Asked by
To ask Her Majesty’s Government what assessment they have made of
the impact of the benefit cap on the incomes of Universal Credit
claimants following the increase in the Universal Credit standard
allowance announced by the Chancellor of the Exchequer on 20
March.
The Question was considered in a Virtual Proceeding via video
call.
The Parliamentary Under-Secretary of State, Department for Work
and Pensions () (Con)
My Lords, we monitor the impact of the benefit cap policy and
publish these findings every three months. The latest available
statistics were published last week, on 7 May, and reflect the
position as at February this year. The next publication,
scheduled for 6 August, will reflect the current position and the
impact of the increases awarded from April of this year.
(Lab)
My Lords, welcome as the increase is, many thousands will not
benefit because of the cap, which is already causing real
hardship and unfairness, as demonstrated by the Work and Pensions
Committee, yet it is not realistic or safe at present to expect
people to seek work or reduce housing costs to avoid it. Will the
Government now listen to anti-poverty and faith groups, the IFS
and others, and urgently fulfil their statutory duty to review
the cap and suspend it, or, if operationally easier, raise it
significantly?
I must be very clear that it is not the Government’s intention to
change the current level of the benefit cap. What I want to point
out is that claimants may benefit from a nine-month grace period,
where their universal credit will not be capped, if they have a
sustained work record. Exemptions will also continue to apply for
the most vulnerable claimants who are entitled to disability
benefits and carer benefits. I finish my answer by saying that
the Government have quickly and effectively introduced £7
billion-worth of measures that benefit those facing the most
severe financial disruption.
(Con)
Many people who have recently found themselves made redundant as
a result of the Covid-19 crisis will be struggling on universal
credit. Some of these people will have decided to isolate with
vulnerable loved ones to provide them with the care that they
need to be protected from the disease. This can lead to added
expense. Will the Government consider removing the benefit cap
for such people?
Claimants who receive certain benefits for caring or for a severe
disability or health condition will not have their benefits
capped. This ensures that the most vulnerable people are
protected. Universal credit households are exempt from the cap if
the household earnings are at least £604 each month. Households
may also be exempt for a period of nine months, if they have a
sustained work history.
(CB)
My Lords, advances for universal credit claimants have to be
repaid when claimants finally receive their benefits—after at
least five weeks, and often very much longer than that. But their
benefits will be well below subsistence level, due in part to the
benefits cap, but also to the two-child limit, and to very tough
rent and council tax rules. Could any Minister maintain their
mental health in these circumstances? I absolutely could not—and
I mean that. Will the Minister plead with her colleagues for
urgent further changes—I understand that some have been made—to
protect the mental health of universal credit claimants?
The noble Baroness makes an excellent point: these are very
difficult times. People are struggling in all sorts of ways, and
we are mindful of the impact of mental health issues. I am afraid
that I am unable to make any commitments around the points that
the noble Baroness made, but I will say that, in these very
difficult times, nobody has to wait five weeks. Since 16 March,
we have issued 700,000 advances, and the majority have received
their money within 72 hours.
(Lab)
My Lords, can I bring the Minister back to the point made by my
noble friend Lady Lister? The Government’s argument for the
benefit cap was that you can always escape it by just going and
getting a job or moving to a cheaper house. But that is simply
not possible at the moment. The Minister says that the Government
are not going to lift the cap. Given the demand from the IFS and
over 50 organisations, and given the Commons Library estimates
that an extra 18,000 families are being drawn into the benefit
cap as a result of the Government’s actions, can she tell the
House not merely that they will not do it but why they will not
do it?
I draw the noble Baroness’s attention to the fact that, in a
repeated Oral Statement and at Oral Questions, the Secretary of
State was absolutely clear that this benefit will not be changed.
I agree with her that things are very difficult at the moment.
That is why we have tried to be as flexible as we can by
introducing this £7 billion package which gets to the people who
are in the most difficult group, removing the minimum income
floor, increasing UC, pausing deductions for historic debts,
introducing statutory sick pay from day one and increasing
working tax credits from over £1,000 to £3,000. I cannot give her
any other answer than that, but I can make a commitment to take
her question back to the department and again ask what she and
others would like me to ask.
(LD)
Is the Minister aware that 85% of those who have had benefits
capped are single parents, many of whom have lost jobs through
the current crisis? To ease the severe hardship these families
are suffering, will the Government at least consider suspending
the benefits cap pending a future review?
The benefit cap is reviewed once in every Parliament. The
Secretary of State will do this, although I cannot tell noble
Lords when. Until that happens, I am not aware of any intention
or plan by the Government to remove the cap.
I thank the noble Baroness for again highlighting how the benefit
cap is trapping families in poverty. In light of the report
published last week by the Church of England and CPAG which
estimates that around 60,000 more families will be affected by
the two-child limit due to Covid-19, what assessment have Her
Majesty’s Government made of the impact of this limit on families
who have made a new universal credit claim since the lockdown?
I will need to go back to the department and ask whether an
assessment has been made. I am mindful of the recent Child
Poverty Action Group report and was grateful to receive an
advance copy. My officials are carefully considering this, and I
hope to be able to write to the Child Poverty Action Group and
the Church of England this week to cover the point that the right
reverend Prelate just made.
(Con)
My Lords, I point out that, as far as I am aware, Labour is not
committed to ending the benefit cap; let us start by saying that.
It seems that we can never do enough, but would the Minister
agree to look very carefully at the situation as it unfolds and
confirm that, where we can make minor adjustments, we will? But
we have to realise that there is a limit to the amount of money
we can spend.
My noble friend makes a very valid point. These days are very
difficult and the situation is fast-changing. We are reviewing
and considering things on a daily basis. There is nothing at all
in our plan that aims to make life worse for people; in fact, it
is quite the opposite. When noble Lords look at what we have
done, we have moved quickly and effectively to try to bring
additional resource and support into the system.
(CB)
My Lords, one of the drivers of food bank usage identified by
Feeding Britain—I declare an interest—is the monthly sums
deducted from universal credit to repay advance payments. The
Chancellor’s plans to lower the rate of deductions and extend the
repayment period are not due to take effect for another 18
months. Would the department not consider bringing them forward
immediately for existing claimants and replacing advance payments
with targeted grants for all new claimants from now on?
I advise all noble Lords that there is no plan to convert
advances to grants. I must be clear about that, although I know
that it is not what people want to hear. However, I will take the
point back to the department and see whether there is any
movement, and I will give a written response to the noble
Baroness.
(Lab)
Given that, because of Covid, we are in all likelihood entering a
period of much higher unemployment when it will be more difficult
for people to get a job, does the Minister agree that there is a
case for a review of universal credit and suspending the benefit
cap until such a review has taken place?
I think that I have answered the questions about the benefit cap
and reviewing benefits quite adequately during the course of the
Question. I agree that these are very challenging times. We have
launched a job help website and an employer help website. We will
turn every stone to ensure that we help people back to work as
quickly as possible.
