Social Security (Additional Payments) (No. 2) Bill

Debbie Abrahams Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[Mel Stride]

My hon. Friend is entirely right, and I am pleased to hear his personal experience of the measure. He is right to point out that there is great flexibility in how it can be administered by local authorities. We place a particular emphasis on making sure that that assistance goes to those who may not have benefited from the measures I am outlining, but who are still in need.

In addition to the taper, we recognise that pensioners need additional support where it is appropriate. My Department has thrown itself into promoting the uptake of pension credit. The Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman), did such sterling work as the Pensions Minister and, more recently, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott), has promoted pension credit with such vigour on social media and radio that there has been a 73% increase in applications for pension credit compared with this time last year.

My Department has an excellent record on unemployment. Disabled employment is up by 1.3 million since 2017. We have arrived at our target for the employment of disabled people a full five years earlier than originally planned.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I just wonder whether the Secretary of State would like to comment on the disability employment gap.

[Mel Stride]

As the hon. Lady will know, the disability employment gap is a key measure on which we are focused. It has more recently increased a little, which I think is the point that she is alluding to, but generally, prior to that it was on a downward trend. The Department is very focused on making sure that we get it as low as we possibly can.

In the last year we also had the energy price guarantee, which ensured that average energy bills came in at £2,500 on average, and £400 off energy bills directly paid to bill payers. In England, we had the council tax discounts for bands A to D. We had two further extensions to the household support fund, as was just referred to by my hon. Friend the Member for Bosworth (Dr Evans). For the devolved Administrations, there have been Barnett consequentials of £1.5 billion since October 2021. I am very proud of our record and the wide package that has already been deployed, which is valued at £37 billion.

That brings me to this year, when we intend to go still further. As the Prime Minister has stated, one of our key aims as a Government is to reduce inflation by 50% by the end of this year. I am confident that we will achieve that, but we recognise that, despite the relief that that will provide to millions up and down the country, we need to provide further support payments. There will be three payments totalling £900 for around 8 million low-income households. Like last year, there will be a £300 payment alongside the winter fuel payment of £300 to pensioners, and a £150 payment to disabled people. The delivery of the support for pensioners will be via regulation and is not the subject of the Bill, but the other payments will be delivered through this legislation.

The Bill sets out the basis of qualification for the payments and who makes the payments, whether that is me and the DWP or His Majesty’s Revenue and Customs in the case of, for example, tax credits. It makes provision as to how the timing of the payments will be set out and it exempts the payments from charges to taxation. It sets out the arrangements that will ensure that data can be transferred and shared between my Department and HMRC, so that all the payments run smoothly and we avoid duplication and minimise fraud.

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[Jerome Mayhew (Broadland) (Con)]

I rise to support this enabling Bill, which will enable the payment of additional cost of living support for many millions of the poorest in society. Before I go into the detail of the proposals, it will be useful to set the debate into context, which is of course that the best welfare, where it is accessible, is access to a job. We know the obvious financial implications of being in employment, but there are equally important mental health benefits.

[Debbie Abrahams]

Can the hon. Gentleman explain then why 4.2 million people in work are in poverty and six out of 10 people in a low-paid job will still be in a low-paid job 10 years later?

[Jerome Mayhew]

I am not saying that employment of any description is the silver bullet. We have phased movement under universal credit, because it is a tapering benefit from unemployment through additional support from Government that diminishes as pay rates increase. Most hon. Members would accept that that is the right approach, but I also accept that the hon. Lady rightly drew attention earlier to the disability employment gap. Although I recognise the recent unwelcome upward tick in that, the direction of travel and the long-term trend is downward, which I wholeheartedly welcome.

In my constituency of Broadland, the universal credit claimant rate is only 2%. Bearing in mind that a percentage of those will be in employment, in my part of the country at least we benefit from full functional employment. It is a feather in the Government’s cap that the national average universal credit claimant rate is just 3.6%; we see that in particular when we look at youth unemployment. In Broadland, the rate among the 18 to 24-year-old cohort—who are often hard to employ and most quickly affected by economic downturn—is just 3.6%, whereas nationally it is 4.6%. It is worth taking a moment to make some international comparisons. In France, the rate of unemployment among 16 to 24-year-olds is more than 20%, and the equivalent figure for Spain is about 35%. Something is happening in the United Kingdom that is not happening on the European mainland. My submission is that it is because Conservative policies are leading to fuller employment, particularly in those cohorts that have traditionally found it harder to gain and retain employment. That is down to the brave decisions of this and former Conservative Administrations in creating a dynamic labour market that has allowed and encouraged employment and, yes, the ability to reduce the employment count for employers. That has led to fuller employment in this country than there has been in areas that are perhaps more unionised, where once someone is in the club their job is protected but that comes at the cost of the young and the poorest.

