Social Security (Up-rating of Benefits) Bill

Stephen Timms Excerpts

2nd reading
Monday 20th September 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I am pleased to follow the hon. Member for Amber Valley (Nigel Mills), who makes an important contribution to the work of the Work and Pensions Committee. I echo his words of appreciation and good wishes to the hon. Members for North Swindon (Justin Tomlinson) and for Colchester (Will Quince).

The Bill reduces an increase in the state pension that the Government’s triple lock policy would have delivered. I understand why it has been done, but let us not kid ourselves; we have a growing problem with pensioner poverty, after a quite long-sustained improvement following the introduction of pension credit 18 years ago. The charity Independent Age has analysed the Government’s households below average income statistics. Its analysis shows that pensioner poverty has started to increase again since 2012, with 18% of pensioners—more than 2 million people—in 2020 living in poverty after paying housing costs, of whom more than 1 million are in severe poverty. This is a significant challenge and it is getting worse. Of the English regions, the problem is particularly acute in London. There is no room for complacency about pensioner poverty.

The Bill will increase the standard minimum guarantee of pension credit by 2.5% or inflation—whichever is the greater—next April. When the Minister responds, will he tell us what the Department will do to increase take-up of pension credit so that more people can benefit from the increase? The most recent figures show that only six in 10 of those who are eligible for pension credit are claiming it, and that only 76% of the total amount of pension credit that could have been claimed is claimed. That is quite a significant reason why the problem of pensioner poverty is rising.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I am extremely grateful to the right hon. Member for making that important point. In preparation for this debate, I read an incredible stat: in Wales alone, about £214 million of pension credit is not claimed. Increasing take-up would be an easy way to deal with the growing tides of pensioner poverty, but the key thing with pension credit is that it is also a gateway to other support.

[Stephen Timms]

The hon. Gentleman is absolutely right. That is why Independent Age has called on the Government properly to research who is not claiming pension credit, and to draw up a plan to increase take-up over five years.

Research by academics at Loughborough University found that maximising pension credit uptake could lift three in 10 pensioners out of poverty and reduce the number living in severe poverty by half. When the Secretary of State came to the Select Committee in July, I asked her whether the Department would bring forward an action plan. She replied that there had been a “media day of action” in June to encourage take-up of pension credit, and told the Committee:

“We will continue to advertise it in a different way but I am not anticipating a big action plan, no.”

That is disappointing. Given that the Bill will deny pensioners an increase that the Government’s policy appeared to promise, I ask the Minister to look again at further steps to increase pension credit take-up.

My name was also on the reasoned amendment tabled by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), which, as he reminded the House, was not selected. However, I want to comment on the reasoned amendment that was selected, which states that we should reject the Bill because it

“fails to increase key benefits, such as making permanent the uplift to Universal Credit.”

Let me pick up that specific point. As the amendment drafted by the right hon. Member for Chingford and Woodford Green pointed out, the money that the Bill will save the Government next year would almost deliver the £20 a week uplift to universal credit next year. Many Members across the House are deeply worried by the plan to remove the uplift next month. The Select Committee’s call to at least postpone the removal of the uplift was unanimous. There are lots of different kinds of worry, which I will outline.

First, this is not the right time, because the furlough scheme is about to end. We are told that Ministers’ intention in introducing the uplift was to protect people who were becoming newly unemployed, but there will be a surge of newly unemployed people when furlough ends. Ministers told the Select Committee last week that the Government have no estimate of the number of redundancies that will follow the end of the furlough scheme, but the most recent figures showed that 1.6 million people were furloughed at the end of July. Surely the consideration given to people who became unemployed at the start of the first lockdown should be given to those losing their livelihood next week as well. What justification could there be for treating them differently?

Secondly, since the decision to introduce the uplift—especially in the past month—we have seen a surge of price rises. September’s inflation figure was a record, reflecting increased food prices in particular, and earlier this afternoon the House was considering the current steep increases in energy prices. This cannot be the right time to take £20 a week away from everyone receiving universal credit. The Select Committee recently heard evidence of people having to skip meals before the uplift was introduced. Well, their position will be a good deal worse if the uplift is taken away in a couple of weeks, because the prices they now face are so much higher, and have become so much higher in just the last few weeks.

Thirdly, what justification can there be for reducing universal credit to a historically low level? If the uplift is taken away, support for unemployed families will be the lowest in real terms for more than 30 years. The economy has grown by more than 50% in real terms over that period, but we are being asked to agree that support for unemployed families should be no higher at all in real terms than it was 30 years ago. As a proportion of average earnings, support for unemployed families will be the lowest since the modern welfare state was introduced in 1948. The Library tells me that it will be lower as a proportion of average earnings than it was when unemployment benefit was first introduced in 1911.

