Social Security
Will Quince Excerpts(3 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
I beg to move,
That the draft Social Security Benefits Up-rating Order 2021, which was laid before this House on 18 January, be approved.
There is no question but that this has been a challenging time, and the coronavirus outbreak has caused financial hardship and disruption for many across our country. That is why, since the start of the pandemic, we have mobilised our welfare system like never before to provide a comprehensive package of support worth over £7 billion, providing an essential safety net for those who need it.
My Department has risen to the challenge, utilising the speed and agility of the universal credit system to deal with the huge increase in people needing our support. There is little doubt that had we relied on the legacy benefit system, we would have seen queues down the streets outside our jobcentres and long delays, leaving families facing financial disruption without support. Crucially, through our universal credit system, we have managed to pay over 90% of new claimants on time and in full.
That has meant that universal credit and the Government’s investment in the welfare safety net have been there to help catch many of those affected by the pandemic. That has been hugely important for the 3 million more people who have made a benefit claim since March last year. I think it is right once again to publicly thank the thousands of work coaches in jobcentres up and down our country, who have responded at speed and scale to ensure that we have supported people in their hour of need. Now they are working tirelessly to deliver our plan for jobs.
As the House knows, the Chancellor introduced the £20 per week uplift to universal credit and working tax credit as a temporary measure in March 2020 to support those facing the most financial disruption. That additional support increased the universal credit and working tax credit standard allowances by up to £1,040 for a year.
I understand that that subject is the elephant in the room; I know that the House is eager to know about the future of the £20 uplift to universal credit. The uplift sat, and continues to sit, outside today’s annual uprating order and is therefore not directly relevant to today’s proceedings, but I have to say that the Labour party is simply wrong in its use of emotive language that the Government plan to cut universal credit in April. In fact, the only talk of cutting universal credit in April has come from the Opposition parties. I gently say to them that they should be very careful with their use of emotive language and what they say in this House, because scaremongering in this House has real-world consequences, which the Department sees every day in claimant behaviour.
David Linden (Glasgow East) (SNP)
The Minister will be aware of the cross-party Select Committee on Work and Pensions report published this morning, which speaks of the need to extend and make permanent the universal credit payment. Does he think that his Conservative colleagues on the Committee who authored that report are scaremongering when they talk about the damage that would happen as a result of not continuing that past April?
Will Quince
I will of course study in detail the report from the Select Committee, chaired by the right hon. Member for East Ham (Stephen Timms), and look closely at the recommendations made, but when there is emotive language about things such as cuts to universal credit in April that are frankly not true, that drives adverse claimant behaviour, which we as a Department see day in, day out. For example, we see people who would be eligible for universal credit delaying their claim, so they claim not at the point at which they are eligible but when their money has run out and they have hit crisis. And for example, there are hundreds of thousands of people on legacy benefits who we know would be better off on universal credit, but they do not make a claim. Why? Because of the scaremongering and scares from the Labour party.
Stephen Timms (East Ham) (Lab)
I do not quite understand the point that the Minister is making. As it stands, Government policy is to reduce universal credit by £20 a week from April. Surely it is perfectly legitimate for Members of this House to draw attention to that.
Will Quince
I thank the right hon. Gentleman for that intervention, but it was absolutely clear that the uplift of £20 per week was a temporary measure for one year, and we have also been clear that the Chancellor has yet to make a decision and that all options are on the table.
I have said this before, but it is important to stress the point: discussions remain ongoing with Her Majesty’s Treasury and a decision on the future of the £20 universal credit uplift will be taken by the Chancellor of the Exchequer in due course. The Chancellor has been clear that all options are on the table and that he will take into account the assessment of the economic and health situation as the best way to build on the successful support that the Government have put in place and provided for those on low incomes and in need throughout this year, through our plan for jobs and winter support package. My right hon. Friend Chancellor of the Exchequer has an unenviable task—there is no question about that—but I point out to the House that he has a proven track record of stepping up to support the poorest, most vulnerable and most disadvantaged in our country throughout this pandemic. I have no doubt that he will continue to do so. The scaremongering is not helpful.
We must not forget that the more than £7 billion of additional funding to strengthen our welfare safety net was just one part of a much larger package of support measures for individuals, which has dovetailed with DWP-led support. Those measures include the coronavirus job retention scheme; the self-employment income support scheme; increases to the local housing allowance; local council tax assistance; the local welfare assistance scheme; the covid winter grant scheme; the protection for renters; and the support and protection for homeowners. Despite our delivering an unprecedented package of support since March and the crucial support that we continue to roll out through our jobcentre network throughout the country, we know we must continue to maintain the strength of our welfare safety net, particularly to protect those experiencing financial hardship for the months to come.
The Government propose, in the draft order, to spend an extra £2.7 billion in 2021-22 on increasing benefit and pension rates. With this spending we are upholding our commitment to the country’s pensioners by maintaining the triple lock, increasing pensions by 2.5% and therefore spending on pensioner benefits by £2.2 billion; helping the poorest pensioners who rely on pension credit; and ensuring that working-age benefits, including essential support for disabled people and carers, maintain their value in relation to prices by increasing them by 0.5%. That is in addition to the comprehensive support package already in place to support those affected by the pandemic.
The Government remain committed to providing families and pensioners throughout our nation with a helping hand, should they need it. We will do so by once again increasing the levels of benefits for the next financial year. I commend this order to the House.
Will Quince
I begin by thanking all those who have spoken and taken part in the debate, which covered many important topics. Given the time constraints, I will not be able to cover off all the points raised, but as I said in my opening speech—I will just focus on this for one moment—the statutory annual review of benefits does not include a decision on the £20-per-week uplift to universal credit, which was announced by the Chancellor as a temporary measure in March last year. I repeat, because this is important, that the Chancellor has been clear that all options are on the table. He will take into account the assessment of the economic and health situation when considering the best way to build on the successful support that the Government have provided to those on low incomes throughout this year so far.
I make no apology for using the word “scaremongering”. I understand some of the points that Opposition Members made, but there is a big difference between lobbying for additional Government support going forward and using emotive language and politicising an issue. I gently remind the House that it was this Government who introduced the temporary £20-per-week uplift to universal credit; it was not a measure that Opposition parties were calling for. This Government have not flinched throughout this pandemic in supporting the poorest, the lowest paid and the most vulnerable and disadvantaged, and I have no doubt that the Chancellor and the Government will continue to do so.
Members raised concerns about legacy benefits. First, let me say that I appreciate that many people face financial disruption due to the pandemic. That is why the Government put in place an unprecedented package of support, totalling more than £280 billion, to protect jobs, help families and strengthen our welfare safety net. Just to give a bit of the broader context on welfare spending, in 2021 we will spend more than £100 billion on benefits for working-age people. That is £100,000 million—around £1 in every £9 that the Government spend; double our Defence budget. We spend more on family benefits than any other country in the G7, at more than 3% of GDP. We make no apologies that we will continue to reform our welfare system so that it encourages work while supporting those who need help—an approach based on the clear evidence that work offers families the best route out of poverty.
Stephen Timms
Does the Minister accept the evidence that disabled people have seen significant cost increases in the course of the pandemic?
Will Quince
I understand the point that the right hon. Gentleman has made. I know that his report goes into some detail on this issue. I gently remind the Chair of the Select Committee that universal credit is about £2 billion more generous than the legacy benefits system it replaced and is part of a broad package of support. Over and above the £20 uplift available for those on universal credit, those in receipt of legacy benefits may be entitled to other measures. It is important that they go on to the gov.uk benefit eligibility checker to check their eligibility before applying, because as the right hon. Gentleman knows, there is no path back to legacy benefits once someone has made a universal credit application. It is important to stress that universal credit is part of that broader package of measures worth more than £280 billion throughout the course of this pandemic. Yes, of course we recognise that people across the country have faced additional costs throughout this pandemic. That is exactly why the Chancellor stepped up with that £280 billion package, including an extra £7 billion in welfare support.
The Opposition spokesman, the hon. Member for Feltham and Heston (Seema Malhotra), said that we should heed the words of those on the frontline. I totally agree and encourage her to visit her local jobcentre at the earliest available opportunity to speak to work coaches, because then she will hear what they think about universal credit and how they believe it has been the tool that not only has enabled us to support an extra 3 million people throughout this pandemic but has allowed them to incentivise, support and empower people into work.
Seema Malhotra
I have visited my local jobcentre and keep in close touch with it. I hope that the Minister also listens to what I said about what the Trussell Trust, Citizens Advice and the Child Poverty Action Group have been saying, because that is important, and they will probably want a response from the Minister on those points.
Will Quince
I work very closely and meet with all the organisations that the hon. Lady references, but work coaches are an important reference point. They all say without hesitation, when I visit jobcentres across the country, that universal credit is an incredible tool—a powerful tool—to help support and empower people back into work. That is why it is so absurd that the Labour party wants to scrap it.
Several Members raised pension credit and its uptake. I have no doubt that the Pensions Minister will be willing to meet hon. Members to discuss that further, because I know that he has done a considerable amount of work in that area.
The uprating order will ensure that working-age benefits increase in line with inflation, which represents a cash increase of £500 million for working-age benefits. That includes those benefits that contribute towards extra costs arising as a result of disability or a health condition, and pensioner premiums in income-related benefits.
To conclude, I will summarise the benefit increases that the Government are implementing to support those most in need. We are increasing the basic state pension and the new state pension by 2.5%. That will deliver on our manifesto commitment for the state pension triple lock. We are increasing the pension credit standard minimum guarantee in line with the cash increase in the basic state pension to support the poorest pensioners. We are increasing working-age benefits in line with prices; we are increasing the universal credit work allowances so that claimants can earn more before their payments are reduced; and we are increasing benefits to meet additional disability needs and carer benefits in line with prices. I commend the order to the House.
Question put and agreed to.
Resolved,
That the draft Social Security Benefits Up-rating Order 2021, which was laid before this House on 18 January, be approved.
Madam Deputy Speaker (Dame Eleanor Laing)
I will suspend the House for three minutes in order that the Chamber can be prepared for the next item of business.
