Poverty Reduction

Viscount Younger of Leckie Excerpts

Thursday 22nd February 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am very pleased to close this important debate. It has allowed us to discuss many issues and challenges relating to poverty, with a focus on cross-government efforts to find a solution.

I will start by thanking all noble Lords for their valuable contributions today—particularly the noble Lord, Lord Bird, who has tirelessly championed vulnerable and homeless people over many years, for initiating this debate. I will say a little more because noble Lords should be in no doubt that I was very moved by his impassioned speech. He spoke about giving the poor more, mentioning it many times, and how this was not necessarily the way forward. He also spoke with great conviction about PECC—prevention, emergency, coping and cure. I listened carefully to his remarks. I am afraid that I may use the word “initiative” in some of my remarks, and I await the spears that will be thrown at me without, I have to say, any particular shield.

I also pay tribute to the noble Baroness, Lady Taylor, for her long service in local government. It is appropriate to acknowledge the time she spent in local government. She now gives us the benefit of her knowledge and skills in this House, and we are all the better for that.

I have listened with great interest to many ideas promulgated today, particularly about a co-ordinated approach to tackling poverty. I would like to reassure noble Lords, in particular the noble Baroness, Lady Lister, that we indeed have a co-ordinated approach. I will set out our stall in terms of what the Government have been doing. The noble Baroness, Lady Burt, is right; we need to work together. That is extremely important.

I also acknowledge the outstanding maiden speech from the right reverend Prelate the Bishop of Hereford. I am glad, as has been said by others, that he has survived so far, given the past experiences—some rather gruesome—of his predecessors. It is especially helpful and important to have a representative from his Benches for rural issues, which is not to say that there are not other right reverend Prelates who cover rural issues. He has clearly made it his business to become steeped in many local issues in Hereford, and that bodes well, because I can tell that his style is to focus on detail, with cogent argument. The House is all the better for his presence here, and I await his further contributions—with some trepidation, if I happen to be at the Dispatch Box.

I fully recognise that poverty is a hugely complex subject and that many people who experience it often face a range of barriers that can make it difficult for them to move on with their lives. As the noble Lord, Lord Bird, acknowledged, it is incredibly difficult. I also recognise that tackling these complex underlying challenges cannot be done in isolation. This Government have a range of programmes that work across departmental boundaries to help people to address the challenges they face, so that they can take their first steps towards employment and better outcomes for themselves and their families.

The noble Baroness, Lady Lister, is right that it is also about dignity and promoting and upholding the dignity of those who are suffering in poverty and destitution, without patronisation, if I can put it in that way.

I want at this point to acknowledge the valedictory speech of my friend, the right reverend Prelate the Bishop of Durham. We all wish him well for his retirement, and I personally thank him for his commitment and for raising many important issues during his time in the House. I have to say that I have appreciated his frankness in speaking truth to power—as the noble Baroness, Lady Armstrong, said, not about him but in other respects—and for his friendship. As many Peers have mentioned, the right reverend Prelate has consistently raised important matters relating to poverty, and this debate is certainly no different. I will be addressing many of the points he has raised, including raising the national living wage, reappraising of the value of unpaid work, the two-child limit, which is an old favourite that I shall be covering, the essentials guarantee, too much silo thinking and the need for a shift in national thinking, which was a big comment that he made. We will miss him and, if I may say so, he leaves certain important matters, including questions, ringing in my ears, and I will not forget that.

I shall set out some specific examples in a moment, but I want to start by reminding noble Lords of the significant support provided by my department to those on the lowest incomes. Before I get into detail on that, coming back to some questions that have been raised by the noble Baroness, Lady Lister, in terms of a poverty strategy, while there is no written strategy, we have been clear in our approach, which I will outline throughout my speech, and I hope that she will acknowledge this, focusing on both our welfare offer and our efforts to get people into sustainable employment and progress. There is more than that. She will expect these lines to be “trotted out”, as she put it, but I hope she does not think that way too much.

The noble Baroness asked an important question about poverty measurement. She might like to know that my department is developing so-called below average resources—BAR—statistics to provide a new, additional measure of poverty based on the approach proposed by the Social Metrics Commission, led by my noble friend Lady Stroud. The new BAR approach seeks to provide a more expansive view of available resources, both savings and inescapable costs, than the income measurement adopted under the DWP’s households below average income statistics. In developing this additional poverty measure, the DWP is working closely with stakeholders, including the SMC, other government departments and subject matter experts on this important point.

A strong welfare system is at the heart of ensuring support for those who need it, and our commitment to maintaining a strong safety net is reflected in the £276 billion that we expect to spend through the welfare system in Great Britain this financial year. Having uprated in line with inflation this financial year, we have announced a further increase of 6.7% in working age benefits for 2024-25, subject to parliamentary approval. The basic and new state pensions will be uprated by 8.5%, in line with earnings, as part of the ongoing triple lock.

