I beg to move,
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.
I thank the Backbench Business Committee for this opportunity. The new Work and Pensions Committee had an ambitious programme. Our first meeting in March was with the Health and Safety Executive, but in no time we were in lockdown and our programme was set aside. The Department for Work and Pensions has been key in this crisis as so many have lost the means to earn a living, and universal credit has delivered. I have been a frequent critic. I repeatedly pointed out that transition to universal credit could not be completed by October 2017, but the system that we now have has passed the test of this year. It is a national asset, which we should make the most of.
DWP staff have been on the frontline, with many redeployed to handle the tidal wave of claims. They have withstood enormous pressure. In our report, the Committee expresses thanks to them for their dedication and hard work, and that does need to be reflected in their pay; yesterday’s announcement was a heavy blow.
Ministers made good decisions at the start. After a decade of cuts, the £20 increase in universal credit and working tax credit, and the reconnecting of local housing allowance with actual rents, were key for many to surviving the crisis. I had understood that local housing allowance would be kept in line with local rents, so I was dismayed yesterday to hear that it will be frozen—decoupling it once again. My Committee agreed unanimously that the £20 increase should stay and many others have taken that view, including the Joseph Rowntree Foundation’s “Keep the lifeline” campaign. The campaign wrote an open letter to the Chancellor on
“The basic level of support for an out-of-work single adult would fall to the level it was at when Margaret Thatcher left office”.
The Institute for Fiscal Studies warned of a significant decline in the incomes of 4 million families. The Chair of the Welsh Affairs Committee, Stephen Crabb, a former Work and Pensions Secretary, called the £20 a lifeline and urged its retention. I very much regret that the Chancellor rejected those calls yesterday.
The spending projections show universal credit being cut by £20 in April, and people claiming universal credit are left fearing the worst. Our motion calls for the £20 uplift to be extended to legacy benefits. Yesterday, an increase of 37p per week was announced; Ministers must reconsider.
Not increasing jobseeker’s allowance and employment and support allowance for those out of work for ill health was done on the grounds, we were told, that computer systems were slow to change, but they certainly could have been changed by now, and it is absurd that people in otherwise identical circumstances, claiming different benefits because of universal credit roll-out sequencing, are receiving such different support. It is legally questionable. People should not face extended hardship because their benefits are run on out-of-date systems. Ministers were absolutely right to introduce the increase; it should be extended to legacy benefits, too
Our report last month, “Universal credit: the wait for a first payment”, calls for other much-needed changes. The five-week delay between applying and the first regular payment causes great hardship; we called for non-repayable starter payments to tide people over. We also called for “advances” to be renamed “loans”, to make it clear they have to be repaid, because calling them “advances” obscures that.
The motion also highlights the people made worse off by claiming universal credit. Government online advice says: “Apply online for universal credit to get financial support if you’ve lost your job.” For most people, that was sound advice, but not for everyone: if someone on tax credits claims universal credit, their tax credits stop.
We surveyed experiences of the benefits system in the pandemic; 6,000 people responded, and I thank all of them. Some had not realised that claiming universal credit meant losing tax credits. For some, their universal credit entitlement then turned out to be zero—for example, one of my constituents with £16,000 saved. That person was left, as many were, with no support at all. That is benefit mis-selling; Government should put it right.
In May, answering Mr Paterson here in the Chamber, the Secretary of State said that she would look “very carefully” at whether people should be able to return to previous benefits. That held out some hope, but now she says that allowing it would threaten to unravel the roll-out of universal credit; that is a very poor excuse.
Today’s motion highlights our call, also made by the Home Affairs Committee, for the no recourse to public funds immigration condition to be suspended for the pandemic. Some 3 million extra people have had to claim universal credit this year, but families working legally, with no recourse to public funds on their immigration status, do not have that safety net. They may get discretionary council help, but provision varies immensely. Indeed, Andy Jolly at the University of Wolverhampton has found that many families refused council help, so our report made this call:
“The Government should publish or at least clarify existing guidance for local authorities on what support they can provide for people with NRPF, including…whether measures such as the hardship fund are classed as public funds or not.”
At the Liaison Committee in May the Prime Minister said that people in this situation should get “help” of one kind or another. I agree, but unfortunately they do not. Families facing destitution can apply for exemption, but it is extremely hard. The all-party group on immigration law and policy heard this week from the Unity Project that it takes about 100 pages of evidence; many people cannot provide that. The Home Office takes a month, on average, to determine an application. No destitute family should have to wait a month for Government to decide whether they can claim benefit.
Our report in May also called for an impact analysis of the benefit cap in the pandemic. UC and the local housing allowance were rightly raised, but the benefit cap was not, so many families crashed into the cap for the first time. The Department told our inquiry that the number of people affected by that would be “very small”. We asked for a full analysis of the numbers and the characteristics of households newly subject to the cap, and of the impact on hardship. We now know that far from a very small impact, the number affected by the benefit cap has almost doubled in the pandemic.
