Oral Answers to Questions
Thérèse Coffey Excerpts(3 years ago)
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Greg Smith (Buckingham) (Con)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
We have made £500 million available across the UK to support vulnerable households this winter. It really is for local authorities, which are closer to their communities, to use the funding to support those with needs for food, utilities and wider essentials. They are best placed to design schemes that support those most in need locally.
Greg Smith
The £500 million household support fund is extremely welcome and my local council is busy ensuring that support reaches those who need it through their excellent Helping Hand scheme. Will my right hon. Friend join me in congratulating Buckinghamshire Council on ensuring that a comprehensive package is available for those who are sadly unable to put food on the table or heat their homes, and will she set out what more can be done to ensure that those in such distressing circumstances know that local authorities have the resources and should be the first port of call?
Dr Coffey
My hon. Friend is right to praise Buckinghamshire Council, which was allocated £2.4 million from the fund. It is fair to say that local authorities delivering the household support fund have access to elements relating to health visitors, social workers and housing departments, and access to the benefits system through the Searchlight portal, to identify people who may need help at this time and are most in need. Of course, people should turn to their councils for that support, and they should be warmly welcomed.
Ms Karen Buck (Westminster North) (Lab)
According to the Resolution Foundation, the combined effect of the removal of the £20 universal credit uplift and the Budget measures means that 3.6 million households on universal credit—three quarters of the total—will still be worse off this winter. These measures take £3 billion out of support for the poorest, so how far does the Secretary of State estimate that the £500 million household support fund, which is equivalent to just one sixth of the amount that has been removed, will reduce the level of hardship for people this winter?
Dr Coffey
The hon. Lady will recognise that some of the announcements made in the Budget recently will, I expect, provide some direct support for people working or, indeed, encourage people into work. However, the £500 million, being a targeted fund, will be a great support, with people identified by local councils that know who to target in this regard. It is also fair to say, as has been said many times, that the uplift was temporary, recognising the situation that we are in, and candidly, it was far more generous than ever happened—or rather, never happened—when we had the 2009-10 financial crisis.
Mr Steve Baker (Wycombe) (Con)
Like my hon. Friend the Member for Buckingham (Greg Smith), I pay tribute to Buckinghamshire Council for all that it has done with the Helping Hand scheme. Does the Secretary of State agree that in a place such as High Wycombe, where riches and poverty are often found so close together, it is imperative that we equip councils to provide local people with the local help that they need?
Dr Coffey
I strongly agree. That is why we are working through local authorities, which understand their communities well, without there being blanket schemes. It is important that that is reflected around the country, including in places such as High Wycombe.
Alison Thewliss (Glasgow Central) (SNP)
Claire Coutinho (East Surrey) (Con)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The universal credit system stood up to the challenge of the pandemic, which meant that people received vital financial support at their time of need. On one day alone we received just over 100,000 new claims, 10 times the average. The old system would not have coped with the unprecedented pressure that we have seen over the past 18 months, and that is yet another reason why universal credit is working.
Claire Coutinho
During the pandemic, the universal credit system proved not only its resilience but its agility in providing people with the emergency support that they needed. Now that the Government are rightly focusing on getting people back into work, could my right hon. Friend set out the timetable for the very welcome changes that she has made to the universal credit taper rate and to work allowances?
Dr Coffey
I was not the only person to cheer loudly when the Chancellor announced to the House that we were increasing work allowances and reducing the taper rate to 55% no later than 1 December. I am pleased to inform my hon. Friend that the latest information I have is that we intend to try to bring that in from 24 November, which means that an extra 500,000 claimants will benefit, even more than might have been predicted just a couple of weeks ago.
Mr Toby Perkins (Chesterfield) (Lab)
The Department for Work and Pensions makes substantial efforts to assure itself that people who are on universal credit and not in work are entitled to that payment, either because of the disabilities that they have or because they have made every possible effort to find work. On that basis, why would the Government reassure themselves that it is okay to plunge those people into poverty, when they have done everything that the Government have asked them to do in terms of trying to find work? Why not just reintroduce that £20 payment?
Dr Coffey
The £20 uplift was a temporary measure reflecting the nature of what happened in the pandemic, and the greatest financial impact was on those who had gone from having earnings to having no earnings at all. We have doubled the number of work coaches and we are striving to help people to get into work, because we know that that is the best way to get on in life. I am sure the hon. Gentleman will welcome the change that happened in the Budget, which shows, perhaps even quicker than initially predicted, that work genuinely pays.
Andrew Jones (Harrogate and Knaresborough) (Con)
My right hon. Friend is aware that Harrogate has been the location for the pilot work on the managed migration from legacy benefits. Is she able to update the House on how that is going? Before the pandemic, it was going very well indeed. Is she now in a position to recommence the pilot, or to move on to the next stage of the migration?
Dr Coffey
My hon. Friend is right to point out that we undertook some pilot work in Harrogate on the managed migration element of moving everybody to universal credit. I am pleased to say that there was a considerable amount of learnings from that time in Harrogate, and we have also learned a lot during the pandemic. As such, I am not envisaging a need for the pilot to be resumed in Harrogate, but it has informed our plan, which is still in preparation, on resuming the managed move to universal credit.
Deidre Brock (Edinburgh North and Leith) (SNP)
Deidre Brock (Edinburgh North and Leith) (SNP)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Since the last Work and Pensions oral questions, I am pleased to welcome the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Norwich North (Chloe Smith), and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Macclesfield (David Rutley) to join our ministerial team. I congratulate the Under-Secretary of State for Education, my hon. Friend the Member for Colchester (Will Quince) on moving to his new role, looking after childcare. I also thank my hon. Friend the Member for North Swindon (Justin Tomlinson) for the great work that he did during his time in the Department; he should be proud of his achievements, including the changes to accessibility of benefits for those with terminal illness, and the national disability strategy.
Last week I was in Glasgow for COP26. I know you were also there at the weekend, Mr Speaker, to have discussions at that important climate conference. I was meeting my international counterparts and leading industry figures to discuss how to unlock the global superpower of pension funds to help us to achieve net zero. The UK is already leading the way. We need to mobilise climate finance, but together—with the resolve and readiness of countries and companies to act—the commitment that we secured in Glasgow will deliver prosperity and protection for people and the planet.
Deidre Brock
My constituent contacted the Department for Work and Pensions several times after her universal credit stopped at the end of July because she had reached state pension age, but she received no response. Three months later, I wrote to the DWP on the matter and received a letter on the same day, admitting the error, immediately depositing the outstanding amount and beginning the pension payments that my constituent was due. I listened to the excuses of the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), on this earlier, but I still cannot understand how it could have happened. Will the Secretary of State apologise to my constituent for the very great anxiety that she has suffered because of the DWP’s blunders?
Dr Coffey
The hon. Member just shows her effectiveness as a Member of Parliament in responding to her constituent and taking the issue up with us. If there are specific details that she would like to go into, I think the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), will be more than happy to respond. It is right to say that universal credit is not paid to people who are of pension age, but I flag to her some of the issues addressed by my hon. Friend earlier when considering the backlog in paying out pensions.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
May I add my welcome to the new Ministers on the Front Bench today?
In the year before the pandemic, 380,000 sanctions were handed out by the DWP to the British people. Of course, there must be rules in any system, but since the Conservatives came to power in 2010, there has been a heavy focus on punitive sanctions, often for minor infractions, yet when the Home Secretary breaks the ministerial code by bullying, she gets off scot-free; when the Electoral Commission tries to investigate the Prime Minister’s flat refurbishment, it gets its wings clipped; and last week, when Mr Owen Paterson broke the rules on paid advocacy, this Government tried to do away with the rules all together. These are not one-offs. This is a pattern of behaviour. Does the Secretary of State appreciate that many people are comparing how the DWP operates with how the Conservative party behaves, and are asking, “Why is there one rule for the Government and another for everybody else?”?
Dr Coffey
Well, what can I say? The interests of the British public are best served when the Conservative party is in power and in government. We are seeing a rise in employment. We are seeing a universal credit benefit system that is more generous than the legacy system that was there. We are finally removing a lot of the thresholds that actually prevented people from working more than 16 hours per week. I am proud of not only our policies but our civil servants in delivering an excellent record in trying to make sure that money gets to the people who deserve it the most.
Jonathan Reynolds
People simply want to know that everyone in this country is playing by the same rules, and I think that is reasonable.
Let me turn to another crisis of the Government’s own making—the problems in the labour market we have seen over the past few months that left the pumps dry and the shelves sparse. As we left the single market it was obvious which sectors would be most disrupted: transport, logistics, and social care and the NHS. Regardless of how people voted, we have to make this work, which it clearly does not at the moment because of Government incompetence. This Government often claim they have a plan for jobs, but surely any credible plan would have tackled these shortages head on and got unemployed people the skills the economy needs to keep Britain moving. So, very simply, why was there no plan in place to prevent these problems?
Dr Coffey
Very evidently, the plan for jobs is working. We are seeing more people on the payrolls than was happening pre-pandemic. I hear what the hon. Gentleman says about some of the skills that may be required. I am conscious that many people who campaigned vigorously to stay in the European Union are still trying to use the excuse of leaving the European Union for why certain sectors are still under-supplied. The reality is that nearly 6 million people registered for the EU settlement scheme and they have an entitlement to live in this country if they so wish. I think there are some aspects of covid that are perhaps hindering people in coming back into the UK who are considering a return to their native countries. Let me say very clearly that we are working on this right across Government. We have the Prime Minister’s lifetime skills guarantee. We are encouraging people to consider swapping sectors, as is happening with aspects such as SWAPs—sector-based work academy programmes—for people who are unemployed. There are also the bootcamps for skills and the incentives to take on apprentices that have given been to employers right across the country. I can honestly assure the hon. Gentleman that the plan for jobs is certainly working.
Selaine Saxby (North Devon) (Con)
David Linden (Glasgow East) (SNP)
The British Government’s statutory minimum wage is not a real living wage; in fact, it is a sham. It does not meet the minimum income needed for an acceptable living standard, and the differing rates for young people, including in the Secretary of State’s constituency, are wholly unjust and discriminatory. What action will she take to ensure that all workers, regardless of age, get a real living wage, as set by the Living Wage Foundation in April, that actually reflects the rising cost of living, and not the sham supported by this British Government that Scotland did not vote for?
Dr Coffey
We have a separate body that already makes recommendations. It is called the Low Pay Commission, and the differential in wages is out there. The hon. Member can cite whatever campaigning body he likes; we have seen a huge increase in the national living wage, and that is to be welcomed right across the country as we head towards the national living wage being 66% of median earnings.
Rob Roberts (Delyn) (Ind)
Dr Coffey
We have been working consistently to try to ensure that for people who receive benefits, for which immigration status is required, we exhaust all avenues to encourage them to apply to the EU settlement scheme to maintain that benefit entitlement. I am pleased to say that the vast majority of people have done so, and we will keep working to try to ensure that, whether people have received letters, UC journal messages, invitations to come to face-to-face appointments, or supportive officers have been sent round to help them with the process, we are taking every action possible to try to ensure they do so. I encourage hon. Members to ensure that people know they must apply for EUSS status so that they continue to be eligible for the benefits.
