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

Karen Buck Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

These continue to be some of the hardest times in recent living memory for so many of our fellow citizens. Few have been entirely immune. Millions are struggling, but for far too many, these hard times have brought them close to, or even into, destitution.

Given the importance of energy prices to the cost of living crisis, the fall in the price of wholesale gas futures over recent months is immensely welcome, but let us not imagine that this crisis is about to come to an end. Forecasts consistently suggest that this is, at best, the end of the beginning, not the beginning of the end, not least as consumers face a rise in their costs as the energy price guarantee gap is raised this year, with no continuing energy bills support scheme to cushion the blow.

The Resolution Foundation estimates that working-age household incomes have fallen by an average of 3% this year, but will fall by an average of 4% next year—the biggest single fall since 1975. As food inflation hits 16.7%, food banks, such as those run by the Trussell Trust and the Independent Food Aid Network, are overwhelmed by demand. This week, IFAN said:

“Our fasted growing client group are working people on low wages who cannot make ends meet.”

We have had references today from several Members, including my right hon. Friend the Member for Hayes and Harlington (John McDonnell), about the rise of in-work poverty. IFAN went on to say:

“The majority have always managed on a low income.”

It said that they

“know how to budget and to live frugally, but, with costs rising, there simply isn’t enough money in their pockets. It’s soul destroying.”

This weekend, we heard that the Co-op store group has resorted to putting packets of formula milk behind the counter as a security measure, as though they were precious stones in a Mayfair jeweller’s. We have seen the impact of these price rises devastating families and pensioners. We have seen that a quarter of people on means tested benefits now report food insecurity, even with the special payments that were made last year—that compares with just 4% in food insecurity before covid. We have seen how costs have risen this year, driven by energy costs, but we have seen them being felt in the weekly food shop just as acutely.

We understand how much of this is attributable to factors beyond our control. We know that the catastrophic shocks that the economy experienced, first from covid and then from the energy price spike, were felt most severely by those least able to withstand them. As we debated just two weeks ago in this House, most working age benefits where uprating was not fixed by statute were not fully uprated over a period of seven years from 2013 to 2020, with nominal increases limited to 1%. or with rates frozen altogether.

Child benefit, which was uprated only once between 2010 and 2019, lost a fifth of its value between 2010 and 2022. The value of jobseeker’s allowance and employment and support allowance fell by 12.5% in real terms. The value of universal credit, the Government’s flagship benefit, fell by 12% in value between 2013 and 2022.

However, the extreme vulnerability experienced by so many of our fellow citizens is not just because of what has happened within the social security system. It is because of sluggish wage growth and the failure to protect workers in insecure employment. It is because of the failure to prepare this country for energy price rises by investing in home insulation and renewable energy, or by extending the energy price guarantee into the summer when prices may actually be falling. It is because of the failure to build new homes—especially affordable homes—and to protect those who are being hit by spiralling private sector rents. It is because of over a decade’s neglect of the childcare sector, which is seeing providers fold, costs escalate and too many parents forced to consider whether work is even a realistic option in the face of their childcare bills.

Of course, we do not oppose the payments; they are welcome so far as they go, but one-off provision of that kind is not, and can never be, the answer to the deep cost of living crisis stalking the country, with in-work poverty at record levels and destitution wrecking the physical and mental health of far too many people. Emergency responses, inevitably somewhat rough and ready, are never going to be able to take into account the full range of individual circumstances, not least household size, which determines additional need. In this short but important debate, we have also had reference to how people with nil awards are treated, the impact of cliff edges on incomes, and anomalies linked to qualifying periods.

The additional payments policy, a flat-rate payment triggered simply by whether people are in receipt of means-tested benefits, is cruder than it needs to be. When this was discussed last year, it would not have been beyond the capability of Government to take into account actual household size in setting entitlements, or to sort out some of the other anomalies—all of which were debated when we discussed special payments a few months ago. Let us speed this essential help to households in need, of which there are so many, but let us not pretend that this is the very best that could have been done.

Social Security and Pensions

Karen Buck Excerpts

Monday 6th February 2023 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

In a few weeks’ time, we will have the latest figures on households below average income. They are likely to confirm what we already know: that poverty will soar as the measures taken during the covid pandemic fall out of the adjustment. The figures will confirm what we see every day, and what the Trussell Trust and others see at their food banks, which is that the cost of living crisis is hurting millions. For those with the least, soaring inflation means hunger, cold, and the fearful wait for the bailiffs, for debt recovery, or for the forced imposition of a prepayment meter. It has meant families being unable to put a school uniform on their child’s back.

There are 4 million children already in poverty; 700,000 more children were in poverty than in 2010 even before the pandemic, and the Joseph Rowntree Foundation report of a few weeks ago estimated that one in seven families was going without essentials. One fifth of pensioners are in poverty, with older and disabled pensioners being most seriously affected—and there, too, the figures are going up.

In a report published last week, the Institute for Fiscal Studies said:

“Although it never sounds the most exciting part of benefits policy, the default indexation of benefits —what happens to their value each year if the government takes no deliberate action—is a first-order issue over the long term, and even over the short term when inflation is high.”

The IFS is right to make the important point that indexation and uprating are assumed to happen if the Government take no deliberate action. The annual uprating of working-age benefits with prices has long been the default in this country. When Governments fail to uprate benefits, that is a deliberate action, although they like to pretend otherwise.

Over the last couple of years, a new ritual seems to have been established in the run-up to the autumn statement: rumours circulate that the Government have not decided what to do, or whether they will uprate; think-tanks work out the implications of a freeze on rates of poverty and living standards; and charities and civil rights organisations urge the Government not to allow the real-terms value of benefits to fall. Uprating becomes a hot topic in the media speculation that attends any fiscal event. Then, at the last moment, we learn that the Government have decided to uprate after all. The Government expect praise for doing the right thing, and nobody considers for a moment what an extraordinary state of affairs this has become. However, it is an extraordinary state of affairs.