In London, with high rents pushing up LHA, many have crashed into the benefit cap for the first time. People claiming benefit after losing their job have a nine-month grace period when the benefit cap does not apply. The employment Minister says that 160,000 households have a grace period due to end next month—the benefit cap will apply for the first time. I wrote to the Secretary of State yesterday, with the Committee’s agreement, about this issue. The Government were right to increase support for struggling families at the start of the pandemic and there should be a cap easement for those about to be hit.
Our report in May pointed out that the future jobs fund did a great job of supporting young people in the last financial crisis. I welcome the kickstart scheme, with its identical structure, that was announced the month after our report. It was disappointing to see yesterday that spending on kickstart will be much lower than planned. That seems to be because employers have to offer at least 30 places, thus shutting out small firms. That should surely be fixed. The Committee will take evidence on the Restart scheme, which was announced yesterday. An evaluation of the Work programme was published on Tuesday. Major commitment to employment support is absolutely right, but we need it—this is unlike what happened with the Work programme—to do a good job with, for example, disabled people.
The importance of dependable social security has never been clearer. The UC system and Department for Work and Pensions staff have passed an extraordinary test, and they have our congratulations and our thanks. The changes outlined in our report are needed now to minimise damage from the crisis, and to look forward and build back better in the months ahead.
I have asked Members to consider a five-minute limit. We are not putting the clock on, but Members who go wildly over five minutes will be doing a great disservice to those lower down the call list.
I pay tribute to Stephen Timms for securing this debate. There has been so much criticism of the Government in this place this year, much of it very unfair and political, and much of it fair and necessary in holding the Government to account for things that are going wrong. What we do not hear often from the Opposition, however, is recognition of what has gone right, which is why I note the generous spirit in which the right hon. Gentleman spoke about universal credit, acknowledging it as a “national asset”. That is good description of what has been achieved.
I honour Ministers at the DWP for the tremendous success story of 2020. There have been 3.2 million new UC claimants, a near doubling of the total case load, as I understand it, and yet despite all the protests about UC in recent years, I do not think that there been a squeak of protest in this place about the process of onboarding those claims. In my constituency, we have had nearly 3,000 new UC claims and, having just checked, I have had eight items of casework on UC this year, which represents a fairly small proportion of my total case load. I honour what has been done, and give my thanks to Jobcentre Plus staff and all the staff at the DWP. There are many heroes working behind the scenes in our country this year, and Jobcentre Plus staff are leaders among them.
I also wish to pay tribute to the coalition Government and principally my right hon. Friend Sir Iain Duncan Smith for his role in designing and implementing UC. I can only imagine what would have been the case had we stuck with the old system and the myriad benefits, mostly with paper-based administration; it would have been a complete disaster. But we had a digital system, so when millions of people suddenly needed unemployment benefits, the computer said yes.
On that topic, the right hon. Member for East Ham raises the suggestion from his Select Committee in its report earlier this year that people should be able to go back to legacy benefits after being on universal credit. It is certainly true that, despite the significant increases in universal credit, some people appear to be worse off on it, but as we have seen, and as I have just described, UC is a far more agile system and the intention—I think of the whole House—is to replace legacy benefits. I agree with the Government’s position that it would not be right to let people go back. The right hon Gentleman mentions mis-selling: surely that is an exaggeration, but I do wonder whether more can be done to explain to people what joining UC means and to make sure that they are able to check properly whether it is the right move for them.
I also congratulate the DWP and, more particularly, Citizens Advice on its scheme, Help to Claim, which the DWP funds. It is the beginning of the far more substantial system that my right hon. Friend the Member for Chingford and Woodford Green always intended to accompany universal credit. The Government are recruiting 13,500 new work coaches to work in jobcentres, which is tremendous, but people need more than coaches—they need training, professional support and peer support. They might have issues with addiction or debt, or family problems. We need to create the systems that support job coaches and support individual jobseekers, so I urge the Minister to consider what more can be done to deepen Help to Claim beyond the initial period of joining UC to create a system that works with businesses and charities. The gateway system for kickstart potentially offers a model for that.
The right hon. Gentleman mentioned the future jobs fund. We want to do better than that, because it had quite a high drop-out rate. The opportunity for the kickstart scheme is to sustain those young people in employment, but in order to do that, we need to ensure that they have the right support around them, not simply the job placement itself.
My final point is more strategic and about the principles of welfare. I hope that I will not be thought abstract or even flippant when I make this point. I call in my defence Professor Simon Szreter of Cambridge University, who has made the same point. He said that we need to go back to the principles of the Elizabethan poor law. I am not talking about Victorian poor law—the Dickensian horrors of the workhouse and so on—but the original poor law of 1601. It was the first comprehensive system of social security in this country and, as Professor Szreter explains, it had two elements. First, it was local, it was funded from local taxation and it was paid out to people flexibly according to their needs. Secondly, it encouraged altruism and social responsibility by the wealthy through incentives to create almshouses, colleges and churches.
I do not propose going back to those days, but those are the principles that we need—a more local and more flexible approach and one in which the wealthy, by which I mean businesses in today’s age, play a central role in supporting local communities and helping people into employment. The right hon. Gentleman mentioned the need for a more dependable social security system, and I entirely agree. I support everything the Government are doing to help people facing unemployment, and I hope for more substantial reform in due course.
