Oral Answers to Questions

Hywel Williams Excerpts

Monday 18th March 2024 Commons Chamber

[Paul Maynard]

It is as if the shadow Minister has not noticed the almost £900 of cost of living payments made to pension credit recipients across the country over the last year. I know the Opposition have relied on last week’s Resolution Foundation report to criticise what we are doing, but this is what the report actually says:

“‘Pensioners used to be by far the most likely to be in poverty…now they are the least likely.’ This change in the relationship between old age and low income is one of the most profound social and economic changes this country has seen”.

We achieved that under this Government, not under our failed Labour predecessors.

[Hywel Williams (Arfon) (PC)]

11. What steps he is taking through the benefits system to tackle poverty in rural areas.

[The Secretary of State for Work and Pensions (Mel Stride)]

We are bearing down on poverty, not least by incentivising work within the benefit system. As the hon. Gentleman will know, we have reduced the universal credit taper, for example, which has led to a record level of payroll employment and near record low unemployment.

[Hywel Williams]

I commissioned a poverty report for the Arfon constituency from the highly respected Bevan Foundation—copies are available online in Welsh and English. One finding is that, of the people receiving both universal credit and housing benefit in Arfon, 35% are paying the bedroom tax, compared with 21% across Wales. This is cushioned to some extent by the Gwynedd local authority’s discretionary help, but will the Minister review the differential negative effects of the bedroom tax between communities, particularly those with a diminished housing stock because of, for example, high levels of holiday homes?

[Mel Stride]

I thank the hon. Gentleman for referring to that report, which I will look at with interest. Of course, there is no such thing as a bedroom tax, as it is not a tax at all; it is a spare room subsidy. It is there for very good reason: to free up additional space for those who need it. On the housing front, as I said earlier, local housing allowance has been improved such that 1.6 million people on low incomes in the private rented sector will be, on average, £800 a year better off come April.

Autumn Statement Resolutions

Hywel Williams Excerpts

Monday 27th November 2023 Commons Chamber

[Hywel Williams (Arfon) (PC)]

The autumn statement may have been intended as something of a pre-election sweetener, but for most people in Wales it has a bitter taste. The intended big news was, of course, the tax cuts and, in Wales as elsewhere, a few small persuaders for some favoured Tory marginals—but not for others, as we will see at the next election. The reality is the biggest drop in living standards since records began and, as we have heard, the highest tax burden since the second world war. The Chancellor’s speech gave little relief and even less hope to Welsh households and leaves our public services in an even more desperate condition.

On Thursday, we will no doubt hear right hon. and hon. Members on the Government Benches making a great deal of the intended cut to national insurance. I look forward to hearing at least one of them also noting that tax thresholds have been frozen, pushing 4 million low-paid workers into income tax and 3 million people into a higher tax band, which strikes me as something of an own goal for the Conservative party at the next election. The wholly predictable regional truth is that the national insurance cut predominantly favours London and the south-east, where it offers an average gain of £316 annually, while those in Wales, for example, stand to gain £211. That amplifies rather than relieves Wales’s economic plight.

Our public services continue to wither without the investment needed. Buses, railways, healthcare, sustainable energy and other such initiatives in Wales are desperate for proper funding, yet the projections for departmental budgets show a £19 billion cut. We have been through many years of crisis, yet our economy is not prepared for the shocks of the future—an ageing population, higher Government debt, higher interest rates, energy insecurity and, of course, climate change—because we are seeing the consequences of failure to act over 13 long years.

A report published today by the Energy and Climate Intelligence Unit finds that, due to the combination of energy cost and climate change impacts across 2022 and 2023, household food bills have increased by an average of £605. Climate costs account for 60% of that—£361 per household.

Wales desperately needs to break from the economic doom loop caused by chronic short-termism. The autumn statement tightened the trap of short-term thinking. It is a cycle in which we are told that investment is not possible because we cannot afford it, but failure to invest weakens our economy even further.

Plaid Cymru has outlined fair and ambitious plans for Wales, which include replacing the Barnett formula with a funding system based on need. We would also devolve the Crown Estate to Wales, as has been done in Scotland, ensuring that the profits of our natural resources are invested back into our communities. But we also need practical help for the immediate cost of living pressures faced by ordinary people. For example, we ask for moderate measures to help with petrol and diesel costs. Major supermarket fuel retailers are enjoying record profit margins by overcharging at the pumps, despite reduced wholesale fuel prices.

We called on the Chancellor to pressure the large fuel retailers to reduce prices when wholesale costs fall. The rural fuel duty relief scheme currently gives 5p relief to rural areas in England and Scotland. Extending it to Wales would have helped people in rural areas who are sadly reliant on cars due to our terrible public transport system, but the Chancellor chose not to act.

We urged the Government to address the severe geographical disparity in energy bill standing charges. Residents in Wales pay £80 more than Londoners every year, though we produce much more electricity than London. The stark inequality requires urgent action by the Treasury and further underlines the need for a fairer energy pricing system, including the development of a social tariff but, again, the Chancellor chose not to act.

Wales deserves more than empty promises. We are asking for—indeed, we are demanding—fairness, investment and a genuine commitment to rid our communities of poverty and the lack of opportunity. The autumn statement delivered none of that. It is further proof to us that London-based economic policymaking will never work in the interests of Wales.

Work Capability Assessment Consultation

Hywel Williams Excerpts

Tuesday 5th September 2023 Commons Chamber

[Mel Stride]

It is correct that we have gone from 21% to 65% in that short space of time and I recognise that that statistic is simply unacceptable. We know that one in five people in that group wants to work, given the right support, and we need to do something about that. Quite rightly, my hon. Friend also raises the fundamental change in the way that work is conducted in the modern world. The last time the work capability assessment was reviewed for reform was 10 years ago. That is inadequate and it is now time to make appropriate changes.

[Hywel Williams (Arfon) (PC)]

There are 76,000 people in Wales with a severely limiting condition. New research this summer shows that four in 10 of them are having to skip or cut down on meals or have gone without heating. Is the Secretary of State confident that the proposed changes will remedy that?

