Oral Answers to Questions

Karen Buck Excerpts

Monday 4th September 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

We all want to see both unemployment and economic inactivity as low as possible, but the Office for National Statistics, quoted approvingly by the Minister a few minutes ago, reports that this spring’s quarter showed a large fall in the number of people moving from economic inactivity into employment, and that the net movement from employment to economic inactivity was the largest since the covid autumn of 2020. Given that this is the Department’s priority, what assessment has he made of why this is going wrong?

[Mel Stride]

My assessment of economic inactivity is that it is falling; it has fallen by around 350,000 or more since its peak during the pandemic. That leaves us below the average rate of economic inactivity across the G7, the European Union and the OECD. We are making real progress and will continue to do so.

In-work Poverty

Karen Buck Excerpts

Wednesday 28th June 2023 Westminster Hall

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

It is a pleasure to be here under your chairmanship, Sir George. I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on introducing the debate, and on setting out a powerful and well-argued case for action on the scourge of in-work poverty. We also heard excellent contributions from my hon. Friends the Members for Wansbeck (Ian Lavery), for Newport West (Ruth Jones), for Luton South (Rachel Hopkins), and for Reading East (Matt Rodda).

A consistent theme of the debate has been the extent to which the problem of in-work poverty, which has increased over a number of years, has been exacerbated by the cost of living crisis that we have been grappling with over the past year. That is driven by such factors as core food inflation, which is worse in this country than in neighbouring countries; the housing cost crisis, which has been driven by rising mortgages and rents; and a decade of low wage growth.

The Trussell Trust’s figures today, which should shame the Government—should shame any Government—show that the scourge of food insecurity is affecting millions of people. As was said by many hon. Friends, it has been proven that work is not in itself a means of ensuring that people are not food insecure. My food bank, and food banks in the constituencies of my hon. Friends, are reporting unprecedented demand for assistance from people who are working.

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

Does my hon. Friend want to comment on the fact that work is now not the route out of poverty, as we have heard? Nothing in what the Government propose on in-work progression will make an impact on that.

[Ms Buck]

I will touch on that in a second. We all want to see people in good, well-paid work. The fact that work is not a route out of poverty has been proven amply in recent years, and more so than previously, but I would also say that work in itself is not necessarily a route out of poverty for people bringing up children. It has always been, and remains, the case that Government have a role to play in ensuring that working families, including those with children, receive support, and that that is not simply left to wages.

The story of in-work poverty over the last 13 years is one of wasted opportunity. One of the most underappreciated social changes of recent decades is the decline in family worklessness. When Labour came into government in 1997, one in five children were living in a workless household. On the most recent data, 9% of children are in workless households. The decline in family worklessness has been an almost continuous trend, outside of economic downturns, over the last two or more decades. There are not only far fewer children in workless families than there were a generation ago, but more couple families in which both adults are working, and fewer in which only one parent works. All those changes should be positive for poverty reduction.

“Work is the best route out of poverty” was always a glib soundbite that dismissed the challenges faced by people who cannot work, whether because of disability, health or caring responsibilities, but it is true that as a general rule parental employment greatly reduces the risk of poverty. On the face of it, then, the employment situation for families with children is incomparably better than it was a generation ago, yet despite continuing improvement in parental employment, child poverty was higher in 2021-22 than it was in 2010-11.

The link between increased employment and poverty reduction broke down somewhere around the middle of the last decade. Some 19% of children in families with someone in work were in poverty after housing costs. By 2019-20, that figure had risen to 26%. It fell back very slightly in the latest data, which are for 2021-22. I suspect that is to do with the boost provided to universal credit and other support during the pandemic.

Astonishingly, the poverty rate after housing costs for children in single-earner families with full-time work is now 44%. Given the changes to employment over this period, had the risk of poverty for working families remained where it was when Labour left office in 2010, we would now be looking at there being far fewer children in poverty. That is what I mean about a wasted opportunity. Just think: the historical record of Conservative-led Governments would be one of poverty reduction. Ministers would be able to proudly defend their record on child poverty. They would not need to switch poverty measures to confuse people. They would be quite happy to be judged on the headline relative poverty measure.

