Social Security (Additional Payments) Bill

Marsha De Cordova Excerpts

2nd reading
Wednesday 22nd June 2022 Commons Chamber

[Dr Coffey]

The hon. Gentleman is incorrect in saying that money is denied to people. The whole point of receiving an advance is that there is phasing and, instead of receiving 12 payments in a typical calendar year, 13 payments are made. We extended that recently so that people can choose whether to have 25 payments over 24 months. It is not a case of people being denied.

The Social Security (Additional Payments) Bill before the House is a short Bill of 11 clauses that gives us the powers necessary to administer payments to families on means-tested and disability benefits. As one-off new benefit payments, they will be delivered by the UK Government to eligible households right across the United Kingdom in England, Wales, Scotland and Northern Ireland. The timing of such payments will vary, starting with the first payment of £326 for DWP means-tested benefit claimants from 14 July. The second payment will arrive in the autumn for those eligible. Those on tax credits who do not receive DWP means-tested benefits will get each instalment later to avoid duplicate payments.

People not eligible in time for the first £326 payment because they were not getting a qualifying benefit in the month before the announcement may get the second £324 payment if they have a qualifying entitlement to a benefit in the month before the next eligibility date. We have deliberately not included the next eligibility date in the Bill to try not to change claimant behaviour. Instead, there is the power to set a date through regulations.

Those on qualifying disability benefits will get their £150 as a single payment from September. Where eligibility for any of these cost of living payments is found retrospectively—for example, someone who had applied for personal independence payment but not yet been awarded it—people will still receive that disability cost of living payment; it will just be at a later date.

[Marsha De Cordova (Battersea) (Lab)]

In opening, the Secretary of State alluded to the fact that 6 million disabled people would qualify for the additional disability support payment of £150. Does she acknowledge that some disabled people—particularly those in receipt of disability living allowance, PIP or attendance allowance—who no longer qualify for the warm home discount since her Government changed the rules, will lose out? In effect, they have taken away £150 through the warm home discount, and the additional £150 really does not do anything to meet the extra costs for people who have already lost out.

[Dr Coffey]

The warm home discount is not relevant to the Bill, but I understand the point. It is the policy of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, but I do not know that the intention was—[Interruption.] I am trying to answer the hon. Lady’s question. My understanding of the policy rationale is that because PIP is not means-tested—it is not income-based—a decision on warm home discount eligibility was made to include many more households on the basis of income rather than PIP eligibility. I am sure that she will welcome the fact that we have included £150 in this legislation.

These one-off tax repayments do not count towards the benefit cap and will not affect existing benefit awards. They will provide a budget boost for millions of the lowest-income households right across the United Kingdom.

--- Later in debate ---

[Jonathan Ashworth]

The hon. Gentleman anticipates a point I am going to make, which is why now is a good moment to turn to the specifics of the Bill. I want to raise a number of points that I hope Treasury Benchers will address throughout proceedings this afternoon, particularly regarding how the Bill impacts on four groups: the self-employed on universal credit; disabled people and carers; pensioners; and larger families.

First, on the self-employed who claim universal credit, the minimum income floor will reduce universal credit payments for some self-employed people to zero. Could the Minister clarify, in responding to the debate, whether self-employed universal credit claimants whose UC payments are zero purely because of the minimum income floor will be entitled to these cost of living payments?

Secondly, on how this impacts on disabled people, the disability charity Sense has warned today of the increasing numbers of disabled people pushed into debt as a result of the rising cost of living. Those on the Treasury Bench must surely understand that many disabled people have needs that make heating and electricity to power equipment particularly central to their wellbeing, so that economising on energy can bring severe hardship.

As my hon. Friend the Member for Battersea (Marsha De Cordova) raised a few moments ago, disabled people on non-means-tested benefits will get £150 as a minimum, and indeed those on means-tested benefits will get the £650. I appreciate that the Secretary of State says this is a responsibility of the Business Secretary, but Ministers did recently change the rules on the warm home discount scheme so that 290,000 people on disability living allowance, PIP and attendance allowance are no longer eligible.

For people on PIP, that means that the Government are giving £150 to them after it was taken off them through the changes to the warm home discount scheme. This is robbing Peter to pay Paul, and it suggests that one hand of Government does not know what the other hand of Government is doing. How can that be justified?

[Marsha De Cordova]

My right hon. Friend is making an excellent point, and he probably articulated it even better than I did. Does he also agree with me that the whole premise of DLA, PIP and attendance allowance is to help meet some of the extra costs faced by disabled people? The Secretary of State has stated that this is a different Department—it is BEIS—but she must none the less acknowledge the purpose of these benefits, and taking away one payment and giving some money back with another is actually going to leave nearly 300,000 disabled people worse off.

[Jonathan Ashworth]

My hon. Friend is absolutely right. I can assure her that she speaks with an eloquence on these matters that I rarely muster, and I thought she put her points powerfully.

Even though many disabled people have been given an additional £150, for many of them that will not cover the additional cost of inflation when applied to disability-related benefits. For example, for those on universal credit, the supplement for someone unable to work or engage in work-related activity rose by about £240 a year less than if it had been uprated in line with the consumer prices index. In addition, someone receiving the daily living component of PIP is worse off by £185 on the standard rate and by £274 on the enhanced rate as a result of the sub-inflation upratings later this year.

That is one of the reasons why many people out there are particularly concerned that the Secretary of State—I understand that, in legislation, she has to review these matters—and the Government may well resile from their commitment to inflation-increase benefits and pensions this September.