[Mel Stride]

It is a fact that people are better off, on average, being in work than being on benefits. I pay tribute to my predecessor who introduced universal credit, which makes that the case. Bringing people into work who would not otherwise be in work means that they will, on average, be better off. This Government have increased the national living wage by over 9%—it has been £10.42 since April—and have introduced cost of living support for 8 million low-income households, 6 million disabled people, pensioners and so on. In response to the hon. Gentleman, the proposed changes are another step in exactly the right direction.

Universal Credit Deductions

Hywel Williams Excerpts

Wednesday 19th July 2023 Westminster Hall

[Hywel Williams (Arfon) (PC)]

It is a pleasure to serve under your chairmanship, Dame Maria, and to speak in this debate. I congratulate the right hon. Member for Glasgow South West (Chris Stephens)—sorry, the hon. Member, though I am sure he will be right hon. at some point—on securing it.

I did have a much longer speech. However, I cut it quite severely for this debate, thinking that there might be a mass of Conservative Back Benchers here to defend their Government’s policy. Clearly, I was mistaken. Given First Minister Mark Drakeford’s statement last night that Welsh Labour would oppose cuts and stoppages to universal credit, I had rather hoped to see a mass of Welsh Labour MPs here as well. I confess that cannot spot a single one, though I commend the three Labour Back Benchers who are present, and look forward to their speeches.

Arfon is one of the poorest constituencies in the UK, as the Minister will know, having stood against me there some time ago—but we will not go into that. For the poorest of the poor, the outlook is very bleak. In February this year, 4,500 people claimed universal credit in Arfon, and 2,100 of them, or 48%, were subject to deductions—nearly half of them. The average deduction was £59. The total deduction taken from the very poorest people in Arfon every month is £125,000; grossed up, that is £3 million a year. Every year, therefore, the poorest people in Arfon are returning £3 million to the Treasury. They cannot afford that. They are on universal credit—a sum assessed to be the very minimum needed to live. I could not live on universal credit, and certainly not on universal credit that is reduced by £59 every month. I have a straight yes/no question for the Minister: could he live on universal credit that has been cut every month by £59?

I did a surgery specifically on universal credit some time ago, and did a budgeting exercise with a constituent of mine from a housing estate on the very edge of town. She knew exactly how much she had to spend. There was nothing spare at all. Looking at the figures, I said, “ Look, you’ve got a pound spare.” She replied, “Once a week, I take the bus home with heavy shopping, rather than having to walk the whole way every time.” I do not know exactly how much I have to spend every month. Does the Minister know? My constituent did. She is an expert. It is unlike the picture that is often conveyed of people on universal credit—that they are somehow feckless.

In Wales, in February, 114,100 children lived in families who are on universal credit and paying deductions. The percentage of Welsh children in universal credit households paying deductions was 57%. Three of every five children are in families on universal credit living below the minimum sum assessed to meet their needs. That is the level of deprivation that the system causes. The Trussell Trust has been mentioned several times; it is no surprise that people on universal credit are being referred to its schemes in Wales. Over half of them are also paying deductions. It is quite clear from the evidence where the problem lies: with deductions for half of people on universal credit.

The monthly deduction from universal credit households with children in Wales was £4,208,000—over £50,496,000 every year. Wales is a poor country. Other parts of the UK are poor as well, such as north-east England and Merseyside, but I can say this for Wales as a Welsh MP: our poorest people cannot afford to lose £50 million in income every year. We cannot afford this Tory Government. Indeed, we need a coherent Welsh benefit system, among other things, starting of course with the devolution of benefits administration—that is my party’s policy.

On 24 April of this year, I asked the Under-Secretary of State for Work and Pensions, the hon. Member for Mid Sussex (Mims Davies), a very straightforward question:

“Have the two-child limit and the benefit cap increased child poverty?”—[Official Report, 24 April 2023; Vol. 731, c. 491.]

Now, I would imagine that most people here know the answer to that. The Under-Secretary of State, however, replied with 88 words of evasion but no answer. Put simply, that answer is of course, “Yes”.

The two-child limit affects nearly 19,000 families in Wales, and abolishing it would give each child an extra £3,235 every year. On a UK basis, it has been calculated that this change would cost £1.3 billion. To put that in perspective for hon. Members, the most valuable premier league squad is Manchester City, which is valued at £895 million. But let’s not be too ambitious! The fifth most valuable is Man United at £645 million; for the value of two Man United squads, we could take all of these children out of poverty. This Government will not do it, but for pity’s sake, what about the official Opposition angling to be the next Government? Are the lives of children blighted forever by poverty not worth two football teams? Would that not be better on day one of a new Government—better than scrambling to balance the Tories’ books?

The shadow Minister should consider the words of Raymond Williams, one of the giants of socialist thought in this country in the last century—although a member of my party, not his—who said something very striking, with which I will finish:

“To be truly radical is to make hope possible rather than despair convincing.”

Oral Answers to Questions

Hywel Williams Excerpts

Monday 24th April 2023 Commons Chamber

[Mims Davies]

May I remind the hon. Gentleman of Labour’s 10p tax rate, and the fact that we have doubled tax-free allowances? [Interruption.] Food banks are important. They are independent charitable organisations where people in local communities can support each other. [Interruption.] This is a great example of the generosity of spirit in our communities. [Interruption.] If this mattered to the hon. Gentleman, perhaps he would listen to my response rather than chuntering from the Front Bench.

I remind the hon. Gentleman that we take the issue of food security very seriously. That is why we added the internationally used food security questions to the “Family Resources Survey: financial year 2019 to 2020”. The new statistics on usage will help the Government to understand more about the characteristics of the people who are most in need, and we will continue to do what we pledged to do and are proving to do in supporting the most vulnerable.

[Hywel Williams (Arfon) (PC)]

8. What steps he is taking to reduce child poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

This Government believe that work is the best route out of poverty for families and we are supporting parents to progress, to stay in work and to be better off. That was shown in our spring Budget, which will deliver an ambitious package of measures, across Government, to support people to enter into work, increase their working hours and extend their working lives. We have also raised benefits and benefit cap levels by 10.1% and we are providing those further cost of living payments, which commence tomorrow.

[Hywel Williams]

Have the two-child limit and the benefit cap increased child poverty?

