Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)Department Debates - View all Ed Davey's debates with the Department for Work and Pensions
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Ed Davey (Kingston and Surbiton) (LD)
I beg to move,
That this House recognises the remarkable contributions that the UK’s 5.7 million unpaid carers make to society and the huge financial challenges many face; notes with deep concern that tens of thousands of carers are unfairly punished for overpayments of Carer’s Allowance due to the £151-a-week earnings limit; believes that carers should not be forced to face the stress, humiliation and fear caused by demands for repayments of Carer’s Allowance; condemns the previous Government for failing to address this scandal; calls on the Government to write-off existing overpayments immediately, raise the Carer’s Allowance earnings limit and introduce a taper to end the unfair cliff edge; and further calls on the Government to conduct a comprehensive review of support for carers to help people juggle care and work.
It is a great honour to open the first full Liberal Democrat Opposition day in 15 years. I assure the House that we will not waste our precious debates on the sort of political game playing to which Opposition days often fall victim. Instead, we will use them to focus on the things that really matter to ordinary people, and to tell Ministers directly about the real problems that our constituents face.
That brings me to our first motion on unpaid carers, or family carers as I prefer to say. They are people looking after relatives, friends or neighbours, and they do a remarkable and important job. Looking after someone they love can be rewarding and full of love—whether they are a parent of a disabled child, a teenager looking after a terminally ill parent or a close relative of an elderly family member—but it is far from glamorous. Caring for a family member can be relentless and exhausting.
As the House knows, I have been a carer for much of my life but, more importantly, I have also had the great privilege of meeting and hearing from thousands of carers in my constituency and across the United Kingdom. I have some understanding of the challenges that carers face every single day: the worries, the exhaustion, the lack of breaks and the financial difficulties, too. Britain’s carers deserve our support.
Chris Vince (Harlow) (Lab/Co-op)
I hope that the right hon. Gentleman will take this as a friendly intervention, as he knows what I am going to say. He talks about family carers and mentioned teenagers who support loved ones, which is important, but does he agree that we should recognise the role of young carers? Having worked with them, I know that they can be as young as five years old and supporting a loved one or family member.
Ed Davey
The hon. Member is absolutely right. I include young carers; indeed, I am a member of the all-party parliamentary group on young carers and young adult carers, and I invite him to join us. It is chaired by a well-established Labour Member. Young carers are very much part of our thinking, but for some, who will not be young—
Mr Speaker
Order. May I say to the hon. Member for Reading West and Mid Berkshire (Olivia Bailey), please do not walk in front of Members when they are intervening? Please, can we think of others?
Jim Shannon (Strangford) (DUP)
I commend the right hon. Gentleman for his endeavours in the debate, which we support, and on his compassion for carers given his own experience. Someone who cares for their parents all day and then works a couple of hours in the evening is precluded from receiving carer’s allowance. Does the right hon. Gentleman agree that those people, who do not get carer’s allowance because they happen to work a few hours, should qualify?
Ed Davey
I am grateful to the hon. Gentleman for that point. That should certainly be part of the review, but one or two other issues, which I will talk about, are critical to reform probably even before that.
At just £81.90 a week, carer’s allowance is the lowest benefit of its kind. For someone doing 35 hours of caring a week—the minimum period for eligibility—that is just £2.34 an hour. It is not just the low rate of the carer’s allowance that worries me but the fact that the eligibility rules are inflexible and very badly designed, chief among them being the earnings limit of £151 a week. Even for someone on minimum wage, that is just 13 hours and 20 minutes a week. The earning limit operates like a cliff edge. As soon as someone makes £151.01 a week, they lose the whole carer’s allowance—every penny of the £81.90. It acts as a significant barrier and a major disincentive to work. It means carers on low incomes cannot work a bit more to help make ends meet, so it is bad for them, bad for the person they are caring for, bad for their employers and bad for the economy.
But here is where things get worse. There are tens of thousands of carers who go slightly over the earnings limit, mostly without realising it. Maybe they pick up an extra shift, happen to get an end-of-year bonus, or understandably do not realise the way carer’s allowance operates in such a daft way. Even though the Department for Work and Pensions gets regular alerts from His Majesty’s Revenue and Customs when people go over the earnings limit, it has not been telling carers and it keeps paying carer’s allowance until one day, out of the blue, the carer gets hit with demands to repay those overpayments, which may have built up over months and years due to the DWP’s own inaction.
