Welfare and Pensions Update
Thérèse Coffey Excerpts(4 years, 6 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I am announcing the proposed social security benefit and pension rates for 2020/21.
More than 10 million people in receipt of working-age benefits will see their payments increase at the rate of inflation next year.
Some 2.5 million people on universal credit and claimants on legacy benefits will receive a 1.7% rise in April. This includes people receiving jobseeker’s allowance (JSA), employment and support allowance (ESA), income support, housing benefit and universal credit.
The basic and new state pensions will increase at the highest rate for 8 years, by 3.9%, boosting the retirement incomes of 13 million people. Pensioners receiving the full new state pension will get an extra £344 a year. The basic state pension will increase by £263 a year.
The pension credit standard minimum guarantee for a couple will be £265.20 a week, the basic state pension will be £134.25 per week, the full rate of the new state pension will be £175.20 per week, and the universal credit standard allowance couple one or both over 25 will be £507.37 a month.
The annual up-rating of benefits will take place for state pensions and most other benefits in the first full week of the tax year. In 2020, this will be the week beginning 6 April.
A corresponding provision will be made in Northern Ireland and the Scottish Government will lay its own statutory instrument in respect of increases to carer’s allowance in Scotland.
The annual up-rating process takes into account a variety of measures:
The basic and new state pensions will be increased by the Government’s “triple lock” commitment, meaning that they will be up-rated in line with the highest of prices (CPI), earnings or 2.5%. Consequently, they will be up-rated by 3.9% (the May-July average weekly earnings figure).
The pension credit minimum guarantee will also be increased by earnings in line with legislation. The pension credit savings credit maximum amount will be increased in line with CPI (1.7%).
Benefits linked to the additional costs of disability, and for carers, are increased by the annual rise in prices (1.7%). A number of other elements—including non-dependent deductions—will also be up-rated in line with prices.
Working age benefits will be increased by CPI (1.7%) from April 2020. Those linked to child tax and working tax credits will be up-rated in line with those benefits.
Universal credit work allowances will be increased in line with CPI (1.7%) from April 2020.
The full list of proposed benefit and pension rates will be placed in the Libraries of both Houses in due course.
This will increase expenditure on social security benefit and pension rates by £5 billion. This includes £3.9 billion more to be spent on pensioner benefits. From April 2020 the yearly basic state pension will be worth over £1900 more in cash terms than in 2010. £1 billion more will also be spent on working-age benefits, ensuring that we continue to support the most vulnerable in society.
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Work of the Department
Thérèse Coffey Excerpts(4 years, 6 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The Department for Work and Pensions is the UK’s biggest public service Department, supporting people into work and administering the state pension and a range of working age, disability and ill health benefits to around 20 million claimants and customers. The Department is carrying out a world-leading transformative welfare agenda, and has had great success in recent years, while the Health and Safety Executive continues to make the workplace safer.
Universal credit is the biggest change programme in Europe, and the UK is seen as a world leader in welfare. The roll out of universal credit is now complete and it is available in every Jobcentre across the country, with 94% of all claims paid in full and on time to 2.5 million people. This financial year we will spend over £95 billion on working age benefits and over £120 billion on benefits for pensioners, bringing the total welfare spending across Government this year up to £220 billion.
The Government believe that work is a pillar of a strong economy, and that work should always pay— according to the 2018 universal credit full claimant service survey, 85% of claimants believe getting and keeping a job is their number one priority—with 75% feeling that having almost any job is better than being on benefits. Overall satisfaction among claimants has remained consistently high over the last three years, with four out of five people satisfied with the support they have received when claiming universal credit.
The next phase of universal credit, “Move to UC”, will open up work, allowing people to increase their hours without the penalties they would normally be subject to under tax credits. As of 26 September 2019 we have made over 13,800 severe disability premium transitional payments, worth on average £2,280. This represents over 90% of expected backdated payments, totalling over £37.2 million.
Universal credit introduced a single taper system so payments reduce in a transparent and predictable way as earnings increase, making sure we support claimants in their transition into work. Additionally, when we complete moving legacy benefit claimants over to universal credit, an estimated 700,000 more people will get paid their full entitlement because of universal credit—getting on average an extra £285 per month.
As universal credit was rolled out, we made the taper more generous, reducing it to 63%, which means claimants can work more hours and keep more of their benefits. And again, in April this year, we increased the universal credit work allowance by £1,000 per year. This means that 2.4 million households will keep an extra £630 of income each year.
To support our claimants, we have introduced additional dedicated specialist work coaches, with training covering domestic abuse support, mental health, support for those with disabilities and health conditions, through to specialised local employment support.
