Social Security Benefits Up-rating Order 2022
Considered in Grand Committee
4.15pm
Moved by
That the Grand Committee do consider the Social Security Benefits
Up-rating Order 2022.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth
and Development Office and Department for Work and Pensions
() (Con)
My Lords, I am required to confirm that the draft Social Security
Benefits Up-rating Order 2022 and the draft Guaranteed Minimum
Pensions Increase Order 2022 are compatible with the European
Convention on Human Rights and I am happy so to do.
The Social Security Benefits Up-rating Order increases state
pensions and benefits by 3.1% from April 2022, in line with the
increase in the consumer prices index in the year to September
2021. This represents an additional £4 billion of expenditure on
benefits for pensioners and £2.6 billion on benefits for people
below state pension age in 2022-23. In November 2021, Parliament
passed the Social Security (Up-rating of Benefits) Act, which
made amendments to the Social Security Administration Act 1992,
setting aside the earnings link in the state pension triple lock
for the year 2022-23. This was in response to exceptional
circumstances caused by the distorting effects of the pandemic on
the earnings statistics used in the triple lock formula. Setting
aside the earnings element is temporary, only for one year. We
are committed to reapplying the triple lock in the usual way from
next year and for the remainder of the Parliament.
From April 2022, the basic state pension will rise to £141.85 a
week for a single person. This means that the basic state pension
will be over £2,300 per year higher in cash terms than in April
2010. The full rate of the new state pension will increase to
£185.15 a week and additional state pensions and protected
payments in the new state pension will also increase by 3.1%. The
pension credit standard minimum guarantee for a single pensioner
will rise to £182.60 a week and the rate for a couple will rise
to £278.70 a week. The personal and standard allowances in
jobseeker’s allowance, employment and support allowance, income
support and universal credit will increase by 3.1%. Certain
elements linked to tax credits and child benefit will be
increased in line with those payments. The monthly amounts of
universal credit work allowances will also increase in April to
£344 and £573.
Benefits for unpaid carers and those who have additional costs as
a result of a disability or health condition will increase by
3.1%. These benefits include disability living allowance;
attendance allowance; carer’s allowance; incapacity benefit;
personal independence payment; the carer and disability-related
amounts in pension credit and other means-tested benefits; the
employment and support allowance support group component; and the
limited capability for work and work-related activity element of
universal credit.
I am aware that the noble Lord, , has tabled a
regret Motion against the uprating order and I respect his
position on the matter. The regret Motion will be debated at a
later date, but today we must agree the uprating order to ensure
that my department can introduce the new rates of benefits and
pensions from 11 April.
The Guaranteed Minimum Pensions Increase Order provides a degree
of inflation protection for members of formerly contracted-out
defined benefit occupational pension schemes. It requires schemes
to increase guaranteed minimum pensions built up from April 1988
to April 1997. As set out in primary legislation, a guaranteed
minimum pension in payment must be increased in line with the
increase in the general level of prices as at September 2021,
which was 3.1%, or 3%, whichever is less.
To conclude, with the Social Security Benefits Up-rating Order,
the Government propose to spend an extra £6.6 million in 2022-23
on increasing benefit and pension rates. Furthermore, the
Guaranteed Minimum Pensions Increase Order increases the
guaranteed minimum pension by 3% in line with primary
legislation. I beg to move.
(Lab)
My Lords, it was tempting to do no more than recite the
contributions from the Conservative MPs who spoke on the social
security order in the Commons, as they said much of what needs
saying about this shamefully low increase in social security
benefits in the face of forecast inflation of 6% to 7.25% this
April, which will go even higher later this year following the
horrifying assault on Ukraine. It does not take a mathematician
to work out how a 3.1% increase will mean a significant cut in
benefits’ real value, without even taking account of the
differential impact of inflation on people on low incomes, who
spend a disproportionate amount of their income on the basics of
fuel and food.
The Government’s answer to the cost-of-living crisis has been
widely criticised as inadequate and poorly targeted towards those
who will suffer most, including by the Conservative MP in the Commons debate on the
order. A huge increase in fuel poverty is now predicted, despite
the measures taken. Why have the Government ignored the calls
from a wide range of organisations, including the Institute for
Fiscal Studies, the Resolution Foundation, Citizens Advice and
the Joseph Rowntree Foundation, to raise benefits by 6%, 7% or
even 8% in line with the anticipated inflation rate? At the
relaunch of the book by the noble Lord, , of the DWP said that it would
be technically feasible to do so for universal credit. Even if it
is not possible to do this for other benefits immediately,
recipients could presumably be given a delayed uprating or a lump
sum grant in lieu.