The Government have been right to focus on a dynamic labour market, in addition to direct Government support in schemes such as the £2 billion kickstart scheme, which worked so well in the aftermath of the pandemic, and the restart scheme. It cost an eye-watering £2.9 billion, but UC claimants of nine months or more got additional focus from their Jobcentre Plus work coaches to help them step back into employment, countering the terrible drain on the country and the individual cost to people’s lives of long-term unemployment.

On work coaches, this Government have doubled their number in 2021, increasing it by 13,500. I have seen these work coaches at work in my constituency, at the Jobcentre Plus in Fakenham. I pay particular tribute to all the staff members there, who have a huge amount of enthusiasm and expertise, and are going the extra mile day in, day out to get the long-term unemployed in my area into jobs. The total number of UC claimants in Broadland is 1,130. They are not all long-term unemployed, but, in a period of full employment, we just need an extra bit of help to get that hardcore group into the jobs, which are available. The additional work coaches are exactly the right way to go, which is bearing fruit.

The apprenticeship schemes are also being supported and encouraged by the Government. Members from around the House will recall that two weeks ago it was National Apprenticeship Week. To celebrate that and encourage its further uptake, I visited a business in my constituency, Ben Burgess, which many in the east will recognise as agricultural machinery suppliers of great repute. At any one time, the company has about 30 apprenticeships, which, typically, start at the age of 16. The apprentices get taken through training both on the job and at a national training facility in the midlands, where they have university-style education as well as on-the-job training in their place of employment. They come out of that scheme with a machinery technician qualification, a job and a career, leading to a really fulfilling lifestyle. That is exactly the kind of thing that the Government should be and are supporting.

I cannot move on from this area of my speech without a little plug for my jobs fair, which is taking place at Taverham High School on 10 March. It is one of a series that I have been holding and will continue to hold. My first one was in Fakenham, in the aftermath of the covid pandemic, when my assumption was that we would have a tidal wave of unemployment. The estimate at the time was that we would have 12% unemployment. I set in place a jobs fair to try to solve that problem, but because of the incredible intervention of the then Chancellor, now Prime Minister, we did not have 12% unemployment. The Government put their arms around the economy, supported people in their jobs and the potential crisis did not materialise.

On the detail of the proposed legislation, I fully support the uplift in the national living wage by 9.7%, taking it to £10.42 an hour, and not just for those whose employment is at the national living wage. As a former employer, I know very well that the national living wage is the base upon which many, many layers of employment judge their own job offers. We have created the conditions where there is full functional employment in the vast majority of the country, so employers are having to compete for staff. One way—it is not the only way—to compete is on pay. As the national living wage base rises, the gradated competition in pay rises as well, and that has a really beneficial effect.

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[Angela Richardson (Guildford) (Con)]

I rise to speak in support of this legislation. I warmly welcome the extra cost of living measures that it provides, which will benefit my constituents in Guildford and Cranleigh and in our villages. Colleagues across the House have mentioned the context in which we are debating these necessary measures, which is that we are facing tough economic headwinds because of global energy and food supply shocks resulting from the appalling Russian invasion of Ukraine. The Chancellor was right to take tough but necessary decisions in the autumn statement and subsequently, in order to put our public finances on a sustainable path while ensuring that those in need are supported. An inflation rate not seen since the early 1980s, fuelled by the rise in energy and food prices, has had a disproportionate impact on lower income households across the country, and I know that the Chancellor will do all he can to ensure that they are supported through this challenging period until inflation is back at a sustainable level. This Government understand the current pressure and are taking unprecedented steps to protect households from the rising cost of living, spending almost £70 billion to help households through to 2024.

Although my Guildford constituency is thought of as an affluent area, I know from my surgeries, from my inbox and from speaking to residents on the doorstep that there are many who, over the past few months, have faced rising bills with great anxiety. However, they are always incredibly grateful for the important financial help provided by this Government.

As this Government and Prime Minister work diligently to halve inflation by the end of this year and to ease the pressure of price rises on families, we must support those facing challenges in the here and now, but we also know that economic growth is what gives people financial security. The Prime Minister is right to make growth one of his five key priorities.

This Bill will support more than 8 million families across the country, including almost 7,000 families in Guildford, with at least £900-worth of cost of living payments split into three instalments. These payments, the first of which will be received at the end of April, followed by payments in October 2023 and February 2024, will go to households on means-tested benefits.

[Debbie Abrahams]

Will the hon. Lady comment on the adequacy of social security, including the additional payments in this Bill, given that 4.2 million people in work, many of whom receive support, are still in poverty?