Kirsten Oswald (East Renfrewshire) (SNP)
Like other Members, I welcome the modest reduction in the universal credit taper rate, but it does not come close to compensating for the effect of the £20 a week cut to universal credit, to say nothing of the national insurance hike, rising inflation and soaring energy prices. In a written answer to me in September, the Minister for welfare delivery, the hon. Member for Macclesfield (David Rutley) confirmed that prior to cutting universal credit, the Department had not assessed the effect of the cut or the increase in energy costs on child poverty. Will the Secretary of State act now to correct that omission and conduct and publish an up-to-date assessment of how the cut to universal credit and the rising cost of living will impact on child poverty?
Dr Coffey
Given that it was a temporary uplift, recognising the effect of aspects of the pandemic on people new to benefits, no impact assessment was undertaken. With the removal of the temporary uplift, therefore, no impact assessment has been undertaken either.
Bob Blackman (Harrow East) (Con)
The cut to the taper rate from 63% to 55% was clearly a vital measure to support people on low incomes. What consideration has my right hon. Friend given to lowering the taper rate further so that we can ensure that people who go to work continue to work and benefit as a result?
Dr Coffey
I congratulate my hon. Friend on championing the announcement of the reduction of the taper rate from 63% to 55%. He may be aware that that was the original design of the universal credit system. The Chancellor agreed with me and the Prime Minister that, in trying to ensure that work pays, it was the right moment to do it. It recognises the labour market opportunities and makes sure that people are better off working. With my right hon. Friend the Chancellor having already provided for costs of about £2.5 billion annually, I am not convinced that we will seek to change the taper rate further; instead, we will be seeking to ensure that all the current job vacancies are taken up so that work really does pay.
Andrew Gwynne (Denton and Reddish) (Lab)
In answering an earlier question about 1950s women, the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), referred to the High Court but not the Parliamentary and Health Service Ombudsman’s report. Given that the report explicitly urged the Government not to drag their feet and to proactively co-operate with the next stages of the investigation, will he assure me that he will break the habit of a lifetime and do just that?
Cold Weather Payments Scheme
Thérèse Coffey Excerpts(3 years ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
We are today announcing the outcome of this year’s Met Office review of the cold weather payments scheme. The Department for Work and Pensions asks the Met Office to provide advice annually on whether the linkages between postcode areas and weather stations remain the best available. The postcode linkages take account of topography, the extent of built-up areas and the distance from available weather stations. Each postcode area is assigned to a station with the most similar climate in terms of mean winter temperature. Therefore, the assigned station is not necessarily the nearest one. Where necessary, we make changes annually to ensure that postcodes are linked to the most appropriate weather station for the purposes of administering cold weather payments.
For the 2021-22 season, the changes to weather station and postcode linkages are as follows:
The PH12 postcode will move from Leuchars to Strathallan weather station.
Due to the closure of the weather station at South Farnborough, the following postcodes will move to Odiham: GU1-4, GU7-12, GU14-35, GU46-47, GU51-52, RG1-2, RG4-8, RG10, RG12, RG14, RG18-27, RG29-31, RG40-42, RG45, SL1-2, SL4-6 and SO24.
Due to the closure of Bedford weather station, the following postcodes will move to Wittering: NN14-16; and the following postcodes will move to Stowe weather station: NN1-7, NN11-13 and MK18.
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Plan for Jobs Extension
Thérèse Coffey Excerpts(3 years, 1 month ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Our plan for jobs is working. With the UK economy rebounding strongly, the number of payrolled employees is now above pre-pandemic levels and vacancies are at record levels. Our unprecedented £407 billion support package protected jobs and livelihoods through the worst of the pandemic and the formidable force of our jabs and jobs armies means we are building back better—helping people move into decent, well-paid jobs and get the skills they need to succeed.
We are investing a further £500 million to expand the plan for jobs to build on its successes to help people of all ages fulfil their potential, in particular younger and older jobseekers and those on low incomes.
We are extending our kickstart scheme until the end of March 2022, which has so far helped over 85,000 young people take a confident first step in their careers. This will allow thousands more young people to benefit and enable employers a further opportunity to apply for funding for roles, especially those who were unable to take on young people while covid restrictions were in place. New applications for roles will be accepted until 17 December 2021, though employers will be expected to move quickly to fill their approved roles.
We are extending our youth offer to 2025. This will ensure that young people can continue to benefit from intensive work coach support through the youth employment programme, specialised youth employability coaches and over 135 youth hubs, which are already providing support to thousands of young people across England, Scotland and Wales. We are also expanding eligibility, with 16 and 17-year-olds able to join alongside 18 to 24-year-olds claiming universal credit and searching for work.
For older workers, who often face specific challenges remaining in and returning to work, we will be funding a new support package. This will ensure they receive more intensive, tailored support during their work search journey, as well as information and guidance on later life planning, helping them make informed choices and supporting them to plan their career and stay in, or return to work.
And for low-paid workers, from April 2022, we will bolster our work coach support for people on universal credit to help them boost their earnings through a focus on career progression advice, with jobcentre specialists working with local employers to identify opportunities for people to progress in work.
We are also extending JETS—our job entry targeted support scheme—to September 2022, which has so far supported over 175,000 people across the UK by providing light-touch employment support for six months within the first year of unemployment. And our job finding support (JFS) scheme will continue to prioritise support for those coming off furlough through online, tailored, one-to-one support for those newly unemployed and claiming universal credit, including recruitment advice from a skilled adviser, support with CVs, and mock interviews.
This expansion of our plan for jobs and jobcentre network is an example of our commitment to invest in skills and jobs, helping people to move into well-paid work, progress, earn more and increase financial resilience —boosting pay, prospects and prosperity.
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Household Support Fund
Thérèse Coffey Excerpts(3 years, 1 month ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Our £407 billion covid support package has protected jobs and livelihoods through the worst of the pandemic. With the UK economy rebounding, our plan for jobs is working, with the number of payrolled employees now above pre-pandemic levels and vacancies at record levels. Thanks to the formidable force of our jabs and jobs armies, and an expansion of the Government plan for jobs worth over £500 million, we are building back better—helping people to move into better paid work, progress, and increase their financial resilience. Our approach is boosting pay, prospects and prosperity for the long term.
However, we recognise that some people may require extra support over the winter as we enter the final stages of recovery, which is why vulnerable households across the country will now be able to access a new £500 million support fund to help them with essentials. The household support fund will provide £421 million to help vulnerable people in England and allocations to individual local authorities are set out below. The Barnett formula will apply in the usual way, with the devolved Administrations receiving almost £80 million (£41 million for the Scottish Government, £25 million for the Welsh Government and £14 million for the Nl Executive), so the fund totals £500 million.
The household support fund is available to councils in England from this month and will run over the winter to 31 March 2022. The funding will primarily be used to support households in need with food, energy and water costs, with flexibility to support with wider essentials. In cases of genuine emergency, where existing housing support schemes do not meet this exceptional need, the household support fund can also be used to support housing costs. At least 50% of the funding will be reserved for households with children and up to 50% is available for vulnerable households without children, including individuals. Local authorities have the flexibility to design their schemes to best suit local needs, within the parameters of the guidance.
This new fund will bolster existing measures that we have introduced for low-income households, such as increasing the national living wage, expanding the £220 million holiday activities and food programme, doubling free childcare for eligible working parents and increasing the value of healthy start vouchers by over a third. The household support fund also sits alongside the support available through the warm home discount, the cold weather payment scheme and the almost £30 billion that Government are projected to spend in 2020-21 on housing benefit and the housing element of universal credit.
The table for the household support fund indicative funding allocations per county councils/unitary authorities for the period 6 October 2021 to 31 March 2022, can be found at: Government launches £500m support for vulnerable households over winter - GOV.UK (www.gov.uk)
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Personal Independence Payments
Thérèse Coffey Excerpts(3 years, 2 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I would like to update the House on the Department’s implementation of the Supreme Court judgment from July 2019 in the case of Secretary of State for Work and Pensions v. MM, known as MM. The judgment concerned the way we assess the help that someone might need to engage with other people face to face and whether that help is considered “prompting” or “social support” under the PIP assessment.
The Department set out to the House on 17 September 2020 that, following this judgment, the Department had made changes to the way PIP is assessed for all new claims, award reviews and mandatory reconsiderations.
We have now started an administrative exercise, looking at PIP claims since 6 April 2016 to check whether claimants may be eligible for more support under PIP.
This is a complex exercise that will take some time to complete. We will be contacting claimants who may be affected by this change and will be writing to those we review. If claimants are eligible for more PIP, we will make backdated payments.
It is important to stress that not everyone we contact will be eligible for more PIP, however, I hope this reassures the House that we are committed to treating people fairly and ensuring that they are fully supported.
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Social Security (Up-rating of Benefits) Bill
Thérèse Coffey ExcerptsMonday 20th September 2021
(3 years, 2 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I beg to move, That the Bill be now read a Second time.
Each year I am required to undertake a review of social security rates to consider whether benefits have kept pace with inflation or an increase in earnings. I will undertake that review shortly, and will report to Parliament in November. The Bill refers to how I will undertake the review.
As set out in the Social Security Administration Act 1992, there are four benefits for which there is a direct link with earnings: the basic state pension, the new state pension, the standard minimum guarantee in pension credit, and survivors’ benefits in industrial death benefit. That last benefit is devolved to Scotland, and I can confirm that we have received the legislative consent motion that is necessary. I must emphasise that the Bill does not extend to other benefits, including universal credit, where the uprating review is linked to prices.
Normally, I have a specific reference period to consider earnings growth as part of my review. That same earnings reference period has been used for the last decade. In preparing for the review last year, with regard to that reference period, we anticipated and saw an unprecedented fall in average earnings as a result of the covid restrictions that we introduced to protect lives—especially those of the most vulnerable, including many pensioners—and to protect the NHS. That was why we changed the law for one year to set aside the earnings link. Otherwise, state pensions would have remain frozen. I then made the assessment, and awarded an uprating of 2.5%, which was higher than the then inflation rate of 0.5%.
As I prepare for this year’s review, the economic context is very different from last year’s, as our economy and businesses have reopened following our successful vaccination programme and unprecedented support for businesses and households. Millions of people have moved off furlough and back into work, and we are witnessing a surge in the labour market, with over a million job vacancies. The combination of those factors has resulted in a distorting effect on wages, with a statistical anomaly.