[Mims Davies]

The reality of the policy that the hon. Gentleman mentions is about fairness for the taxpayers who support the most vulnerable and making sure that we have a welfare and benefit system that works. We will spend around £276 billion through the welfare system in 2023-24, including £124 billion on people of working age. I would again point people towards the cost of living website and the benefits calculator on gov.uk and I would ask him to note that the benefit cap was raised this year as well.

Local Housing Allowance

Hywel Williams Excerpts

Wednesday 15th March 2023 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I beg to move,

That this House has considered the Local Housing Allowance.

I am grateful and delighted to be able to lead the debate, and to do so under your chairmanship for the first time, Ms Elliott. I am glad to be here.

Housing represents a large cost to many people, but it is becoming increasingly unaffordable. The aim of the local housing allowance, of course, is to help those renting in the private sector, but it is becoming less and less effective because the level of support is increasingly out of step with the actual housing market. Since 2012, LHA rates have been decoupled from the 30th percentile of rents. Some hon. and right hon. Members will perhaps remember when it was coupled to the lower half of the market, rather than the lower third, but there we are—it is now the 30th percentile. Decoupled, it is instead uprated by consumer prices index inflation, 1% or even 0%.

That, in turn, has led to a growing gap between the actual rents that people pay and the amount of housing support that they can receive. It was therefore very welcome —but long overdue—when, in March 2020, in response to the pandemic, the Government increased LHA rates to realign them with the lowest 30% of rents at September 2019. Suddenly, we were returned to the status quo ante. However, that relief was very short lived: inexplicably, the Government froze LHA again in November 2020. Indeed, the Institute for Fiscal Studies said that the policy was

“arbitrary and unfair, and its consequences will only become more bizarre over time.”

Freezing the LHA has two broad consequences. First, the rise in rents is decreasing the amount of housing in the private rented sector available to those claiming housing benefits. Secondly, the support that low-income renters get with housing costs will be related not to the current level of rents in their area but rather to the rents of 2019. A moment ago, I used the word “inexplicably.” However, the Government’s thinking might well be quite obvious. Most commentators see it plainly as a short-term money-saving exercise—short term and short sighted, as the annual cost of maintaining the LHA level in cash terms was forecast to be £840 million in 2022-23, which would gradually fall to £345 million by 2025-26.

The alleged saving is illusory when one factors in the wider economic and social damage that the decision is causing. Previous analysis from Crisis showed that the annual cost of restoring LHA to the 30th percentile would be around £1.1 billion. That would in turn lift 32,000 people out of poverty and save a further 6,000 people from homelessness, which would produce savings of £5.6 billion—a cost of £1.1 billion, a saving of £5.6 billion. Some £5.5 billion of that saving would be on homelessness services, and £124 million on temporary accommodation. Over a three-year period, after the costs are deducted, that would save the UK Government £2.1 billion. That is why one must take the broader costs into account.

That sum is itself not to be discounted—it is a large amount of money—but most importantly, restoring the LHA to the previous level would save vulnerable people and their children from untold misery. That is the real gain. I would say it is unnecessary misery—unless, God forbid, we think that the cut in LHA is in fact an arm of disciplining the poor. Despite that evidence and the growing pressure on the Government, it was bitterly disappointing to see them maintain a freeze on LHA in the 2022 autumn statement. Although I listened very carefully to the Chancellor’s jolly festival of optimism at lunchtime, I did not detect a single word of comfort about LHA.

Despite the housing benefit freeze, rents continue to rise. In the 12 months to January 2023, private rents, in Wales at least, increased by 3.9%, the highest annual percentage change since records began in 2010. The damage being done is quite clear. The Bevan Foundation reports that in the last month only six of the 22 local authorities in Wales had any properties available at or below the LHA rates. The actual numbers are stunningly bad. During the first two weeks of February, only 32 properties in Wales were available at or below LHA rates—just 32 properties for the entire country and just 1.2% of the properties advertised on the formal rental market. In my local authority of Gwynedd, 187 properties were advertised for rent, but only 10 were fully covered by the LHA rates. People should remember that Gwynedd is—if Members will allow me this term—one of the “better” areas, with 10. Many places have none whatsoever.

There is broad consensus across the housing and homelessness support sector in favour of unfreezing the LHA and restoring it to the 30th percentile. Voices such as Crisis, the Select Committee on Levelling Up, Housing and Communities, the National Residential Landlords Association and Welsh anti-poverty organisations—such as the Bevan Foundation, which did the research I mentioned earlier—say that, and I echo those calls. The Chancellor should unfreeze local housing allowance and uprate it to the 30th percentile of market rents as we begin to address the unaffordability of housing.

Last year, I asked the Government in a parliamentary question whether they had made an impact assessment of the decision not to uprate the LHA and about the impact on the proportion of homes available in Wales that would be covered in full by LHA. I was told that no such assessment had been made. That is making policy in the dark. If we do not know what we are dealing with, how can we make policy? I ask the Minister, given that the growing gap between real rents and LHA rates in Wales is plain to see, how the Government can justify not making such an assessment and whether she will do so? That seems to me to be an obvious step to take.

Such an assessment might highlight the way that the LHA freeze perpetuates homelessness and housing insecurity. The shortfall means that people claiming housing benefit are forced to move into properties that are not fully covered by what they receive from the DWP and, often, properties of terrifyingly poor quality. Many hon. Members will have seen the sorts of cases we get—I get them regularly—that involve houses that are essentially unfit for people to live in.

Crisis Wales has said that

“too many people and families are being forced into homelessness because housing benefit simply isn’t sufficient to keep a roof over their heads”.

It is a fundamental failure. Policy in Practice found that for every 10% increase in the number of households experiencing a gap between the LHA rate and rent, the proportion of households in temporary accommodation will rise by 1%. The cause and the effect are quite obvious, I think; there is a congruity and a causality there. There are just more people in temporary accommodation.

Between 2015 and 2022, the number of households that required assistance to avoid homelessness in Wales increased by approximately 9,000, while the estimated number of rough sleepers increased by 69%. The evidence is there if the Government choose to look; if they choose otherwise, and not to look—if they choose to pass on the other side of the road—they will of course not see it. The Bevan Foundation also notes that it is not a coincidence that this all took place at the same time as LHA rates were frozen. Even now, we can see a slow increase in homelessness, with 158 more people in temporary accommodation in Wales between November and December of last year. That is in just one month. I say again that that is at a substantial and unneeded cost to the public purse.

