Universal Credit and Working Tax Credits

Rachel Hopkins Excerpts

Wednesday 15th September 2021 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

In my two minutes, I want to make a couple of key points.

The Conservatives’ planned £20 cut in universal credit is truly callous, but it is also economically illiterate. I am astounded that the Secretary of State for Work and Pensions should agree that she is “entirely happy” with this decision. Five million households, including 3.5 million children, will suffer a cut of £1,000 a year, and that personal impact will be exacerbated by the damage to our recovery, as local economies are stripped of vital money that would otherwise be spent with local businesses. In Luton, we face an estimated £16.5 million being stripped from our local economy. That will impact on local businesses trying to recover after the pandemic, as we have heard from other Members.

Luton has been particularly exposed to the economic fallout of the pandemic, because it has one of the highest proportions of workers in sectors that are vulnerable to lockdown and restrictions, notably aviation, retail, hospitality, food and accommodation. As a result, it has seen one of the biggest claimant count increases anywhere in the country. With furlough ending next month and no sector-specific financial support package for the aviation industry, I cannot but foresee more people having to rely on universal credit.

In Luton South, 16,000 households may have to choose between heating and eating. According to the Institute for Public Policy Research, one in six working households cannot make ends meet. I recently met representatives of the citizens advice bureau in Luton, who told me that one of the biggest concerns they have will be the increase in personal debt as a consequence of the cut in universal credit.

Fundamentally, the Government should listen to the families who need this money, listen to key workers who are struggling to make ends meet, listen to the charities and civil society organisations, and cancel the cut.

Income Tax (Charge)

Rachel Hopkins Excerpts

Thursday 4th March 2021 Commons Chamber

[Rachel Hopkins (Luton South) (Lab) [V]]

Yesterday’s Budget needed to do two things: first, support communities and businesses through the economic crisis created by the pandemic; and secondly, outline a comprehensive strategy to kick-start the UK’s recovery. However, the Chancellor failed to deliver on both counts.

All I can draw out from the Chancellor’s Budget speech is that, rather than meaning redistributing wealth and investment and giving working class people a real stake in their economy, “levelling up” seems to mean moving part of the Treasury to Darlington, creating a few freeports and rehashing old funding. It is smoke and mirrors to cement the status quo—policies that fail to provide a vision for a more prosperous, fairer society and that will not improve people’s day-to-day lives.

There is nothing for the NHS, social care, schools or local council services, and no meaningful plan to tackle the housing crisis. Rather than levelling up living standards, the Budget has downgraded them, with a public sector pay freeze, forcing councils to increase council tax, and announcing a £20-a-week cut to universal credit in six months’ time.

My Luton South constituents needed to see plans for a more secure, equal and sustainable future, with the Chancellor committing to a new green economy based on full employment and a strong public sector. By choosing to adopt a half-baked, unambitious version of Labour’s commitment to a green investment bank, the Chancellor failed fully to comprehend the scale of the climate emergency we face. The funding made available to the bank offers only a fraction of that recommended by the National Infrastructure Commission, and no new investment has been announced for green recoveries in key industries such as automotive and aerospace.

The free market is incapable of addressing the climate crisis—in fact, I would say that it was market failure that created the crisis—so policies that weaken the state’s role in the market, such as the super deduction tax, only reduce the Government’s ability to incentivise and direct investment towards a green transition. Instead, the UK needs an innovative, Government-led industrial strategy that stimulates green growth and job creation, ensuring that the transition is equitable and that everyone has the opportunity to have a well-paid, skilled job—something that the market is incapable of delivering.

Last week, Unite the union highlighted seven shovel-ready projects that would help the UK to develop as a modern manufacturing nation. Investing in those projects would have wide-ranging benefits. For example, building gigafactories and rapid charging infrastructure would help Vauxhall in Luton South transition to manufacturing electric vehicles. Labour has repeatedly called for a £30 billion green economic recovery to create 400,000 secure, unionised jobs in clean industries. We must not return to the same insecure, unequal, unsustainable economy that preceded the pandemic.

Oral Answers to Questions

Rachel Hopkins Excerpts

Monday 30th November 2020 Commons Chamber

[Mims Davies]

I join my right hon. Friend in paying tribute to the hard work and commitment of the Harlow jobcentre staff throughout these difficult times. We are in active discussions on a new DWP youth hub in Harlow. Those at Harlow jobcentre, alongside our 600-plus other jobcentres, do an immense job daily, encouraging and helping our most vulnerable claimants and supporting all individuals based on their circumstances, and that is where kickstart and other programmes will come in. Jobcentres do work locally with external partners—with charities, local employers and key organisations across Harlow and elsewhere—on local recovery plans and local needs.

[Rachel Hopkins (Luton South) (Lab)]

What recent assessment her Department has made of trends in the level of unemployment.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

The latest ONS labour market unemployment level in the east of England is 137,000, and the national rate now stands at 4.8%. In addition to other measures, the DWP has established “job help” and “employer help” websites to provide jobseekers locally and employers the opportunity to get guidance and tools to help people find new roles.

[Rachel Hopkins]

Nearly 15,000 people are relying on the inadequate support provided by universal credit. So, to get a grip of the jobs crisis, what discussions is the Minister having with the Chancellor regarding reasons for using the furlough scheme to keep people in work and to incentivise employers to use it as flexibly as possible—for example, to allow workers at risk of redundancy a trial period in a new role, rather than proceeding to make them redundant?

[Mims Davies]

That is absolutely the reason we have the job help website and at DWP our rapid response service. That is why we have our £30 billion plan for jobs, which includes the JETS—job entry targeted support—scheme, the “find a job” support service and the new employer help and job help websites.

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?

Kickstart Scheme

Rachel Hopkins Excerpts

Thursday 3rd September 2020 Commons Chamber

[Dr Coffey]

I agree with my hon. Friend that this is a mutually beneficial arrangement for young people and employers. The amount of money that has already been set aside is £2 billion of investment over, in effect, the next two years. We know that unlimited placements can be generated, and I am conscious that we need to try to get those partnerships going quickly, so that we can help young people to get on that first rung of the ladder.

[Rachel Hopkins (Luton South) (Lab)]

What safeguards has the Secretary of State put in place to ensure that disabled young people are fully able to benefit from the kickstart programme? The employment rate for them stands at 37%, which compares with a figure of 57% for non-disabled people, so will she ensure that this new programme supports disabled young people?

[Dr Coffey]

The Minister for Disabled People, Health and Work has, as with all DWP Ministers, been a key part of making sure we work at this as an entire Department. We have also been working with colleagues right across government, so we are taking a whole-government approach. Ensuring that we keep monitoring this issue has a role to play in this. In answer to the right hon. Member for East Ham (Stephen Timms), let me say that we will be keeping this scheme going and trying to learn from it as we go, to make sure that we are reaching all parts of not only the country but our communities.