Work and Pensions
Will Quince Excerpts(3 years, 3 months ago)
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Will Quince
My hon. Friend is absolutely right. Maintaining the uplift would cost a huge amount of money—somewhere in the region of £6 billion. But it is not just about that. Throughout this pandemic, we have always looked at how best to support the poorest, most vulnerable and disadvantaged in our society. Because this is an ever-emerging and changing situation—that is the very nature of a pandemic—we have to keep everything under review. That is why the Secretary of the State, the Chancellor of the Exchequer and the Prime Minister do meet regularly to discuss all these issues. I want to make one further point because it was raised by the Chairman of the Select Committee: yes, we will continue the roll-out of universal credit, as we committed in our manifesto, ensuring that those on legacy benefits and working tax credits are moved across by 2022.
[Official Report, 18 January 2021, Vol. 687, c. 644.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for Colchester (Will Quince).
An error has been identified in my response to the debate.
The correct response should have been:
Will Quince
My hon. Friend is absolutely right. Maintaining the uplift would cost a huge amount of money—somewhere in the region of £6 billion. But it is not just about that. Throughout this pandemic, we have always looked at how best to support the poorest, most vulnerable and disadvantaged in our society. Because this is an ever-emerging and changing situation—that is the very nature of a pandemic—we have to keep everything under review. That is why the Secretary of the State, the Chancellor of the Exchequer and the Prime Minister do meet regularly to discuss all these issues. I want to make one further point because it was raised by the Chairman of the Select Committee: yes, we will continue the roll-out of universal credit, as we committed in our manifesto, ensuring that those on legacy benefits and working tax credits are moved across by 2024.
Oral Answers to Questions
Will Quince Excerpts(3 years, 3 months ago)
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Chris Elmore (Ogmore) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Her Majesty’s Treasury’s analysis has shown that the Government’s comprehensive £280 billion response to the pandemic, including a temporary and emergency £6 billion increase to welfare support specifically designed to help low-income families, has supported the poorest working households the most, with the poorest 10% of working households seeing no income reduction.
Wes Streeting [V]
It has been clear from what Department for Work and Pensions Ministers have said to the House and in the media that they understand the real difference the £20 a week universal credit uplift has made to some of the poorest families. Given that we know withdrawing that uplift will plunge huge numbers of people into poverty, including 300,000 children, why are Ministers having such a difficult time persuading the Chancellor to do the right thing by the poorest families and tackling child poverty?
Will Quince
We are in active discussions with Her Majesty’s Treasury regarding the £20 universal credit uplift. No one in this House wants to see anyone in poverty. I understand the hon. Gentleman’s ask and it comes from the right place, but I would just push back a little and say that, over and above the £100 billion we spend annually on benefits for working-age people to support those facing the most financial disruption throughout this pandemic, we have invested several billion pounds more. The Chancellor of the Exchequer has an unenviable task, but I point out to the House that my right hon. Friend has a proven track record of stepping up and supporting the poorest and most vulnerable in our society. I have no doubt he will continue to do so.
Chris Elmore [V]
I understand, without a shadow of a doubt, that the Minister cares deeply about this issue, but I listened to the Secretary of State this morning on broadcast media saying that she was not able to set a particular date because of the active conversations in the Treasury. The Minister just gave the same answer to my hon. Friend the Member for Ilford North (Wes Streeting). Why is the Chancellor not listening? Is he tin-eared on this issue? We are talking about 600,000 extra children in poverty since this Government came into office in 2010. The £20 uplift provides certainty and these people need that security desperately. We cannot be a nation where there are more and more children living in absolute poverty, and more and more families living without savings. That simply is not good enough. I ask the Minister to challenge the Chancellor and ensure we stop more children going into poverty.
Will Quince
As I have said, the universal credit uplift is still in place for the remainder of this tax year. Discussions remain ongoing with Her Majesty’s Treasury, and a decision on the future of the universal credit and working tax credit uplift will be taken by the Chancellor of the Exchequer in due course.
Ms Karen Buck (Westminster North) (Lab) [V]
But the number of children in poverty has increased by 600,000 after housing costs since 2010, and that has been in substantial part due to the £9 billion that the Government have withdrawn from social security since 2015 alone. The universal credit uplift and other measures taken since the beginning of the pandemic will have reduced the number of children living in poverty to 300,000, but can the Minister confirm that if the Government proceed with ending the £20 UC uplift, together with rising unemployment, that will mean, by the end of this Parliament, that they will have seen 700,000 more children cast into poverty than at the beginning?
Will Quince
We take the issue of poverty, and tackling poverty, incredibly seriously, and as I made clear, active discussions are ongoing with Her Majesty’s Treasury. But I have to say that I fundamentally disagree with the approach of Labour party: simply throwing money at our benefits system—an approach that, under the last Labour Government, left a generation trapped on benefits, trapped in poverty and incentivised not to work by punitive cliff edges in the legacy benefit system. We will not be going back to those dark old days. We know that work is the best route out of poverty and, under universal credit—our modern, dynamic, agile system—work always pays.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Kerry McCarthy (Bristol East) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Local authorities apply the “more than minimal” test as part of the process for determining housing benefit for supported accommodation. No assessment has been made of the effectiveness of the “more than minimal” test for care, support and supervision in housing benefit; however, we are reviewing the guidance for local authorities to help improve consistency in decision making.
Kerry McCarthy
The Minister and I have talked about this, so he will know that I have real concerns about the exploitation of vulnerable people in the supported housing sector by landlords who know that they can charge much higher rents by providing only “more than minimal” support. Will the Minister look at the regulations to see whether they can be tightened up? I know that pilots are going on and consideration is being given to whether we can regulate supported housing, and that might be one way to do it.
Will Quince
The hon. Lady is right to point out that work is under way in this policy area. The DWP Minister in the Lords remains responsible for the policy; she is offering to all MPs and peers a session on 24 February at which they can raise any areas of concern, so I will make sure the Lady is invited to that. We recognise that there are problem areas and I share a number of the hon. Lady’s concerns, but it is important to stress that the majority of supported housing is provided by well-run, registered social landlords with a strong social mission.
David Johnston (Wantage) (Con)
Mr Richard Holden (North West Durham) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Since the start of the pandemic, the welfare safety net has been there to support nearly 6 million claimants. Parliament has voted for universal credit and to end legacy benefits. The nationwide roll-out of universal credit was successfully completed in December 2018, and we are committed to ensuring that those on legacy benefits move across in a safe and secure way.
Mr Holden
I thank the Minister for his answer. It is quite clear that, during the coronavirus pandemic, alongside our massive vaccine programme and world-leading support of £4,000 a head—£280 billion in total—universal credit has been a real success. I praise the officials in Crook and Consett in my constituency for the work that they have done. Does the Minister agree that the last thing we should be doing is moving to scrap universal credit, which is a system that is really helping thousands of my constituents? Does this not show how out of touch the Opposition are, when this system is benefiting millions of people across the country at this incredibly difficult time?
Will Quince
I completely agree; universal credit is a modern, dynamic, agile and fairer welfare safety net, which, in the face of unprecedented demand, ensured that millions of people were paid in full and on time. This is a system that, by any measure, has passed the most challenging of tests, supporting nearly 6 million vulnerable people through this pandemic. There is little doubt that, had we relied on the legacy benefits system, we would have seen queues down the streets outside jobcentres, and long delays leaving families facing financial disruption without support.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Thanks to universal credit’s modern, dynamic and agile system, it has effectively supported nearly 6 million people, with over 90% of new claimants receiving their first payment in full and on time. This is in stark contrast to the paper-based legacy system, which would have seen queues outside our jobcentres and would have buckled under the pressure.
Mr Clarke [V]
I have seen for myself on visits to the fantastic jobcentres in Guisborough and Loftus how the teams there really value universal credit, and how it has helped to support people over the last turbulent year. Will my hon. Friend reassure my constituents that there is no question of universal credit going anywhere, and does he agree that the Leader of the Opposition calling for it to be scrapped is simply the height of opportunism and irresponsibility?
Will Quince
The universal credit system and tens of thousands of dedicated, incredible DWP staff have processed an unprecedented number of claims—over 3 million since mid-March. It is not just my hon. Friend who is saying this; the IFS slammed Labour’s pledge to scrap UC as uncosted, as well as,
“unwise…expensive, disruptive and unnecessary.”
The Government believe that work should always pay and we need a welfare system that helps people into work, supports those who need it and is fair to those who pay for it. Remember: no Labour Government have ever left office with unemployment lower than when they started.
Kate Osamor (Edmonton) (Lab/Co-op)
Mrs Emma Lewell-Buck (South Shields) (Lab) [V]
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
We keep all policies under review, including the uplift to universal credit, which is under active discussion between our Department and the Chancellor of the Exchequer. I would gently push back on what the hon. Lady said and alert her to the fact that in 2020-21, we will spend more than £120 billion on benefits for working-age people. That is £120,000 million—around £1 in every £8 that the Government spend; three times the defence budget, and nearly as large as the NHS budget. We continue to support people throughout this country during the pandemic.
Wendy Chamberlain (North East Fife) (LD)
Will Quince
First, let me say that I appreciate that many people are facing financial disruption due to the pandemic, and the Government have put unprecedented levels of support in place. As the hon. Lady rightly points out, legacy benefits are being increased by 0.5% this year, on top of the 1.7% last year. Legacy benefit claimants can make an application for universal credit, but what I would say is that I encourage them to check on one of the benefit calculators on gov.uk. Once they make an application to universal credit, their entitlement to legacy benefits will cease, so it is very important that they do check first.
Mark Pawsey (Rugby) (Con) [V]
Will Quince
The qualifying period for support for mortgage interest is in place because it is reasonable for homeowners to make arrangements with their lenders, to manage any loss of income for a short period, without the state needing to intervene. Homeowners struggling with mortgage repayments because of covid-19 should contact their lender as soon as possible to discuss what support may be available. At present, the Department has no plans to amend the qualifying period for support for mortgage interest, but I am happy to meet my hon. Friend to discuss the matter at length.