How did this all happen? Faced with employment trends that would have reduced poverty, we had policies that made working and out-of-work families poorer—specifically the benefit freeze, which permanently reduced the value of in-work and out-of-work support. Universal credit was designed around a single-earner household model, and it continues to provide poor rewards for second earners when they increase their hours and earnings. The Government’s response to the weak incentives in universal credit is the crude stick of in-work conditionality. It is virtually an admission that they do not expect second earners to be dramatically better off if they increase their earnings.

For too long, jobcentre policy has been concerned with getting people into any job without considering crucial aspects of job quality such as stability and predictability of earnings and progression. If we want work to be the main route to poverty reduction—and we do—for those who can work, it needs to be work where people can genuinely improve their incomes over time, rather than struggle with zero-hours contracts, unpredictable shift patterns and fluctuating earnings.

The lesson is that increasing parental employment is a necessary but not sufficient condition for reducing child poverty. If we want to reduce poverty, we need a genuinely supportive welfare state and a focus on job quality. These have been the missing ingredients in Government policy since 2010, leading to the squandering of opportunities for poverty reduction.

Oral Answers to Questions

Karen Buck Excerpts

Monday 19th June 2023 Commons Chamber

[Mr Speaker]

We are only on Question 2, so I am a little worried about how long it is taking. I call the shadow Minister.

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

The Government’s mortgage crisis is about to be the next blow to hit renters, because so many are renting from those with buy-to-let mortgages. Already, 49%—almost half—of children in privately rented homes with parents receiving universal credit are in absolute poverty, to take the Government’s preferred measure, and as we know, many of those parents work. Since then, rents across the country have risen by 9.5%, but the local housing allowance has risen by 0%. What does the Minister think is going to happen to low-income families with children in the private rented sector this year?

[Mims Davies]

Those struggling with mortgage payments should engage with their mortgage lenders. We have abolished the zero earnings rule to allow claimants to continue to receive support while in work or on universal credit, and there is support for mortgage interest rates out there, so please do reach out. In fact, £25 million was paid in loans to 12,000 households in 2021-22, in order to support low-income homeowners. Over 200,000 low-income homeowners have been supported, and that has been a focus, but I understand the point that the hon. Lady makes. I assure her and the House that this is something that the Secretary of State and I are working on, as well as the Department for Levelling Up, Housing and Communities—it is not solely an issue for my Department—but I take on board her points.

Child Poverty in the North

Karen Buck Excerpts

Wednesday 3rd May 2023 Westminster Hall

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

It is a pleasure to reply to this debate under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for South Shields (Mrs Lewell-Buck) on introducing it in a rigorous and well-argued speech in which she drew out the commission’s work. I welcome the important contribution of the hon. Member for Cheadle (Mary Robinson) to the debate, and we also heard a strong speech from my hon. Friend the Member for Blaydon (Liz Twist). Welcome as it is to have this important debate today, it would have been marvellous if we had been able to hold it on a day when other representatives from the north could have been here to give the topic the full range of contributions it deserves.

The speeches we heard drew heavily on the work of the child of the north all-party parliamentary group and the North East Child Poverty Commission—I was heavily involved in the earlier London Child Poverty Commission, so I know how much work goes into such inquiries. What is important about them is that they draw on the lived experienced of people in poverty, the range of factors that drive poverty, including ill health and disability—sadly, correlated with poverty—and the growing significance of in-work poverty, as my hon. Friend the Member for Blaydon drew out. That is something that we have always had, but it has, sadly, developed into a strong driver of poverty these days.

All the speeches we have heard this morning have made it clear that there are long-term consequences and harms if a child grows up in poverty. When we talk of poverty, we should always reflect on the moral dimension. It is morally critical for us to recognise and commit to dealing with child poverty. We should also reflect on the sheer inefficiency and waste that comes from trapping families and children in poverty. Growing up in poverty will have an impact on health status, leading people into poorer physical and mental health. It is also so closely correlated with educational underachievement that our schools must make extra efforts to support, educate and help children in poverty. In addition, my hon. Friend the Member for South Shields drew out the fact that, tragically, there are consequences for some of our poorest children and families in terms of interventions by children’s services. There is simply a strong economic as well as a moral case for ensuring that we deal with and invest in child poverty.