How can a social security system carry out its most basic functions if the value of basic entitlements is being eroded by inflation? Previous Governments did not need to spend weeks deciding whether to uprate; uprating was just what happened if they took no deliberate action. The sorry truth is that since 2010, Governments have increasingly treated the annual uprating of working-age benefits as a policy choice rather than a norm—a policy choice driven by short-term considerations, but with permanent effects that they prefer to ignore.

[Dr Luke Evans]

The hon. Lady is missing the key point that the universal credit taper was changed from 63p to 55p. That is new, and it makes a huge difference; those who are earning have more money in their pocket.

[Ms Buck]

The hon. Gentleman should go back to the original plans for universal credit, and to what the taper rate was intended to be at the very beginning, before a former Chancellor got his hands on it.

[Guy Opperman]

There is criticism that this Government are different, but the process has not changed since 1987. It has been exactly the same under 13 years of a Labour Government, under the coalition Government since 2010, and under this Government.

[Ms Buck]

I am slightly baffled by that. Although we have heard confirmation of the uprating this year, the point is that it comes on the back of years and years of that annual uprating simply not happening. The failure—[Interruption.] It is not a question of process; what matters is the outcome of the process. Over a number of years, the freeze on benefits and the failure to uprate has left us with a rise in poverty, as I have said.

[Guy Opperman]

I do not want to get too much into a tit for tat, but will the hon. Lady accept that there are 400,000 fewer pensioners in absolute poverty, that absolute poverty has declined by 1.2 million people, and that the living wage is going up?

--- Later in debate ---

[Ms Buck]

The Government have decided to refer to the absolute poverty figures only, which we would expect to go down as the years go by. However, under the standard measure of poverty, the relative measure, there is an increase in poverty. Indeed, if we want to get into the details, the Government’s preferred measure also shows an increase in poverty among families, including families with more children. This year’s uprating will at best serve to maintain the value of benefits, which has been severely reduced over the last decades. The resulting inadequacy of the safety net has played out exactly as one might expect; it contributes to increased numbers of children in poverty, to deepening poverty, and to increased need for food banks.

[Margaret Greenwood (Wirral West) (Lab)]

My hon. Friend is making an excellent speech. Does she agree that the last Labour Government took 1 million children out of poverty, and that we could do with having a Labour Government immediately to take further action?

[Ms Buck]

I could not agree more. The Labour Government demonstrated what could be done with will, policy and investment; they brought about a dramatic reduction in pensioner poverty and child poverty. A future Labour Government will do exactly the same. Of course we will support the motion, but the Government deserve no praise—

[Richard Graham (Gloucester) (Con)]

Will the hon. Lady give way?

[Ms Buck]

I have given away enough for the moment. The Government deserve no praise for refraining from a deliberate action that they should never have contemplated taking in the first place.

It is important to recognise the limitations to the uprating order. Although the nominal value of most working-age benefits will increase by 10.1%, there will be no change to the eligible cost limits of two crucial benefits: the childcare element of universal credit and tax credits, and the local housing allowance. Do the Government think that childcare and housing costs are immune to inflation? How does allowing the erosion of the value of childcare support fit with their stated aims of encouraging work progression and helping working parents to increase their hours of work?

Yesterday, the deputy political editor of The Sunday Times reported that:

“Sunak and Hunt want a new benefits crackdown, including”

increasing the

“threshold under which people must attend regular job centre interviews/meet work coaches to be raised to 18 hours”.

If the Government are serious about helping parents to progress, they should ensure that parents are better off working more hours, rather than using the crude and unproven instruments of conditionality. As the IFS has shown, parents in the lower thirds of the earning distribution already stand to lose 58% of their additional earnings when moving from 20 to 40 hours of work a week.

Incentives to progress are already weak, so allowing inflation to erode the value of childcare support makes absolutely no sense. As evidence to the Work and Pensions Committee stated recently,

“The childcare support provided with UC is only sufficient to cover part-time hours, because the cap it is subject to has been frozen for six years”,

and

“A fixed cap amid rising childcare costs means fewer hours are eligible for reimbursement under UC today compared to Working Tax Credit in 2005—potentially restricting parents’ employment options.”

While I am on the subject, we hardly need reminding that the requirement for parents who claim childcare support to pay up front heaps the burden on to low-income parents, and contributes to the nightmare of overpayments and deductions, which contribute to the debt and destitution crisis.

The local housing allowance remains frozen for the third year in a row—at least, that is how everybody apart from the Secretary of State sees it. He said in his written statement of 17 November:

“I can also confirm that the local housing allowance rates for 2023-24 will be maintained in cash terms at the elevated rates agreed for 2020-21.”—[Official Report, 17 November 2022; Vol. 722, c. 24WS.]

Perhaps the Minister can explain how those rates, which are based simply on the 30th percentile of local rents in 2019—since when rents have risen by 8% overall according to the Institute for Fiscal Studies, and vastly more in some parts of the country—can seriously be described as elevated.

[Margaret Greenwood]

I thank my hon. Friend for giving way—she is being very generous. According to the Institute for Fiscal Studies, freezing local housing allowance, as opposed to uprating it to match local rents, will reduce support for nearly 1.1 million households by an average of £50 per month. Does she agree that that is an utterly impossible situation for people to face, and that we need action from the Government on it?

[Ms Buck]

It is absolutely impossible. Rents are such a major component of people’s expenditure. For that shortfall to first be fixed, and then to grow, is inexplicable. It absolutely eats into people’s residual income.

