Cost of Living

Chris Stephens Excerpts

Tuesday 5th July 2022 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to follow my good friend, the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), and it is a pleasure to be a member of that Committee in holding the Government to account. I of course refer to my entry in the Register of Members’ Financial Interests, particularly my role as chair of the PCS parliamentary group, as I will have some things to say about the office closures issue.

I want to start with the Secretary of State’s appearance at the Work and Pensions Committee last week, when she said that, on Thursday, she was going to meet her officials to discuss a second remedial order on bereavement support benefits for cohabiting couples. This is a very important issue, and we have had many great campaigners, including my Glasgow South West constituent Ailsa MacKenzie, who has been in the vanguard of pushing this issue. I hope the Minister will update the House on that issue, because it affects many thousands of people. The quicker we get the remedial order laid down, the quicker people can start receiving those bereavement support payments, which will no doubt help them deal with the cost of living crisis.

Let me touch on what I think lies at the heart of the problems in the Department for Work and Pensions: the start of the claim, the five-week wait and the deductions that come with that. The Minister responded to a written question from me, and the figures are becoming increasingly alarming. Ever since, I have periodically tabled such questions, and the number of deductions and the amount deducted have increased over the past 18 months. A total of £11 million a month is now being taken off claimants as a result of deductions. In my view, that has become a poverty tax.

For example, figures show that in February this year, 189,000 households in Scotland—an increase of 9,000 in just three months—had an average of £60 deducted from their social security payments. That is mainly to pay back the loans issued by the Department to cover the five-week wait at the beginning of a new claim, but some of it is due to overpayments, which include the Department’s errors. I hope the Department will look at that issue, because there is already case law when it comes to pay. By law, if there has been a mistake and someone has been overpaid, the employer cannot take that back. I suggest that if the Department has made a genuine error, it should not be deducting payments from future claims. I hope the Government will look at that, because a number of organisations have said that a deduction should not be made if the Department for Work and Pensions is to blame.

[Kirsty Blackman (Aberdeen North) (SNP)]

Does my hon. Friend share my concern about the lack of reassurance regarding top-up payments, as announced by the Chancellor last week? We may end up in the same situation, because if DWP accidentally gives that money to someone, it might try to claw it back, putting people in an even worse state of poverty than they are in already.

[Chris Stephens]

I share that concern, and I hope the Department will respond positively to the concerns that hon. Members, including my hon. Friend the Member for Aberdeen North (Kirsty Blackman), have raised.

On departmental error, taking £60 a month from people who require state support can be the difference between whether they can buy food or not, or whether they can heat their homes. I am sometimes a bit concerned about the phrase “heat or eat”, because some people will now not be able to do either. That is the desperate situation that far too many people face across these islands, particularly with the cost of living being so high.

On the one-off payments, the Department appears to have conceded the point that grants are better than loans. I welcome that, but I hope it will now look seriously at the report by the Work and Pensions Committee about the five-week wait and introduce a non-repayable grant—a starter payment, as we call it—within two weeks of the claim. That would stop people getting into debt as a result of deductions, and I suggest that it would save money on administration, compared with paying people after five weeks and then deducting £60 a month from them. It seems a false economy to insist on continuing the five-week wait, and then going back and deducting money from people’s claims.

A good friend of mine, Andrew Forsey, director of the charity Feeding Britain, which is involved with Threehills community supermarket in Glasgow South West, recently said:

“Last year, figures like these prompted the DWP to lower the cap on deductions and double the length of time people had to repay those upfront loans. What these latest figures show is that there remains a lot more work to be done, to bring these deductions down still further, if people are to have the money they need each month to put food on the table.”

The Chair of the Work and Pensions Committee mentioned no recourse to public funds, and I agree with what he said. I hope the Department will look seriously, once again, at the Committee’s report that recommends extending child benefit to all children, irrespective of their parents’ immigration status. The right hon. Gentleman laid that out well, and, as someone who represents a city that has signed up to the Home Office’s asylum seeker dispersal scheme, I know this is a very real issue. In areas where asylum seekers have become refugees, it was certainly an issue during covid. I hope the Department will go back and look at that.