We are also providing cost of living support worth £104 billion over the period 2022-23 to 2024-25. This is a cross-cutting package of support built on what we learned during the Covid-19 pandemic about supporting those most in need during challenging times. In particular, my department has worked closely with HMRC, HM Treasury and the devolved Administrations to deliver cost of living payments of up to £900 to more than 8 million households across the UK on eligible, means-tested benefits this financial year. I am pleased to say that DWP and HMRC delivered the third means-tested cost of living payment of £299 to most eligible households between 6 February and 22 February 2024.

We have not been delivering this support alone. My department has worked closely with local government—to be helpful to the noble Baroness, Lady Taylor, and perhaps also to the noble Baroness, Lady Lane-Fox—to deliver the household support fund. One hundred and fifty-three local authorities across England have used this funding to provide a variety of support to households to help with their essential costs. I am aware that there remains considerable interest across both Houses in the future of this fund. As with any issue, the Government continue to keep these matters under review in the usual way. As the House knows only too well, the current scheme continues to run until the end of March.

From April, we are increasing the national living wage for people aged 21 and over by 9.8% to £11.44, representing an increase of more than £1,800 to the gross annual earnings of a full-time worker on the national living wage. The right reverend Prelate the Bishop of Durham asked about low pay, particularly with regard to insecure work. I have already mentioned the national living wage, but this record cash increase of £1.20 per hour means we will hit the target for the national living wage to equal two-thirds of median earnings for those aged 21 and over in 2024. This will bring an end to the low hourly rate for this particular cohort. The new in-work progression offer is now live across all jobcentres in Great Britain and we estimate that 1.2 million low-paid claimants are eligible for work coach support to help them to increase their earnings. Progression leads are working with key partners, including local government employers and skills providers, to identify and develop local progression opportunities.

The right reverend Prelate the Bishop of Hereford raised the importance of housing. As he will know, the Government are supporting people in paying their rent and will invest £1.2 billion on increasing the local housing allowance rate to the 30th percentile of local market rents. That will ensure that 1.6 million private renters in receipt of housing benefit or universal credit gain on average around £800 per year in additional help towards their rental costs in 2024-25. I believe that is a significant investment, worth about £7 billion over five years.

I said earlier that we do not work in isolation, and many of the complex issues faced by vulnerable people cannot be tackled through the welfare system alone. My department continues to work in partnership with other parts of central and local government to deliver the support that people need. Alongside the Department for Levelling Up, Housing and Communities, we are committed to working with local authorities to tackle homelessness and end rough sleeping for good—which we must do, to reassure the noble Lord, Lord Bird, who is so steeped in this subject. I am proud of the progress that has been made in recent years and the continued work to meet all the commitments outlined in the cross-government rough sleeping strategy but, as I will be told by the noble Lord, there is much more to do, and I can see it myself when walking through the streets.

I turn to the important theme that was raised today of families and children. The Department for Work and Pensions, the Department for Levelling Up, Housing and Communities and the Department for Education are working together to deliver the Supporting Families programme. Between April 2015 and December 2023, the programme funded local authorities to help more than 612,000 families make sustained improvements in relation to the often complex problems that led to them joining the programme in the first place. A network of 300 specialised work coaches, the Supporting Families employment advisers, support the programme by providing employment support for families that are experiencing multiple disadvantages.

The departments also work together to deliver a range of support to help ensure that children thrive, which is another key theme that has come up today. The pupil premium will ensure that targeted funding continues to help schools to support disadvantaged five to 16 year-old pupils and to close attainment caps.

The noble Baroness, Lady Lister, raised the importance of child poverty in an important part of her speech. I hope I can reassure her that we are taking this seriously and working across government on a range of matters to reduce child poverty. She shakes her head, so I clearly have more work to do.

The right reverend Prelate the Bishop of Durham also raised the importance of child poverty and talked about the two-child policy. He asked again why the Government do not do the right thing and abolish it. We believe that families on benefits should face the same financial choices when deciding to grow their family as those supporting themselves solely through work. He will know only too well, and he has heard these lines from me before, that on 9 July the Supreme Court handed down the judicial review judgment on the two-child policy. The court found the policy lawful and not in breach of the European Convention on Human Rights. However, no doubt we will continue to debate this matter.

In addition, there is collaboration between the Department of Health and Social Care and the Department for Education to provide support to families through Healthy Start, the nursery milk scheme and the school fruit and vegetables scheme, which together help more than 3 million children. To reassure the noble Baroness, Lady D’Souza, the Government have extended the free school meals eligibility several times, as she will probably know, and to more groups of children than any other Government over the past half a century.

The issue of child poverty was raised also by the noble Baroness, Lady Armstrong, and the right reverend Prelate the Bishop of Durham, focusing on poverty in the north-east and with particular reference to the North East Child Poverty Commission, and I listened carefully to what she said. There are some figures that I could bring out, but the most recent data shows that the proportion of children in the north-east in absolute poverty after housing costs fell by seven percentage points in the three years to 2021-22, compared with the three years up to 2009-10. Having said all that, we understand that many families are still struggling—I am the first to say that—and this is work in progress. That is why some help has been given through the comprehensive cost of living support.