Confirmed figures will be published in October, but provisional figures from the Office for National Statistics show an increase in earnings of 8.3%, more than two percentage points higher than at any time over the last two decades. Given that this statistical spike in earnings is due to a covid-related distortion, I am seeking the agreement of Parliament to again set aside the earnings link for just one more year, 2022-23. I have put provision in the Bill to award the higher of inflation or 2.5%, applying in effect, again, a double-lock policy. The triple-lock policy will be applied in the usual way from next year for the remainder of the Parliament. This approach has been strongly recommended by external commentators, including Sir Steve Webb, who was the Liberal Democrat Pensions Minister for the lifetime of the coalition Government. While it has come as no surprise to most of us in the House, I was disappointed by the amendment tabled by the Liberal Democrats, finding their latest bandwagon to jump on. They really should listen to Sir Steve, who probably knows more about pensions than anybody in the Liberal Democrats.
This Government are committed to ensuring that older people can enjoy their retirement with security, dignity and respect, and since 2010 the full yearly basic state pension has increased by more than £2,050 in cash terms. There are now 200,000 fewer pensioners in absolute poverty, both before and after housing costs, than in 2009-10. I am proud of our record on support for pensioners and of the action we took last year to ensure that pensioners’ incomes continue to increase. This Bill will ensure that a temporary statistical anomaly in wages does not unfairly track across into pensions, while also preserving the spending power of pensioners and protecting them from increases in the cost of living. I commend the Bill to the House.
Universal Credit and Working Tax Credits
Thérèse Coffey Excerpts(3 years, 2 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Just this week, the official jobs statistics showed that more people are getting back into work and there is a record number of vacancies. That is a tribute to the British people and businesses. It shows that our plan for jobs is working. It shows that our comprehensive and unprecedented support for citizens and corporations as well as the NHS, in trying to protect lives and livelihoods, has worked. After the terrible personal and economic impact of covid, boosted by the successful vaccination roll-out, Britain is now rebounding.
It was right that we took prompt and decisive action to support our nation during this challenging time. We had the job retention scheme, the self-employment grants, the VAT changes, the business rates relief, the suspension of evictions for people and businesses who were renting—I could go on. We could only do that, though, because we went into the global pandemic with strong economic foundations built as a result of 10 years of Conservative measures to restore the nation’s finances after the financial crisis on Labour’s watch, when, memorably, there was no money left. Those measures included a sustained focus on supporting people to move into and progress in work through universal credit, with the highest level of employment ever seen in this country just before covid hit.
Stephen Timms (East Ham) (Lab)
If this cut goes ahead, with £20 a week taken off universal credit, it will reduce the support for an unemployed family to the lowest level as a proportion of average earnings at any time since the welfare state was established after the second world war. How can that possibly be justified?
Dr Coffey
As I will probably say a bit later as well, this was indeed a temporary uplift, recognising the financial impact on people newly unemployed and that the uplift would be somewhat of a cushion for their financial circumstances. However, do bear in mind all the other support that we have given to help families get back on their feet, all the other elements that we have used to help people manage the cost of living, as well as the extra welfare grants that we targeted specifically through local councils. They have all been actions to help people, and we are helping people back into work, and better-paid work.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the Secretary of State give way?
Dr Coffey
I am going to make a little more progress and then I will come to the hon. Gentleman.
Those foundations meant that we had the fiscal firepower and responsive welfare system to take decisive and unprecedented action in the face of the covid emergency. We delivered a package of over £400 billion to support the British people and businesses through the economic shock and injected over £7 billion extra into the welfare system, increasing local housing allowance rental support by nearly £1 billion, as well as over £400 million of targeted grants for local government to directly help the most disadvantaged and vulnerable families in local communities.
Alan Brown
If a constituent comes to my surgery saying that they cannot afford to eat and have to go to a food bank because of the removal of the uplift, does the Secretary of State think they will feel any better when I say, “It’s not a cut; it’s just the removal of a temporary uplift”? What does she say to constituents who are on universal credit for the first time? They will have no idea that this cut is coming.
Dr Coffey
We have communicated once already with recipients of the universal credit temporary uplift. That has already gone through. The second message is under way, and the third message will be done. I think that we have taken responsible action to make sure that people realise that this change is coming, but of course the hon. Gentleman’s constituent will still be engaging with their work coach about how we can perhaps help them into better-paid work than they had before.
Hywel Williams (Arfon) (PC)
The Secretary of State started by listing the support that this Government have given to businesses, and specifically small businesses, which are very important in my constituency. How can she justify taking £5 million out of the local economy in Arfon?
Dr Coffey
I have already given way a bit, so I will make some more progress.
Let us recognise that not everyone was fortunate enough to be furloughed; sadly, many people were made redundant. Fortunately, we had the universal credit system, and with the mass efforts of the great civil servants in my Department, we responded instantly to support the millions of people who turned to us for help. I will never tire of praising my Department for how we helped those at their lowest ebb. I know that that would simply not have been possible with the old benefits system. People would have been queuing round the block trying to get into jobcentres, especially in the middle of a lockdown. It may be an inconvenient truth for Opposition parties, which have constantly tried to demonise universal credit, but universal credit proved itself even more during the pandemic, showing that it worked both by design and in delivery.
David Linden
I, too, pay tribute to the civil servants and the work coaches in the Secretary of State’s Department. That is the point that I want to explore with her. We all understand that unemployment is yet to spike. We expect that there will be problems as a result of the furlough scheme ending. I think that is widely anticipated; indeed, the Government have gone around opening temporary jobcentres and appointing more work coaches until March next year. If the Government understand that unemployment is about to spike, why are they removing this uplift to universal credit right now?
Dr Coffey
Of course, we now have a record number of vacancies, but we are also about being ready and anticipating. The OBR forecast that there would be a significantly higher unemployment effect as a result of what happened, and it mattered that we had jobcentres and work coaches ready to help people with that. I hope that we can now make sure that our army of work coaches can continue to help just under 2 million people still looking for work to get into those 1 million vacancies, as well as their efforts to help people progress in work.
James Cartlidge
I am grateful to my right hon. Friend and neighbour, who is making an excellent speech. She is right to highlight the resilience of the universal credit system, but on the point that is made about taking money out of local economies, is that not an insult to John Maynard Keynes? Is it not a fact that if individuals get more hours and better-paid work, there will be more money going into their economies, and on a more sustainable basis?
Dr Coffey
I would not normally rely on John Maynard Keynes to help the cause, but undoubtedly, there is an element of investment; we are seeing plenty of investment by the Government in our economies and in businesses in support of that, not least the £650 billion programme announced by my right hon. Friends the Prime Minister and the Chancellor earlier this week, which we estimate will generate an extra 425,000 jobs just in the next few years. We want people to have more take-home pay. That is why we have pursued increases to the national living wage, which is now at 60% of median earnings. The intention is that it will reach 66% of median earnings before the end of this Parliament—and that is just the minimum. We want people to have high-skilled, high-paid jobs, and that is why our plan for jobs is all about helping people take advantage of the support that is there.
Sir Desmond Swayne
Spending £6 billion handing an uplift to all recipients of universal credit, irrespective of their circumstances, was never a targeted way of affecting those people who are most in need. That is why it was temporary. When the Secretary of State comes to the longer term, will she consider the taper and the way that childcare costs are met?
Dr Coffey
My right hon. Friend is right that it was quite a blunt way of quickly delivering instant support, particularly for those most financially impacted by covid, many of whom were made redundant for the first time in their lives. I am conscious that we have still more to do to try to make sure that people can keep more of what they earn. I also have strong views that we need to continue to try to make best use of the funding that goes into childcare. As my right hon. Friend will know, under universal credit 85% of childcare costs, worth up to £13,000 per family, can be reclaimed. That is higher than that possible under tax credits.
Coming back to universal credit, the point has been made by hon. Members across the House that it is a dynamic benefit. It supports people in work and out of work, which is exactly what it was designed to do. People are better off working than not working, unless they cannot work. That is why, automatically and instantaneously, when people started to see a change in their working patterns due to the covid pandemic, it responded to the needs of people already in the system. Those affected saw their universal credit payments rise straight away when they lost working hours or found themselves out of work completely. That is a key part of why the UC system is absolutely vital. I am pleased that the Opposition seem at least to have decided to drop their opposition to that, even if it is just to rebrand. Nevertheless, we decided to somewhat cushion the fall of people made redundant.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Does my right hon. Friend not agree that it would be quite nice if the Opposition actually came here and apologised for year after year, in Opposition day debate after Opposition day debate, spreading scare stories and terrifying the poorest and the most vulnerable in the country by telling them that universal credit would not work? When we were under the biggest strain this country has ever faced, universal credit worked. That is a testament to my right hon. Friend, her great Ministers and the thousands of DWP staff up and down the length and breadth of this country.
Dr Coffey
My hon. Friend is absolutely right. There are still 3 million people on legacy benefits. We estimate that about half of those people would be better off on universal credit and that a significant number of people would see no change, yet the scare stories and the fear that the Opposition generated are why people are still not transitioning across the system. They will do just that now, because this Parliament voted to end legacy benefits; it voted to have universal credit, so we are still, through our action programme, going to move people across to universal credit. I am with my hon. Friend that many people would actually and substantially be almost certainly better off if they moved. For those people, we have to have a managed migration. We have, of course, already put in place a transitional payment.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Secretary of State said a moment ago that we are spreading scare stories. Can I say to her—she may wish to comment on this—that talking about the very real impact of losing £20 per week for people who are already struggling is not a scare story, but reality?
Dr Coffey
I recognise what the hon. Lady says. I am talking about the fact that universal credit has been demonised ever since it was introduced, yet people on legacy benefits—about half of them, we believe—would be financially better off if they moved over to universal credit, regardless of the £20. A significant proportion more would see no change to their financial income. People are scared to move over and that is why there is a missed opportunity for them to access some of the support we have today.
Several hon. Members rose—
Dr Coffey
I am going to make some more progress and then I will come back to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) and my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb).
Returning to the crux of the debate, the temporary £20 uplift was an important intervention to help people facing the greatest financial disruption to get the support they needed. It brought the universal credit standard allowance close to the level of statutory sick pay, the minimum amount required to be paid by employers for people who could not work.
In the Budget earlier this year, recognising that the country was still under restrictions, the Chancellor set out that we would continue covid financial support until autumn, several months after the country came out of lockdown. That helped many people stay on furlough and be connected to their employers as businesses gradually opened, and meant keeping that extra financial support for people on universal credit and tax credits for an extra six months. As our economy continues to recover, it is right that we are investing in jobs and skills to boost pay, prospects and prosperity for people right across the UK as part of our plan to level up and build back better.
Stephen Crabb
On universal credit, I have spoken to dozens and dozens of work coaches all over the country. Every single one of them has told me, without a shadow of a doubt, that universal credit is a better benefit than what was before. It is down to the enthusiasm and the skills of work coaches, to a large extent, that universal credit has been such a success during this very difficult period.
Dr Coffey
My right hon. Friend is absolutely right. We already had about 640 jobcentres. We are opening a further 200 by the end of the year, recognising that we need to support more people. Of course, work coaches do not just deal with helping people—people with disabilities and a limited capability to work—to get back into work. Work coaches do a wide variety of work to support some of the most disadvantaged and vulnerable. Again, I thank him for paying tribute to our work coaches. They will play a key role in the time ahead. Perhaps the hon. Member for Oldham East and Saddleworth would like to intervene now?
