Coronavirus Outbreak: DWP Response

Nigel Evans Excerpts

Thursday 26th November 2020 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House notes the First Report of the Work and Pensions Committee, “DWP’s response to the coronavirus outbreak”, HC 178; and calls on the Government to increase relevant legacy benefits in line with increases to universal credit, to take steps to return people who have been inadvertently left worse off under universal credit compared with their previous benefits, and to suspend the no recourse to public funds visa condition for the duration of the coronavirus outbreak.

I thank the Backbench Business Committee for this opportunity. The new Work and Pensions Committee had an ambitious programme. Our first meeting in March was with the Health and Safety Executive, but in no time we were in lockdown and our programme was set aside. The Department for Work and Pensions has been key in this crisis as so many have lost the means to earn a living, and universal credit has delivered. I have been a frequent critic. I repeatedly pointed out that transition to universal credit could not be completed by October 2017, but the system that we now have has passed the test of this year. It is a national asset, which we should make the most of.

DWP staff have been on the frontline, with many redeployed to handle the tidal wave of claims. They have withstood enormous pressure. In our report, the Committee expresses thanks to them for their dedication and hard work, and that does need to be reflected in their pay; yesterday’s announcement was a heavy blow.

Ministers made good decisions at the start. After a decade of cuts, the £20 increase in universal credit and working tax credit, and the reconnecting of local housing allowance with actual rents, were key for many to surviving the crisis. I had understood that local housing allowance would be kept in line with local rents, so I was dismayed yesterday to hear that it will be frozen—decoupling it once again. My Committee agreed unanimously that the £20 increase should stay and many others have taken that view, including the Joseph Rowntree Foundation’s “Keep the lifeline” campaign. The campaign wrote an open letter to the Chancellor on 30 September with Citizens Advice, the Child Poverty Action Group, Feeding Britain, Oxfam, the Trussell Trust, disability charities and bishops. The Resolution Foundation says that otherwise:

“The basic level of support for an out-of-work single adult would fall to the level it was at when Margaret Thatcher left office”.

The Institute for Fiscal Studies warned of a significant decline in the incomes of 4 million families. The Chair of the Welsh Affairs Committee, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), a former Work and Pensions Secretary, called the £20 a lifeline and urged its retention. I very much regret that the Chancellor rejected those calls yesterday.

The spending projections show universal credit being cut by £20 in April, and people claiming universal credit are left fearing the worst. Our motion calls for the £20 uplift to be extended to legacy benefits. Yesterday, an increase of 37p per week was announced; Ministers must reconsider.

Not increasing jobseeker’s allowance and employment and support allowance for those out of work for ill health was done on the grounds, we were told, that computer systems were slow to change, but they certainly could have been changed by now, and it is absurd that people in otherwise identical circumstances, claiming different benefits because of universal credit roll-out sequencing, are receiving such different support. It is legally questionable. People should not face extended hardship because their benefits are run on out-of-date systems. Ministers were absolutely right to introduce the increase; it should be extended to legacy benefits, too

Our report last month, “Universal credit: the wait for a first payment”, calls for other much-needed changes. The five-week delay between applying and the first regular payment causes great hardship; we called for non-repayable starter payments to tide people over. We also called for “advances” to be renamed “loans”, to make it clear they have to be repaid, because calling them “advances” obscures that.

The motion also highlights the people made worse off by claiming universal credit. Government online advice says: “Apply online for universal credit to get financial support if you’ve lost your job.” For most people, that was sound advice, but not for everyone: if someone on tax credits claims universal credit, their tax credits stop.

We surveyed experiences of the benefits system in the pandemic; 6,000 people responded, and I thank all of them. Some had not realised that claiming universal credit meant losing tax credits. For some, their universal credit entitlement then turned out to be zero—for example, one of my constituents with £16,000 saved. That person was left, as many were, with no support at all. That is benefit mis-selling; Government should put it right.

In May, answering the right hon. Member for North Shropshire (Mr Paterson) here in the Chamber, the Secretary of State said that she would look “very carefully” at whether people should be able to return to previous benefits. That held out some hope, but now she says that allowing it would threaten to unravel the roll-out of universal credit; that is a very poor excuse.