I thank the Chair of the Work and Pensions Committee, Stephen Timms, and all its members, including my hon. Friend Chris Stephens, for the report. However, I might be the fly in the ointment when it comes to some of the issues it raised.
From my perspective, and I hope that of the majority of Members on my Benches, the report provides a true exposition of the Government’s position on social security, and their ideological thinking about its role in society. At least on these Benches, we believe that a social security policy worth its name should be based on its role in defining society through support enabling equal access to security for all based on need, especially during a global pandemic. I am afraid that, at least from my perspective, the Government’s position and outlook seem to uphold a post-Thatcherite fundamentalism. It is as though they have offered a prayer to a dystopian Saint Francis of Assisi, “Where there is discord, may we bring more. Where there is error, may we entrench it. Where there is doubt, may we add to it, and where there is despair, may we embolden it.” I am afraid that I do not see UC as a national asset. I certainly see the members of staff who are having to deal with its consequences as an asset, because I and my team, and many other Members, know how much hard work they have done.
It is as though the Conservative party believes that the path to paradise begins in hell, but, just maybe, the long road to salvation actually lies in the Committee’s recommendations. For example, it says:
“The Department should continue to allow claimants to use their Government Gateway accounts to verify their identity once the lockdown has ended. It should also use this as an opportunity to reflect on what other changes to the process are needed, with a particular focus on the needs of people who are vulnerable and digitally excluded.”
I would actually go so far as to say that the opportunities of digitisation should not cloud the Government’s view of the lived experience of many citizens. Even the most advanced digital states recognise the fundamental truth of digitisation: it is to ensure that traditional means of access to services remain open to all, and it is not some mandatory utilitarian concept of happiness and human worth.
The Committee also states:
“We recommend that the Government urgently take steps to return to their pre-existing benefits, or the equivalent financial position, anyone who has inadvertently left themselves worse off by making a claim for Universal Credit during the coronavirus outbreak.”
It is as though those on the Government Back Benches see social security as they see foreign aid—as a reserve worth fleecing. Just as they fail to see the worth of foreign aid, they fail to see the worth of a needs-based social security system. I am reminded by Rachel Maddow that social security is not a Ponzi scheme, is not bankrupting and is not an outrage and that—these are my words—if it is funded and worked properly, it works. The Government should restore entitlement, as the Committee’s report highlights, not just because of covid-19, but because it is the morally just and economically sound thing to do.
The Committee’s litany of exasperation continues:
“In these exceptional circumstances, the Government should immediately suspend NRPF conditions on public health grounds for the duration of the outbreak”— that is, on public health grounds during a global pandemic. As the Committee also notes, the Government might not even know how many citizens have no recourse to public funds—so much for a digital nation approach.
The Committee gets into its stride on the issue of the benefit cap, as the Chair of the Committee highlighted. It states:
“The Chancellor’s decision to increase Universal Credit payments by £20…is very welcome. But some households will not be able to benefit from these increases. This is because, as a result of the uplifts, they will be hit by the benefit cap.”
The Tory party giveth, and the Tory party taketh away, and all the while 4,100 of my constituents who are claimants have lost an average of £57, which was deducted during a global pandemic. That is the difference between queuing at Asda and queueing at a food bank.
I could go on to a litany of despair from Glasgow East; Kirkcaldy and Cowdenbeath; North Ayrshire and Arran; Ayr, Carrick and Cumnock; and Coatbridge, Chryston and Bellshill, in each of which nearly 4,000 constituents have lost, on average, about £52 to £55 over this period. That is less a prayer of supplication—a mea culpa, mea culpa—than a Tory mantra of faithless cold-heartedness that repudiates the worth of our common humanity. In summing up, I, my party and, I believe, Scotland repudiate that false dogma and its baseless Thatcherite foundations.
First, I pay tribute to the Clerks, the staff and fellow members of the Work and Pensions Committee, and to Stephen Timms for the work he did on this report. It was an interesting inquiry to be involved with and, as I am sure he will agree, we heard a wide range of evidence about the Government’s handling of the covid-19 pandemic.
The report recognises the unprecedented and difficult circumstances that our social security system has found itself in. Most of the people who rely on it have found themselves having to do so for the first time as a result of this crisis. We heard stories of people who never expected to have to rely on social security now having absolutely to depend on it. What we also heard about, and what has also been shown, are some of the operational challenges that the Department has faced. However, I have been very heartened by my hon. Friend the Minister’s listening mood and approach to some of these issues.
I want to concentrate my comments today on three things that I pulled out of the report. I certainly do not wish to step on or repeat any of the comments that right hon. and hon. Members have made so far, but for me a number of elements stick out: the operational challenges that the Department has faced during this period; the support for the self-employed and its impact, nowhere more so than in my constituency; and how we ensure that those people who have to go to work during covid get support from the agencies that are meant to ensure that they remain safe.