Debbie Abrahams
I would be delighted to, although it is not specifically on work coaches. The right hon. Lady is absolutely right that there are winners and losers with universal credit. Last week, the Select Committee heard from four single parents about how they are the losers. I would add that disabled people are also losers. What is the cumulative impact of the cuts to universal credit, the introduction of the new national insurance contributions payment, the rise in food prices and energy bills, and the childcare costs which we have already heard about? What would the impact be on a single parent with two children living on the minimum wage with support from universal credit?
Dr Coffey
The hon. Lady will know that every individual or household on universal credit has very distinct relationships, which is why we can find households earning up to nearly £40,000 still being recipients of universal credit. It depends on the circumstances. As the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince) said the other day, trying to do some kind of analysis by trying to make individual assessments is just not viable. However, we know, and she knows—
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Will the Secretary of State give way?
Dr Coffey
I will give way to the former Secretary of State for Work and Pensions shortly. The hon. Member for Oldham East and Saddleworth must agree with me that the best way to get more pounds into people’s pockets is through work. We have universal credit work allowances for people with children—this may have covered some of the people who gave evidence to the Select Committee—who have a limited capability to work, so they can keep all the extra money they earn until the allowance is used up and the taper rate kicks in. That is why we have given extra support for people who may not currently be working full time. That is an extra way for them to get all the money they earn for more hours.
Yvette Cooper
I thank the Secretary of State for giving way. A care worker or a low-paid public sector worker—for example, a nursery assistant—who works full time, loves their job and has no prospect of a pay raise any time soon, is now about to be told that they will have £20 a week taken away from them. What does she say to those care workers about why that is fair?
Dr Coffey
The right hon. Lady is right to praise care workers, who played an important part during the covid pandemic. It is my understanding that half a billion pounds of the health and social care levy, which was passed yesterday—the Opposition voted against it—will go to supporting the workforce in the care industry, recognising aspects of skills and pay. I want to put across to the right hon. Lady that we know—there is evidence on this—that where both parents are working full time, 97% of those households are not technically in poverty. That is why we have such emphasis. Households with children working part time are more likely—substantially higher, closer to 42%—to be in poverty. Frankly, five times the rate of people who do not work at all—workless households—are in poverty compared to those who are working. That is why we have worked really hard to reduce the number of workless households. I think there are 650,000 fewer workless households, lifting children out of poverty.
Dr Coffey
I will make some progress if the hon. Lady will allow.
We know that the best way to get more pounds into people’s pockets is through work. Those of us on the Conservative Benches believe in a welfare safety net, not a welfare trap, where it feels the Opposition are keen to keep people. We know that work and progressing in a job is the best route out of poverty, and I have spoken about parents working full time. That is why the Government, having provided unprecedented support during the height of the pandemic, are now right to focus on helping people back into work and helping those already in jobs to progress in their career.
Although the legacy benefits system penalised people for taking on more hours, universal credit ensures that working always pays. We got rid of the cliff edge that was part of working tax credits where people were penalised for working more than 16 hours and of the other cliff edges. I repeat that that is why we have UC work allowances focused on people with children or with limited capability to work, so that they can keep all the extra money that they earn until the allowance is used.
Rachael Maskell
I am grateful to the right hon. Lady for giving way. She says that universal credit is responsive, but when she announced this cut, we did not know that there would be a 3.2% increase in inflation. My constituents are in work; it is just that the cost of living in York is exceedingly high. This proposal will hit them significantly, so will she take it back and reconsider in the light of inflation rising?
Dr Coffey
The hon. Lady represents a beautiful city—a magnificent city—and she will know that the jobcentre and our work coaches are working hard there with the communities. In lifting the local housing allowance rates, we made nearly a £1 billion investment, and we have maintained that in cash terms to recognise some of the costs of housing, which are truly challenging in very popular areas such as hers, and I am sure that she will welcome that.
We are making the most of our 13,500 extra work coaches. Right across the country, we have doubled our jobs army, which is helping people to get into work and to progress in work by accessing skills and job schemes. Our plan for jobs employment programmes are providing tailored support to help more people to move into and progress in work.
Andy Carter
Last week, I visited the jobcentre in Warrington and saw for myself the work that the new job coaches are doing, particularly with young people. Does the Secretary of State agree that we need to focus on young people and that that is exactly the work that the kickstart programme is doing?
Dr Coffey
I agree. Kickstart has so far given over 69,000 young people a foot in the door as they start their working lives. There are more jobs to be filled and we are working with employers to accelerate the recruitment process in that regard.
We also have a scheme called SWAP—the sector-based work academy programme—where people might consider changing their career. The beauty of SWAP is that it is employer-led. We have helped 64,500 people gain the skills that they need to land a job in a whole range of growing sectors. At the end of the training and work experience, there is a guaranteed job interview.
Dr Coffey
I will make some progress and then come back to the hon. Lady. We also have the job entry targeted support scheme, which, again, provides tailored support, and 138,000 newly unemployed people have got a leg up that way to make sure that they can try to find sustainable work. The restart scheme has recently started. That will provide intensive help, supporting over 1 million jobseekers who have been out of work for over a year. That is not all, but I will give way to the hon. Lady.
Dame Angela Eagle
I thank the Secretary of State for giving way. Will she explain to the House why, if everything is reasonable and as it should be, her six predecessor Conservative Secretaries of State for the Department for Work and Pensions have all come out against this cut?
Dr Coffey
I think it is fair to say that in the letter I saw that my six predecessors had signed—they are magnificent people and it is an honour to follow in their footsteps—they were keen to have the extra financial support that has gone into aspects of the welfare system and to help people in that way. It was not specifically about the £20 but about recognising, as has been said today, that there may be better ways of using that financing. I am conscious that the media may have reported that in a slightly different way and I am not going to put anybody on the spot. However, I think they valued the extra money that went in, and I want to continue to support people.
Stephen Crabb
I am grateful to my right hon. Friend for giving way again; she is being incredibly generous with her time this afternoon. The central argument of the letter that we sent to the Secretary of State and other colleagues in Government was about trying to retain the investment in universal credit. There are different ways to spend that money. All the evidence that I have seen suggests that investing in the standard allowance gives us more bang for our buck in protecting families against poverty. It was really a last-ditch attempt by me and a number of my colleagues who had served in that Department to persuade the Government to hang on to the crucial extra investment that had been put in at the start of the pandemic and which has made such a powerful difference to so many poor families up and down the country over the last 18 months.
Dr Coffey
I thank my right hon. Friend. Anybody who has served in this office, including the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), will recognise, for the people we meet daily, as other hon. Members do in their constituencies, what a difference an intervention from a work coach or a decision maker can make to really boost people when they are at their lowest ebb. I do not know whether any hon. Members watched the series “The Yorkshire Jobcentre” on Channel 4. Our social justice team there go above and beyond in trying to help people who have been rejected by the rest of society to get their lives back on track. That is the sort of work we can do. I understand why my right hon. Friend is keen for the welfare budget to still be substantial in supporting such people.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
My right hon. Friend is being very generous with her time. She has been talking about work coaches and how these fantastic people can support people into work and the different people they help. Will she tell the House more about how work coaches and universal credit are helping disabled people back into work?
Dr Coffey
I will. I am pleased to say that I think there are more people with disabilities in work at the end of the pandemic than there were at the beginning. There is a number of things and I encourage my hon. Friend to read the Green Paper on what we have set out as possible ways forward. We want to make elements such as the Access to Work programme work better in terms of potentially being transferrable. In particular, we have some specialist schemes that we target on people with disabilities, and particular efforts are being made to help people with disabilities to access kickstart. We will continue to try to support people with disabilities to make the most of their potential, as we set out in our broader approach in the national disability strategy.
Dr Coffey
I will not, because I am conscious that we are nearly an hour into this debate and many hon. Members will want to speak about this important matter.
Right across Government, we are investing to help people to get better-paid jobs, whether that is through digital boot camps, the lifetime skills guarantee, the £650 billion infrastructure programme that will generate 425,000 jobs, the £8.7 billion affordable homes programme expected to support up to 370,000 jobs, and the green jobs taskforce, which goes from strength to strength as we work our way towards net zero. I have referred to the extra funding through the health and social care levy, which will include support for care workers, but we will not stop as we help people to progress in work. This Conservative Government and Conservative party want people to prosper as we build back better and level up opportunity across the country.
Tackling poverty through boosting income is one element and we will continue to support people with the cost of living. We have kept the uplift in housing support through the local housing allowance rates, as I mentioned to the hon. Member for York Central (Rachael Maskell), maintaining it in cash terms this financial year. We spend over £6 billion on supporting childcare, which is equivalent overall to about £5,000 per family. As I said to the House, that can be up to £13,000 per family for people on universal credit.
We have increased the automation of matching benefit recipients with energy suppliers to make it easier for the warm home discount to be awarded almost automatically. I was very pleased to see that more mobile and broadband suppliers stepped forward with social tariffs for people, which is why I am delighted to let the House know that we are working with those suppliers to make it easier for them to verify the identity of people seeking those special discounts. I am also leading cross-Government action to do more on tackling poverty and the cost of living, which will help many families with their day-to-day costs.
We have heard that universal credit is flexible and that people are treated individually. I am very aware of the challenges on food insecurity. That is why we included the questions we did in the family resources survey so that we can start to think about how we can direct our policies specifically to those people. As my hon. Friend the Member for South West Hertfordshire (Mr Mohindra) was trying to get out of the shadow Secretary of State, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), what is accurate—I am pretty sure to say—is that, in 2008, tax credits may have changed, but that was effectively for people in work. What we did not see was a boost in the unemployment benefits, so when the shadow Secretary of State criticises us for putting an extra £20 a week in the pockets of people who were newly unemployed, I do not think that his assertion is defensible.
One thing that the House may see in a couple of years is that, although in the last year of the last Labour Government we saw a reduction in relative poverty, that was largely driven by the fact that higher-paid people were unemployed—we saw a shrink in relative poverty simply because of a statistical anomaly. We have to deal with real-world facts and make sure that the provision of cash, by helping people with their income, is really the way to help them to get on in work but also to help them with the cost of living.
Jonathan Reynolds
It is incredibly generous of the Secretary of State to take an intervention from me on the Front Bench, but if relative poverty is what we are measuring—although Conservative MPs have broadly run away from that measure since saying that they would accept it—I have to say that child poverty in the UK is heading towards 5 million under this Government.
If the Secretary of State wants a discussion about the legacy of 2008, rather than about what is happening today, let me say first that benefits had not been frozen for four years under the Labour Government, so they kept their real-terms value. Secondly, the Secretary of State says that she has put more money into the system, but take the money for housing that she mentioned on Monday. That was not more generosity; it was not a boost; it was funding the level of policy that the Government already had with the 30th percentile. They were not improving on it; they were simply putting in the money that should have been there from the beginning. That is the crucial difference.
Dr Coffey
The last Labour Government—admittedly that was quite a long time ago and many Members of this House will not have been serving here then—did not build enough homes. Prices were not tackled, money was not well spent and we were left with no money.
