Carer’s Allowance

John McDonnell Excerpts

Wednesday 30th March 2022 Westminster Hall

[John McDonnell (Hayes and Harlington) (Lab)]

The reason I am participating in the debate is that I brought together an unpaid carers group that has been meeting over the past few months to talk about the current situation. The fact is, it is heart-rending to talk about the struggle that most of them are having. The pressure they are under is immense, and the pressure that they have been under as a result of covid has exacerbated the way in which their lives have been transformed by the altruistic act of caring for someone else.

The carers in the group are, basically, families looking after a child with a disability or a special need, or families looking after an elderly relative. What is also remarkable is the number of the children who look after others in their families. What came across in the group is that that act of caring has implications for the whole family: individuals have given up their careers to undertake caring, and siblings who have given up the opportunity of going to university to help the family out with care overall.

It is interesting that none of them asks for anything in return. They do not even ask for thanks. They just want to get by. They just want to be able to survive. To be frank, from the discussions I have been having with them, I do not think that some will survive this coming period. We call it the cost of living crisis glibly, but it is a crisis for this particular group of people in our society in a way that it is possibly not for others.

To run through some things that they would emphasise—points others have made—for example, the issue of higher energy costs is not just about heating; it is the energy that is needed to maintain basic equipment to enable the person people are caring for to survive, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said. Apart from the health-support devices and the special equipment, other issues raised were the transport costs to get to appointments—again, that can become very costly—and nutritional costs, in particular as inflation hits hard a number of nutritional inputs required for the person they are caring for.

It then comes down to what those carers receive. My hon. Friend the Member for Kingston upon Hull East (Karl Turner) raised the issue of the contradiction between the earnings allowance and carer’s allowance. It is ludicrous—we all know that it is ludicrous—and it just needs resolving quickly. I do not understand what logic there is for arguing for anything other than reform on that issue. It comes down to the basic level of carer’s allowance, as far as I am concerned. We are inflicting a level of poverty on these people, who do so much work to assist our society overall.

[Liz Twist (Blaydon) (Lab)]

I thank my right hon. Friend for giving way. We have Carers Week, when we celebrate and thank carers, coming up in June. Does he agree that there is no better time to look seriously at raising the carer’s allowance and making sure that we not only recognise carers with words but treat them decently?

[John McDonnell]

I fully agree. There is a sense of urgency about this issue now, because what came out of the discussions that I have had with the carers group that I brought together is the stress that carers are under, and the mental health implications not only for themselves as individuals but for their whole family. We know that there are examples in the past of how such stress has caused a mental health problem that has led to suicide.

There is a need for urgent action now. We have gone beyond intellectual debates about this issue; we just need some action rapidly, given the fact that carers face these massive increases in prices, particularly around energy. And then effectively they face a cut—a 3.1% increase, as against inflation now, which ranges between 7% and 10%. That level of inflation comes in like a whirlwind for these particular families and we need urgent action now. Perhaps that action has not been considered effectively in the past, but it certainly needs to be considered now.

[David Linden (Glasgow East) (SNP)]

I am grateful to the right hon. Member for giving way. Does he also believe that it is incumbent on the state to view this matter through the prism of preventive spending? If we pile so much pressure on these carers, who are caring for some of the most vulnerable people, and then the carers themselves end up in mental health predicaments or poor health, the costs of that will be borne by the state anyway. So it is a false economy not to support them.

[John McDonnell]

That is exactly the final point that I was going to make, because most of the people who I have talked to are at a tipping point, where they and their whole family can no longer survive on the level of income they have, given the pressure they are under.

What comes across time and again is that carers have to struggle: first of all for recognition; then for assessment of the person they are caring for; then for support services; and then for just a respite every now and again. For some of them, that struggle is becoming insurmountable. Then what happens? The person they are caring for is taken into care and the costs escalate beyond anything that we have seen so far. So there is a desperate need to resolve this matter.

I will just throw in one other point as well. The benefit that carers get is not an access benefit to other benefits. With regard to energy costs in particular, a small step would be access to winter fuel allowance and—to be frank—a doubling of that winter fuel allowance.

--- Later in debate ---

[Chloe Smith]

I am sorry if the hon. Lady thought that that was a useful use of the minutes we have left, when I have plenty more to say. She stops me to insult me rather than letting me talk about carers; that is not particularly helpful.

Like other hon. Members, I want to talk about the rate of carer’s allowance. I will start with whether it is high enough. The Government continue to provide financial support to unpaid carers through carer’s allowance, the carer element in universal credit, and other benefits. We have chosen to focus extra support on carers who need it the most. About 360,000 carer households on universal credit can receive nearly £2,000 year through the carer element, and that amount will increase from April 2022. Universal credit is of course a key benefit—indeed, it is the key benefit—for carers on low incomes, on whom we most need to target the support. Indeed, carers in receipt of universal credit do not face the cliff edge identified by the hon. Member for Kingston upon Hull East in opening the debate.

[John McDonnell]

Will the Minister give way?

[Chloe Smith]

I am afraid I need to make progress.

The hon. Member for Salford and Eccles (Rebecca Long Bailey) argued that we need to increase the rate of carer’s allowance even further to reflect the current rate of inflation, rather than last September’s rate of CPI. Of course, the Secretary of State undertakes an annual review of benefits and pensions; and CPI in the year to September, as published by the Office for National Statistics, is the latest figure that the Secretary of State can use to allow sufficient time for the needed legislative and operational changes before new rates can be introduced at the start of the new financial year.

Let me turn to the carer’s allowance earnings limit. Right hon. and hon. Members have mentioned the limit throughout the debate and argued that it ought to be increased. Carer’s allowance has an earnings limit, which permits carers to undertake some part-time work if they are able to do so. This recognises the benefits of staying in touch with the workplace, including greater financial independence and social interaction. In many cases, carers are keen to work, so we want to encourage them to combine some paid work with their caring duties, if they wish to do so and wherever possible. That is why we regularly increase the earnings limit.

The limit for those in receipt of carer’s allowance will increase to £132 net earnings a week from this year, which means that the earnings limit will have increased by about a third since 2010. Many of those who are receiving carer’s allowance and doing some work will also be receiving universal credit. In those cases, the 55% taper rate and any applicable work allowance will help to ensure that people are better off in work, which means more generous treatment in universal credit of earnings above the carer’s allowance earnings limit.

Right hon. and hon. Members have mentioned the increases in fuel bills, which I absolutely recognise. The Government acknowledge that people are facing pressures with the cost of living, including rising fuel and heating costs, and Members will know about the measures announced in the spring statement last week, which build on the existing support that the Government provide and will be worth over £22 billion.

A number of schemes are in place to help with heating costs, depending on carers’ circumstances. They include the winter fuel payment, the cold weather payment and the warm home discount. I recognise the argument made by the hon. Members for Salford and Eccles and for Bolton South East about extending the warm home discount to carers. I think they will know that colleagues in the Department for Business, Energy and Industrial Strategy recently consulted on the scheme and announced that automatic rebates will be extended from those getting the guarantee credit in pension credit to include other low-income households whose homes are fuel inefficient.

The hon. Member for Worsley and Eccles South (Barbara Keeley) and others made the point that it is important that carers apply for all the support that might be available to them. Many working-age carers receive means-tested benefits as well as carer’s allowance, and I have already mentioned universal credit. Pensioner carers may be able to receive pension credit, which includes an additional amount for carers. Very importantly, receiving a means-tested benefit can act as a passport to other support, so if carers are not already receiving a means-tested benefit, I encourage them to look at gov.uk or to seek other advice, to see whether they might be entitled to that.