I first thank the DWP staff, who have been absolutely phenomenal during this period—I am sure we all agree. They have had to step up, with many seconded into roles of which they have had no experience before, and they have got on with it, worked hard and ensured that people who need access to benefits get those benefits and the entitlements they need. We heard stories in the report about how people not only got access to benefits but felt supported by the staff. People felt that they had the support, were being listened to and were being treated as individuals.
In looking at some of the operational notes, one of the things that stuck out was the verification of ID process. We heard that some of the issue with the process was that people sometimes found it complex and complicated. I absolutely support the need for digitisation of our benefits system—that is absolutely right, and we need to ensure that we have a streamlined system, which enables quick processing of people’s applications for benefits—but, certainly in a constituency such as mine, where I represent wards with some of the highest levels of deprivation, the digital divide is real.
Many people do not have access to digital services, whether the internet or IT equipment. However, I have been very impressed by the way in which jobcentres have engaged with people pre and post pandemic. This is a cross-Government project: we have to ensure that we plug the digital divide. I have said that repeatedly, and I will keep on saying it. We have got to ensure that people can access our services, irrespective of where they are, their background or where they come from. I am heartened by the discussions I have had with my hon. Friend the Minister and with other Ministers to ensure that we address the issue. I know that it is recognised.
I now turn to the self-employed. The fact is, as I said at the beginning of my remarks, many people found for the first time that they required support that they never thought they would need. In the report, I welcome the temporary suspension of the minimum income floor—a welcome acknowledgement by the Government of the problems for the self-employed, in particular those who have volatile monthly incomes. I also totally agree with the report on communications and the need to communicate with people about how to navigate the system. Often, self-employed people have found it difficult to know what benefits they are entitled to or to get the best support they need. I therefore welcome the Department’s and the Minister’s openness to ensuring that the self-employed get the support they need.
To touch on the point about the £16,000 saving limit, I know that it is one that my hon. Friend the Minister has recognised. However, we need to be acutely aware that many people put aside savings to pay their tax liabilities or to pay for things that they need. I know that the Department has heard that, and I have been really reassured by the conversations I have had with Ministers, but we must be mindful that people have not always burrowed such money away because they are well off; it is often intended to pay off liabilities, so the cash is not accessible.
Finally, because I am conscious that other colleagues want to get in, I turn to those people who went out to work during the pandemic. Many of my constituents cannot work from home, because they work in manufacturing, in food processing or as key workers. In the evidence from the Health and Safety Executive, we can see clearly that work still needs to be done on that. The TUC, for example, had 1,000 contacts from workers concerned about unsafe working and the HSE itself received about 6,000 concerns regarding social distancing.
Often, those workers who are classed as—I hate this expression—low-skilled had the highest risk and the highest death rates as a result of covid-19. It is important that the HSE is empowered to undertake spot checks and that we take an approach of cross-communication with the HSE, employers and, yes, trade unions to ensure that we have that cross-stakeholder approach to keep our key workers safe so that they can go out to work and so that those people in those jobs can continue to provide those vital services.
To conclude, I commend the Government for the unprecedented effort they have put in—let us not forget that at all. I commend my hon. Friend the Minister for his listening mood. The times have been unprecedented, and he has accepted the challenges and has the openness to solve them. However, ultimately, I cannot commend highly enough the work of the DWP staff and the fact that they have come out to ensure that our most vulnerable are supported.
I congratulate my right hon. Friend Stephen Timms on securing this important debate. This report demonstrates how the coronavirus has exposed the critical shortcomings of our social security system, yet the report highlights issues that we have known about for a long time, such as the five-week wait for universal credit payment and the financial burden on claimants of repaying advance loans. The report also criticised the fact that the £20 increase in universal credit had not carried across to legacy benefits such as jobseeker’s allowance and employment and support allowance. That has resulted in people facing hardship as a result of the Government’s inhumanity. The Government must urgently level up their support.
The Institute for Fiscal Studies recently found that 4 million families face a significant decline in income if the Department for Work and Pensions goes ahead with its plan to scrap the £20 increase. It is deeply worrying that the Government are planning to cut universal credit amid an unprecedented economic crisis. That is especially concerning in Leicester East, as last month, over 5,000 of our residents claimed unemployment benefits—a figure that has more than doubled and has gone up by over 3,000 since the lockdown began in March. This means that our community’s unemployment rate is above the national average. It is also beyond belief that benefit sanctions resumed in July, during an unprecedented period of economic hardship.
The report highlights the impact of the callous “no recourse to public funds” condition during the pandemic, particularly on children. Thousands of UK residents who are undocumented and those who have no recourse to public funds have already been driven into destitution during this crisis. Recent Home Office statistics show that the number of migrants with no recourse to public funds who have applied for destitution funds increased dramatically by 572% in the months spanning the coronavirus crisis. This means that nearly 3,000 migrants facing total hardship could be waiting to hear whether they and their families will be able to avoid severe poverty—and that only includes the limited number of migrants who are aware of the destitution provision. Given the hostile environment for migrants, many do not know that they are eligible for any state support.
