Child Maintenance Service
Thérèse Coffey Excerpts(1 month, 3 weeks ago)
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Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to see you in the Chair, Sir Charles. I congratulate the Chairman of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), on securing this important debate.
I recognise the importance of the Child Maintenance Service in trying to help children in low-income households. I give credit to Arlene Sugden, the former director of the CMS: she did a tremendous job and made a lot of changes. It is sad to hear that some of the reforms that she brought in might now have slid, but we should recognise that thanks to the CMS, more than £1 billion a year has made its way to the parents who look after the child for the majority of the time.
Several of us will have distressing stories. When parents come to us, they and their child are struggling. It is terrible to see how children are often used as pawns in a dysfunctional or non-existing relationship. That is why I really care about the Child Maintenance Service. In my time in the Department, I worked with my noble Friend Baroness Stedman-Scott to see what we could do to improve the experience for parents. Our priority was to reduce child poverty. With only one parent working, perhaps not full time, extra income from child maintenance was critical to boosting opportunities for the child.
I am conscious that in the majority of situations, whether they involve hiding assets or getting someone else to do a DNA test to avoid being identified as a parent, it is women and children who are affected. Men are also affected, however; I do not want to dismiss that in any way. Some of the most harrowing cases that I have heard have been those in which a father has been left with the children while the mother has been trying to avoid responsibility and, in some instances, lying to my face. Nevertheless, the Department continues to fund the Reducing Parental Conflict programme. The Child Maintenance Service is never seen to take sides between the two parents; it is seen to be on the side of the child. That is a vital approach.
I have already laid out how the issue matters to me. We started a strategy; it is good to see significant elements of that. I was delighted when my hon. Friends the Members for Stroud (Siobhan Baillie) and for Hastings and Rye (Sally-Ann Hart) took legislation through the House on the issue, with the support of the Government. As the right hon. Member for East Ham says, we are still waiting to bring into force these important Acts of Parliament with the important changes that are needed, and we are still waiting for commencement orders. As my hon. Friend the Member for Stroud says, it is vital for section 25 of the Child Maintenance and Other Payments Act 2008 to come into force.
I appreciate that the Minister is very competent, but this matter is not in his brief; he is speaking for my noble Friend Viscount Younger and for the Government more broadly. In July 2022, the Department issued a call for a consultation—not a call for evidence—on enacting section 28 of the 2008 Act, which is about curfew orders. We have still not had a response to that consultation.
By the way, it is perfectly acceptable for a new Secretary of State to come in and change the approach taken by their predecessors and different Prime Ministers. I have no issue with that, but it is important that we hear from the Government what their intentions are. I am not a huge fan of doing lots of pilots. The Government have put forward legislation and Parliament has voted for it, so we should get on with putting it in place. That is one of my key messages. I will take this matter directly to the Minister when I meet him in March, but it could be useful to pre-empt some the questions.
One thing I discovered during our deep dive is that, for people who are not working or are on benefits, there is a “nominal” payment—it is actually quite a significant one for someone who does not really have an income—of £7 a week, to be paid from their benefits to the receiving parent. There are also challenges with universal credit when not everyone is not working, and there may be different elements of income support. One challenge with child maintenance is that those who do not pay everything may end up paying nothing, so over time they end up accruing money to which the child should be entitled. We need to look again at that. We also need to focus a lot more on work coaches getting people into work so that they can start paying for their children.
I will keep to my six minutes, Sir Charles. In essence, we need parents to cough up the cash for their children, and the Child Maintenance Service needs to facilitate that. I am glad that it seems to have dropped the idea that it would potentially do all collect and pay. The state does not need to be involved in every interaction between two parents, but when parents ask it to get involved it must do so to the best of its ability. I look forward to the commencement orders getting under way so we can make sure that children are put first.
Sir Charles Walker (in the Chair)
Thank you for being so helpful to the Chair and setting a fine example.
Oral Answers to Questions
Thérèse Coffey Excerpts(2 months, 2 weeks ago)
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Paul Maynard
Where parents have certain categories of taxable income not being captured by the standard child maintenance calculation, they can make a request to the CMS to have the calculation varied. We have consulted on proposals to include more types of taxable income held by His Majesty’s Revenue and Customs in the standard maintenance calculation.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
The Department has a number of ways to try to get paying parents to cough up, and we must remember that this is cash for the children. In July 2022, the Government consulted on child maintenance and improving our enforcement powers through the commencement of curfew orders, and we still have not had a response to that consultation. I would be grateful to hear from the Government when they plan to respond, and I remind them of the other powers in place, such as depriving people of the ability to drive or of their passport. This is a simple thing, where people have the money and will not cough up the cash. I think we need to get on with curfew orders.
Paul Maynard
My right hon. Friend is quite right that the Government have consulted on the use of curfews, which are complex and interact with numerous Government services. Several enforcement initiatives aimed at improving compliance are currently in train, and we need to get those in place and assess their effects before we can best see how curfews might fit with them. I note her enthusiasm for curfews and might well put her in touch with Viscount Younger of Leckie, the Minister in the Lords, whose policy brief this is, so that he can update her on our latest thinking.
Household Support Fund
Thérèse Coffey Excerpts(2 months, 3 weeks ago)
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Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to speak in this debate, and I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing it. He will recall the situation that we were faced with in the middle of covid, when covid was continuing for longer than we had initially expected. Recognising the challenges that families and pensioners were facing, it was right that we took that action then. I give credit to the Prime Minister, who was then the Chancellor, for working with me and my Department to establish the household support fund. It was with great pride that I formally announced the fund on 30 September 2021.
The right hon. Gentleman was right to raise local welfare assistance. Indeed, it was the Department for Work and Pensions that handed money to councils—it was not ringfenced, but the Department took a localist approach. That funding was kept in as part of the baseline grant for many years; I think it was not until 2020 that it was removed from the information that was formally published on the transfer, recognising that councils were still being funded on local welfare assistance.
I am conscious that covid was a challenging time. In particular, we wanted to make sure we went to the upper-tier unitary authorities that had statutory responsibility for children and adults. We made sure the funding was ringfenced, and we also imposed reporting conditions to ensure the money went either directly into people’s hands or to agencies that could make a difference.
I am conscious that quite a lot of councils resorted to vouchers for funding, but I commend Telford and Wrekin Council, and others like it, for thinking ahead. Instead of just handing out vouchers, the council identified the children who were struggling at home and started buying coats for people—they considered the long term. I would have loved to have seen more innovation in some of the ways the money was spent—whether that concerned bed poverty or similar issues—so that the local elements could be identified. It was important to increase funding for pensioners too; they did not have any opportunity to increase their economic income and were struggling.
I hear what councils are saying, and I do think the Government should extend the household support fund—whatever they may choose to call it in the future. We should challenge councils more to work with, for example, community foundations, whereby significant tax relief is given to local philanthropists to make the money go further. At the same time, we still have the holiday activities and food programme. That was established in October 2021 and was deliberately targeted at young children who were receiving free school meals. Those are the sorts of initiatives in which I am proud to have played a part. I urge the Minister to look further at how we can make the most of the money we distribute.
Oral Answers to Questions
Thérèse Coffey Excerpts(1 year, 9 months ago)
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Stephanie Peacock (Barnsley East) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
It is not usual to project poverty levels in terms of statistics—[Interruption.] Does someone want to join in? [Interruption.] I just cannot hear. Somebody is talking. Projecting poverty levels is not something we normally do. However, the latest official statistics show that in 2021, some 8 million people were in poverty in absolute low-income before housing costs, which was a fall on the previous year. I am very conscious of the challenge of the cost of living right now, which is why we are providing a £15 billion support package targeted at the most in need, but I am proud of the fact that we are getting more and more people into work—over half a million in just the past five months. We know that for most people, the best way to get out of poverty is to get into work.
