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.

--- Later in debate ---

[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?

Pensions

Stephen Timms Excerpts

Tuesday 9th February 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I wish to raise concerns specifically about the guaranteed minimum pension, which is the subject of the order. Concerns have been raised by the public with the Select Committee. The ombudsman investigated complaints from two people, and concluded that there had been maladministration in introducing the new state pension system in 2016 over its impact on people with a guaranteed minimum pension. The concern being raised in correspondence since is that the problem identified by the ombudsman still has not been properly addressed.

The ombudsman concluded:

“DWP was aware the pension changes could negatively affect people with long periods of contracting out who were due to reach State Pension Age shortly after the new State Pension was introduced…DWP failed to provide clear, accurate and complete information through its pension forecasts, impact assessments and other literature…despite being warned by both the National Audit Office and the Work and Pensions Select Committee that better communication was needed for those with long periods of contracting out…some individuals were not aware that they might need to consider seeking independent financial advice and might need to make alternative provision for their retirement.”

The concern is still being raised that those problems are not yet being properly addressed.



Last August, the permanent secretary at the DWP replied to a letter from the Committee on that subject. He confirmed that compensation of £500 and £750 had been paid to the two people who had raised the complaint with the ombudsman, as the ombudsman had recommended. I asked for an update on responding to being found guilty of maladministration. In response, the permanent secretary wrote that the ombudsman

“also recommended…that we invite others who believe they have suffered a similar injustice as the two individuals to come forward to have their cases considered.”

That was the ombudsman’s recommendation. The permanent secretary wrote:

“We propose to respond…by publishing a factsheet on GOV.UK and I attach a draft. We are currently awaiting the”

ombudsman’s “comments on this.”

The ombudsman will have to decide whether publishing a factsheet meets its recommendations—I must say that I have my doubts—but it certainly falls well short of what the Work and Pensions Committee previously called for. It said:

“Government should not rely on general awareness campaigns or happenchance in promoting that understanding. It should focus on identifying the individuals affected, assessing their potential losses, and communicating with them.”

The permanent secretary also wrote that, in addition, the ombudsman

“recommended that their reports into the matter were shared with the Select Committee and we have sent your office copies of these documents today.”

The report was finalised on 30 September 2019, and it was sent to the Committee on 28 August 2020, and that was only in response to my request for an update.

I also asked how much the Department knew of the negative impact of the policy on individuals and how it was communicated to Parliament. The permanent secretary wrote:

“As was clear from publication of the Government’s White Paper in January 2013, it was an intrinsic feature of the new State Pension that the old regime of additional State Pension and contracting out, along with its various forms over the years, would be replaced by a new, simpler single-tier system. It was a fundamental feature of the changes that the withdrawal of additional State Pension meant also the withdrawal of GMP indexation.”

The ombudsman’s report highlighted that the White Paper did not say that those who had reached state pension age and could no longer add qualifying years would lose out from the changes. The White Paper gave the impression that people would be able to offset the increase in national insurance contributions that they will pay over the rest of their working lives. It implied that people will offset losses through additional national insurance contributions.

The permanent secretary also wrote:

“A detailed account of the change was provided in a response to a”

parliamentary question

“on 6 January 2014 and is attached for reference”,

but that answer does not make it clear that some people would lose out. Even if someone affected had seen that answer, which is unlikely, it would not have helped them to understand the impact on their own pension.

The permanent secretary wrote:

“More generally, the policy, and how it was communicated, was examined by the Work and Pensions Select Committee in its investigation into Understanding the new State Pension in 2016. In addition, the NAO reported on the policy in the same year.”

However, both those events took place after the legislation had been passed, not before. Both concluded that the DWP provided insufficient information to people about potential negative impacts.

The ombudsman, I believe, is right that

“DWP should have acted on the feedback they received through the Work and Pensions Committee and NAO reports. By failing to do so, DWP were not open and accountable and failed to seek continuous improvement…this amounts to maladministration.”

The ombudsman found that the DWP had failed to make its external communications clear and that

“there were some individuals who might financially lose out over the long term from the transition of the second state pension to the new State Pension—specifically in relation to the ending of indexation in relation to the second state pension/Guaranteed Minimum Pension.”

It also concluded that there is an injustice to members of the public who were not aware of the possible negative impacts of the removal of the second state pension and its relationship with the GMP. Up to 2 million people have reached state pension age since 2016. DWP literature has not told them that the 2014 reform could harm them over time. The Department has not fully acknowledged the negative consequences to the pension reforms over the long term. Its literature reassures people that notional losses will be offset and that they will not lose out, but that will not be true for some. The ombudsman says:

“The DWP’s actions, therefore, may have provided false reassurance and reduced the incentive for these people to find out about their future pension situation. This is an injustice for those who wished to plan for the future and might have been negatively affected.”