The statistics also reveal that it took the Home Office an unacceptable average of 30 days to decide on these life-or-death applications. This process must be considerably sped up, but better still, the concept of no recourse to public funds must be suspended for the duration of the pandemic at least. That would be the more humane approach to adopt. It is appalling that the Home Office does not even record the number of UK residents with no recourse to public funds, despite a recent intervention from the Office for Statistics Regulation, which expressed alarm at the Home Office’s repeated refusal to do so. It is contrary to reason to develop policy without knowing how many people the condition affects. The Government must adopt this most basic of tasks.
The report highlighted the performance of the Health and Safety Executive and its limited capacity to assess covid-secure workplaces. At the time of the report’s publication, the Health and Safety Executive had only shut down one workplace for covid-related reasons. As Members can imagine, this is particularly relevant for my community. One of the main reasons why worker exploitation in Leicester’s garment industry has been able to exist unchecked is that 10 years of austerity have severely downgraded our regulatory institutions. The Government have slashed the Health and Safety Executive’s budget by £100 million, or 46%, since 2010. Rights are meaningless if they are not properly enforced. The Government must therefore urgently reverse the funding cuts to regulatory bodies to ensure the safety and fair pay of those who work, and support our unions, which are championing them so excellently.
This Government’s cruelty over the past decade has transformed the Department for Work and Pensions into a symbol of fear. The coronavirus pandemic has further demonstrated the need for universal welfare support that we will be there to help and support people, not punish or police them. The Government must therefore empower the Department to act now to prevent the further impoverishment of working people and their families during the pandemic.
I congratulate Stephen Timms on securing this debate. I think it fair to say that he is well regarded on both sides of the House for his approach to these issues and for his expertise on them, which was reflected in his opening remarks and in his Committee’s report.
I want to speak in this debate because I think the performance of the Department for Work and Pensions during the pandemic has been one of the unsung successes of this period. It saw an increase in claimant numbers between February and August from 2.9 million to 5.6 million. There are few services that saw that level of increase. A lot of services saw a decrease. Some saw an increase, and obviously the biggest pressure was on the health service, but few saw such an increase in this period, and the fact that 93% of people were paid on time is a huge achievement.
I accept that for those among the 7% those delays are very distressing, although I know from my own constituents that the delays are sometimes caused if the Department does not have all the information it needs. I am not saying that that accounts for all the delays—I am sure there have been some things that have gone wrong for that 7%—but I wonder how many services, public or private, could claim a 93% success rate in the past decade or, indeed, the past two or three decades.
I want to pay tribute to the DWP staff. I was at the jobcentre in Didcot just last week, and their commitment and dedication to ensuring that every jobseeker gets the right support hit me in the face the moment I walked in.
We could make the case for all public servants to be given a pay rise at all times, but of course we have to keep a good control over the expenditure that the Government make on behalf of taxpayers. Considerable support has been given, in one of the most generous packages in the world, through the covid period, and I think that has to be taken into consideration when we talk about a pay rise. And of course some public sector workers are getting a pay rise; in fact, I think the majority still are.
I also want to give credit to the ministerial team and the way in which they have worked flexibly, whether in bringing forward the use of Government Gateway identification by six months or in suspending the conditionality on job-seeking for this period. All those things mattered and played an important role. Some of the criticism that has been made of the DWP involves things that I think are reasonable. For example, I think it reasonable still to require evidence of health conditions if someone wants to claim health-related benefits.
I accept the point about not everyone having the right level of digital literacy, but on the other hand, we wanted a system that was quick and easy to access, and we were keeping everybody inside, and I think that probably affected a small but not insignificant minority of people. Some of the other criticisms are about problems that people have with the system as a whole, such as the benefit cap or no recourse to public funds. I am not saying that those issues have not been exacerbated, but they are broader questions than just about the performance of the DWP during this period. I agree with some of the criticisms, however. The delays to mandatory reconsiderations, for example, are a problem. I have seen this for myself, and we have to sort it out. I know that the Department is committed to doing so, and the faster it can do so, the better.
After the Health and Education Departments, the DWP has had tremendous pressure placed on it, and the reason we have heard a lot less about it is that things have gone so well. That is not the case with everything, but it is a service that has gone a lot better than could have potentially been expected at the outset of this crisis, given the increase in the number of claimants. That is backed up by the statistics. The bottom 10% saw no reduction in the income level that they received, and the Government’s package overall reduced the scale of losses by up to two thirds, in the majority of cases, for working people.
The Department should be commended for this. It has some big things on its plate, like the kickstart programme—which I take a particular interest in, given my previous work with young people—and the new Restart programme. It is right to target those people who have been unemployed for at least a year. I think that what we have seen so far bodes well for how it will deliver these programmes.
I pay tribute to the members of the Work and Pensions Committee and its Chair, Stephen Timms, for the important work they have been carrying out during the coronavirus pandemic. I welcome the recommendations in their report on the DWP’s response to covid.
For many of my constituents, this crisis has been the first time that they have engaged with the benefits system. While it is important to note that, as we have heard, there have been some successes, many of my constituents have been shocked to find out that what they believed to be a safety net has some significant holes. I want to limit my remarks to the issue of those left worse off and one particular constituency case.
