Israel and Hamas: Humanitarian Pause

Debate between Baroness Laing of Elderslie and Stephen Timms

Monday 27th November 2023 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

It is great when the Minister gives very quick answers, which is what I asked him to do.

[Sir Stephen Timms (East Ham) (Lab)]

The prospect of the carnage simply resuming at the end of this pause is a really dreadful one. What is the Minister’s assessment of the likelihood that the ceasefire might be made permanent if, over a period of some further days, all the hostages are released?

Department for Work and Pensions

Debate between Baroness Laing of Elderslie and Stephen Timms

Tuesday 4th July 2023 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Work and Pensions Committee to open the debate.

[Sir Stephen Timms (East Ham) (Lab)]

I am very grateful to have been granted today’s debate about DWP spending.

I will focus in particular on universal credit, whose roll-out started 10 years ago in 2013. The DWP is forecast to have, by some considerable margin, the highest expenditure of any Government Department, at £279.3 billion in this financial year, followed by the Department of Health and Social Care, at £201 billion. DWP spending is the largest by a considerable distance.

Of course, the DWP forecast is uncertain. Almost all its funding counts as annually managed expenditure; it is hard to forecast demand-led spending. DWP’s admin spending—departmental expenditure limits—is 27% lower in real terms this year than in 2010-11. Universal credit spending is forecast to be £50.8 billion this financial year, which is £8.8 billion higher than forecast in these estimates last year, reflecting the recent much-needed uprating and a higher case load. In February, 4.5 million households were receiving universal credit payments.

A key argument in the business case for universal credit was the prospect of reducing fraud and error. Nearly a quarter of the £34 billion net present value gain expected over 10 years from introducing universal credit was due to come from lower fraud and error. In fact, fraud and error have been much worse than they were for legacy benefits. The Department’s statistics show that the universal credit overpayment rate decreased, but from an astronomical 14.7% in May 2021 to 12.8% last year. I know that the Department is setting out to address that problem, and that it has obtained resources from the Treasury to do so. Underpayments were at their highest-ever recorded rate last year, at 1.6%. I hope the Minister will be able to tell us about plans for tackling those problems.

An additional reason that it is so important to get decisions right at the moment is that universal credit is a passport to cost of living support payments. There was a strong case for merging the various benefits into universal credit, and the success of the system in getting urgently needed support out effectively during the pandemic was very important and very impressive. However, there are some big problems—above all, the problem of the five-week wait between applying for the benefit and receiving the first payment. With legacy benefits, the first payment would usually arrive a week and a half or so after applying. With universal credit, having spent hundreds of millions of pounds on what we were always assured was agile technology, the same thing now takes five weeks. That is a fundamental and unnecessary flaw; the security is absent from social security.

In January 2021, the Government rejected the Select Committee’s recommendations to eliminate the wait and instead pay all first-time claimants of universal credit a starter payment equivalent to three weeks of the standard allowance, just to tide people over. The Government response pointed out that claimants can access advances, but of course, those are loans. Repayments reduce the already low monthly awards, and repaying advances is a major driver of the explosive growth in food bank demand that we have seen. Our colleagues in the other place, those on the Lords Economic Affairs Committee—with its Conservative Chair—succinctly highlighted the consequences of the five-week wait in July last year:

“the five-week wait for the first payment…drives many people into rent arrears, reliance on foodbanks and debt.”

As such, I ask the Minister once again whether the Government will reconsider our recommendations, or whether we have to wait for a different Government for that fundamental flaw to be addressed.

I am very pleased to say that one area in which the Government have listened to the Committee is reimbursement of childcare costs for people claiming universal credit. I warmly welcome the lifting of the cap and up-front payments for childcare announced in the Budget, and I hope that our future reports will have comparable levels of success. Those changes will support people to be in work in future.

Last week, the Child Poverty Action Group published a fascinating report called “You reap what you code”, highlighting areas where the universal credit computer system does not deliver what it should. It gave the example that legislation and guidance allow some groups to submit a universal credit claim up to a month in advance, but the system does not allow that, nor is there an adequate workaround outside the digital system. As such, some care leavers and prisoners expecting release can miss out on an entitlement that they are due. For all its success in the pandemic—I am unstinting in my recognition of that success—the rigidity of the digital system is a problem. Can the Minister tell us whether a fix is planned for that problem of early claims, which the Child Poverty Action Group highlighted last week?

Does the level of benefits meet need in the way it is supposed to? Do benefits represent value for the taxpayer? The Committee is conducting an important inquiry into benefit levels in the UK, and will report in the first half of next year. Benefit levels are very low. The Joseph Rowntree Foundation and the Trussell Trust told the Committee that

“the basic rate of Universal Credit—its standard allowance (or equivalents in previous systems)—is now at its lowest level in real terms in almost 40 years (CPI-adjusted) and its lowest ever level as a proportion of average earnings.”

