Social Security Benefits Up-rating Order 2021

Baroness Janke Excerpts

Wednesday 10th February 2021 Grand Committee

[Baroness Janke (LD) [V]]

I thank the noble Baroness for the clarity of her presentation. I agree with the noble Baroness, Lady McIntosh, that thanks are due to DWP staff for their response to the huge uptake of universal credit as a result of the pandemic. I also welcome the £20 a week addition to universal credit and working tax credits and strongly urge the Government to continue this.

There is no doubt that the pandemic has hit the poorest hardest, in terms of both vulnerability to the virus and loss of earnings and employment. A report by the Resolution Foundation, The Debts that Divide Us, is based on the results of surveys of families receiving universal credit. It tells us that more than half of all single parents are now on universal credit. It also shows evidence of the extent to which universal credit claimants are experiencing financial difficulties. One-third of new claimants report that their family income in January was at least 40% lower than pre-pandemic; one in five are behind on essential bills; and three in 10 are more in debt than a year ago.

Looking ahead, the Government must soon make a decision on whether to continue the additional £20 for universal credit and working tax credit. The report tells us that, if this is not continued, basic unemployment benefit will be at its lowest since 1990-91. Stopping the additional payment will contribute to a rise in child poverty of 400,000 by 2021-22. As the noble Lord, Lord Empey, said, this is an absolute crisis, as has been made clear by the fact that many children are now not getting enough to eat.

I am sure that the noble Baroness is familiar with the report by the House of Lords Economic Affairs Committee—chaired by her noble friend, Lord Forsyth of Drumlean—Universal Credit Isn’t Working: Proposals for Reform. It recommends a major review of universal credit in the light of dramatically changed economic circumstances. The noble Baroness, Lady Ritchie of Downpatrick, is right in calling for a root-and-branch review. We need to look at the new circumstances which the current system was not designed for. For example, recommendations in the report suggest that the Government should commit to making the increase in the standard allowance permanent. It also talks about the review of the benefit cap:

“In light of the unfolding economic crisis we recommend that the Government review the level of the benefit cap and its effect on hardship and poverty.”


It also makes clear that the two-child limit is unfair:

“We urge the Government to remove the two-child limit and consider introducing tapered awards for families with more than two children.”


As I said, I very much support a root-and-branch review.

I welcome the Government’s commitment to retaining the triple lock and support the call by the noble Lord, Lord Davies, for a confirmed commitment from them to provide pensioners with clarity for the future. My noble friend Lady Bowles asked that we should look at what progress has been made in recovering the value of the state pension and I would welcome that. The commitment to the poorest pensioners is of course welcome. They have paid their contributions over many years and should reasonably expect to receive a realistic income in their old age. I welcome the comments of the noble Baroness, Lady Altmann, and the noble Lord, Lord Dodds. As other noble Lords have said, the state pension is the lowest in Europe; we are culpable for having allowed this to happen over recent years. I attended the meeting with the noble Lord, Lord Foulkes, about getting the BBC to run a proper take-up campaign for pension credit. We would welcome the Minister’s response to that.

As we face the economic costs of the pandemic and Brexit, it is also important to keep the triple lock, as future generations are unlikely to benefit from the same generous private pensions as their parents. It will be all the more important for the state pension to provide a realistic income. I support these orders and look forward to the Minister’s response to my questions and those raised by other noble Lords.