I have another question for the Minister. Will she now assess how much local authorities could save in housing people who are homeless by unfreezing LHA rates, to enable them to sustain tenancies? That is an obvious piece of research, and the answers would be illuminating.

Housing insecurity can also lead to further pressure on other essential costs, such as energy and food, with serious consequences for mental and physical health. That is likely to be one contributing factor in the shocking statistic that 61% of people in Wales report that their mental health is negatively affected by their financial position. The LHA freeze means that emergency discretionary funding, such as discretionary housing payments or DHPs, are being used to plug the gap. Again, Welsh local authorities spent the highest sum of their allocated DHPs in 2020-21. The latest data show they are on course to do the same this year, with a 4% increase in the number of DHPs being spent on local housing allowance shortfalls.

That is all in the context of austerity, of course, as the reduction in DHP funding available to Welsh local authorities in the last financial year amounted to a 27% cut, which follows a reduction in the previous year of 18%. The cuts resulted in the Welsh Government topping up DHP funds last year by £4.1 million. That is the knock-on effect. I again put it to the Minister that there is a fundamental problem when local authorities are using their emergency allocations, and the Welsh Government have to top up the funds due to successive cuts. Does the Minister think that is sustainable in the long term? I do not think so, but I am interested in her opinion.

The LHA freeze is not the only concern. When it comes to the calculation of LHA, it is important to note that the rates sometimes do not accurately reflect market conditions, particularly at the very local level. At present, there is no obligation on landlords to share information on rents they charge, which makes it difficult to secure a true overview of the local rental market. Furthermore, are the broad rental market areas used to calculate each area’s LHA truly representative? They can encompass large areas with multiple rental markets within them. The gradient of change in the markets might be extremely steep, and might not take hotspots of high rent into account.

For example, in my constituency of Arfon we have Bangor University and a student population of 9,000, which is very large relative to the around 20,000 people in the local area of Bangor itself. There might be a severe hotspot there. In more rural parts of north-west Wales, holiday lets might have a significant effect. In the south-east, the removal of the Severn bridge tolls has increased rents in places near the border, such as Newport. People live in the cheaper parts in Wales and drive over to Bristol for their jobs.

[Kerry McCarthy (Bristol East) (Lab)]

The hon. Gentleman mentions Bristol, where this is a massive issue, which is the reason I have come to this debate. A recent inquiry by the Bureau for Investigative Journalism and a local newspaper, The Bristol Cable, found that there were virtually no properties with LHA rates available in Bristol, as he said is the case in his patch. I share his concerns; it is happening everywhere.

[Hywel Williams]

I agree entirely with the hon. Lady. As I said earlier, this affects the entire UK. Indeed, she might be clairvoyant, because I am going to refer that particular point in Wales. My concern, of course, is with Wales, where I know what is happening best. In Arfon, as I said, we have Bangor University and the holiday lets market, and then we have the Severn bridge.

I have asked the Department for Work and Pensions if it plans to undertake an assessment of the accuracy of the mechanism and metrics used to calculate the rate at which the local housing allowance is set and allocated in Wales, and the broad rental market area boundaries, if they are relevant. I was told that those boundaries are kept under review by the rent officers in Wales, and if they decide that a boundary should change, they can submit a review to the Secretary of State for consideration. I ask the Minister: have there been any applications by rent officers in Wales to request a review of broad rental market areas in Wales? I would be interested to know. I believe the BRMA mechanism should be devolved. Housing is already a devolved matter, as are other welfare services. There is a congruence between them, and a reasonable case can be made for them to be under the same authority. We could then redesign the mechanism to be far more responsive to local circumstances.

The local housing allowance is just one plank of the large-scale reform of the housing market. That is why Plaid Cymru secured the inclusion of a welcome commitment by the Labour Government in Wales to introduce proposals for a fundamental right to adequate housing for Welsh citizens, as well as an explanation of the role that a system of fair rents could play in making the private rental market affordable for local people on local incomes. There are also new approaches for making housing affordable. The devolution of housing benefit has a key role to play in that process. Had we control of the funding of housing benefit, we would then do things differently, such as repurposing some of the money into building more social housing. That would allow Wales to move from a model of subsidy to a rent system that subsidises supply. It is a straightforward move.

Welsh Labour has committed, in the co-operation agreements with Plaid Cymru, to advocate for the devolution of the administration of benefits. I asked the shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth), if he would be prepared to pledge that. He said that I was inviting him to venture into choppy waters. I think that is quite true, but I will just bowl this one at my colleague on the Labour Front Bench, the hon. Member for Westminster North (Ms Buck): will the Labour party in Westminster consider supporting devolving LHA to Wales, as Welsh Labour Members in the Senedd have asked?

To conclude, it is vital that the Government take action to end the housing crisis. Affordable, decent housing should be a right for everyone. Affordability is central to housing stability, and can then reduce stress and increase self-esteem, wellbeing, life satisfaction and a sense of security for people. It can also alleviate crowding, further reducing stress and the spread of infectious diseases. I call on the Government to take action now to address the affordability crisis by unfreezing the local housing allowance.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

I thank the hon. Member for Arfon (Hywel Williams) for calling this debate on the local housing allowance, which provides housing support for universal credit and housing benefit claimants in the private rented sector. I thank you, Ms Elliott, for presiding over this important debate; it is my first time here, too.

The Government fully recognise the importance of affordable, decent quality housing, as the hon. Member for Westminster North (Ms Buck) pointed out, which is why we have invested significantly to support those on low incomes, including private renters. All constituency MPs are focused on this issue, as has been alluded to this afternoon. We are grateful to our excellent caseworkers who support us and keep us informed about what is going on in our constituencies. I thank all the charities for all the positive work that they do in the sector. I will be visiting further innovative pilots and interventions on Monday to look and learn and see how we can really help the most vulnerable to progress, including some of the groups that have been mentioned this afternoon.