Furthermore, we have made changes to support the most vulnerable, such as reducing the length of the maximum single sanction from three years to six months.
From October this year we reduced the normal maximum level of deductions in universal credit from 40% to 30% of the standard allowance; lowering this rate could see a couple keep up to an extra £600 over 12 months.
To support families and households, we announced the policy to support a maximum of two children would no longer be extended to apply to children born before 6 April 2017 in new claims to universal credit. We have also introduced more flexible childcare cost arrangements, as well increasing their worth from up to 70% to up to 85%.
Additionally, we provide alternative payment arrangements such as more frequent payment options and managed payments to landlords—we have created an online system for landlords to facilitate this. We also encourage payments to go to the main carer.
From April 2019, Citizens Advice have been delivering the new “Help to Claim” support service to claimants making a new claim for universal credit.
In 2012, we reformed the child maintenance system with the aim of increasing co-operation between separated parents to meet their financial responsibilities, as this produces the best outcomes for their children. The scheme promotes parental responsibility by encouraging clients to set-up a private family-based arrangement where appropriate—and removing the obligation to join the statutory scheme.
We introduced further enforcement powers at the end of 2018 to enable us to deduct child maintenance directly from a wider range of accounts, target complex earners via a calculation of notional income based on assets and to disqualify non-compliant parents from holding a UK passport.
In June 2019, the child maintenance service was managing 488,300 statutory child maintenance arrangements, covering 706,700 children.
The Government are committed to improving employment outcomes for disabled people and for those with long-term health conditions. We want to support employers to realise the benefits and insight that the huge pool of talented disabled people can bring to the workforce.
That is why we have committed to more than doubling the number of disability employment advisers in our Jobcentres to over 500 to provide specialist expertise to help disabled people enter employment. Alongside this, the Government are spending £55 billion a year on benefits to support disabled people and people with health conditions. That’s a record high and an increase of £10 billion in real terms since 2010.
In November 2017, “Improving Lives: The Future of Work, Health and Disability” set out the Government’s 10-year plan, including an ambition to see 1 million more disabled people in work by 2027.
Over the past six years, we have seen 1.15 million more disabled people in work, reaching a total of 4.1 million in the second quarter of 2019. This includes an increase of 404,000 over the first two years since the Government announced their 2027 goal.
We are working with employers through our disability confident scheme; over 14,000 employers have now signed up and all Government Departments are signed up to this scheme.
The Government have completed a consultation on their proposed reforms to statutory sick pay so that it will be better enforced, more flexible and cover the lowest paid employees for the first time.
The Health and Safety Executive continues to make the workplace safer. It has clarified guidance on health and safety regulations to improve employer understanding of the need to consider mental health alongside physical health when undertaking a first aid needs assessment. The UK continues to rate as one of the safest countries in Europe in terms of fatal injury and to perform well against EU countries on a range of other health and safety indicators
Personal independence payment (PIP) is a more modern, dynamic and fairer benefit than the predecessor, disability living allowance. PIP focuses support on those experiencing the greatest barriers to living independently. The number of working-age people now receiving support from PIP and DLA is up by over 257,000 since PIP was introduced in 2013 and, crucially, a higher proportion of the over 2.2 million people on PIP receive the top rate of benefit than on DLA—31% compared to 15%. Claimants are also receiving their benefits sooner—the average time taken to process claims is down by over 60% since July 2014 for new claimants.
We have reduced the number of assessments for those receiving the highest level of support, where needs will not improve, as well as for people over the state pension age. Up to 325,000 pensioners will benefit from the change to ensure that pensioners will receive ongoing PIP awards with a light touch review at the 10-year point.
The Government’s pensions agenda will provide more security and safety to pensioners in retirement, tackle reckless behaviour from employers on people’s pensions and help more pensioners than ever before to plan for their retirement. In 2019-20 alone, the Government expect to spend over £120 billion on benefits for pensioners—this includes £99 billion of expenditure on the state pension.
Since 2012, 10 million workers have automatically enrolled into a workplace pension thanks to automatic enrolment. This policy alone has helped to reverse a decade of decline in savings and, as of 2019-20, an estimated extra £18.6 billion a year will go into workplace pensions.
We are building on the success of auto-enrolment, looking to make it easier for self-employed people to save. In December 2018 the Government published a report setting out their delivery plan for research and trials to identify the most effective options to increase pension savings among the 4.9 million self-employed workers and we will carry out these trials throughout 2019 to 2021.
The Government introduced the triple lock and, accordingly, the full yearly amount of the basic state pension is around £675 higher than if it had just been up-rated by earnings since April 2010. This is a rise of over £1,600 in cash terms.