The Government have made a lot of their levelling-up agenda over the past few years, but if we do not do more to tackle the stark disparities in income poverty between regions, it will continue to be a slogan rather than something that makes a difference on the ground. We can see what remains to be done simply from the Department for Work and Pensions’ own statistics. In the three years leading up to the pandemic, 37% of children in the north-east were living in poverty after housing costs; in the north-west and Yorkshire and the Humber, about a third of children were in poverty. That is the last three-year period for which we have full income data, as the pandemic prevented the production of regional figures for 2020-21, so later figures need to be treated with a degree of caution, but there is little reason to believe that things have got better. Indeed, there are strong reasons for believing that they have, in fact, got worse.

Child poverty is a major problem in every region and every country of the UK. Even in the south-east, nearly one in four children are living in poverty after housing costs. But the north-east has seen a major worsening of its position: child poverty increased by a remarkable 11 percentage points in the five years leading up to the pandemic. The Institute for Fiscal Studies states:

“On a wide variety of measures, regional disparities in the UK are greater than in most comparable countries.”

Tackling those economic disparities requires concerted, long-term action across the full range of Government functions, at central and local levels—from economic development to skills, housing, employment services and infrastructure. It certainly requires more than a pot of levelling-up funding that delivers the equivalent of £80 per capita to the north-east and north-west and just £60 to Yorkshire and the Humber. What the Conservative Mayor of the West Midlands describes as Whitehall’s “broken begging bowl culture” cannot be the basis for addressing entrenched economic inequalities between areas.

The issue of regional child poverty also brings out the centrality of social security policy, because bad social security policy choices will exacerbate underlying economic inequalities between regions. The Government are simply not addressing that problem; indeed, for the last 13 years they have pursued policies that lead to a sharpening of regional disparities, and no amount of levelling-up rhetoric can disguise the fact that those policies remain in place and continue to have their inevitable effect.

[Mrs Lewell-Buck]

If the Government are committed to the levelling-up rhetoric, why is child poverty not mentioned once in the levelling-up White Paper or the Levelling-up and Regeneration Bill? Is my hon. Friend concerned about that, as I am?

[Ms Buck]

My hon. Friend is absolutely right. Frankly, it is bizarre that child poverty is not seen as a critical issue in its own right in the levelling-up agenda.

At the root of the problem is the fact that the Government have long ceased to bother with one of the most basic tasks of any social security system, which is matching resources to needs. Not bothering with that task is, of course, the explicit aim of the two-child limit, whereby the DWP is forbidden by statute from taking third and subsequent children into account in setting universal credit and tax credit entitlements, but it is also the effect of a host of other policies that override entitlements based on assessed needs. Those policies include the failure to uprate benefits by inflation and, from 2016 to 2020, the failure to uprate them at all. The four-year benefit freeze has permanently reduced the value of benefits, including in-work benefits. Ministers seem to have difficulty getting their heads around that point; they seem to think that, because benefits were uprated with inflation this year, everything is now all right. They seem not to be aware of the permanent damage that has been done.

Failing to set the local housing allowance in line with real-world rents is another issue. The local housing allowance remains frozen at 2019 levels. Across the north, two thirds of universal credit households receiving rent support in the private sector have rents above the local housing allowance maximum for their area. The shortfall between rent and the local housing allowance has to be made up out of whatever other income households have. At a national level, the average shortfall is £100 a month. Have a Government ever come up with a more elementary design flaw than building debt into universal credit by making people wait five weeks for their first payment? The examples can be multiplied.

In all cases, we see the Government breaking the link between benefit entitlements and needs as a matter of deliberate policy. Families can wind up falling foul of more than one of those policies simultaneously, which can lead to cumulative impacts—needing to make up the rent out of the rest of the UC payment, which has already been reduced to pay back an advance and which takes no account, for example, of their third child. This has been going on for years. Is it any wonder, then, that we see evidence of destitution throughout the country, or that regions that have historically done worse have faced a disproportionate impact? Consider that 49% of children in the north-east are in families receiving universal credit or an equivalent legacy benefit, compared to 24% in the south-east. Of course these policies impact some regions more than others. One of the more shocking results of the latest poverty statistics from the Department for Work and Pensions is that one in 10 children in the north-east are in families that used a food bank in the last 12 months—nearly twice the national figure.