Acting on childcare, as we have done today, helping people to progress and earn more and helping people with energy costs will help with the wider challenges that many of our colleagues have spoken about this afternoon and all the constituents who have been impacted. The Government spent almost £30 billion supporting renters with housing costs in 2021-22. More widely, the Chancellor announced in the autumn statement a significant wide-ranging package of support to help low-income households struggling with the increased cost of living, which will of course include housing.

We recognise and acknowledge that rents are increasing. However, the challenging fiscal environment does mean that difficult decisions were necessary to ensure that support is targeted effectively. That support provides stability and certainty for households through the further cost of living payments for the most vulnerable for 2023-24, which I was pleased to bring forward myself. Around 8 million households on eligible means-tested benefits will get a further £900 pounds in payments in 2023-24.

[Hywel Williams]

Does the Minister accept the argument that I and other Members have made—that doing something about the local housing allowance would save the Government money in the round?

[Mims Davies]

I appreciate and understand the point that the hon. Gentleman is making, and I will make some further comments shortly.

Today’s Budget has focused on more help so that people can be better off, to raise living standards and to improve lives. To the hon. Member for Westminster North and the right hon. Member for East Ham (Sir Stephen Timms), I say that this is a challenge that I am working on and that I am keen to rise to—across Government, as the hon. Lady says, and of course with the Department for Levelling Up, Housing and Communities. I say to anybody struggling today, whether with housing costs or other matters that are impacting them, that there is an opportunity to find out more on the benefits calculator website, in case they are missing out on any extra support. There is also the Help for Households website and the Job Help website. Of course, as has been mentioned, the benefit cap, working age benefits and disability benefits will also be uprated by 10.1% for 2023-24.

The household support fund extension provides an extra £1 billion of funding, including the Barnett impact. I met many local authorities yesterday afternoon to see how they are targeting that support—particularly on housing needs and costs, white goods and other things that might affect household budgets. The scheme will be backed with £842 million and will run from 1 April to 31 March 2024. It is right that devolved Administrations will decide how to allocate that Barnett funding. As we have heard, local authorities are expected to support those households most in need.

One of the Government’s key aims is to support people into work and to progress in work where possible. That approach is based on clear evidence that, for those who can work, particularly where the work is full time, it substantially reduces the risks of poverty. We see real challenges, to which the hon. Member for Westminster North alluded: more single households, more single parents and family breakdown. The support that we are giving, because of global impact, means that the supply is all the more challenging. I agree with the hon. Lady that wider issues around cost and quality, which very much concern me, mean that this policy, the growing need and the focus are only getting larger. I agree that, in Government, the issue is very much about more than me; I am sorry that I am not enough this afternoon, but I will try to do my best.

Let me turn to some of the points made by hon. Members. On the decision to freeze, we recognise that rents are increasing. However, the challenging fiscal environment has led to where we are, and it is important that we target effectively. The Secretary of State will review the rates and the standard process annually. The hon. Member for Arfon raised the issue of quality. Discretionary housing payments can be made to help claimants with the costs associated with moving to a new home if there is a quality issue. Everyone rightly has the ability to get a safe and secure home. Landlords are key; we need them to come forward, to stay in the sector and to want to be part of the solution where they have already met the decent homes standard. Quality housing remains a priority for this Government, and of course there is currently a White Paper on that.

--- Later in debate ---

[Hywel Williams]

I thank everyone who has taken part in the debate; we have heard some very powerful evidence. I thank the Minister for her replies, as well. We will not let this be. Can I also say that other Members would have been here? I neglected to say that my hon. Friend the Member for Cynon Valley (Beth Winter) would have been here, but she had to attend a family funeral. There is a great deal more interest than we see here in the Chamber.

Social Security (Additional Payments) (No. 2) Bill

Hywel Williams Excerpts

Committee stage
Monday 6th March 2023 Commons Chamber

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I am delighted, as I am sure everyone is, to see you back in the Chair, Dame Eleanor.

I also do not seek to delay the Bill’s progress. New clause 14 is a probing amendment that raises an issue to which the shadow Minister alluded: the failure of the system, however good its intentions, to deal adequately with people who have fluctuating incomes, particularly those who are self-employed.

The way in which the system interacts with self-employed people has always led me to believe that, with all due respect, the vast majority of people advising Ministers, and the government machine as a whole, do not understand the self-employed or how they work. All too often, I am afraid, those who work for the Government in full-time, regular jobs seem to think that self-employment is something to be wary of, and that it can lead to a risk of fraud or a lack of seriousness. There is a fundamental culture gap in the system of government.

[Hywel Williams (Arfon) (PC)]

Of course, this leads to a differential effect in communities, such as mine, that have a high incidence of self-employment. The disadvantage to my community is quite clear.

[Sir Robert Neill]

I am sure the hon. Gentleman is right. This can apply to particular communities and to particular sectors. I suspect it is not deliberate, as I do not believe Ministers are looking to treat people unfairly, but I genuinely think there is a lack of understanding in how the system works for the self-employed and the degree to which fluctuating incomes are not captured by the scheme, as currently devised. That is why I urge the Government to review the position.

I particularly ask the Government to review how the minimum income floor interacts with self-employed people on varying incomes. I will explain it as briefly and as swiftly as possible. Eligibility for each of the three cost of living payments depends on receiving a universal credit payment of at least 1p during the corresponding qualifying month, as set out in the Bill. The position was the same for the original cost of living payments set out in the Social Security (Additional Payments) Act 2022.

Equity, which represents self-employed people working in the creative industries and the theatre, challenged the 2022 Act as unfair and detrimental to the entertainment industry, and it seems to me that it presented good evidence. I refer to my interest as chair of the all-party parliamentary group on opera and as a member of the all-party parliamentary group on theatre. I regret to say that Ministers did not make any changes, and I ask them to look into this in more detail and to think again as more evidence emerges.

When the minimum income floor is applied to self-employed universal credit claimants, their universal credit payments are, of course, reduced. For some claimants, the MIF reduces their payments to zero. The MIF is assumed earnings for UC claimants who are deemed gainfully self-employed, irrespective of whether those earnings are being received in a particular month. It is a calculation based on the national minimum wage and in a typical case the assumption is 35 times the hourly national minimum wage per week. On 2022-23 figures, that equates to £311.85 a week or £1,351.35 over a UC monthly assessment period.

