Oral Answers to Questions

Will Quince Excerpts

Monday 29th June 2020 Commons Chamber

[Sarah Champion (Rotherham) (Lab)]

What recent estimate her Department has made of the number of universal credit applicants awaiting a decision on applications made since the start of the covid-19 outbreak.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

Since mid-March, we have processed about 3.2 million individual universal credit claims. Despite that surge, the system is standing up to the challenge and demonstrating the resilience and scalability that is a fundamental part of its design. From the peak of claims made, less than 1% of claimants have outstanding verification preventing payment. There is no way that the legacy benefit system could have coped with such pressure.

[Jeff Smith]

Citizens Advice found recently that more than half of people claiming universal credit for the first time during the crisis had experienced hardship and that many did not want to take out a loan because they were afraid of taking on more debt. A system where more than half of people are experiencing hardship is surely a system that is not working, so will the Minister reconsider proposals to end the five-week wait and replace loans with a cash grant?

[Will Quince]

I do not recognise the picture the hon. Gentleman paints. Universal credit advances are available for those who need them. They are interest free for 12 months and as of next year that will increase to 24 months. We get support to people as quickly as they need it. That is why the payment advance is available, usually within a couple of days.

[Dame Diana Johnson [V]]

When the job retention scheme is wound down, we will see, I am sure, a second wave of universal credit applications, on top of the 70% increase we have already seen in Hull. With unemployment in Hull forecast to get to about 16%, is it not time now to prepare to remove the five-week wait for universal credit and to make the £20 increase a permanent feature?

[Will Quince]

The Department has processed an unprecedented number of claims during this period. We have put over £6.5 billion into our welfare system to support those who need it quickly. In terms of what the hon. Lady defines as the five-week wait, nobody has to wait five weeks for a payment. An advance is available, usually within a couple of days, for those who need it.

[Sarah Champion [V]]

Covid-19 has had a huge impact on manufacturing, particularly the automotive and aviation industries. In Rotherham, McLaren and Rolls-Royce face redundancies. As well as universal credit, what package of support can the Minister put in place to help these highly skilled workers if job losses do come their way?

[Will Quince]

Any job loss is regrettable, and the Department stands ready to support people who find themselves in that position. The £6.5 billion package included an increase to universal credit of over £1,000, a similar increase to the standard allowance for tax credits and an increase to the local housing allowance. That is over and above measures such as the job retention scheme, the self-employment income support scheme, the £500 million hardship fund via local councils and the £63 million local welfare assistance fund. As the Chancellor said, we will do whatever it takes to support people through covid-19.

[Mark Pawsey (Rugby) (Con)]

What steps her Department is taking to ensure an effective transition between universal credit and the state pension.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

The Government announced in March that anyone reaching state pension age while claiming universal credit will be eligible for a run-on until the end of the assessment period in which they reach state pension age. An estimated 200,000 people will benefit from this measure over the next five years, receiving on average an additional £350 each. I am pleased to confirm that regulations are being laid today to put this measure on a statutory footing.

[Mark Pawsey]

In November 2017, my constituent Caroll Nash visited my advice surgery and told me about a shortfall of £530 as a consequence of transitioning from universal credit to the state pension. Her claim ended on 17 October in anticipation of her receipt of the state pension from 6 November. At that time, no facility for a part-payment was available, although we did manage to resolve the issue. Can the Minister confirm that, as a consequence of the test-and-learn approach that his Department has taken in respect of universal credit, that claimant’s circumstances today would result in a seamless transition?

[Will Quince]

I thank my hon. Friend for his question. He is right, and I am pleased to confirm that everyone who reaches state pension age while on universal credit will be eligible for the new run-on payment. That will mean no gap in benefit provision as people transition from universal credit to the pension-age benefit system.

[John Nicolson (Ochil and South Perthshire) (SNP)]

What recent assessment she has made of the effectiveness of universal credit on reducing poverty.

[Richard Thomson (Gordon) (SNP)]

What recent assessment she has made of the effectiveness of universal credit on reducing poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

There are now over 200,000 fewer people in absolute poverty compared with 2010, and universal credit is a fundamental part of this Government’s strategy to support people. As a result of the covid-19 pandemic, we have increased the UC standard allowance by around £1,000. An estimated 2.5 million households on UC will benefit from that straightaway, as well as new claimants who will become unemployed or those whose earnings or work hours decrease because of the outbreak.

[John Nicolson [V]]

I would like to begin by saying that my party’s thoughts are with the victims of the terrible knife attack in Glasgow, and we want to thank the emergency services for their incredible bravery.

According to the Select Committee on Work and Pensions, the DWP last published a full impact assessment of universal credit in 2012, and no formal impact assessment has ever been produced on advance payments. How can we have any idea of the effectiveness or otherwise of universal credit unless assessments are available for scrutiny?

[Will Quince]

I thank the hon. Gentleman for his question, and I would like to echo his comments; we are certainly thinking of the people of Glasgow at this incredibly difficult time.

