Health and Social Care Levy (Repeal) Bill

David Rutley Excerpts

Committee stage
Tuesday 11th October 2022 Commons Chamber

[Steve Brine]

Without question. We had some success with our tobacco control plan, but progress has stalled. We cannot ignore the pandemic, as the Opposition Front Benchers sometimes try to, and I understand that it disrupted the smoke-free England plans, but we need to get back to it, for social reasons, and for economic reasons relating to the health service that we seek to fund.

I am sure that right hon. and hon. Members from across the House have heard of the “Be Clear on Cancer” campaign, and of the “Touch, Look, Check” message encouraging women to check their breasts. I lost my mother to breast cancer; it destroyed much of my family. I brought a ten-minute rule Bill on the subject to the House earlier this year. Breast Cancer Now tells me that it thinks that there are 12,000 undiagnosed breast cancers in this country today. One does not need to be a genius, a former Health Minister or a breast surgeon to understand what that could mean: undiagnosed breast cancers move beyond stage 1, into 2 and 3, when they are untreatable. That is what happened to my mother, and I do not want it to happen to others. If the nanny state means implementing “Be Clear on Cancer” campaigns to help people avoid cancer, I am a nanny state-ist.

[David Rutley]

My hon. Friend makes an important point about raising awareness, particularly on public health, and I support the points that he makes, but does he agree that, at this time of real challenge, it is also important to drive public awareness of how to use energy more efficiently, in order to help people with their fuel bills?

[Steve Brine]

I know why Dame Rosie is smiling: she thinks that I have possibly attempted to fit my Second Reading speech into this response to new clause 1. If I go down the road of energy policy, I may test her patience. All I would say to my hon. Friend is that, if the energy price guarantee was a price cap, and people could not pay more than the amount at which the cap was set, there would be some argument for not having a public campaign advising people on their energy use. It is not a cap; it is an energy price guarantee. If people use more energy, they will pay for more energy. It therefore seems logical to me, on lots of levels, to help people save energy—but what do I know?

I was just coming to diabetes. The NHS spends about £10 billion a year—that was about 10% of its budget, when I was in the Department—on diabetes care. That is a phenomenal amount of money, yet type 2 diabetes is preventable and, as we have heard from Members, people can turn it around. Why would we not want to encourage people to manage their weight better, when weight is one of the big drivers of diabetes?

Finally, stoke is a big killer in this country. It costs the NHS billions. During conference recess, I visited a group in my constituency called Say Aphasia—I figured it was a better use of my time. I met a group of 15 men who had had strokes. One was two years younger than me. They had severe communication difficulties. I see my hon. Friend the Member for Bury St Edmunds (Jo Churchill), a former public health Minister, by the Front Bench. She knows what I am going to say. Why would we not want to help the NHS prevent stroke through a proper salt reduction strategy? Given my surname, when I tried to suggest one to the Department, it caused some amusement among officials, but I think it is the right thing to do. If we cannot prevent stroke, I will meet a lot more people like those I met in the Say Aphasia group last week. Their ongoing cost to the NHS is significant.

In conclusion, the point I am trying to make, and maybe I am not making it very well, is that, if we do not believe in prevention—and in my heart I believe that those on the Front Bench do believe in prevention—the costs of the NHS predicted in the OBR book are going to look quite conservative. I think I am right in saying that those projections include this levy being in place, not repealed—

No-fault Benefit Debts

David Rutley Excerpts

Thursday 21st July 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

I congratulate the hon. Member for Glasgow East (David Linden) on securing the debate. It is always a pleasure to follow the Deputy Leader of the House, who was responding to the Sir David Amess summer Adjournment debate—even the fact that the debate has been named after him is very moving.

I also congratulate the hon. Member for Glasgow East on his tenacity and assiduous approach to these issues and many others in this space. Of course, today he has been rewarded with the last Adjournment debate before the summer recess, which shows not only his keen interest but his dedication. I have always valued our exchanges, because he raises important issues and I try to respond as best I can. I do not doubt his sincerity in these matters.

The Department for Work and Pensions plays a pivotal role every day, including through paying benefits to millions of households in a timely and accurate way, providing the vital welfare safety net that people need. In addition, where people are able to work, work coaches in our jobcentre network help our claimants into sustainable employment all across the United Kingdom.

The universal credit system rose to the challenge of the pandemic admirably. The DWP redeployed staff, harnessing the agility of the system to process benefit claims remotely, and paid over 3 million households. Incredibly and crucially, we kept payment timeliness at very high levels during that time of genuinely global disruption. To illustrate the strength of our welfare system, despite the challenges I have laid out, the statistics from the 2022 financial year show that universal credit official error overpayments were at their lowest recorded level of just 0.7%, having fallen for the third year in a row. Despite the record low levels of official error, which I am proud to be able to set out, I want to assure the hon. Gentleman and other Members that we are absolutely committed to improving further on that record. The good news is that as a percentage, we are on a downward trajectory and we want to go even further. Not only do we run extensive checks to rule out fraud, but we also have a series of internal checks in place that allow us to correct errors pre payment and to learn from any errors we do make to minimise the risk of reoccurrence.

As Members may be aware, under section 105 of the Welfare Reform Act 2012, any overpayment of universal credit, new style jobseeker’s allowance or employment and support allowance in excess of entitlement is recoverable. This includes overpayments arising as a result of official error. The approach ensures fairness for the taxpayer and that claimants receive the appropriate amount of support given their circumstances. The Department seeks to recover benefit overpayments as quickly and efficiently as possible, including prescribed official error debt, but it is committed to doing so without causing undue financial hardship. The hon. Member for Strangford (Jim Shannon), who also deserves a medal today for his assiduousness and tenacity, should be cognisant of that fact. He used the word compassion. We try to lean into that important word through the process we embark on. We do not abandon people in financial difficulty, and we will always work with and support any individual who deserves our help.

We understand the difficulties claimants can face, which is why we have taken action and lowered the standard cap on deductions from universal credit twice in recent years, from 40% to 30% in October 2019, and then to 25% in April 2021. I am sure Members, particularly those who follow these matters, will appreciate that in April this year a temporary change was introduced, so that for 12 months only benefit claimants themselves can ask the DWP to pay their ongoing energy bills directly from their benefit or alter any existing arrangement. This ensures that claimants have greater autonomy over their benefit award at a time when energy prices are at a record high. Deductions are taken in priority order, which means that higher priority deductions such as utility payments are taken first, with debt only taking up the remainder of the overall cap. Where a person feels they cannot afford the proposed rate of recovery and the debt has not arisen as a result of fraud, they are encouraged to contact us.

[David Linden]

I am very grateful to the Minister for giving way. One issue, which came up in a call I had yesterday with StepChange and a number of other advice lines and organisations, is that when people try to get through to the Department to that specific team, it is incredibly difficult to do so. I am not asking for a miracle at the Dispatch Box, but can he go back to the Department and consider whether it could be made easier for people to get in touch with the Department when they face such financial hardship?

[David Rutley]

The hon. Gentleman makes a good point. I will take it away for sure and follow it up. I have replied to StepChange recently in its correspondence with me, or I am about to do so, on those very same issues. He makes a good point and I will genuinely follow up on that.

The Department is then able to work with individuals, reviewing their financial circumstances and, in most instances, agreeing a temporary reduction in their rate of repayment. We have recently extended the time period, from 12 months to 18 months, before any reduced debt repayments are reviewed. To ensure people can get in touch, we are automating processes, freeing up debt management staff time to respond to customer calls and provide timely support. Again, I acknowledge the hon. Gentleman’s point and will follow up on it. We also have a rapid response team in place to help manage calls at peak times.

