benefit as possible for their day-to-day needs, while understanding that although the taxpayer expects us to recover overpaid benefit debt, that must be done without causing undue hardship.
It is worth remembering that people who are on disability benefits and pensioners have never been more supported. Welfare has never been more supported. Colleagues will be aware that state pensions and benefits were uprated by 10.1% in April this year, the national living wage was increased by 9.7% to £10.42 an hour, and other support includes the energy price guarantee, the household support fund and the various cost of living payments, which I will go through in a little more detail. It is not right to look at universal credit through the prism of what it provides because, for those who require extra support, there are the cost of living payments—£94 billion over 2022-23 and 2023-24—as we continue our support for the most vulnerable households.
Over 8 million UK households on eligible means-tested benefits will receive additional cost of living payments totalling up to £900 in this fiscal year. The first £301 payment was made in April and May this year. Two further payments of £299 and, I believe, £300 will follow this autumn and in spring 2024. That is £900 additional support over and above the universal credit support that is provided.
In addition, 6.4 million people on eligible extra costs disability benefits have also recently received a further £150 disability cost of living payment. In 2023-24 we will spend £276 billion on Great Britain’s welfare system, including £124 billion on people of working age and children. Much criticism was made in the debate, which I have taken on board, but those sums have never been higher.
There is also approximately £30 billion for supported housing. Again, a criticism was made that we do not provide enough for that. I remind colleagues that 1.4% of GDP goes on supported housing. That is by a significant margin the largest sum in the OECD—the next highest is 0.9%. Those are the consequences of decisions made to support individuals on an ongoing basis.
Much was made of the deductions policy, which I will try to address.
Jim Shannon
The hon. Member for Glasgow South West (Chris Stephens) referred to the deductions and the data he had received for England, Scotland and Wales. He had asked for the same information on the deductions in Northern Ireland, but for whatever reason that was not available and I do not understand why. Can the Minister use his powers to enable us to have that data?
Guy Opperman
I can hardly turn down a man who ambushed me with cake not once but twice in Newtownards on my two visits to Northern Ireland. It was a pleasure to join the hon. Gentleman and his colleagues there. I saw not just a thriving business, but some of the difficulties and complexities of life in Newtownards and the work that he and the local support organisation to which he referred very favourably, and rightly so, are doing.
On the Northern Ireland statistics, I am 99% sure that those are due to the changes in Government and the current difficulties in relation to Stormont, but I will do everything I can. I will write to the hon. Gentleman individually—[Interruption.]—and to the hon. Member for Glasgow South West, of course. I will probably refer the hon. Member for Strangford (Jim Shannon) to the Department for Communities in Northern Ireland, with a view to ascertaining the specific data that he seeks. He will be aware that, as we discussed when I visited his beautiful constituency by the lough, I as the individual Minister do not control individual jobcentres or the policy in Northern Ireland.
The hon. Gentleman raised a couple of points, which, as he intervened on me, I will try to deal with. One of the points—a general criticism of the roll-out of universal credit—was also raised by the hon. Member for Birkenhead (Mick Whitley). I respectfully reject that point. Disregarding what one thinks of this Government, under no circumstance could the legacy benefit system have coped with covid. Under no circumstance could it cope with and support the cost of living support that we are rolling out on an ongoing basis. Under no circumstance could it allow for the universal approach that we are able to manage because of universal credit. The hon. Member for Birkenhead has a very illustrious predecessor, to whom I send best wishes, because I know he is not in good health. Lord Field would very much have made the case that universal credit was the right thing to do and that it was right to reform, albeit that the roll-out has been a long-term situation.
The managed migration of tax credits was also discussed. With respect, that is an ongoing policy, and there is transitional protection for people moving from tax credits to universal credit. I respectfully invite colleagues to be aware that the migration is going well and that there are ongoing protections.
The hon. Member for Arfon (Hywel Williams) raised many points. It is not really for me to get into the disastrous state of Labour policy, whether it is that of the Welsh First Minister, the Leader of the Opposition, colleagues on the Opposition Back Benches or the hon. Member for Reading East (Matt Rodda), who chose to present the Opposition’s policy. The best comment I heard was from the hon. Member for Leicester East (Claudia Webbe), who has left—or perhaps the Labour party left her. She quoted Engels, and I think also Marx, in support of her policies. When Marx was talking about the division of labour, I did not know he was actually talking about the Opposition party. The long and short of it is that in Labour-run Wales employment is down, as compared with the rest of the country, where it is up. We could compare and contrast the health service in Wales and in England; the constituents of the hon. Member for Arfon, even on the Llŷn peninsula, are travelling to England for operations.
I believe that I have the time briefly to say that I remember well the summer of 2005, when the hon. Member for Arfon and I were both younger, fitter and probably better looking—[Interruption.] He did not have much hair even then, I have to say. We were both standing for the seat of Arfon and the Llŷn peninsula, as the constituency then was, I believe. The hon. Gentleman was exceptionally courteous to this young whippersnapper, who was representing the Welsh Conservative party, particularly when we attended a hustings event that was conducted entirely in Welsh. Although I can say diolch and many other things, can order two beers in Welsh, and have a mother who is a Llewellyn from the Tywi valley, it was an ordeal I will never forget: spending two hours conducting the whole meeting in Welsh, with some rather large headphones for the translation.