In addition to compensating the individuals and communicating with the Committee, the ombudsman recommended:

“Within three months of this report, review and report back to us on the learning from this investigation, including action being taken to ensure that affected individuals receive appropriate communication from the DWP about their state pensions. In particular, the DWP should ensure that their literature clearly and appropriately references that some individuals, who have large GMPs and reach State Pension Age in the early years of the new State Pension, may be negatively affected by the changes. The DWP should advise individuals to check their circumstances, and should provide instructions for how to do this; Within three months of this report, review and report back about how other individuals who believe they have suffered an injustice as a result of the maladministration we have found can raise any concerns with the DWP and have them considered”.

Neither of those things has happened so far. It will soon be two years, let alone three months, since the ombudsman published that report. I have given the Minister notice of this question. Can he explain to us how the Department now plans to fulfil its obligations?

There is no doubt that the Department’s claims about the state pension reforms were misleading. They mislead members of the public, potentially seriously, and denied them the opportunity to act to safeguard their position. Can the Minister assure us that the Department has learnt its lessons and that similar mistakes, covering up damaging impacts of its policies on some claimants, will not be repeated in the future?

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.

--- Later in debate ---

[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.

--- Later in debate ---

[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?

Oral Answers to Questions

Stephen Timms Excerpts

Monday 25th January 2021 Commons Chamber

[Justin Tomlinson]

Further to the principle that if a claimant could be better off on UC than on legacy benefits they have the ability to apply to go on to UC, as a Government we have increased support for people with disabilities through the main disability benefits by an extra £3 billion in real terms since 2010. We are proud of our record.

[Stephen Timms (East Ham) (Lab)]

But people claiming severe disability premium cannot switch to universal credit; they are not allowed to. The costs facing many in that group have increased by more than average during the pandemic. Why is that particular group denied the £20 a week increase?

[Justin Tomlinson]

The SDP gateway comes to an end in a couple of days, so those claimants will also be able to see whether they would be better off under universal credit. However, as I said, it is part of the wider support available, and those with disabilities in particular will have benefited from the annual uprating increases in disability living allowance, personal independence payment and attendance allowance. That is how we have delivered the additional £3 billion-worth of support in real terms for those with disabilities and health conditions.

Universal Credit and Working Tax Credit

Stephen Timms Excerpts

Monday 18th January 2021 Commons Chamber

[Will Quince]

I thank my hon. Friend for that intervention. He is absolutely right that not just in his constituency, but in constituencies up and down the country, our Jobcentre Plus network of dedicated work coaches have worked incredibly hard to process an unprecedented number of claims and they stand ready to help support people back into work. That is exactly why we have secured this additional investment from Her Majesty’s Treasury to, in effect, almost double the number of work coaches across our network across our country.

Work coaches are just one part of the jigsaw; the other is the universal credit system itself. Universal credit has, without doubt, stood up to the challenge of covid-19, whereas the previous legacy benefits system would have buckled under the pressure. Millions more were able to access financial support that is fairer and more generous than the legacy benefits system. We have made the processing of claims and paying people quickly the top priority for this Department. Over 90% of new claimants receive their payment in full and on time.

We have a modern, dynamic, agile, fairer welfare safety net that, in the face of unprecedented demand, ensured that millions of people were paid in full and on time. So what is Labour’s position? It is to scrap it.

[Stephen Timms (East Ham) (Lab)]

Is it now the policy of the Department, as the Prime Minister suggested at the Liaison Committee last week, that people should move from legacy benefits to universal credit in order to gain the £20 per week increase? If that is now the policy, what about the position of those who have been receiving the severe disability premium, who are not allowed to move to universal credit?

[Will Quince]

I thank the Chairman of the Work and Pensions Committee for that intervention. I would be very happy to meet him, alongside the Minister for Disabled People, Health and Work, to discuss, in particular, those in receipt of the severe disability premium. Yes, it is the position of Her Majesty’s Government that we want more people to move over from legacy benefits, including working tax credits, on to universal credit, because it is a modern, more dynamic benefits system; it is the future. However—this is a very important caveat—I would encourage anybody looking to move over from legacy benefits to universal credit to first go on to gov.uk and check their eligibility, because it is important to note, as I know the Chairman of the Select Committee knows well, that on application for universal credit, the entitlement to legacy benefits will cease, so it is very important that people do check.