Pioneering work has been undertaken to help more people prepare for retirement than ever before. Pensions dashboards—digital interfaces that will allow people to see online what they have in their various pensions, including their state pension—will put individuals in control of their data; they will, for the first time, provide clear and simple information regarding pension savings in one place online and help people reconnect with “lost” pensions pots.
The Government are also tackling reckless behaviour of employers that would strip people of their hard earned retirement funds. In February 2019 we announced measures to reduce irresponsible conduct from employers by extending the pension regulator’s powers, including the power to send business owners to jail.
Recognising that climate change is a defining national and international emergency, we have introduced three key measures to ensure that pension schemes understand their responsibilities in responding to it. Since January 2019, those running single employer occupational pension schemes are required to establish an effective system of governance, including consideration of environmental, social and governance factors related to investment assets in investment decisions; and schemes with 100 or more members must carry out and document a risk assessment of their system of governance including risks relating to climate change.
Furthermore, as of 1 October, trustees of occupational pension schemes must state their policy on how they take account of the financial risks of climate change when developing their investment strategies.
The Government are committed to ensuring that people have access to the information and guidance they need to make effective financial decisions throughout their lives. The Financial Guidance and Claims Act 2018 has brought together the services provided by Pension Wise, the Pensions Advisory Service and the Money Advice Service into a single organisation.
We have promoted long-term savings and pensions products, including the lifetime individual savings account, to encourage and incentivise more people to make provision for long-term needs, including a house purchase and retirement. We are encouraging working people to save for a workplace pension by helping to protect their savings and monitoring the products, charges, and processes adopted by pension schemes. We are also giving individuals the confidence to save and access their pension pots by providing more guidance and support on pensions through the establishment of the Money and Pensions Service which is delivering free and impartial money and pension guidance, along with debt advice.
We will continue to engage across Government to ensure that we are aligned with the industrial strategy, supporting the flexible working task force, and the careers strategy and the national retraining scheme—ensuring that skills provision meets the needs of an ageing demographic. We have introduced older claimant champions into all 34 Jobcentre Plus districts. We will also continue to work with employers through our business champion for older workers and the local enterprise partnerships. We will ensure there are provisions for older returners to the workplace by working with Government Equalities Office and HM Treasury, and are engaging with businesses to understand their concerns in line with changes to the ageing demographic of the workforce.
We have also been supporting everyone who can, and wants to work, to continue to work. Initiatives such as the fuller working lives strategy have led to more people aged 50-64 in employment than ever before. In addition to our legislative reforms such as removing the default retirement age and extending the right to request flexible working, we are supporting employers to recruit, re-train and retain older workers.
Our record on employment is strong, and the number of people in work is up by over 3.6 million since 2010—a near-record high. The employment rate, at 75.9%, is also at a near-record high, with 1,000 more people moving into work on average every day since 2010.
Through our new enterprise allowance (NEA) scheme, we have supported 209,000 claimants to create over 130,000 businesses since 2011. On average, we have helped to launch 203 businesses by unemployed benefit claimants, every week since 2017.
UK nationals make up around 90% of all people in work and have accounted for 66% of the rise in employment over the last nine years. Additionally, over 60% of the growth in employment since 2010 has been outside London and the south-east. There are now more than 1 million fewer workless households than in 2010 and 730,000 fewer children living in a household where no one works.
Since 2010, over 75% of the growth in employment has been in full time work and employment, and employment high-skilled occupations has risen by over 2.9 million.
There are over 1.8 million more women in work since 2010, and the female unemployment rate is at 3.7%—a near record low; the black Asian and minority ethnic employment rate has reached 66.2%—a near record high—up 7.4% since 2010; and, the youth unemployment level has almost halved since 2010, to a near record low—falling by more than 130 on average every day. Furthermore, wages have been growing for 19 consecutive months.
We are providing targeted support for young people between the ages of 18 and 24 to get into employment, through the youth obligation support programme (YOSP), as well as other specialised support within Jobcentres for young people.
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Oral Answers to Questions
Thérèse Coffey Excerpts(4 years, 7 months ago)
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Lisa Forbes (Peterborough) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Universal credit payment timeliness continues to improve and is near a record high, with the most recent data showing we paid 83% of new claims in full and on time.
Tom Brake
Can I thank the Secretary of State for saving herself to answer my question? I welcome that. She will know that the five-week delay is still causing huge harm, so could I ask her what effort the DWP is making to ensure that UC recipients are not penalised by other organisations for the five-week gap in their incomes, and what extra support can the Government give to organisations that support universal credit recipients with financial management during this very difficult period?