I thank the hon. Gentleman for the specific recommendations he made. He mentioned the distinction between legacy benefit official error debt and universal credit official error debt. Because of existing legislation, he is right in saying that the Department writes off legacy benefit official error debt, but, as hon. Members will know, Parliament voted to end legacy benefits and to make universal credit the welfare system of the future. The intention is that the vast majority of working age claimants will move to universal credit by 2024, and a long-standing part of the universal credit system is that official error debt is recoverable. The 2012 welfare reform changes were designed to ensure that claimants took ownership of all aspects of their claim, including the accuracy of their payments. I reassure the hon. Member that I understand the points that he has raised and that, as a Department, we recognise that official error can cause disruption to our claimants, which is why minimising these occurrences is a major focus.

The Department maintains vigorous control of the official error via its quality assurance framework, which provides an assurance that the necessary quality controls are in place. Additionally, an independent quality and assurance team checks transactions conducted within DWP benefits, and this insight informs training requirements, infrastructure improvements and risk management processes. A senior stakeholder group, comprising directors, oversees the quality agenda. I am confident about the approach that our Department is taking. We are minimising the occurrence of official error, and also recovering payments where this unfortunately does occur. We need to balance our duty to the taxpayer with the need to deal with customers sensitively and appropriately. In that context, we do not think it is unreasonable that all overpayments are repayable.

The hon. Member also asked that we ensure that decision makers are involved in determining whether overpayments should be repaid. We are trained to take account of the factors listed in the benefit overpayment recovery guide. I can give the hon. Member a very clear assurance that this is the case, and also that regular refresher sessions are undertaken. The guidance to which the hon. Member refers was updated to give further clarity on some of the factors that have always been considered relevant when deciding whether to grant a waiver, as well as the evidence that should be provided to support an application. I am confident that this guide will make it clearer from the outset what evidence should be supplied in support of a request for waiver. We, of course, recognise the importance of doing all that we can to safeguard the welfare of claimants who have incurred debt. Our debt management agents are trained how to recognise signs of vulnerability, which is a critical point, and how best to support those customers.

My Department also has a network of advanced customer support leads to provide additional support to our most vulnerable customers. We are working in partnership with the Money Adviser Network, which offers free, independent and impartial money and debt advice, to routinely refer indebted customers to their service. In addition, the guidance to all universal credit agents is being reviewed to ensure that cases that may be appropriate for consideration of waiver are duly identified and referred to the waiver team for consideration.

Recovery of benefit debt must be balanced against the claimant’s social obligation to repay the money they owe to the Exchequer or the taxpayer. In April 2021, we reduced the cap on standard deductions to 25%, as I have explained, and at the same time we doubled the new claim advance award period to 24 months. This provided all new universal credit claimants with greater flexibility over how they received their advance. Such changes have helped hundreds of thousands of UC claimants retain more of their award in any given month. Some people have advocated for a reduction of the maximum deduction rate for the Government debt, as the hon. Member has done today. However, the limits that we currently have in place strike the right balance between managing the social obligations while supporting claimants with debt. To be clear, reducing the threshold further would risk key payments, including child maintenance, not being fulfilled. I think that those points need to be considered, notwithstanding the concerns that he has raised.

In addition, through the universal credit system, the recovery of universal credit and tax credit overpayments can be taken up to a maximum of 15% of the standard universal credit allowance, although this can be higher where a claimant has earnings. As I have said already, we understand and take seriously the impact that the recovery of overpayments can cause. However, reducing the 15% cap would extend the length of time until claimants return to their full UC award, and there is already a significant amount of support that is available for claimants repaying these overpayments.

Claimants can already contact the debt management to agree an affordable rate of repayment. There is no minimum amount that a person is expected to repay; they can pay an amount less than 5% if that is all they are able to afford. That is an important consideration.

Moving on to the last of the hon. Gentleman’s points—I have taken them in a slightly different order—the Department can waive benefit debt in exceptional circumstances, but waivers are generally granted only in truly exceptional circumstances where it can be clearly demonstrated that a person’s circumstances will improve only by waiving the debt. Such requests are rare, and there would normally need to be specific and compelling grounds for a waiver, such as when the recovery of the debt was causing either long-standing financial hardship or welfare issues for the debtor and their family. Waivers are granted at the discretion of the Secretary of State.

As a number of requests is low, we do not normally feel it is necessary to stop recovery during the waiver process. When a request is received, it usually follows a discussion with the claimant regarding recovery of the debt, and that discussion often already results in a reduction or could involve a suspension in recovery, so there are other factors we can consider in the journey of the individual claimant. Further along in the process, we do not suspend recovery of an overpayment during the appeal process because, in legislation, anything paid in excess of entitlement is recoverable, and there is no right of appeal against the recoverability of the overpayment. The Department is responsible for ensuring fairness to the taxpayer because, as I stated earlier, overpayment is effectively debt that is owed to the taxpayer.

It is also worth highlighting that other measures are in place to support people struggling with debt, such as the breathing space scheme, which I think we may have mentioned in previous debates. The hon. Gentleman knows about it, so I will not prolong this point. Let us use all the tools that are available. In Scotland, the debt arrangement scheme provides similar support to that available in England.

We recognise that people are facing serious challenges in Glasgow, in Scotland and across the United Kingdom and much of the world, and I think even the hon. Gentleman acknowledges that we have put a significant package on the table. We have had similar debates, so I know he feels that it is not quite enough, but it is substantial none the less, now totalling £37 billion. We as Members have a duty to communicate and reassure people that a package of support is being made available to them. The £326 means-tested cost of living payment has gone out to nearly all eligible benefit claimants, but others will receive the first of those instalments by the end of the month. Claimants will get a second payment to get up to £650 well before Christmas, which will be vital for their budgeting at that time of year. The £150 disability cost of living payment will be made available in September. The energy bills support scheme will also provide £400 for all who have a domestic electricity contract. Of course, pensioners will receive—I know the hon. Gentleman has strong views on the support available—£300 on top of their winter fuel payment.

Whatever our views on the different approaches to supporting people in poverty and those facing financial challenges, a significant amount of support is available. I will be doing all I can to help to communicate that, and I am sure he will do the same with his constituents. I want to put it on the record that, through the programme of support that will be put in place, 8 million low-income households in the United Kingdom will receive a package of support of around £1,200, which will be of significant help in these challenging times.

Of course, additional funds will be made available through the household support fund in England. There is similar support in Scotland; I have learned from previous debates that it does not total £79 billion in Scotland—that is for Scotland, Northern Ireland and Wales—but it is £41 million in Scotland. I am grateful that the hon. Gentleman has taught me that lesson in previous debates. None the less, further funds have been put in place to help people with the cost of essentials.

To conclude, I hope that the hon. Gentleman recognises that the Government are taking a considered and balanced approach to the recovery of debt. We are not overlooking, and will not overlook, anyone who needs our help and is struggling during these times of financial uncertainty. Equally, we will always strive to be both fair and equitable to people who are paying back the debts that they owe. We will continue to recover debt where the law allows, but we will also try to set recovery plans that are sustainable for the individual. If people are concerned about their benefit debt, I encourage them to contact the Department to discuss the help and support that might be available to them.