As I said, we have a modern, dynamic, agile, fairer welfare safety net that, in the face of unprecedented demand, ensured that millions of people were paid in full and on time. Therefore, it is quite astonishing that the position of Her Majesty’s Opposition is to scrap it—a system that, by any measure, has passed the most challenging of tests. This weekend they briefed to the papers with a press released entitled, “Cut to universal credit to hammer families in marginal Conservative seats”, playing politics with the lives of nearly 6 million vulnerable people rather than focusing on helping them through this pandemic. We will take no lectures whatsoever from Labour on universal credit. There is little doubt that had we relied on the legacy benefits system, we would have seen queues down the streets outside jobcentres and long delays leaving families facing financial disruption without support.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

The problem is that the Government have lost the capacity to listen—to listen to their own Back Benchers, to the all-party Work and Pensions Committee, to people claiming universal credit and to the public. That was clear in the contemptuous dismissal of my Committee’s report on the five-week delay between applying for universal credit and receiving the first regular payment. The Government response to that report was published last week. In our meetings, we studied the evidence, sifted the material and listened carefully to what Ministers said in response. It is clear that the five-week delay is forcing people to food banks and pushing them into rent arrears. Social security is supposed to protect people from those things, not induce them as it does at the moment.

On a unanimous, all-party basis, my Committee recommended new starter payments equivalent to three weeks’ worth of standard universal credit, to tide people over in those difficult first few weeks. The Government’s response simply dismissed that recommendation and all the recommendations. Of course, the Government can reject our recommendations. They could carry out their own analysis and reach different conclusions. We recommended that the Department should do its own research on the impact of the five-week wait on food bank demand, rent arrears and claimants’ mental health. The response was:

“The Department will not be conducting nor commissioning any research.”

That was it. The Government do not want to know. They have lost the capacity to listen.

How can it be right that people have to wait until March to find out whether universal credit will be cut by almost a quarter at the end of March? How are struggling families supposed to plan? What justification can there be for having left jobseeker’s allowance and employment and support allowance unchanged? Those claiming them are in exactly the same position as people claiming universal credit. People receiving the severe disability premium have not been allowed to switch to universal credit, even if they wanted to. Why have Ministers singled out disabled people for such harshness?

If the cut goes ahead, it will push child poverty up to levels we have not seen since 1997. There is no justification for going back to £72 per week. There was one very telling point in the briefing circulated by the British Association of Social Workers: the sharp increase in children in care, up from 60,000 to 80,000, with the enormous cost that that imposes, began when the cuts to benefits began. It is a false economy. The £20 a week should be left in place.

--- Later in debate ---

[The Chief Secretary to the Treasury (Steve Barclay)]

It is a privilege to close this debate on behalf of the Government. Let me begin by thanking right hon. and hon. Members across the House for their contributions. Many spoke with great passion. Having listened to the debate, it is clear to me that there is a heartfelt desire, shared on both sides of the House, to support those constituents impacted by the economic consequences of covid. That was reflected in the well measured opening remarks of the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), speaking from the Opposition Front Bench, and in the comments from my hon. Friends the Members for Sevenoaks (Laura Trott), for Barrow and Furness (Simon Fell) and for Guildford (Angela Richardson), among many others.

The Government are acutely aware of the harm that the crisis has done to people’s finances, including the most vulnerable in our society. At every stage of the pandemic, we have striven to support those who have found themselves at the sharp end. As the Minister for welfare delivery, my hon. Friend the Member for Colchester (Will Quince), outlined earlier, that is why we introduced a wide-ranging package of welfare measures worth over £7 billion this year. That included temporarily increasing the universal credit standard allowance and the working tax credit basic element by £20 a week—an increase that has boosted welfare spending by £6.1 billion. As my hon. Friend also pointed out, given the evolving nature of the pandemic, it is right that we wait until the Budget before making future tax and welfare decisions.

[Stephen Timms]

rose—

[Steve Barclay]

I will of course give way to the Chair of the Work and Pensions Committee.

[Stephen Timms]

Is it not unreasonable to force families who claim universal credit to wait until March to find out whether the rate of benefit will be cut by nearly a quarter at the end of March? Surely the Government need to announce their decision sooner.

[Steve Barclay]

I think what that ignores is that a quarter of the scheme is still to run, because there is still almost three months until the end of the financial year.

