Social Security

Stephen Timms Excerpts

Tuesday 9th February 2021 Commons Chamber

[Will Quince]

I will of course study in detail the report from the Select Committee, chaired by the right hon. Member for East Ham (Stephen Timms), and look closely at the recommendations made, but when there is emotive language about things such as cuts to universal credit in April that are frankly not true, that drives adverse claimant behaviour, which we as a Department see day in, day out. For example, we see people who would be eligible for universal credit delaying their claim, so they claim not at the point at which they are eligible but when their money has run out and they have hit crisis. And for example, there are hundreds of thousands of people on legacy benefits who we know would be better off on universal credit, but they do not make a claim. Why? Because of the scaremongering and scares from the Labour party.

[Stephen Timms (East Ham) (Lab)]

I do not quite understand the point that the Minister is making. As it stands, Government policy is to reduce universal credit by £20 a week from April. Surely it is perfectly legitimate for Members of this House to draw attention to that.

[Will Quince]

I thank the right hon. Gentleman for that intervention, but it was absolutely clear that the uplift of £20 per week was a temporary measure for one year, and we have also been clear that the Chancellor has yet to make a decision and that all options are on the table.

I have said this before, but it is important to stress the point: discussions remain ongoing with Her Majesty’s Treasury and a decision on the future of the £20 universal credit uplift will be taken by the Chancellor of the Exchequer in due course. The Chancellor has been clear that all options are on the table and that he will take into account the assessment of the economic and health situation as the best way to build on the successful support that the Government have put in place and provided for those on low incomes and in need throughout this year, through our plan for jobs and winter support package. My right hon. Friend Chancellor of the Exchequer has an unenviable task—there is no question about that—but I point out to the House that he has a proven track record of stepping up to support the poorest, most vulnerable and most disadvantaged in our country throughout this pandemic. I have no doubt that he will continue to do so. The scaremongering is not helpful.

We must not forget that the more than £7 billion of additional funding to strengthen our welfare safety net was just one part of a much larger package of support measures for individuals, which has dovetailed with DWP-led support. Those measures include the coronavirus job retention scheme; the self-employment income support scheme; increases to the local housing allowance; local council tax assistance; the local welfare assistance scheme; the covid winter grant scheme; the protection for renters; and the support and protection for homeowners. Despite our delivering an unprecedented package of support since March and the crucial support that we continue to roll out through our jobcentre network throughout the country, we know we must continue to maintain the strength of our welfare safety net, particularly to protect those experiencing financial hardship for the months to come.

The Government propose, in the draft order, to spend an extra £2.7 billion in 2021-22 on increasing benefit and pension rates. With this spending we are upholding our commitment to the country’s pensioners by maintaining the triple lock, increasing pensions by 2.5% and therefore spending on pensioner benefits by £2.2 billion; helping the poorest pensioners who rely on pension credit; and ensuring that working-age benefits, including essential support for disabled people and carers, maintain their value in relation to prices by increasing them by 0.5%. That is in addition to the comprehensive support package already in place to support those affected by the pandemic.

The Government remain committed to providing families and pensioners throughout our nation with a helping hand, should they need it. We will do so by once again increasing the levels of benefits for the next financial year. I commend this order to the House.

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[Stephen Timms (East Ham) (Lab)]

I am pleased to follow the hon. Member for Glasgow East (David Linden) and I congratulate him on his appointment.

This order is an annual routine, but this year is different: the number claiming universal credit has more or less doubled since last March; we are still in a global pandemic; and the order would dramatically cut the universal credit standard allowance. We have already been reminded by my hon. Friend the Member for Feltham and Heston (Seema Malhotra) that for four years, from 2016 to 2020, people claiming around half the benefits covered by this order had their incomes frozen: they were no longer connected at all to the cost of living.

In 2018, the House of Commons Library estimated that, this year, working-age social security spending would be £37 billion less than in 2010 in real-terms 2018-19 prices. The Resolution Foundation says much the same, coming up with a figure for social security spending that is around £34 billion lower in 2023-24 than if the 2010 system had remained in place. People claiming universal credit and working tax credit had a temporary increase of £20 a week. That costs about one sixth of the real-terms cut in annual working-age benefits since 2010—less than 3% of overall pandemic support.

The Minister was right to say that people are scared at the prospect of losing the £20-a-week increase. I think he was kind of hinting—saying, “Well, don’t worry; it is not really going to happen.” But the answer to that problem is not to suggest that other Members of the House should not be talking about the issue; it is for the Government to make a clear statement that they are not going to go ahead with their current policy, which is to cut the benefit in April. I hope we do not have to wait until the Budget, which is still another three weeks away, before we have an announcement about what exactly the Government’s policy is.

The Joseph Rowntree Foundation says that withdrawing the temporary increase will risk sweeping half a million more people, including 200,000 more children, into poverty. In its report this morning, which has been referred to, the Work and Pensions Committee unanimously, on a cross-party basis, called on the Chancellor, as others already have in this debate, to extend the increase for at least a year. We are joined in that call by lots of organisations, as well as by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who I see in the Chamber, and the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), both former Secretaries of State; by many other Government Members —we have just heard from the right hon. Member for North Thanet (Sir Roger Gale); and by the House of Lords Economic Affairs Committee, chaired by the noble Lord Forsyth.

The Joseph Rowntree Foundation quotes a woman in London saying:

“That £20 is often the difference between light and heat or no light and heat. If you don’t have gas, you can’t cook.”

That is what many people have been up against during the pandemic. That support must not be withdrawn next month.