I thank the staff for their amazing work this year and I thank you, Madam Deputy Speaker, for your support throughout the year and in similar debates. I wish the hon. Gentleman and other Members present a good recess. I wish to pass on my huge thanks to the officials at DWP who have provided me with a huge amount of support over recent months. It is much appreciated and they do sterling work.

[Madam Deputy Speaker (Dame Eleanor Laing)]

As we approach the final Question before the summer, I join the Minister and everyone in the Chamber in wishing all Members and everyone who helps, supports and looks after us so well in the House a most peaceful and refreshing summer.

Question put and agreed to.

Work and Pensions

David Rutley Excerpts

Wednesday 13th July 2022 Ministerial Corrections

The following is an extract from the estimates day debate on the Cost of Living on 5 July 2022.

[David Rutley]

Throughout the pandemic, the Government acted decisively to protect lives and livelihoods, continually supporting individuals and businesses. Our social security system had a key component—universal credit—which provided a vital safety net for about 6 million people during the pandemic, and stood up to those testing times. We were able to prove, in a real-life environment, how resilient the system was, and I am incredibly proud of the work that the Government did to keep the country going. Our support package was worth a total of £407 billion between 2020 and 2022, and constituted the biggest single fiscal intervention since world war two.

[Official Report, 5 July 2022, Vol. 717, c. 766.]

Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for Macclesfield (David Rutley):

An error has been identified in my response to the debate.

The correct information should have been:

[David Rutley]

Our support package was worth up to £400 billion between 2020 and 2022, and constituted the biggest single fiscal intervention since world war two.



Unemployed People: Help into Work

The following is an extract from questions to the Secretary of state for Work and Pensions on 11 July 2022.

[Dan Jarvis (Barnsley Central) (Lab)]

I welcome the Minister to her new role. Does she share my concern at recent data showing up to 70,000 armed forces veterans in receipt of universal credit? Does she think that the 50 armed forces champions around the country, who are no doubt doing their absolute best, have the capacity to provide the support to those who have served our country so that they can weather the cost of living crisis?

Oral Answers to Questions

David Rutley Excerpts

Monday 11th July 2022 Commons Chamber

[Tom Randall (Gedling) (Con)]

1. What estimate she has made of the number of universal credit claimants in Gedling constituency who will receive a cost of living payment.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

Despite what has happened today, our spirits will not be dampened, and I am sure that the Chamber will be in full flow before we know it.

Universal credit claimants who received at least 1p during assessment periods that ended between 26 April and 25 May 2022 will be eligible for the first instalment of a cost of living payment worth £326. Latest statistics show that 4,800 households in Gedling were in receipt of universal credit in February 2022.

[Tom Randall]

Will my hon. Friend confirm when the more than 10,000 households in my Gedling constituency that are eligible for a cost of living payment should expect to receive that help from the Government?

[David Rutley]

The first instalment of the means-tested cost of living payment of £326 will be paid to eligible households from 14 July. I am pleased to remind colleagues that the payment is the first in a £15 billion package of measures to help households this year.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

2. What steps she is taking with Cabinet colleagues to help ensure that disabled people are supported in work.

--- Later in debate ---

[James Sunderland (Bracknell) (Con)]

5. What steps her Department is taking to reduce the level of fraud and error in the welfare system.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

In May this year, we published “Fighting Fraud in the Welfare System”, which details our proposals for reducing fraud and error, including legislative change and closer working across Government.

[James Sunderland]

The claimant rate in Bracknell is way below the national average. My constituency enjoys high employment, but we still have lots of job vacancies. What steps is the Department therefore taking to ensure that the remaining claimants are helped into work?

[David Rutley]

With a record 1.3 million vacancies, our focus is not only on tackling fraud but on continuing to help people to get back into work and to progress in their careers. A multi-billion-pound plan for jobs will continue to help our constituents and people across the UK to find work and progress in employment.

[Christian Matheson (City of Chester) (Lab)]

With regard to DWP issues, one of the largest problems I see in my mailbag is people who go for assessed benefits, such as the personal independence payment, being turned down at the first stage, having to go to appeal and, in huge numbers, winning on appeal. Why are there so many errors in the assessment process?

[David Rutley]

I thank the hon. Member—another good Cheshire MP—for his question. We are working hard to make the right decisions first time, every time. All health professionals undertaking assessments on behalf of the Department must be registered practitioners who have also met requirements around training and competence. We are working hard to make sure that we can further improve the quality of those assessments with clinical coaching and monthly performance meetings.

[Simon Fell (Barrow and Furness) (Con)]

6. What assessment she has made of the potential impact of the proposed closure of her Department’s office based in Phoenix House in Barrow-in-Furness on the ability of her Department to deliver specialist services in that area.

--- Later in debate ---

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

9. What support her Department is providing to benefit claimants to help meet increased living costs.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

Our £15 billion cost of living package includes a one-off £650 cost of living payment to low-income households in receipt of a means-tested benefit, a one-off £150 disability cost of living payment, and a £300 top-up to the winter fuel payment for pensioners. That is on top of a wider package of measures that takes the total Government help for households to £37 billion this year.

[Chris Stephens]

The Minister will be aware that during a recent Work and Pensions Committee meeting, the Secretary of State told me that she was not satisfied with the progress of bereavement benefits for cohabiting partners, and that she was meeting her officials the next day. When will the second remedial order be laid so that people who would qualify for that benefit can meet their living costs?

[David Rutley]

The hon. Member is a determined terrier on this issue, and understandably so. Important issues have been raised and it is vital that we get it right. We are carefully considering the issues and we will lay the order before the House as soon as we are able. In parallel, DWP officials are working at pace on implementation plans for the order, as I have discussed with him separately.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

11. What assessment she has made of the adequacy of the state pension in meeting the rising cost of living.

--- Later in debate ---

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

16. If she will make an assessment of the impact of the universal credit minimum income floor on performers and creative workers with unpredictable and fluctuating earnings.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

We recognise that earnings can fluctuate for all self-employed people, including performers and creative workers, and that it takes time to establish a business. That is why we offer a 12-month start-up period, giving claimants time and support to grow their earnings and reach their agreed minimum income floor before it is applied.

[Sir Robert Neill]

I understand the objective of the minimum income floor, to get into sustainable employment, but perhaps the Minister does not appreciate that for people in the performing arts and creative sectors it is not just a short-term period for which they have unpredictable and fluctuating incomes. By the nature of theatre, music, performance and so on, shows are cancelled at short notice. In fact, established performers with viable careers still get hit disproportionately by the minimum income floor. Would it not be sensible to collect the data on a sector-by-sector basis, so that we do not have a one-size-fits-all approach but can tailor it to achieve the objective he wants, which is to reach the need of each specific sector?

[David Rutley]

Universal credit supports self-employed people and the Department ensures fairness by treating all sectors equally. I have already talked about the 12-month start-up period, which is designed to strike the right balance between supporting claimants to make a success of their business and protecting public funds.

[Kerry McCarthy (Bristol East) (Lab)]

19. What steps her Department is taking to support people in receipt of disability benefits with the rising cost of living.

--- Later in debate ---

[Wendy Chamberlain (North East Fife) (LD)]

Last year there were 337,000 overpayments as a result of errors by the DWP, with the debt waived in only 10 cases. Claimants spend these funds in good faith, but are then required to make repayments that they simply cannot afford. Will the Minister agree to bring universal credit in line with legacy benefits by making no-fault debts non-repayable?