Mr Speaker
I will now suspend the House for three minutes to enable the necessary arrangements for the next business to be made.
Universal Credit and Working Tax Credit
Will Quince Excerpts(3 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
I welcome today’s debate. It gives me the opportunity to highlight some of the unprecedented support that this Government have provided to people right across our country who have been affected by covid-19. I can confirm that the amendment in the name of the Prime Minister will not be moved this afternoon.
Without doubt, this has been a challenging time for many. That is why, since the start of this pandemic, we have mobilised our welfare system like never before in modern times, with a wide-ranging package of measures worth more than £7 billion. Members across the House will raise the future of the £20 per week uplift to universal credit, which I will come on to shortly.
I want to start by talking about how well the Department and universal credit have stood up to the challenge of the pandemic. Many people have sadly lost their jobs as a result of the pandemic, or seen their incomes reduced. Universal credit and the Government’s investment in the welfare safety net have been there to help catch many of those affected. That has been hugely important for the 3 million more people who have made a benefit claim since March last year.
I am so incredibly proud of how thousands of work coaches in jobcentres up and down our country have responded at speed and scale to ensure that we have supported those additional people in their hour of need, especially as the number of people on universal credit rose from 2.9 million last February to nearly 6 million in November. Through our £895 million investment, we are well on the way to meet the Government’s pledge to recruit 13,500 new work coaches by the end of the financial year.
Gary Sambrook (Birmingham, Northfield) (Con)
This morning, I chaired a meeting of the Northfield covid recovery strategy group with Becky from Northfield Community Partnership. We learnt this morning that, in Birmingham and Solihull, we will see an extra 430 work coaches, 24 of whom will be based at the Longbridge jobcentre. Does the Minister agree that that is a perfect example of how the Government are taking a proactive approach to making sure that we get people back to work as quickly as possible?
Will Quince
I thank my hon. Friend for that intervention. He is absolutely right that not just in his constituency, but in constituencies up and down the country, our Jobcentre Plus network of dedicated work coaches have worked incredibly hard to process an unprecedented number of claims and they stand ready to help support people back into work. That is exactly why we have secured this additional investment from Her Majesty’s Treasury to, in effect, almost double the number of work coaches across our network across our country.
Work coaches are just one part of the jigsaw; the other is the universal credit system itself. Universal credit has, without doubt, stood up to the challenge of covid-19, whereas the previous legacy benefits system would have buckled under the pressure. Millions more were able to access financial support that is fairer and more generous than the legacy benefits system. We have made the processing of claims and paying people quickly the top priority for this Department. Over 90% of new claimants receive their payment in full and on time.
We have a modern, dynamic, agile, fairer welfare safety net that, in the face of unprecedented demand, ensured that millions of people were paid in full and on time. So what is Labour’s position? It is to scrap it.
Stephen Timms (East Ham) (Lab)
Is it now the policy of the Department, as the Prime Minister suggested at the Liaison Committee last week, that people should move from legacy benefits to universal credit in order to gain the £20 per week increase? If that is now the policy, what about the position of those who have been receiving the severe disability premium, who are not allowed to move to universal credit?
Will Quince
I thank the Chairman of the Work and Pensions Committee for that intervention. I would be very happy to meet him, alongside the Minister for Disabled People, Health and Work, to discuss, in particular, those in receipt of the severe disability premium. Yes, it is the position of Her Majesty’s Government that we want more people to move over from legacy benefits, including working tax credits, on to universal credit, because it is a modern, more dynamic benefits system; it is the future. However—this is a very important caveat—I would encourage anybody looking to move over from legacy benefits to universal credit to first go on to gov.uk and check their eligibility, because it is important to note, as I know the Chairman of the Select Committee knows well, that on application for universal credit, the entitlement to legacy benefits will cease, so it is very important that people do check.
As I said, we have a modern, dynamic, agile, fairer welfare safety net that, in the face of unprecedented demand, ensured that millions of people were paid in full and on time. Therefore, it is quite astonishing that the position of Her Majesty’s Opposition is to scrap it—a system that, by any measure, has passed the most challenging of tests. This weekend they briefed to the papers with a press released entitled, “Cut to universal credit to hammer families in marginal Conservative seats”, playing politics with the lives of nearly 6 million vulnerable people rather than focusing on helping them through this pandemic. We will take no lectures whatsoever from Labour on universal credit. There is little doubt that had we relied on the legacy benefits system, we would have seen queues down the streets outside jobcentres and long delays leaving families facing financial disruption without support.
Jonathan Reynolds
As the Minister has raised press speculation, will he comment on the news in the papers at the weekend that the reason he is here and not the Secretary of State is that the Secretary of State agrees with us and it is the Treasury that is behind the cut of £20 a week from April?
Will Quince
The reason I am here today responding to this debate is that I am the Minister responsible for universal credit and this is a debate about the £20 per week uplift to universal credit. The Secretary of State is in active discussions with Her Majesty’s Treasury, the Chancellor of the Exchequer, and, of course, the Prime Minister about how best to continue to support the most vulnerable, disadvantaged, lowest-paid and poorest in our society, as the Chancellor has consistently done throughout this pandemic.
Sara Britcliffe (Hyndburn) (Con)
Can my hon. Friend confirm that conversations are still ongoing and that one of the reasons for that is that this does need to be fully costed because it is a lot of money? I was hoping that the shadow Minister would lay out how Labour intended to pay for the uplift.
Will Quince
My hon. Friend is absolutely right. Maintaining the uplift would cost a huge amount of money—somewhere in the region of £6 billion. But it is not just about that. Throughout this pandemic, we have always looked at how best to support the poorest, most vulnerable and disadvantaged in our society. Because this is an ever-emerging and changing situation—that is the very nature of a pandemic—we have to keep everything under review. That is why the Secretary of the State, the Chancellor of the Exchequer and the Prime Minister do meet regularly to discuss all these issues. I want to make one further point because it was raised by the Chairman of the Select Committee: yes, we will continue the roll-out of universal credit, as we committed in our manifesto, ensuring that those on legacy benefits and working tax credits are moved across by 2022.[Official Report, 1 February 2021, Vol. 688, c. 6MC.]
I will now turn to the specific issue of the UC uplift. The Labour party is quite simply wrong in its use of emotive language, saying that the Government plan to cut universal credit. The £20 per week uplift to universal credit and working tax credit was announced by the Chancellor as a temporary measure in March 2020. This additional support increased the universal credit and working tax credit standard allowances by up to £1,040 for a year. We took this approach in order to give those people facing the most financial disruption the financial boost they needed as quickly as possible. The agility and flexibility of the universal credit system allowed us to implement this vital increase rapidly, and was hugely successful in giving claimants—many of whom, incidentally, had not interacted with the DWP before—a foundation by which to navigate the uncertainty of the beginning of this pandemic, and in many ways lessen the drop in earnings.
The Chancellor has always been clear that this measure remains in place until the end of the financial year. I hear the calls from Labour and, indeed, from the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), for a decision now on whether the uplift to universal credit will continue post April, and I have sympathy with the argument that it would give claimants certainty. However, one of the evident features of a pandemic is uncertainty: if the hon. Gentleman is certain about what the economic and social picture will look like in April, then to be frank, he must have a crystal ball. The reality is that we simply do not know what the landscape will look like, which is why it is right that we wait for more clarity on the national economic and social picture before assessing the best way to support low-income families moving forward.
Why is that important? One word: agility. The poorest and most disadvantaged in our society are best served by a Government that have the agility to respond to emerging situations and the facts at the time. None of us in this House can say with any certainty what the economic landscape will be like in April, which is why we continue to work with Her Majesty’s Treasury on the best way to support those in receipt of benefits.
I will add one more thing, which is that I know my right hon. Friend the Chancellor well, and I put it to right hon. and hon. Members that, throughout this pandemic, he has consistently stepped up to support individuals’ jobs and livelihoods. This is the Chancellor who created the furlough scheme and the self-employment income support scheme; uprated universal credit by £1,040 this year; lifted the local housing allowance by £1 billion; protected renters from eviction; protected homeowners; gave grants to businesses; supported rough sleepers to get off our streets; funded the local welfare assistance scheme to the tune of £63 million; and set up the £170 million covid winter grant scheme. This represents one of the largest and most comprehensive support packages in the world.
Sammy Wilson
I think everyone in this House must acknowledge the work that the Government have done to try to help people through the economic difficulties caused by the response to the pandemic. However, will the Minister accept that, even with the best will in the world, he cannot say that after April, everything is going to be rosy? We know there is going to be a long tail of businesses that have been damaged during this pandemic—damaged by the lockdowns—and people, especially those at the low-paid end of the market, are going to find themselves still in need of support. Therefore, it is wrong to say that somehow or other, things are going to be rosy from 1 April, and that the level of support required by the lowest paid in society will no longer be needed.
Will Quince
I thank the right hon. Gentleman for his intervention, but I do not think anybody is saying that. We are saying that the situation remains unclear, so the Chancellor of the Exchequer in particular needs the agility to be able to act on the information at the time.
My right hon. Friend the Chancellor has an unenviable task, but I repeat the point that I made just a moment ago: he has a proven track record of stepping up to support the poorest and the most vulnerable and disadvantaged throughout this pandemic, and I have absolutely no doubt that he will continue to do so. Throughout this pandemic, the Chancellor has consistently acted with the necessary agility to support and wrap our arms around those who need it. The Chancellor has always said that, sadly, we cannot save every job or every business. That is why getting Britain back to work is the relentless focus of the Secretary of State, myself and the entire ministerial team at the Department for Work and Pensions. That is key to our national recovery and is why we are investing billions of pounds to secure the economic recovery. Through our plan for jobs we are injecting billions of pounds-worth of support and have launched a range of employment schemes and programmes.