Today’s motion highlights our call, also made by the Home Affairs Committee, for the no recourse to public funds immigration condition to be suspended for the pandemic. Some 3 million extra people have had to claim universal credit this year, but families working legally, with no recourse to public funds on their immigration status, do not have that safety net. They may get discretionary council help, but provision varies immensely. Indeed, Andy Jolly at the University of Wolverhampton has found that many families refused council help, so our report made this call:

“The Government should publish or at least clarify existing guidance for local authorities on what support they can provide for people with NRPF, including…whether measures such as the hardship fund are classed as public funds or not.”

At the Liaison Committee in May the Prime Minister said that people in this situation should get “help” of one kind or another. I agree, but unfortunately they do not. Families facing destitution can apply for exemption, but it is extremely hard. The all-party group on immigration law and policy heard this week from the Unity Project that it takes about 100 pages of evidence; many people cannot provide that. The Home Office takes a month, on average, to determine an application. No destitute family should have to wait a month for Government to decide whether they can claim benefit.

Our report in May also called for an impact analysis of the benefit cap in the pandemic. UC and the local housing allowance were rightly raised, but the benefit cap was not, so many families crashed into the cap for the first time. The Department told our inquiry that the number of people affected by that would be “very small”. We asked for a full analysis of the numbers and the characteristics of households newly subject to the cap, and of the impact on hardship. We now know that far from a very small impact, the number affected by the benefit cap has almost doubled in the pandemic.

In London, with high rents pushing up LHA, many have crashed into the benefit cap for the first time. People claiming benefit after losing their job have a nine-month grace period when the benefit cap does not apply. The employment Minister says that 160,000 households have a grace period due to end next month—the benefit cap will apply for the first time. I wrote to the Secretary of State yesterday, with the Committee’s agreement, about this issue. The Government were right to increase support for struggling families at the start of the pandemic and there should be a cap easement for those about to be hit.

Our report in May pointed out that the future jobs fund did a great job of supporting young people in the last financial crisis. I welcome the kickstart scheme, with its identical structure, that was announced the month after our report. It was disappointing to see yesterday that spending on kickstart will be much lower than planned. That seems to be because employers have to offer at least 30 places, thus shutting out small firms. That should surely be fixed. The Committee will take evidence on the Restart scheme, which was announced yesterday. An evaluation of the Work programme was published on Tuesday. Major commitment to employment support is absolutely right, but we need it—this is unlike what happened with the Work programme—to do a good job with, for example, disabled people.

The importance of dependable social security has never been clearer. The UC system and Department for Work and Pensions staff have passed an extraordinary test, and they have our congratulations and our thanks. The changes outlined in our report are needed now to minimise damage from the crisis, and to look forward and build back better in the months ahead.

[Mr Deputy Speaker (Mr Nigel Evans)]

I have asked Members to consider a five-minute limit. We are not putting the clock on, but Members who go wildly over five minutes will be doing a great disservice to those lower down the call list.

--- Later in debate ---

[Shaun Bailey (West Bromwich West) (Con)]

First, I pay tribute to the Clerks, the staff and fellow members of the Work and Pensions Committee, and to the right hon. Member for East Ham (Stephen Timms) for the work he did on this report. It was an interesting inquiry to be involved with and, as I am sure he will agree, we heard a wide range of evidence about the Government’s handling of the covid-19 pandemic.

The report recognises the unprecedented and difficult circumstances that our social security system has found itself in. Most of the people who rely on it have found themselves having to do so for the first time as a result of this crisis. We heard stories of people who never expected to have to rely on social security now having absolutely to depend on it. What we also heard about, and what has also been shown, are some of the operational challenges that the Department has faced. However, I have been very heartened by my hon. Friend the Minister’s listening mood and approach to some of these issues.

I want to concentrate my comments today on three things that I pulled out of the report. I certainly do not wish to step on or repeat any of the comments that right hon. and hon. Members have made so far, but for me a number of elements stick out: the operational challenges that the Department has faced during this period; the support for the self-employed and its impact, nowhere more so than in my constituency; and how we ensure that those people who have to go to work during covid get support from the agencies that are meant to ensure that they remain safe.