One of my constituents, Lara, wrote to me. She is a student mental health nurse, and the previous academic year was the second year of her studies. During the pandemic, like all second-year student nurses, she was offered a fixed-term contract to help the NHS that would run until August. She said:
“It was fantastic to be recognised as having the skills that were needed, and like my classmates, I felt it necessary to take this offer. Should I have declined, I would then have needed to extend my studies by 6 months as in order to register as a nurse, 2300 placement hours must be worked.”
Many students nurses work alongside their studies to top up their nursing bursary, but Lara was unable to do that owing to disability, and, as a result, was eligible for housing benefit and for employment and support allowance, as well as the personal independence payment. She said that this was able to help her have a place of her own, which has vastly improved her health, something of which she feels the benefit daily. When she took on the fixed-term contract, that meant that she was receiving a wage, which meant a temporary pause in her benefits. She told me:
“I had to decide between keeping a benefit I was entitled to, or my education, and I chose my education.”
So she served on the frontline during the first wave of the pandemic, like so many other student nurses—I pay tribute to them all—putting themselves at risk to help protect our NHS.
But when Lara’s fixed-term contract came to an end, she found herself, in her own words, in “an awful situation.” She said:
“It turns out, since I started claiming benefits, the system has changed. Housing benefit no longer exists, neither does the version of ESA I received. I was advised I would now have to apply for Universal Credit, which…isn’t actually available to students.
Living off my nursing bursary, and PIP, means after I pay my rent and bills, I have £8 a week to live off. I either must take a loan, and leave university in debt, or give up my rented flat and move into a box room at my mum’s.
I am honestly so deflated that because I did what I felt was right in helping the country during the pandemic by providing skills I have, that I am now in this situation. It is a kick in the teeth that had I declined the placement, none of my benefits would have been affected.”
How is that fair? Lara showed such dedication in the spring to take the fixed-term contract when she was only halfway through her studies, putting herself at risk to help protect the NHS, and giving up the benefits she was receiving in order to do that.
It was people like Lara we were lining up outside our doors to clap for earlier this year. She and so many like her were making an enormous sacrifice to help keep us safe, and that is something we should be rewarding. What kind of society claps for our carers and then leaves them with barely enough money to survive on, applauds our public sector frontline workers and then hands them a pay freeze, and sees the need for a commitment to help the most vulnerable and disadvantaged around the world, only to withdraw that at a time when the need for support has never been greater?
The Committee’s report has rightly highlighted the failure of the Government to uplift legacy benefits in the same manner as universal credit. I have had a great deal of correspondence from constituents who have been directly impacted by this. In Lara’s case, this is someone on legacy benefits who leaves them and is now ineligible for both legacy benefits and universal credit. I hope that the Minister will engage with me on this particular case. Is there any estimate of how many other student nurses and doctors find themselves in the same position as Lara, having made the same decision earlier this year? We have seen from the Office for Budget Responsibility’s releases yesterday that welfare spending actually makes up a very small proportion of the total covid response. I look forward to the Minister’s response.
I, too, welcome the report, and the speech made today by my right hon. Friend Stephen Timms.
The impact of the covid pandemic has exposed so many of our constituents, who never thought that they would need to apply for benefits, to the Department for Work and Pensions. They have experienced what many have had to put up with for years—politically driven viciousness towards those who, through no fault of their own, need help from the state to keep a roof over their head and food on the table. I do not blame DWP staff, who work hard to support increasing numbers of people in distress, but those staff are having to implement these terrible policies.
There are about 13,000 households on universal credit in my constituency as of last month. That is 50% more compared with the same month a year ago. There are also almost 5,500 households on legacy benefits and tax credits. That is an estimate. I am particularly concerned about people who have no recourse to public funds. We have no local data, but I know there will be many hundreds of such adults and children, given that the national estimate is 1.4 million adults and 175,000 children impacted. With no right to state help, apart from discretionary funds from already overstretched local authorities, there are real concerns about those people.
There is a particular impact on lone-parent families, especially with black, Asian and ethnic minority backgrounds. The Local Government Association has called for NRPF to be suspended, because these are people who, in the main, were working. They had a right to work and a right to live here, but their jobs have gone, particularly in my area, where so many jobs depend on Heathrow. That industry has been hit particularly hard. The Unity Project, which works with NRPF families, reports that 54% of its families assisted had no work during lockdown.
I want to cover a couple of cases and the experience of my case workers. People are using universal credit for the first time and having real trouble navigating what is a complex system, even for those with a high level of IT and literacy skills. The Work and Pensions Committee report mentions the difficulty facing self-employed workers owing to their specific needs. The minimum income floor has been suspended and they are worried that it might be brought back. Many self-employed workers who were excluded, particularly in the creative and arts sectors, have also been denied access to universal credit owing to the savings threshold. Savings are not some sort of indulgence; for many, they are the fund being built up for a deposit, so that they can get on the housing ladder, now that 100% mortgages are something of the deep past.