To conclude, we have demonstrated during the pandemic that this Government are committed to supporting the most vulnerable in our society and to ensuring that people have the right level of support. Through universal credit and our plan for jobs, we are supporting people of all ages to gain the right skills and experience to support them back to work. We know how quickly things can change with this virus—the new variant has led to increased challenges—but there is now also real hope from the rapid vaccine roll-out, which promises to have a hugely positive impact on the way ahead and the effort to get back to normal and to get our economy growing again. As the Government have done throughout this crisis, we will continue to look carefully at the changing impact of the virus on public health and on our economy, to help to inform how we can continue to support people and give them the tools that they need to move into the workplace so that the country can build back better after the pandemic.
Mr Deputy Speaker (Mr Nigel Evans)
For the avoidance of doubt, the Minister has not moved the selected amendment. The question before the House remains that already proposed, as on the Order Paper.
Oral Answers to Questions
Will Quince Excerpts(3 years, 5 months ago)
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Shabana Mahmood (Birmingham, Ladywood) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Local authorities apply the minimal test for determining housing benefit for supported housing accommodation. No assessment has been made of the effectiveness of the more than minimal test for housing benefit. However, we are reviewing the guidance to help improve consistency in decision making.
Shabana Mahmood
The annual housing benefit bill in Birmingham for supported exempt accommodation is now a massive £200 million. Too many housing providers are exploiting the extremely weak regulations that govern the payment of enhanced housing benefit; all they have to do is show that the support they provide is more than minimal, and this is causing misery for vulnerable tenants and the communities they live in. So will the Minister meet me to discuss the situation in Birmingham, and will he bring forward urgent proposals to change the situation and get a grip of this growing national scandal?
Will Quince
Although we recognise there are problem areas, it is worth noting that the majority of supported housing is provided by well-run registered social landlords with a strong social mission. These are regulated by the Regulator of Social Housing, for registered charities, or by the Charity Commission. But I do recognise that there is a problem, and I would be happy to meet the hon. Lady.
Mark Menzies (Fylde) (Con)
Andrew Jones (Harrogate and Knaresborough) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Throughout the pandemic, our covid-secure jobcentres have remained open to the most vulnerable in society who require face-to-face support. We have also introduced new processes to cut telephony waiting times and enhanced our digital platforms. That empowers our work coaches to engage with customers through appropriate channels, based on their knowledge of the customer and the local situation.
Andrew Jones
I thank my hon. Friend for that answer, but in some parts of our country, including parts of Harrogate and Knaresborough, access to broadband or even a mobile phone signal can be quite limited. How is he helping the excellent team at Harrogate jobcentre help those who cannot have a face-to-face appointment, yet struggle to gain access to the internet?
Will Quince
My hon. Friend is absolutely right, and he is a huge advocate and supporter of his local jobcentre. We have made all our jobcentres covid-secure, including Harrogate, by introducing a range of safety measures, including screened desks, social distancing signage, mandatory face covering for claimants, the provision of hand sanitiser and regular touch-point cleaning, but for those who are unable to attend a jobcentre, and depending on their individual circumstances, alternative arrangements can of course be put in place.
Craig Tracey (North Warwickshire) (Con)
Lilian Greenwood (Nottingham South) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Analysis from Her Majesty’s Treasury shows that the Government’s interventions have supported the poorest working households the most, with those in the bottom 10% of the income distribution seeing no reduction in income. As the Government have done throughout this crisis, they will continue to assess how best to support low-income families, which is why we will look at the economic and health context in the new year.
Lilian Greenwood
In 2018-19, 34.8% of children in my constituency were living in poverty when housing costs were taken into account, and from January to August this year there was a 68% increase in the number of families claiming universal credit. Last week the Chancellor told us that the
“economic emergency has only just begun”—[Official Report, 25 November 2020; Vol. 684, c. 827.]
and that unemployment is set to rise for months to come. When the Minister knows that more and more families in Nottingham are going to face wage cuts and job losses, how can he argue that universal credit should be cut in just a few months’ time?
Will Quince
First, I do not recognise those figures and certainly nobody is making that case. The Chancellor of the Exchequer has confirmed the universal credit uplift until March 2021, and it is right that we wait for more clarity on the national economic and social picture before assessing the best way to support low-income families moving forward. I would just gently say to the hon. Lady that the uplift is just one part of a comprehensive package that we have put in place to support people through this most difficult of periods.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Sir Desmond Swayne (New Forest West) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
First, let me say that I appreciate that many people are facing financial disruption due to the pandemic, and the Government have put an unprecedented package of support in place. The universal credit uplift was designed to be targeted at those facing the most financial disruption, but most working-age legacy benefits will be increased in April next year in line with inflation, and legacy benefits recipients could benefit from the local housing allowance or, indeed, the local welfare assistance schemes. I remind the House that claimants on legacy benefits can make a claim to universal credit if they believe they would be better off, but I would encourage them to check their eligibility as their legacy benefit entitlement will cease on application.
Bell Ribeiro-Addy (Streatham) (Lab)
Mike Hill (Hartlepool) (Lab)
Will Quince
The universal credit system has risen to the challenge, going up from 2.2 million to 5.8 million claimants. That is why we have this modern, agile, dynamic system. It has performed incredibly well and I have no doubt that it will continue to do so.
Rob Roberts (Delyn) (Con)
Jonathan Gullis (Stoke-on-Trent North) (Con)
Will Quince
Our £170 million covid winter grant scheme will enable local authorities to support vulnerable households this winter with food and key utilities. As the Secretary of State has made clear, there are conditions, but I would certainly encourage local authorities to work with partners on the ground, making sure that this support reaches people across our communities.
Matt Western (Warwick and Leamington) (Lab)
The Minister will be aware that, according to the Office for National Statistics, the national average increase in unemployment is 24%, but for over-50s, it has risen by a third. Yet vacancies have fallen by 278,000 since the pre-pandemic period. Does the Minister agree that there are approximately a quarter of a million people over 50 who will never find work again?
Coronavirus Outbreak: DWP Response
Will Quince Excerpts(3 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
I thank the Work and Pensions Committee for its report, which provides important scrutiny of the Department for Work and Pensions, and our response to the coronavirus outbreak. I thank all hon. Members for their contributions to today’s debate, and for their largely constructive tone. Of course, I also thank the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Stephen Timms), with whom I enjoy a constructive, if not sometimes challenging—and rightly so—relationship.
I will start with some comments on the performance of my Department over the course of the pandemic before moving on to some of the substantive points raised in the debate. I pay tribute to the tireless efforts of my Department’s civil servants, who have stepped up to the challenge with remarkable speed and aptitude when faced with overwhelming demand as a result of the unprecedented pandemic. I thank the Committee for its acknowledgement of the work of our hard-working frontline staff.
Let me offer an insight into the sheer volume of UC claims that we have faced. From 16 March to the end of April, we received over 1.8 million claims for universal credit. The legacy benefits system simply could not have coped with this demand. Rather than the queues in the streets that we would have seen with a paper-based legacy system, our payment timeliness ran at a record high, with over 94% of claims paid in full and on time, and more than 1 million individuals able to access funds quickly via new claim advances. We moved rapidly to roll out a package of emergency and temporary welfare measures, including the injection of billions of pounds into our welfare system this year to support those facing the most financial disruption because of the pandemic. That injection included a temporary increase to the universal credit standard allowance of more than £1,000 for this financial year. We also increased the local housing allowance rates for universal credit and housing benefit claimants to the 30th percentile of local rents from April; this vital financial support for private renters was worth on average £600 throughout this challenging period. We are, though, just one part of an overarching Government commitment to wrap our arms around the public.
Let me turn to the first of the points raised by the right hon. Member for East Ham, on the uprating of benefits and the UC standard allowance. The Secretary of State announced yesterday, as part of the annual review of social security rates, that benefits would again rise in line with inflation at the start of the next financial year. That is a cash increase of around half a billion pounds in 2021-22. We also affirmed the commitment that the increase to local housing allowance rates in April this year will be retained. Earlier this year we invested nearly £1 billion, increasing the local housing allowance rates to the 30th percentile of local market rents, and we will maintain that level of support next year by freezing the rates at current levels.
Let me address the question of the £20 universal credit uplift. The Government introduced a raft of temporary measures—including the furlough scheme, the self-employment income support scheme and, of course, the £20 universal credit uplift—to support those facing the most financial disruption. With the uplift confirmed until the end of March 2021, my right hon. Friend the Chancellor of the Exchequer set out yesterday why it is right that we wait for more clarity on the national economic and social picture before he decides on the best way to support low-income families from April. I stress to the House that discussions are very much ongoing with Her Majesty’s Treasury.
Let me turn to the second point raised by the right hon. Member for East Ham, on returning people to legacy benefits once they have moved over to universal credit. As a matter of fundamental policy design, making a universal credit claim will cease any entitlement to legacy benefits and tax credits that an individual may have. This function is supported in legislation and reflects the overarching principle of universal credit: that it will replace the legacy benefits system. The Department continually makes improvements to the UC service in response to feedback and user research. On 3 June, we introduced a new check-through box to remind claimants to check their eligibility before making a claim for universal credit, and to remind them that legacy benefits will cease when a universal credit claim is made and submitted and they will not be able to return to legacy benefits. I encourage claimants to check their independent eligibility calculators on gov.uk.
Let me turn to the third point raised by the right hon. Member for East Ham, on support for those with no recourse to public funds. Access to DWP income-related benefits such as universal credit flows from an individual’s immigration status. All claimants, regardless of their nationality, are required to be both legally and habitually resident in the United Kingdom in order to access income-related benefits. Ultimately, these matters are governed by the Home Office, and people without recourse to public funds can apply for a change of condition. I stress that support has been available, including through the coronavirus job retention scheme, the coronavirus self-employment income support scheme, the contributory employment support allowance and, of course, support via local authorities, including the new £170 million covid winter support grant, provided that the relevant eligibility criteria are met.
In the interests of time—I am conscious that it is very tight and we have Department for Work and Pensions oral questions on Monday—let me conclude by reiterating our commitment to providing a strong safety net for those who need it and targeting support at those most in need. I take immense pride in our Department’s response to the unprecedented challenges that this year has brought, and I know that the Department will continue to play a key role in delivering crucial services to society’s most vulnerable and disadvantaged over the coming months. As the recovery phase grows, the Department will continue to offer key services through our £30 billion plan for jobs. The Select Committee was right to acknowledge the exceptional work of our Department in supporting people through these unprecedented times, and I look forward to the important role that we will play in ensuring that we build back better in the coming months.