We are told that the Government’s priority is levelling up. This policy is not levelling up; this is a policy of grinding down. Social security has a job to do—an important job that we all recognise needs to be done. Pushing it inexorably downwards when prices are surging upwards means that it cannot do that job. People cannot focus on getting a job if they are worrying about whether they can afford to eat their next meal.

Speaking to the Committee last week, Ministers from the Department could give no reason at all for the Government choosing to set the rate of universal credit so low, other than as a consequence of historical accidents. They said that the Government had made no assessment of the impact of ending the £20 a week uplift on people claiming, nor of how many people would be pushed into poverty as a result. The Legatum Institute has today published research suggesting that the number of people in poverty will go up by 840,000, including 290,000 children, if the uplift is removed. The Government have also made no new estimate of the annual cost of keeping the uplift.

[Sir Iain Duncan Smith]

Does the right hon. Gentleman agree that often in the briefings used there is a kind of mistake in that they talk about this as being an unemployment benefit? It is not, because it combines tax credits, so putting investment into this is more likely to get people through and into work than taking it out. That is the point I was going to make but was not able to.

[Stephen Timms]

The right hon. Gentleman makes a very important point that I agree with. It is a vital fact, often not understood, that universal credit is an in-work benefit as well as an out-of-work benefit. I think that 40% of universal credit claimants are in work. We have taken evidence in the Select Committee from working parents receiving universal credit who are having quite a hard time at the moment and are going to have a very hard time indeed if they lose the £86 a month that they will if the uplift is removed.

The cost of keeping the uplift, the figure that we are given, is £6 billion a year, but—the hon. Member for Amber Valley drew attention to this in the Select Committee last week—that figure was calculated when lockdown was still in place and job vacancies were much lower, so presumably the cost would be less if the uplift was kept.

The Bill misses the chance—the Liberal Democrats’ reasoned amendment gives us the opportunity to reflect on this—to address this very serious flaw in the Government’s current intentions. We are heading into an extremely difficult period for both working families and unemployed families who depend on universal credit, because of price rises across the board.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I thank the 13 colleagues who have contributed to a wide-ranging debate. The Bill makes technical changes to set aside the earnings link for 2022-23. We will instead increase the relevant pensions and benefits by at least the higher of inflation or 2.5%. This approach will ensure that pensioners’ spending power is preserved and that they are protected from the higher cost of living, but it will also take into account the difficult decisions elsewhere across public spending.

The practical reality is that many issues were raised tonight, not least pensioner poverty. I would respectfully remind the House that pensioner poverty is going down, not up. As a result of the triple lock since 2010, the full yearly basic state pension has increased by £2,050 in cash terms. There are 200,000 fewer pensioners in absolute poverty, both before and after housing costs, as compared with 2009-10, and material deprivation—an alternative way of measuring poverty—is at an all-time low of 6% of pensioners.

[Stephen Timms]

Will the Minister give way?

[Guy Opperman]

One second.

It is worth reminding ourselves that the spending on state pension used to be £99 per person, and less than £60 billion in total—when in fact the right hon. Gentleman was the Pensions Minister under the Labour Government. Those figures are now up to £137 or to £179, and to £105 billion.

[Stephen Timms]

I am very grateful to the Minister for giving way, and I am delighted he is still in his post. He talked about pensioner poverty, but rather idiosyncratically, he is using the absolute measure. The much more widely used measure is the relative measure of poverty, on which the analysis of Independent Age is based, and on that much more widely used measure, pensioner poverty is of course going up.

[Guy Opperman]

I am not going to repeat the points I have made, but I manifestly disagree with the right hon. Gentleman. I would point out that we could add on the £24 billion of top-ups that this Government put forward over and above the £105 billion of state pension, so with respect we are in disagreement. There is also a significant degree of support for winter fuel, NHS prescriptions, free eye tests, the over-75s free TV licence and a variety of other matters.

Universal Credit and Working Tax Credits

Stephen Timms Excerpts

Wednesday 15th September 2021 Commons Chamber

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

Just this week, the official jobs statistics showed that more people are getting back into work and there is a record number of vacancies. That is a tribute to the British people and businesses. It shows that our plan for jobs is working. It shows that our comprehensive and unprecedented support for citizens and corporations as well as the NHS, in trying to protect lives and livelihoods, has worked. After the terrible personal and economic impact of covid, boosted by the successful vaccination roll-out, Britain is now rebounding.