We keep all policy under review, but I think Members across the House recognise yet another attack on universal credit and the system. We know that the legacy benefit system simply would not have coped with the unprecedented demand we have seen during covid-19. Universal credit has done a superb job. I hope that when the hon. Gentleman reflects on the role that universal credit has played in ensuring that over 3.2 million people have got the support they need as quickly as possible, he will take a different view about its success.

[Stephen Flynn]

The Social Mobility Commission has highlighted that, in the last seven years, there has been “little or no action” by the UK Government on a third of its recommendations, including on ensuring that child poverty is not exacerbated by universal credit. Indeed, its damning report criticised DWP for failing to provide a detailed assessment of how benefit changes are tied to these poverty rates. On that basis, how can the Minister possibly know whether universal credit is increasing or decreasing poverty?

[Will Quince]

The statistics show that full-time work substantially reduces the chances of poverty. The absolute rate of poverty for a child where both parents work full time is 4% compared with 44% where one or more parents are in part-time work. We are supporting people into full-time work wherever possible, for example, through our childcare offer, and universal credit, where work always pays, is a fundamental part of that offer.

[Richard Thomson]

Research by the Institute for Fiscal Studies has found that, despite the DWP’s temporary increase to universal credit, out-of-work households with children are, on average, £2,900 a year worse off than they would have been without cuts since 2011. Does the Minister understand that, far from doing a superb job, as he says, universal credit is leaving some families in serious difficulty and poverty, and will he commit to looking at the IFS findings?

[Will Quince]

Our focus today is rightly on what the Government can do to support people financially through these unprecedented times. However, our broader ambition remains to build an economy that ensures that everyone, no matter their background, has opportunities to enter and progress in work where possible, while being supported by the welfare system in their time of need. I just gently remind the hon. Gentleman that, in this financial year, we have spent more than £120 billion on benefits for working-age people.

[Stephen Timms (East Ham) (Lab)]

I welcomed the Minister’s confirmation last week of no appeal in the universal credit court case that the Department lost, but has he yet grasped the full scale of the problem that that issue has raised? He said in the House last week that, at most, 1,500 people were affected and suggested that 85,000 was a figure that had come from the Opposition. I wonder whether he has now had the chance to see that that 85,000 figure comes from the decision of Lady Justice Rose in the Court of Appeal last week. Did he also see that Lord Justice Underhill said:

“It is not simply a matter of uneven cash-flow…affected claimants will receive substantially lower payments”.

[Will Quince]

I answered an urgent question on this matter on Thursday for some 45 minutes, as the right hon. Gentleman has mentioned. I confirmed that we would not be appealing the decision of the court. As I made clear to him, I am now considering options to address the issue and will keep the House updated on progress. The 85,000 figure, which he references, from the judgment, came, in my understanding, from the Opposition. It is referenced in the judgment, but it came from the Opposition and we do not recognise those figures.

[Neil Gray (Airdrie and Shotts) (SNP) [V]]

My hon. Friends have highlighted the range of expert reports out over the past couple of weeks showing that the DWP has no idea how universal credit impacts child poverty. It has done precious little to address it and could have made it worse through systematic cuts, leaving families and children worse off since 2011. The Joseph Rowntree Foundation and Save the Children say that families need an extra £20 a week in the child element of universal credit and child tax credits. Will the Minister ask the Chancellor to make that happen?

[Will Quince]

As I just said, in 2020-21, we will spend more than £120 billion on benefits for working-age people. We spend more on family benefits than any other country in the G7 at 3.5% of GDP. The measure that the hon. Gentleman raises would alone add another several billion to that bill. We will continue to reform the welfare system so that it encourages work while supporting those who need help. It is an approach that is based on the clear evidence that work offers families the best opportunity to get out of poverty.

[Neil Gray]

I note that the Minister did not answer my question. There is growing pressure on the UK Government to act here. The former DWP Secretary of State, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), has called on the Minister and his colleagues to accept the recommendations of the Joseph Rowntree Foundation and Save the Children and to uprate legacy benefits, too. Poverty Alliance’s report today shows that UC is pulling people into poverty rather than acting as a lifeline, so will he agree to convene a cross-party meeting, including the former Secretary of State and a Treasury Minister, to look at ways to make that recommendation happen?

[Will Quince]

For a start, the hon. Gentleman knows that that is well above my pay grade, but I gently remind him that universal credit will be over £2 billion a year more generous when fully rolled out compared with the legacy benefits system that it replaces. He also fails to recognise the £6.5 billion to £7 billion that this Government have put in place to support people through covid-19. As the Chancellor has said, we will do “whatever it takes”, and this Government are doing that: we are supporting people and this Department is getting that support to those who need it quickly.