The effects of that are unduly harsh for the self-employed with variable and unpredictable incomes, because it removes UC payments during periods of low earnings. The difficulty for people in the theatre is that, although they may well have periods when they are busy and above the threshold for any benefits, there may be weeks and months when they are not getting paid and the system does not pick that up. During those months when they are not qualifying they are likely to fall into debt, needing to borrow, and into arrears. That cannot be a fair way to deal with this. At a time when the entertainment industry and the theatre have been particularly hard hit during covid and the lockdowns and are still, in some respects recovering, the position seems to me and to many others to be unjust. It particularly hurts those who are starting out in their careers in the industry. I have been self-employed in the past and I know that at least one of the Ministers on the Bench has, but there is a difference between being in an established set of barristers’ chambers with a significant workflow coming through and being a young actor, musician or creative starting out. The inability to draw such distinctions and to be more nuanced in approach needs to be looked at, and I ask Ministers to do that.

The figures that have been demonstrated by Equity in looking at the DCMS workforce estimates show, for example, that between 2019 and 2021 the number of young people aged 16 to 24 working in music and performing and visual arts fell by 19%, which compares with a 14% drop among people aged 55 to 64. That was probably largely due to people leaving because of the impacts of the lockdown on that sector, but it is happening more among the youngsters, for the reasons I have set out. The number of black, African, Caribbean, black British people—those with minority ethnic backgrounds —in music, and performing and visual arts has fallen by 39%, which compares with a fall of some 9% among people with white ethnic backgrounds. Again, the people who find it harder to access careers in the arts sector to start with are the ones being most hard hit, because their incomes are more precarious, as it often takes them longer, by the nature of the business, to establish themselves. I am sure that is not an outcome Ministers wish to see, but that is the way the system, without any reform, is currently operating.

That situation is likely to get worse. In the first round of cost of living payments some 80,600 UC claimants were subject to the MIF, of whom 4,860 earned below their MIF and received a nil payment—that is about 6% of them. We are likely to be talking about a lot more people in 2023-24, because more claimants are now subject to the MIF than they were in the previous regime. That is simply because some 219,000 claimants were in a 12-month start-up period and therefore exempt during the qualifying period for the first payment. That of course has now ended for that cohort, so they will be subject to the MIF. If we were looking at the same percentages, we would be talking about another 13,000 people. That leaves us with the figure that Equity suggests of about 17,000 being affected.

This issue has been raised before, including by the right hon. Member for East Ham (Sir Stephen Timms), the Chair of the Select Committee on Work and Pensions. He raised it with Ministers back in November 2022, and I am grateful to him for doing so. He asked the Secretary of State to consider a way to rectify the position of claimants who had had a nil payment during that period, but I regret to say that the Secretary of State rejected that request. He said that, among other things, simplicity of processing in the timeframe required and an inability to readily identify people affected were the reasons. I am not sure that simplicity of processing is, of itself, a good justification for causing unfairness to people. I thought that the Government were about fairness, more importantly, than they were about administrative simplicity. The suggestion that having the three qualifying periods reduces the risk of someone missing out completely does not work for every sector. It may work in some industries, but it does not work for the theatre and other sectors. The lack of flexibility and the rigidity need to be addressed.

Against that background, I hope that the Government will reflect on this matter. We want to encourage people into our creative industries, which is a thriving sector that does a great deal for this country. They work well for us economically, in social matters and for our cultural heritage, but it is hard for young people, in particular, to start out and this is a precarious life. We ought to have a system that more readily recognises that. It is not, as has been suggested, that the MIF is dealing with cases of fraud here; these are not fraudulent people, and we can sometimes worry so much about fraud that we exclude the honest from the system. We ought to get a balance on that. It has also been suggested that this was to weed out hobbyists who cannot sustain themselves in self-employment. I know lots of people in the creative industries who are not hobbyists. They work immensely hard to sustain themselves in self-employment but their incomes fluctuate to such a degree that they lose out on supplements and benefits that others who happen to be in slightly different forms of work with a slightly different pay structure get. That does not seem to be fair, which is why I tabled my new clause. I hope that the Government will reflect on it and undertake at the very least to review the matter again, look again at the evidence and meet people in the sector. I am not sure how often Ministers have face-to-face meetings. They should meet the people affected. Let us try to find a fairer way of making the Government’s objectives work for those people.

--- Later in debate ---

I want to speak up for one more group. I congratulated the Government on introducing the triple lock on pensions, but nevertheless 20% of single pensioners live in poverty; 1.7 million pensioners live in relative poverty. The Joseph Rowntree Foundation has advised the House that pensioner poverty is forecast to rise again. I supported the triple-lock legislation, but it has not had maximum impact. That is why new clause 7 is important. It would enable us to stand back, see where we are, recognise the problems, and recognise that we have significantly failed, and need to move forward with a new strategy, on a new basis.

[Hywel Williams]

May I state my delight at seeing you back in the Chair, Madam Deputy Speaker? I support new clause 14. My constituency has a very high level of self-employment, as I indicated in my intervention on the hon. Member for Bromley and Chislehurst (Sir Robert Neill), but it also has a large and active television industry, surprisingly to some people, considering that it is at the far end of Welsh-speaking Wales. Most of the TV is in Welsh. The new clause is on an issue that has an impact on us.

I mainly want to speak in favour of new clause 2, which is in the name of my hon. Friends in the Scottish National party, and in favour of the amendments that they have proposed. I support the requirement for an assessment of the latest cost of living support package that the Government have announced. The hon. Member for North East Fife (Wendy Chamberlain) said that the cost of living payments, although necessary, are a sticking-plaster, and I would repeat that. The payments are inferior to ensuring that benefits keep up with the real cost of living. The Institute for Fiscal Studies has shown that almost half of all families with three or more children on means-tested benefits would have been better off if the Government had not introduced cost of living payments, but had instead just ensured that benefits kept pace with inflation.

Benefit-receiving households where people were in receipt of disability benefits, or were in paid work, were less likely to have been properly compensated for the failure to uprate flat-rate cost of living payments in good time. That is another matter that needs to be looked at. I understand that the cost of living payments will result in the Government spending around £2 billion more on recipients of means-tested or disability benefits in 2023-24 than would have been needed simply to raise ordinary benefits in line with inflation. We really do need a full, detailed analysis by the Government, showing why they think that these ad-hoc payments are an appropriate way to distribute support fairly.