Tackling economic disparities between areas requires a functioning social security system that takes account of all relevant needs and costs. As long as we do not have that, the rhetoric of levelling up will remain just that—rhetoric.

Oral Answers to Questions

Karen Buck Excerpts

Monday 24th April 2023 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

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

The Department’s recently published research on sanctions, including those relating to in-work conditionality, show that sanctions have a negative impact on claimant earnings. How will the Minister take account of those findings in setting future sanctions policy?

[Guy Opperman]

We want to encourage claimants to comply with reasonable requirements, which are set and agreed with their work coach in the claimant commitment. That will continue on an ongoing basis, and I see no change to that.

Child Support (Enforcement) Bill

Karen Buck Excerpts

3rd reading
Friday 17th March 2023 Commons Chamber

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

We all know that being a single parent increases the risk of falling into poverty, and that is even more the case when an absent parent does not fulfil their maintenance obligations. We all wish it were not so, but it is, as we know; we have heard examples in contributions this morning and I am sure all of us know from our casework that there are occasions when the absent parent, usually, but not always, the father, will act abominably in seeking to avoid their obligations. I have certainly had such instances in my constituency—and not always, it has to be said, involving those on the lowest incomes.

Labour completely supports the principle that non-resident parents should meet their responsibilities for child maintenance and that where they fail to do so the state needs to step in to enforce payment. As has been reinforced this morning, timely meeting of responsibilities is crucial, because when payments fall behind and the parent with care has to take action and wait for payments, that can cause financial distress and massive psychological distress. So I, too, congratulate the hon. Member for Stroud (Siobhan Baillie) on introducing the Bill and the hon. Member for South Ribble (Katherine Fletcher) on stepping up this morning and taking it through the final stages.

As my hon. Friend the Member for Reading East (Matt Rodda), the shadow Pensions Minister, said on Second Reading, not only do we support the principle, but we recognise that enforcement of child maintenance obligations needs to be improved. This Bill will improve enforcement. It is a largely technical set of measures, but we hope it will make a significant contribution to speeding up the process by which the absent parent can be made to pay. However, we do not think it will resolve all problems with the CMS. Nor, it is fair to say, is it intended to, as I am sure Conservative Members would agree. I think everyone recognises that we are a very long way from having a Child Maintenance Service that ensures that all absent parents meet their responsibilities and that all families receive the financial support to which they are entitled.

As my hon. Friend the shadow Treasury Minister pointed out in the Committee that considered the Bill, last year’s report by the Public Accounts Committee concluded that, in the 10 years since the Child Support Agency was replaced by the Child Maintenance Service, there has been effectively no improvement in the system for parents, children and families. Around half of children in separated families—1.8 million children—receive no support at all from their non-resident parent.

[Mark Tami (Alyn and Deeside) (Lab)]

We have heard a lot of stories today, and they are always about the very difficult cases, where people work cash in hand, or try to avoid things, and it is important that we pursue those people. We also have people coming to us who say, “I play by rules, but I am pursued all the time, because I am an easy person to get hold of, whereas some of the others are not.”

[Ms Buck]

I agree with my right hon. Friend. It is really distressing when we see these cases. After separation, often, families will find themselves in financial stress. Even so, many parents will do absolutely everything that they can to put their children first and to meet their obligations. They are of course very angry about the behaviour of those parents who simply do not play by the rules and who, as we have heard, do everything that they can to avoid those commitments—they drop in and out of work, create shadow companies, and conceal their incomes in every way that they can. They do so because, sadly, money is so tied up with emotions after a relationship breakdown that it is often used as a tool to continue to cause emotional damage to those families.