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

It is obviously important to ensure that we get our payments right, and we are working hard to do that, but it is also important to balance the needs of the taxpayer with those of benefit recipients. We do need to get that balance right.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The Department’s annual report, released last week, has revealed that the estimate of the number of women who have been short-changed over their retirement pensions has risen by a further 103,000. That is not quite the rosy impression that the Select Committee was given when the Secretary of State and the permanent secretary appeared before it recently. Just how long will these women have to wait before they receive their legal entitlement, and can the Minister confirm that there will not have to be a further upward revision of these estimates?

Cost of Living

David Rutley Excerpts

Tuesday 5th July 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

I am learning to share the joy that the hon. Member for Aberdeen North (Kirsty Blackman) takes in estimates day debates. I can feel the love and appreciation, predominantly from Opposition Members. It was good to see many hon. Members at the national prayer breakfast this morning, which I think we can all agree was a truly uplifting experience. I thank the right hon. Member for East Ham (Sir Stephen Timms) for opening this debate on behalf of the Work and Pensions Committee, which holds us regularly to account, as it should, and provides challenge. I thank members of the Committee and other right hon. and hon. Members for their contributions today.

The Government have provided and continue to provide help for households. Throughout the pandemic, the Government acted decisively to protect lives and livelihoods, continually supporting individuals and businesses. Our social security system had a key component—universal credit—which provided a vital safety net for about 6 million people during the pandemic, and stood up to those testing times. We were able to prove, in a real-life environment, how resilient the system was, and I am incredibly proud of the work that the Government did to keep the country going. Our support package was worth a total of £407 billion between 2020 and 2022, and constituted the biggest single fiscal intervention since world war two.

We are providing further support to help people with the cost of living. The current cost of living pressures have emerged from a series of economic shocks. We could understand and appreciate some of those shocks as demand increased while the effects of the pandemic receded, but what we clearly could not have anticipated were the sharp increases in energy costs that were driven by Russia’s absolutely unacceptable invasion of Ukraine. These global pressures are making it very difficult for households and businesses to absorb the rising cost of essentials in their budgets, which is why the Government are taking direct action to help the lowest-income households with the cost of living. However, fiscal responsibility is important to the country’s long-term prosperity, and Government intervention must therefore be timely, temporary and targeted to minimise the risk of further inflationary pressures.

[Debbie Abrahams]

I take on board some of the Minister’s points, but I must challenge him in one regard. He seems to have ignored what has been said about the inadequacy of the system before the pandemic and before the cost of living crisis. Would he care to comment on last week’s observation by the Institute for Fiscal Studies that if the Government had provided more targeted support for those in the greatest need, the national inflationary pressures would not have occurred?

[David Rutley]

We are having to deal with some challenging headwinds, as a result of the pandemic and now these inflationary pressures, but we have sought to take targeted measures. During the pandemic, especially the early stages, we focused particularly on those who were feeling the impact of changes in the employment market, which were immediate. Now we are focusing our efforts on targeted support for the people and households who will be most affected by inflationary pressures. The means of dealing with those are complex, and we are having to develop systems and processes to get the payments out quickly. Because of their nature they will never be 100% perfect, but we have taken other steps to support those who may not previously have been eligible for support. I shall say more about that shortly.

Our labour market policies are part of our plan to manage inflation, and that is a further reason for us to redouble our efforts to encourage more people to get into work and take advantage of the current buoyant labour market, with a record 1.3 million vacancies. Our multimillion-pound plan for jobs is helping many people into work with the kickstart scheme and the restart programme. Opposition Members do not always talk about the importance of work and the achievements that have been made in the labour market, so let me point out that last week our Way to Work campaign met its ambition of moving more than half a million people into work in under six months. That is an important achievement, not necessarily for the Government —although we welcome it—but in terms of the difference it will make to households throughout the country.

Moving into work and making work pay are core tenets of our strategy to build long-term growth and prosperity up and down the country, which is why we have introduced a number of work incentives. In particular, we have cut the universal credit taper rate from 63% to 55%, and have increased work allowances by £500 a year. Tomorrow, 6 July, we are cutting the national insurance threshold, a move that will be worth up to £330 a year for nearly 30 million working people.

Some Members have mentioned uprating, including the Select Committee Chair, the right hon. Member for East Ham. As part of the Department’s long-term approach, the Secretary of State completed her annual review of benefit and pension rates last year in the usual way, using well-worn, well-proven methods and processes. The state pension and the pension credit standard minimum guarantee were increased by 3.1%, the rate of inflation for the year to September 2021 as measured by the consumer prices index. As I think the right hon. Gentleman will know, we remain committed to implementing the state pension triple lock for the remainder of this Parliament, and on 26 May the Chancellor confirmed that it would be reinstated next year. All other benefits have also been increased this year in line with the consumer prices index of 3.1%. That approach has formed part of a long-standing convention. Since April 1987, all benefit uprating has been based on the increase in the relevant price inflation index in the 12 months to the previous September, helping claimants through the inflationary cycles.

[Sir Stephen Timms]

I am grateful to the Minister for setting out the commitment to uprating in line with inflation, but does he accept my earlier point about the need, in this very inflationary environment, to uprate the level of the benefit cap? Is he able to tell us whether it will be reviewed between now and next April?

[David Rutley]

I was going to come to that later, but as it is an important point, I will address it now.

As has been acknowledged today, none of the new one-off payments will be taken into account in the benefit cap, but there is a statutory duty to review the levels of the cap at least once every five years, and that will happen at the appropriate time. The current unusual economic period, with potentially counterintuitive and shifting trends, will need to be considered in the context of any decision about a review. The benefit cap provides a strong incentive and fairness for hard-working taxpayers and households, and encourages people to move into work. Last week, the Secretary of State told the Select Committee that she was taking advice on the exact timing and the approach. The statutory obligation to review the cap levels at least once a year in each Parliament changed on 24 March 2022, when the Fixed-term Parliaments Act 2011 was repealed, and the new obligation requiring the Secretary of State to review the levels at least once every five years means that the DWP now has until 2027 to complete a review. As I have said, however, she is seeking advice on that.

The annual review of benefits and pensions for the next tax year will begin in the autumn. To measure inflation, the Secretary of State will use the consumer prices index in the year to September. To measure earnings related to the pensions side of the equation, she will use average weekly earnings for the period from May to July. The uprated benefits and pensions will come into effect in April 2023.

[Wendy Chamberlain]

May I ask a very brief question? I am really thinking out loud. In that review, when looking at uprating, will the Government examine the implications of the energy price gap, which is clearly having a critical impact on people’s incomes?

[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.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With the leave of the House, I call Sir Stephen Timms to wind up briefly.

Cost of Living Payments: Contingencies Fun Advance

David Rutley Excerpts

Monday 4th July 2022 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

The Department for Work and Pensions has obtained approval for an advance from the Contingencies Fund of £2,477,600,000. This will enable the Department to administer the first cost of living payments from 14 July, before the Supply and Appropriation (Main Estimates) Bill, which includes these measures, gains Royal Assent.

The amount covered by the advance is for the first cost of living payment to eligible means tested claimants, worth £326, provided for by the Social Security (Additional Payments) Act.

The payments will deliver immediate support to around 8 million low-income families at a time of increased costs of living.

Parliamentary approval for additional resources of £2,477,600,000 for this new expenditure will be sought in the main estimate for the Department for Work and Pensions. Pending that approval, urgent expenditure estimated at £ 2,477,600,000 will be met by repayable cash advances from the Contingencies Fund.