I first thank the DWP staff, who have been absolutely phenomenal during this period—I am sure we all agree. They have had to step up, with many seconded into roles of which they have had no experience before, and they have got on with it, worked hard and ensured that people who need access to benefits get those benefits and the entitlements they need. We heard stories in the report about how people not only got access to benefits but felt supported by the staff. People felt that they had the support, were being listened to and were being treated as individuals.

In looking at some of the operational notes, one of the things that stuck out was the verification of ID process. We heard that some of the issue with the process was that people sometimes found it complex and complicated. I absolutely support the need for digitisation of our benefits system—that is absolutely right, and we need to ensure that we have a streamlined system, which enables quick processing of people’s applications for benefits—but, certainly in a constituency such as mine, where I represent wards with some of the highest levels of deprivation, the digital divide is real.

Many people do not have access to digital services, whether the internet or IT equipment. However, I have been very impressed by the way in which jobcentres have engaged with people pre and post pandemic. This is a cross-Government project: we have to ensure that we plug the digital divide. I have said that repeatedly, and I will keep on saying it. We have got to ensure that people can access our services, irrespective of where they are, their background or where they come from. I am heartened by the discussions I have had with my hon. Friend the Minister and with other Ministers to ensure that we address the issue. I know that it is recognised.

I now turn to the self-employed. The fact is, as I said at the beginning of my remarks, many people found for the first time that they required support that they never thought they would need. In the report, I welcome the temporary suspension of the minimum income floor—a welcome acknowledgement by the Government of the problems for the self-employed, in particular those who have volatile monthly incomes. I also totally agree with the report on communications and the need to communicate with people about how to navigate the system. Often, self-employed people have found it difficult to know what benefits they are entitled to or to get the best support they need. I therefore welcome the Department’s and the Minister’s openness to ensuring that the self-employed get the support they need.

To touch on the point about the £16,000 saving limit, I know that it is one that my hon. Friend the Minister has recognised. However, we need to be acutely aware that many people put aside savings to pay their tax liabilities or to pay for things that they need. I know that the Department has heard that, and I have been really reassured by the conversations I have had with Ministers, but we must be mindful that people have not always burrowed such money away because they are well off; it is often intended to pay off liabilities, so the cash is not accessible.

Finally, because I am conscious that other colleagues want to get in, I turn to those people who went out to work during the pandemic. Many of my constituents cannot work from home, because they work in manufacturing, in food processing or as key workers. In the evidence from the Health and Safety Executive, we can see clearly that work still needs to be done on that. The TUC, for example, had 1,000 contacts from workers concerned about unsafe working and the HSE itself received about 6,000 concerns regarding social distancing.

Often, those workers who are classed as—I hate this expression—low-skilled had the highest risk and the highest death rates as a result of covid-19. It is important that the HSE is empowered to undertake spot checks and that we take an approach of cross-communication with the HSE, employers and, yes, trade unions to ensure that we have that cross-stakeholder approach to keep our key workers safe so that they can go out to work and so that those people in those jobs can continue to provide those vital services.

To conclude, I commend the Government for the unprecedented effort they have put in—let us not forget that at all. I commend my hon. Friend the Minister for his listening mood. The times have been unprecedented, and he has accepted the challenges and has the openness to solve them. However, ultimately, I cannot commend highly enough the work of the DWP staff and the fact that they have come out to ensure that our most vulnerable are supported.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank everybody for showing great time restraint and understanding.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

I thank the Work and Pensions Committee for its report, which provides important scrutiny of the Department for Work and Pensions, and our response to the coronavirus outbreak. I thank all hon. Members for their contributions to today’s debate, and for their largely constructive tone. Of course, I also thank the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Stephen Timms), with whom I enjoy a constructive, if not sometimes challenging—and rightly so—relationship.

I will start with some comments on the performance of my Department over the course of the pandemic before moving on to some of the substantive points raised in the debate. I pay tribute to the tireless efforts of my Department’s civil servants, who have stepped up to the challenge with remarkable speed and aptitude when faced with overwhelming demand as a result of the unprecedented pandemic. I thank the Committee for its acknowledgement of the work of our hard-working frontline staff.