Alex Cunningham
Even using the Government’s preferred measure of absolute child poverty, the proportion of children living in absolute poverty rose in every north-east local authority area between 2014-15 and 2019-20, and continued to rise in the first year of the pandemic. In Stockton, that figure is up by 7.1 percentage points; in Hartlepool, it is up by 7.2; in Darlington, it is up by 7.9; in Redcar, it is up by 9.4; and in Middlesbrough, it is up by a colossal 13.9 percentage points. Those are not just numbers: they represent thousands of children. Can the Minister tell the House which of the Tory leadership candidates will be content to see children in places such as Stockton go hungry, and which of them will take action to ensure they do not?
Dr Coffey
I would be grateful if the hon. Gentleman would give me the specific source of his statistics, because I believe that statistically, child poverty has actually fallen, something of which Government Members are proud. Nevertheless, he will be pleased by the fact that people have opportunities and are getting into work. That is what we will continue to do, because we know that children in workless households are undoubtedly more likely to be in poverty. That is why we continue to focus on getting their parents into work.
Stephanie Peacock
One in three children in Barnsley are living in poverty. My constituent cares for his disabled eight-year-old son. He recently started a part-time job to supplement his income, but after working just two hours’ overtime, he had a whole month of carer’s allowance deducted. The Secretary of State has just said that the best route out of poverty is to get into work, so can she explain why those who receive carer’s allowance are penalised for doing just that?
Dr Coffey
I expect that the hon. Lady’s constituent is receiving the caring element of universal credit, rather than carer’s allowance specifically, which is a slightly separate approach. Universal credit is a dynamic benefit. It reflects the fact that when a person is working more, they receive less support from other taxpayers, and—just as happened at the beginning of the covid pandemic—when taxpayers are working less, they immediately started receiving more. That is the success of universal credit, and we will continue to encourage people to get into work.
Henry Smith (Crawley) (Con)
Nick Fletcher (Don Valley) (Con)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Following the success of kickstart, which has seen over 163,000 jobs started by young people, with approximately 30,000 still on that scheme, the DWP youth offer remains in place to support those who still need help. That includes youth hubs, which bring together partner organisations and the DWP in local communities to provide employment and skills support.
Nick Fletcher
I have spoken with many young people since becoming an MP. They believe that waiting and fighting for their dream job is the right thing to do. Does the Secretary of State agree with me that our young people should take opportunities that arise which will get them earning while still applying for their dream job, as that will not jeopardise their chances but will, most probably, do exactly the opposite?
Dr Coffey
As ever, my hon. Friend talks common sense. It is really important that people realise that the heart of our Way to Work campaign is ABC—any job, better job, career. We know that having a job already allows people to build a lot of skills so they can progress, perhaps in the job of their dreams. Through support such as the DWP youth offer, work coaches will continue to help unemployed young people move into a range of roles. The skills and work experience that people can gain from a job will help them to progress.
Sir Robert Neill (Bromley and Chislehurst) (Con)
Rachel Hopkins (Luton South) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
At this moment, I am delighted to have a team who are making sure that the wheels of government keep turning. That is particularly true given that we are the biggest delivery Department in Whitehall, on which so many vulnerable people rely.
It is certainly my focus to deliver help for households. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Norwich North (Chloe Smith) pointed out, we will be sending out the first instalment of the £650 cost of living payments, starting from this Thursday.
We are also building on our successful Way to Work scheme, having smashed our ambition to get half a million people into a job in just five months, thanks to help from my hon. Friend the Member for Mid Sussex (Mims Davies). Dare I say, Mr Speaker, that that is way to go for Way to Work!
We are now putting more focus on those further from the labour market who are economically inactive or most at risk of inactivity, whether through the lifetime MOT offer or the £1.3 billion-worth of employment support for disabled people. That will help to grow the economy and ensure that more people are on the path to prosperity and prospects through work.
Rachel Hopkins
Many of my Luton South constituents are struggling to make ends meet. In fact, across the east of England, 50% of Citizens Advice debt clients are in a negative budget, with their monthly expenditure on essentials exceeding their income; that is up 12% from the same period in 2019. Does the Secretary of State still think that it is a good idea for the Government to raise taxes this year, when the UK is the only G7 country to do so?
Dr Coffey
The hon. Lady will be aware of the £37 billion package that is going to households, £15 billion of which is being deployed this year. People will already have received some elements of that through council tax support, and I have outlined the cost of living payment support. I could add to that the lifting of the national living wage to £9.50 an hour and the reduction in the taper rate to 55% for people who are working and on universal credit. We are targeting support at the most challenged low-income households, and we will continue to do that. Meanwhile, we will continue to try to do what we can to grow the economy to help households, so that we can tackle inflation overall.
Elliot Colburn (Carshalton and Wallington) (Con)
Dr Coffey
My hon. Friend continues to be a champion for his constituents. He will be aware of aspects of the Way to Work campaign that are different from how they were in the past. Far more job fairs are happening, bringing employers into jobcentres for interviews. That enables us to make quicker decisions, find out what is going wrong in the process and support people so that they can more quickly get the pay packet that they cherish.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
As we have heard, it is expected that the energy price cap will rise by £450 more than was anticipated when the Government announced their cost of living package. A typical household will face energy bills of £3,250; that is more than a third of the value of the state pension. How on earth does the Secretary of State expect pensioners and families to cope this winter?
Dr Coffey
I think the right hon. Gentleman is referring to an external analyst’s prediction of what might happen with energy prices. Nevertheless, the Government have responded. We deliberately made sure that our cost of living payment package came out when Ofgem made its announcement, and that is why we tailored the cost of living payment support to help households. We will make sure that support for household energy costs goes to every single household in the country, in addition to our comprehensive package. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy leads on fuel poverty. I am conscious that in making decisions, he will consider the vulnerable the most, as all of us in the Government do.
Jonathan Ashworth
I appreciate that the Secretary of State may not be in her place come this October—who knows?—but she is currently in a Cabinet with a Chancellor and a Foreign Secretary, and she shares the Government Benches with a whole host of colleagues, who have made £30 billion to £40 billion-worth of unfunded tax cut commitments. Is not the truth that those tax cuts can be paid for only by further cuts to the state pension, further cuts to universal credit and further cuts to disability benefit, and that the reality is that the next Tory Prime Minister will make the cost of living crisis even worse?
Dr Coffey
Far from it; as has been shown yet again, this Conservative Government have stepped up to deal with the cost of living challenge, just as we did through covid, and we will continue to do so. That is why we will be spending £37 billion on this. As for support going forward, I am conscious that people who are running to be leader of the Conservative party and the future Prime Minister want, quite rightly, to make sure that we have an active, growing economy. I will leave them to be judged on their policies. I am the Secretary of State for Work and Pensions, and we are going ahead with the additional payments, starting this week. Many households will be looking forward to them, and I am pleased that we are able to deliver them.
Mrs Sheryll Murray (South East Cornwall) (Con)
Kirsty Blackman (Aberdeen North) (SNP)
The UK Government recently rejected the Work and Pensions Committee report’s recommendation to
“extend Child Benefit to all British children irrespective of their parents’ immigration status.”
People with no recourse to public funds do not qualify for the additional cost of living payments. Children are literally starving and suffering malnutrition because of this cruel policy. Does the Secretary of State believe that this is acceptable in the 21st century?
Dr Coffey
The hon. Lady refers to the fact that people without recourse to public funds are not eligible for benefits. When people arrive, I accept that they are not going to be eligible for child benefit. Any family in a state of difficulty can apply to the Home Office for a review of that status; it is for them to do so. At the same time, as I think we confirmed to the Select Committee when we discussed the matter at the hearing last week, it is for local councils to design the way they do the household support fund. It may be possible for people without recourse to public funds to apply to their local authority.