The advance will be repaid at the earliest opportunity following Royal Assent of the Supply and Appropriation (Main Estimates) Bill.

[HCWS171]

Social Security (Additional Payments) Bill

David Rutley Excerpts

2nd reading
Wednesday 22nd June 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

I thank those who have contributed to this debate. I echo the points made by my right hon. Friend the Secretary of State to stress the importance of this urgent legislation to support people up and down the country. The sharp increase in the cost of living is a challenge shared across the globe due to the aftershocks of covid on global supply, amplified by Russia’s unacceptable invasion of Ukraine. This Bill is the flagship component of our bold package of cost of living additional payments which have been designed to help people to cope with increased costs.

We are grateful for the support of Opposition Front Benchers in facilitating the speedy progress of the legislation. It is vital that these payments get to the people who need them. I am also very grateful for the contributions that have highlighted that these are a serious response to serious challenges, such as those made by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), as well as by my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and my hon. Friend the Member for Amber Valley (Nigel Mills).

The support provided through this Bill is timely and comprehensive, and we are taking significant steps and targeting resource to support those in greatest need. The spirit of this Bill is in line with the approach that the Government have taken since the start of the pandemic, which has been shown to deliver for the people of this country in challenging times. We will continue to work hard to help people on low incomes get the support that they need.

We have worked hard through the vaccine roll-out, through the dedication of amazing people, to reopen society, and our economy has responded positively. There are record numbers of people in payroll employment, unemployment is just 3.8%, which is around the lowest level since the 1970s, and there are 1.3 million vacancies, which we are working diligently with employers and communities to fill. My hon. Friend the Member for Ashfield (Lee Anderson) will be pleased to know that, given his focus on work.

With all the work going on to help get people into work and progress in work, we recognise that people do need additional support in dealing with the cost of living challenges. That is why the Chancellor has set out his generous package, with another £15 billion of targeted support, which brings our total package to £35 billion this year alone. Of these additional payments, a particularly important one is the means-tested benefit that will provide a £650 one-off cost of living payment. It will be paid in two instalments to recipients entitled to qualifying means-tested benefits or tax credit. The first starts on 14 July and the second, of £324, later in the year. The hon. Member for Richmond Park (Sarah Olney) asked if there could be one payment. I understand the point she made, but we have consciously staggered the payments to help people on low incomes with their budgeting, which I hope she will welcome. The other important element of the Bill is providing disability cost of living payments of £150, which will go to 6 million people in the United Kingdom and will be paid in September.

We have deliberately kept the rules of the additional cost of living payments as simple as possible, because that is the way we can ensure that we develop the systems and processes required to make the payments at pace. I pay tribute to the hard work of officials across the Government to make that possible.

There are a number of contributions in the debate to which I need to respond. The benefit cap was raised by the right hon. Members for East Ham and for Leicester South (Jonathan Ashworth) and also by my hon. Friend the Member for Amber Valley. We have kept the payments very simple both for those receiving them and for Government systems. They are tax-free, they will not impact on benefit entitlement or the benefit cap, and they will be paid to people without the need for paperwork. They will be paid into people’s bank accounts.

The hon. Member for Aberdeen North (Kirsty Blackman) made points about uprating. Of course, as the Secretary of State said in her speech at the start of the debate, there will be an annual review of benefits and pensions for the tax year 2023-24, which will commence in the autumn as per convention.

Some hon. Members have highlighted the legacy systems and pensions, and asked why we cannot do uprating more frequently. I think we know that the legacy systems are not that agile. Of course, what we are trying to do and working very hard to do—recognising how flexible universal credit is and how resilient it has proven through the pandemic—is to move people through to universal credit by the end of 2024.

[Sir Stephen Timms]

I want to go back to what the Minister said about the benefit cap, and I welcome the point he made. Does he recognise that, in a very high inflation environment, there really is quite a compelling case for looking again at the level of the benefit cap for next year alongside the other benefit uprating matters?

[David Rutley]

There is a statutory duty to review benefit cap levels at least once every five years, and this will happen at the appropriate time. When the Secretary of State decides to undertake the review, she will consider the national economic situation and any other matters she considers relevant at that moment in time.

I reiterate that carer’s allowance is not a means-tested benefit. Nearly 60% of working-age people on carer’s allowance will get the cost of living payment as they are on means-tested benefits or disability benefits. Carer’s allowance recipients will benefit from the £400 per household universal support being provided to help with the cost of energy bills.

People who receive carer’s allowance may live in a household that will benefit from the Government’s support package. For example, they may live with someone who receives a means-tested benefit, a disability benefit or tax credits. If so, the household will benefit from the cost of living payment.

The hon. Member for Westminster North (Ms Buck) has asked me in a number of debates why this measure does not more fully reflect different family sizes and formations. The challenge is trying to get these payments out as fast as possible. To do that, we need to get the payments out to “single benefit units,” as they are described, and households. The important thing to highlight is that most low-income families will be able to receive the £150 council tax support and the energy bill support, on top of the work allowance taper and the increase in the national living wage.

It is not possible to distinguish between those who have a permanent increase in their earnings and those whose earnings are temporarily fluctuating. If a UC claimant’s income subsequently falls, they will return to having a positive award after the cut-off date, and they may be eligible for the second payment.

The right hon. Member for Leicester South talked about the minimum income floor, which ensures we do not prop up unproductive employment or self-employment indefinitely. There is a start-up period to protect newly self-employed people. Beyond that, having a minimum income floor is the right policy. If it means there is a nil UC payment, the claimant would not be entitled to the means-tested payment. However, they would get the £400 energy payment and the £150 council tax rebate, and they would potentially be eligible for the household support fund. It is worth recognising that there are paid employment opportunities out there, given the high level of vacancies.

We have heard about the take-up of pension credit, and I am sitting next to the expert, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman).

[Jonathan Ashworth]

Twinkle toes!

[David Rutley]

Whatever we want to call him, he will take this forward with aplomb, that is for sure.

There was a serious question about why the number of means-tested benefit recipients will fall in the second cost of living payment period, and it is because the projections reflect mortality rates. However, they do not reflect the important work many of us are doing to raise awareness, so hopefully many more people will claim it.

I think I have now answered most of the questions. The hon. Member for Richmond Park asked about industrial injuries disablement benefit, on which I would be more than willing to talk to her separately. We should not underestimate the additional payments from the household support fund to help people with the cost of essentials. The Chancellor announced another £500 million in his latest statement, and it will be available from October 2022 to March 2023.

In England, the £421 million household support fund will be administered by local authorities, and the devolved Administrations will receive £79 million through the Barnett formula. Importantly, there will be new guidance to local authorities on this latest extension of the household support fund to reflect the fact that some people who are not able to secure these additional payments will be able to go to their local council to secure support.

[Kirsty Blackman]

Some household support funds ran out months earlier than expected. Does the Minister expect the new funds will be sufficient and will last as long as they are supposed to last?

[David Rutley]

The current tranche of household support fund is on top of all the other benefits we have talked about. As we have said, these are substantial additional support payments that are being made available, and the £500 million on top is there to help those people who have further needs with the cost of essentials. Further guidance will be made available.