Back in July, I told the Prime Minister about one of my constituents, Andrea, who lives in Chessington. She is a full-time carer for her mum. Back in 2019, Andrea decided to go back to work part-time in a charity shop—mainly for her mental health, she told me. She informed the DWP at the time and it continued her payments. Five years later, it wrote to her and said that no, she now had to repay £4,600. Andrea says she feels “harassed, bullied and overwhelmed.” She now does just six hours’ unpaid work a month to avoid going over the earnings limit and getting into more debt. She says the whole thing makes her “want to give up work and give up caring.”
Mr Adnan Hussain (Blackburn) (Ind)
The right hon. Gentleman refers to mental health. Romi Taylor is a 16-year-old who cares for her mother, who has chronic obstructive pulmonary disease. Romi recently won an award at the BBC Radio Lancashire’s Make a Difference awards—you were there, Mr Speaker. Many carers find caring for a loved one to be a lonely place. This is a 16-year-old taking care of her mother and not having time with her friends. Does the right hon. Gentleman agree that carers need to be recognised, and that the support they require beyond benefits, including mental health support, should be—
Mr Speaker
Order. May I just say to my constituency neighbour that interventions are meant to be short? I have a list, so if you want to make a speech I am more than happy because these contributions do matter, but try not to make a speech through interventions. Don’t follow Mr Shannon—he will mislead you. [Laughter.]
Ed Davey
Thank you, Mr Speaker. The hon. Gentleman is of course right and I pay tribute to his constituent, who was lucky enough to be presented the award by Mr Speaker. He is right about the mental health of carers. NHS data shows that the mental health of carers is twice as poor as it is for the population at large because of the isolation, so that issue is absolutely a part of this debate.
Sir Julian Lewis
Before the right hon. Gentleman resumes his narrative—he speaks with huge authority on this subject—can he underline what he told the House before the previous intervention? This was a case where someone reported what they were doing, was wrongly told it was okay to proceed and was then hit with a bill for thousands of pounds retrospectively. Surely that is incompetence and maladministration. Is there not any way for that person to have recourse to justice?
Ed Davey
The right hon. Gentleman makes exactly the right point and as her MP I am pursuing that line of argument, but we need a change of culture and attitude at the DWP to be able to proceed with these cases on behalf of our constituents. She told me that the whole thing makes her want to give up caring and give up working. That is how affected she has been. Who is it helping, when carers feel like that?
I am sure that someone, somewhere in the DWP or the Treasury, thinks this sort of penny pinching saves the Government money, but they could not be more wrong. It is millions of carers like Andrea who save the Government money: £162 billion a year, according to Carers UK, through the vital work they do for free. When badly designed Government policies fail to support carers and instead push them over the edge, the real cost—an enormous cost—is to taxpayers and the economy.
There are so many stories like Andrea’s. Government figures suggest that more than 130,000 people have outstanding carer’s allowance debt, some going back years. According to the DWP’s own figures, last year alone there were 34,500 overpayments due to the earnings limit. We have heard how carers have even been threatened with prosecution. This is a terrible scandal: tens of thousands of carers becoming victims of a system that is supposed to be there to support them.
Although the stories we have heard in recent months have been truly shocking, they are not new. The Work and Pensions Committee launched an inquiry into this issue almost six years ago, back in 2018. The National Audit Office published its own report in 2019. The last Government should have acted then, but they did nothing. I raised it with the last Prime Minister. He did nothing. Conservative Ministers failed to tackle it for the entirety of the last Parliament. They just passed it on to the new Government, as yet another part of their legacy.
I raised the matter, therefore, at the new Prime Minister’s first oral questions in July. Although he was non-committal, I am genuinely pleased and grateful that Ministers have now announced a review, at least into the scandal of carer’s allowance overpayments. Whether that was in response to our motion, I will let others decide. I hope the Minister will say a lot more about the review when she speaks and how the Government are thinking about that. I hope the debate can be seen as the first input to, or kick-off of, that review. I certainly hope the Minister will make it clear that the review will not be a repeat of the type of review we had in the last Parliament, when Conservative reviews were set up primarily for delay and kicking issues into the long grass.