Sir Edward Leigh (Gainsborough) (Con)
Will the Secretary of State confirm that support for the welfare state depends on a kind of social contract where people realise that those who are pensioners or out of work should be helped because they have paid their taxes? How is support for the welfare state improved when 60,000 people a year are pouring across the channel, paying illegal smugglers—these are not the poorest of the poor—and being kept on social security, maybe for 10 years, without ever being deported? By the way, what does it cost?
Dr Coffey
I am conscious that through the help—the visa schemes—being put forward for Ukrainian citizens and for Afghan resettlement, there is access to public funds. My right hon. Friend will be aware that people who arrive in the country illegally are given a payment via the Home Office, I think, of a very small amount of money to pay for the day-to-day, but they are not eligible directly for benefits.
Ian Byrne (Liverpool, West Derby) (Lab)
Social Security (Additional Payments) Bill
Thérèse Coffey ExcerptsWednesday 22nd June 2022
(1 year, 10 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I beg to move, That the Bill be now read a Second time.
The cost of living challenge facing many families right now is being driven by forces beyond their control. The aftershocks of covid on global supply chains, and Putin’s invasion of Ukraine, have caused a hike in prices and a spike in bills, particularly for energy costs. As a result, household budgets are being stretched further than at any time in recent memory, so just as we did during covid, the Government are stepping up at this challenging time to help families who are feeling the strain. It is because we got the big calls right that we have the fiscal firepower to take decisive and direct action to help millions of people across the country.
Although we have always been clear that the Government cannot cover every situation or solve every problem, we are providing financial support to every household to help relieve some of the pressures that people are under, and to help them cut costs across their household expenditure. Approximately four in five households—all those living in band A to band D homes—are receiving a £150 discount on their council tax, with millions already benefitting from the money landing in their bank accounts, and all households that are domestic energy customers will get £400 towards their energy bills this autumn, in the form of a grant with nothing to repay. We are, however, principally targeting help at those who need it most, helping ease the squeeze for those on low and fixed incomes, who we know spend a higher than average proportion of their income on energy.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
There is an issue with people who live in park homes—I have a few sites in my constituency—because the energy rebate does not make it through to them. Are the Government looking at innovative ways of addressing the issues faced by those individuals and households?
Dr Coffey
My understanding is that the Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), is aware of that particular channel. I am led to believe that a solution is being developed so that people will benefit from that cost even if they do not receive the money directly, because a lot of park home owners do not pay their energy bills directly. I know that my right hon. Friend is aware.
Returning to what we are doing to help people, we are providing a direct cost of living payment of £650—split into two payments of £326 and £324—to over 8 million families who already get help through means-tested benefits. This includes people on universal credit, income-based jobseeker’s allowance, income-related employment and support allowance, income support, working tax credit, child tax credit and pension credit—both guarantee and savings credit recipients. On top of that, we are providing a £150 payment for approximately 6 million people with disabilities who are on qualifying benefits, and giving 8 million pensioner households an additional £300 alongside their winter fuel payment. Combined, that is extra support of at least £1,200 this year for the majority of households that are least able to absorb rising costs, which takes our total support package to £37 billion.
Sir Stephen Timms (East Ham) (Lab)
I just want to check one point. At the moment, about 150,000 working-age people who receive universal credit have their benefits limited by the benefit cap. Am I right to say that these additional payments are not constrained at all by the level of the benefit cap?
Dr Coffey
Yes, that is the case. I was planning to cover that later. For the record, I will still make that point.
Our household support fund administered through local authorities in England and the money given to devolved Administrations are further avenues for people to seek help with the cost of essentials. From October, the Government are adding an additional £500 million to the fund, extending support through the winter. That equates to an additional £421 million in England and £79 million for the devolved Administrations, and that will take total funding for this UK-wide household support to £1.5 billion.
Hywel Williams (Arfon) (PC)
One group of people who receive universal credit and are in some difficulty are those who lose some of their universal credit because they received a universal credit advance for the first five weeks. Some 92,000 households in that situation in Wales are getting about £60 a month less, and that comes to a total of about £5 million being denied to them. I hope that the Secretary of State is prepared to reconsider her position on that. Obviously, that is not in the Bill, so she has taken a decision in the short term, but I press her to reconsider.
Dr Coffey
The hon. Gentleman is incorrect in saying that money is denied to people. The whole point of receiving an advance is that there is phasing and, instead of receiving 12 payments in a typical calendar year, 13 payments are made. We extended that recently so that people can choose whether to have 25 payments over 24 months. It is not a case of people being denied.
The Social Security (Additional Payments) Bill before the House is a short Bill of 11 clauses that gives us the powers necessary to administer payments to families on means-tested and disability benefits. As one-off new benefit payments, they will be delivered by the UK Government to eligible households right across the United Kingdom in England, Wales, Scotland and Northern Ireland. The timing of such payments will vary, starting with the first payment of £326 for DWP means-tested benefit claimants from 14 July. The second payment will arrive in the autumn for those eligible. Those on tax credits who do not receive DWP means-tested benefits will get each instalment later to avoid duplicate payments.
People not eligible in time for the first £326 payment because they were not getting a qualifying benefit in the month before the announcement may get the second £324 payment if they have a qualifying entitlement to a benefit in the month before the next eligibility date. We have deliberately not included the next eligibility date in the Bill to try not to change claimant behaviour. Instead, there is the power to set a date through regulations.
Those on qualifying disability benefits will get their £150 as a single payment from September. Where eligibility for any of these cost of living payments is found retrospectively—for example, someone who had applied for personal independence payment but not yet been awarded it—people will still receive that disability cost of living payment; it will just be at a later date.
Marsha De Cordova (Battersea) (Lab)
In opening, the Secretary of State alluded to the fact that 6 million disabled people would qualify for the additional disability support payment of £150. Does she acknowledge that some disabled people—particularly those in receipt of disability living allowance, PIP or attendance allowance—who no longer qualify for the warm home discount since her Government changed the rules, will lose out? In effect, they have taken away £150 through the warm home discount, and the additional £150 really does not do anything to meet the extra costs for people who have already lost out.
Dr Coffey
The warm home discount is not relevant to the Bill, but I understand the point. It is the policy of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, but I do not know that the intention was—[Interruption.] I am trying to answer the hon. Lady’s question. My understanding of the policy rationale is that because PIP is not means-tested—it is not income-based—a decision on warm home discount eligibility was made to include many more households on the basis of income rather than PIP eligibility. I am sure that she will welcome the fact that we have included £150 in this legislation.
These one-off tax repayments do not count towards the benefit cap and will not affect existing benefit awards. They will provide a budget boost for millions of the lowest-income households right across the United Kingdom.
Dr Coffey
No, I will not.
This Government have supported and continue to support those most in need. I am proud of our record of lifting people out of poverty.
Anyone listening to Opposition parties could be forgiven for thinking that poverty was going up. The fact is that in 2021 there were 1.2 million fewer people in absolute poverty, before housing costs, than when we came into government in 2010. Between 2019-20 and 2020-21, every measure of poverty, whether absolute or relative, saw a reduction in poverty. In terms of statistics, on absolute poverty, our preferred measure, the number of working-age people in poverty is down by 100,000, the number of children in poverty is down by 200,000, and pensioner poverty is down by 200,000.
We know from the latest available data that for most families the best way out of poverty is through work.
Dr Coffey
I will not take any further interventions from the hon. Gentleman, because he has already intervened. I am sure that if he wants to contribute to this debate he will have put in to speak.