Nearly 1.5 million universal credit households receive the housing allowance. Of those, 844,000, or 58%, have rents above the maximum that local housing allowance will support. On average, they face a shortfall of £100 a month, which has to come out of their residual income.

[Richard Graham]

I am grateful to the hon. Lady, with whom I served on the Work and Pensions Committee a long time ago, for giving way. Have this Government not increased benefits by more than inflation, which is something that Labour never did in the 13 years it was in power? Secondly, will those on universal credit not be £1,000 better off as a result of the further reduction of the taper in the universal credit system, which she and the right hon. Member for East Ham (Sir Stephen Timms) continue to insist should be scrapped completely? Where does she think the social justice is in her party’s proposals?

[Ms Buck]

The fact of the matter is that poverty is rising —pensioner poverty is rising, child poverty is rising, and the local housing allowance and the childcare element are not keeping up with costs. That is simply a fact.

[Jeremy Corbyn (Islington North) (Ind)]

If I may, I will just take my hon. Friend back to the point she was making about rent levels, which have gone up extraordinarily in the past six months. London now has the highest rents of any city in Europe, and many people on benefits living in the private rented sector are paying well over £100 a month out of their remaining benefit. Does she not think that there is also a case for looking at local housing allowance levels?

[Ms Buck]

This freeze in local housing allowance, which is such a critical element of people’s income, is causing such hardship for hundreds of thousands of families. That is not only undermining living standards in the middle of a cost of living crisis, but leading to utterly perverse disparities between areas due to differences in rent inflation. The 30th percentile of rents in Bristol is £100 more than in Newbury, but the amount of housing support that those who live in Bristol can receive is £12.50 less than those who live in Newbury. To quote the Institute of Fiscal Studies again:

“the current approach makes little sense. It permanently bakes in historic information about differences in rents across the country, while entirely ignoring current information about those differences.”

We can see the real-world consequences playing out on our streets as rough sleeping soars and council homelessness units are stretched to breaking point.

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

I simply want to respond briefly to the intervention of the hon. Member for Gloucester (Richard Graham), who mentioned me in passing—inaccurately, I must say. He was wrong to say that benefits have been uprated in line with inflation. At the moment, the headline rate of benefits is the lowest in real terms for 40 years, following the repeated freezes we have had. Does my hon. Friend agree that the hon. Member for Gloucester ought to check the record?

[Ms Buck]

I totally agree with my right hon. Friend, who speaks with expertise on this issue.

The fact is that we have seen the implications of freezes in benefits. We are seeing it in soaring poverty, and we are seeing support for housing and childcare costs failing. Those things need to be based on real-world prices, not those obtained in the past. Universal credit and legacy benefits need to be uprated with general inflation—not just once in a while, but every year—if their value is not to be permanently eroded. It would be welcome if the Minister could commit to those basic principles at least.

Draft Bereavement Benefits (Remedial) Order 2022

Karen Buck Excerpts

Tuesday 24th January 2023 General Committees

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to respond to this important order under your chairmanship, Mr Dowd. I thank the Minister for her comprehensive opening remarks.

We are all conscious of the fact that bereavement is not only a personal tragedy for the families concerned, but all too frequently a trigger for major financial risk and sometimes even poverty. It can result in people losing their homes or being at risk of that, so ensuring that at the very least families, and above all families with children, are protected at that difficult time is incredibly important. It is irrelevant to such children, and for the purpose of the order, whether they are in a cohabiting family or one that is legally married. Equal treatment is long overdue and fair, and the Opposition welcome it.

If it is all right with the Minister, I have a fair few questions for her. I am grateful to the Low Incomes Tax Reform Group and the Childhood Bereavement Network, which have produced some helpful notes to guide the Committee on the issue.

To return to the intervention from my hon. Friend the Member for Birmingham, Hall Green, my first question is about the number of people who will be affected by the order, which has consequential implications for take-up. The Childhood Bereavement Network estimates that around 1,800 parents may be able to claim bereavement support payments in the future compared to now, which is welcome. It estimates that around 10,200 parents bereaved before April 2017 and 10,500 parents bereaved after April 2017 may be able to make retrospective claims for widowed parent’s allowance, which makes 20,700 parents in total. Does the Minister recognise that number? Those figures are important in terms of take-up, and in a year or two it will be important to get a sense of whether 5%, 10% or 90% of those eligible are making a claim.

That question also relates to the Minister’s point about how the payments will be publicised. The Minister said that there will be a communications strategy, information will be put on the DWP website, gov.uk and elsewhere, which is all fine, but, critically, parents who were bereaved more than four years ago will have no reason to look at whether they now qualify for the benefit. They will not be aware of it at all. This is not an easy question to answer because there is no obvious way to find such parents, other than going back through DWP records. In some cases, even that option will not available. That calls for a more imaginative approach that uses and supports the expert community and voluntary organisations, faith communities and others who may have been interacting with those bereaved parents at the time of bereavement. It is absolutely critical that in a year’s time we do not find that this welcome initiative to bring fairness to the social security system has simply failed to hit the mark and payments are not being taken up by parents in desperate need and vulnerable children in need. I ask the Minister to think harder about how the Government can make sure that they reach parents to encourage them to make claims.

There is some concern about the way in which applications will be made. There is a window for applications, so we want to make it as easy for people as possible. I think the Minister was confirming that the widowed parent’s allowance applications would need to be made physically, in the old-fashioned way, whereas bereavement support payments can also be made online. We are in 2023, and it worries me that we are relying on that system, especially at the moment when the postal service is not what we would like it to be. The risk is that asking people to make a physical application could lead to some of them falling through the net. I do not quite understand why we cannot make the application process as easy as possible and put everything online—with a back-up, of course, because not everything should be online. We also need flexibility in the system when people make physical applications through the post in good faith but then find that they have not arrived, as has happened with passports, driving licences and all kinds of other applications in the last year or two. Such situations need to be treated sensitively.