As I hinted at during today’s Question Time, my concern about the review is that the evidence to make a decision is already well-founded, with two recent Select Committee reports and mountains of evidence immediately available from organisations such as Carers UK or Carers Trust, and the National Audit Office carrying out its second review in just five years over the last four months. I ask the Secretary of State, therefore, to reshape the review that she has announced, because it is self-evident that the vast majority of overpayments of carer’s allowance should be written off immediately. I accept that there may be a few cases of genuine fraud in which that would not be appropriate, but the DWP should not be persecuting tens of thousands of carers whose overpayments were caused by the crazy cliff edge in the current carer’s allowance system, and by the DWP’s own incompetence in failing to notify them of overpayments immediately.
Some changes could be made to the rules that are just common sense, making it easier for carers to juggle work and care and thus boost our economy, such as raising the earnings limit and replacing the cliff edge with a taper. There are changes that do not need a long review; there are decisions that can be taken now, or at least very quickly. However, as our motion says, we need to go further for carers than these obvious and relatively simple decisions. The Government should conduct a full-scale review of all support for carers, so that we can make it easier for them to carry on caring and to juggle caring with work. That will be better for them, better for their loved ones, and better for our economy.
I urge the House to pass the motion. Let us not allow carers to be forgotten and ignored any longer.
Alison McGovern
In a moment.
If the results of the pilot are positive, that will be the first step towards addressing the overpayments problem. I know that we need to do much more, and there are many other issues, but it will be a good start.
Ed Davey
I am grateful to the Minister for what she has just said, but will she confirm that the remit of the review will go further into the structure of carer’s allowance? Many of us think that the earnings limit is way too low, and the whole cliff-edge structure has to change. Can she confirm that the review will look at that?
Alison McGovern
I thank the right hon. Member for his question. I went through the details of what the review will look at just a moment ago, but there are wider problems with support for carers. The right hon. Member will know that the Department is currently looking at a whole host of areas, and we need family carers to be much better supported, both in work and when they are not working, so we will look at the wider issues. The review is about doing that, as I have said, but that does not mean that we are not fully aware of all the issues that carers face. As I was saying, addressing overpayments is only part of the action we need to take to ensure that unpaid carers get the support they need and deserve.
Mel Stride (Central Devon) (Con)
I welcome this debate on this important matter. There is unanimity across the House that carers up and down this country do an extraordinary job, often in very difficult circumstances. We owe them a huge amount, and not only for the compassion and social value that their work brings, but for the financial and fiscal benefits, as Carers UK has identified, because of the costs that the taxpayer is not required to pick up.
I recognise the experience that the leader of the Liberal Democrats has in this area, through his campaigning and his personal experience. I think he said that it was good that the Liberal Democrats had brought forward a motion today that was devoid of any politics, but I am not sure that I entirely agree with him. The motion of course contains much that we can all agree on, but the relevant poisonous pills within it will ensure that when we divide later—I confidently predict that the motion will fall—only the Liberal Democrats, and perhaps a few other minority parties, will go through the Aye Lobby. They will then be able to crank up the Risographs so that their leaflets can say that only they care about this particular matter. That is far from the truth. My party, the official Opposition, cares very deeply.
When we were in Government, we brought forward a number of measures to ensure that we supported those carers. The level of carer’s allowance has increased by £1,500 since 2010. In 2023 it was my party that brought in the statutory entitlement to one week per year of carer’s leave. It was only last year that we, through the better care fund, provided £327 million to those in desperate need of respite from their caring duties. The care Act of this year increased the rights of carers and also the duties placed upon local authorities. I am also pleased to tell the House that, even more recently, my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies), the shadow Minister for Women and Equalities, attended an event here hosted by Carers UK so that we could continue that really important dialogue.
Mel Stride
I think the right hon. Gentleman will find that that measure was supported by our Government—[Laughter.] No, no—most private Members’ Bills are not supported by the Government of the day and therefore make no progress. We were happy, whatever legislative vehicle was available, to ensure that that important measure came into effect on our watch.