We are working at unparalleled pace to get money into people’s pockets. It is vital that we meet the deadline for Royal Assent by 30 June, after a fast-tracked passage, so that we do not create a strong risk that we fail to make payments in July. We want to make sure that the most vulnerable people in our society—people on low incomes, people with disabilities—get the payments and support that they need. As I have highlighted already, this payment package in total comes to £37 billion this year alone. The Bill helps to deliver key elements of the support package to those who need it most. I strongly support these measures and commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).

Social Security (Additional Payments) Bill: Money

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Social Security (Additional Payments) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) a sum not exceeding £326 to anyone who is entitled, in respect of 25 May 2022, to—

(a) universal credit or state pension credit,

(b) an income-based jobseeker’s allowance, an income-related employment and support allowance or income support, or

(c) working tax credit or child tax credit;

(2) a sum not exceeding £324 to anyone who is entitled, in respect of a day after 25 May 2022 and not later than 31 October 2022, to a benefit mentioned in paragraph (1);

(3) a sum which, together with any sum paid as mentioned in paragraph (1) or (2), does not exceed £650 to anyone who receives a working tax credit or child tax credit of at least £26 in the tax year 2022- 23;

(4) a sum not exceeding £150 to anyone who is entitled, in respect of 25 May 2022, to—

(a) a disability living allowance,

(b) a personal independence payment,

(c) an attendance allowance or a constant attendance allowance,

(d) an adult or child disability payment,

(e) an armed forces independence payment, or

(f) a mobility supplement.—(Michael Tomlinson.)

Question agreed to.

Social Security (Additional Payments) Bill

David Rutley Excerpts

Committee stage
Wednesday 22nd June 2022 Commons Chamber

[David Rutley]

We have had a useful debate on Second Reading and I welcome the chance for more detailed examination of the Bill in Committee of the whole House. We had an extensive debate, with some probing questions, so I will endeavour—with the support of the Opposition Front Bench and your permission, Mr Evans —to move as fast we can through the Committee stage.

Clause 1 will ensure that the £326 and £324 cost of living payments totalling £650 will be made to an individual or couple who have a qualifying entitlement to a social security benefit or tax credit. The clause also sets out the qualifying benefits and tax credits. Where a claimant is entitled to both a qualifying social security benefit and a tax credit, the social security benefit will be the qualifying benefit for the purpose of receiving a cost of living payment.

Clause 2 sets out who is eligible for the two payments that make up the £650 cost of living payment. It ensures that only those with the entitlement to a positive payment or award in respect of the passporting social security benefit or tax credit will receive a cost of living payment. The aim is to ensure that we target payments to those on the lowest incomes. The clause also defines the relevant eligibility period in relation to the qualifying days set out in clause 1.

[Nigel Mills]

The Minister will be aware that there are some situations in which an employer pays a month’s wages late, wages are paid on a four-weekly cycle and two payments are made in a month, rather than one, or a one-off bonus is paid in a certain month. Those situations could mean that someone who ordinarily gets a UC payment in a month has a month in which they are entitled to nothing. If that happened to be the month that was used for the qualifying payment in this situation, the person would miss out on the whole £326. Would the Minister be tempted to use a two-month period, so if someone gets at least 1p in either month they would get the £326, rather than risk the strange one-offs that could wipe out someone’s monthly payment?

[David Rutley]

I understand the point that my hon. Friend makes. We have already talked about fluctuating earnings. The important thing here is that we have had to define these eligibility periods to be able to get the payments out speedily, and we have also made sure that there is a protection mechanism. There is a wider package of support that is available other than just the £650 cost of living means-tested benefit. There is also the further funding of the household support fund, which will help these individuals.

Clause 3 addresses the situation in which a person has a qualifying entitlement to a social security benefit or a tax credit more than once. It ensures that, where the person is entitled to both universal credit and another social security benefit, they will receive the cost of living payment as a result of their entitlement to universal credit only.

Where a claimant is entitled to both a qualifying social security benefit and a tax credit, the social security benefit will be the qualifying benefit for the purpose of receiving a cost of living payment. Where a person is entitled to both child tax credit and working tax credit, but not a qualifying social security benefit, they will receive the cost of living payment as a result of their entitlement to child tax credit only. That will ensure that a person does not receive duplicate cost of living payments irrespective of whether they have a qualifying entitlement to more than one passported social security benefit or tax credit.

Clause 4 places a duty on Her Majesty’s Revenue and Customs to make a cost of living payment to people whose entitlement to qualifying tax credits only becomes apparent at a later date. The clause will ensure that those people will not miss out, which is a point that has been raised by others in this debate.

Clause 5 places a duty on the Secretary of State to make a disability cost of living payment of £150 to 6 million people who receive eligibility benefit in respect of 25 May 2022. This disability cost of living payment will support disabled people with the additional costs they may face. The clause also sets out the eligible benefits, or the qualifying benefits, for this particular additional payment. To be eligible, the person must have been entitled to a payment of one of these benefits in respect of 25 May 2022.

Clause 6 confirms that the administration rules used for each cost of living payment are the same as the benefit or payment that conferred the eligibility. Clause 7 provides for co-operation between the Secretary of State, the Department for Work and Pensions and HMRC in the delivery of cost of living payments. The scale and scope of the measure also require collaboration with other colleagues across government. Together, the bodies set out in the clause ensure that the intended recipients of the cost of living support are paid. There is a need to have data sharing to minimise the risk of duplicate payments and to support operational delivery.

On clause 8, some important points have been raised on this already on Second Reading. It ensures that the cost of living payments are disregarded for the purposes of tax and social security. I can confirm that the cost of living and the disability cost of living payments are exempt from tax. Payments will not affect a person’s entitlement to social security benefits or tax credits, either as capital or as income. I can also confirm that the payments will not be subject to the benefit cap.

[Nigel Mills]

When my hon. Friend says that they will be disregarded as capital, does that mean that, if somebody quite prudently puts the money in the bank and saves for their high energy bills in the winter, that would not take them over the £16,000 savings limit for universal credit? Effectively, they could ignore not just the receipt of the income, but that part of their savings as well if they were to treat them in that way.

[David Rutley]

Just to clarify, yes. That is the important thing. The clause ensures that every person who is entitled to a cost of living payment receives every penny, as all Members across the Chamber will want to see.

Clause 9 sets out the definition and interpretation of certain terms used in the Bill. Clause 10 explains the procedures for laying the regulations, previously referred to under the powers contained in clause 1(4), to specify the qualifying day for the second cost of living payment, which will be no later than 31 October, and clause 6(5), to apply and disapply regulations around the administration of payments, including overpayments and recovery, as is required. These provisions ensure that regulations made under the Bill can enable the efficient delivery of the second payment in the autumn. Finally, clause 11 defines the territorial extent of the Bill, whose provisions extend to England and Wales, Scotland and Northern Ireland. This ensures that the payments will be payable throughout the United Kingdom.

--- Later in debate ---

I will have more comments to make and questions to ask on Third Reading, but those are my questions and comments on the substance of the clauses in the Bill. One last thing: I thank the Government for including the Scottish payments for disability in the eligibility criteria. In Scotland, we are doing our best to have an excellent social security system on the basis of dignity and respect, and I appreciate the UK Government working with the Scottish Government to ensure that people in receipt of Scottish disability payments will also get the additional £150.

[David Rutley]

I am grateful for the contributions made; I will respond to them briefly. On Scottish qualifying benefits, yes, individuals will be able to receive the £150. As for the second payment, we are having to be careful in setting out the details definitively because of fraudulent behaviour. We certainly saw that with other payments made during the pandemic, so, now that we know the levels of fraud going on around benefits, we cannot be as explicit as perhaps we might have been. However, I assure hon. Members that consideration of the regulations on the second payment will take place after recess.