Mr Deputy Speaker (Mr Nigel Evans)
I thank everybody for their contributions and co-operation today, without a time limit being imposed. Everybody behaved impeccably—thank you.
Question put and agreed to.
Resolved,
That this House notes the First Report of the Work and Pensions Committee, “DWP’s response to the coronavirus outbreak”, HC 178; and calls on the Government to increase relevant legacy benefits in line with increases to universal credit, to take steps to return people who have been inadvertently left worse off under universal credit compared with their previous benefits, and to suspend the no recourse to public funds visa condition for the duration of the coronavirus outbreak.
Universal Credit: Effect of Child Element on Separated Parents
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
It is a pleasure to serve under your chairmanship, Mrs Murray, on your first occasion in the Chair. I thank the hon. Member for Chesterfield (Mr Perkins) for securing a debate on this hugely important issue.
The hon. Gentleman rightly raises some of the challenges faced by separated families. I have listened very carefully to the points that he has made. Following this debate, I and the DWP Lords Minister, Baroness Stedman-Scott, will be happy to meet him to discuss the issues further. Baroness Stedman-Scott has responsibility for the Child Maintenance Service and the reducing parental conflict programme, so there is clear crossover there.
I will start with the principles of universal credit. One of the core principles is to enable families to manage their own affairs. We believe that the current arrangements whereby one designated party receives the whole child element payment are fair and allow families to make their own decisions on how it is used.
To touch on the most recent support, we have taken immediate action to protect jobs and incomes in the face of the pandemic and the Treasury analysis of these measures is that they have been targeted at those most in need. We have injected more than £9.3 billion into the welfare system, including an increase to the universal credit standard allowance of up to £1,040 this year and we have increased the local housing allowance rate to the 30th percentile of local rents from April, so for UC and housing benefit claimants, we are giving additional financial support for private renters to support them through this difficult period. For an average family, that is worth about £600.
Yesterday, we announced that the current easement of the suspension of the minimum income floor in universal credit that was due to expire on 12 November will be extended to the end of April 2021. This sits alongside a generous package of additional support already announced by the Chancellor, including further grants through the self-employment income support scheme and an extension to the furlough scheme until December.
The hon. Member for Chesterfield spoke about who receives the child element of universal credit when separated parents share custody, including arrangements where it is shared 50:50. Where a separated couple have joint custody for their children, the parent who receives the child element is the one the child normally lives with, but if the child normally lives with both, it is the parent who has the main responsibility for the child who receives it. That is decided by the parents, or by a Department for Work and Pensions decision maker if the parents cannot agree or the decision maker does not think that the nomination accurately reflects the arrangement. It is important to stress that similar rules apply to child tax credit and to child benefit, both of which are administered by Her Majesty's Revenue and Customs.
I appreciate the points the hon. Gentleman made and I have huge sympathy with some of them. This is a hugely complex situation and there are no simple or easy options, as he said. There are many different kinds of childcare arrangements that families can come to; that is why our policy is to pay the child element to one parent, and then leave it to families to decide how it is shared between different parties who care for the child or children. Our view is that separated families are able to make their own private arrangements regarding the sharing of resources for children without state intervention.
It might assist and add some important context if I set out some details of how universal credit awards are calculated. Universal credit is a unitary benefit made up of different elements. There is a standard allowance, plus additions to help with additional expenses; for example, the cost of raising children comes via the child element. These elements are all subject to prescribed maximum amounts and paid as a single monthly award, which is calculated at the end of a claimant’s assessment period. Consequently, certain elements, such as the child element, cannot be ring-fenced or separated from the monthly award. Attempting to ring-fence individual components or extract them from the calculation would ignore the all-important interaction between the different stages of the calculation and would not correctly reflect how universal credit is designed in legislation and how it operates in practice.
I understand the case the hon. Gentleman made for his constituent, and we have corresponded on it. There is a 50:50 shared care arrangement, but the ex-partner receives the child element for both children. I understand that that means the constituent does not receive housing support for the additional bedroom that he has. As I have pointed out in correspondence with the hon. Gentleman, we have provided resources to local authorities so that additional financial support for those facing a shortfall in meeting their rental housing costs can be given through discretionary housing payments. We have provided about £1 billion in discretionary housing payments to local authorities since 2011, and they are designed to help the most vulnerable and disadvantaged to meet their housing costs.
Mr Perkins
I seek clarity on that point. It is the understanding of Chesterfield Borough Council that discretionary housing payments are a transitional payment for local authorities to work with vulnerable people so that they can get themselves out of the position of having a spare bedroom. In this particular case, and many others like it, however, it is not a transitional arrangement. The man will have a long-term need to accommodate the children. The council is under the impression that the Government do not want it to use discretionary housing payments as a long-term support. Has the council has misunderstood the guidance? If it has not, what does the Minister suggest for this case?
Will Quince
We have provided £180 million in discretionary housing payments this year; that is an additional £40 million in this financial year. We deliberately do not give prescriptive guidance on how discretionary housing payments should be spent by local authorities, because they are precisely that: discretionary. They are there for the local authority to use its discretion to support people who sometimes face very complex situations at the point of need. That discretion is deliberately with the local authority. We also do not prescribe how long discretionary housing payment can be paid. In cases such as this, people may have to apply multiple times for a discretionary housing payment, but we do not say that payments can only be, for example, handed out once, twice or three or four times. It is wholly at the local authority’s discretion.
Just one more point: I gently suggest to the hon. Gentleman that, even if the Government were to agree with his suggestion and I were minded to agree with him—I stress that we do not agree—any proposed change of this nature would require significant structural system change or a manual intervention, which would take considerable departmental resource, along with any legislative change. The Department simply does not have any capacity to make that kind of change at the moment.
To add some context, we have had to divert huge amounts of resource across the Department to the processing of claims throughout this unprecedented period, with claims for universal credit going up from 2.2 million to some 5.7 million. It is important to point out, despite that unprecedented shift, that more than 94% of people were paid in full and on time. We simply do not have the capacity to make big structural system changes, even if we were minded to agree with the hon. Gentleman, but we are committed to providing a strong safety net for those who need it.
Mr Perkins
The Minister talked about the Government wanting parents to work together and leaving it to parents to decide, but clearly, this is not a unique situation. After a separation, there is often contention and disagreement between former partners. When both are looking after the children 50:50, how is it fair for the Government to decide that one of those parents is the main carer and therefore gets the support with housing, child benefit and the gateway that that opens, and the other parent gets nothing? It seems patently unfair. To dismiss that by saying that is how the system is and it would be difficult for the Department to work on it in a different way is not really good enough, not just for Mr Waterhouse but for many others in that situation.
Will Quince
The hon. Gentleman hits the nail on the head when he says that these situations are extremely complex. Every family is different. In the vast majority of cases, families come to individual arrangements that work well. The answer cannot always be state intervention. He says that it is not fair. That may well be the case; in many of these situations, there is an element of unfairness. There are often situations of family breakdown and separation that are hugely regrettable and there are situations that are deeply unfair, but we, as the state, try to encourage families to come to arrangements themselves. We have programmes such as the reducing parental conflict programme and the Child Maintenance Service precisely for situations where parents are not able to come to individual arrangements themselves, or need the support of the state to do so.
The question comes down to this: how much state intervention and involvement do we want? That is why I said I am happy to sit down with the hon. Gentleman and hear more about his constituent’s case and about his ideas for how we might reform the system. I just gently say to him that fundamental or large-scale system reform would not be an easy or quick thing to do. That does not mean we should not explore it or look at it for the future, but it is certainly not something that we could do in the short-to-medium term. As a Government, we are always looking to see what more we can do to support families and to support separated families, be that one family unit or a unit migrating into two or multiple units.
Mr Perkins
I remind the Minister of the question I asked and invite him to respond. Is the gender of each party a deciding factor in who ends up getting the original payment? Certainly, the view of Mr Waterhouse and many others is that there is a sort of natural bias in the system, so that where both parties share the care, the woman is treated as the main carer. Is that how the system works, and what more can he tell us about that aspect of it?
Will Quince
My understanding is that that is not the case, but I think that if the hon. Gentleman and I sat down with officials from the Department, it would give him a level of comfort about the procedure when individuals from separated families cannot reach an agreement, and how the DWP decision maker will consider all the facts of the case and then come to a conclusion and make a judgment. I would be very happy to have that meeting with him and with officials to go through that process.
As I said, we are deeply committed to providing a strong safety net for those who need it, which is why we continue to spend over £95 billion a year on welfare benefits for people of working age. We believe that families should be free to make their own decisions about how their benefits are used, without Government intervention. As I also said, there are no current plans to change arrangements for the payment of child benefit to separated families. I appreciate that that is not the response that the hon. Gentleman hoped for, but I repeat that I and the DWP Minister in the Lords, Baroness Stedman-Scott, will be happy to meet him.
This Government will continue to reform our welfare system so that it promotes work as the most effective route out of poverty, and is fairer to those who receive welfare and to the taxpayers who pay for it.
Mrs Sheryll Murray (in the Chair)
Would the hon. Gentleman like to have two minutes to respond?
Oral Answers to Questions
Will Quince Excerpts(3 years, 6 months ago)
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Alison McGovern (Wirral South) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
This Government’s unprecedented support package has supported the poorest working households the most, with Her Majesty’s Treasury’s analysis showing that the poorest 10% of working households have seen no income reduction, owing to the fast action taken by this Government in responding to the pandemic, including a £9.3 billion injection into the welfare system.
Alison McGovern
The problem with the Minister’s answer is that this crisis is only revealing problems with policies that we knew were there already. Members of this House are against it; members of faith communities are against it; leading charities are against it; and now Marcus Rashford is campaigning against it. So what is the Minister going to do to end the two-child policy for universal credit once and for all?