When it comes to living standards and social security, it is important that we recognise the differential effect across the nations of the UK—a point I referred to earlier. The Bevan Foundation’s latest research shows that even before the pandemic, around one in eight people lived in deep poverty in Wales. Around one in 30 has such low income that they live in destitution. New clause 2, proposed by my hon. Friends in the SNP, would require an analysis of the cost of living payments that considered the differing policy contexts in Wales, Scotland and Northern Ireland.

In Wales, we have the shameful record of having the highest proportion of children living in poverty of any nation in the UK. An analysis of how the cost of living payments will play out in Wales might reveal significant differences between the system in my country and the partially devolved benefits systems in Scotland and Northern Ireland. For instance, the Scottish child payment of £25 was a bold step towards tackling child poverty. It was one of the wider reforms that the IFS said was part of a trend in which the Scottish Government are using their devolved income tax and benefits powers to increase the progressivity of the tax and benefit system. That is something that we dearly need in Wales. Had we a similar payment in Wales, our tragically high levels of child poverty would surely be reduced. We also have a higher proportion of disabled people in Wales. An analysis by the disability equality charity Scope estimates that the extra costs faced by disabled people average £583 a month.

These are just a few examples showing why we need a Wales-specific analysis of the cost of living payments and how they interact with wider social security policy. Such an analysis would most certainly strengthen the argument for devolution of social security to Wales, I believe—understandably so, as that is my party’s policy. I am told that new clause 2 will not be pushed to a vote tonight, but I hope that the Government accept its logic, and provide for a proper analysis of changes to social security—an analysis that specifically takes into account the impact in Wales.

[Mims Davies]

It is a pleasure to respond to points made this evening. I thank all hon. Members for their contributions and discussions. I take this opportunity to fully, strongly assure all Members that policy officials in my team at DWP and I have looked roundly at the cliff edges and the challenges in getting these payments out swiftly. This will very much link to the household support fund, and the learnings from that. I can reassure the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), that there will be strong communications and engagement with local authorities for anybody who may be missing out. I hope that reassures my hon. Friends and colleagues.

Clause 2 sets out in more detail the eligibility criteria and the means test for the cost of living payments. I have covered much of clause 1, but I will come back to that briefly, if I may. The eligibility criteria, as we have heard, are similar to those in the Social Security (Additional Payments) Act 2022. We know from making those tens of millions of payments last year that keeping the policy simple is essential to delivering the payments successfully and to those most in need.

Labour Market Activity

Hywel Williams Excerpts

Tuesday 28th February 2023 Commons Chamber

[Jonathan Ashworth]

My hon. Friend, typically, anticipates a point I will be making later, but it is clear that certain members of the population could be encouraged to return to work if the correct flexible option was in place, along with appropriate help with childcare or indeed social care. Many people are caring for loved ones—parents and so on.

[Hywel Williams (Arfon) (PC)]

The Institute for Public Policy Research estimates that six out of 10 people who are economically inactive because of illness are economically inactive because of mental health problems. Does the right hon. Gentleman agree that changing the conditions of work, for example, with good childcare, with proper jobs, with proper wages and so on, is the way to deal with this problem?

[Jonathan Ashworth]

The hon. Gentleman makes an entirely reasonable point. We are seeing more and more people being forced out of the labour market, or not able even to enter it in the first place, because of depression, stress or anxiety. If we reform the way in which we deliver employment support, we can get many of these people back to work, because being in work will be good for them in terms of managing their mental health. Obviously, that is not necessarily the case for everybody, but it will be for a significant proportion. The problem is that there are many who want to work, yet under the Government’s approach, which focuses just on the unemployed via the jobcentres, only one in 10 out-of-work older people or disabled people are getting any support. We reject that approach.

--- Later in debate ---

[Jonathan Ashworth]

I agree. May I welcome my hon. Friend to her place? This is the first opportunity that I have had to do so. She brings to this House great experience in local government. She knows that local authority leaders, working in partnership with the business community, with those who provide skills, and with civic societies, trade unions and so on, can do a much better job of getting people back to work, which is why we should be shifting resources, be it to the east midlands combined authority, the Cheshire region or elsewhere.

Where that has happened in pockets—such as in Andy Burnham’s Greater Manchester, through the working well initiative—there have been great successes, so we need to shift resources. That is the key to providing a form of universal support, which my friends at the Centre for Social Justice have rightly called for, to help people with complex barriers to return to work. We endorse that approach.

[Hywel Williams]

I am grateful to the right hon. Gentleman for giving way—he is being very generous. We have a Labour Government in Wales. Would he support the devolution of the administration of social security to that Labour Government?

[Jonathan Ashworth]

The hon. Gentleman is tempting me into very choppy waters by offering to disrupt the way in which we provide social security across the country, but I will resist the temptation to go off course.

At a time when local areas should be given more resources to deliver employment support, the Government are cutting resources. Not only did they announce out of the blue in December that they were cutting a scheme that helped those with health conditions to move into work in the west midlands and South Yorkshire—they then U-turned on that a couple of weeks ago—but, as I heard from the Salvation Army when I went to visit an employment project in East Ham this morning, they are also leaving the voluntary sector with no answers about its future because of decisions about the shared prosperity fund.

The shared prosperity fund, which is the successor to the European social fund, helps to fund schemes that support people with complex barriers into work. The European social fund money ends at the end of this year, and there is then a nine-month funding gap until the people and skills element of the new shared prosperity fund kicks in. How does the Secretary of State expect to get more of the economically inactive into work when that funding gap means that voluntary organisations in all our constituencies have no idea how they will fund their work for the best part of a year? That is not the way to go about it, and when the Department leaves those voluntary organisations with no funding, it does not suggest that the Government are serious about getting people back to work.

Social Security (Additional Payments) (No. 2) Bill

Hywel Williams Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[The Secretary of State for Work and Pensions (Mel Stride)]

I beg to move, That the Bill be now read a Second time.