Another issue is proving cohabitation, and the Minister confirmed that there is no time qualification for cohabitation to qualify. Will the Minister confirm her understanding of how cohabitation can be proved and what evidence needs to be provided? We know that the DWP is fairly rigorous in proving cohabitation the other way—when it is seeking to take action against parents who are cohabitating while claiming benefits that it does not believe they should receive. How easy will the Department make it for parents to provide that evidence? The critical question is about retrospectivity. If a widowed parent makes a claim for a period of cohabitation—it may not have been a very long period—for several years ago, they may no longer have all the necessary evidence. I am sure all Members of Parliament have had to deal with instances where people are trying to prove that they are in a single household, for a housing application for example, but they do not have the evidence any more and it is sometimes difficult to obtain.

On the important but technical question of qualification periods, the Minister talked about the cut-off dates that related to the McLaughlin judgment. The Childhood Bereavement Network has raised some important questions about the treatment of some groups of bereaved parents who may be disadvantaged compared to other parents in terms of what they qualify for. Its briefing suggests that the current proposals disadvantage cohabiting parents bereaved in the 12 months before August 2018 relative to their married counterparts, as well as parents bereaved more than 12 months before that date. It estimates that a cohabitee parent bereaved on 6 April 2017 would receive £700 in retrospective payments, compared with up to £28,000 for someone bereaved just a day later, and £9,800 for someone bereaved on 30 August 2018. That is quite a difference in benefits over a very short period. I know some form of cut-off date is inevitable, but there is a risk of inequitable treatment in this case.

The JCHR recommended that a fund be established to make ex gratia payments in cases of inequitable treatment depending on the date of qualification. The Government have said that they do not want to do this, but I urge them to think again. It is very possible that, as the claims start coming in, the differences will be really stark, and the Government and MPs will be dealing with some distraught parents who have not received what they thought they would be entitled to.

On the issue of backdated payments and capital, the Minister recognised that the situation is complicated. It is complicated, and it is possible that people will fall foul of it without some clear guidance from the Government. Will the Minister tell us how many people who now qualify are estimated to have been in receipt of another contributory benefit during that time because they were deemed not to be eligible for widowed parent’s allowance? Will those who received backdated widow’s parent allowance now have their previous benefit entitlement offset against the WPA? If so, how will that be done?

We have heard about how lump sum payments will be treated under the capital rules and that recipients should be advised on the various risks. There is a particular risk of potential allegations of capital divestment. We know that there are rules about how people are deemed to have reduced their capital in order to be able to quality for future means- testing. Given the circumstances and the fact that in some cases people will get a capital sum years later, their position will be different from the one they are in now and there is a risk that they will seek to use their capital in a different and less planned way than someone in the immediate aftermath of bereavement, so I urge the Minister to advise how guidance will be given for that to be treated as flexibly as possible so that people do not find themselves in receipt now of a very welcome lump sum payment that they have not had before, only to find themselves falling foul of capital divestment rules in future. Capital divestment is a thing that people do not anticipate and plan for and do not have a great deal of knowledge of, and people should not find themselves falling foul of that.

We only need to look at the news to know that people can very easily find themselves on the wrong side of a tax repayment issue. The Minister is aware of that, but I would like to know a little more about how the Government are seeking to make sure people are very clear about how they will be treated for taxation purposes. We know from the history of tax credits how easy it is for people to get themselves on the wrong side of this and trapped with bills that they had not anticipated and do not have the ability to manage. People need to advised about that and which tax year the payments refer to.

The Low Incomes Tax Reform Group suggested that payments could have been made either net of tax or with an amount reserved back for tax to reduce the risk for the recipient. Did the Government consider that, and have they considered the suggestion from the same organisation that DWP could have shared at least some data with HMRC to help the process be automated in some way?

The order is, of course, extremely welcome. We need to make sure that, of those deemed to be eligible, take-up is there and that people benefit from that. I am slightly unconvinced given the Government do not seem to know how many people will qualify and are on the right page for this, so I hope that there will be some stepping up on that. It is important to recognise the complexity of the tax and benefits arrangements in order to avoid unforeseen negative consequences for people navigating the system. I hope the Minister will be able to respond to those questions.

Oral Answers to Questions

Karen Buck Excerpts

Monday 23rd January 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Ms Karen Buck (Westminster North) (Lab)]

Soaring childcare costs are indeed a major barrier to parents seeking to return to the workplace. Parents seeking to take a job may find that they have to have at least £1,000 in the bank in advance to pay for the first month’s childcare. Can the Minister explain how a parent on universal credit who wants to move back into work is supposed to fund those up-front childcare costs and then wait a month for them to be reimbursed?

[Mims Davies]

I thank the hon. Lady for that point, and take the opportunity to remind the House and all employers to think about job design, flexibility and inclusive recruitment, because that will make a difference. With regard to eligible claimants moving back into work, they can receive support for up-front childcare costs through the Department’s flexible support fund. Claimants can also receive support for up-front costs if they increase their hours and take on an additional job. Payments can be made direct to the childcare provider, and we are working on further guidance on that.

Child Maintenance Services

Karen Buck Excerpts

Tuesday 17th January 2023 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to respond to the debate under your chairmanship, Mr Twigg. I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing the debate, on his work on the APPG and on a powerful opening speech.

The contributions that we have heard this afternoon draw on the casework that Members of Parliament have brought to them, many of which are deeply harrowing and very powerful, and reinforce a point made several times: we do not want to be here debating the failure of the system. We want to be able to concentrate on other topics, knowing that the management of this policy area has been brought under control once and for all.