Equally, the hon. Gentleman who sits for a Welsh constituency that I cannot remember, and I am not sure I can pronounce it either—[Interruption.] The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) raised carer’s allowance, and people claiming carer’s allowance will not get any extra support. Carers often have higher energy bills because of their caring responsibilities, yet people in receipt of carer’s allowance—remember that they provide care for at least 35 hours a week and earn less than £132 a week—are likely to be hit hard without additional support. Why were carers left out of this package?

Thirdly, I want to talk about pensioners. We have 2 million pensioners in poverty, and the number is rising. The Prime Minister promised that pensions would keep pace with wages and prices, but, without any thought as to how hard pensioners are finding it to make ends meet, Ministers broke that promise by removing the so-called triple lock. That meant a real-terms cut of about £500 in the basic state pension—the biggest real-terms cut, I believe, for about 50 years. I was pleased to see Ministers commit to honouring the triple lock for next year, but we can see the pressure Ministers are coming under and we hope the Secretary of State does not break that promise for the next financial year.

We also need clarity from Ministers on whether the standard minimum guarantee of pension credit will be uprated in line with the consumer prices index in September. Pensioners on pension credit will receive the £650, as the Secretary of State knows, but pension credit uptake is not what it should be. If we could drive up the uptake of pension credit, Loughborough University estimates than an extra 440,000 retirees could be lifted out of poverty. With approximately 850,000 pensioners not claiming pension credit, a huge number are set to miss out. Failing to do more to increase pension credit uptake could mean that two thirds of the poorest pensioners will not get the extra £650.

I recognise that the Minister for Pensions and Financial Inclusion—the hon. Member for Hexham (Guy Opperman), who is not in his place—has been leading a campaign to drive up the uptake and has even been ballroom dancing with Len Goodman. However, the Bill’s impact assessment, which the Government have published today, shows that 1.4 million pensioners are benefiting, but in the second round it is estimated that 26,000 fewer payments will be made to pension credit recipients. Can the Secretary of State or the Minister responding to the debate—the Under-Secretary of State, the hon. Member for Macclesfield (David Rutley)—explain why that is and what it says about the success, or otherwise, of the Government’s pension credit take-up campaign?

Families with children are poorly served by flat rate payments. Families in the bottom half of the income distribution with two or more children spend twice as much on food, essential household goods and services, clothing, footwear and transport. Families with three or more children are likely to spend an additional £500 on energy, but the support on offer is not adjusted for size of family.

We recognise that the cost of living payment, combined with the £150 council tax rate, will provide £1,200 for working-age households in receipt of means-tested benefits. However, that will not cover the whole increase in energy bills, especially as further large increases in the price cap, perhaps of £1,000, are expected in October. Nor will it provide much mitigation of the wider price food rises.

Let me spell it out. We know that there will be another rise in gas and electricity prices, possibly of £800 to £1,000, for a family who have already faced an increase of £850. That family will therefore need to find at least £1,650. They will get the council tax deduction of £150; they will get the energy bill loan, turned into a grant, of £400; and they will get £650, paid in two instalments, supposedly to cover the year ahead. That is £1,200 in total, which will still leave them £450 worse off because of the energy price rises this year. As that comes on top of last October’s £20-a-week cut in universal credit, that family’s standard of living will be down by £1,450 on last year—£28 a week. That is even before we take into account the food shopping bill, which Kantar has today predicted will go up by at least £380. The Governor of the Bank of England has warned of “apocalyptic” increases in food prices.

Surely more Government action is needed. Ministers will retort that they are helping families to find employment; employment should indeed be the best defence against the rising cost of living, but under this Government, 8 million people in work are in poverty and are picking up food parcels for their families because of low pay and family circumstances. Some 2 million working families are on universal credit and have suffered similar losses to those who are out of work: they have lost the £20 uplift, they faced a real-terms cut in universal credit in April, and their wages are being outpaced by inflation, even after the national living wage increase.

I recognise that the Minister will respond that the Chancellor has reduced the UC taper rate and increased the work allowance, and that those with the highest earnings who qualify for universal credit gain the most from the reduced taper. However, for those with very low earnings, the gains are much less than the losses elsewhere. A lone parent with two children would lose £1,200 if they were not working, but would lose £1,300 if they were working 10 hours, nearly £700 if they were working 20 hours and £400 if they were working 30 hours. These families have already lost substantial amounts, and the package that the Chancellor has announced does not make up for it. Those examples are not exceptional. They will have a familiarity to every Member who speaks to their local food bank or citizens advice bureau. The problem is that the flat payment system takes no account of family size or special needs.

I hope the Minister addresses those points this afternoon, because we need more than quick fixes to protect the living standards of our constituents and tackle the chronic injustices of poverty. We entered the living standards crisis not just on the back of years of underwhelming economic growth, but after years of cutting, freezing and restricting access to social security, which left us with a threadbare system and an explosion in food bank, baby bank, bedding bank and fuel bank usage. The real-terms value of out-of-work benefits is the lowest for years. We have seen the pernicious two-child policy, caps on support, inadequate help with housing and council tax, and real-terms cuts to universal credit—real-terms deductions to the amount that people on universal credit are forced to grapple with.

That is why child poverty is rising on its way to 5 million, with half a million more children destitute and 500,000 children going without a decent bed at night. The outcry from our communities forced the Government to take short-term action, but we need a long-term plan to rebuild social security, grow the economy, raise living standards, and defeat child and pensioner poverty, so that the victims of poverty can participate fully in society. That is what I am determined to build.