They estimate from pretty careful research that a single adult needs £120 per week to cover essentials: food, utilities, vital household items and travel. That is excluding rent and council tax. Universal credit’s standard allowance is £85 per week for a single adult over 25. That is a shortfall of at least £35 per week, and deductions—for advance payments, for example—often pull actual support well below the headline rate.

The Joseph Rowntree Foundation and the Trussell Trust call for an essentials guarantee. They make the point—which has been suggested this week in the press—that we might get a below-inflation uprating of benefits next year, making those problems even worse. I would be grateful if the Minister gave an assurance on that front, because that would be very bad news indeed.

Budget Resolutions

Debate between Baroness Laing of Elderslie and Stephen Timms

Thursday 12th March 2020 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

It is a privilege to follow the hon. Member for Warrington South (Andy Carter) and to congratulate him on a warm and confident maiden speech. I welcome his generous tribute to Faisal Rashid, not only for his brief period in the House but his work as mayor and local councillor before that. The hon. Gentleman is right to highlight the potential of Daresbury science park in particular. The House will look forward to hearing much more from him in the years ahead.

The Financial Times pointed out this morning that yesterday marked the end of the Tory promise to eliminate the deficit. For a large part of the past decade, ending the deficit appeared to be the Tories’ raison d’être, but we cannot blame the current Chancellor for concluding yesterday that his Tory predecessors’ policies on the deficit had comprehensively failed and that the result has been, to quote the Chancellor yesterday,

“a decade-long slowdown in productivity.”—[Official Report, 11 March 2020; Vol. 673, c. 282.]

In what was a remarkable phrase, the Chancellor told us yesterday that his was a plan to “fund…our future prosperity.” I have never heard any Chancellor previously claim that we could spend our way to prosperity, but that is precisely what many Members on the Conservative Benches used to accuse Members on the Labour Benches of believing. It is now apparently official Tory policy. Repudiating past Tory policy is no bad thing, though, and I wish to welcome a number of the measures in the policy area of the Work and Pensions Committee, which I chair.

I warmly welcome the wider availability of statutory sick pay; the faster access to employment and support allowance; and the £500 million hardship fund for disbursement by local authorities, which recognises, as I suggested in my intervention earlier during the excellent speech of my right hon. Friend the Member for Hayes and Harlington (John McDonnell), the need for central Government funding to replicate what the old social fund used to do until it was abolished by the coalition.

I welcome the changes on universal credit. The suspension of the minimum income floor means that self-employed people whose income takes a hit will get at least some extra help from universal credit. The truth is, though, that the minimum income floor should not be there, and there is a strong case for making its suspension permanent.

I also welcome the reduction in the maximum rate of repayment of advances, and the longer period of repayment, although those measure will take effect only from October next year.

As my hon. Friend the Member for Croydon North (Steve Reed) said, the Budget did not address the fundamental problems with universal credit. Research by the Trussell Trust has found that people on universal credit are two and a half times more likely to need help from a food bank than people in otherwise similar circumstances who are still on the legacy benefits. That is a remarkable statistic that underlines the scale of the problems that universal credit is causing.

Even more startling is the article this month in The Lancet. I do hope that Ministers will weigh very carefully the dry academic prose in that article, which concludes that up to the end of 2018:

“An additional 63,674 unemployed people will have experienced levels of psychological distress that are clinically significant due to the introduction of Universal Credit”.

It goes on to suggest that over one third of them

“might reach the diagnostic threshold for depression.”

About one quarter of those ultimately expected to be on universal credit are on it at the moment. The Government say that the rest will be on it by the end of 2024. The Office for Budget Responsibility yesterday expressed its traditional and well-founded scepticism about that timetable, and suggested it is likely to take two years longer than the Department for Work and Pensions says. Given that the harm being caused by universal credit is so well documented, I do not think it is viable for the Government simply to press on.

What is it about universal credit that is causing such hardship? I think it is the delay—never before a feature of the social security system—of five weeks between applying for benefit and being entitled to payment. That is why the Select Committee has made it the subject of our first major inquiry. We want to work closely and constructively with Ministers and the Department to identify workable and affordable solutions to what is, incontrovertibly, a very serious problem.

I want to make one final point. One of yesterday’s Budget’s few revenue-raising measures was the increase in the immigration health surcharge. One might think that this is about increasing the charge to tourists coming to the UK to take advantage of the NHS, but it is not. It is a major burden being imposed on a large number of modestly paid working families, a large number of them in my constituency, and I cannot see how it can be justified. These are families who are settled in the UK, often with children who have been born in the UK, and who are on the 10-year pathway to indefinite leave. They are given leave to remain for two and a half years at a time. They are paying their taxes, like everybody else who uses public services, but every two and a half years they have to pay thousands, on top of their taxes, in visa charges, and now they will have to pay even more through this immigration health surcharge. They have already paid tax and national insurance. How can these swingeing additional charges be justified?

[Madam Deputy Speaker (Dame Eleanor Laing)]

It is a great pleasure to call, to make his maiden speech, Mr James Grundy.