Universal Credit

Baroness Stedman-Scott Excerpts

Thursday 9th September 2021 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I thank the noble Baroness, Lady Tyler of Enfield, for securing this debate, and I thank all those who have contributed to today’s discussion on this important question. I know how important it is, and I understand the depth of feeling.

I was pleased to hear some balance and the view that the Government had done well in supporting people through the pandemic and through their work to get people into work. The debate has been wide-ranging, and there is no doubt that the last 18 months have brought unprecedented challenges: we all had to change the way we lived and worked, and, in the face adversity, this Government provided an unprecedented response, delivering support to people right across the country in response to the crisis.

We have heard how the £20-a-week uplift to universal credit has made a difference to households facing economic shock and financial disruption as a result of the pandemic. The noble Baronesses, Lady Donaghy and Lady Tyler, the right reverend Prelate the Bishop of Gloucester and others have made reference to the £20 uplift. It was clear right from the word go that it was temporary and not going to be permanent. I remind the House that the Chancellor has always been clear that the universal credit uplift was a pandemic response. He has ensured that support was in place well beyond the end of restrictions and reopening the economy, and we are not finished supporting those who need our help. No one wants to see anyone in poverty, so I agree with my right honourable friend the Chancellor when he says that he does not accept that people will be forced into poverty because it is now right that we switch our focus to getting people back into work and improving their prospects to progress in work. Our comprehensive plan for jobs will help to deliver this.

As I have said, the £20-a-week uplift to universal credit and working tax credit was announced by the Chancellor as a temporary measure in March 2020. We took this approach in order to give those people facing the most financial disruption the help that they needed as quickly as possible. At the Spring Budget, we announced a six-month extension of the temporary £20-a-week increase, meaning that it would be in place well beyond the end of restrictions. The additional support has increased the universal credit standard allowance and working tax credit basic element by up to £1,560 since its introduction.

We have also provided other support, and we should look at that rather than just at the £20 uplift in isolation. We introduced the Covid winter grant scheme—now the Covid local support scheme—with £269 million provided to local authorities in England between 1 December 2020 and 20 June 2021 to help the most vulnerable children and families with the cost of food, utilities and other essentials. This temporary scheme has now been extended for the final time, with an additional £160 million for local authorities to help vulnerable households as the vaccine rollout continues. From April 2021, we increased the national living wage. It has always been this Government’s intention that this additional financial support and other Covid support will end once the economy has reopened. Now, as we open up and our recovery gathers pace, it is right that we switch our focus to getting people back to work and improving their prospects to progress in work.

My noble friend Lady Eaton, and the noble Baronesses, Lady Tyler and Lady Smith of Newnham, talked about dignity. In my career, I have never seen anything more dignified than someone having a job that enabled them to live and be independent. Our vacancies are currently above pre-pandemic rates, sitting just below a record high since the series began in 2018. This is a very promising sign that the economy is recovering.

In this context, extending the uplift, even by a further 12 months, would have been premature and come at a very significant cost—the equivalent of adding 1p on the basic rate of income tax in addition to a 3p increase on fuel duty—when we consider that total welfare spending in Great Britain will be £241 billion in 2021-22, with over £111 billion on working age welfare, or 4.9% of GDP. Universal credit provides a safety net but is not designed to trap people in welfare. Fundamentally, we recognise—and I support the fact—that work is the best route for individuals.

As we are aware, there have been significant positive developments in the public health situation since the extension to the uplift was announced and the vaccine rollout is now progressing well, with 80.3% of the population fully vaccinated. It is now right that the Government should shift their focus to supporting people into work and to progress in work. We have a comprehensive plan for jobs to do this.

We are spending over £7 billion, around £1 billion more than the cost of a one-year extension of the £20 uplift. This includes £2 billion on Kickstart; £2.3 billion on the number of work coaches, which we have doubled; tripling sector-based work academies; £2.9 billion on Restart; £200 million on JETS; and tripling the number of traineeships. Our work coaches will be working very hard to get people into work and to progress them.

The noble Baroness, Lady Tyler, asked about an impact assessment. The department has not completed an impact assessment on the ending of the temporary uplift as it was introduced as a temporary measure. We have no obligation to conduct an impact assessment as we are returning to business as usual as the temporary Covid uplift is expiring, as it was always intended to do. Understandably, the noble Baroness also asked us about fuel poverty. My noble friend Lady Bloomfield, who has expertise in this area, said to me that we are doing an awful lot on it. If I may, I will write to the noble Baroness to update her on what we are doing.

My noble friend Lady Eaton raised the point about a £6 billion improvement in the labour market and asked how we would spend it. I cannot answer that in detail, but I have every confidence that those discussions took place. She asked how we would use that money differently, if we could use it again. I cannot answer that, but I am sure that those discussions have taken place.

My noble friend also mentioned in-work progression. Currently, 4.2 million individuals are in low pay, and the Resolution Foundation has found that only one in six low-paid employees managed to escape low pay over the decade to 2016. There are 2.2 million universal credit claimants in work. These numbers have risen due to the impact of the pandemic. My noble friend Lady McGregor-Smith has conducted an in-work progression report, which I hope noble Lords have read. My colleague at the Department for Work and Pensions, the Minister for Employment, is busy trying to implement the things that will make a difference to people to achieve in-work progression.

The noble Baroness, Lady Tyler, also spoke about addressing poverty. Looking at the impact of poverty on an individual is complex and inherently speculative, as it requires projecting how incomes will change for every individual in society, which are affected by a huge range of unknown factors. In 2019-20, working-age adults in households where all adults were in work were six times less likely to be in absolute poverty after housing costs than adults where nobody worked.

The noble Baroness, and other noble Baronesses and noble Lords, asked why we are ignoring the comments and points that stakeholders have made. We are not ignoring them; we are listening but, at the risk of repeating myself, this was always meant to be a temporary measure. As I understand it, the Government have made their decision, but it is not just to stop it and run; they are investing in other areas where we hope this will make a difference to people’s lives.

The noble Baroness, Lady Tyler, raised the issue of planning for jobs. I could give her a running commentary on all that we are doing. Let me write to all noble Lords to tell them exactly what we are doing.

The noble Baroness, Lady Donaghy, and the noble Lord, Lord Desai, mentioned people in the creative industries who have precarious employment. These things have an impact on them when their work stops; I acknowledge that. I am pleased to say that the Minister for Employment in the Department for Work and Pensions has been working with the creative industries. We have been working with Pinewood Studios to help people into jobs there, because there are so many of them. I would be happy to arrange a briefing from the Minister for Employment for noble Lords to see how that work is progressing, and I hope that it will give noble Lords an opportunity to raise other things.

The right reverend Prelate the Bishop of Gloucester and the noble Baroness, Lady Smith of Newnham, talked about food bank usage. I pay tribute to the food banks; they are doing a great job in supporting communities. They have enabled people and communities to work together to benefit the people they are trying to help, but it is difficult to predict impacts on the use of food banks. There are many reasons why people use them, and their use cannot completely be linked to a single cause. Impacts also depend on the speed of economic recovery and how we can quickly return individuals to work.

Time has eluded me again—it does annoy me when that happens because I feel that I have not answered everyone’s questions and shown them respect—so I will conclude my remarks now. I will write to the noble Lords who asked me questions and place a copy of my answers in the Library, but let me say that I am also prepared to meet people to further this discussion, if that would be helpful.

Finally, our focus is rightly on continuing the implementation of our plan for jobs programme, which will continue to help millions of families into stability and on to the path of prosperity because a working Britain is at the heart of a Britain that works.