Let me offer an insight into the sheer volume of UC claims that we have faced. From 16 March to the end of April, we received over 1.8 million claims for universal credit. The legacy benefits system simply could not have coped with this demand. Rather than the queues in the streets that we would have seen with a paper-based legacy system, our payment timeliness ran at a record high, with over 94% of claims paid in full and on time, and more than 1 million individuals able to access funds quickly via new claim advances. We moved rapidly to roll out a package of emergency and temporary welfare measures,  including the injection of billions of pounds into our welfare system this year to support those facing the most financial disruption because of the pandemic. That injection included a temporary increase to the universal credit standard allowance of more than £1,000 for this financial year. We also increased the local housing allowance rates for universal credit and housing benefit claimants to the 30th percentile of local rents from April; this vital financial support for private renters was worth on average £600 throughout this challenging period. We are, though, just one part of an overarching Government commitment to wrap our arms around the public.

Let me turn to the first of the points raised by the right hon. Member for East Ham, on the uprating of benefits and the UC standard allowance. The Secretary of State announced yesterday, as part of the annual review of social security rates, that benefits would again rise in line with inflation at the start of the next financial year. That is a cash increase of around half a billion pounds in 2021-22. We also affirmed the commitment that the increase to local housing allowance rates in April this year will be retained. Earlier this year we invested nearly £1 billion, increasing the local housing allowance rates to the 30th percentile of local market rents, and we will maintain that level of support next year by freezing the rates at current levels.

Let me address the question of the £20 universal credit uplift. The Government introduced a raft of temporary measures—including the furlough scheme, the self-employment income support scheme and, of course, the £20 universal credit uplift—to support those facing the most financial disruption. With the uplift confirmed until the end of March 2021, my right hon. Friend the Chancellor of the Exchequer set out yesterday why it is right that we wait for more clarity on the national economic and social picture before he decides on the best way to support low-income families from April. I stress to the House that discussions are very much ongoing with Her Majesty’s Treasury.

Let me turn to the second point raised by the right hon. Member for East Ham, on returning people to legacy benefits once they have moved over to universal credit. As a matter of fundamental policy design, making a universal credit claim will cease any entitlement to legacy benefits and tax credits that an individual may have. This function is supported in legislation and reflects the overarching principle of universal credit: that it will replace the legacy benefits system. The Department continually makes improvements to the UC service in response to feedback and user research. On 3 June, we introduced a new check-through box to remind claimants to check their eligibility before making a claim for universal credit, and to remind them that legacy benefits will cease when a universal credit claim is made and submitted and they will not be able to return to legacy benefits. I encourage claimants to check their independent eligibility calculators on gov.uk.

Let me turn to the third point raised by the right hon. Member for East Ham, on support for those with no recourse to public funds. Access to DWP income-related benefits such as universal credit flows from an individual’s immigration status. All claimants, regardless of their nationality, are required to be both legally and habitually resident in the United Kingdom in order to access income-related benefits. Ultimately, these matters are governed by the Home Office, and people without recourse to public funds can apply for a change of condition. I stress that support has been available, including through the coronavirus job retention scheme, the coronavirus self-employment income support scheme, the contributory employment support allowance and, of course, support via local authorities, including the new £170 million covid winter support grant, provided that the relevant eligibility criteria are met.

In the interests of time—I am conscious that it is very tight and we have Department for Work and Pensions oral questions on Monday—let me conclude by reiterating our commitment to providing a strong safety net for those who need it and targeting support at those most in need. I take immense pride in our Department’s response to the unprecedented challenges that this year has brought, and I know that the Department will continue to play a key role in delivering crucial services to society’s most vulnerable and disadvantaged over the coming months. As the recovery phase grows, the Department will continue to offer key services through our £30 billion plan for jobs. The Select Committee was right to acknowledge the exceptional work of our Department in supporting people through these unprecedented times, and I look forward to the important role that we will play in ensuring that we build back better in the coming months.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank everybody for their contributions and co-operation today, without a time limit being imposed. Everybody behaved impeccably—thank you.

Question put and agreed to.

Resolved,

That this House notes the First Report of the Work and Pensions Committee, “DWP’s response to the coronavirus outbreak”, HC 178; and calls on the Government to increase relevant legacy benefits in line with increases to universal credit, to take steps to return people who have been inadvertently left worse off under universal credit compared with their previous benefits, and to suspend the no recourse to public funds visa condition for the duration of the coronavirus outbreak.