The shadow Secretary of State will be aware that I am not a fan of talking about relative poverty, because it is simply a statistical element. However, since 2010, there have been 60,000 fewer children in absolute poverty before housing costs. Children living in workless households were around five times more likely to be in absolute poverty last year than those in households in which all adults worked. We know that full-time work reduces the chance of being in poverty. Overall, there are also 220,000 fewer pensioners in absolute poverty.
Laura Trott (Sevenoaks) (Con)
When we talk about the legacy of the last Labour Government, we must never forget the sky-high rates of youth unemployment that we inherited from them. Will my right hon. Friend commit to carrying on the brilliant work that she has done to reduce youth unemployment in the midst of this crisis?
Dr Coffey
My hon. Friend will be conscious that we are making progress right across the country in tackling that issue. I am conscious that we intend to level up. That is why we are doing a lot of work to make sure that communities right around the country, as well as in her great constituency of Sevenoaks, can take advantage of the schemes so that they can get on and prosper.
With the economy rebounding, now is the time to trust in our track record, which delivered the highest ever employment levels before the pandemic. We know that work and progressing in work are the best route out of poverty. We now have a unique opportunity, with more than 1 million vacancies in the labour market, to help people to move into new and better-paid jobs or to progress in their existing job, raising their earnings and building their financial resilience. We will continue to deliver our plan for jobs, because as we build back better and fairer, a working Britain is at the heart of a Britain that works.
Several hon. Members rose—
Oral Answers to Questions
Thérèse Coffey Excerpts(3 years, 2 months ago)
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Robert Halfon (Harlow) (Con)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Ministers are meeting this week to discuss the success of the holiday activity fund, and good progress has been made on the digitalisation of Healthy Start vouchers. We will continue the ministerial meetings on developing support for families and family hubs.
Robert Halfon
I thank my right hon. Friend for her remarkable work on universal credit during the pandemic. With the forthcoming changes to UC, will my right hon. Friend continue to target financial support on families who need it most, and will she work with the Department for Education to use existing funds from the sugar levy to expand breakfast clubs for disadvantaged children? We know that breakfast provision significantly increases educational attainment. Children with free breakfast provision achieved an additional two months’ progress in educational attainment.
Dr Coffey
I am conscious, especially with my right hon. Friend’s leadership of the Select Committee on Education, of how passionately he feels about this particular area. My Department is supporting the Department for Education’s family hubs work, which includes investing up to £24 million to continue our national school breakfast programme over the next two years, and that includes the recently announced additional £20 million investment from the Treasury’s shared outcomes fund.
Karin Smyth (Bristol South) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
As was announced by the Chancellor at the March Budget, the £20 temporary uplift will come to an end within the next month.
Karl Turner
Time and again, the Government have promised investment into areas such as east Hull, but the Minister knows full well that this savage cut to universal credit will pull £35 million from our local economy and leave families worrying about putting food on the table to feed their kids. Is it not time that the Government matched their rhetoric with actions and cancelled the cut for decent, hard-working people?
Dr Coffey
As the hon. Gentleman will know, at the time of the Budget the uplift was always advocated to be temporary, recognising that the pandemic’s lockdown elements were not over. We did extend it for a further six months, as we did other covid-related support for people. I remind him that when we had Labour’s crisis in the late noughties, that Government did not make any changes to benefits. We are proud that we did so in that temporary time.
Gerald Jones
Last month, I wrote to the Prime Minister with three local food banks, three housing providers and my local citizens advice bureau to highlight the considerable damage that the removal of the £20 uplift would cause. Those organisations and many others in Wales and across the UK are at the forefront of supporting the most vulnerable people in our communities. Does the Secretary of State agree that those organisations are best placed to know the impact of cancelling the uplift? May I ask her to remove the proposal?
Dr Coffey
The hon. Gentleman may not be aware that we have been funding Citizens Advice to assist people in making potential claims for universal credit. To that end, we estimate that about half the people still on legacy benefits would be better off with universal credit and we want to encourage people to consider carefully how they go about that. However, we believe that people progressing in work, as well as getting back into work, is the best way to tackle poverty.
Karin Smyth
The circumstances of this cut are very different from those to which the Secretary of State alluded. In Bristol South, people are not happy about the cut and businesses, which will lose £11 million from the local economy, are not happy with it, either. The Secretary of State should not be happy with the situation. There is time for her to change her mind. Will she do so?
Dr Coffey
The hon. Lady may be aware that more than £400 billion of support has been given more broadly to the UK economy and to people. We are conscious that more than £7 billion was invested in the welfare system to help people during this difficult time. However, as the economy is recovering and employment is growing, we will do more with our work coaches—we have doubled their numbers since a year ago—to ensure that people can get back into work and progress in work.
Chris Grayling (Epsom and Ewell) (Con)
The Secretary of State and indeed the whole Government should take credit for the amount of support they have provided to people on low incomes in the past year during the pandemic. Will she take a further look at the housing element of universal credit? In my constituency, rising rental costs and high house prices have made the private rental sector difficult for people on low incomes. Will she look at how the universal credit housing element operates in areas such as mine, just outside London, which are particularly affected by property and rental prices, and whether changes are needed?
Dr Coffey
I am conscious of my right hon. Friend’s concerns. When we made the uplifts just over a year ago, we put an extra £900 million a year into support for housing costs through the changes we made to the local housing allowance rate. He will know that rental areas go beyond constituency boundaries, but the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince), who is responsible for welfare delivery, will be happy to discuss what is happening in regard to geographic locations.
Paul Maynard (Blackpool North and Cleveleys) (Con)
As much as politicians on both sides of this place obsess about the headline rate of universal credit, will the Secretary of State also look at whether universal credit is going as far as it can in meeting rising pressures on the cost of living? In particular, there is the interaction between the energy cap for those with general electricity bills and that for those on prepayment meters, for whom the cap works in a different fashion, which means that people who are often on the lowest incomes pay far more.
Dr Coffey
My hon. Friend is right to raise that issue. The warm home discount is administered through the Department for Business, Energy and Industrial Strategy in conjunction with the energy companies, although the DWP does, in effect, facilitate the automatic claiming of that for a number of benefit claimants. I will share his concerns about the potential mismatch with prepayment customers with the relevant Minister, who I hope will respond to him directly.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Does my right hon. Friend agree that our economy is beginning to show signs of recovery, with unemployment down and record high job vacancies? In Stoke-on-Trent North, Kidsgrove and Talke, Steelite International, a global ceramics manufacturer, has a jobs fair for more than 100 vacancies. Does she agree that that is the way to help people on universal credit into work and get them out of poverty?
Dr Coffey
My hon. Friend is absolutely right. Today, the Government have announced the infrastructure programme, with a mixture of public and private sector investment of £650 billion over the next 10 years. We believe that will generate 425,000 jobs in the next four years, and these will be well-paid jobs. Between my Department and the Department for Education, we will be trying to make sure that as many people are as upskilled as possible to take advantage of the higher wages of the jobs being created.
Ms Karen Buck (Westminster North) (Lab)
Research by the Joseph Rowntree Foundation indicates that nearly four out of every five families with children are receiving universal credit or working tax credit, rising to 45% or more of families with children in the north-east, Yorkshire and the Humber, and the west midlands. Can the Secretary of State share her Department’s assessment, which we heard about at the end of last week, of how these families are expected to manage the income shock of losing £1,000 a year due to the impending cut?
Dr Coffey
It may surprise the hon. Lady to know that more than half of recipients of universal credit are actually households without children. We are conscious that this support had a widespread impact when we had the impact of the pandemic. However, what the hon. Lady will know about is that in the last year, collectively across Government, we have injected several hundred million pounds specifically to help people with children with the difficulties of some of the financial challenges they have. However, now that the jobs market is well and truly open, we will be doing whatever we can to help people get into work, and get into better-paid work as well.
Ms Buck
It is not clear from that answer whether the Secretary of State has actually undertaken any form of assessment of the income shock. However, it is not only about the impact on individuals’ and families’ incomes; it is also about the wider economic consequences. According to the Resolution Foundation, a quarter of all households in the north-east will lose £1,000 a year from the cut, which will strip millions of pounds from the economies of some of the poorest communities in the country. Has her Department carried out an assessment of what the economic impact will be of the cut coming into effect in just a few weeks’ time?
Dr Coffey
My understanding is that, as we always knew the uplift was going to be temporary, an impact assessment was not undertaken because we knew it would be for a limited time.
David Linden (Glasgow East) (SNP)
People were already struggling to get by after an eye-watering £37 billion of Tory cuts to social security between 2010 and 2019, and they now face the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state 70 years ago. Given that the Secretary of State is her Department’s voice around the Cabinet table, can she confirm with a simple yes or no whether she is and has been lobbying the Treasury to stop these cuts?
Dr Coffey
As the Chancellor set out in the Budget, when we had the discussion of what we are doing, it was about continuing to extend the support beyond the time of the lockdown that happened in step 4. I am conscious that we have increased the number of work coaches in jobcentres in Scotland to help people back into work, and into better-paid work as well.
Jacob Young (Redcar) (Con)
Can the Secretary of State outline how much extending the temporary uplift would cost and what measures she could think of to pay for it?
Dr Coffey
The estimated cost for a year of the extension of universal credit is about £5 billion. As my right hon. Friend the Chancellor has set out, and we have updated the plan for jobs today, we want to invest in people to make sure that they can not only get into work, but get into better-paid work as well. That is why with a variety of levers, such as the lifetime skills guarantee, and all the work we are doing for people out of work at the moment, including the sector-based work academy programme, alongside some of our other programmes, we have a really good record of getting people into well-paid work, and that is where our focus has to be.
Stephen Timms (East Ham) (Lab)
Single parents who are in work told the Work and Pensions Committee last week how hard they are going to find it to sustain the £87 a month fall in their income that this cut will deliver. One witness told us that he is going to have to skip meals to make sure that his children do not have to. Surely social security must be better than that.
Dr Coffey
I hope the right hon. Gentleman will direct that person to go and have a chat with the work coach. I do not know the status of that individual, exactly what paid employment they are in right now or their situation with childcare, but I remind him that 85% of the cost of childcare can be claimed by people on universal credit. One of the directions we want to encourage individuals to go in is to go and talk to their work coaches so that we can help them get on in life and be more prosperous.
Dr Luke Evans (Bosworth) (Con)
Karin Smyth (Bristol South) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
This summer, we launched our national disability strategy, setting out more than 100 practical actions and a long-term vision for reform that will make a real difference to disabled people’s everyday lives. Our strategy sets out the actions, ambition and accountability in helping disabled people to overcome the remaining hurdles. We will publish annual reports setting out progress and further actions, and the Minister for Disabled People, Health and Work will chair cross-Government meetings to hold our ministerial disability champions to account for delivery across Departments.
