Universal Credit

Debate between Earl of Kinnoull and Baroness Stedman-Scott

Thursday 12th November 2020 Lords Chamber

[Baroness Stedman-Scott (Con)]

As I already said to the noble Lord, Lord Woolley, we are having discussions with the Treasury on the best way to support people both through Covid-19 and beyond. As soon as those decisions are made, Parliament will be advised.

[The Deputy Speaker (The Earl of Kinnoull) (Non-Afl)]

My Lords, the time allowed for this Question has now elapsed and we therefore move to the fourth Question.

Covid-19: People Living in Poverty

Debate between Earl of Kinnoull and Baroness Stedman-Scott

Thursday 30th April 2020 Lords Chamber

[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?

[The Deputy Speaker]

I am sure the Minister can have a minute or two more.

[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.