It was right that we took prompt and decisive action to support our nation during this challenging time. We had the job retention scheme, the self-employment grants, the VAT changes, the business rates relief, the suspension of evictions for people and businesses who were renting—I could go on. We could only do that, though, because we went into the global pandemic with strong economic foundations built as a result of 10 years of Conservative measures to restore the nation’s finances after the financial crisis on Labour’s watch, when, memorably, there was no money left. Those measures included a sustained focus on supporting people to move into and progress in work through universal credit, with the highest level of employment ever seen in this country just before covid hit.

[Stephen Timms (East Ham) (Lab)]

If this cut goes ahead, with £20 a week taken off universal credit, it will reduce the support for an unemployed family to the lowest level as a proportion of average earnings at any time since the welfare state was established after the second world war. How can that possibly be justified?

[Dr Coffey]

As I will probably say a bit later as well, this was indeed a temporary uplift, recognising the financial impact on people newly unemployed and that the uplift would be somewhat of a cushion for their financial circumstances. However, do bear in mind all the other support that we have given to help families get back on their feet, all the other elements that we have used to help people manage the cost of living, as well as the extra welfare grants that we targeted specifically through local councils. They have all been actions to help people, and we are helping people back into work, and better-paid work.

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[Stephen Timms (East Ham) (Lab)]

I very much welcome the argument that the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) has just set out, and I am grateful to him for reaffirming his support for the £20 a week rise. Like him, I want to focus on the question of adequacy.

If this cut goes ahead, it will reduce real-terms support for an out-of-work family to the lowest level since Margaret Thatcher was Prime Minister. The economy has grown by more than 50% in real terms since then, but the Government’s proposal is that support for unemployed families should not have grown at all over those 30 years. That support will be about one seventh of average earnings, which is, as I said in my intervention on the Secretary of State, the lowest proportion of average earnings it has been since 1948. The Secretary of State made no attempt to justify why it was so low. I invited her to do so, but she did not, and of course it cannot be justified. The House of Commons Library tells us that, if we go back to 1911 when unemployment benefit was introduced, it was set at a higher level as a proportion of average earnings than the system will deliver if this cut goes ahead. The cut will take effect just as we are seeing prices surge, including food prices, as we have seen in today’s inflation figures, and energy bills, with the Ofgem price cap lifted.

The Work and Pensions Committee heard last week from a lone father of two children who told us what this was going to mean for him:

“The uplift sent some relief and for that to be removed is going to leave us with that big question again: do I go hungry, do my kids go hungry or do we keep the house warm?”

Somebody worrying about how to buy their next meal is not going to be able to focus on finding a decent job. Taking away £20 a week will leave the level of support below the basic minimum that is needed and that we require the system to provide.

The cut will hit working families hard as well. The Committee heard from working lone parents who will lose £86 a month from their income. One of them told us that

“if one of the children gets a party invite—which some weeks is my worst nightmare because then I have to find the money for them to be able to do that—it is kind of a case of robbing Peter to pay Paul all of the time anyway. There have been months where I have to decide which bill I am not going to pay this month...you are constantly playing catch-up on utilities particularly...The extra £86 a month has allowed for us not to be doing that so much.”

And that is a parent who is in full-time employment. If this cut goes ahead, it will reduce support for working parents and unemployed parents below the basic minimum that we all want people to have to enable them to look for a job, or for a better job, and to care for their children—things we all want them to do. We will instead be imposing grinding hardship on a very large number of people at a time of surging costs and inflation. Taking away the £20 a week now will mean that the level of support provided will be less in real terms, given today’s inflation figures, than the support that was available going into the pandemic.

The Government have lost touch with what people are having to deal with. The Secretary of State’s claim that people could make up the extra £20 a week by working an extra two hours is simply wrong. Governments do lose touch, but this House must not. We must retain a recognition of the realities that people are dealing with. We need to grasp what this will do to families, even though Ministers do not. It is not just about numbers on a spreadsheet. Half of those claiming universal credit only started doing so during the pandemic. They are not returning to their former level of support. Many will have to get used to a lower income than they have ever had to cope with, and that will come as a rude shock to those who were convinced at the 2019 election, maybe for the first time, that the Conservative party understood what they were dealing with. Every former Work and Pensions Secretary since 2010 opposes the cut, as the right hon. Member for Preseli Pembrokeshire reminded us. It will leave the system unable to do the job we need it to do, and the House must reject this cut.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 13th September 2021 Commons Chamber

[Dr Coffey]

The estimated cost for a year of the extension of universal credit is about £5 billion. As my right hon. Friend the Chancellor has set out, and we have updated the plan for jobs today, we want to invest in people to make sure that they can not only get into work, but get into better-paid work as well. That is why with a variety of levers, such as the lifetime skills guarantee, and all the work we are doing for people out of work at the moment, including the sector-based work academy programme, alongside some of our other programmes, we have a really good record of getting people into well-paid work, and that is where our focus has to be.

