Carer’s Allowance
Debate between Ed Davey and Mel Stride(1 week, 3 days ago)
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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.