It is concerning that Child Maintenance Service performance seems to have declined over recent years. Of course, enforcement action was negatively affected by the pandemic, as staff had to be redeployed to manage universal credit claims, and the courts were closed. However, performance was already showing a worrying trend before the pandemic, with the number of liability orders in process falling from 6,900 in the first quarter of 2019 to 3,700 in the last quarter of 2019. Things have improved on the most recent data, for the third quarter of 2020, but, at 5,300, numbers remain far below the earlier level. Meanwhile, the number of enforcement agency referrals in process is less than half what it was in 2019. It would therefore be helpful if, in replying, the Minister could update the House on how the Government intend to address these apparent shortfalls in Child Maintenance Service performance since 2018, and reassure the House that this legislation will not lead to any relaxation of efforts to improve performance in the round.

Having said that, I again congratulate the hon. Member for Stroud. I have no doubt that this is important and useful legislation and we on the Labour Benches give it our wholehearted support.

Health and Disability White Paper

Karen Buck Excerpts

Thursday 16th March 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

No one will mourn the passing of the work capability assessment; Labour has been calling for reform of that for a long time. It needed to change, because people’s lives do not fit neatly into a binary system of work or no work. However, disabled people and those with serious health issues want and deserve support and reassurance in work and out of it, and what people fear, understandably, is that under the guise of reform their lives will be made harder and vital financial support might disappear.

The devil is always in the detail, so I have a few questions for the Minister. The PIP assessment is designed for a totally different purpose from the WCA; how will he reconcile those completely different systems? What will happen in future to those people who do not currently receive PIP—those on the limited capability for work and work-related activity element of universal credit, and particularly those with short-term and fluctuating conditions? Unless it is the Minister’s intention that some 750,000 people will lose £350 a year, an alternative needs to be in place; what will that alternative be?

Do the Government believe that it is fair that the hundreds of thousands of people with disabilities that prevent them from even engaging in work-related activity should receive less financial support through UC than people who are entitled to PIP, and if so what is the basis for that justification? If the intention is to allow work coaches to use discretion in all such cases, how will we ensure consistent decision making and decision making that is based on a proper understanding of serious health conditions and their impact on daily life? What provision is made within the Department to ensure that capacity for that is in place?

As transparency and openness are so essential in building confidence, will the Minister now publish the report on the operation and effectiveness of sanctions? By publishing the White Paper, the Government have started this debate; the minimum we need now is openness and clarity about how those ideas are intended to work in practice.

[Tom Pursglove]

May I first welcome what I think is a cautious welcome from the Opposition for the reforms that we are seeking to advance? I think it reflects some of the utterings that we have heard from Labour Members over recent weeks and months about the direction of travel they want, recognising that there will be people for whom work is not appropriate. I repeat the point that, where that is the case, we will not be expecting people to engage with this support, but it is right that that structural impediment to work is removed from the system, that those who want to work are supported in being able to do so, and that we make sure that we have a system that is responsive to that and that also has health as a focus. I hope we can move forward on a cross-party basis on those terms.

On the specific point about PIP, again it is important to recognise that we will look very carefully at whether those individuals who are not currently in receipt of PIP meet the PIP criteria, and we will act accordingly. Also of course, anybody who thinks they may be eligible for PIP is able to apply for it. I would always encourage people who might be eligible for any given benefit to apply for it.

On the point about the health top-up, I can confirm that the award rate for the new UC health element will be at the same level as is currently awarded to those who have LCWRA. I again make the point about the approach that we intend to take: the reform will be carried out on a staged geographical basis, beginning with new claims in 2026-27. Of course, legislative steps will need to be taken to bring this reform to fruition, but there is much to welcome and I hope we can come together. On the point about the legal case, as I said earlier, colleagues elsewhere in the Department are considering next steps and will come forward in due course.

Local Housing Allowance

Karen Buck Excerpts

Wednesday 15th March 2023 Westminster Hall

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

It is a pleasure to respond for the Opposition under your chairmanship, Ms Elliott. I congratulate the hon. Member for Arfon (Hywel Williams) on securing this important debate. This is a niche issue for many people, yet it is so incredibly important. Rents are the single largest item in most families’ budgets. Not being able to pay the rent has the consequence of forcing families into poverty and also risks homelessness, as we have heard—I will return to that point in a minute.