The debate is timely: the highly critical report by the National Audit Office on child maintenance was published last March and we will be closely studying the Government response to the review of the Child Maintenance Service response to domestic abuse, which has been published today. There are also two private Members’ Bills on aspects of the service going through Parliament at the moment.

Child maintenance may no longer attract the almost entirely negative headlines that it attracted a couple of decades ago, but, as we have heard, it concerns 2.4 million separated families with 3.5 million children, only half of whom have in place an effective management maintenance arrangement, where any maintenance at all is being paid. That figure is effectively unchanged since 2011-12.

We know that maintenance payments are important in reducing child poverty. It has been estimated that one in five single parents on benefits is lifted out of poverty by maintenance payments—a figure that can and should be a great deal higher. For hundreds of thousands of families, the system is failing to ensure that maintenance is paid or paid in full. Remarkably, the National Audit Office says

“it receives more correspondence on child maintenance than any other single issue.”

In addition, the DWP receives more complaints on child maintenance than on any other subject.

Ideally, we would all prefer not to need an agency such as the Child Maintenance Service, or to need it a great deal less than we do. We would prefer that the overwhelming majority of separated families had voluntary arrangements in place, where the separated parent fully met their responsibilities to their family, so that it was unnecessary for the state to intervene. However, we do not live in such a world and we cannot bring it about just by wishing it.

There are major problems in the enforcement of maintenance obligations, as we have heard and as I will return to, but it is important to recognise that the issue is not simply one of enforcement of statutory maintenance arrangements, which involve only 18% of separated families; it is no less importantly about the absence of any arrangements whatever. As the NAO has shown, 44% of separated families simply have no maintenance arrangement in place, whether statutory or voluntary, effective or ineffective.

Nobody wants to return to the days of the old Child Support Agency, but the present situation is hugely out of line with the expectations of the DWP when the system was reformed a decade ago. As the NAO has reminded us, back then the Department’s assumption was for voluntary arrangements to rise to 35% of separated families by 2019. That expectation was slightly exceeded, at 38%, which is welcome.

However, the Department also assumed that take-up of the statutory scheme would fall only from 46% to 33%. In the event, that expectation was hugely overshot, with only 18% of families now using the statutory scheme. It was thus a matter of simple arithmetic that the percentage of families with no maintenance arrangements in place at all rose from 25% in 2011 to 44% in 2019-20. Remember, the Government’s stated objective in 2012 was to increase the proportion of separated families with effective maintenance. That objective has simply not been met. There has been no change at all, as the NAO has shown. The explanation lies as much in the low take-up of the statutory scheme as in non-compliance with it. Why did the Government think that the 2012 reforms would increase the number of families with effective maintenance arrangements? The NAO said:

“The Department’s 2011 green paper...set out the need to better integrate support provided to families to help them make family-based arrangements with other services such as those provided to parents going through separation, the family justice system and the then Sure Start system.”

The Government then proceeded to devastate the Sure Start system, cutting provision by more than a third. What steps are DWP Ministers taking to improve take-up of the direct pay and collect and pay options offered by the CMS? The question is not about what might be achieved through unspecified integrated support with other services, but what the Department itself intends to do. How will Ministers ensure that the intention is driven through the Department and how will they ensure accountability in line with the expectations?

None of that is to suggest that enforcement is not an issue; it just should not be used to distract attention away from other failures. There are huge problems in the enforcement of statutory maintenance arrangements. It was understandable that enforcement action was negatively affected by the pandemic. CMS staff were redeployed to manage the surge in universal credit claims. The courts were closed. The number of liability orders in process fell from 6,900 in March 2020 to 2,400 in September 2020. All that was understandable, but since 2020 there has been only the most partial recovery. The figures for June 2022 are not only far lower than they were before the pandemic, at 4,200, but lower than they were in June 2021—by over 1,000 cases. The number of enforcement agency referrals in process is less than half what it was before the pandemic.

We need a child maintenance system that works: with voluntary arrangements where possible, but with statutory arrangements that reach the families who need them and are enforced far more effectively than they are now. Will the Minister set out exactly how the DWP intends to rise to those twin challenges, so that we do not need to come back to this Chamber and once again debate the failures of the Child Maintenance Service?

Benefit Sanctions

Karen Buck Excerpts

Tuesday 13th December 2022 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to respond for the Opposition to this short and important debate under your chairmanship, Mr Pritchard. I, too, congratulate the hon. Member for Glasgow South West (Chris Stephens) on introducing the debate and making a powerful speech. We have heard powerful contributions, and many who spoke drew on their own experiences of cases as well as cases brought to them by advice agencies in their constituencies.

Before the debate, I asked my local citizens advice bureau about the changes it had experienced in terms of clients with concerns about sanctions. It told me that there has been an increase in calls for help, including appeals from clients who were bedbound when the sanction was imposed because they had covid and were quarantining. I was told about someone who was sanctioned for attending a funeral and about a young woman who was forced to leave her home because she became pregnant outside marriage and feared for her safety. She was sanctioned for not wishing to return to a jobcentre near her family home in order to attend an appointment.

What has come through all of the speeches is the strong theme—it is a theme that has come up time and again whenever we have debated social security issues over recent months and years—of the impact on mental health. So many of the clients who come to us asking for help with sanctions and other aspects of social security problems are highly vulnerable and sometimes chaotic in their vulnerability, as my right hon. Friend the Member for Hayes and Harlington (John McDonnell) stated. Sometimes they have significant mental health concerns that should have been a red flag.

As we have heard, this debate is well timed because over the last few months it has become increasingly clear that the DWP’s approach to sanctions has changed in ways that Ministers have so far been unwilling to explain or justify. The evidence lies in the sheer volume of sanctions that the Department has been handing out. Let us not be distracted by the suspension of most forms of conditionality during the pandemic. That was, of course, the right thing to do, and obviously that meant there was bound to be some degree of a resurgence in sanctions once things opened up again. But that does not explain—and this point has been made several times this afternoon—why sanction levels and rates are so much higher now than they were before the pandemic.