[Stephen Timms (East Ham) (Lab)]

Single parents who are in work told the Work and Pensions Committee last week how hard they are going to find it to sustain the £87 a month fall in their income that this cut will deliver. One witness told us that he is going to have to skip meals to make sure that his children do not have to. Surely social security must be better than that.

[Dr Coffey]

I hope the right hon. Gentleman will direct that person to go and have a chat with the work coach. I do not know the status of that individual, exactly what paid employment they are in right now or their situation with childcare, but I remind him that 85% of the cost of childcare can be claimed by people on universal credit. One of the directions we want to encourage individuals to go in is to go and talk to their work coaches so that we can help them get on in life and be more prosperous.

Pensions Update

Stephen Timms Excerpts

Tuesday 7th September 2021 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Select Committee.

[Stephen Timms (East Ham) (Lab)]

Is it still the Secretary of State’s view that it is important that the level of the basic state pension keeps track with earnings over time, as the coalition pension reforms assumed? If so, will it not require some further adjustment after these two exceptional years? Given that pensioner poverty was starting to increase before the pandemic, after a long period in which, as she said, that did not happen, what will her Department do to increase the currently very low take-up of pension credit?

[Dr Coffey]

In response to the first part of the right hon. Gentleman’s question, the legislation is there regarding the earnings link and we are maintaining that. We will be doing further analysis to understand what proportion of median earnings the pension will be, but I have no plans to change aspects of it. We think it is a sensible approach that we have taken to redress the balance, which had moved away.

Forgive me, but I have forgotten the second part of the right hon. Gentleman’s question. [Hon. Members: “Pension credit.”] Okay. The thing about pension credit is that it is split in two: the income guarantee and the savings credit. As I said to the House, our estimate is that 75% of people we think could be eligible take up the income side of pension credit, but the savings side has a much lower take-up. That is because sometimes when people do the calculation, it may be just 1p or 2p a week and they may not think it worth while to do the whole application. However, even with the savings credit side of pension credit come things like the free TV licence and access to other benefits, so we encourage people to take it up. With the income side, we estimate that three in four eligible pensioners are taking it up.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 28th June 2021 Commons Chamber

[Will Quince]

The hon. Gentleman knows that I will not be able to comment on live litigation, but what I would say is that we do have a comprehensive childcare offer, both as a Government and specifically as a Department. I would also say that, unlike the previous benefit system, in which childcare costs could be up to 70% recoverable, in universal credit the figure is 85%, so it is a far more generous system.

[Stephen Timms (East Ham) (Lab)]

The Joseph Rowntree Foundation has told the Work and Pensions Committee that cutting £20 a week from universal credit in October will reduce unemployment support to the lowest level for over 30 years at exactly the point when unemployment is being increased by the ending of the furlough scheme, and that it will also pull 400,000 people, including many children, below the poverty line. What assessment will the Minister make of the impact of that cut on child poverty before the cut goes ahead?

Oral Answers to Questions

Stephen Timms Excerpts

Monday 17th May 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

Hard-working, law-abiding families without indefinite leave to remain have not had as much support as others during the covid-19 outbreak because of the effect of the no recourse to public funds condition. Some of those families have been able to benefit from the job retention scheme, so how will they be supported after that scheme closes in September?

[Will Quince]

The right hon. Member knows that we are restricted, as per legislation, in what we can do in relation to the benefits system and those with no recourse to public funds. I know this is an issue that he cares very passionately about and has raised numerous times. I would certainly be very happy to raise this issue with the Immigration Minister—the Under-Secretary of State for the Home Department, my hon. Friend the Member for Torbay (Kevin Foster)—and if we have a meeting, I will certainly invite the right hon. Member along.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 8th March 2021 Commons Chamber

[Dr Coffey]

My hon. Friend is right to point out that removing the threshold has enabled a number of institutions to apply directly to kickstart. The example he highlights was already under way, but it just shows some of the fantastic opportunities that this scheme can offer young people. By creating so many of these roles, with the wider variety of roles that we are seeing, we are reducing the risk of long-term unemployment for hundreds of thousands of young people, and we will continue to keep the House updated on progress.