We need more resources to go into ensuring that those who are entitled to pension credit receive it. It is reckoned that between 65% and 70% of people who are entitled to pension credit receive it. I would like the Department to do more work on that, and I would like more resources to go into working with pensioners’ groups and various third-sector organisations to ensure that those who are entitled to pension credit get it. It seems to be a very real issue, and some of the statistics from the independent charity Age UK about the amount of unpaid claims for pension credit suggest that the figure is far too high; it is in the millions. Frankly, that pension credit could do a lot of good for pensioners who are dealing with increasing food and fuel costs.

Finally, let me raise my concern about office closures by the Department for Work and Pensions; I know that you also have a constituency interest in this subject, Madam Deputy Speaker. We have Government offices in areas of high economic deprivation, and the Department is one of the largest employers in some constituencies, but it wants to close those offices. That will not just impact on people employed by the Department, although of course it will do that, but have a wider effect on the economy. Many small businesses round and about those offices rely on custom from people who work in the Department, and I refer the Minister to my hon. Friend the Member for Glasgow North East (Anne McLaughlin), who has done a survey on this issue in relation to the proposed closure of the Springburn office.

The Department seems to want to take out far too many of the 91,000 jobs that the Government want to cut. The Department responsible for employment and helping people get into work really should not be laying off its own workers and throwing people into unemployment; that would send completely the wrong message and make no sense whatsoever. I will leave it there, Madam Deputy Speaker, and I hope—indeed, I am sure—that I will get a positive response from the Minister to all the points I have raised.

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[Debbie Abrahams]

I recognise what the hon. Member says. I visited Glasgow last week—the constituency of my friend the hon. Member for Glasgow South West is there—and it was interesting to see the reforms being introduced there, particularly those for disabled people.

Many hon. Members will not be aware of yesterday’s report from Deaths by Welfare, which provided even more evidence of the impact of the so-called reforms on premature deaths and suicides. It had a timeline that showed when there had been reforms and further cuts, and what they meant in terms of deaths of vulnerable social security claimants. Another recent report shows a detrimental impact on social cohesion. The University of Newcastle quantified that, between 2013 and 2015, for every £100 lost in income per working age adult, motivated hate crimes increased by about 6%. The effects are much wider than the Government recognise.

My second point is about the pandemic. We know that people on the lowest incomes, and particularly those reliant on social security support, were disproportionately and negatively affected by covid. They were more likely to be exposed to the virus and to be infected, and they were more likely to be seriously ill and die. Within that group are disabled people. After adjusting for a range of factors including health, the Office for National Statistics has estimated that disabled people were between 1.3 and 1.6 times more at risk of death from covid. The reasons for those disproportionate deaths must be investigated in the covid public inquiry, but given the context that I have just described—the inadequacy of our social security system—the contribution of the cuts in social security support cannot be ignored.

On the cost of living package and its impact on the DWP spending estimates, of course I welcome the package, but I have just spent the past few minutes describing the context and, much though the Government congratulate themselves on what they are doing, it just about scratches the surface of the cuts that they have made. I must, as others have done, highlight some of the gaps in the package. As support is on a household basis, larger families will not get the same support as smaller families. As the Resolution Foundation suggested, in the light of inflation, a 9.5% uplift to all social security support would have been more progressive than the 3.1% awarded at the beginning of the year, and would have taken us beyond the Chancellor’s stop-start, ad hoc approach.

My concern is that the cost of living will not just be an issue this year; it will carry on—and what will the Government do then? We need principles that ensure that all social security support is uplifted to account for inflation.

As my friend the hon. Member for Glasgow South West mentioned, there are huge issues with deductions. We asked the Secretary of State about that last week. The Joseph Rowntree Foundation, StepChange and many other charities have pointed out that 4.6 million households are in arrears on at least one bill, so what is handed out with one hand will be clawed back by another. I join those charities and hon. Members in their calls to reduce the amount that can be deducted from the universal credit standard allowance; it is now 25%. I would like it to be less than 15%. When the deductions are for debts to Government—figures indicate that the Government are the largest debt collector—it would only be reasonable to reduce it to 5%.