Just as you praised a recent sporting achievement, Mr Speaker, I would like to pay tribute—fresh from the Paralympics GB homecoming yesterday and the celebration on the Terrace just now—to all our amazing Paralympians. I was able to cheer them on in Tokyo and talk to them about aspects of the national disability strategy and the daily barriers that they face. In addition to praising Emma’s remarkable success in winning her championship, I say well done to Alfie Hewett and Gordon Reid, who won the gold medal at the Paralympics for wheelchair tennis doubles. They flew straight to the USA, and I am pleased to say that on the same night they also won the grand slam. Those are fantastic sporting achievements—well done to them.
Karin Smyth
I join the Secretary of State in those comments; it was a pleasure to bump into some of those athletes and Ms Balding this morning in Westminster Hall. It was lovely to see them here—well done.
The latest figures show that 50% of personal independence payment mandatory reconsiderations result in a change of award. This is causing huge stress and anxiety to vulnerable people in Bristol South and additional work for advice agencies. What sanctions have been applied to the private companies that are wrongly assessing the applicants?
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I am conscious of what the hon. Lady has said. Over the past couple of years, we have tried to improve the decision-making stages along the way. One of those important elements involves mandatory reconsiderations, and how we take what we have learnt into the initial decision making, which is still done by DWP civil servants on the advice of assessors. We have further plans, as set out in our Green Paper, which we published before the summer recess, and I am sure that the hon. Lady will take a close interest in that progress.
Chris Green (Bolton West) (Con)
Dr Coffey
My hon. Friend is right to praise his local jobcentres. One thing we have done as part of the plan for jobs is increase the number of work coaches, and indeed the number of jobcentres, thus demonstrating to people—particularly those who have been out of work already but are coming off furlough—that we are ready to support them so that they can get back into work as quickly as possible.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
This morning, during her television appearance, the Secretary of State said that a person could make up for the Government’s £20 a week cut in universal credit by working just two extra hours a week. I am sure she is aware by now that she got that completely wrong: the taper rate would of course remove a proportion of those additional earnings, so the net earnings for those extra two hours would be far less than £20. May I therefore ask her if she now knows how many more hours a single parent working full time would have to work to make up for the money the Government is cutting?
Dr Coffey
Every single universal credit payment depends on the individual, so I cannot articulate that, but it is fair to say that a number of different levers appear when people work more hours, and that includes the lifting of the benefit cap. There are a number of ways in which people can earn more and keep more of their money when they are working more hours.
Jonathan Reynolds
The figure is 10 extra hours a week, so the cut would force that person to work 50 hours a week in total to get what he or she is receiving now. That is why I have said that reducing the taper rate will be our absolute priority in our replacement for universal credit, but it is also why we oppose the cut. It is why six former Conservative Secretaries of State for Work and Pensions oppose the cut. It is why every Labour Mayor, and even Conservative Mayors such as Andy Street, have spoken out against it. It is why the Government’s own analysis, leaked last week, says that the cut will be “catastrophic”.
This is a Government who half the time do not know what they are doing, and the rest of the time they just do not care. Is not the truth that the only way to get the Government to see sense will be the House of Commons voting to defeat them this Wednesday?
Dr Coffey
I do not know the basis of the hon. Gentleman’s calculation and his suggestion, but what I do know is that the Labour Government did nothing to help people in the midst of the financial crisis of 2008, whereas we have injected more than an extra £7.5 billion. We recognised the need for the temporary uplift, particularly for those who were newly unemployed and coming on to benefit for the first time. That is why we made the temporary uplift similar to that of the minimum paid through statutory sick pay. We will continue to do what we have been doing: investing in our plan for jobs, helping people back into work and helping them to make progress in work.
Jacob Young (Redcar) (Con)
I commend my right hon. Friend the Secretary of State and her Department for their success in doubling the number of work coaches to 27,000 in just a few short months. Does she agree that thanks to that boost more jobseekers will get the personalised support they need?
Dr Coffey
My hon. Friend is so right; it has been a successful recruitment programme. We wanted to reintroduce the face-to-face interventions because we know that that direct intervention through our work coaches is the best way to help people identify roles that they are suitable for and consider the skills involved—they might want to change career. That is how we can guide them on our various jobs programmes and make sure they can start earning again.
Sarah Owen (Luton North) (Lab)
Dr Coffey
The hon. Lady is wrong to suggest that our Government have not supported the people of Luton throughout this difficult time. The furlough scheme was unique; it was not introduced when many hundreds of thousands of people were made redundant after Labour’s financial crisis. We stepped in, putting more than £400 billion into Government spending overall to support the country during this time. I am conscious of that fact that some people will be concerned about the impact on aviation travel, which is why we have invested in various job schemes, including encouraging people to switch sectors, recognising that the skills they have are transferable.
Chris Stephens (Glasgow South West) (SNP)
Will the Secretary of State tell us what work is being undertaken to prevent future maladministration in the communication of major policy changes? I am thinking about not only 1950s-born women, but, as we heard at the Select Committee last week, the many claimants who are still to be told of the imminent cut to UC. Is the ombudsman going to be kept very busy because of the structural failings of this Department?
Dr Coffey
Communications have already been issued to every UC claimant, through the journal messages, and further communications are continuing to go out.
Tony Lloyd (Rochdale) (Lab)
In my constituency, some 5,000 families with children—possibly more than 10,000 children—are dependent on UC. Can the Secretary of State guarantee that when the benefit is reduced by that £20 a week not one of those children will suffer as a result? Can she look me in the eye and promise that that is the case?
Dr Coffey
Every family has a different situation and I encourage any of the hon. Gentleman’s constituents who are concerned to approach their jobcentre. We are very conscious that where both parents are actively working, rather than one parent being economically inactive, that will bring more revenue into the household budget. That is one thing we need to do to try to make sure that as many people are economically active as possible, for not only their own prosperity, but the prosperity of the nation.
Anum Qaisar-Javed (Airdrie and Shotts) (SNP)
Many constituents have emailed me to outline their concern that the planned removal of the £20 uplift will have a significant impact on their family and children. How does the Department expect families to survive Tory cuts to UC coupled with a national insurance hike?
Dr Coffey
The national insurance levy increase is there to tackle a long-standing issue and will be spread between businesses and employees. In fact, the top 15% of earners will pay roughly half the future levy revenues. We are conscious that the universal credit uplift was temporary and we will be doing what we can to help more people not only to get back into work but to progress in work.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
My local economy is already struggling, with £12.6 million to be taken out by the universal credit cut. The Secretary of State said that no economic impact assessment had been carried out so far, but will she look again and consider doing one? The cuts are going to affect the most disadvantaged parts of our country, and that does not fit with the Government’s so-called levelling-up agenda.
Dr Coffey
Just today, the Prime Minister and the Chancellor have announced £650 billion of investment in infrastructure over the next decade. The right hon. Lady will be aware of the industries in her constituency, where there has been huge support from the Government to bring green jobs to her part of the world, and I am conscious of the other benefits that she and colleagues may see in respect of freeports. All that is putting into effect our aim: we want to help people not only to get back into work but to progress in work, with higher-skilled jobs that bring higher pay.
Peter Grant (Glenrothes) (SNP)
This morning, the Secretary of State claimed to know exactly how many extra hours a universal credit claimant would have to work to make up the £20 by which the benefit is to be cut; this afternoon, she admitted to the House that she had no idea of the answer to that self-same question. That must mean that her comment to the BBC this morning was at best wildly misleading and recklessly irresponsible. Will she apologise for that inadvertent but serious error?
Dr Coffey
I was not misleading the House in any way in any of my statements made so far, and I ask the hon. Gentleman to withdraw.
Patrick Grady (Glasgow North) (SNP)
Why are lifetime individual savings accounts counted as capital in the calculation of universal credit entitlement? They are designed not to be touched until the saver reaches 60 or is buying a house, so why are people like my constituent being hit by penalty charges because the DWP is forcing them to withdraw from a lifetime ISA early?
Dr Coffey
Since universal credit was introduced, there has always been a capital recognition, recognising when people have resources that they can draw on to support themselves rather than drawing on the resources of other taxpayers. That is the principle of why capital is included when people want support for their other living expenses.
Pensions Update
Thérèse Coffey Excerpts(3 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
With permission, Madam Deputy Speaker, I will make a statement on the annual uprating of state pensions and survivors’ benefits in industrial death benefit.
Each year, as the Secretary of State for Work and Pensions, I am required to undertake a review of certain benefit and pension rates in relation to the general level of earnings. Just as last year, this year I anticipate an unusual change in earnings due to the effects of the covid pandemic. The unprecedented but necessary covid restrictions we introduced last year protected lives, especially the most vulnerable, many of whom are pensioners, and protected the NHS, but those restrictions caused disruption to the economy, including preventing many people from working, wages falling and, sadly, many people being made redundant.
As we sought to protect lives, so we sought to protect livelihoods. To mitigate the worst impacts, we introduced a £407 billion package of support, including the furlough and self-employment schemes, to support incomes. Nevertheless, last year we saw earnings fall by one percentage point. In response, we legislated to set aside the earnings link, allowing me to award an uprating of 2.5%, as that was higher than inflation. If we had not done that, state pension would have been frozen.
Thanks to our vaccination programme, which started with the eldest and most vulnerable in our society, we have seen that as the economy and businesses have reopened and millions have moved off furlough and returned to work, the labour market has shown strong signs of recovery and earnings have risen at an unprecedented rate. We face a distorted reflection of earnings growth. The latest Office for National Statistics figures from August show an increase in average weekly earnings of 8.8%, compared to the same time last year. Confirmed figures will be published next month, but we expect growth of 8% or more for May to July 2021. The relevant period earnings are taken into account as part of my uprating review.
This year, as restrictions have lifted and we experienced an irregular statistical spike in earnings over the uprating review period, I am clear that another one year adjustment is needed. So tomorrow, I will introduce the social security (uprating of benefits) Bill. For 2022-23 only, it will ensure that basic and new state pensions increase by 2.5% or in line with inflation, which is expected to be the higher figure this year. As happened last year, it will again set aside the earnings element for 2022-23, before being restored for the remainder of this Parliament. That will ensure pensioners’ spending power is preserved and protected from higher costs of living, but also ensure that as we are having to make difficult decisions elsewhere across public spending, including freezing public sector pay, pensioners are not unfairly benefiting from a statistical anomaly. At a time when we have made tough decisions to restore the public finances which have impacted working people, such as freezing income tax personal thresholds at current levels, that would not be fair. Setting aside the earnings element is temporary and only for one year. This means we can and will apply the triple lock as usual from next year for the remainder of this Parliament, in line with our manifesto commitment.
While the earnings growth is a welcome sign of the country’s overall economic recovery given the unique and exceptional events of the past 18 months, this year’s measure is being skewed and distorted, reflecting a technical and temporary period of reverting or rebounding earnings—the differing cohorts of people who were retained or made redundant. As a result, the earnings measure is a statistical anomaly and is not a real-life basis for considering this year’s uprating of state pensions. As other commentators have said, for example the Institute for Government:
“The figure for earnings growth is distorted...the increase is artificially high because so many workers were furloughed last year”.