[Stephen Timms (East Ham) (Lab) [V]]

Kickstart is only for young people claiming universal credit. Many disabled young people claim employment and support allowance instead. Will the Secretary of State consider extending kickstart to include disabled young people who are not eligible for it at the moment?

Income Tax (Charge)

Stephen Timms Excerpts

Thursday 4th March 2021 Commons Chamber

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

It is a pleasure to respond to the hon. Member for Oxford East (Anneliese Dodds) in this Budget debate. I think it is fair to say that, since the start of the pandemic, our priority as a Government has been to protect the lives and livelihoods of people right across this country. That is why my right hon. Friends the Prime Minister and the Chancellor, over the last year and again in this Budget, have taken unprecedented steps to support British people and businesses, including help for those who need it most. That includes further measures using our fiscal firepower to revitalise our economy, get people back into existing jobs and encourage investment to help create new jobs.

Let us remind ourselves of the steps we have already taken. Through the furlough scheme, we have supported more than 11 million jobs. This unprecedented cushion of support has helped millions of people to stay connected to their employers who could otherwise have been made redundant. Through the self-employment income support scheme, we have helped more than 2.5 million self-employed workers with grants and business loans, as well as targeted support for those on benefits.

Not everyone was fortunate enough to be furloughed, though, and through the £20 a week increase to universal credit, we ensured that those who faced a drop in earnings or were newly out of work received extra support during this difficult period. I am proud of our swift action at the start of the pandemic and throughout to support an extra 3 million people through universal credit and other benefits. That has been thanks to the hugely dedicated staff of the Department for Work and Pensions, which I consider to be the Department of Wonderful People, who delivered that support competently and compassionately.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will have seen the evidence that disabled people have seen a big increase in their grocery costs during the pandemic, and yet people claiming employment and support allowance have had no extra help at all. Why have they not been supported?

[Dr Coffey]

As the right hon. Gentleman will be aware, and as the Chancellor has said repeatedly, there was a specific reflection at the time of introducing the extra £20 a week uplift to recognise the issues regarding people who were newly unemployed. I am conscious that the right hon. Gentleman’s Select Committee is undertaking an inquiry on people with disability and employment, and we will provide evidence in due course, when we can perhaps discuss that matter further.

[Dr Coffey]

I am grateful to my hon. Friend for highlighting the really good work undertaken by officials. I would also like to thank my ministerial team, because we have worked together to do this. Indeed, arm’s length bodies such as the Health and Safety Executive have also done really good work in trying to ensure that workplaces are safe, helping employers to ensure that that is the case and minimising the transmission of this wretched coronavirus that we have endured. I will bear in mind his thoughts, but I do not think it is in the interests of the DWP to take on the DVLA as well.

Last week, the Prime Minister set out the road map that will lead us out of lockdown and back to the way of life that we are all eager to enjoy. As we all play our part in controlling coronavirus, and after a particularly wretched winter, we are ratcheting up for what I hope will be a spectacular summer. But we know that recovery will not be instantaneous for everyone, which is why the Prime Minister said explicitly that we would not just pull the rug out from under people’s feet as we start to see light at the end of the tunnel. That is why yesterday my right hon. Friend the Chancellor set out targeted measures in the Budget that would deliver on that commitment to help people and businesses through these next few months as we open the economy and deliver on our plan for jobs, helping people who are still impacted by coronavirus to get back into work.

First, to support low-income households we will extend the temporary £20 increase to universal credit for a further six months, on a monthly basis, taking it well beyond the end of this national lockdown. Working tax credits are administered by Her Majesty’s Revenue and Customs, and claimants will receive a one-off covid support payment of £500—this is largely driven by the way that system works operationally. That is in addition to all the other Government support for people on low incomes, be that support with some of the most expensive bits of the cost of living, through things such as the increase to the local housing allowance, which is going to be preserved in cash terms, or with other elements, such as through council tax support.

[Stephen Timms]

The Secretary of State said that the universal credit uplift would be extended on a monthly basis. Does that mean that if circumstances warrant it, the uplift will be continued beyond September of this year?

[Dr Coffey]

The clear intention is that this is an extension of six months, because that will take this well beyond the aspect of the national lockdown. I was particularly making the point about monthly payments because I have always been clear that this is about UC continuing on a monthly, rather than one-off, basis, and that would be the preferred approach. I am pleased that the Chancellor has agreed with me on that and on making sure we keep that regular payment uplift for the next six months.

Secondly, we have self-employed people on UC, and in addition to the further help through our self-employment income support scheme we will suspend the minimum income floor for a further three months. That means that hundreds of thousands of people will continue to receive financial support based on their current actual earnings, rather than on the assumed amounts we would normally undertake through the gainfully self-employed test.