Let me speak for a moment about the complexities of carer’s allowance, because this is really important. It goes to the heart of many of the assertions that have been made in the Chamber today. This is how it works. It is £81.90 per week. We expect somebody who is in receipt of that benefit to be providing care for 35 hours or more to one or more individuals. There is an element of trust in the way the benefit works, because the Department for Work and Pensions cannot establish exactly what individuals are doing up and down the country, and therefore there is an earnings limit, which is a proxy for the amount of paid work that somebody is doing, rather than the amount of time they are spending looking after a loved one. That is the purpose of the limit.
A complication, which has not yet been raised in this debate, is that someone’s income has to be adjusted in order to determine whether they are above or below that limit. There are adjustments. For example, they can reduce their declared income in this respect by 50% of any pension contributions they may make. They can adjust the amount of income that they compare to the limit for any equipment that they purchase in respect of their caring obligations. There are also travel costs. If someone is self-employed, various business costs can also see a reduction in the level of income. This lies at the heart of why there is a challenge in notifying people of whether they are above or below the earnings limit, because it is impossible, at the centre, to determine the answer to that question, for the reasons that I have given.
Mel Stride
Quite possibly not, which is why the Department operates on a case-by-case basis. That is the correct approach, rather than a blanket approach that says it does not matter if someone goes over the threshold. As I said, if there is never going to be a requirement for repayment, we might as well not have a threshold at all. In some cases, going over the threshold is egregious. The Government know this, and they will have to take it into account.
Mel Stride
It is difficult to give a precise answer; what does the right hon. Gentleman mean by “a small amount over the earnings limit”? We know that, for the vast majority of the thousands of people in this situation, it will almost certainly be small amounts, including some very small amounts. None the less, fraud and error are a significant challenge across the benefits system, and need to be addressed. Any responsible Government will take that approach. Simply to say, “We have a problem, so we should take off the brakes and have no limit. We should let people claim what they like, whatever it might be, even if it is fraud”, as suggested by the leader of the Liberal Democrats, is not viable.
Mel Stride
I will give way, but I invite the right hon. Gentleman to explain how he would deal with fraud when he is pushing for none of the overpayments to be returned.
Ed Davey
I made it very clear in my speech that there could be examples of fraud, so I ask the right hon. Gentleman to check the record. I could not have been clearer, and we have talked about this at length in other fora—indeed, we made it clear at the general election.
I am afraid that the right hon. Gentleman has shown to the House that he failed to get a grip of this issue when he was Secretary of State. He recognises that the vast majority of overpayments were small amounts, often because the DWP, in which he was Secretary of State, did not pass on information to HMRC. I am afraid that he is digging a hole for himself.
Mel Stride
Regardless of what the right hon. Gentleman may or may not have said in his opening remarks, the text of the motion cannot be disputed. On the point of whether anyone should be expected to repay, the motion says that this House
“believes that carers should not be forced to face the stress, humiliation and fear caused by demands for repayments of Carer’s Allowance”.
To me, that suggests everyone. The motion goes on to say that the Government should “write-off existing overpayments immediately”. It is clear and obvious that that would include any fraudulent payments.
It may be that the earnings limit could be increased, but there would be a fiscal cost. Indeed, the Liberal Democrat manifesto reforms would cost about £1.5 billion, which is significant. We would have to take account of the balance between being more generous to carers and respecting the 35-hour rule, if that remains.
Finally, whenever there is a cliff edge, it is suggested that tapering will solve the problem, but that neglects the fact that it introduces complexity, which is the very thing that universal credit, for example, was designed to iron out. The system was like spaghetti, and nobody could quite understand how it worked. In the tax system, for example, the personal allowance tapers away after £100,000. Many people just stop working further when they reach that level of earnings, because it is not worth their while, given the marginal tax rate.
There is an interplay between universal credit and carer’s allowance, because people who earn more will end up having their carer’s allowance withdrawn. There is already a taper within carer’s allowance to make sure that work pays, so that as people earn more, their benefit is reduced but not sufficiently to make them worse off. Under the system advocated by the Liberal Democrats, there will be two tapers in two interacting benefits, which I do not think would best serve anybody, least of all carers.
Madam Deputy Speaker is seeking my conclusion. I welcome this motion, and like other parties in this House, we stand four-square behind our carers, who do an extraordinary job. I wish the Government well with their review, which we will consider seriously and objectively, as we are all on the side of carers. I stand by our record in office, of which I am proud.