Will Quince
The two-child policy in universal credit is one of fundamental fairness, and it means that those who are in receipt of benefits should be in the same position as those who are not. I am not a particular football fan, but I certainly know Marcus Rashford’s name now, and I congratulate him on his MBE. We welcome the establishment of the taskforce and will carefully consider its recommendations as we approach the spending review.
Ms Karen Buck (Westminster North) (Lab)
We already know that child poverty rates have been rising across north-west England, and that is before the economic impact of the restrictions consequent upon tier 3. The Chancellor talks about the way that the job support scheme and universal credit protect income, saying that it leaves households with 90% of their income, but many households will get nothing like that, and those who lose their jobs entirely sometimes go on to universal credit at 30% of income. What assessment has the Minister made of the impact of the restrictions on child poverty in the north-west and how that compares with a local furlough scheme that protects all jobs that are at risk?
Will Quince
I will look carefully at the points that the hon. Lady raises, but I stress that this Government have implemented an unprecedented support package, including the job retention scheme and the self-employment income support scheme, which has helped families to cope with the financial impact of covid-19. For those most in need, we strengthened the welfare system with an additional £9 billion this year. That is in addition to the around £5 billion increase to benefit rates as part of the 2020-21 uprating, including around £400 million more on children’s benefits.
Elliot Colburn (Carshalton and Wallington) (Con)
Mark Jenkinson (Workington) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
My Department continually reviews its processes and the service it provides to claimants using a long-standing test and learn approach. In July, we introduced a two-week run-on of DWP income-related benefits, which is in addition to the existing two-week extension of housing benefit that is already payable to eligible claimants. Claimants who believe they may be better off on universal credit should check their eligibility before applying, as legacy benefits will end when they submit their claim and they will not be able to return to them in the future.
Jo Gideon
I thank my hon. Friend for that answer. With difficult times ahead for Stoke-on-Trent families hit by the economic downturn caused by coronavirus, does my hon. Friend agree that it is more important than ever for universal credit to offer any necessary flexibility to ensure people get the support they need to return to work, particularly those affected by local lockdown restrictions?
Will Quince
I absolutely agree with my hon. Friend. Universal credit is designed to support people into work. It supports those who need help and is fair to everyone who pays for it. Throughout the pandemic many, sadly, have lost their jobs or seen their incomes reduced. Thankfully, universal credit and the Government’s £9.3 billion investment in the welfare safety net have been there to help catch many of those affected, and that has been vital for the 3 million people who have made a benefit claim since March.
Mark Jenkinson
Our plan for jobs will help people get the skills they need at every stage of their lives and delivers on our promise to level up opportunity across the country. Work coaches will play a crucial role in delivering that agenda and helping people back into work, so will my hon. Friend join me in paying tribute to the brilliant work coaches of Workington jobcentre, and commit to increasing the number of work coaches across the jobcentre network?
Will Quince
I too pay tribute to the brilliant work coaches in Workington Jobcentre Plus, who I know have done an incredible job in particular around partnership working, and I can point to the Maryport GP surgery outreach work, the youth hub, the sector-based work academy programmes and the virtual mentoring circle by Workington jobcentre. That is brilliant work and, yes, I can absolutely confirm that we are investing £895 million in doubling the number of work coaches and Jobcentre Pluses by March 2021.
Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]
The £20-a-week uplift to universal credit has been a lifeline for many during the pandemic, yet this vital extra support continues to be denied to legacy benefit claimants, many of whom are disabled. I raised this with Ministers in the Chamber on 11 May, again on 29 June and yet again on 14 September, each time getting a non-answer. To date, the uplift could have given legacy benefit claimants £600 of extra support. Minister, can we please have a straight answer today: will anything be done to rectify this?
Will Quince
The hon. Lady is right is that she has asked this question on three occasions, and she has had three answers. The legacy benefits were increased by 1.7% in April 2020, following the Government’s announcement to end the benefit freeze. It has always been the case that claimants on legacy benefits can make a claim for universal credit if they believe that they will be better off. There are special arrangements for those in receipt of the severe disability premium, who will be able to make a new claim to UC from January 2021. But it is important—I stress this—that claimants should check their eligibility before applying to universal credit as legacy benefits will end when they submit their claim and they will not be able to return to them in the future.
Kim Johnson (Liverpool, Riverside) (Lab)
Peter Aldous (Waveney) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
There are currently no plans to extend the suspension of benefit deductions. Action to restart deductions commenced on 6 July and should be completed by mid-November. We recognise that there will be some people who may be experiencing financial difficulty, and anyone unable to afford the rate of recovery proposed is encouraged to contact the Department.
Peter Aldous
I am grateful to the Minister for that reply. These suspensions have provided a lifeline to many vulnerable people over the last six months. Unfortunately, there is at present no reason to believe that we will be in a better position in April 2021 than we were in April 2020, thus I urge my hon. Friend to consider extending the suspensions and working with local authorities to put in place fair local support arrangements that will operate in conjunction with the national welfare system and complement the Chancellor’s initiatives to get people back to work.
Will Quince
It is right that those claimants who owe the Department money are able to resume payments to reduce their debt. We continue to apply a flexible approach to recovery and endeavour to recover without causing undue financial hardship. Anyone unable to afford the rate of recovery proposed is encouraged to contact the Department so that an affordable rate of repayment can be negotiated. In May, we will be launching the breathing space scheme to help to prevent problem debt and provide support to people who fall into that problem debt.
Tom Randall (Gedling) (Con)
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
The latest statistics from 2018-19 show that the rates and numbers of people in absolute poverty were lower than in 2010. Since those statistics were published, we have injected a further £9.3 billion into our welfare system, including an increase to universal credit of up to £1,040 for this financial year.
Alan Brown
The reality is that that is not enough. Thanks to the efforts of the Scottish Government to mitigate the worst impacts of austerity, Scotland has the lowest child poverty rates, but the impact of UK Government policies means that 4,600 children in my constituency are estimated to be living in poverty, which is absolutely shameful. Will the Minister listen to the calls of the End Child Poverty coalition and the likes of Macmillan Cancer Support and pledge to keep the £20 a week universal credit uplift to avoid putting more families and children into poverty?
Will Quince
One child in poverty is one child too many. We at the Department are continuing to work with Her Majesty’s Treasury and other Government Departments to monitor the evolving economic and labour market situation and identify the most effective ways to help people to stay in or close to work, both now and in future. It is important to stress that Her Majesty’s Treasury published a distributional analysis that assessed the impact of covid-19 on incomes compared with the incomes of working households in May 2020. That analysis showed that the Government’s interventions have supported the poorest households the most.
Rob Butler (Aylesbury) (Con)
Mr David Davis (Haltemprice and Howden) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
During the pandemic, several economic support measures have been announced by the Chancellor, including supporting the retention of 9.6 million jobs through the furlough scheme. Additionally, 2.2 million individuals have claimed £5.6 billion under the second self-employment income support scheme grant announced by the Chancellor as part of his winter economic plan. The Department has spent £9.3 billion on additional support, including the increase of the universal credit standard allowance by £20 a week. Together, those measures provide a safety net for almost everyone who needs it, but eligibility for the different support packages is set out clearly on gov.uk.
Mr Davis [V]
Small businesses account for about 13 million people employed, which is about 60% of the workforce, and many of them are in trouble. When I spoke this weekend to ForgottenLtd, which represents people who are not in receipt of benefit, it told me that its latest survey showed that 70% of its members receive no benefit whatsoever. Do the Government intend to do something about that? If so, will the Minister meet me to discuss the criteria for improvement?
Will Quince
I know that my right hon. Friend has campaigned hard on the subject. The question may be better directed at the Chancellor of the Exchequer or Ministers from Her Majesty’s Treasury, as I know he has also done.
Universal credit is an in-work and out-of-work benefit. It is also available for those who are self-employed. As the Secretary of State set out in her letter to the Work and Pensions Committee last month, we plan to proceed with the reinstatement of the minimum income floor, and claimants will be contacted as it is reinstated for them. Notwithstanding my right hon. Friend’s point, more than £13 billion of support has already been provided for more than 2.6 million self-employed individuals through the first two stages of the self-employment income support scheme and the scheme has now been extended.
Sarah Jones (Croydon Central) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
The Department does not take benefit fraud lightly, and we are committed to using the full range of powers and penalties at our disposal. As part of our response to covid-19, we have established our integrated risk and intelligence service to prevent high-risk claims from going into payment. Our investigations have successfully led us to correct and suspend serious and organised claims fraud in large numbers, and we continue to review our processes and to anticipate new attacks, which will make it even harder for people to defraud the taxpayer in the future.
Sarah Jones
A constituent of mine, a mother of three children, recently had her universal credit and housing benefit stopped for over two months because of a fraudulent claim made in her name. She was completely innocent, but she and her young family suffered significant financial hardship. We know that benefit fraud, in universal credit in particular, is increasing, and I know of several other MPs who have had similar cases. What will the Government do to stop innocent families suffering for months just because this Government are failing to detect and investigate fraud?
Will Quince
I would be very happy to meet the hon. Lady to receive more details about that individual case, but first let me apologise, because that should not have happened. In effect, Ministers had to make decisions about the redeployment of staff in order to process the unprecedented number of claims, which went up from 2.2 million to 5.7 million claims. That meant deploying staff away from counter-fraud and into the processing of claims, but I am pleased to say that that has now changed and more staff are going back into fraud. We have to take fraud incredibly seriously, because it is individuals such as the hon. Lady’s constituent who are often the target of serious organised crime.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Kerry McCarthy (Bristol East) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
The hon. Lady is absolutely right—this issue is a concern for me and has been for some time. I am working closely with my counterpart at MHCLG and would be delighted to meet the hon. Lady to discuss progress.
Laura Farris (Newbury) (Con)
Universal Basic Income
Will Quince Excerpts(3 years, 6 months ago)
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Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under you as Chair, Mr Davies. I start by saying to both contributors so far that I wholeheartedly agree with the thesis that they set out while also highlighting the practical realities of what a universal basic income could bring.