Thirdly, the further extensions of the furlough scheme to the end of September represent a huge investment in people, keeping them connected to their current jobs and employers. I urge employers and employees to take full advantage of this additional time of furlough to get ready to return to work, and do the training and refresher courses, so they are ready to hit the ground running as their business fully reopens. Taken together, I believe that these temporary extensions will provide essential support as we move along the road map, restart the economy and transition to our full recovery.

Thanks partly to the extension of the furlough scheme, the OBR is now expecting a better jobs outlook than it was in its November forecast, with unemployment now expected to peak at 6.5% at the end of this year, instead of 7.5%, which was its previous forecast. Although that represents a third of a million fewer people than the OBR previously forecast, I fully recognise that the OBR is still predicting that, sadly, unemployment will rise by a further half a million people compared with now. As we have always said, we cannot, sadly, save every existing job, but my right hon. Friend the Chancellor set out yesterday extraordinary measures of support to help businesses stay in business and to create new jobs. The supercharged super-deduction on capital investment is exactly the kind of initiative that can stimulate businesses to invest here in Britain, leading to brand new jobs.

I am very conscious of what the hon. Member for Oxford East said, which is why we have undertaken significant work across government on our labour market sector plans in working through the opportunities we can create, not only by resurrecting some businesses and sectors that have been temporarily affected by the lockdowns but to bring in new jobs. I particularly commend initiatives such as the freeports, which we know will be creating tens of thousands of extra jobs right around the country. I was delighted that Freeport East was successful, as it covers the ports of Felixstowe and Harwich, one of which is in my constituency. It was a great pleasure to work with businesses across Essex and Suffolk to make that happen, particularly with the creation of a green hydrogen energy hub. That is really important investment that will be coming now thanks to the freeport initiative, and I know that the same will be happening right across the country. I can see people in this Chamber, such as my hon. Friend the Member for Thurrock (Jackie Doyle-Price), whose constituents will benefit from her ports coming together to be a freeport.

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[Stephen Timms (East Ham) (Lab) [V]]

I expected the right hon. Member for Wokingham (John Redwood) to complain about the fact that this was a massively tax-raising Budget. I am not sure whether, perhaps in a coded way, he was doing so, but it did reverse policies on income tax thresholds and corporation tax rates that have been central to Tory policy for 10 years.

We all understand the reason why the Chancellor made these announcements, but I must say it was unedifying to watch him yesterday hand out funding on such a brazenly party political basis. However, the real criticism of yesterday, as my hon. Friend the Member for Oxford East (Anneliese Dodds) spelled out in her opening speech today, is the absence of vision. The Financial Times says this morning that

“the needed long-term vision for a country facing an uncertain future is absent.”

We need much better than that.

I want to focus on points of particular interest to the Select Committee on Work and Pensions. I am relieved that the £20 uplift to universal credit will not be scrapped this month. That should have been announced weeks ago; I have no doubt that the Secretary of State for Work and Pensions was doing her level best to achieve that, but it should not have been left until yesterday. However, the uplift is going to be scrapped in September. Tax rises are being delayed until next year, because, as the Chancellor recognised, we will not have a proper recovery until then. Why then is the universal credit cut not also being deferred for 12 months, as the Select Committee recommended? A total of £20 a week is to be cut from unemployment benefit in September, just as furlough ends and unemployment reaches its peak. The House of Commons Library tells me that the only precedent for that is the 10% cut in unemployment benefit introduced by the National Government in 1931.

There is no additional support in the Budget for people claiming legacy benefits. The Government should not simply ignore the needs of all those who, because of Government policy, claim benefits relying on outdated computer systems. Disabled people, above all, have lost out. They have seen big cost rises in the pandemic—I hope the Secretary of State, having told the Committee that she had not seen evidence of that, has now seen the clear evidence—through not being able to shop around as normal, but they have had no extra help. That is unforgiveable.

The previous Work and Pensions Committee welcomed the commitment in 2019 to new statistics for measuring poverty based on work by the Social Metrics Commission. That has ground to a halt. The Secretary of State said last month that she has no plans to restart it. Baroness Stroud, the Social Metrics Commission chair, told the Committee that

“we are going into Budgets and Spending Reviews and we are spending £200 billion, but we have no sense at all as to the impact on poverty.”

The Committee has commissioned me to write to the Prime Minister to ask for an assurance that the Government remain committed to this work, and, if they are, for a timetable to restart it.