Dr Coffey
It is important to recognise the help to claim—I think it is £39 million of support—that has been given through the citizens advice bureaux to try to help people who may not always be there with the paperwork that is required, so we are making best efforts so that people can make the right claims so they can be paid on time. As regards other elements, of course the advance is available, which can then be repaid over a 12-month period.
Lisa Forbes
With former Thomas Cook employees being offered food bank vouchers by the Department for Work and Pensions and the Trussell Trust in Peterborough reporting a 50% increase in the number of food parcels given to my constituents in the last year alone, can the Secretary of State tell us what impact she thinks the collapse of Thomas Cook will have on these figures?
Dr Coffey
The hon. Lady was at our first taskforce, and I am sure she will be impressed with the work that we have already been doing together, including the jobs fair that happened last Thursday. It is important, and we have seen this with Thomas Cook ex-employees, that they make a universal credit claim quickly—some of them have —so they can get the support that they need. I welcome, actually, the support that is given through the Trussell Trust in order to help people in this difficult time, but the sooner people come into Jobcentre Plus and start claiming universal credit, the sooner we can help.
Margaret Greenwood (Wirral West) (Lab)
Without giving this House a debate or a vote, as they had promised, the Government have pushed through regulations for the pilot of universal credit managed migration and payments to severely disabled people who lost out in being forced to transfer to universal credit. Will the Government explain why those payments still do not fully reflect the financial loss those disabled people have suffered?
Dr Coffey
There is an extra £600 million of support going to the most vulnerable. I really do want to encourage the Opposition to withdraw their early-day motion, because if they succeed in praying against this, they are hitting the most vulnerable people, and I am sure that is not something that they wish to be remembered for.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The Department’s resource budget will increase by 1.9% ahead of inflation for the first time since 2011, enabling us to provide excellent customer service, help people move into and progress in work, and provide financial security through timely benefit payments. As part of this, the DWP has been allocated £106 million to support vulnerable people and help to tackle private rented sector housing affordability through additional funding for discretionary housing payments.
Alan Brown
The Joseph Rowntree Foundation has highlighted that, with more social housing and lower housing costs, Scotland’s poverty figures are lower than the rest of the UK. The reality is that the biggest poverty factor is still Tory austerity. The Institute for Fiscal Studies has estimated that recent announcements will only mitigate a quarter of the cuts implemented since 2010. It is clear from the Secretary of State’s answer that a 1.9% increase is not enough. If austerity is really ending, when will the other three quarters of the cuts that have been implemented be reversed?
Dr Coffey
The hon. Gentleman will be aware that the Government have lifted 400,000 people out of absolute poverty since 2010 and that income inequality has fallen. I encourage the hon. Gentleman to go back to the Scottish Government and see what more they are doing to increase the number of higher paid jobs, because we all know that the best way out of poverty is to work.
Marion Fellows
On this subject yet again, the spending round did nothing to address the cuts to the local housing allowance and the pressures on private renters, who are £38.49 a week worse off due to the UK Government’s benefits freeze. To ensure affordability and prevent evictions and hardship, will the Secretary of State immediately increase the LHA to the pre-2010 level, and uprate it in line with inflation and rent increases?
Dr Coffey
I have just laid out that we increased the amount of money for discretionary housing payments. I have spoken to Shirley-Anne Somerville, the Scottish Minister, and it is my intention to see her soon, but the hon. Lady knows there are things the Scottish Government can do with the funding they have.
Steve Double (St Austell and Newquay) (Con)
Grahame Morris (Easington) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
It is a pleasure to be in the Chamber as Secretary of State for Work and Pensions, leading a fantastic Department that serves people from the Shetlands to the Scilly Isles, with more than 20 million customers across the country. In my short time in this role, I have already witnessed at first hand the inspiring and incredible work of civil servants throughout the country, and they are benefiting as well in seeing our employment rate continuing at a joint record high and an unemployment rate at its lowest since the ’70s. There is more to do, however, and I will keep focusing on improving the payment of universal credit and ensuring that we support everyone in society.
Grahame Morris
I am grateful for the Secretary of State’s sunny disposition in outlining her priorities, but the retirement plans of millions of women born in the 1950s are in ruins because of a decision by the previous Conservative-Lib Dem coalition Government to accelerate the increases in the state pension age. Last week, a decision in the High Court made it clear that only a political decision could deliver a just solution for these women, so will the Government now give the WASPI women dignity in retirement? Some 197 MPs have signed early-day motion 63 calling for justice for the WASPI women and for this historic injustice to be put right.