I wish that, just occasionally, we could have a debate such as this with more than one Department present—it would be a good experiment and brilliant to have that opportunity. It is absolutely impossible to consider local housing allowances in isolation from housing policy. The fact that the housing market is so fundamentally broken is driving the crisis in rents and unaffordability, and therefore the pressure on the local housing allowance. The attempt to bear down on the local housing allowance drives up homelessness and has consequences for other Government Departments. It would be good to be able to hold two Ministers to account for the policies they pursue and their two different agendas, which usually—and in this case—involve a toxic pass-the-parcel game of responsibility and blame, with consequences for both.

As we have heard, the Government have accepted the need to uprate benefits in line with inflation this year—indeed, they have been proud of that fact. I do not think that should be a cause for congratulation. It should be the most absolutely fundamental principle of social security policy, yet they completely fail to accept that that same principle should apply to the local housing allowance. I would like the Minister to explain exactly why in this one area of policy, which affects the largest item of a family’s budget, the Government do not seem to believe that inflation exists. Of course, inflation does exist and, as we particularly heard from the Chair of the Select Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms), rents are soaring across the country, but probably most severely in London.

There are two consequences. First, over 800,000 households in the private rented sector face a shortfall between their rent and their local housing allowance. Some 57% of all universal credit households in the private rented sector have that shortfall. Secondly, dipping back into the issue of housing policy, it forces households into the absolute worst end of the private rented market. In this place, we discuss what has happened to households stuck in the poorest quality housing and the conditions that people are forced into if they are concentrated at the bottom end of the market, even if they can get it, have been a big media theme over the course of this winter.

Although we are discussing the freeze that has happened, in particular since 2020, this is also not a new phenomenon. Since the Government reduced the LHA from the 50th percentile to the 30th, there has been a continuing series of freezes, of which this is only the most recent. It was all based on the belief that the setting of the LHA levels would be bound in itself to influence rents, because it was understood or believed that such a large proportion of the private rented sector was funded by it. That was only ever partially true, or only true in some places, and always failed to recognise that even in a broad market rental area, there are different housing markets, and what applies to one part of the private rented market will not apply to others.

We know that the blind spot over the local housing allowance uprating can be seen in the homelessness statistics, as well as being felt by tenants in the shortfall between actual rents and the support available. There is an average monthly shortfall between rent and local housing allowance of £100 a month. It is indisputably true that the shortfalls are driving tenants to lose their homes. The end of a private rented tenancy is the single largest contributor to homelessness almost everywhere in the country.

[David Linden]

Does the hon. Member agree that the Government have to look at the picture in the round? When someone is evicted from their home, it is ultimately the state that picks up the cost. We should consider local housing allowance a preventive spending measure and the Government are short-sighted on the issue.

[Ms Buck]

I absolutely agree with the hon. Gentleman that homelessness is a cost on the central Government budget and on local authority budgets as well.

We have seen homelessness soar. Rough sleeping is up by 74% since 2010 and by 26% in the last year; there has been an 83% rise in the number of children who are now living in temporary accommodation as a result of homelessness. One in 23 children in London is now homeless. The squeeze on local housing allowances is undoubtedly a major factor driving that situation.

I have no doubt that the Minister will refer to discretionary housing payments, but, as my right hon. Friend the Member for East Ham has made clear, they make only a tiny contribution towards the total cost of budget shortfalls. Those payments have been cut by one fifth in 2021-22, and again this year. In any event, they are restricted in various ways, including by the fact that they are only ever meant to be temporary, so they are not, and never can be, the answer to the fall in local housing allowance.

The poorest, the most vulnerable and those with the least bargaining power in a toughly competitive private rented market, among them families with hundreds of thousands of children between them, are forced to deal with evictions, with frequent moves, and with all the disruption that homelessness causes to education, employment and caring allowances.

As Policy in Practice demonstrated in an important research report yesterday, the broken housing market also drags a substantial number of higher earners and higher-rate taxpayers into means-tested benefits such as universal credit via the housing allowances system, which is a completely unintended consequence of the freeze.

Investment in social housing—a way of ensuring that those with the lowest incomes can enjoy secure and affordable homes—is by far the best solution to this crisis. A better managed private rented sector would also be good for tenants. We have been promised action on that for years but we are yet to see it. All of these things would be better for the public purse, too. In the meantime, freezes in the local housing allowance make no sense whatsoever and only serve to make a bad situation worse.