I want to discuss a case in respect of the benefit cap, which affects so many in my constituency, where rents are between £1,500 and £1,800 a month for a modest flat. Rents are high because we are in west London. The £27,000 benefit cap does not leave much change after the rent is paid, so let me illustrate that by way of the example of a lone parent, recently separated, with three children, one of whom is a tiny baby. Her rent is £1,300 a month. Her partner left her while pregnant and she claimed universal credit. She was awarded £1,731 a month, which meant that, after she had paid the £1,300 in rent, she was left with £431 a month, or £99 a week plus child benefit, for everything for her and her children, including a baby, which of course means additional costs. The two-child limit meant that she was not entitled to any more benefit once her third child arrived. She was left with the same amount to live on.
I am particularly concerned about those subject to sanctions and the reintroduction of the requirement for claimants to phone their DWP advisers or risk sanctions. That particularly impacts on those with learning disabilities or mental health issues. We know that mental health problems have escalated this year. Many need access to IT, but they have been dependent on face-to-face support to help them with their benefit claims and their journal. That support was often given in places such as libraries and other public spaces, but those have been closed for much of the year because of lockdown rules.
In conclusion, I support the Committee’s recommendations. I also oppose any attempt to cut the £20 a week increase for universal credit. I want to see an increase in legacy benefits in line with the £20 uplift to ensure that those on older legacy benefits, such as jobseeker’s allowance, are not missing out. I would have scrapped the benefits cap that penalises private renters, particularly in high-cost areas such as London, and suspended the savings cap. All that would mean money in the pockets of low-income families. That would not only help them: as we know, low-income families are far more likely to spend any additional pound in the local economy and that supports others. It is a win-win.
I, too, want to start by thanking all key workers across the Department for Work and Pensions, including many members of the Public and Commercial Services Union, for their critical role in our covid-19 response, and for supporting millions of people across the UK, including the nearly 15,000 in Luton South who claim universal credit.
The unprecedented public health emergency, coupled with its economic implications, has seen hundreds of thousands of people turn to our social security system for the first time. I think it has been a shock for many people as they have realised how inadequate the support actually is and how hard it is to live on. The Work and Pensions Committee’s report provides an excellent holistic understanding of the severe shortcomings of the system that have been further exposed by the pandemic. Household incomes across the country have been significantly hit, and when many people have turned to the social security system for support they have had to suffer the five-week wait for a universal credit payment, forcing many to take on the extra financial burden of an advanced payment loan. To prevent increasing household debt, the Government should convert that loan into a grant. To get the economy back on its feet, people need money in their pockets, not increased debt.
The rise in the standard allowance for universal credit and working tax credits was a welcome introduction to support the UK’s most hard-up, but it makes no sense that the Government did not extend the increase to legacy benefits, which include critical economic support for disabled people. Analysis by the Social Metrics Commission found that nearly half of people in poverty, 48% or 6.8 million people, live in a family that includes someone who is disabled. More than four in 10 people, 41%, are in a family that includes both a disabled adult and a child and is living in poverty. To tackle rising poverty, legacy benefits need targeted support. As the Motor Neurone Disease Association told the Committee:
“the amount of financial support through Carers Allowance is not enough, especially at a time when now more than ever extra pressure is being placed on unpaid family carers.”
I fully support the Committee’s call for the DWP to ensure legacy benefits receive the same uplift in support as universal credit and working tax credits, but we must also go further. The Government must make the benefit uplift permanent, as the economic impact of the pandemic will continue for the foreseeable future.
The rate of local housing allowance is also insufficient to keep a roof over many people’s heads. Shelter research states that more than four in 10, or 42%, of private renting households now rely on LHA to pay their rent. It was a positive step to increase LHA to cover the lowest 30% of private rents, but it does not solve the problem as it still creates a huge chasm between the benefits many tenants receive and the rent they are contractually obliged to pay. Furthermore, the decision at yesterday’s spending review to maintain the cash value of LHA but not continue to link it to the 30th percentile of local market rents will worsen the situation by leaving LHA rates falling well behind the cost of private rents once again. I support Shelter’s call for a mechanism to be put in place to ensure that LHA continues to cover at least the 30th percentile of local market rents going forward.
Finally, I want to speak about the huge suffering caused by the no recourse to public funds status. I have heard from families who are recently unemployed or who have lost income about their desperate financial situation due to their no recourse to public funds status. As a volunteer at Luton food bank, I met people with no recourse to public funds who are relying on the foodbank to feed themselves and their children as they cannot access sufficient support. Sadly, this heartbreaking situation is not unique. Children’s Society research referenced in the Select Committee report estimates that about 142,000 children under 18 and 1 million adults are in this situation. It is not in the public’s interests to force people, many of whom are key workers and frontline medical staff, to adhere to restrictive public health guidance while also denying them access to the social security safety net. That is truly callous. Many of these families cannot work, as that would risk their loved ones’ health, but they also have no support system to fall back on. They are stranded in mounting household debt, living hand to mouth without any respite on the horizon, so will the Minister explain to the House and those suffering why the Government refuse to suspend the no recourse to public funds rules for DWP benefits?