In 2019-20, children in households where all adults were in work were about six times less likely to be in absolute poverty than children in a household where nobody works. That is why our economic priority during the pandemic was to protect, support and create jobs through the furlough scheme and the many other measures we took as part of our plan for jobs.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
The Secretary of State will of course know that her figures on absolute poverty and relative poverty are disputed by the various stakeholders who work in this field. One of the issues that is concerning people with regard to poverty is the failure to uprate benefits this year along the lines of this year’s levels of inflation. She has rightly said that pensions and benefits such as disability benefits and universal credit—and, hopefully, the minimum income guarantee and pension credit—will rise in line with inflation this September. She is coming under some pressure on that now. Can she give us a guarantee that she will not resile from that position?
Dr Coffey
The right hon. Gentleman may not be aware that I cannot make any declaration about the rises in benefits; I can only point to our policy in terms of, for example, the triple lock for pensioners. That is because I am required by law to undertake a review of the benefits once a year and I have not yet done so. I am sure that he will judge us on past performance, especially in following the regular legislation.
The unemployment rate is now below the low level we saw before the pandemic—close to the lowest since 1974—and we have more people on payrolls than ever before, but we are not resting on our laurels, particularly with a record number of vacancies in the labour market. We want people to get into work and to boost their incomes, which is why we launched the Way to Work scheme, quickly connecting claimants with employers looking to fill vacancies. Having turbo-charged jobcentres into super, almost dating, agencies in the way that they match people looking for work to people offering work, I am confident that we will achieve our target to move half a million people into jobs by the end of the month. There are hundreds of thousands more people benefiting from a pay packet, along with the prospect of a better job tomorrow and a future career.
Mr Richard Holden (North West Durham) (Con)
Will the Secretary of State confirm that the payments in this Bill, to almost 25,000 of my constituents, are on top of the support that has already been put in place, with the £1,000 that families will benefit from through the taper rate, the living wage rise and the £330 that most of those in work will get through raising the national insurance threshold, meaning that tens of thousands of people in North West Durham will be better off as a result of these changes and showing that we are providing support now, just like we did during the pandemic, during the cost of living issues due to international factors such as Russia’s invasion of Ukraine?
Dr Coffey
My hon. Friend is right to point out the additional measures. I do not know exactly how many people in his constituency will be affected, but I rely on his excellent local knowledge as a great constituency MP. Absolutely—I am setting out additional measures to those that he has outlined.
The Bill will deliver one-off additional payments responding to the challenges faced by people in every part of our country over the coming months. I thank the usual channels and the House more broadly for agreeing that it can make its necessary progress today. Its provisions are intentionally straightforward and will enable a straightforward approach for claimants, with no complicated forms, no bureaucracy and nobody having to make an additional claim, as payments will automatically go into people’s bank accounts.
The actions in the Bill will boost the budgets of millions of stretched families in every part of the United Kingdom, helping them through the cost of living challenge. I commend it to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State, Jonathan Ashworth.
Oral Answers to Questions
Thérèse Coffey Excerpts(1 year, 10 months ago)
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Alex Cunningham (Stockton North) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The right hon. Member for Kingston upon Hull North (Dame Diana Johnson) will be aware that, in recognition of the cost of living challenge, we have announced a new £15 billion support package that is targeted at those who are most in need, bringing the total cost of living support to £37 billion. The extra support should cover every household, but is particularly targeted at helping more than 8 million households in receipt of means-tested benefits. The household support fund, which is delivered through councils, is another way that constituents can access help.
Dame Diana Johnson
I must say to the Secretary of State that the £20 cut to universal credit seems even meaner now. Even the package of measures that she mentioned is not stopping what the Trussell Trust has announced: an increasing number of people turning up to get food parcels. In my own constituency, Unity in Community and St John’s church, Bransholme, are seeing soaring demand for food packages while their stocks are diminishing. I know that Ministers are occupied with party games today, but when will the Secretary of State get a grip of these benefits and set them at a level that means that people can pay for their everyday essentials?
Dr Coffey
The Government have always been clear that getting into work and getting on in work is an important way to lift people’s prosperity. That is why we lifted the national living wage from April; why last December we quickly put in place a change in the taper rate so that people keep more of what they earn, while still getting support and benefits; and why we have stepped in with a substantial package of support to help people with this particular challenge of global inflation—caused not only by supply chain challenges after covid, but by Putin’s invasion of Ukraine, which has done a lot to damage to energy costs.
Alex Cunningham
As well as being impacted by the soaring cost of living, two thirds of the near 50,000 children in the Tees valley and families on universal credit are affected by the punitive impact of deductions. That is because most of them are paying back the Department for Work and Pensions advance that is needed to survive the five-week wait for their first universal credit payment. Will the Secretary of State accept that every pound clawed back is a pound not available for families to spend on food and other essential costs? Will she change this cruel policy now, and make a real difference to children and families already living in poverty?
Dr Coffey
The hon. Gentleman forgets that the advance is there to spread the payment that people are entitled to over a year into 13 payments. We have also enabled people in effect to have that payment spread over two years, with 25 payments. It is about a phasing of how we put into families’ pockets the benefits to which they are entitled, and nothing else.
Dame Caroline Dinenage (Gosport) (Con)
Among those worst impacted by the cost of living rising is the army of unpaid carers who do so much not only to support their friends and loved ones but to ease the pressure on the NHS. I know that my right hon. Friend understands and appreciates that. This is Carers Week; what thought has she given to increasing unpaid carers allowance to support them and reflect their hard work, sacrifice and need?
Dr Coffey
The whole House would unite with my hon. Friend in thanking carers, and I am sure we all have lived experiences as well. I think it is fair to say that carers allowance is not intended to be a replacement salary or anything like that; it is a contribution, and a modest contribution, I accept. As with all benefits, we consider the uplift annually, and I will continue to do so.
Liz Twist (Blaydon) (Lab)
Kirsten Oswald (East Renfrewshire) (SNP)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
This Government have taken decisive action to make work pay, giving 1.7 million families an extra £1,000 per year, on average, through changes to the universal credit taper, work allowances, and increasing the national living wage to £9.50 an hour. Some extra support is coming in through the packages we have already mentioned today. It is also important to make the House aware that we extend help to people already on universal credit who are working to see what we can do to help them to progress in work and to take up other opportunities, such as making sure that they know about things like childcare support.
Chris Stephens
So grants rather than loans are the solution after all. Evidence from Feeding Britain and Good Food Scotland shows, for example, that people who work in a supermarket cannot afford to shop there, with fridges being switched off and lightbulbs being removed at home, and more pawning, borrowing and reliance on credit. Now that the principle is that grants are preferable to loans, will the Secretary of State apply the same principle to universal credit advance payments, as argued for by the Work and Pensions Committee?
Dr Coffey
This is the second time I have discussed this particular topic today. People can choose to get an extra payment of universal credit earlier, and then we spread that over the entire year, so, in effect, they get 13 payments instead of 12. That is what the advance is about. A number of people who move across from legacy benefits get some run-ons of different benefits to try to help with the cash transition when they are used to getting cash on that more regular basis. We will continue to make sure, though, that our top priority is to help people to get into work and to progress in work.
Kirsten Oswald
Having a child is one of the tipping points that can plunge families into poverty. Each year, thousands of claimants are excluded from statutory maternity pay by arbitrary rules that disadvantage people in low-paid and insecure employment. These claimants are forced to rely on maternity allowance, which is offset against any universal credit they receive, leaving them thousands of pounds worse off than those on statutory maternity pay. When will the UK Government tackle this manifest injustice rooted in their policies?
Dr Coffey
The two benefits are completely different, recognising the situations that people find themselves in, so they will be treated differently. The hon. Lady should of course be aware that this was challenged in court and the court did not go with the person who challenged it, recognising that they are completely different benefits.