The noble Baronesses, Lady Burt and Lady Armstrong, addressed the pupil premium. I emphasise, in response to the comments from the noble Baroness, Lady Burt, that the funding is on top of the £1 billion of recovery premium funding provided in the 2022-23 and 2023-24 academic years, following over £300 million delivered in 2021-22.

On our approach to poverty, while it is absolutely right that we maintain a strong welfare safety net for those in need—I emphasise that—particularly during challenging economic times, we have always believed that, for those who can, the best way to help people to improve their financial circumstances is through work. I know that the noble Lord, Lord Bird, and I alluded to this earlier, mentioned prevention and cure. That is an answer, but not the only answer. We believe that prevention and cure are possible through getting people into work and I hope he will agree with that, although, as I say, it may not provide all the answers.

Our approach is based on the clear evidence around the important role that work, especially full-time work, can play in lifting people out of poverty. This is why, with over 900,000 vacancies across the UK, our focus is firmly on helping people take their first steps into work and to progress towards financial independence. We want everyone who can to be able to find a job and to progress and thrive in work, whoever they are and wherever they live. To ensure that support meets the needs of people across the country, my department offers a national programme of welfare and employment support, delivered through the Jobcentre Plus network across Great Britain.

My department also has local teams that specialise in working in partnership with local government and other local stakeholders, including businesses and communities—to be helpful to the noble Baroness, Lady Lane-Fox—to understand each area’s needs. This place-based approach is crucial in helping to address the disparities that exist between regions and underlines our commitment to spreading opportunity and unleashing potential across the UK.

Of course, we recognise the points raised by the noble Baroness, Lady Finlay, on the link between health and work. That includes mental health conditions, which she particularly focused on. The joint DWP/DHSC Work and Health Unit was set up in 2015 in recognition of the significant link between work and health and to reflect the shared agenda of boosting employment opportunities for disabled people and people with health conditions.

I want to cover some of the questions raised; I hope I can cover them in the remaining time. Notably, these questions were from the noble Lords, Lord Bird and Lord Loomba, and the noble Baroness, Lady Lister. This goes back to strategy. I think the noble Lord, Lord Bird, was probably asking the Government for a ministry of poverty, not a Ministry of Justice. I may be wrong in interpreting what he was trying to say. I hope I have shown in my speech that we saw during the pandemic the Department for Work and Pensions consistently working well across government to support the most vulnerable households.

There is a lot of work going on across government and I believe that there is joined-up thinking. In addition to Ministers meeting counterparts in other departments, officials work regularly with colleagues across government to better understand the multidimensional nature of poverty and to craft effective policy. This includes a cross-government senior officials’ group on poverty, as well as bilateral meetings and meetings with external anti-poverty stakeholders.

The noble Baroness, Lady D’Souza, asked about the five-week wait. It is not possible to award a universal credit payment as soon as a claim is made, as the assessment period must run its course before the award of UC can be calculated. This process ensures that claimants are paid their correct entitlement, based on verified information and actual earnings, and prevents significant overpayments from occurring.

The noble Baroness, Lady Lane-Fox, made an important point about digital exclusion particularly affecting lower-income households. I reassure her that we are aware of this. She is right and she is a great champion in this area. The costs of being connected online can be a barrier for low-income households. The DWP has worked with DCMS and Ofcom to influence broadband providers to support extending eligibility for new broadband social tariffs to low-income households. As a result, some broadband providers have made their new social tariffs available to all UC claimants and claimants of other means-tested benefits. The DWP has worked with Ofcom to promote awareness of these social tariffs to DWP stakeholders and work coaches throughout our Jobcentre Plus network, who can then signpost claimants to apply for broadband social tariffs.

The noble Baroness also raised the issue of chambers of commerce, and I listened carefully to what she said. I think my speech set out, as I said earlier, some emphasis on the close cross-government working with local authorities. I agree that it is vital that local authorities also work collectively to build local leadership, and I will certainly take her remarks back.

The noble Lord, Lord Loomba, and the noble Baroness, Lady Lister, spoke about funding for local government. I reassure them that the Government have announced additional measures for local authorities in England, worth £600 million—the noble Baroness will know that.

The right reverend Prelate the Bishop of Hereford and the noble Baroness, Lady Finlay, spoke about mental health. I alluded to that earlier, but we recognise the challenges of those in poverty, which is why we are investing an additional £2.3 billion a year in mental health services.

I should draw my remarks to a close. There are a couple of questions, particularly from the noble Lord, Lord Desai, who made interesting points about a universal basic income. I will write to the noble Lord on his interesting idea, which is not new to me. I will expand upon it and perhaps give him a full answer.

I reassure the House that Ministers continue to work across and beyond departmental boundaries to ensure that we take a co-ordinated approach to supporting vulnerable and low-income households. We look forward to working with all noble Lords across the House to continue to support those in need. This is a very important subject, and I again thank the noble Lord, Lord Bird, for once again raising it. It certainly is important for the Government.