[Huw Merriman (Bexhill and Battle) (Con)]

What steps she plans to take with Cabinet colleagues to support employment after the covid-19 outbreak.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

If she will hold discussions with the Secretary of State for Environment, Food and Rural Affairs on trends in the level of food insecurity among the poorest communities since the start of the covid-19 outbreak.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

I regularly engage with my counterpart in DEFRA, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Banbury (Victoria Prentis), on this issue and participate in the food and essential supplies to the vulnerable ministerial taskforce. In addition to welfare changes worth more than £6.5 billion, Departments have worked together throughout this period to ensure support for the most vulnerable. Funding of up to £16 million, including the £3.5 million food charities grant fund, is available so that charities can continue to provide food for those in need.

[Geraint Davies [V]]

The Food Foundation has found that 5 million adults and 2 million children suffer from food insecurity, which the United Nations defines as insufficient nutritious food each day to avoid hunger. The 2019 national food strategy was shelved because of coronavirus. What plans has the Minister to introduce more money for those most in need so that we do not have growing numbers of people relying on food banks and to prevent millions more from being plunged into hunger in the event of a second wave of coronavirus and a bad or no deal Brexit?

[Will Quince]

Over and above the £6.5 billion we have pumped into our welfare system, there is the more than £16 million for food redistribution charities, the £3.5 million for the food charities fund, which offers grants of up to £100,000 to support those charities, the £63 million local welfare assistance fund through local authorities that the Prime Minister announced two weeks ago and, of course, the free school meals voucher scheme. However, the hon. Gentleman raises a good point. We want to better understand food insecurity in this country. That is why we commissioned extra questions for the family resources survey. I look forward to looking at the results of that in great detail.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on her promotion to the shadow Cabinet.

The Government say that the aim of the benefit cap is to make people work more hours or move to cheaper accommodation. Neither of those options has been possible during the covid crisis, so what possible justification have the Government got for persisting with that policy, which prevents families from receiving what the Department for Work and Pensions itself believes to be necessary?

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[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Child Poverty Action Group and the Church of England estimate that by April 2020, around 230,000 families had been hit by the two-child limit, causing huge distress to children and their families in the middle of the pandemic, and that 1.3 million children will be forced into poverty—or, if they already face poverty, into deeper poverty. When will Ministers scrap this cruel and vicious policy that is punishing children?

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

We keep all policy under review. The particular policy change the hon. Lady references would not only cost around £2 billion a year but could not be operationalised now even if we wanted to, because all the focus is rightly on the Department’s response to covid-19. I say to her gently, though, that it is a policy based on fairness; those in receipt of benefits are faced with the same choices in life as those not in receipt of benefits.

[Tom Hunt (Ipswich) (Con)]

I have recently been contacted by a number of beauty salons, such as the Beauty Academy in Ipswich, that have serious concerns about not being able to reopen their doors as expected on 4 July alongside hairdressers. Many beauty salons under pressure have already shut their doors for good, causing a number of job losses. What discussions has my right hon. Friend had with the Business Secretary about preventing further job losses, including by allowing beauty salons to reopen on 4 July and giving them the certainty they need so that they can plan over the coming weeks?

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[Alison Thewliss (Glasgow Central) (SNP)]

The Minister talks of fairness with regard to the two-child limit, but how can it be fair that the 60,000 families who have made a claim since lockdown began, who could not have anticipated having to claim universal credit, are now struggling to feed their third or subsequent children? They could not have planned for this; how is that fair?

[Will Quince]

We recognise that people face unprecedented financial pressure as a result of covid-19. That is exactly why the Government have invested £6.5 billion in our welfare system, increasing universal credit by £20 per week, increasing tax credits and increasing the local housing allowance.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

Many people in my constituency rely on their summer earnings as a contribution towards their annual budget to make ends meet. Tourism is very seasonal, but what it brings has a knock-on effect across all sectors in Cornwall. Will my hon. Friend look at what more can be done if the summer does not produce the savings people need for the lean months?

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[Scott Benton (Blackpool South) (Con)]

Universal credit has supported millions of new claimants since March, many of whom will now be looking for new job opportunities as the economy reopens. Does my hon. Friend agree that one of the inherent strengths of universal credit is its flexibility in incentivising and rewarding employment?

[Will Quince]

I thank my hon. Friend for that question, and he is absolutely right. The amount paid in UC reflects as closely as possible the actual circumstances of a household during each monthly assessment period. This allows UC awards to be adjusted on a monthly basis, ensuring that if a claimant’s income falls, they do not have to wait several months for a rise in their UC. UC pays up to 85% of childcare costs to support working parents, compared with 70% in the legacy benefits system.

[Mr Virendra Sharma (Ealing, Southall) (Lab) [V]]

ExcludedUK estimates that around 3 million taxpayers are ineligible for the furlough and self-employed income support schemes. Among the left behind are thousands of freelancers on short-term PAYE contracts, particularly in the creative industries. What is the Minister doing to ensure that support is reaching those who make such a vital economic and cultural contribution to this country?