Coronavirus Outbreak: DWP Response

Rachel Hopkins Excerpts

Thursday 26th November 2020 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

I, too, want to start by thanking all key workers across the Department for Work and Pensions, including many members of the Public and Commercial Services Union, for their critical role in our covid-19 response, and for supporting millions of people across the UK, including the nearly 15,000 in Luton South who claim universal credit.

The unprecedented public health emergency, coupled with its economic implications, has seen hundreds of thousands of people turn to our social security system for the first time. I think it has been a shock for many people as they have realised how inadequate the support actually is and how hard it is to live on. The Work and Pensions Committee’s report provides an excellent holistic understanding of the severe shortcomings of the system that have been further exposed by the pandemic. Household incomes across the country have been significantly hit, and when many people have turned to the social security system for support they have had to suffer the five-week wait for a universal credit payment, forcing many to take on the extra financial burden of an advanced payment loan. To prevent increasing household debt, the Government should convert that loan into a grant. To get the economy back on its feet, people need money in their pockets, not increased debt.

The rise in the standard allowance for universal credit and working tax credits was a welcome introduction to support the UK’s most hard-up, but it makes no sense that the Government did not extend the increase to legacy benefits, which include critical economic support for disabled people. Analysis by the Social Metrics Commission found that nearly half of people in poverty, 48% or 6.8 million people, live in a family that includes someone who is disabled. More than four in 10 people, 41%, are in a family that includes both a disabled adult and a child and is living in poverty. To tackle rising poverty, legacy benefits need targeted support. As the Motor Neurone Disease Association told the Committee:

“the amount of financial support through Carers Allowance is not enough, especially at a time when now more than ever extra pressure is being placed on unpaid family carers.”

I fully support the Committee’s call for the DWP to ensure legacy benefits receive the same uplift in support as universal credit and working tax credits, but we must also go further. The Government must make the benefit uplift permanent, as the economic impact of the pandemic will continue for the foreseeable future.

The rate of local housing allowance is also insufficient to keep a roof over many people’s heads. Shelter research states that more than four in 10, or 42%, of private renting households now rely on LHA to pay their rent. It was a positive step to increase LHA to cover the lowest 30% of private rents, but it does not solve the problem as it still creates a huge chasm between the benefits many tenants receive and the rent they are contractually obliged to pay. Furthermore, the decision at yesterday’s spending review to maintain the cash value of LHA but not continue to link it to the 30th percentile of local market rents will worsen the situation by leaving LHA rates falling well behind the cost of private rents once again. I support Shelter’s call for a mechanism to be put in place to ensure that LHA continues to cover at least the 30th percentile of local market rents going forward.

Finally, I want to speak about the huge suffering caused by the no recourse to public funds status. I have heard from families who are recently unemployed or who have lost income about their desperate financial situation due to their no recourse to public funds status. As a volunteer at Luton food bank, I met people with no recourse to public funds who are relying on the foodbank to feed themselves and their children as they cannot access sufficient support. Sadly, this heartbreaking situation is not unique. Children’s Society research referenced in the Select Committee report estimates that about 142,000 children under 18 and 1 million adults are in this situation. It is not in the public’s interests to force people, many of whom are key workers and frontline medical staff, to adhere to restrictive public health guidance while also denying them access to the social security safety net. That is truly callous. Many of these families cannot work, as that would risk their loved ones’ health, but they also have no support system to fall back on. They are stranded in mounting household debt, living hand to mouth without any respite on the horizon, so will the Minister explain to the House and those suffering why the Government refuse to suspend the no recourse to public funds rules for DWP benefits?