The other point made was about the timing of cycles. That is important, and we will do everything that we can to ensure that the cycles do not align, so that people who may not have been able to qualify for the first payment will be able to qualify. It will be difficult, because we are moving at extreme pace and with huge volumes of claimants, but we will do everything we can to assist those individuals.

It is not often that the hon. Member for Aberdeen North (Kirsty Blackman) says things that I completely support and agree with, but she did on this occasion. All of us, and particularly the Government, need to do a lot more on communication about these payments. There are lots of them, and they are targeted, so there is a duty on us to communicate clearly when these things are going to happen. However, there are reasons why we cannot be as clear on the timing of the second payment.

I understand the point made by the hon. Member for Westminster North (Ms Buck) on household composition. Sometimes, it would be great to have more data in these situations, but we have produced an impact analysis—that is not always the case in these situations—to ensure that colleagues can understand what is available for their constituents at constituency level. We have also seen the distribution analysis that looks at comparator groups. That is really important data, and I think that it helps to paint a pretty broad picture of how these payments will help vulnerable and low-income families across the United Kingdom.

The household support fund will indeed ensure that we can provide support to people with the cost of essentials. It is vital that local authorities do the work and report back to Government on the work that they have been doing. I hope that, with those points, I have made the case for hon. Members not to press their new clauses.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 11 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

4.50 pm

[David Rutley]

I beg to move, That the Bill be now read the Third time.

I thank the DWP Bill team and the cross-Government officials who have stood up to deliver this legislation and the payment mechanisms at pace. I also thank the House authorities, parliamentary staff, Clerks, Doorkeepers and Members across the House who have participated in today’s debates.

The Bill reflects the Government’s commitment to supporting low-income households and disabled people across the United Kingdom. Due to the current economic circumstances, many people need additional support to alleviate the financial pressures caused by the cost of living challenge. That is why this Government are providing a significant package of support worth £37 billion this year alone. It includes a £150 council tax rebate in England, £400 of support through the energy bills support scheme, a £650 cost of living payment for people entitled to qualifying means-tested benefits, a £150 disability cost of living payment for people entitled to a qualifying disability payment, and £300 in additional support for pensioners through a top-up to winter fuel payments. In practice this means people in receipt of UC or another qualifying means-tested benefit could receive £1,200 in additional support, which could increase to £1,350 if an individual also receives a qualifying disability benefit.

The Bill provides the Government with the necessary powers to administer the £650 cost of living payment and the £150 disability cost of living payment. These payments will provide targeted support to 8 million people including some pensioners and 6 million disabled people. We want to ensure these payments are in people’s bank accounts as soon as possible. We intend to begin phasing in payments from 14 July, subject to the Bill securing Royal Assent on 30 June.

This Bill is a further demonstration of the action this Government are taking to support people across the country and I commend it to the House.

Universal Basic Income

David Rutley Excerpts

Wednesday 15th June 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

It is an honour to serve with you in the Chair, Ms McVey—one of Cheshire’s finest. I am mindful of the time that is available, and I am sure you will give me a reminder as we go on.

It is an honour to be involved in the debate. I know that all Members have sincerely held views. It is also pretty clear that there is still quite a lot of debate about this subject, even within the Opposition parties. I look forward to seeing how that debate moves forward.

As Members are aware, our welfare system is centred on the support provided by universal credit, which offers a streamlined and simplified benefits system that supports those on low incomes, as well as those who are unemployed or who cannot work. Universal credit is a dynamic benefit that reflects people’s needs from month to month. It ensures that claimants are paid depending on their circumstances, with claimants’ awards changing depending on how much they earn from month to month. That is in strong contrast to a universal basic income, which does not fluctuate based on earnings in the same way but mandates a standard monthly allowance paid to all working-age adults—although I am mindful that there are still details to be worked through in the proposals from the Scottish Government.

I want to reassure colleagues—not least the hon. Member for Lanark and Hamilton East (Angela Crawley), whom I congratulate on securing the debate, but also my friend the hon. Member for Strangford (Jim Shannon), the hon. Member for Edinburgh West (Christine Jardine) and so on—that my views, and those of my hon. Friend the Member for Grantham and Stamford (Gareth Davies), are not ideologically held. They are concerns based on practical issues that, as we have heard in the debate—in particular during the past 10 or 15 minutes—need to be properly worked through.

We have real, evidence-based concerns about UBI on a practical basis because it does not provide the work incentive that we believe is vital in these sorts of systems. We have fundamental concerns, too, about what it might mean for targeting. Many of the UBI schemes that have been put in place are not targeted at those with greatest need. We feel that it is vital that targeted approaches are put in place. We saw that from the Chancellor on 26 May, when he set out our targeted measures to help those who need support through cost of living challenges, whether that is those on means-tested benefits, those on disability benefits or pensioners. By the way, that legislation will come to the House next week.

We have fundamental concerns, which are held not just by the Government but by many think-tanks—they were also expressed by the Work and Pensions Committee back in 2020. They are concerns based on evidence from trials in different parts of the world, such as Spain, Canada and, in particular, Finland. The Finnish Finance Minister concluded that the case was closed and there must be conditionality in the social security system.

It is for those reasons that we have concerns about UBI, whether in the form put forward initially by the Scottish Government or that in the Welsh Government’s planned pilot. I look forward to being a fly on the wall in the discussions between Opposition Front Benchers and the Welsh Government on these matters.

Oral Answers to Questions

David Rutley Excerpts

Monday 6th June 2022 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

9. What recent assessment she has made of the adequacy of universal credit payment levels in the context of the rise in the cost of living.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

We have announced £15 billion in further cost of living support, bringing our total package to £37 billion this year. Through the Government’s recent interventions, we are targeting those most in need. Our package equates to at least £1,200 for almost 8 million of the most vulnerable households, at a challenging time for many people.

[Liz Twist]

Earlier today, Carers Trust Tyne and Wear, which is based in my Blaydon constituency, launched its report on the experiences of unpaid carers during the pandemic and made the point that they are the unsung heroes of the pandemic. As we have heard, carers allowance is the lowest benefit of its kind, yet those who receive it will get no cost of living support. Does the Minister really believe that carers allowance is adequate in the face of the current cost of living crisis?

[David Rutley]

I echo what my right hon. Friend the Secretary of State has already said. I also highlight the fact that households that pay energy bills will receive the £400 cash grant to support them, and that if somebody with a disability lives in a household, there will be further funding with the £150 disability cost of living payment.

[Catherine West]

My constituent, who is severely sight impaired and has learning difficulties, lives with his mother, who is basically supplementing his day-to-day living from her own pensioner poverty pot, because of the relentless increase of inflation. What action will the Minister take urgently to address this terrible injustice, with one person who is already in poverty having to try to help her severely disabled son? Will he step in to assist in this terrible cost of living crisis?

[David Rutley]

I do not know the exact details of that case, but there may be opportunities in that household to explore pension credits. Of course, the Chancellor, with support from my right hon. Friend the Secretary of State, recently announced that the household support fund has also been increased by a further £500 million, until April next year.

[Richard Thomson]

The Scottish Government have doubled their game-changing Scottish child payment to £20 per child per week and will increase that to £25 by the end of the year, thereby supporting more than 100,000 children. Why will the UK Government not commit to increasing universal credit by an equivalent amount over the same timescale, and match that for and extend it to those on legacy benefits as well?