The Social Market Foundation also endorses my proposal, stating:
“The triple lock should be replaced with a double lock...pensions would still rise, but less quickly, reducing the fiscal burden on the working-age population”.
In addition to those receiving basic and new state pensions, this adjustment will apply to those receiving standard minimum guarantee in pension credit, and widows’ and widowers’ benefits in industrial death benefit. The Bill will not extend to other benefits that are linked to prices, which I will review under the existing legislation, as I did last year.
The Government are committed to ensuring that older people can enjoy their retirement with security, dignity and respect, and that those who have worked hard and put in for decades can be confident that the state will be there to support them when they need it. Since 2010, the full yearly basic state pension has increased by over £2,050 in cash terms. There are also 200,000 fewer pensioners in absolute poverty, both before and after housing costs, than in 2009-10.
I am proud of our record on support for pensioners and of the action we took last year to ensure that pensioners’ incomes continue to increase despite falling earnings among working-age taxpayers. Our recovery is based on the principles of fairness and sustainability as we level up opportunities across the country, invest in jobs, skills and public services while repairing the public finances. This is the fair and reasonable course of action, given the temporary statistical anomalies in earnings we have seen this year as a result of unprecedented interventions in the economy and the labour market. I commend this statement to the House.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank the Secretary of State for advance sight of her statement and for our telephone conversation this morning after the Cabinet meeting informing me that it would occur.
I believe Governments should keep their manifesto promises. It may be out of fashion—it may even seem old-fashioned—but that is what I believe and that is what is right. Before I address this announcement, I want to make some observations about the triple lock policy itself. The UK state pension is low by international comparison. It compares better when pension credit and the NHS are folded in, and a lot better when occupational pensions are considered, but the core state pension itself is still very important for millions of pensioners. The last Labour Government drastically reduced the link between old age and living in poverty, but there can be no room for complacency. The triple lock and the issue of indexation of the state pension is fundamentally about what the value of the state pension will be in future for working people today when they retire. I reject the presentation of this issue as a source of intergenerational tension or unfairness, because we all have an interest in ensuring that there is a decent state pension in future.
We should never present increased longevity as a problem. The fact that people are living longer is a good thing and it has come about because we have an NHS, because the school leaving age is no longer 14, and because pioneering Ministers of the past, such as Barbara Castle, were prepared to fight for a decent pension and retirement system. There is no doubt that the triple lock has made a significant contribution to restoring the value of the state pension following the Thatcher Government’s decision to break the link with earnings in 1980.
Turning to the Secretary of State’s proposals, the Government’s case, which is that the furlough data and the pandemic have produced a statistical aberration, has to be considered by us alongside the other decision made today, which also breaks the promises in the Conservative manifesto. Of course, we know that the promise on international aid was also broken before the recess. It is more a triple let-down than a triple lock. This decision is not a one-off but a significant repudiation of the basis on which the Government were elected and it would be naive to say otherwise.
I say to the Secretary of State that we simply cannot take the Government on their word alone. Will they show us their analysis that has led to this decision? Will they explain why they could not assess the underlying levels of wage growth with the impact of furlough discounted? Will they publish the legal advice cited as the basis for this decision? Only then could any Opposition or any MP make a decision on what is being proposed.
Finally, while the Prime Minister is well known for making and breaking promises at will, and for frequently being economical with the facts, that does come at a cost. That cost is a lack of trust, so I hope the Secretary of State appreciates that pensioners and workers, as well as the Opposition, need fuller reassurance before any decision can be made on prospective legislation.
Dr Coffey
I thank the hon. Gentleman for having read the statement and for recognising some of the challenges that we face. I accept that it is his role and that of the Opposition to suggest that the Government are not taking the right course of action. However, this is where I disagree with him. He referred to the earnings link that was dropped in, I think, the late ’70s or early ’80s. It was not reinstated by the Labour party until the late noughties and was not commenced until the coalition Government were in place. That is why we have followed the triple lock policy for the last decade, recognising that we wanted to restore the earnings link and to see an increase in pensions overall. We have made good progress on that, as I set out, with the £2,050 cash-terms increase in just over a decade.
We have used the earnings link since the policy came into effect a decade ago, and we have done this on the same basis. As for trying to mess about with different bits of earnings, the Office for National Statistics produced some data but we did not find it necessarily reliable, in terms of what could be considered as a substantiated basis to make the change. I have made the recommendation to the Government—that has been endorsed today and I hope that the House will endorse it in the forthcoming legislation—to set aside the earnings link, as we did last year, recognising the challenges of covid and the implications that that would have had last year directly on pensioners. There is the same fairness of approach here.
I do not intend, as is usual, to publish legal advice. That legal advice is quite straightforward. I would summarise it as “The best way to introduce this temporary set-aside is through legislation, just as we did last year.” I intend to take this forward on that basis.
As for making comparisons with other countries, I am conscious that we have a substantial amount of occupational pension here. We also have a whole fringe of pensioner benefits alongside it that are not necessarily available in many other countries. Just this year alone, which is about to come to an end, while the pension cost is about £105 billion, we are spending about £129 billion directly on pensioners. We have genuinely shown a measured approach to supporting pensioners during our time in office. We think this is a sensible thing that will be broadly welcomed by the public, recognising the balancing act that we continue to face.
Stephen Crabb (Preseli Pembrokeshire) (Con)
Government Members should be incredibly proud of the state pension triple lock. It has transformed the state pension landscape for retired people—no more derisory 75p pension increases, as we saw when Labour was in government—and it has become a key part of the defences that we have built around pensioners to protect them from poverty. Does my right hon. Friend agree that the triple lock that we put in place was never designed for a set of fiscal events of the kind that we have been through over the last 18 months? The difficult decision that she has come to is the right one. When I talk to pensioners in my constituency and elsewhere about the difficult challenges that we face, they understand that. We just need to explain it clearly and with compassion.
Dr Coffey
My right hon. Friend is right that the triple lock policy was never anticipated for these extraordinary times. He will know that, as a former Secretary of State. The Lib Dem Pensions Minister, who served a five-year term, has also publicly said again today, as well as recently, that it was simply not designed for this sort of situation. I believe that the pensioners in our country are wise people. They will recognise that a statistical anomaly is not the basis for the uplift this year. Some people will of course be keen to encourage more people to take up pension credit. We estimate that only three in four of the people who could get the benefit are taking it up, in terms of the income guarantee, and we will continue to encourage people to do so. Nevertheless, this is a sensible approach and I thank my right hon. Friend for his support.
David Linden (Glasgow East) (SNP)
I, too, thank the Secretary of State for advance sight of her statement. Today’s bonanza of manifesto commitments being broken is like nothing we have ever seen before. I do not think I have seen this many U-turns in one day since I sat my driving test back in 2007. Not only have the Tories hiked national insurance, but now they are waging war on pensioners’ incomes by watering down the triple lock.
Despite all of today’s spin and smoke and mirrors, let us be clear what the Secretary of State’s announcement means for pensioners all across these islands. It is a clear violation of the contract offered to voters by a Tory Prime Minister who says one thing yet does another after he gets a whopping majority in Parliament. The state pension is by far the largest source of income for UK pensioners and the triple lock has maintained this throughout the pandemic, but we know that pensioner poverty is on the rise and the UK’s state pension is already the lowest in Europe. Today’s announcement demonstrates that there is no prospect of closing that gap with a Westminster Tory Government that Scotland did not vote for and has not voted for since the 1950s.
Pensioners in independent countries comparable to Scotland’s size or smaller receive a much higher proportion of the average working wage than UK pensioners. Today’s statement provides yet more clear blue water between an uncaring, austerity-obsessed Government in London and the prospect of a fully empowered independent Scottish Parliament that will ensure dignity and fairness in retirement. Given that Scottish pensioners clearly cannot trust the British Government, will the British Government now devolve powers relating to the state pension to Scotland’s Parliament, or is it easier for Scotland to just vote for independence and end pensioner poverty from London once and for all?
Dr Coffey
The hon. Gentleman may want to speak to his Cabinet Secretary because, at the moment, the Scottish Government are not using the powers that have already been devolved. I am conscious that they intend to but it is taking quite a lot longer. One of the reasons given by them, reasonably, is the impact of covid. However, he may wish to take this up with his colleagues in Holyrood.
I am conscious of the concerns about pensioner poverty. As I mentioned, we have seen a reduction, with about 200,000 fewer pensioners in absolute poverty before and after housing costs than over a decade ago. We want to maintain that. It might be informative to the House if I mention that material deprivation, one of the other measures of poverty, is at an all-time low, with 6% of pensioners considered materially deprived. The overall trend of pensioners living in poverty has seen a dramatic fall in recent decades. That started off with the Conservative Government and then continued with the Labour Government. We have seen that halve since 1990. However, I assure the hon. Gentleman that this measure is for one year only. That will be on the face of the Bill, and I am confident that that will not be amended.
Nigel Mills (Amber Valley) (Con)
Will the Secretary of State confirm that this is a one-year change and that she is not taking the various suggestions to scrap the triple lock completely, so it will be restored from next year? Secondly, does she believe that when we have put this rise through, the pension will realistically have roughly kept pace with the rise in earnings over the three-year period from before the start of the pandemic, or does she think that the rise will end up being a bit less than earnings on a real basis for the average worker around the country?
Dr Coffey
It would probably not be wise for me to go down that route, because we are still trying to estimate the likely uplifts in the different metrics. We will not actually use the figures until later in the year, but because of how the machinery of benefit upratings works, we need to be in a position to trigger it in November. Given my hon. Friend’s position on the Work and Pensions Committee, he may wish to ask that question a little later once we have some more detailed analysis in that regard, if that is okay.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Chair of the Select Committee.
Stephen Timms (East Ham) (Lab)
Is it still the Secretary of State’s view that it is important that the level of the basic state pension keeps track with earnings over time, as the coalition pension reforms assumed? If so, will it not require some further adjustment after these two exceptional years? Given that pensioner poverty was starting to increase before the pandemic, after a long period in which, as she said, that did not happen, what will her Department do to increase the currently very low take-up of pension credit?
Dr Coffey
In response to the first part of the right hon. Gentleman’s question, the legislation is there regarding the earnings link and we are maintaining that. We will be doing further analysis to understand what proportion of median earnings the pension will be, but I have no plans to change aspects of it. We think it is a sensible approach that we have taken to redress the balance, which had moved away.
Forgive me, but I have forgotten the second part of the right hon. Gentleman’s question. [Hon. Members: “Pension credit.”] Okay. The thing about pension credit is that it is split in two: the income guarantee and the savings credit. As I said to the House, our estimate is that 75% of people we think could be eligible take up the income side of pension credit, but the savings side has a much lower take-up. That is because sometimes when people do the calculation, it may be just 1p or 2p a week and they may not think it worth while to do the whole application. However, even with the savings credit side of pension credit come things like the free TV licence and access to other benefits, so we encourage people to take it up. With the income side, we estimate that three in four eligible pensioners are taking it up.