Several Members have referred to the work of Dr David Webster, whose regular briefings on sanctions for the Child Poverty Action Group have served to bring the issue to the fore. He finds that the number of sanctions handed out per month in May to July of this year was on average 45,000, equivalent to 2.5% of people on universal credit subject to conditionality, compared with 1.4% in the three months before the pandemic. That increase in the number of adverse sanction decisions is reflected in the cumulative number of people on universal credit serving a sanction at any point in time. Dr Webster writes:

“The number of universal credit claimants who were serving a sanction in August was 115,274…more than three times the pre-pandemic peak of 36,771 in October 2019.”

Of course, there were more people on universal credit in August 2022 than in October 2019, but as Dr Webster shows, the percentage of universal credit claimants subject to conditionality serving a sanction was 6.4% in August, more than double the pre-pandemic peak of 3.1% in October 2019. And for unemployed people—those in the searching for work group—Dr Webster estimates that nearly 8% were under sanction in August 2022. My first question to the Minister is: how have we arrived at a situation where one in 13 unemployed universal credit claimants are currently under sanction?

We should be under no illusion that sanctions are just a slap on the wrist for claimants. Typically, sanctions involve the withdrawal of 100% of the universal credit standard allowance, and even the reduced rate for the lowest level of sanction is 40% of the standard allowance. And except for the lowest level sanctions, the penalties continue after the person sanctioned has complied with the rules—for seven days rising to 28 days for low level sanctions, while higher level sanctions apply for 28 days and 91 days rising to 182 days, depending on whether there have been previous failures to comply in the same year.

An increase in the sanction rate is not just a technical matter. People on universal credit do not have a margin of income that they can fall back on to weather an interruption to benefit payments—all the less as the four-year benefit freeze has permanently eroded the real-term value of benefits.

There is an urgent need to understand what lies behind the increase. Has there been a revolution in people’s behaviour or attitudes since 2019? If so, what is the evidence for that? Has the level of non-compliance with conditionality really doubled since the pandemic? Have there been operational changes leading to more sanctions being issued without any change in the level of compliance? Has there been a change in the Department’s policy on sanctions? Or is the increase an unintended consequence of other factors? in other words, is the sanctions regime out of control?

The purpose of sanctions has been well described by Professor Paul Gregg as a backstop to the system of benefit conditionality. The point is that while sanctions set at a reasonable level serve an important function, they are not an end in themselves. A sudden increase in the number of sanctions such as we have seen should be seen by any responsible Government as a cause for concern rather than for self-congratulation. It raises the fear that the sanctions tail is wagging the conditionality dog, that the Government are more concerned with signalling toughness than with improving employment outcomes, and that the purpose of conditionality has been twisted towards catching people out rather than maintaining contact with the labour market. Or, no less worryingly, it raises the fear that the number of sanctions has shot up because the Government have lost control of the sanctions regime and no longer know what they are doing.

The fact that the Government have suppressed their own research into the effectiveness of the universal credit sanctions regime is hardly reassuring. In 2018, in response to a Work and Pensions Committee report, the Department agreed to

“evaluate the effectiveness of reforms to welfare conditionality and sanctions,”

and said that this would focus

“on whether the sanctions regime within Universal Credit (UC) is effective at supporting claimants to search for work.”

It said that it would publish the results in spring 2019, but we know what happened. The research was undertaken, but earlier this year the last Secretary of State but one—the right hon. Member for Suffolk Coastal (Dr Coffey)— reneged on the commitment to publish the results. That is the behaviour of a Government who are uninterested in learning lessons, and evasive of public scrutiny.

[Chris Stephens]

I thank the shadow Minister for making that important point. The same applies to the drivers of food bank use, which include sanctions.

[Ms Buck]

Sanctions are indeed an important driver of the increase in food banks, which is another symptom of widespread structural failure in the system.

It would be refreshing if the new Secretary of State took a different view of the matter. A doubling in the rate of sanctions in the context of a cost of living crisis and permanent reductions in the value of benefits is a serious matter. I hope that the Minister can give a suitably serious response.

Oral Answers to Questions

Karen Buck Excerpts

Monday 5th December 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Ms Karen Buck (Westminster North) (Lab)]

May I also warmly welcome my hon. Friend the Member for City of Chester (Samantha Dixon) to her place?

Fifty-nine per cent. of private renters on universal credit—844,000 households—have rents above the maximum level that local housing allowance will cover. That means that they have to make up the difference, which, as we have heard, is often substantial, either by reducing spending on other necessities such as food and heating, or by getting into arrears, risking homelessness. With homelessness already rising, local authorities predicting how much more they will have to spend and the Government only today announcing an extra £50 million having to be spent on the homelessness prevention grant, does the Secretary of State accept that what the Government are saving through the freeze on housing allowance is merely popping up in additional spending elsewhere and that it is time to get a grip?

[Mel Stride]

As I set out, the amount being spent on housing and housing support is almost £30 billion a year. That has grown strongly over the last decade or so and is on a trajectory to reach £50 billion by 2050. The Government are therefore putting huge support into that area. In addition to LHA, there are, as I have said, discretionary housing payments. When it comes to the homeless, we have brought forward a £2 billion package to help to resolve those issues.

Social Security Support for Children

Karen Buck Excerpts

Wednesday 23rd November 2022 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to respond for the Opposition under your chairmanship, Sir Christopher. I congratulate the hon. Member for Airdrie and Shotts (Ms Qaisar) on securing this debate. We have heard a small number of contributions, but powerful ones, in which people have reflected not just on the strategic issues of poverty but on the impact of hardship on their constituents. Everybody has said that we are going into a hard winter; for millions, it will be the hardest winter in my 30 years in politics. I commend my hon. Friend the Member for Birkenhead (Mick Whitley) for making the point that we are going into the festive season, which many look forward to, but this year people will dread it because of the hardship that they face.