[David Rutley]

As we have highlighted, we have just set out a really significant increase in benefits payments as part of the package that is now worth £37 billion. As a result of the work we are doing not just to provide support but to enable people to get into work, there are now 200,000 fewer children in the UK who are in absolute poverty before housing costs.

[Mr Speaker]

I call the shadow Minister, Karen Buck.

[Ms Karen Buck (Westminster North) (Lab)]

The Government have been scrabbling to catch up with the escalating cost of living crisis. Any and all help for lower-income families is very welcome, but the fact is that the protection of those on universal credit and other benefits from the worst impacts of inflation depends on their having adequate and predictable levels of income. How is it acceptable, then, that 42% of universal credit claimants face deductions of, on average, £61 a month? What is the Minister going to do about that?

[David Rutley]

We have already set out our cost of living payments, which will benefit 8 million households in the UK. They are significant and much needed as we face these current cost of living challenges. It is also important to highlight that, over the past couple of years, we have seen the maximum amount that can be taken in deductions from benefits fall from 40% to 30% and now down to 25%.

[Alexander Stafford (Rother Valley) (Con)]

7. What steps she is taking to tackle unemployment in Rother Valley constituency.

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[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

18. What assessment she has made of future trends in the level of child poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

The latest official statistics show that 200,000 fewer children were on absolute low income before housing costs in 2020-21, compared with 2019-20. This Government take the cost of living very seriously, and that is why we have announced a new £15 billion support package targeted at those most in need, bringing the total cost of living support to £37 billion this year.

[Matthew Pennycook]

The Department’s own data makes it clear that rates of absolute child poverty after housing costs in families with three or more children rose by 300,000 between 2016-17 and 2019-20. With the situation for children in these families having worsened significantly, and with inflation biting, will the Government now finally reconsider their pernicious two-child policy?

[David Rutley]

The two-child policy plays an important role in balancing fairness between those receiving benefits and those who are not. However, as we have already said through much of the questioning today, we have put a huge package on the table, which will benefit families of all sizes. With a vibrant employment market, there are big opportunities for people not just to get into work, but to progress in work as well.

[Simon Jupp (East Devon) (Con)]

22. What recent progress her Department has made on allocating the household support fund to local authorities.

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

Local authorities in England have already received their allocations for the household support fund for April to September, and those have been published online. The Government recently announced a further £421 million increase for the household support fund, extending it from October to March 2023. Devolved Administrations will also receive a further £79 million to help households with the cost of essentials, bringing the total funding for this support to £1.5 billion across the United Kingdom.

[Simon Jupp]

Devon has been allocated a further £5 million to help households in the county with the cost of living crisis. What has the Secretary of State done to ensure that that money is directed at the right places in Devon to make sure that the support really helps?

[David Rutley]

Local authorities, with their local ties and knowledge, are best placed to identify those most in need. To assist local authorities with identifying those who may be in need of additional discretionary support, the DWP has introduced data shares with local authorities, which enables them to proactively identify individuals in need, as well as the supporting guidance for the scheme.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

The Government were able to switch on, and then switch off, the £20 universal credit uplift quite easily and efficiently. What conversations did the Minister have with Treasury colleagues about doing the same again for those on universal credit in the latest package of measures, rather than imposing another bureaucratic headache on already overstretched councils?

[David Rutley]

We have important guidance in place to support local authorities, but they are best placed to provide support for people in their individual localities. That is why the household support fund has been designed with that in mind.

[Mhairi Black (Paisley and Renfrewshire South) (SNP)]

24. What (a) information and (b) financial advice her Department provides to people approaching state pension age on deferring their entitlement to the state pension.

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[Laura Trott (Sevenoaks) (Con)]

T2. Parents across Sevenoaks and Swanley are facing rising childcare costs. I know that there is a huge amount of support available, so can the Secretary of State update the House on what she is doing to simplify the system so that it is clearer to people what they are entitled to and easier for people to claim?

[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

The Department is promoting the generous universal credit childcare costs offer as part of a wider national advertising campaign, and it is also working across Government to promote the full range of childcare support through the “Childcare Choices” website and by putting new guidance in place for our work coaches.

[Mr Speaker]

I call the shadow Secretary of State.

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[Claire Coutinho (East Surrey) (Con)]

T4. Many of my poorest households in East Surrey will be anxious about their energy bills and about what our cost of living package will mean for them. Now that we have had the Ofgem forecast, will the Minister confirm that the expected average increase in energy bills this year will be about £1,200 and that our package of support for anyone on means-tested benefits will mean that they receive £1,200?

[David Rutley]

It was vital that the Chancellor, the Cabinet and the Government looked at all the cost pressures arising in the economy. Once we knew what was happening with the energy price cap, it was possible for the Chancellor to start looking at what the options might be. We also needed to look at what payment mechanisms could be used to get the funding out to people. It is therefore entirely right that this package was put together and that it should have the impact that my hon. Friend has so clearly set out.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

T5.   My constituent is a paramedic and was on the frontline throughout the pandemic. He told me how much he was struggling with the cost of living crisis and how he feels cheated out of the household dream that if people worked hard, they could enjoy a good quality of life. He speaks for millions of NHS staff and many others. Does the Minister still think it was a good idea to raise taxes for working people this year?

[Mr David Davis (Haltemprice and Howden) (Con)]

T8. This year Government receipts are at a record high, and billions of pounds have rightly been announced in cost of living support. However, for those most in need—people on means-tested benefits—the support is somewhere between £1,000 and £1,200, which is roughly what they lost when the £20 universal credit uplift was withdrawn. The Joseph Rowntree Foundation has said that withdrawing the uplift would put half a million people into poverty. Citizens Advice has estimated that it has caused 2.3 million people to fall into debt. Times were tough during the covid crisis, but they are going to get tougher this year, so will the Minister look at the £20 that has been taken from universal credit, with a view to returning it by the time of the financial statement in the autumn?

[David Rutley]

I understand my right hon. Friend’s point, but it is important to highlight that the £20 uplift to universal credit was only ever a temporary measure to deal with the immediate impact of coronavirus. Since then we have been monitoring the situation and providing the support that is required at particular times, and that has led to the latest package, which totals £37 billion. As I said in other responses, it is vital to highlight that, at a time of record vacancies, there is a responsibility and requirement to help people to tackle poverty by being able to get into the workplace and to progress in employment as well.

[Ian Byrne (Liverpool, West Derby) (Lab)]

T6. Almost a fifth of pensioners are living in poverty under this Government. With the abandonment of the triple lock, a real-terms cut to their state pension—already one of the lowest in Europe, at around £500—bills rising by £1,000 and food costs spiralling, will the Minister acknowledge that the measures announced by the Chancellor will not stop many pensioners in West Derby being plunged into poverty over the coming months?

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[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

According to the Child Poverty Action Group, each month some 4,300 households in my constituency are receiving an average of £57 less than they are entitled to because of automatic deductions from their universal credit, and that affects about 3,700 children. What action is the Department taking to reform the deduction system so that innocent children are not disadvantaged?

[David Rutley]

As I said earlier, we put forward policies that have reduced deductions from 40% to 30% and now to 25%. Those policies and the support available for families are designed to help tackle child poverty, along with enabling people to get into work and to progress in employment.

[Mr Speaker]

I call the Chair of the Work and Pensions Committee, Sir Stephen Timms.