I will start by congratulating the Select Committee on a superb report, as always, and on the introduction by the Chair of the Committee, my right hon. Friend Stephen Timms. It will not be a surprise that I agree with everything he has said. In the middle of a crisis of this kind, it is very tempting to not welcome rigorous scrutiny and, indeed, challenge of the policies that are brought forward in response to it. However, it is even more important at these times that we hear that kind of scrutiny, which draws particular strength from being cross-party: we have heard contributions from both sides of the House on these important points.
Getting this right makes the difference when it comes to people having food on the table and being able to warm their homes, and being able to have a roof over their heads and communicate with each other—essentials of a basic but decent standard of living. It also means offering people security and dignity at a time of personal crisis, when their worlds are crumbling around them. Getting it wrong means debt, hunger, homelessness, and the fears, stresses and insecurities that can and do trigger mental and physical ill health. It is entirely possible for two things to be true at the same time: that the system has indeed handled, and handled well, a soaring number of claims for benefits, and that too many people are left in desperate need and, in some cases, total destitution. It is true that more money has been spent this year in response to this crisis, but also that the level of need is outstripping it, and it is certainly true that—as we learned yesterday—the temporary nature of so much of that assistance is leaving us with some profound concerns for what happens next.
It is absolutely right, as I think has been said by everybody who has spoken so far, that a debt of thanks is owed to the DWP staff, locally and nationally, supported by the work of voluntary organisations and other public bodies. People have gone above and beyond what is required of them, as they did during the financial crisis 10 years ago, when the system also rose splendidly to the challenge it was put under. As always, we owe our thanks to those dedicated staff.
It is no reflection on the work of the Department’s public servants to say that the effectiveness of the policy response itself has been more mixed. In part, that is because of the austerity policies pursued by the Conservative Government since 2010, which left the benefits system woefully unprepared for the impact of this crisis. Ministers like to boast about the £9 billion they have allocated to social security in response to the pandemic, but the Office for Budget Responsibility has confirmed that £9 billion is the amount taken out of social security by the Government in the 2015 Budget alone. The long history of failing to uprate benefits—the benefit freeze that we had for so many years—meant that between 2010 and the onset of the pandemic, the value of the main income replacement benefits—JSA, ESA, income support and universal credit—fell by 9% in real terms. We cannot ignore that this is the context of what we are now dealing with.
That is why it is also so concerning that we are hearing about measures that have been adopted since the start of this crisis being temporary. Several hon. Friends have made reference to the £20 uplift for universal credit. It is absolutely essential that the Government lift the threat that is hanging over millions of people who are reliant on a low income, and ensure that this uplift is made permanent. It is also essential, as my hon. Friend Rachel Hopkins in particular referred to, that the Government continue to increase the support available for people who have a housing need and are reliant on local housing allowance, which has also drifted further and further away from meeting real housing costs. The Government cannot ignore the relationship between that failure to meet genuine housing costs in many parts of the country and homelessness, which has soared over recent years. The local housing allowance must be related to real rents in the real world, in all parts of the country. We only just came out of a period of freeze of local housing allowance, and now we are told that we are going back into it.
In short, the social security system has been falling further and further away from living costs as a matter of Government policy for a long time. The increases in funding that we have seen this year are no more than a partial reversal of policy. As the Committee has stressed, the Government have taken a completely different approach to universal credit and working tax credit on the one hand, and to other legacy benefits on the other—a point also made by several hon. Friends—with the latter receiving only a 1.7% uprating after years of real-terms cuts. This affects 1.8 million people on ESA, nearly 300,000 people on income support, nearly a quarter of a million people on JSA, and more than 1 million working families receiving child tax credit but not working tax credit. On present trends, next year they can look forward to a 37p a week uplift in their benefits.
The Committee rightly condemned this unjustified disparity in the treatment of people in similar circumstances depending on whether or not they are receiving the Government’s flagship benefit. To argue, as Ministers have done, that this disparity is due to the greater flexibility of universal credit is particularly galling, as the Government are simultaneously pleading the inflexibility of universal credit as an excuse for not addressing the issue of advance repayments and the five-week wait. I can only echo the words of the Committee:
“We were astonished to hear that the Universal Credit system has been built in a way that makes it all but impossible for repayments of Advances to be suspended in a crisis situation.”
The Government’s response has been undermined by a failure to join up policy across Government. The pandemic has meant that the Department for Work and Pensions now plays an essential role in supporting public health policy, which is—or should be—a major shift in the Department’s priorities. If people are to comply with Government rules on social distancing and self-isolation, we need to ensure that they are able to do so and that the DWP is up to this task. That is why we have consistently called for the suspension of the no recourse to public funds rules for DWP benefits for the duration of this pandemic—a point that was stressed by my hon. Friends the Members for Leicester East (Claudia Webbe) and for Brentford and Isleworth (Ruth Cadbury).
The DWP has proved its operational ability to deal with unprecedented demands, but that effort has been severely hampered by the impact of austerity over many years, by the inflexibility of universal credit and by a failure to co-ordinate policy across Government Departments. Above all, the Government must ensure that the measures that have been taken over recent months in response to this crisis are not ended next April, and that they give security to millions of people who are looking to them.
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, 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
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
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.
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.
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.