My final point is that given the cuts in spending and the culture in the Department, our social security system does not provide the safety net that everybody thinks it does. I really like the approach being introduced in Scotland, which is not about people proving that they are entitled to support; there is trust. We should try to make that the basis of the culture in England as well.

[Chris Stephens]

I thank the hon. Lady, my good friend, for giving way. She mentions culture; there is also the issue that sanctions are part of that culture. It had seemed that we were persuading the Government to introduce a system in which there were warnings before sanctions, but they seem to have rowed back on that. Does that not add to the concern that she rightly raised about the culture?

[Debbie Abrahams]

We have spoken many times about that. My hon. Friend is absolutely right. We have a system in which there is conditionality, but I believe that there are other ways of recognising that than by taking away somebody’s income and making things even harder for them.

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[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to take part in this estimates day debate. I do love estimates day; it is wonderful every time that this rolls around—I am not being sarcastic, I promise.

I will talk briefly about the shortcomings of the estimates process. We are discussing the DWP estimate today—which involves spending of £240 billion—under, I think, Standing Orders 53 and 54, which were written before I was born. We are unable to table meaningful amendments in relation to £240 billion of spending because of the way in which the Standing Orders are written. That is shocking. Has anyone here ever tried to explain the Budget process to people outside the House? Have they ever tried to explain the fact that we have to stand here and discuss hundreds of billions of pounds of expenditure without any meaningful way to amend that? It is absolutely ridiculous, flawed and deeply inadequate.

The DWP’s objectives in the main estimates book are, first,

“Maximising employment and in-work progression”;

secondly,

“Improving people’s quality of life”;

and thirdly,

“Delivering excellent services for citizens and taxpayers”.

Those are the Department’s aims for the next year. I suggest that the Government have failed and continue to fail in what they are doing. I make it clear that that is not, for a second, the fault of DWP staff, who are working incredibly hard to make the social security additional payments.

[Chris Stephens]

Is it not ironic that the DWP says in the main estimates book that it wants to maximise employment when it is threatening its staff with redundancy?

[Kirsty Blackman]

It is, and it is ironic that the DWP is asking staff to step up and deal with its creaking, unfortunate, flawed computer system. It is asking them to do all this additional work to make that happen while failing to make the investment where it should be making it, in the computer system and in the people. I am also seeing a reduction in DWP office staff in Aberdeen. I very much hope that the Government change their mind about the direction in which they are going.

We have heard from Members across these Benches about the issues affecting people’s quality of life as a result of the DWP’s failures and the failures of the Government’s policies. Loads of people have mentioned the safety net. The whole point of a safety net is that it catches people. The point is not to make the holes as big as possible so that as many people as possible fall through. I would rather have a social security system like the one that we are building in Scotland; a social security system that ensures that everybody is caught by the safety net, so that everybody gets what they are entitled to and people do not accidentally fall through. This Government’s policy seems to be to give social security payments to as few people as they possibly can and to try very hard to set the bar as high as possible so that people cannot meet the requirements.

We have heard about the Scottish social security system and its openness compared with the DWP’s system, where the report on food banks and the equalities impact assessment were buried. Audit Scotland recently audited the Scottish social security system. It said:

“The Scottish Government has continued to successfully deliver new and complex social security benefits in challenging circumstances. This is a significant achievement. There is a conscious focus on the needs of service users, building on the principles of dignity, fairness, and respect. People are positive about their experiences of engaging with Social Security Scotland.”

How different that is from the views that we are hearing down here, from what is in our inboxes, from the absolute intransigence and the issues that people face every day when simply trying to get what they are entitled to.

The social security uprating fails to get anything close to inflationary levels this year. We have seen an increase, but it is nothing close to the level of inflation. In fact, the £650 payment that the Chancellor announced does not even cover the £1,000 that was taken off people last year—never mind going any way to cover the increase in the cost of living. The Chancellor, the Minister and the Secretary of State have repeatedly said, “But people are getting more, with the £650, than they would have if we had uprated benefits”. We are asking them to do both. We are asking them to adequately uprate the benefits and backdate that to April as well as to make the additional payments. Only then can we get to a situation that is close to helping with the cost of living.