[Margaret Ferrier]

Even with the energy cap announced by the Government, all families will be spending a significant amount on their energy bills. It will be a cold and grim Christmas for many. Does the shadow Minister agree that support for families—and therefore for children—needs to be reviewed as a whole, not just single benefits?

[Ms Buck]

I will come to that later, but it is obvious that we need to look at the system as a whole. Indeed, we have to look at the issue of hardship and poverty not just in terms of the social security system, although that is the subject of today’s debate and money is crucial, and lies at the heart of tackling poverty; I have never had any doubt about that. We also know that the conditions in which people live and the conditions in which children are brought up reflect poverty in a wider sense.

Only this week, we have been discussing in particular the terrible tragedy of Awaab Ishak, who died in a cold and mouldy flat. That coroner’s report should be mandatory reading for anybody with an interest in poverty, because the issue of growing up in a damp and cold home is an issue of poverty. If people are not able to heat their homes or access half-decent accommodation in which to live, that is a matter of poverty, as is not being able to secure food and not being able to go to school in a uniform—not being properly clothed, shod and so forth.

I do not think that this is a theme that has particularly emerged in this debate, but all of these issues of poverty cost money—they cost the state billions and billions of pounds. Bad housing alone, which is a condition of poverty, costs the national health service at least £1.4 billion.

The issue of mental health has been referred to. Poverty drives poor mental health; worry and anxiety about money is known to do that. It costs the national health service millions and millions of pounds to respond to it. It also feeds into educational underachievement and impacts on our criminal justice system. We could go right across the issue of state spending, at a local level and a national level, and we would see that money is poured into the costs of poverty. Therefore, when we consider how much we spend on social security, we also need to consider what we will save in the medium and longer term.

The debate is timely, because this time last week we were waiting anxiously to see whether the Government would do the right thing in the middle of a cost of living crisis—something that would, only a few years ago, have gone without saying—which is to uprate social security benefits in line with inflation. As much as we all welcome what happened last week, because we were all very anxious to know what the Government were going to do about uprating, we should not allow the Government to normalise the idea that simply maintaining the real-terms value of social security benefits is an optional extra. If routine uprating of benefits with inflation is evidence of a turn towards compassionate Conservatism, I fear that the bar for compassion has been set very low indeed.

We have been through 12 years in which the Government, as a matter of policy, have repeatedly and permanently reduced the value of social security for working-age adults and children—and, yes, it is a permanent reduction, because the impact of below-inflation uprating in one year does not wash away if benefits are uprated from a reduced baseline the following year. The period of austerity for social security did not end with George Osborne’s four-year benefit freeze in 2019 and it did not end last week.

Let us take child benefit alone. It has been uprated this week—again, that is welcome—but it has lost 30% of its real-terms value since 2010. All the Government did last week, welcome though it is, was to decide not to erode the social minimum even further than they already have, and that is before we consider the many ways in which Governments since 2010 have sought to reduce payments even below the social minimum.

The social security infrastructure around children who live in families—whatever shape those families come in—is tough and has been getting tougher. We have heard about debt and deductions for debt repayments being built into the universal credit system through the five-week wait for the first payment. On top of that, we have benefit caps, the bedroom tax and the two-child limit, and crucially, let us not forget, we have a system of support for housing costs that has been frozen since 2020 and remained frozen in the autumn statement. The failure to uprate the local housing allowance with inflation undoes a great deal of the good that the uprating of social security payments elsewhere achieves, because people live in homes and they have to pay for those homes.

Let me give an indication of how far entitlements can fall below what might be expected to be the social minimum. There are 325,000 households in the private rented sector alone that face a shortfall between their rent and their universal credit housing support and also have a deduction for an advance payment or an overpayment. The median rent shortfall that they have to make up is £100 a month and the median deduction is £65 a month. We congratulate ourselves on the rate of payment of social security, but hundreds of thousands of people are trying to survive on less than even that minimum.

We have a permanently reduced baseline for the social minimum and a policy-driven multiplication of ways in which families can receive even less, and the Government expect to be praised for deciding not to drive down the minimum even further. They like to point to international factors beyond their control as drivers of the cost of living crisis, but they come on top of 12 years in which the social security system for working-age adults and children has been undermined not by the Ukraine war, not by the pandemic, not by international energy prices, but by domestic policy choices.

It suits the Government to pretend that social security policy affects only a minority of families. In fact, the family resources survey shows that, as of 2019-20, nearly 40%—four in 10—of all children in the UK were in families receiving universal credit or one of its legacy equivalents. The great majority—almost three quarters, at 72%—were in working families, and that is just at one point in time. The share of children whose families receive those benefits at some point during their childhood is now higher again.

It is, then, unrealistic to see universal credit and legacy benefits simply as a safety net for the most vulnerable. Of course, that is one of the purposes they serve, and they can serve it considerably less well now than they did before the Government embarked on permanently reducing the value of the safety net. They are also one of the instruments by which our society redistributes resources to families with dependent children, as any modern society needs to do under any economic circumstances.

It is only through social security that we can provide support on a basis that fully takes account of need by basing payment on family size and composition. That basic principle represents yet another way in which Governments since 2010 have broken with the approach of all modern UK Governments since the social security system was established in 1946. As the Child Poverty Action Group points out, the two-child limit already affects 1.3 million children, and cuts income by up to £2,935 a year.