--- Later in debate ---

[Mims Davies]

I appreciate and understand the point that the hon. Gentleman is making, and I will make some further comments shortly.

Today’s Budget has focused on more help so that people can be better off, to raise living standards and to improve lives. To the hon. Member for Westminster North and the right hon. Member for East Ham (Sir Stephen Timms), I say that this is a challenge that I am working on and that I am keen to rise to—across Government, as the hon. Lady says, and of course with the Department for Levelling Up, Housing and Communities. I say to anybody struggling today, whether with housing costs or other matters that are impacting them, that there is an opportunity to find out more on the benefits calculator website, in case they are missing out on any extra support. There is also the Help for Households website and the Job Help website. Of course, as has been mentioned, the benefit cap, working age benefits and disability benefits will also be uprated by 10.1% for 2023-24.

The household support fund extension provides an extra £1 billion of funding, including the Barnett impact. I met many local authorities yesterday afternoon to see how they are targeting that support—particularly on housing needs and costs, white goods and other things that might affect household budgets. The scheme will be backed with £842 million and will run from 1 April to 31 March 2024. It is right that devolved Administrations will decide how to allocate that Barnett funding. As we have heard, local authorities are expected to support those households most in need.

One of the Government’s key aims is to support people into work and to progress in work where possible. That approach is based on clear evidence that, for those who can work, particularly where the work is full time, it substantially reduces the risks of poverty. We see real challenges, to which the hon. Member for Westminster North alluded: more single households, more single parents and family breakdown. The support that we are giving, because of global impact, means that the supply is all the more challenging. I agree with the hon. Lady that wider issues around cost and quality, which very much concern me, mean that this policy, the growing need and the focus are only getting larger. I agree that, in Government, the issue is very much about more than me; I am sorry that I am not enough this afternoon, but I will try to do my best.

Let me turn to some of the points made by hon. Members. On the decision to freeze, we recognise that rents are increasing. However, the challenging fiscal environment has led to where we are, and it is important that we target effectively. The Secretary of State will review the rates and the standard process annually. The hon. Member for Arfon raised the issue of quality. Discretionary housing payments can be made to help claimants with the costs associated with moving to a new home if there is a quality issue. Everyone rightly has the ability to get a safe and secure home. Landlords are key; we need them to come forward, to stay in the sector and to want to be part of the solution where they have already met the decent homes standard. Quality housing remains a priority for this Government, and of course there is currently a White Paper on that.

[Ms Buck]

On the point about people moving to alternative accommodation, in London just 4.2% of available private rented properties are below the local housing rate, and other examples have been given by other Members. Where are people meant to move to?

[Mims Davies]

I understand the point. That is why I want the quality to rise, rather than people feeling that they have to move. There is obviously a fall-back position.

The hon. Member for Arfon made a point about the broad rental market rates. Those are determined for Wales by rent officers in Wales. If the rent officers believe —I have just looked again at my local rates—that the boundary needs to be reviewed, as the hon. Member for Bristol East (Kerry McCarthy) mentioned, they can apply to the Secretary of State for change, but no reviews have been submitted by Wales. Local authorities can also request a review by contacting rent officers. It is up to the rent officer whether they will review it, but I think that is an important point for the hon. Member for Arfon to take away. 

Obviously, there is the wider cost of living support as regards Welsh and indeed Northern Ireland devolution. The hon. Member for Strangford (Jim Shannon), with his typical empathetic tone and understanding, has brought real care to the debate, as usual. I recognise the hon. Member for Neath (Christina Rees), because I lived nearby in Neath for many years, and I very much welcomed the Welsh housing standard. I think that is exactly what we should be doing, rather than reducing things. I sense that the right hon. Member for East Ham is keen to come in.

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

Karen Buck Excerpts

Committee stage
Monday 6th March 2023 Commons Chamber

[The Chairman of Ways and Means (Dame Eleanor Laing)]

I call the shadow Minister.

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

I, too, welcome you back to the Chair, Dame Eleanor.

We continue to support the additional payments covered by this Bill because they will deliver much-needed support to households facing the greatest cost of living crisis we have seen for decades, but we also continue to recognise the limitations inherent in any policy of one-off, flat-rate payments and the extra limitations of the approach taken here.