[Angela Richardson]

The hon. Lady is right to ask that question, but across these many measures, the Government are having to work within quite constrained parameters. I know that the Chancellor and the Secretary of State for Work and Pensions will be looking at it as we head into the next fiscal event. It is right that we are providing this extensive support, but we also have the equal challenge of making sure we get inflation down so that people are able to use their funds more effectively, rather than being hit by the very high food and energy prices we have discussed.

In addition to the 8 million families supported with further payments, more than 6.5 million people in receipt of disability payments, including 6,300 in Guildford, will receive £150 to help tackle the rising cost of equipment. I urge struggling households and families in my constituency to check the Government’s website to see what support they are able to access. My office is always on hand to guide constituents towards the appropriate support channels.

This Bill is part of the Government’s wider package of measures to ease the cost of living, which will be worth £26 billion in 2023-24. I welcome the fact that pensioners who are entitled to the winter fuel payment will receive an extra £300 this winter, providing certainty to many households through to spring 2024. I urge all pensioners to check their eligibility for pension credit so that they can unlock these cost of living payments.

I also welcome the announcement of an extension to the household support fund, including more than £10 million of extra funding for Surrey, which will help local authorities to support the most vulnerable households. In the period from October 2022 to March 2023, Surrey County Council used its allocated funding from the household support fund to enable the continued provision of food vouchers during the October, December and February school holidays; to provide energy support to care leavers; to place additional funding into the Surrey crisis fund; to give money to food banks and community fridges; to provide payments to families with disabled children; and to give funds to charities that work with vulnerable and less well served communities. The remaining funds will be distributed by borough councils to households identified as financially struggling.

It is important to think back to covid and this past winter, to understand that it was right that the Government gave money directly to councils that know which are their most vulnerable families and can get support directly to them.

In recent months, the Government have: put in place the largest cash increase in the national living wage, to £10.42 an hour, benefiting 2 million workers; announced the uprating of benefits, with the state pension and the benefit cap increasing by 10.1% from April; and delivered the energy price guarantee, protecting households from sky-high energy bills caused by Putin’s barbaric war in Ukraine, which represents one of the largest support packages in Europe.

The cost of living payments being introduced today will go some way in easing the rising costs facing families and those on disability benefits, but, in the longer term, we must combat the challenge of inflation. This Government’s plan to halve inflation by the end of 2023 will benefit everyone across the country, including my constituents in Guildford, Cranleigh and our villages. I am confident that this Government will continue to support those who are in need, and I welcome the steps that are being taken here today.

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[Mims Davies]

I will come onto the point about sanctions shortly. I know there is confusion among those on the Opposition Benches about whether they support sanctions, but this is about a safety net; it is about progressing and supporting people and helping them to go forward. In reality, when people are sanctioned, it does not just happen. There are processes to go through where work coaches try to engage and support people. If people are disconnected and they fail to attend, that is why they are sanctioned, which is often the reason they then re-engage, talk to their work coach and get involved with what is going on. That helps us to get under the skin of what is holding them back, and I think that is important. I assume from his question that there is a fundamental disagreement, but I will not hold it against him.

My hon. Friend the Member for Broadland (Jerome Mayhew) very kindly turned the focus on to employment. Having been Employment Minister for three years, how can I resist responding to that? A dynamic labour market is important, including the work around furlough, the plan for jobs, and the kickstart and restart schemes—I designed many of those programmes, so it is always nice to have a compliment. In reality, our talented new work coaches—those who we found, recruited and brought into the DWP because of the impact of the pandemic—have been transformational. The other side of this debate is important—it is jobs, it is livelihoods, it is careers, it is opportunities, and it is making sure that people, when at their most vulnerable, know that they have that safety net. I wish my hon. Friend good luck with his jobs fair on 10 March. I have my second in Burgess Hill—this is a great opportunity to mention it.

The right hon. Member for Hayes and Harlington (John McDonnell) spoke up for his constituents and their fuel requirements. Of course, the energy price guarantee will be key to protecting customers and our constituents, and the household support fund will be a key driver as well. It is absolutely right to focus on our constituents. I have worked very strongly on the household support fund to complement this piece of legislation, working with the Local Government Association, to ensure that we support everyone who comes to us in any situation. I was pleased to hear him talk about the rewards of work and why they matter too. We know that it is more than just a pay packet that we are looking for.

My hon. Friend the Member for Guildford (Angela Richardson) spoke about households being squeezed, the cost of living website, and, of course, the fact that the help-to-claim service is there and that all constituencies—no matter how leafy and lovely they may seem—have pockets of challenge. It is absolutely right that we act when we see the impact of a global squeeze. That is absolutely the mark of what we stand for at the DWP. There is the £10 million going to Surrey, and the almost £10 million going to West Sussex just next door to my constituency. What has come out of this and the work that we have done during covid? It is our work with local authorities, which I must commend for stepping up and doing a magnificent job in helping people. They know where those pockets of support are needed. I thank those local offices.