Justin Tomlinson (North Swindon) (Con)
Carolyn Harris (Swansea East) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
What a marvellous weekend the country enjoyed. I am grateful to everybody who was doing that, including my civil servants who were working over the jubilee weekend, as we are working hard to make sure that we can deliver the cost of living payments to people next month. I continue to congratulate not only them but work coaches up and down the land who are helping people to get into work. I am pleased to say that we had a record number of claimants getting into work in March, and we had more than 100,000 in April as well, so we are well on our way to achieving our ambition of half a million extra people. I referred to the cost of living payments that we intend to deploy, and in the next couple of weeks, on 15 June, we will have our pension credit day of action. I encourage all Members of Parliament to make their constituents aware of that opportunity to claim benefits.
Carolyn Harris
Everyone Deserves a Christmas is a Swansea project that supports struggling families to enjoy a few treats at Christmas. It starts taking referrals in November, but this year, worried families are already requesting hampers, because they are struggling to pay their bills and feed their kids now. What hope can the Government give to struggling yet working families that they will be able to provide for their children’s needs as the cost of living crisis deepens?
Dr Coffey
The poverty statistics—admittedly, they are statistics rather than individual experiences; I accept that—show that, where both parents are working full time, fewer than 3% of people are effectively in poverty. I want to extend the help that we can give through our local jobcentres to help that particular family to perhaps extend their work or get on in work. It will be those measures, as well as the extra cost of living payments that we are making, that will help people with the challenges they face now.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
I join the Secretary of State in congratulating all those who worked over the weekend, and in saying that it was a fabulous platinum jubilee weekend. May I congratulate her on her sung prayer that she shared on Twitter yesterday, which shows that it is not just at karaoke where her singing excels?
Work should be the best defence from the rising cost of living, yet millions in work are in poverty. The numbers in overall employment are down by 500,000 since before the pandemic, and there are 3 million people on out-of-work benefits not looking for work. Sheffield Hallam University estimates that about 800,000 of those people on out-of-work benefits, often in places such as Wakefield, could be helped back into work with the right support and a plan. The Secretary of State promised to help the economically inactive find work. Why is she failing?
Dr Coffey
Well, I do not have the voice of an angel, and nor do I claim to have the pathway to heaven in this regard, but I am very conscious of the people of Wakefield, as I am of those right across the country. On people who are economically inactive, I have been consistent in saying that my priority is those who are currently on benefits and receiving financial support. They will always be my top priority, but I am working across Government to see what we can do, particularly working with employers, to ensure that the economically inactive come back into the workplace.
Jonathan Ashworth
The number on out-of-work benefits has increased by 1 million since the pandemic. We have the highest level of worklessness due to ill health for 20 years. Increasing numbers of over-50s are leaving the labour market who might stay in it if there was flexible work. More parents are leaving the labour market because they cannot afford childcare. And this is at a time of 1.3 million vacancies. We need to increase the supply of workers to get inflation down, so why does the Secretary of State not have a plan to deliver that?
Dr Coffey
There clearly is a plan. That is why there are actually more people on payroll than prior to the pandemic. I am very conscious of the challenges for the self-employed, and also that some people have currently chosen to leave the labour market. That is what we are working on across Government, as well as with the activity on childcare. We will continue to make sure that it is in everybody’s interests to work, because they will be better off in work than not working, unless they cannot work.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Kirsty Blackman (Aberdeen North) (SNP)
People across the UK are dying younger as a result of UK Government austerity. A new Glasgow University and Glasgow Centre for Population Health report has found:
“Austerity is highly likely to be the most substantial causal contributor to the stalled mortality trends seen in Scotland and across the UK”.
Will the Secretary of State acknowledge the tragic human cost of the cruel Westminster austerity agenda and urge the UK Government to change course?
Dr Coffey
I am afraid I just do not recognise the situation that the hon. Member mentions, and I do not know the basis of the academic report. What I do know is that we are getting more people into work. I do not know the status of health in Glasgow specifically, but I do know that it is part of the levelling-up mission of this Government to ensure that we reduce health inequality. In particular, I encourage her to continue to work with her public health authority to ensure that people are well prepared to go into work, but can also stay in work through occupational health services.
Claire Coutinho (East Surrey) (Con)
Ruth Cadbury (Brentford and Isleworth) (Lab)
Dr Coffey
As the hon. Lady knows, the levy that was introduced is there to support the NHS, particularly in tackling backlogs, but also to support adult social care, and I am sure her constituent could benefit from the outcomes of both. The hon. Lady should also be aware that next month the threshold for national insurance will rise, which will mean that 70% of working households will see a cut in the amount they pay in tax and national insurance.
Mr David Davis (Haltemprice and Howden) (Con)
Dr Coffey
We are working with a number of employers in a number of ways to try to help them fill their vacancies. We learnt a lot from the kickstart scheme, such as bringing employers into jobcentres to undertake interviews. We are also working with employers on the descriptions they put into job requirements and what is really needed to fill a job. I am conscious that there are lots of vacancies—it is a fortunate position in which the UK finds itself—and we are working hard to ensure that people get and stay in those jobs.
Stephen Flynn (Aberdeen South) (SNP)
In Scotland, in the last year alone some 15,000 people were sanctioned by the Secretary of State. Given that she is such a stickler for rules, surely she will show the same resolve this evening and place a sanction on her party leader.
Dr Coffey
Mr Speaker, I was going to say that when we share taxpayers’ money with people looking for work, it is important that they honour their side of the bargain. When they do not, there often have to be consequences. That is not something that we seek to do—we try to work with people—but it is really important that people do their bit of the bargain when they look for work.
Helen Morgan (North Shropshire) (LD)
I am troubled by the number of constituents who have recently come to me because either they have been overpaid in error by the DWP or they are struggling to receive their first payment because of administrative difficulties, when they are already really struggling. What steps is the Department taking to ensure that errors and disputes can be resolved satisfactorily and in a timely way so that those repayments will not push them over the edge and into poverty?
Sir Stephen Timms (East Ham) (Lab)
The household support fund now accounts for billions in public spending. What information is the Department collecting about how that fund is being used, who is benefiting from it, what their circumstances are and how much support they receive? What plans does the Department have to publish that information?
Dr Coffey
We issue funding based on grant conditions. We undertake a very light-touch approach with councils to make sure that they satisfy those conditions. We do not collect extensive information, but it is important that we allow councils to get on. They are close to the community, so they are well placed to make sure that that discretionary funding can go to the right people.
Completing the Move to Universal Credit by 2024
Thérèse Coffey Excerpts(1 year, 12 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
In 2012, Parliament voted to end legacy benefits and replace them with a single modern benefit system, universal credit. The UC system stood up to the challenges of the pandemic and ensured that support was provided for a significant number of new claimants with varying needs across the country. As the rest of Government and society returns to business as usual, it is appropriate to resume the process to complete the move to UC by 2024.
There are around 2.6 million households receiving legacy benefits and tax credits who need to move across to UC. The natural migration process, where claimants experience a change in circumstances and consequently move to UC, has largely continued throughout the last two years. The voluntary migration process has also been available throughout. We are taking steps to increase people’s awareness of the fact that they could be better off financially if they were receiving universal credit, including through the publication of our document “Completing the Move to Universal Credit” today on www.gov.uk. I will place copies in the Libraries of both Houses.