The report also looked at the idea that has been floated of removing the increase but giving instead a lump sum—perhaps £1,000, equivalent to a year’s worth of the increase. The Committee is strongly opposed. It is a very bad idea, and the Secretary of State for Work and Pensions made it clear to the Committee last week that she rightly opposes it. Citizens Advice told us that

“having a stable regular income is the best way to support people to budget and manage their money.”

The attraction for the Treasury, of course, would be the hope of withdrawing the increase without people noticing. It would not work.

People claiming benefits other than universal credit and working tax credit have seen, as we have been reminded, no increase at all. In our report in June, as the hon. Member for Glasgow East reminded us, we recommended increasing legacy benefits by the same amount. The report said:

“that does not mean that the Government should simply ignore the needs of those people who are claiming—through no fault of their own—benefits which rely on outdated and complex administrative systems. Those benefits include support for disabled people, people with health conditions, for carers…We recommend that…the Department should immediately seek to increase the rates of relevant legacy benefits by the equivalent amount.”

Since then, the Government have steadfastly refused. The Prime Minister told the Liaison Committee that it is because the Government

“want everybody to move on to universal credit.”

However, until two weeks ago, people receiving severe disability premium were prevented by law from doing so.

It has been argued recently, against the increase in legacy benefits, that the universal credit rise was to help people claiming for the first time, rather than those already claiming, but that was not what the Chancellor said in announcing the increase on 20 March 2020. He said that it was to

“benefit over 4 million of our most vulnerable households”—

the 4 million claiming universal credit and working tax credit at the time. All the other equally vulnerable house- holds, and many more vulnerable than those 4 million, have had no extra help at all. This order increased disability-related benefits by 0.5% at most.

Should disabled people have had some extra help during the pandemic? The Secretary of State told the Select Committee last week that she was

“not aware specifically of extra costs that would have been unduly incurred”

by disabled people during the pandemic. I spoke to a constituent—a disabled single parent with two daughters, one of whom is disabled. She used to search for bargains in local markets and supermarkets. During the pandemic, she has had to stay safe and not do that. She pays £1.50 or £2 for what used to cost her £1. She feels very hurt that she has had no extra help for those extra costs. Others have to pay supermarket delivery charges of £4 or £5 a time, and another £4 if they buy less than the minimum £40 order. That is a big chunk out of an income of £74.70.

The Select Committee’s coronavirus survey last year showed that people claiming disability benefits have substantial additional costs, such as extra cleaning and carers’ protective equipment. Last week, the Disability Benefits Consortium, in a new survey of disabled people claiming legacy benefits, which my hon. Friend the Member for Feltham and Heston referred to, found that 82% have had to spend more than normal during the pandemic and two thirds have had to go without essentials at some point over the past year. That is the evidence that the Secretary of State said last week that she had not seen. It is very clear, and I hope the Minister will reflect on it.

Unpaid carers have borne an extraordinary burden during the pandemic. Carer’s allowance is going to rise under this order by 35p per week. Carers UK is calling for it to increase by £20, like universal credit.

The standard minimum guarantee in pension credit will be raised, which is welcome, but take-up of pension credit remains much too low. The Minister for Pensions wrote to the Committee last week with an estimate of 63% for pension credit take-up. The charity Independent Age has called today for a new written strategy on pension credit uptake, including trial automatic enrolment. It estimates that the cost to the Government of those eligible for but not receiving pension credit is

“£4 billion a year in increased NHS and social care spending.”

That is a powerful reminder that scrimping on social security imposes large additional costs elsewhere.

The British Association of Social Workers has pointed out that the start of real terms working-age social security cuts in 2010 marked the start of a big surge of children being taken into care, imposing very large new costs on the Exchequer. We need to ensure that the social security system has the resources to do the job that all of us agree it should do. That means maintaining the £20 a week rise in universal credit for at least another year, and ensuring that legacy benefit claimants can, at last, get extra help as well.

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[Will Quince]

I begin by thanking all those who have spoken and taken part in the debate, which covered many important topics. Given the time constraints, I will not be able to cover off all the points raised, but as I said in my opening speech—I will just focus on this for one moment—the statutory annual review of benefits does not include a decision on the £20-per-week uplift to universal credit, which was announced by the Chancellor as a temporary measure in March last year. I repeat, because this is important, that the Chancellor has been clear that all options are on the table. He will take into account the assessment of the economic and health situation when considering the best way to build on the successful support that the Government have provided to those on low incomes throughout this year so far.

I make no apology for using the word “scaremongering”. I understand some of the points that Opposition Members made, but there is a big difference between lobbying for additional Government support going forward and using emotive language and politicising an issue. I gently remind the House that it was this Government who introduced the temporary £20-per-week uplift to universal credit; it was not a measure that Opposition parties were calling for. This Government have not flinched throughout this pandemic in supporting the poorest, the lowest paid and the most vulnerable and disadvantaged, and I have no doubt that the Chancellor and the Government will continue to do so.

Members raised concerns about legacy benefits. First, let me say that I appreciate that many people face financial disruption due to the pandemic. That is why the Government put in place an unprecedented package of support, totalling more than £280 billion, to protect jobs, help families and strengthen our welfare safety net. Just to give a bit of the broader context on welfare spending, in 2021 we will spend more than £100 billion on benefits for working-age people. That is £100,000 million—around £1 in every £9 that the Government spend; double our Defence budget. We spend more on family benefits than any other country in the G7, at more than 3% of GDP. We make no apologies that we will continue to reform our welfare system so that it encourages work while supporting those who need help—an approach based on the clear evidence that work offers families the best route out of poverty.

[Stephen Timms]

Does the Minister accept the evidence that disabled people have seen significant cost increases in the course of the pandemic?