I will quickly whip through some of the challenges made about the legislation. On the adequacy point, inflation is forecast to remain high over the next few months, meaning that many people will need this additional support, but it is important to remember that these payments are just one element announced by the Chancellor back in November. The broader uprating will make a difference.

On the points about housing support, I am working with colleagues at the Department for Levelling Up, Housing and Communities on quality and provision. My party strongly continues to focus on opening up the benefits and freedom of home ownership and all that it gives. The 2020 local housing allowance rates were raised to the 30th percentile—a significant investment of £30 billion—and we have since maintained that increase. Of course, we know that housing costs are incredibly challenging, particularly for renters. That is something that we are working on and taking forward in through the housing taskforce.

[Debbie Abrahams]

Can the Minister say to what extent the measures in the Bill will replace or add to the £34 billion that has been taken out of support for working-age people since 2010?

[Mims Davies]

I understand the hon. Lady’s point, but it is not necessarily this Bill that will answer the challenges that some of our constituents face. It deals with issues that they face in skills, progression and other areas that have been holding them back. Tax credits, for example, quite often trap people in 16-hour contracts when they would be much better off moving on to universal credit and taking more hours, training and opportunities. I say to anybody listening: “Take the opportunities to see what is out there.”

The hon. Member for Glasgow East talked about the disability cost of living payments in the Bill. They are not disability benefits themselves, but rather payments relating to the cost of living increases that a disabled person may face. I hope that answers his point. I have covered some of the issues regarding Scotland, so I will move on swiftly, if I may.

In regard to the point from my hon. Friend the Member for Amber Valley (Nigel Mills) about the 1p payment, we successfully delivered tens of millions of payments in 2022 by keeping the rules simple. That included a simple and clear rule that the person must have been entitled to a payment of at least 1p, as he pointed out. That ensures that those with other income sources are not eligible for means-tested benefits and are not included, nor are suspended benefit claims that include risk of fraud.

I reiterate the point around the household support fund and the three payments. They hopefully mean that if people have fluctuating payments, they have a chance to be eligible once again. That was pointed out by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), who is not in his place, in terms of how we address those hard edges. Extending the eligibility dates would involve making more payments to those who had permanently increased their earnings, and that is the challenge. That is not the intention of the cost of living payments, which are deliberately targeted at those on the lowest incomes.

My hon. Friend the Member for Amber Valley also mentioned making more payments, and I would like to address that these payments are being made outside our usual benefit processing systems, using our ad hoc payment system. That system has a limit on the number of payments it can make each day, and it can only make one type of payment at one time. That means a team of specialists have to extract and clean the data to make the payments. Having three means-tested cost of living payments and a single disability cost of living payment balances the spread of support throughout the year, but it does not compromise the core benefit delivery, and I hope that answers my hon. Friend’s questions.

I will just quickly answer the question on larger families and then conclude. In regard to how we look at supporting larger families, as I hopefully have outlined, families on means-tested benefits will benefit from our planned uprating of 10.1% from April, meaning that families subject to the benefit cap will also see an increase of 10.1%. In reality, for families who need additional help, we are extending the support through the household support fund. Again, that is linked to the issues around the ad hoc payment system.

I think I have covered most of the points in the debate, but I just quickly mention the sanctions point and reiterate my earlier point to the hon. Member for Glasgow East that sanctioned claimants who re-engage will be supported.

I will conclude, because I feel that people are desperate to be in the Lobbies. This Government demonstrate our commitment to supporting those in the greatest need and going through the greatest challenge with the increased cost of living. It is vital that we move ahead quickly with the legislation, so that we can begin to make those first payments in the spring. I look forward to further discussion as the Bill proceeds through its next stages, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Social Security (Additional Payments) (No. 2) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Social Security (Additional Payments) (No. 2) Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and on Third Reading

(2) Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.

(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.

Other proceedings

(5) Any other proceedings on the Bill may be programmed.—(Mike Wood.)

Question agreed to.

SOCIAL SECURITY (ADDITIONAL PAYMENTS) (NO. 2) BILL (MONEY)

King’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) (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) a sum not exceeding £301 to anyone who is entitled, in respect of a day (the “first qualifying day”) not later than 30 April 2023, 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 £300 to anyone who is entitled, in respect of a day (the “second qualifying day”) after the first qualifying day but not later than 31 October 2023, to a benefit mentioned in paragraph (1);

(3) a sum not exceeding £299 to anyone who is entitled, in respect of a day after the second qualifying day but not later than 29 February 2024, to a benefit mentioned in paragraph (1);

(4) a sum not exceeding £150 to anyone who is entitled, in respect of a day not later than 30 June 2023, 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.—(Mike Wood.)

Question agreed to.