One should look at the package of measures as a whole. As a number of right hon. and hon. colleagues have pointed out, my right hon. Friend the Chancellor has allocated £280 billion in fiscal stimulus to help weather this crisis—I think the Chair of the Work and Pensions Committee has welcomed a number of these measures. As was further pointed out during the debate, and as Treasury analysis supports, the measures have overwhelmingly supported the poorest families most and reduced losses for working households by up to two thirds. That point was elegantly expressed by my hon. Friends the Members for Bexhill and Battle (Huw Merriman), for Meriden (Saqib Bhatti) and for Redcar (Jacob Young)—he correctly identified that the scale of Government support has been praised by many international observers, including the IMF, which has singled out the UK’s performance.

Let me briefly remind the House of some of the key elements of that support that relate most closely to this debate. The furlough scheme has protected the jobs of almost 10 million people, many of whom are on low incomes. Over 3 million people have benefited from self-employment grants. In addition to the temporary uplift in welfare payments, we have also suspended the universal credit minimum income floor and increased the local housing allowance rates for housing benefit and universal credit.

We have also supported those on low incomes through other measures, including council tax relief through the £500 million hardship fund, and the £500 payments for people on low incomes who have to self-isolate. Our covid winter support package includes the £170 million covid winter grants scheme and a £220 million expansion of the holiday activity and food programme for disadvantaged children. Those points were made during the debate, including by my hon. Friend the Member for Rushcliffe (Ruth Edwards). These measures have provided financial support to millions of families and individuals.

Beyond the state help that those measures have enabled, there can be no doubt that the best way to raise living standards is to keep as many people in work as possible and to support their wages. That is why my right hon. Friend the Chancellor has focused on our pledge to end low pay by increasing the national living wage by 2.2% to £8.91 an hour. Indeed, he has gone further, protecting, creating and supporting employment through our £30 billion plan for jobs—a point that my hon. Friend the Member for Stourbridge (Suzanne Webb) brought to the House’s attention very effectively. Measures including the furlough scheme, along with a raft of other initiatives designed to get people into work, have boosted jobcentre capacity, doubling the number of work coaches, and sit alongside measures such as the new £2.9 billion restart programme to help over 1 million unemployed people back into work.

As well as helping people to find jobs, we are creating new ones through a range of policies. They include our £8.6 billion investment in infrastructure, decarbonisation and maintenance programmes, and our £2 billion kickstart scheme for young people. Over the long term, we plan to unlock 250,000 highly skilled sustainable jobs that will boost our recovery under the Prime Minister’s 10-point plan for a green industrial revolution.

I have set out to the House the scale of support we are providing to people in this crisis, as well as our commitment to helping the most vulnerable and those on low incomes. Let me add that it would not have been possible to provide that support without the dedication of thousands of workers in the Department for Work and Pensions and on the frontline in jobcentres around the country. Let me echo the remarks of the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester, the Minister for welfare delivery, by pointing out how well the universal credit system has coped with the enormous increase in claimants over the past months, a point recognised quite rightly by my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), my hon. Friend the Member for Brecon and Radnorshire (Fay Jones)—I am sure colleagues will join me in wishing her a happy birthday—and my hon. Friend the Member for Gedling (Tom Randall).

Despite immense pressures, payments have still been issued swiftly and efficiently to millions of people through the universal credit system. It is clear that every Member of this House is concerned for the financial wellbeing of families and individuals in their constituencies and across the country. That has been reflected in the remarks from all sides of the House during the course of the debate. The Government, too, are acutely aware of the challenges people face. That is why we have spent £280 billion in response to covid, reflecting the Government’s and the Chancellor’s commitment to support individuals, businesses and our public services. As such, we will not move an amendment to this debate.

Question put.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 30th November 2020 Commons Chamber

[Mr Speaker]

I call the Chair of the Select Committee, Stephen Timms.

[Stephen Timms (East Ham) (Lab)]

The number of households affected by the cap has more than doubled since the start of the pandemic, to 170,000. In addition, 160,000 households will come to the end of their nine-month benefit cap grace period in the coming month. So will the Secretary of State consider extending the grace period, to avoid cutting the benefits of hard-pressed families in the run-up to Christmas?

[Dr Coffey]

The statistics indicate that 140,000 households with children have their benefit capped; my understanding is that overall it is about 3.1% of the UC case load. I am conscious of the fact that the right hon. Gentleman wrote to me last week, in his role as Chairman of the Select Committee, with a variety of questions on the benefit cap. I will respond to him shortly, and I believe that is one of the questions he has asked me to address.