In that document, we set out our analysis which estimates that 1.4 million (55%) of those on legacy benefits or tax credits would receive a higher entitlement on UC than on legacy benefits and would benefit from moving voluntarily, rather than waiting for a managed migration. This is particularly the case for tax credit claimants, with our analysis estimating that around two thirds of them would benefit. That is why we have included information on UC in this year’s renewal forms for current tax credit recipients. It is important for current recipients to satisfy themselves that they would be better off on UC using independent benefit calculators before moving voluntarily, as once the claim is made recipients cannot revert to tax credits or legacy benefits, nor receive any transitional protection payments. More information is included in the document.
For those claimants who do not choose to move and have not migrated naturally, we will manage their migration to UC. Parliament committed to providing transitional financial protection to those who are moved on to UC through the managed migration process. While many households will be better off financially on UC, for those with a lower calculated award in UC than in their legacy benefits, transitional protection will be provided for eligible households. This means they will see no difference in their entitlement at the point they are moved to UC, provided there is no change in their circumstances during the migration process.
Before the pandemic, the Department had started testing processes for managed migration in a pilot based in Harrogate. In 2020, the pilot was stopped to handle the significant increase in new claims for UC resulting from the pandemic. During this pilot there was proactive engagement with 80 people, 38 of whom were moved to UC. Thirty-five claimants were better off and only three people required transitional protection. The remainder of moves were not completed before the pilot was stopped. This pilot only involved claimants that the Department had an existing relationship with. No claimants on working tax credits were approached directly to commence a move to UC.
The pilot provided valuable insights. First, while claimants will likely look for support from organisations they already know, such as a local authority, we are no longer assuming that all engagement needs to be managed by that organisation. Secondly, claimants can and will move autonomously, but some may need more support, particularly on digital access. The pandemic reinforced the importance of claimants being able to manage their own claims online and the strength of this system. Thirdly, claimants can successfully choose a date for their claim, factoring in other income and expenditure points during the month. Finally, the pilot allowed the Department to understand the processes and tools required to complete a managed move, such as those needed to calculate transitional protection.
As I have said to the House previously, we are not resuming the Harrogate pilot. We have learned from that experience and our wider experience over the last two years. As we complete the move to UC, I am absolutely committed to making this a responsible and safe transition. Next month, we will be starting a multi-site approach across the country with a small number of claimants—approximately 500 initially—being brought into the mandatory migration process. We will continue to develop our processes and systems to scale the migration process and complete by 2024.
We are resuming under existing regulations, although I intend to bring forward to Parliament amendments to the UC transitional provisions regulations, following their consideration by the Social Security Advisory Committee.
Universal credit is a dynamic welfare system fit for the 21st century. As part of our levelling-up agenda to support the British public, we will continue to help people into work and to progress in work, taking advantage of the recent reduction in the taper rate and boost to work allowances.
[HCWS780]
Annual Households Below Average Income and Separated Families Statistics 2020-21
Thérèse Coffey Excerpts(2 years ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The Department for Work and Pensions has today published its annual statistics on incomes and living conditions covering 2020-21, the first year of the pandemic. This includes households below average income (HBAI), which includes statistics on household incomes and a range of low-income indicators for 2020-21, derived from the family resources survey. This consisted of around 10,000 households—half our usual sample size due to moving from face-to-face to telephone interviews in response to the pandemic.
Rigorous quality assurance and weighting of the statistics means we can have confidence in the headline statistics published. However, the impact of the changes to data collection during the pandemic become more evident when the statistics are disaggregated into smaller groups. To ensure these statistics maintain high levels of quality, DWP’s chief statistician has taken the decision that HBAI statistics on smaller sub-groups should not be released this year. The full data, however, will be made available on the UK data archive. As a result of impacts on data quality, the Scottish Government publication “Poverty and Income Inequality in Scotland 2015-18” will not be available this year, and statistics published by the Welsh Government and the Northern Ireland Executive will be released with significant caveats.
The HBAI statistics show that between 2019-20 and 2020-21, the proportion of people below the absolute low income line fell. Before housing costs, there was a decrease of one percentage point to 13% or 8.8 million people. After housing costs, there was a decrease of one percentage point to 17% or 11.1 million people.
Compared to 2009-10, there were 1.2 million fewer people in absolute low income, before housing costs: 200,000 fewer children, 500,000 fewer working age adults and 400,000 fewer pensioners.
Between 2019-20 and 2020-21, median incomes fell. The proportion of people below the relative low income line also fell. Before housing costs, there was a decrease of two percentage points to 16% or 10.5 million people. After housing costs, there was a decrease of two percentage points to 20% or 13.4 million people. This shows how relative poverty is affected by median income and reinforces why the Government’s focus has been on absolute poverty as a better measure of real changes in living standards for the poorest in society, as well as on material deprivation.
This year, the Department has published new statistics for children and working age people that combine material deprivation with HBAI’s statutory absolute low income measure. The statistics show that combined absolute low income and material deprivation among working age people fell three percentage points—reducing from 3.1 million in 2010-11 to 2.2 million in 2019-20. A decade of rising employment will clearly be a contributing factor in this trend. In 2020-21, 5%, or 700,000 children and 5%, or 1.9 million working age people were in combined absolute low income and material deprivation, lower than the numbers of children and working age people in low income alone.
Recognising the new statistics released today, the Department has also announced it will not proceed with developing new statistics using the work of the Social Metrics Commission as a starting point.
The Separated Families publication released alongside HBAI also shows the significant impact that child maintenance payments can have on reducing the number of children living in low income households. Overall, as a result of child maintenance payments from 2018-19 to 2020-21, 80,000 children were moved out of absolute low income before housing costs each year; 140,000 after housing costs.
This is the second year that the Department has collected data on food security. In 2020-21, 93% of households were classed as food secure, up from 92% in 2019-20.
The statistics published today show how the Government’s covid support package of over £400 billion helped support jobs and incomes. We are now easing the current pressures people are facing with the cost of living, taking action to support families worth over £22 billion in 2022-23. This includes a £9.1 billion energy bill rebate package, worth up to £350 each for around 28 million households.
Also, from April, the Government are providing an additional £500 million to help households with the cost of essentials, on top of what we have already provided since October 2021, bringing the total funding for this support to £1 billion. In England, £421 million will be provided to extend the existing household support fund, while the devolved Administrations will receive £79 million through the Barnett formula.
With unemployment back to the low levels we saw before the pandemic and vacancies at record highs, our focus is on helping people to move into and boost incomes through work: for example, through the change to the universal credit taper rate and an increase to the work allowances which means millions of families are on average £1,000 a year better off, the rise to the national living wage from April and increasing the level at which people pay national insurance on their income, saving a typical employee over £330 in the year from July.
As we help people to keep more pounds in their pockets, these statistics highlight the unprecedented support we provided to protect livelihoods during the pandemic.
[HCWS748]
Household Support Fund Extension
Thérèse Coffey Excerpts(2 years ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The economy is in recovery, with a record number of people on the payroll, but we recognise inflationary challenges and that people are concerned about pressures on household budgets. That is why we are extending the household support fund to provide cost of living support for households most in need. From April, the Government are providing an additional £500 million to help households with the cost of essentials. This brings the total funding for this support to £1 billion. In England, £421 million will be provided to extend the existing household support fund from 1 April to 30 September inclusive. The allocation for councils is the same as for the previous six months. The devolved Administrations will receive £79 million through the Barnett formula.
The fund will be distributed via upper-tier local authorities. This support will continue to help those who are struggling to afford energy and water bills, food, and other essentials, to prevent the escalation of problems. We know energy bills may be of particular concern to low-income households and so local authorities are being encouraged to focus on supporting households with the cost of energy.
At least a third of the extension funding (£140 million) will be spent on pensioners on low incomes and at least another third (£140 million) will be spent on families with children. This will ensure that the most vulnerable, including those unable to work to boost their income, will continue to receive vital support to help with the costs of household essentials throughout the next six months.