Dr Coffey
The High Court set out quite clearly that successive Governments had taken a measured approach in recognising the inequality in the state pension age and the need to increase the state pension age. Indeed, it was the Pensions Act 2007 that started the trigger going beyond 65. It is important to recognise that and the efforts made to communicate it, but I can assure the House that, as the hon. Gentleman will be aware, there are record numbers of women in employment. We will continue to support them in fulfilling their careers.
Steve Double (St Austell and Newquay) (Con)
Dr Coffey
My hon. Friend is right to praise the people who work for the DWP in his constituency. We have more than 4,000 civil servants in service centres nationally and we constantly monitor the volume of work as universal credit grows, but I assure him that sufficient resources will be in place to support those workers in his constituency.
Dr Sarah Wollaston (Totnes) (LD)
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Peter Heaton-Jones (North Devon) (Con)
On Friday, I visited the new Barnstaple Work Club, a fantastic initiative giving support to those seeking employment, particularly those with disabilities. Will the Minister join me in welcoming this new initiative and in thanking the volunteers as well as Barnstaple library for hosting it?
Toby Perkins (Chesterfield) (Lab)
Dr Coffey
That is simply not the case. The first time that I became involved with a food bank was in 2006, when people were falling between the gaps. One of the things that make me proudest of the Conservative Government and the coalition is that people are better off in work than out of it unless they cannot work, and we have championed the vulnerable. Universal credit is ensuring that people can have more and more income, and I should have thought that the hon. Gentleman would welcome that.
Kate Green (Stretford and Urmston) (Lab)
Tom Brake (Carshalton and Wallington) (LD)
Dr Coffey
The right hon. Gentleman will know that we are still in the middle of a negotiation for how we leave the European Union at the end of the month. It is important to stress that we have decided on a three-year rise unilaterally. We encourage other European Union countries to do exactly the same and we will continue to support those who have relied on UK pensions.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
People with a terminal illness want the choice of whether to work or not, and they should expect help and support from their employer. Does the Minister support the TUC’s Dying to Work campaign, which asks businesses to sign up and promise not to sack employees who have a terminal illness, and will she encourage more businesses to sign it?
Christine Jardine
Further to the points already raised by other hon. Members, there are 6,500 women in Edinburgh West who were born in the 1950s and who have been affected by last week’s Court judgment. Can the Secretary of State assure me that, in the meeting that she has agreed to with the chairs of the APPG, there will be a meaningful attempt to address the poverty that these women face and not just sweep it under the carpet like an inconvenient problem?
Dr Coffey
I refer the hon. Lady to the judgment that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), has already raised. She might also wish to speak to her party leader, because she joined me in the Division Lobby when we made the changes that we did in the Pensions Act 2011. [Interruption.] Or rather, at least that the coalition Government did. I wish to make sure that we have a sensible conversation going forward, but the judgment stands. It is open for the ladies to appeal, but I can assure the House that we have made every effort, as did the Labour Government before us, to ensure that people knew about these changes.
Labour Market Update
Thérèse Coffey Excerpts(4 years, 7 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Latest data released in September shows UK employment has increased by 3.7 million since 2010. Around three-quarters of that increase in employment has come from full-time, permanent and higher-skilled roles. Youth unemployment has also halved since 2010, meaning more young people are in work and the number of children growing up in in workless households is at an all-time low.
It is important that we continue to build on this progress so I am introducing a £4 million package, including two new initiatives, to help disadvantaged young people into work and use mobile technology to help jobseekers into higher-paid jobs.
Additional funding of up to £1.2 million will provide extra support in Manchester and the west midlands, ensuring extra time and resources for young people facing the biggest hurdles to getting a job, like care leavers and young offenders.
Since 2018 the Department for Work and Pensions has worked with the West Midlands Combined Authority to develop the youth employability coaches concept (previously known as progression coaches). Following this successful pilot, we will be expanding the programme to other parts of the west midlands and Greater Manchester area to reach more disadvantaged young people. Youth employability coaches will continue to support young people for up to six weeks after they start a job, helping them continue to build skills and stay in employment.
A new data service will also be piloted, initially in Manchester, with up to £2.8 million funding. Using the latest data-analysis technology, this service will gather a range of skills and labour market data from a variety of public and commercial sources.
It will provide local areas with high-quality and real-time information on skills supply and demand. Additionally, jobseekers or those seeking to progress in work will be able to search for roles based on their skills and experience. The pilot service will show them what new skills they need to move into higher-paid roles available near them. By providing more tailored local labour market intelligence we can help individuals find jobs, back businesses, grow our economy and help people reach their full potential.
Both pilots have the potential to be rolled out nationally, helping reduce youth unemployment even further after it fell 48% since 2010, and helping more people boost their earnings.
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