John Redwood (Wokingham) (Con)
Will the Secretary of State promise to publish, at the point when she makes her final determination of the proposed increase, a three-year smoothed average or some other suitable computation so that we can see that the spirit of the promise has been kept, even if the letter could not be because of the strange gyrations of the earnings figure? I think that people would be reassured if they felt that over the longer period we had met that requirement.
Dr Coffey
I cannot give that commitment to my right hon. Friend today, because I do not know exactly what it involves, so I will take his request away and consider it. I want to emphasise that overall we have seen a variety of increases over the past decade owing to the triple lock policy. I am confident, as I have flagged already, that we have seen a substantial increase in pensioner income as a result of that policy thus far.
Christine Jardine (Edinburgh West) (LD)
First, may I congratulate the Government on quite an afternoon? One afternoon, two statements, two broken promises—even for this Government, that is quite an achievement.
Despite all the problems that we have heard about, the triple lock was designed to protect pensioners, 2 million of whom live in poverty in this country, from the days when all they could expect was a 75p increase. Will the Secretary of State clarify two things? First, she said in her statement that the earnings link was set aside last year because of earnings falling by one percentage point. My understanding of the triple lock was that it would always mean the higher of 2.5% inflation or earnings, so would the percentage not have been 2.5% anyway? Secondly, would she be prepared to put it in writing, in legislation, that this is only for one year, so that pensioners do not feel that they have been asked to take the word of a Government whose word is not worth the paper it is written on?
Dr Coffey
The one year will be set out in the Bill, which I expect to be published tomorrow. As I have said, Steve Webb—the former Lib Dem pensions Minister, who probably knows more about pensions than any other member of the Liberal Democrat party—has been very public about the fact that this is a pragmatic approach, in effect, and it is not what this was designed for. I also point out that, when I made a similar statement last year, the hon. Member for North East Fife (Wendy Chamberlain), who usually speaks on DWP matters for the Liberal Democrats, asked about what would happen next year and whether we should anticipate that something like this approach might be needed again. That was a fair question, but it was important that we took things one year at a time because we did not know the future impact.
As I have already articulated to the hon. Member for Edinburgh West (Christine Jardine), this will be for one year only. The setting aside of the earnings link is because earnings are built into the Pensions Act. If we had not changed the law last year, we would not have been allowed by law to have increased the state pension at all; it would have been frozen in cash terms. Just as last year we set aside the earnings link to allow the uprating and ensure that state pensions were not frozen, this year we are setting it aside to correct for the fact that we have a statistical anomaly.
Steve Double (St Austell and Newquay) (Con)
It is quite clear that this is one of a number of very difficult decisions that we are having to make, and I think most reasonable people understand the reason: the pandemic and its impact on our economy. We do not do this lightly—we do it with a heavy heart—but it is the responsible thing to do. I have actually had emails from constituents who are pensioners, saying that they should not get an 8% increase this year, because they understand that these are very unique circumstances.
I am grateful that the Secretary of State has confirmed that this will be a one-year change. Will she also lay out what the Government have in place to support the lowest-paid and poorest pensioners at this time?
Dr Coffey
Before I answer my hon. Friend’s question, I need to correct part of my last answer: the earnings link is not in the Pensions Act, but in the Social Security Administration Act 1992, so apologies for that.
My hon. Friend is right. I am conscious that we want to help our pensioners at this difficult time. I have already referred to some of the benefits that may be available for people to take up where there is a pension already. We have done a significant campaign in the past year to improve take-up of pension credit and we will continue to signpost people accordingly to take advantage of the benefits that are available to some of our poorest pensioners.
Andrew Gwynne (Denton and Reddish) (Lab)
There is no glossing over this announcement. The suspension of the triple lock will come as a blow to many pensioners in Denton and Reddish—it is a broken promise from this Government.
I know that the prime reason for this statement was the uprating announcement, but it was badged as a pensions update. May I express my dismay that the Secretary of State has not taken the opportunity to respond to the ombudsman’s finding of maladministration in respect of the 1950s-born women’s pensions issue? When will she comment on that?
Dr Coffey
The hon. Gentleman may not be aware of how the Parliamentary and Health Service Ombudsman works in this inquiry specifically. The inquiry is happening in a staged process; we are not expected to give a response, because the process is not yet over. Unusually, the ombudsman has chosen to publish part of the judgment thus far, and there are further stages to come. The hon. Gentleman might want to read carefully the statement that was made, because he should be aware that the period of maladministration is linked to the years between 2005 and 2007, when the Labour Government were in power.
Clive Efford (Eltham) (Lab)
We have become used to the Government’s breaking of manifesto pledges, for instance on overseas aid and a border in the Irish sea, but today we have had two in one day, which is pretty remarkable. First, we heard the Prime Minister announce that he would break his pledge not to increase national insurance—which was not just in the manifesto, but something he had specifically singled out and pledged not to do—and now we have heard about the breaking of the triple lock, which was put in place by the last Labour Government and which played a significant part in reducing pensioner poverty.
We have heard from the Secretary of State that the Department is doing some work to advertise pension credit and encourage uptake, but we did not really hear from her any specifics, or any urgency, about the need to deal with the under-claiming of pension credit. So will she give us some more details about what she is intending to do?
Dr Coffey
As I have already pointed out, in terms of income guarantee, three in four of the people we have estimated may be eligible are taking up the approach. Ultimately, it is for people to apply for this extra benefit.
Relative to earnings, the state pension is now the highest that it has been in 33 years, so the policy that we have undertaken has been well and truly honoured. I believe that, because this constitutes a statistical anomaly, it is not an appropriate way in which to be using our public finances. I am very conscious that pensioners will expect us to be taking a sensible approach to sustaining the public finances, and a statistical anomaly is not one of the approaches that I believe they would accept.
Joanna Cherry (Edinburgh South West) (SNP)
May I press the Secretary of State on the point raised by the hon. Member for Denton and Reddish (Andrew Gwynne) about the women born in the 1950s, who have paid national insurance contributions for at least 40 years? Many are having to continue working through ill health or else face financial hardship or claim benefits, and now they face higher national insurance contributions.
Regardless of which party is responsible for the maladministration that occurred, the Parliamentary and Health Service Ombudsman has found that there was maladministration. Perhaps more important, at the time of the last general election, many Tory MPs made promises to the WASPI women which have yet to be fulfilled. What I would like to hear from the Secretary of State today is whether she can give them any hope for the future—any hope that she will revisit the issue of compensation.
Dr Coffey
I appreciate that this is a statement about the uprating, but let me just remind the hon. and learned Lady of the situation relating to the change in state pension age. It was voted through by Parliament in 1995, and there have been changes in the last decade. The Supreme Court made a ruling. We have been through the cases, and the right of Parliament to set the pension age has been upheld, so we will not be reviewing anything to do with the state pension age in response to the WASPI campaign.
Mike Amesbury (Weaver Vale) (Lab)
Given that the Secretary of State and every other Tory MP stood on a manifesto commitment not to increase national insurance contributions and hit the lowest paid—whom people gladly applauded every Thursday some months ago—and also affirmed the retention of the triple lock, how on earth can the people of Weaver Vale and people across Britain trust a word that the Secretary of State or any Members on those Government Benches utter in this place?
Dr Coffey
I think that the people of this country are very wise. I think that they will have seen the £407 billion package provided by this Government to support taxpayers. We are doing our best to protect lives and livelihoods, and I am absolutely convinced that our pensioners will not want to statistical anomaly to be the basis of a pension uplift when they recognise the challenges that this country has faced and what it has been through. I strongly believe that we are doing the right thing, and I hope that it will gain the support of the House when we present the legislation.
Bill Presented
Misuse of Fireworks bill
Presentation and First Reading (Standing Order No. 57)
Sarah Owen, supported by Rachel Hopkins, presented a Bill to make provision about offences relating to the misuse of fireworks and penalties for such offences; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 21 January 2022, and to be printed (Bill 156).
Plan for Jobs: Supporting People Back Into Work
Thérèse Coffey Excerpts(3 years, 4 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The Department for Work and Pensions has been at the heart of helping to deliver the Government’s plan for jobs to support, protect and create jobs following the pandemic. A year on from its launch, I want to update the House on the progress we have made helping people across the country to move into work or gain the skills and experience that will open up job opportunities as the economy reopens and we build back better.
To ensure we can provide the vital employment support to help people get back into work, we have boosted our frontline jobseeker capacity and capability in towns and cities right across the country. Meeting our target in March to recruit 13,500 new work coaches, we have created Britain’s biggest ever jobs army and secured premises for 139 additional Jobcentres, 52 of which are already open. We have also opened 138 new youth hubs, co-located and co-delivered with our external partners, which are delivering a mix of face-to-face and digital support to young people.
Kickstart
Young people have been affected more than most by the pandemic, with many having had the rug pulled from under them at a critical time. Our kickstart scheme has been helping them land on their feet, with over 40,000 so far benefiting from work placements, gaining valuable skills, experience and confidence to build their future careers. It is fantastic to see that some kickstart graduates have already secured new jobs. As of 30 June, over 243,000 jobs have been approved for funding. With over 145,000 vacancies having been made available for young people to apply for, we are seeing more starts every day and we are working with employers to fill roles.
Alongside support offered across our nationwide network of Jobcentres, we have rapidly introduced a range of provision delivered through external providers, offering targeted and local help to job seekers.
JETS
For those out of work for three months or more, JETS—our job entry: targeted support scheme—has so far helped propel over 5,300 people into jobs by providing personalised support, including specialist advice on how they can move into growing sectors, CV advice and interview coaching. Up to the end of May there had been over 112,000 starts on the scheme in England and Wales since it launched in October last year and over 4,700 starts since the scheme started in Scotland in January this year.
SWAPS
We know some sectors have been impacted more than others during the pandemic and that many people will be looking for work in entirely different sectors. That is why SWAPs—our sector-based work academy programme—is helping people reskill, retrain and move towards growing sectors like construction, infrastructure and social care. Last financial year, 64,500 people benefited from this support, and we have increased the number of available placements to 80,000 to enable more people to take advantage.
Job finding support
Our job-finding support is providing digital help and support for newly unemployed people. Delivered online, and so available throughout covid restrictions, it provides one-to-one advice and group support to help familiarise jobseekers with recruitment practices, identify transferable skills, and develop a personalised job finding action plan.
Restart
And as our economy restarts, our £2.9 billion restart scheme is now offering a fresh start for a million long-term unemployed people in England and Wales. Specialist providers, charities and SMEs are complementing the important work of jobcentres to provide additional expertise, investment, innovation and capacity for tailored support.
With the success of the vaccine roll-out and as we continue to open our economy and society, there are encouraging improvements in the employment figures, a continued rise in vacancies, and increasing numbers of people on company payrolls.
The Government plan for jobs, through the coronavirus job retention scheme and other support, has protected jobs and kept millions of people connected to the labour market during our emergency response to the pandemic. Now, through the continued delivery of our part of plan for jobs, we are helping get Britain back on its feet.
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