A hallmark of a civilised society is that it looks after the most vulnerable and those who are most in need. That lies at the centre of this Bill. The House will be aware of the challenges that inflation has presented to millions of our fellow citizens up and down the country—inflation that was there before the Ukraine-Russia conflict but that has been substantially exacerbated by it.

As a newly appointed Secretary of State, some of the first actions that I took were to increase and uprate pensions by 10.1%, to respect and uphold the triple lock, to increase benefits by 10.1% and to increase the benefit cap by the same percentage. Those actions, along with measures such as the increase in the national living wage by more than 9%, which will come into effect in April, have done a great deal to underscore this Government’s approach to looking after those who are most in need.

In 2022 alone, 30 million support payments were made by my Department. Eight million low-income households received £650. Eight million pensioners received a £300 payment along with their winter fuel payment, and 6 million disabled people received a payment of £150. That was alongside various other measures from the recent past, such as the reduction in the taper rate for universal credit, which provided 1.7 million families with, on average, an additional £1,000 per year.

[Hywel Williams (Arfon) (PC)]

There is a substantial lag between the announcement of the uprating and April when it will be brought in. What steps can be taken to reduce that lag so that people benefit earlier?

[Mel Stride]

The hon. Gentleman will be aware that a series of payments were made last year right up until the autumn. The energy price guarantee and various other payments of which he will be aware will help millions of our fellow citizens come through what is a difficult period. The household support fund administered by local authorities is available, particularly for those who have not benefited from the assistance that I am setting out.

Social Security and Pensions

Hywel Williams Excerpts

Monday 6th February 2023 Commons Chamber

[Hywel Williams (Arfon) (PC)]

It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell). When he was talking about the invalid care allowance, which was the predecessor to the carer’s allowance, I recalled meeting people at that time—I was dealing with these matters professionally then—who were working 60, 70, 80, or 100 hours a week and were in absolutely no position to take on paid work to supplement the meagre level of their allowance.

On behalf of my own party, I welcome the decision to uprate most benefits in line with inflation. However, given the desperate situation facing millions of people on benefits, this is simply not enough. Reference has already been made a number of times to reports by the Child Poverty Action Group that costs for low-income families have risen by 21% in the past two years, which is more than the 14% rise in benefits. This gets to the heart of what I wish to say in my contribution, which is about the inadequacy of benefits.

Since 2010, austerity has caused huge increases in child poverty. The CPAG estimates that, pre-covid, 700,000 more children were in poverty than at the start of the 2010s. Wales currently has the highest level of child poverty, at a shocking 34% of all children. There needs to be urgent investment into the system, far above what is being proposed at present.

Looking at what life is really like for those claiming universal credit, it is plain that current benefit levels, even those matching inflation, will not be enough. A snapshot of poverty in Wales this winter produced by the independent and impartial Bevan Foundation revealed some shocking findings—I have a report here that I can recommend to anyone who is interested in the situation in Wales. In Wales, people on universal credit are five times more likely than the general population to report that, sometimes, often or always, they struggle to afford the basics. Furthermore, 52% of disabled people whose condition limits them severely have gone without heating in their home over the past three months.

It is no wonder that Public Health Wales recently said that the current cost of living crisis is not a short-term economic squeeze. It is having, and will continue to have, wide-ranging and long-term impacts on the health and well-being of the people of Wales. Those impacts have the potential at least to be on the same scale as those of the covid-19 pandemic, which has already exacerbated existing inequalities in Wales. The Government must meet this challenge, go beyond treading water and implement at least a substantial uplift to universal credit and legacy benefits.

Universal credit may not meet a claimant’s needs in full due to the barriers and restrictions on entitlement built up over the years. This has been referred to already by a number of Members. The Government should scrap these restrictions, starting with the pernicious two-child limit, which has also been mentioned today. The benefit cap is being uprated, but it should not exist in the first place. There is, quite obviously, a differential effect on communities that place a high value on having more children, perhaps because of their particular religious or cultural beliefs. Those people are being scapegoated, and they are the poorest in society.

As the right hon. Member for Hayes and Harlington mentioned, removing the benefit cap would cost 0.2% of all social security spending. That is a flea bite, given the beneficial effect that it would have. It would be a price well worth paying to remove this vicious and unfair penalty on ordinary families. Sometimes I reflect on my own family’s experience. I am one of six, brought up after the war when the benefits of the post-war settlement meant that we had so many advantages when it came to health, universal benefits, family allowance and education. Looking at the situation now, the deterioration since the post-war settlement is clear.

Deductions in benefits are also a huge problem facing claimants. It has been estimated that more than four in 10 households receiving universal credit had money automatically taken off their benefit entitlement. The average amount deducted was £61 a month, or £14 a week. As with many social and economic matters, there are no statistics published for Wales, but estimates suggest that 88,000 households in Wales do not receive their full universal credit entitlement because of automatic deductions.

Turning to the local housing allowance, which has already been mentioned, the autumn statement is clearly a driving factor in the growing gap between rents and housing benefit. In my own county of Gwynedd, 35% of households receiving housing benefit face a shortfall in rent. Clearly, although there is an urban element to this, as has been mentioned already, there is a particularly acute and real problem in rural areas of Wales. Estimates suggest that the shortfall is higher than in Wales’s cities, where local housing allowance better reflects local rent levels and there is also a wider range of housing stock to meet people’s bedroom requirements. I join the calls on the UK Government to unfreeze local housing allowance and uprate it annually, so that it keeps pace with rising rents.

There is far more that the Government could be doing to help those on social security. For example, will they commit to looking at the adequacy of benefits? The all-party group on poverty is currently running an inquiry into the adequacy of benefit levels, so will the Government engage with the findings at all? The Resolution Foundation has highlighted the lag in the uprating mechanism and has suggested ways in which it could be more responsive, such as multiple upratings per year or bringing forward the uprating month. Those are just two of the possibilities. There is also an inconsistency as to why certain benefits are enshrined in law to rise with prices and others are not. What is the Government’s rationale behind that?

Finally, I ask the Government to bring forward the cost of living payments. Although they are, at best, a sticking plaster approach, as highlighted by the Work and Pensions Committee, they should none the less be brought forward so that poor claimants, particularly disabled people, are prevented from falling into debt and destitution, as many cannot wait until spring for more support.