The DWP is investigating historic underpayments of the state pension to some married women, to widows and to people over 80, which were first highlighted by the former Pensions Minister Steve Webb. The OBR Economic and fiscal outlook report says that

“it will cost around £3 billion over the six years to 2025-26 to address these underpayments, with costs peaking at £0.7 billion”

in the coming financial year. Those are eye-watering numbers, which we look forward to hearing more about.

The Chancellor announced yesterday, as the hon. Member for Glasgow Central (Alison Thewliss) rightly reminded us, a new highly skilled migrants scheme. For that to work, problems faced by existing highly skilled migrants need to be addressed. Many have been left high and dry in the pandemic by the “no recourse to public funds” condition, as research published today by the Joint Council for the Welfare of Immigrants points out. As the hon. Lady correctly said, large numbers have been refused visa renewal on spurious grounds of historical tax discrepancies, long since corrected and sorted out. A new scheme will require a welcoming, not a hostile, environment, and that will require a major change at the Home Office.

I welcome bringing forward to April the increase in the period over which universal credit advances will be recovered to 24 months, and the reduction, as the Secretary mentioned, of the maximum rate of deductions to 25% of the standard allowance. The Committee had recommended that that should be done “no later than April”, so I particularly welcome that. We also called for the cap on deductions to be reduced further, to 10%. The minimum income floor for self-employed people claiming universal credit will be suspended for a further three months until the end of July. Where is the evaluation of the minimum income floor first announced in 2018? The Red Book announced investment to tackle “welfare fraud and error.” Fraud and error is at the highest level ever recorded for a DWP benefit with universal credit. It will be very interesting for the Committee to see exactly how that new investment will be spent.

Social Security

Stephen Timms Excerpts

Tuesday 2nd March 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab) [V]]

I too welcome the fact that the Government are increasing the value of compensation in line with inflation, even though they are not required to do so. I want to press the Minister on the problems that sufferers of asbestos-related diseases have had while waiting for an assessment for industrial injuries disablement benefit, and I am grateful to him for touching on that point in his opening remarks.

Lots of people suffering from asbestos-related diseases receive IIDB, but eligibility under the provisions we are debating is dependent on whether the applicant has had an IIDB assessment. The Department for Work and Pensions has made the point—the Minister reiterated it today—that the nature of the assessments means that they cannot be carried out remotely. Following the Department’s decision to suspend face-to-face assessments during the pandemic, many claims have been delayed.

The Minister told the Select Committee that the backlog of IIDB claims had increased from a little over 2,000 in March last year up to 5,300 in November, and that the average age of each claim was 116 days. I wonder whether the Minister can update us on those figures. What is the current size of that backlog and the average age of claims? The Minister also told the Committee that the Department has started conducting paper-based assessments for some IIDB claims, and he mentioned that again this afternoon. I wonder whether he can tell us a bit more about how many have been completed, and what the impact has been on the size of the backlog.

The value of a claim for IIDB is reduced with the age of a claimant. There is a sliding scale up to the age of 77, and along that scale payments are reduced as a person gets older. The Minister has given an assurance that awards will be backdated to the date of the claim rather than the date of the determination to ensure that people whose claims were delayed do not have their award reduced. We asked the Secretary of State about that when she gave evidence last month, and the Committee heard from people whose compensation is still reflecting their age at the date of award, rather than at the date of the claim. The permanent secretary acknowledged at a meeting alongside the Secretary of State that at the moment

“the link to age applies to the point where the condition is assessed as opposed to the date of the claim.”

That is a problem.

Let me give one concrete example that was brought to our attention by the asbestos victims support group forum. The Greater Manchester support group helped a 71-year-old man with diffuse pleural thickening to apply for industrial injuries disablement benefit plus a 1979 Act payment. It helped him to make his claim on 21 January last year, but he was not awarded IIDB until 11 November, following a paper-based assessment. In the meantime he had turned 72, so his 1979 Act payment was £5,010, rather than £5,190. He lost £180 because no consideration was made for delays due to the pandemic. The support group makes a perfectly reasonable point:

“We believe it is unjust that victims of asbestosis and pleural thickening are further disadvantaged, having had to wait a considerable length of time for a procedure to be even put in place.”

In another example, a claimant whose date of birth is 2 July 1950 was visited by officials on 31 January 2020, so his application was made when he was 69. However, his workers compensation award letter was not issued until last December. It states his age at determination as 70—correctly, as that is how old he was by then—which entitled him to £5,378. If he had been paid before his birthday on 2 July, six months after he was visited and made his claim, he would have received £5,557. He has missed out on £179.

The Minister has made it clear that he does not intend claimants to suffer that penalty. In those cases, and others like them, what steps will be taken to put things right? How will the Department ensure that all claimants receive the correct amount of compensation, based on their age when they made their claim, rather than when their claim was determined?