Of course, it is welcome that flat-rate payments are addressing the energy crisis, but by definition they do not take account of family size and circumstances, so they are not a substitute for an adequate social security system. When YouGov surveyed universal credit claimants for the Trussell Trust this summer, it found that was exactly what was happening. Despite the survey being conducted in mid-August, almost 70% of people surveyed who had received a cost of living payment said that they had already had to spend all the £326 they received from the Government in mid to late July, and 64% had had to use the money to buy food.

We have entered into a cost of living crisis with a weakened social minimum, a system that seems designed to leave hundreds of thousands of families with even less than the minimum, and the principle of matching support to needs in shreds. However welcome the uprating was last year—sighs of relief were heard right across the country—families in their millions are dreading this winter because they will have to choose between feeding their children or heating their homes. It is well past time for the Government to recognise the damage that has been done since 2010 and set it right on a sustainable and permanent basis.

--- Later in debate ---

[Guy Opperman]

The hon. Lady and I spent nearly six months campaigning to ensure that there was a serious and legitimate change to women’s pensions entitlements in certain private sector pensions. I thank her for her work on the private Member’s Bill that she brought forward and that is now in law, having been signed by Her Majesty the Queen. I welcome the fact that she worked on a cross-party basis to ensure that happened. I will try to address the child poverty issue that was raised by several colleagues. I want to deal with it in a variety of ways. I will then segue on to the in-work progression point—namely, people who are working but also suffering from poverty.

Let me start with the background. The fundamental point is that the Government are committed to a sustainable, long-term approach to tackle child poverty in supporting low-income families. We spent £242 billion through the welfare system in the United Kingdom in 2022-23, including £108 billion on people of working age. We have made permanent changes to universal credit worth £1,000 a year on average to 1.7 million claimants, and have given the lowest earners a pay rise by increasing the national living wage by 6.6% to £9.50 from April 2022. From 1 April 2023, the national living wage will increase by 9.7% to £10.42 an hour for workers aged 23 and over. That is the largest ever cash increase to the national living wage. It represents an increase of more than £1,600 to the annual earnings of full-time workers on the national living wage, and is expected to benefit more than 2 million low-paid workers.

I will address the poverty statistics. The latest statistics show that poverty fell for nearly all measures in 2020-21 compared with 2019-20. In 2021 there were 1.2 million fewer people in absolute poverty, before housing costs, than in 2009-10, including 200,000 fewer children. We will come to workless households in a second, but since 2010 there are nearly 1 million fewer workless households in the United Kingdom. The number of children growing up in homes where no one works has fallen by 590,000 since 2010—

[Ms Buck]

rose—

[Ms Qaisar]

rose—

[Guy Opperman]

May I just finish? I will also come to the point made by the hon. Member for Airdrie and Shotts. That number has fallen by 590,000 since 2010, and 1.7 million more children are living in a home where at least one person is working. I give way first to the shadow Minister.

[Ms Buck]

On the issue of absolute poverty, in a previous debate I raised the fact that the absolute poverty figures for larger families—those affected by the two-child limit—have been worsening, rather than improving, as the Minister claims. Will he go away, have a look at that, and inform himself about it when thinking about where to go next on policy?

Draft Cessation of EU Law Relating to Prohibitions on Grounds of Nationality and Free Movement of Persons Regulations 2022

Karen Buck Excerpts

Wednesday 16th November 2022 General Committees

[Ms Karen Buck (Westminster North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I am grateful to the Minister for setting out an explanation of the regulations. I do not intend to detain the Committee long, but I have a few questions. Regulation 3, “Cessation of free movement of persons”, refers to rights and powers that

“continue by virtue of section 4(1) of the European Union (Withdrawal) Act 2018; and…are derived (directly or indirectly) from”

the relevant articles of the treaties and agreements. The phrase “directly or indirectly” does not occur in regulation 2, “Cessation of prohibitions on grounds of nationality”, which states merely that prohibitions “are derived from” the relevant provisions of the treaties and agreements. Can the Minister clarify why there is that difference in wording? Does it have any meaning, and what is the scope of “indirectly” derived rights, powers and so on?

The schedule goes into some detail on most of the matters relevant to the regulations, but for housing it offers little detail, other than mobile homes being included, but not railway carriages or tents. Can the Minister tell us why the schedule does not detail the relevant matters for housing, and what sorts of rights and powers are envisaged under that heading? What effect will the regulations have on housing rights, and on protections for EEA citizens who arrived after the transition period ended?

I understand—the Minister can correct me if I am wrong—that the intention of the regulations is to end the grounding of entitlements and rights in the treaty, and in the agreement’s provisions on freedom of movement and equal treatment. That makes sense, but a number of the “relevant matters” refer to rights and entitlements that we might expect to apply to all people, without any nationality conditions, once they have a right to live or work here, such as the right to statutory sick pay or the entitlement to child care vouchers. I assume that in many cases, the grounding may have changed, but the rights remain the same. For the avoidance of doubt, can the Minister confirm that it is not the intention that all the rights listed under “relevant matters” will cease to apply to EEA citizens who arrive after the transition period?

Oral Answers to Questions

Karen Buck Excerpts

Monday 31st October 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Karen Buck.

[Ms Karen Buck (Westminster North) (Lab)]

The Secretary of State has indicated that there will be a difference in tone in the Department. There is a way that he can demonstrate that. The Department conducted an examination of the effect of sanctions and conditionality that his predecessor refused to publish. He has the opportunity to allow us to have an informed debate in the Chamber on the effectiveness of sanctions. Will he now publish that report?

[Mims Davies]

Sanctions are incredibly important to support the work coach in doing their job. This really matters, because engaging with the work coach is important where there can be underlying issues—if an individual is a care leaver or there is something going on at home. Sanctions do not apply to all claimants. As I said earlier, if an individual has limited capability to work or there are issues around how they can work, work coaches will use their full discretion to ensure that people are supported, but not engaging is not the right option.