One of the problems that the additional payments are intended to address is the six-month lag between the value of social security benefits and real-world prices, which can lead to long-term impacts on the real value of benefits when inflation is high. That problem became critical in the winter of 2021, when it became obvious that annual inflation would reach over 10% by the time benefits were uprated by only 3.2% in the following April, using inflation data running up to the previous September.

We are still dealing with the consequences of the 2021 uprating decision. As the Institute for Fiscal Studies explains,

“in April 2023, the annual uprating of benefits will merely take them back to around the level they were at a year earlier—the shortfall that opened up between September 2021 and April 2022 will still remain unplugged.”

This means that the real value of benefits will be 6.2% lower in April 2023 than before the pandemic, and astonishingly, based on current forecast inflation, benefits will not return to their pre-pandemic level until 2025.

This problem was completely predictable well over a year ago—a year in which the Government could surely have applied themselves to coming up with a better solution than the one before us today. The approach of one-off, flat-rate payments could just about be justified last year by the international situation and the suddenness of the energy price surge, but that does not apply this year.

We know that one-off payments are a crude substitute for ensuring that social security benefits retain their real value. But even accepting the one-off approach, this Bill, while undoubtedly necessary, will lead to rough justice and, in some cases, poor value for money. It does not even attempt to relate payments to need; it sets qualifying conditions and arbitrary reasons; and it creates an arbitrary cliff edge in support based on whether people are receiving a penny of qualifying benefits.

Some households will be shielded from the impact of inflation—indeed, some will be more than protected—but, as these flat-rate payments take no account of household size and composition, which is one of our most fundamental concerns, there is huge variation in the protection that families in different circumstances will receive.

As the IFS has shown, in general it is those without children who are best protected, and larger families and households with disabled members who lose out most. Forty per cent. of families with three or more children, but only about 3% of those without children, would have been better off with a timely uprating of benefits. Seventeen per cent. of households receiving a disability benefit would have been better off had benefits been uprated in real time.

It is obvious that the flat-rate approach is inherently inequitable and poorly targeted, and it is hard to see how it can be justified given the time the Government have had to devise a better solution. That is further compounded by the qualification conditions, which insist that households must have received a positive award of a qualifying benefit within the month leading up to the qualifying dates. One of the issues that universal credit is supposed to address is fluctuating incomes, but fluctuations in income from month to month, the norm for many lower-income families, are simply ignored by this Bill.

The cliff edge in entitlement is well illustrated by the large number of households, an estimated 850,000, that would be better off by reducing their earnings to qualify for universal credit so that they can benefit from the additional payments. Families on earnings low enough to qualify for universal credit face losing up to £900 if they have a marginal increase in earnings just enough to take them out of receiving UC. It is therefore perfectly reasonable for colleagues to demand a full Government analysis of the distributional and public health impacts of this Bill.

This Bill falls short of what might reasonably have been expected from a Government who had plenty of time to come up with a better solution, but we want this money to go into people’s pockets as quickly as possible in what is, for millions, a deepening personal and family financial crisis, which is why we are not seeking to oppose or delay today’s proceedings.

Oral Answers to Questions

Karen Buck Excerpts

Monday 6th March 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

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

Figures published today by the Centre for Progressive Policy show that the lack of affordable childcare prevented a quarter of parents of children under 10 from working more hours, with all the implications that has for family finances, but also for economic productivity. In fact, parental underemployment is estimated to cost this country over £20 billion. With expectations having been raised again this afternoon that next week’s Budget will do something about the cost of childcare, can the Minister tell us how long it will be before she expects the level of lone parent employment to rise again to where it was three years ago?

[Mims Davies]

I thank the hon. Lady for her question. I think we have some amazing childcare out there and some brilliant opportunities for lone parents, as I have described. It is important to let people know that, on universal credit, they can claim back 85%. It is better than legacy benefits, and they should please look at the benefits calculator on gov.uk and use the flexible support fund. We should also recognise that it is not right for everybody to go straight back to work—this needs to be individualised—and that we should support the lone parent and make sure they can get the skills and the opportunity to always be better off in work.