This extension is just one way that we are helping families with the rising cost of living and other global inflationary pressures. The Government have recently announced a three-part plan of support to help households with rising energy bills, worth £9.1 billion in 2022-23. This includes a £200 discount on energy bills this autumn for all domestic electricity customers in Great Britain, to be paid back automatically over the next five years. This also includes a £150 non-repayable rebate in council tax bills for all households in bands A-D in England, as well as a £144 million discretionary fund for local authorities to support households who are in need, regardless of their council tax band.
Likewise, the national living wage will increase to £9.50 an hour this April, providing an extra £1,000 pay for a full-time worker. This has risen every year since it was introduced in 2016. The cuts to the universal credit taper rate and the uplift to the work allowances will also put, on average, an extra £1,000 a year into the pockets of 1.7 million low-income families.
These initiatives, alongside the household support fund extension, will work to help those most in need over the coming months.
[HCWS749]
Cost of Living Increases: Pensioners
Thérèse Coffey Excerpts(2 years, 1 month ago)
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Jonathan Ashworth
My hon. Friend is absolutely right. We have so many pensioners in poverty, and many of them are living in inadequate, cold, damp homes that they cannot afford to heat. We know that we have considerable excess deaths every winter due to issues associated with hypothermia and so on, because so many pensioners live in cold, damp homes. Frankly, that costs the NHS more in the long run, so the economics of this are completely self-defeating.
What was the Government’s justification for breaking the triple lock even though pensioner poverty is increasing, as it was before the pandemic? Ministers said that the £5 billion cost was unaffordable. So the Chancellor took £5 billion off pensioners and then a month later, in his Budget, gave away billions in alcohol duty cuts and cuts to the bank levy—literally making it cheaper for the bankers to booze on bubbly on the back of making pensioners poorer. It is a disgrace.
Let us be clear: the reason Ministers are not increasing the pension sufficiently is not that the Government lack the money, but that they lack the political will. That is why older people are now asking whether the Government will break their promise on the triple lock next year too. Last year, Ministers rejected the 8.3% rise and refused even to explore alternative measures of wage growth, but they insisted that that was a one-off and that they would honour the triple lock throughout this Parliament. The Bank of England warns that inflation could reach 8% this year. I asked the Secretary of State at questions earlier whether she would rule out breaking the triple lock for a second year in a row. She did not give that guarantee at the Dispatch Box, so I ask her again: can she confirm that the triple lock will be honoured for the rest of this Parliament? Does she want to answer that? She did not do so at questions earlier.
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The right hon. Gentleman asked multiple questions earlier and I answered at least one of them, but the answer is yes, I do make that commitment.
Jonathan Ashworth
I have secured my first U-turn in the role, Madam Deputy Speaker. Does that not just show that we in the Opposition stand up for Britain’s pensioners? I asked the Secretary of State a very simple question earlier—whether she would commit to the triple lock—and she did not say yes. I am pleased that she has now cleared up the muddle she got herself in earlier, but given the other commitments—[Interruption.] The Pensions Minister—the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman)—says Ministers have said it repeatedly, but they all stood on a manifesto saying they were going to keep the triple lock. I say to him that his commitment to the triple lock might not be worth the paper it is written on, given that he broke his manifesto commitment.
While I am talking about the Pensions Minister, he told the House in September, in seeking to justify breaking the triple lock, that the Government would
“ensure pensioners’ spending power is preserved and that they are protected from higher costs of living.”
Does any Tory Member really believe that that ministerial promise has remotely been met? Of course it has not.
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
It is a pleasure to speak in this debate. To be clear, there have been no U-turns. I am sure that the right hon. Member for Leicester South (Jonathan Ashworth) was not intentionally misleading the House when he suggested there was. I am again happy to put on record that the triple lock will be honoured in the future.
The Government have always supported pensioners and will continue to do so, whether through the significant increase in pension rates since we took office in 2010, or the creation of a new, simpler state pension which is better for women and reduces the need to consider top-ups through pension credit. I recognise the No. 1 concern in many people’s minds right now is the rising cost of living and its impact on their household budgets. The unique set of global circumstances that have come together to drive up inflation are largely factors beyond the control of the Government, such as the knock-on effect of covid on the global supply chain and the impact of Putin’s despicable invasion of Ukraine. These items are set out in a letter from the Governor of the Bank of England to the Chancellor, as the Bank of England is charged with achieving the 2% inflation target.
However, we are taking decisive action to cushion the impact of price rises on people’s pockets, providing £21 billion of support over this year and the next. That is particularly true for people on low and fixed incomes. Help is already on hand through the household support fund, which is still accessible through people’s local council, and we are taking further action on rising household energy bills. The £9 billion energy package announced by the Chancellor last month will benefit the vast majority of households, including pensioners, with a £150 discount on council tax for those living in property bands A to D, or the £144 million discretionary fund that is available through local councils. In addition, the £200 rebate on energy bills this year will help to spread the costs of the expected increase over the next few years. I recognise that that will still need to be repaid.
Alan Brown
Of what the Secretary of State calls the £9 billion package, how much is provided by the Treasury and how much is a loan to consumers that has to be paid back?
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Will the Secretary of State give way?
Dr Coffey
No, I will not.
The extra support is on top of a range of existing help for pensioners, including: winter fuel payments, which support over 11 million pensioners’ energy bills and is worth about £2 billion every year; cold weather payments, ensuring pensioners in need keep warm during the colder months; and the warm home discount, which we are extending until 2026, including expanding it to more recipients of pension credit, namely those who receive the savings credit element and live in a home with high energy costs. I am conscious that the warm home discount is a spreading of support towards people in this vulnerable cohort, but nevertheless it is thanks to Government intervention that that is the case. As a result, the number of households benefiting from the warm home discount will increase by almost a third, to 3 million—up from nearly 1 million at the moment—with the vast majority getting their payment automatically with no need to apply. Together, I think that will be welcomed by many people, recognising the extra support that people who are not currently eligible today will receive later this year.
Emma Hardy
I want to raise a point about prepayment meters. A written question to the Department for Business, Energy and Industrial Strategy—admittedly, this Secretary of State represents a different Department—asked how people on prepayment meters would receive the £200 discount, many of whom happen to be pensioners. The answer, given on 25 February, was:
“BEIS will consult in the spring.”
It seems that the Government do not have a plan for how to refund the money to those on prepayment meters, but I hope that the Secretary of State can update us.
Dr Coffey
The hon. Lady asks a valid question. As I have said to the House before, tackling the cost of living and poverty more broadly is shared across Government. Although that may come under our umbrella—recognising our general role in support through the welfare system—my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy leads particularly on items to do with energy and fuel poverty more broadly. I will ask him to contact her.
That leads me on to pension credit, which has been highlighted as a passport to a range of other benefits, including free TV licences, help with council tax and NHS dental treatment. Together, those are making a real difference, reflecting the Government’s commitment to supporting pensioners and continuing the work of successive Governments since 2010—when the Conservatives took office—to tackle and alleviate pensioner poverty.
The facts speak for themselves. The latest figures show that 200,000 fewer pensioners are in absolute poverty than in 2010, with levels of material deprivation having fallen from 10% to 6%, a record low. It is because of our commitment over that time and policies such as the triple lock that, from next month, the full yearly basic state pension will be more than £2,300 higher in cash terms than it was in 2010. In fact, no Government have paid more to pensioners than we will this year: £105 billion alone through the state pension. When we include all the other pensioner benefits, that rises to £129 billion a year.