This is a tale of two Governments. We can see that another country is possible. We can see the failings, with the bedroom tax, the benefit cap and the two-child policy being carried on with. We have heard a lot about no recourse to public funds. When we discussed the Social Security (Additional Payments) Bill last week, I mentioned that children were literally starving and I was scoffed at by Government Members. If we look at reports, we see that junior doctors talk about children presenting with rickets because of the level of malnutrition, because they have no recourse to public funds, because they have been sanctioned, or because they otherwise cannot afford to eat a healthy diet. Comments have been made about the lack of variety and the lack of healthiness in the diets provided by food banks, which try incredibly hard but just cannot meet the requirements. In addition, they cannot provide food for people who cannot afford electricity. If people cannot afford electricity to boil something in a pan, it is difficult for them to cook adequately.

In the main estimates book, the Government talk about providing £5.6 billion—that is the initial spend—under the Social Security (Additional Payments) Bill. However, they mention providing £37 billion for increases in the cost of living. That £37 billion is made up of additional payments, as the Chancellor has stated, but can the Minister confirm that he is including things in it like the freeze on alcohol duty? It cannot be said that the freeze on alcohol duty relates to improving the cost of living for people who cannot afford to eat.

I am pleased to have been able to talk about the DWP estimates today. What is happening is woefully, woefully inadequate. Our constituents are coming to us and we just cannot provide them with the hope that they need and want, because the Conservatives are digging their heels in and refusing to offer adequate support.

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[David Rutley]

As I have said, the Secretary of State will be looking at the wider economic environment when making these decisions.

Let me now pick up some other points that have been made today. The hon. Member for Glasgow South West (Chris Stephens), who is terrier-like in his tenacity, mentioned bereavement orders. The Secretary of State has met officials to discuss the proposed draft order, and they are now working on that as a priority. Others have referred to the five-week wait for universal credit payments. It is not possible to award payments as soon as a claim is made, because the assessment period must run its course before an award can be calculated, and it is not possible to determine accurately what the entitlement will be in the month ahead. Our measures will ensure that the correct entitlement is paid, and will prevent significant overpayments from being made.

[Chris Stephens]

Will the Minister give way, on that point?

[David Rutley]

I will give way, but this is the last time I shall do so, because I need to make some progress.

[Chris Stephens]

I thank the Minister for his generosity in giving way, and also for his generous comments. The Select Committee did not argue that a payment could be made straight away; we argued that within two weeks of a claim, a starter payment could be made. Has the Department considered that as a way of addressing the five-week wait?

[David Rutley]

I have set out our approach, which is to ensure that advances are made available to help people in those difficult circumstances to get the money that they need.

Another point that has been raised is about deductions. We have systematically reduced the amount that can be deducted from benefits from 40% to 30% and now to 25%. If claimants have issues, they can go to the debt management service for further advice and support. Others have mentioned the carers allowance. I want to highlight, as I did in the recent Second Reading debate on the Social Security (Additional Payments) Bill, that the carers allowance is not a means-tested benefit. Nearly 60% of working-age people who are carers will get the cost of living payments, as they are means-tested benefits, or disability benefits. Carers allowance is paid on an individual basis to people in households across the income scale, so they may live in a household that is able to receive the £650 payment or the disability payment as well, which will help them to pay the bills in their own households. We also talked about how larger families will be getting the same payment as individuals. This is because we needed to get the payment out fast to as many people as possible. We will be making the means-tested benefit-related cost of living payment from 14 July, and that is absolutely critical. We were not able to develop a system that would account for every single eventuality.

I conclude by saying that this Government have worked incredibly hard over recent years to ensure that we help people to get into work, that we make work pay and that we support people with the cost of essentials. The latest cost of living payments that have been made and the additions to the household support fund demonstrate that we are absolutely committed to providing this help for households. I would like once again to thank hon. and right hon. Members for their contributions to this important debate.