We live in such an inequitable society—the second most inequitable society that there is. We have 4.5 million people living in poverty today, in one of the richest countries. We know that many have made their millions out of this crisis, but millions have fallen into very stark circumstances. We have heard about the 3.1 million people who have been excluded from any support whatsoever and are desperate at this time.
The unemployment rate in my constituency last year was 2.8%; next year it will be 27%. This is terrifying—one in four people losing their jobs because of the nature of our local economy. The 2.8% was an incredible feat, in a post-industrial city where the manufacturing base was wiped out, with the loss of the rail and chocolate manufacturing jobs, but we now face an unprecedented precipice, and we are worried—terrified—at what lies ahead. We have to think outside the box at a time like this. That is why I believe that York, because of the nature of the economy and the way our city works, would make an ideal pilot for a UBI, or citizen’s wage, as many call it.
We also know that, at the end of this month, many people on furlough today will fall over tomorrow. The reality is that, while wages are currently at 80%, they will drop in areas of high lockdown to 67% and in many areas to nothing. That will mean a longer and longer queue at the jobcentre—none of us wants to see that—or people simply struggling. UBI is not just about economic circumstances; it is about holistically supporting individuals, which is why I am also a convert to such a mechanism. It does not judge or call out, but it does protect. At a time like this, we have to look at how we protect society.
The Prime Minister talks about putting his arms around our society, yet we are not seeing the evidence of that. Many of the economic packages that have come out have been narrow, too late and too little. They do not look at the real, longer-term solutions that we need to look at in this crisis. The packages are short term and have not grappled with the real economic challenges of our age. We have to look at what will sustain us, and not just in the next six months or year—we are talking decades of recovery from this pandemic.
We have to inject the right solutions. Therefore, we should not rush, but move on this path to look deeper into this situation. We have seen the benefits where universality has been applied. We have the pension scheme—too low, I would argue, but it is a scheme that does not judge—and child benefit. Such a solution removes the issue of the undeserving poor, a narrative that has often sat with this Government. It does not judge; it recognises the real challenges. Of course, it should also sit alongside a progressive taxation system—something we desperately need which challenges those with broader shoulders and supports those without that resilience.
At a time when we see our high streets about to topple over, businesses folding, our whole local economy in York and our national economy spiralling out of control, and pp spiralling down with it, we need that safety net. Universal credit has been a good attempt, but it judges, it sanctions and it has caused harm. People have to wait for weeks before they get any money. At the height of the pandemic, it was not just five weeks, it was eight or nine weeks that people in my constituency waited.
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
indicated dissent.
Rachael Maskell
The Minister is shaking his head. I talked to my constituents who were offered a loan, to be paid back. I am telling the Minister about cases in my constituency where people waited that length of time to get their hands on any money. They were absolutely desperate and needed to use the food bank. Why are we doing this to people when we have other tools that we can utilise?
That is why I believe that universal basic income will bring the universality, the collective responsibility of society, and the solidarity to see people through this time. I argued for it at the start of the pandemic, seeing what was ahead. I believe ever more strongly that, as poverty encroaches, we must find proper solutions. At the moment many people are struggling to pay heating bills. A constituent came to me about that this week. People cannot afford to feed their families. Often it is the women in the family—the mothers—who do without to make sure their kids get what they need. It is tough. My city is like many other places in facing that.
One of the benefits of universal basic income comes from the fact that at the moment people are in and out of work, sometimes because they must isolate, and sometimes because of the pace of fluctuations in work. People who are self-employed try to get started or to do more work and then, with levels fluctuating, they fall back. Perhaps they have access to workplaces, or perhaps not. If there was a steady income for the self-employed, what a difference it would make to entrepreneurs who want to start a business but need time to build it up and to build a custom base. That would give them the underpinning they need to grow.
As for people on statutory sick pay—as well as those who do not get it—universal basic income would provide more of an underpinning while people have to move in and out of the economy. People on zero-hours contracts get paid—and then they do not get paid. They do not know, from week to week. Universal credit, whatever the Minister will say, is not agile enough to respond to the real economy that people work in. That would not be the case with a universal basic income. Also, people entering training and skills development may move in and out of it, perhaps with different hours at different times. They may or may not be on full-time courses. Universal basic income provides underpinning and does not discriminate. It does not call out disabled people, those who are shielding, or anyone else. It does not judge in that way, but understands. We need a system that understands people.
Something that came through to me clearly when we debated the Coronavirus Act 2020 was that there were opportunities to volunteer during the pandemic. We saw that from the British people in an incredible way at the start of the pandemic. No doubt as we get through the winter crisis together—and it is going to be a hard winter—many people will put their hand up and say, “I will help.” Universal basic income would give employers flexibility, because they would know that their staff would be out volunteering, moving in and out of those opportunities, as we pull together as a society to get through this impossible situation. We have to have that solidarity that was built. Flexibility, built into our ability to sustain ourselves through the crisis, would be underpinned by a universal basic income.
That is why I say do not push it off the table. A recovery UBI would help the economy to grow and establish itself again. It is interesting that the Mayor of London and even Andy Burnham, the Mayor of Greater Manchester, have said that we need to look at UBI. That is my ask of the Minister today: that we look at how to build the foundations of a new, fair economy, which does not discriminate and is built on the principle of recognising that everyone wants to put in, but sometimes people need help. UBI is the fairest way to do that. I ask the Minister whether he will set up a UBI commission to look at how UBI can work in different areas, and at the economic challenges of our age and the flexibility needed to grow a new economy, and to report back to the House on that commission to show how we can build a stronger, better economy and a fairer system for the future.
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
I thank the Backbench Business Committee for granting time for this important debate, and all Members who contributed. I will try to address as many of the points that they raised in the time that I have.
This issue ignites passionate debate in many quarters, and I am grateful to be able to come to the House and make the Government’s position crystal clear. Throughout the pandemic, people have faced significant challenges. Many have sadly lost their job or have seen their income reduce. During these challenging times, my priority as Minister with responsibility for welfare delivery remains ensuring that the most vulnerable in our society receive the support and financial assistance that is available to them.
Thankfully, universal credit and the Government’s £9.3 billion investment in the welfare safety net has been there to catch those most affected. It has been vital to the 3 million people who have made a benefit claim since March. We have paid more than 90% of claims in full and on time, and we have got support to millions of families at an incredibly difficult period. We have targeted support, which gets to the people who need it most while maintaining responsible economic policies.
Despite the success of universal credit, some still attempt to deride the system and instead demand what they call a universal basic income, or UBI. The concept, as has been explained today, is that a standard monthly allowance is paid to all working-age adults, regardless of their circumstances. At first glance, it may appear appealingly simple, but in reality it would be a costly mess that would leave the vulnerable in society far worse off. It would disincentivise work in key industries and leave the country’s finances in ruins.
On the flip side, the universal credit system has proven that it is up to the challenge. Replacing universal credit, at potentially astronomical cost, would be of little benefit to anyone, not least those who rely on our welfare safety net the most.
I hope that my clear arguments against UBI, which I will set out today, will make it clear that the Government have no plans to adopt this policy, and for good reasons. It is not in the interests of the taxpayer or of those who rely on our welfare safety net. Rather than continuing to push the unrealistic and damaging idea of a UBI, its supporters would do well to look at the welfare safety net that we already have.
In the short time that I have left, I intend to cover three areas, if possible: cost, delivery and impact. First, I turn to cost. A 2018 report by the CSJ found that giving everyone over the age of 16 in the UK £10,000 a year would cost £500 billion. Despite those staggering sums being paid out, a UBI would be likely to leave the most vulnerable in society worse off. As soon as we think about the people who need more support from the state, the supposedly simple idea of UBI quickly starts to unravel.
Will Quince
I will have to write to the hon. Gentleman about the CSJ report, because I do not have it to hand.
Will Quince
The point I am making is that when we even begin to think about introducing a UBI, we see that not only would the cost be astronomical, but the Government would have to increase taxation mercilessly; that is borne out in the feasibility report by the Scottish Parliament’s own commission. Indeed, there would be increased taxation far beyond anything seen in the United Kingdom before. We would be taking thousands of pounds in taxation from hard-working people, often simply to shuffle money around in what could be a costly farce of bureaucracy, before paying it back to people in monthly UBI payments. That would be a decadence of expenditure and a blow to productivity that we can little afford in the throes of one of the most severe economic situations that we have faced.
I turn now to delivery. UBI is indeed a fantasy, in which the practicalities are rarely thought through, and if we interrogate the idea even slightly, it very quickly unravels. Delivering infrastructure schemes of this size is not easy. For all its detractors, who have been proven badly wrong in the face of the pandemic, universal credit is one of the most advanced welfare systems in the world. As with any complex IT system that delivers sweeping reform, it has taken time to implement and it has not been without challenge.
In 2017, the Work and Pensions Committee found that any UBI that attempted to support people’s additional needs would not reduce complexity, and that ultimately it was difficult to see how a UBI would substantially alleviate poverty or provide income security.
As the hon. Member for Inverclyde (Ronnie Cowan) rightly pointed out, other countries have already tested UBI and quickly found that the practice is as bad as the theory. As the hon. Gentleman also pointed out, a UBI test in Finland was abandoned as a flop after two years, with the Finnish Finance Minister saying that the case was closed for UBI. Importantly—
Will Quince
I have given way once already; if I can give way again at the end, I will.
As I was saying, the Finnish Finance Minister concluded that there must be conditionality—that is the important point—in the social security system.
This Government have done brilliant work through the pandemic to stand up and bolster services, and to get money to those who need it in all four nations of our United Kingdom. We have supported more than 9 million people through the coronavirus job retention scheme and we have accepted more than 3 million new claims for universal credit. The universal credit system has proven that it is up to the challenge, and replacing it at potentially astronomical cost would provide little benefit to anyone, not least those who rely most on our welfare safety net.