Our aim over the two years of the pandemic has been to give fairness to pensioners and taxpayers, recognising what has happened with covid. For 2021-22, we protected the value of the state pension by legislating to secure and increase the state pension by 2.5%, despite a decline in earnings and inflation rising by just 0.5%. Had we not acted, the state pension, by law, would have remained frozen. Again, through the Social Security (Up-rating of Benefits) Act 2021, which Parliament passed last November, we legislated to temporarily suspend the earnings part of the triple lock in 2022-23 for one year. As I outlined at the time, that was in response to exceptional circumstances caused by the distorting effects of the pandemic on the earnings statistics.
Pensions will still rise by 3.1% next month. That reflects the inflation index that has been used consistently for many years, so over the past two years, pensions will have risen by a total of 5.6%. Next year, we will return to implementing the triple lock in the usual way for the remainder of the Parliament. I reinforce that full commitment, and whatever the right hon. Member for Leicester South may suggest—he may be trying to score points on politics, which, as the shadow Secretary of State he is absolutely entitled to do—I want to make sure that he avoids scaremongering.
Alan Brown
I welcome the Secretary of State’s commitment to reinstating the triple lock. Given that the Chancellor said this time that 8% was unaffordable and that that was £30 billion that we could not afford, is she saying that if inflation is at 8% when the Government do the measurement, they suddenly can afford to pay the £30 billion to pensioners?
Dr Coffey
I am not aware of any Minister trying to say to people that we did this because it was unaffordable. As a result of the pandemic, there was a statistical anomaly relating to earnings. We also understand the balance relating to intergenerational fairness, as has been outlined. At the time, however, we very much highlighted the statistical anomaly.
As a result of our actions, I believe that the state pension continues to be a strong foundation from which people can build additional savings for their retirement. We are seeing a thriving private and workplace pensions market, fuelled by the success of automatic enrolment, which transformed pension savings for more than 10.5 million workers. That is creating even firmer foundations for a robust pension system to ensure that not just today’s pensioners, but those of future generations are protected and supported. I know that, as a country, we will continue to build on the progress that we have made over the last 12 years under Conservative Governments, so that in the next 12 years, and in decades to come, pensioners will be able to enjoy a secure and dignified retirement.
We also know that a minority of pensioners choose to stay working beyond the standard retirement age. They do not pay the standard employees’ national insurance on their earnings, even though employers do if they earn above the threshold. As for the NHS and social care levy being introduced through national insurance, it is appropriate for anyone working at all, including pensioners, to contribute, bearing in mind that they will do so only if their earnings are at or above the regular threshold. I believe that will be about £190 a week, which is close to nearly £10,000 in earnings a year.
Peter Gibson (Darlington) (Con)
My right hon. Friend rightly points out that many pensioners are indeed working. What does she have to say about how the announced increase in the living wage to £9.50 will benefit pensioners?
Dr Coffey
Any uplift in the national living wage is welcome to anybody still working. Our normal practice on standard national insurance for employees is that once someone reaches pension age, their take-home pay will be automatically higher than somebody else under the age of retirement, if they are doing the same job on the same salary. However, this levy is important to make sure that we get the funding for the NHS backlogs and for the future stability of the social care system.
Let me turn to pension credit. We have heard about the success of the private pensions sector and some of the uplift for people who are still working. It is good for those still saving for their futures, but understandably, the House wants to know what we are doing for the poorest pensioners now. We had a bit of a history lesson about how pension credit was introduced under the Labour Government in 2003, as the right hon. Member for Leicester South said. Let us go back a bit earlier in history: it was only a few years beforehand that the Labour Administration raised pensions by 75p. I think the House will probably recognise that pension credit was introduced directly as a consequence of the impact of what happened with that very modest increase in pensions.
Various funds have been open to pensioners in the past year, including the household support fund, and I encourage people to approach their local council for support.
Stephen Timms
As the Secretary of State knows, about a third of those who are eligible for pension credit do not receive it at the moment. She told us earlier that there is an action plan to improve that. Will she publish that action plan and include in it an ambitious target for increasing the take-up of pension credit?
Dr Coffey
The Chair of the Work and Pensions Committee slightly pre-empts where I am heading with pension credit in my speech.
On the household support fund, within the lifetime of the Government, we have introduced a higher basic state pension so that, increasingly, pensioners are not required to resort to applying for pension credit. However, pension credit, the pension financial safety net, is helping to support those with the lowest retirement incomes. Worth on average over £3,000 a year, some 1.4 million pensioners already claim it, receiving collectively an extra £5 billion in support. As I mentioned, given that pension credit is a passport to other financial help, we want to make sure that everyone who is entitled to it claims it.
Our estimate of pension credit take-up is based on a combination of what information we have on pensioner income and analysis from the family resources survey. That suggests that more people can claim than is the case now, particularly for those eligible for the savings credit element, where we have the lowest take-up. The Minister responsible for pensions, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), and my noble Friend the Minister in the Lords—Baroness Stedman-Scott—have been striving to increase take-up. They undertook a big awareness day last year and they are continuing that work. This is the plan, I say to hon. Gentlemen.
We will continue to promote the take-up of pension credit. As has been highlighted, the Minister responsible for pensions, my hon. Friend the Member for Hexham, has raised awareness through local newspapers. We will send 11 million leaflets to pensioners with their annual state pension uprating letter and we will continue to work with the BBC, financial institutions, Age UK and many other organisations to raise awareness. The latest estimates show that uptake is increasing. We know from internal management information that the number of new applications last year is estimated to have been 30% higher than in 2019, so our efforts are working. I hope that this latest effort will also bear fruit.
Rachael Maskell
I chair the all-party parliamentary group for ageing and older people, which has just had an inquiry into the matter. One thing we suggested was that, since a lot of older people visit their GP at some point, GPs should be active in asking their patients whether they are eligible for pension credit. That would help them to claim the benefits that they should be able to attain.
Dr Coffey
The hon. Lady raises a valid point. I know that we have had paid advertising in post offices and in GPs’ waiting areas in the past; doctors often tell us that they do not necessarily like to be attached to benefit claiming and similar matters, but I hear what the hon. Lady says, and my understanding is that we intend to resume that contact. I have also asked the leading pharmacy chains to be involved, because that is often a more regular way in which people get help. We will try different outlets, in addition to those we have tried in the past, to make people more aware of the potential opportunities.
Dr Coffey
The hon. Lady has already made one intervention, and I want to make some progress.
The right hon. Member for Leicester South asked about issues relating to state pension underpayment. I give credit to my hon. Friend the pensions Minister, who has rolled up his sleeves and really got stuck in. We have 500 people working on the state payment exercise, and before the end of the year we are aiming to have up to 1,500 people getting on with it. There will be an update after the fiscal statement; we have always said that we would give updates more or less in line with it, so the right hon. Member for Leicester South will have to be slightly patient. This issue has been going on for some considerable time. There was an element of shambles in previous Administrations, which was not helped by the 2008 reforms. I respect the former Minister Steve Webb, but he did not find this element at all in his five years as pensions Minister—not even when he was going through the whole process of creating a brand-new state pension. We are getting on with this element, which was not discovered until recently, and we will get on with the job and sort it out.
When we say that we are committed to tackling pension poverty, we mean it, and we have the track record to back it up. On Wednesday, it will have been two years since we took unprecedented action to lock down the country to protect lives. We invested in vaccines and subsequently rolled out the biggest and most successful vaccination programme in the history of the NHS, prioritising pensioners. Today, as we start inviting the over-75s to get their spring covid booster, we want to encourage pensioners to consider getting the boost to their income that pension credit could provide. With the wider range of financial and other support that we are providing, we are doing our best to help to ease the current cost of living squeeze.
We must unite as a House to get more pensioners to access the support that is available. While I am conscious that many people will think that there is more to do, we can do it only if all MPs in this House make a commitment to their pensioners—I look forward to their doing so—to continue to provide as much information as possible.
Several hon. Members rose—