When giving evidence to the Work and Pensions Committee, the permanent secretary promised to write to us on those points, but we have not yet had such a letter. The asbestos victims support groups forum confirmed this morning that it has had

“no information about what can be done for those victims who have lost out on compensation under the Pneumoconiosis etc (Workers Compensation Scheme) Act due to the delays.”

With publication of the Prime Minister’s road map out of lockdown, will the Minister confirm when he expects face-to-face IIDB assessments to resume? Has the Department found any solutions that would enable telephone-based assessments to take place instead? He mentioned those in his opening remarks. How long does he estimate that it will take to deal with the backlog that has arisen?

Pensions

Stephen Timms Excerpts

Monday 1st March 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab) [V]]

I understand the case for stability in the course of the pandemic; that is represented by the order and I would not quarrel with that at all. However, the order does raise a number of issues about the Government’s longer-term intentions on auto-enrolment, which others have raised and which the Minister touched on, and I would like to ask him about that.

On freezing the earnings trigger, again, £10,000 probably represents a very modest increase in the number of people brought into auto-enrolment. The Government’s analysis refers to another 8,000 people, of whom 72% will be women, but the order does not represent any real progress towards the changes set out in the 2017 review, which, as my hon. Friend the Member for Reading East (Matt Rodda) reminded us from the Front Bench, would see contributions made for all employees aged 18 and over from the first £1 that they earn. When the review was published, the Government said, and the Minister reiterated it this evening, that the ambition was to implement those changes before the mid-2020s. We are now halfway from 2017 to the mid-2020s, and it would be helpful if the Minister was able to give some indication to us of when the legislation necessary to achieve that will be made. Is it the Government’s aim to legislate for those changes in the pensions Bill, which the Minister has said he wants to introduce perhaps next year? Is that when we can expect concrete steps to be made?

The previous Work and Pensions Committee recommended in its auto-enrolment report that, as part of their review, the Government should consider

“approaches to increasing contributions beyond the statutory minimum of 8% of qualifying earnings, including mandatory increases in employee and employer contribution rates and means of encouraging greater voluntary contributions”.

Can we look forward to progress along those lines in a 2022 pension schemes Bill as well?

As the Minister knows, and this has not previously been raised in this debate, the Supreme Court recently found that Uber drivers are workers for the purpose of section 54 of the National Minimum Wage Act 1998. That means that Uber drivers are entitled to a minimum wage for the period when they have the app switched on in the area covered by their licence. If they and other gig economy workers are entitled to the minimum wage, they may well also be eligible for auto-enrolment on the terms set out in the order. Auto-enrolment contributions might well need to be paid retrospectively in relation to them. Will the Minister set out what the Government’s view about that is? Are they considering how gig economy workers could be brought into auto-enrolment? Is there a need for legislation to address this, or is it the Government’s view that the existing legislation can do the job?

The Work and Pensions Committee has now launched the second of our three-stage inquiry to assess the impact of the pension freedoms five years on from their introduction, following the first part, which was on pension scams, which I hope we will be able to produce a report on later this month. The third part of the inquiry, which we will launch later in the year, will look at these issues around auto-enrolment for gig economy workers such as Uber drivers and for self-employed people more generally.

The Government launched a series of trials and research exercises around enabling retirement saving for the self-employed at the end of 2018. That followed a report from the Select Committee at the end of 2017, “Self-employment and the gig economy”, which said:

“Low levels of retirement saving amongst the self-employed risk storing up grave problems of potential hardship and reliance on the welfare state in later life. While auto-enrolment for employees has been a great success, current structures are not encouraging sufficient pension saving by the self-employed. The idea of using an opt-out system on tax returns to encourage greater contribution to pensions is an interesting one that merits further consideration.”

Can the Minister, following the trials, which began a couple of years ago now, indicate what the Government’s plans are for extending the success of auto-enrolment to the self-employed?

Those trials involved: marketing interventions aimed at people who previously saved, such as those being automatically enrolled while employed, to encourage them to continue their saving; marketing interventions using trusted third parties for the self-employed, such as trade bodies and trade unions, to promote the value of saving and to provide an easy connection to an appropriate savings vehicle; and behavioural prompts, including testing messages combined with prompts through invoicing services or the banking sector to try to engage self-employed people to think about starting regular saving at a point when they are receiving their income.

What has been learned from those activities over the past couple of years? When will the Government publish the findings? When does the Minister intend to take an initiative based on those findings for the benefit of self-employed people?