Finally, I want to discuss impact, which is the fundamental case against UBI. The welfare system is a safety net and should be there for those who need it. Unlike universal credit, UBI does not target support at those in greater need or take into account additional costs faced by many individuals, such as those with disabilities or those with childcare responsibilities. To put things into some kind of perspective, UBI would be paid, as the hon. Member for Inverclyde pointed out, to me and all the other Members in the Chamber today and across Parliament. I would much rather that it be spent on supporting those who need it. To claim, as the hon. Gentleman did, that that would simply be taken back in tax is not a valid argument, as I have set out, because that is simply shuffling money around.
The OECD has also been clear about the broader consequences. For most high-income countries, a UBI could increase poverty and negatively affect the poorest, with middle-income households most likely to gain. That is all before we start discussing real outcomes. Evidence suggests that UBI provides a disincentive to employment, and in the Finnish trial the Government have acknowledged—I repeat this, because it is important—the need for conditionality.
Chris Stephens
Surely the Finnish model demonstrated that people rejected precarious work and that employers had to increase pay and model terms and conditions. It is just not the case that the Finnish model suggested a disincentive to work.
Will Quince
I thank the hon. Gentleman for his intervention and I hear the call that he and other Members across the Chamber make for a UBI pilot, but in rebuttal I say, “Show me the international evidence.” The hon. Member for Inverclyde made reference to numerous pilots that have taken place all over the world, so why does he not demonstrate what he argues for by showing what impact they had, and then showing the evidence of how those countries have gone on to implement UBI?
Will Quince
I will gladly meet the hon. Gentleman at some point in the future and look at that in further detail—but why have those countries not progressed? On the issue of the pilot, not only do we think that the concept is deeply flawed, but it is certainly not currently operable.
The Government remain wholly unconvinced of the case for UBI. We have taken steps to address the financial implications of the pandemic, and that has been possible only against the backdrop of a welfare system that has been technically capable of meeting the challenge of hugely increased demand, and that targets appropriate support for those who need it most. More than 1 million people who needed to access UC quickly have been able to receive funds within 72 hours and more than 90% of all claims have been paid in full and on time. That is a record of which I am proud. The pandemic has shown that universal credit is the right approach for the United Kingdom. It simplifies the benefits system, promotes and incentivises work, and provides targeted support to those who are most in need, in a way that is affordable to the taxpayer—challenges that UBI simply does not and cannot meet.
Oral Answers to Questions
Will Quince Excerpts(3 years, 7 months ago)
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Bob Blackman (Harrow East) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
As my hon. Friend knows, alternative payment arrangements are already available to enable housing costs to be paid directly to the landlord. We have listened to feedback, and in May we introduced a new online system for private landlords, so that claimants who struggle with managing their money get the right support promptly. Landlords can now request that a universal credit tenant’s rent is paid directly to them online, rather than by email or post.
Bob Blackman [V]
I thank my hon. Friend for his answer. As he will know, it is estimated that 125,000 people are now in rent arrears, with rent not being paid to landlords. Many of those people will be in receipt of either universal credit or housing benefit. What steps can he take to ensure that that rent will be paid to landlords and to prevent spiralling debts that are impossible for people to repay, so that landlords are paid their rent and tenants do not fall into unnecessary rent arrears?
Will Quince
I thank my hon. Friend for that question. He is a passionate and knowledgeable advocate on housing issues, and I always listen carefully to his representations. Alternative payment arrangements such as direct payment to landlords can be requested by the tenant, landlord or work coach, but if there is more that we can do, I am happy to explore it. I regularly meet my counterpart at the Ministry of Housing, Communities and Local Government to discuss these issues, and I am happy to meet my hon. Friend.
Ms Karen Buck (Westminster North) (Lab)
Direct payments to landlords can help vulnerable tenants, but the issue remains that the design flaws in universal credit leave many tenants at risk. We now know that on average, new claimants of universal credit see a net fall of 40% of their income, one in eight tenants have built up arrears and there is a £440 million gap between what landlords believe they are owed and what tenants have paid. What immediate steps can the Minister take to deal with these structural problems, particularly the waiting period for universal credit, so that when the eviction ban is lifted next week, tenants are not at risk of losing their homes?
Will Quince
First, I welcome the hon. Lady to her place. I am afraid that I have to start by disagreeing. It is wrong to attribute a rise in rent arrears solely to universal credit. We know that many tenants are arriving on universal credit with pre-existing rent arrears, which universal credit actually appears to be helping to clear over time. There is no wait for universal credit; people can get an advance immediately. We recognise that this has been a very difficult time for people on low incomes, and that is why we have injected more than £9.3 billion into our welfare system.
Cat Smith (Lancaster and Fleetwood) (Lab)
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Bonuses are earnings and are treated in the same way as any other earnings in calculating universal credit awards, reflecting HMRC guidance and ensuring fairness across the working population, many of whom do not claim welfare. UC is more generous than the legacy benefits that it replaces. The Government have already made significant investment to increase universal credit’s generosity by cutting the taper rate to 63% in 2017, with an extra £1.7 billion a year put into work allowances by 2023-24.
Margaret Ferrier
My constituent, a key worker in a pharmacy, received a one-off bonus of £120 for her efforts supporting vulnerable people during the coronavirus pandemic. That reward for hard work was eroded when £172.69 was subsequently deducted from her monthly universal credit payments. Does the Minister agree that that is no way to treat people who have stepped up to support us all during these difficult times? Will he consider temporary changes to the work allowances and taper rate to enable key workers to receive these bonuses in full?
Will Quince
I want to thank all the key workers across our country who have done so much during the pandemic. Universal credit makes sure that people are always better off in work. Under the legacy benefits system, claimants would not have kept all their bonuses; in fact, in many cases, the legacy withdrawal rate could be as high as 91% for each additional £1 earned, compared with a maximum of 75% under universal credit.
Tom Hunt (Ipswich) (Con)
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
The Government introduced a package of welfare measures worth more than £9.3 billion this year, to help those facing the most financial disruption during the pandemic. We introduced a series of measures to support people, including an increase in the universal credit standard allowance for 12 months, worth up to £1,040. Increased local housing allowance rates have put an average of £600 into people’s pockets, and we made statutory sick pay available to employees from day one.
Stuart C. McDonald
I thank the Minister for his answer, but ending the £20 universal credit uplift could see food bank use increase by 10%, according to the Trussell Trust, and the Joseph Rowntree Foundation has warned that 16 million people could lose £1,000 a year overnight, plunging 700,000 more people into poverty. Will the Government remove that cliff edge and make the £20 uplift to universal credit permanent?
Will Quince
The increase was introduced for an initial period of one year as part of the Government’s measures to assist with the financial consequences of covid-19. It was part of a £9.3 billion increase to the welfare system that ensured that it was able to stand up and support the millions of extra people who needed it. Future decisions on benefit rates will be made at the appropriate fiscal event.
Sarah Champion (Rotherham) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Since mid-March we have received more than 3 million claims for universal credit, ensuring that people have a welfare safety net in their time of need. I am proud that more than 90% of new eligible claimants were paid in full and on time, proving that universal credit can stand up to the challenge. The Government’s support for people and businesses is not ending, and we are now focused on delivering our plan for jobs. I hope that the hon. Lady will support that plan, particularly the new £2 billion kickstart scheme that will create hundreds of thousands of new, fully subsidised jobs for young people across our country.
Sarah Champion [V]
I appreciate the Minister’s response, but with coronavirus support schemes being wound down and the Government seemingly unwilling to contemplate their extension, what actual steps is the Minister taking to ensure that towns such as Rotherham are not faced with a generation of mass unemployment, empty shops and closed factories as a result of the pandemic?
Will Quince
The hon. Lady is right to say that the coronavirus job retention scheme has been a huge success—it has protected up to 10 million jobs—but it is important to point out that support for furloughed employees does not end in October. In the Chancellor’s summer statement, he announced the new job retention bonus, which will pay employers £1,000 for every employee still in post by the end of January. For those who, sadly, are made redundant or lose their jobs, Jobcentre Plus stands ready to assist up and down the country.
Elliot Colburn (Carshalton and Wallington) (Con)
Stephen Timms (East Ham) (Lab)
The National Audit Office told the Work and Pensions Committee two weeks ago that the “sophisticated” analysis of the Trussell Trust has established an association between universal credit roll-out on the one hand and rising food bank demand on the other. Association is not the same as causation, so what plans do the Government have to commission research, as the National Audit Office recommends, into the impact of universal credit on food bank demand?
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
I thank the Chairman of the Select Committee for his question. As he knows, I gave evidence to the Committee recently on this very matter. I have worked closely with food bank providers—the Trussell Trust and others—over the course of the pandemic to ensure that our support has got to those who need it quickly. We continue to better understand the reasons for food insecurity. That is why we have put additional questions in the family resources survey. We keep all policies under review, and of course we listen to the findings of reports such as that of the Trussell Trust.
Mrs Pauline Latham (Mid Derbyshire) (Con)
Helen Hayes (Dulwich and West Norwood) (Lab)
Will Quince
I thank the hon. Lady for her question. The Department has an ongoing positive relationship with a range of food bank providers. It has regularly engaged with them throughout the coronavirus pandemic and will continue to do so. We quickly introduced welfare changes worth an additional £9.3 billion, and worked closely with other Government Departments on the cross-Government taskforce on food and other essential supplies. Further to my earlier answer, the hon. Lady will have to wait for future fiscal events where benefit rates are set.
Andrew Jones (Harrogate and Knaresborough) (Con)
Will Quince
My hon. Friend rightly pays tribute to the incredible team at Harrogate Jobcentre Plus. As he knows, we have seen a surge of over 3 million claims since mid-March, and I agree that UC has stood up to the challenge, with payment timeliness remaining high at over 90%. We will continue to closely monitor our services across the country and will continue to keep staff numbers under review. As he also knows, we have committed to doubling the number of work coaches.
Mr Virendra Sharma (Ealing, Southall) (Lab) [V]
Robert Halfon (Harlow) (Con)
Will Quince
My right hon. Friend is a passionate advocate for hard-working people. He tempts me to set Treasury policy, which I fear the Chancellor of the Exchequer would not take kindly to, but I urge him to make representations to Her Majesty’s Treasury instead.
Tim Farron (Westmorland and Lonsdale) (LD)