Benefit Sanctioning

Anne Begg Excerpts

Tuesday 2nd December 2014 Westminster Hall

[Paul Blomfield]

I thank my hon. Friend for that important clarification. Although hardship payments are available to some vulnerable groups—as I said in response to the hon. Member for Wycombe (Steve Baker), there is a problem even there, and communication is breaking down—there are many groups to whom payments are not available. One recommendation, which the Minister should address, is that access to hardship payments should be given to all householders, not just those in certain defined groups.

Sanctioning is not only ineffective in many circumstances, but deeply damaging. That is particularly the case when it has a knock-on effect on housing benefit and council tax support for those on the lowest incomes. A claimant and their family can soon find that they face rent arrears and that they are unable to pay basic bills. In the case of council tax, non-payment is punishable by imprisonment.

Often, people find themselves in that situation without adequate warning, so they have no time to plan for the shortfall. Emma, another Citizens Advice client mentioned in the report, came very close to losing her home as a result of the knock-on impact of a JSA sanction. Sadly, she is not alone. When margins are tight, the slightest change in income can trigger a downward spiral into deep money problems. The system is not designed for that, and rightly so—how would someone in such dire straits be able to find a job?

The DWP agreed to change its IT software and amend the notification sent to local authorities when a sanction has been applied to allow housing benefit to continue without interruption. Action on that was promised by the autumn, but it is now December. Can the Minister assure us today that that relatively minor change, with the potential to make a substantial difference to the lives of some of the poorest people in our communities, is happening or is imminent?

Will the Minister respond to the report’s proposal that all households, as I said a moment ago, have immediate access to hardship payments to avoid the situations I have talked about? Will financial redress be considered where a sanction is found to have been incorrectly applied, resulting in significant consequences and distress for those involved?

There is much more to be said on the issue, and I have asked the Minister a number of specific questions. I want to end with one point.

[Dame Anne Begg (Aberdeen South) (Lab)]

Before my hon. Friend finishes, will he tell us whether the research found evidence of people having to resort to payday lenders or loan sharks to get over the immediate problem of a lack of cash? Did that then create problems for them further down the road because they had lost a lot of their ability to pay back those loans, even when they had been wrongly sanctioned?

[Paul Blomfield]

I thank my hon. Friend for that intervention and for the great work she has done as Chair of the Work and Pensions Committee, along with the other members of the Committee. She is right to highlight the link between benefits sanctioning and payday lending. As she will know, payday lending is a concern to me. With colleagues from all parties in the House, I introduced a private Member’s Bill on high-cost credit.

I have subsequently worked with colleagues on the all-party group on debt and personal finance to push the Financial Conduct Authority to introduce effective regulation of payday lenders, and I am delighted that we have made some progress on that. However, that is only part of the solution. We are dealing with the consequences of poverty—people resorting to payday lenders—but not the causes, and one of the most significant causes is benefit sanctioning. I am therefore pleased that my hon. Friend raised that point.