The hon. Gentleman rightly raised affordability assessments. I will come to that, if he will bear with me, but it is unquestionably the case that changes have been made to the universal credit deductions policy following representations made by a Select Committee and others, and it is right that I try to explain where we are with that.
In April 2021, the cap on the standard deductions was reduced to 25% of a claimant’s universal credit standard allowance. That followed a reduction from 40% to 30% several years earlier. At the same time, we doubled the new claim advance repayment period to 24 months. The consequence of that was that hundreds of thousands of universal credit claimants retained more of their award. The reduction in standard cap was warmly welcomed, and we believe that it maintains the right balance.
Colleagues have raised many specifics about deductions, but one must remember, for example, that well over 150,000 individuals have child maintenance deducted in respect of children for whom they are responsible. I could add more detail about individual deductions and the different types of deduction, but the child maintenance deduction in particular is one that concerns the Department because it is the state’s obligation to ensure that parents are responsible to some degree for the children they have. Some of those deductions—well over £2 billion—are made in respect of child maintenance, and scrapping all deductions policy, which some have called for, would have a massive impact in that regard.
There are obviously budgeting advances, which help to finance intermittent or unforeseen expenses—for example, essential household items. Those advances ensure that low-income families with an emergency financial need who do not have access to adequate savings or a loan can access funding.
Several hon. Members have mentioned their food banks. I put on the record my support for the Miner’s Lamp food bank in Prudhoe, which I visited again recently and supported with a donation. In respect of loans, credit unions up and down the country are doing a fantastic job and should be supported by Members. I was proud to set up the Northumberland Community Bank, which is the fastest-growing credit union in the north. I am not involved with it now, which is probably why it is the fastest-growing credit union in the north, but it was very much set up with the Church of England and with local communities to try to provide low-cost savings and loans to support individuals and keep them out of potential difficulties.
We believe that we have reached the right balance on the level of deductions from benefits, but we are committed to supporting those who might be struggling. I want to try to address that situation. It was asserted by various colleagues that there is no fall-back position. I do not accept that. We strive to set affordable and sustainable repayment plans, and encourage customers to contact the Department if they are unable to afford the proposed repayment rate. When a customer makes contact, we might be able to reduce the rate of repayment or temporarily suspend repayment, depending on the customer’s financial circumstances.
The review period for customers with a negotiated affordable repayment rate has also been extended from six months to two years. However, customers may contact us at any time to renegotiate affordable repayment terms.
Guy Opperman
I will give way to the hon. Member for Glasgow East (David Linden). The hon. Member for Reading East has had his say.
David Linden
I am grateful to the Minister for giving way. It is important that information is communicated slightly better to claimants. As an action point, will he undertake to go away and look at how information could be better cascaded to claimants so that they are aware that there is a bit more flexibility? I would appreciate that.
Guy Opperman
I certainly will do that, and I will also have a look at the individual letters that apply in those particular circumstances. All such letters, as the hon. Gentleman will know having done the pensions job for five long, lovely years, are kept under review, and there is the opportunity to do that.
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) is no longer in her place—I know she has to be elsewhere—but she raised in particular the issue of access to a journal for those who do not have the internet. Again, we need to make it clear that, obviously, an individual claimant can attend a jobcentre, which has computers that claimants can use to access their universal credit claim and their individual journal, or they can speak to a member of staff who can support them through the process.
Guy Opperman
Bear with me. I might give way, but I am going to keep trying to make progress. The hon. Gentleman had 20 minutes and will have more time soon.
Much criticism was made of DWP staff, particularly by the hon. Member for Leicester East. She used various expressions that I utterly reject. I will not dignify them by repeating them, but I want to make it utterly clear that I am proud to work with the 25,000 men and women who work in our 700-plus jobcentres up and down the country. They do a fantastic job in trying to assist everybody. When she impugns the individual character of DWP staff, I am afraid she is utterly wrong. She should reflect on that and visit her local jobcentre.
Guy Opperman
No, I will not; I am so sorry. I do not think I want to dignify the hon. Lady with any further comment in this debate.
The practical reality of the situation is that we believe very strongly that individual claimants have the ability to receive support. I could go on about various points in respect of advances and the five-week wait. During their first assessment period, a new claimant can receive a payment up to the expected amount of their UC award, which can then be repaid over 24 months. It is not possible to make a payment as soon as a claim is made, and colleagues should understand that. The assessment period must run its course before the award of UC can be calculated. It would not be possible to accurately determine what a claimant’s entitlement will be in the month ahead. The process ensures that claimants are paid their correct entitlement, which is something we all wish to see, and prevents significant overpayments from occurring.
I welcome today’s debate, and I understand and share the concern of the hon. Member for Glasgow South West that we should ensure that we support the most vulnerable in society. I want to finish on a couple of key points. Much criticism is made of the situation in respect of long-standing poverty, but it is a long-standing principle of the Government that the most effective and sustainable way to tackle poverty is by supporting people into work and to progress. In 2021-22, working-age adults living in families in which all adults were working were seven times less likely than working-age adults in workless families to be in absolute poverty after housing costs, and we have made progress. In 2021-22, there were 1.7 million fewer people in absolute poverty after housing costs than in 2009-10, including 400,000 fewer children, with 1 million fewer workless households than in 2010.
Support exists on an ongoing basis and, as I say, there has never been a larger sum spent on those who are most vulnerable. The cost of living support continues into 2024, and I commend the Government’s approach to these issues.