Had the Government listened to us in the autumn when we debated
the triple lock Bill, this would of course have been less of an
issue, though at that point we had not anticipated inflation
going quite so high. It is clear that the current uprating
mechanism, based on inflation around half a year earlier, is not
fit for purpose, as the Resolution Foundation, the IFS and , in the Commons debate, have
argued. Will the Minister undertake to take back the message that
there needs to be a review of the uprating procedure?
To return to the immediate crisis, in order to understand just
how damaging this uprating will be, we need to put it into
context, as the noble Lord, , made clear in the debates on
the triple lock Bill. It is a context in which benefits have been
cut or frozen for much of the period since 2010. Families with
children have been particularly badly hit, thanks to the
two-child limit and benefit cap, described by the noble Lord as
“excrescences” that should be got rid of. It is worth noting here
that, according to the Child Poverty Action Group, of which I am
honorary president, 180,000 families will see no benefit increase
next month because of the cap, which has not been uprated at all
since it was set in 2016.
Moreover, the withdrawal of the welcome £20 uplift means that the
Government will have been responsible for two cuts in the real
value of benefits in under six months, as pointed out by the JRF.
It estimates that 400,000 people could be pulled into poverty by
the April cut. However, the underlying issue is the inadequacy of
benefits to meet people’s needs. I quote the Tory MP, Nigel
Mills, who is a member of the Work and Pensions Committee:
“I genuinely fear that many of the benefits we have are now lower
than people need, so a lower than inflation rise for benefits
that are already too low leaves people in an impossible position
… It should not be a big challenge or a contentious point of
debate to want to ensure that the benefits we are giving the
poorest in society are enough for them to live on”.—[Official
Report, Commons, 7/2/22; cols. 723-24.]
There is plenty of research that shows that all too often they
are not. It was a recurrent theme in the Covid Realities
research, conducted by a number of universities in association
with the CPAG. It underlined that inadequate benefits contribute
to the insecurity that many people living on benefits feel. One
participant, when asked how she felt about the withdrawal of the
£20, answered that she was “terrified”. She explained:
“We only started to claim universal credit in the middle of the
pandemic due to my husband being made redundant, so up until
recently I had no idea we were in receipt of any ‘uplift’ … To be
told that now all of a sudden £86 per month will be taken is
horrifying.”
Another participant commented:
“I’d like people to think about why it was necessary to introduce
a £20 uplift … Surely this is an acknowledgement in itself that
the support given to low-income households just isn’t enough for
them to live on.”
Evidence about the inadequacy of the benefits received by
disabled people can be found in the NatCen report on the uses of
health and disability benefits that the DWP tried to suppress but
which was eventually published in an unprecedented move by an
exasperated Work and Pensions Committee, although a whistleblower
revealed that some references to “unmet need” had already been
excised following pressure from the department. While overall the
ability to meet needs depended on the extent to which recipients
had other sources of income, those of limited financial resources
reported often not being able to meet not only health-related
needs but also essential day-to-day living needs such as heating
their house or buying food.
The Minister in the Commons, , disputed such a reading of the
research, arguing that it showed that
“health and disability benefits … help to meet almost all
identified areas of additional need.”—[Official Report, Commons,
7/2/22; col. 666.]
But helping to meet needs is not the same as being sufficient to
meet them. The health and disability Green Paper made no mention
of the question of benefits adequacy. As Minister with
responsibility for research in the DWP, will the noble Baroness
give us an assurance that the White Paper will do so, taking
account of this research which was commissioned by the DWP? Will
she take back the message that we need a proper review of the
adequacy of social security benefits more generally?
In conclusion, the Minister in the Commons tried to reassure MPs
that there was nothing to worry about because of the smoothing
effect, which meant that this April’s inflation rate would be
reflected in next year’s uprating. However, Torsten Bell of the
Resolution Foundation dubbed it more of a “rollercoaster” on
yesterday’s “Today” programme—anything but smooth. The Minister
demonstrated his complete lack of understanding of what it is
like to struggle on a low income. If you are already facing
difficulties feeding your children adequately and keeping your
home warm, it is no help or comfort to know that today’s
rocketing inflation rate will be smoothed out in benefit rates in
a year’s time. Indeed, some of those affected might not even be
claiming some of those benefits in a year’s time, so they will,
in effect, have been cheated of what is arguably rightfully
theirs. I urge the Minister not to use the smoothing argument in
her response because, frankly, it is cruel when parents and
others on benefits are worried sick about how they are going to
manage and she is not a cruel woman.
(Lab)
My Lords, it is good to follow an informed speech. The
uninitiated may find, as I do, these many details in so many
pages difficult to follow. One finds on page 34 of the order, in
Schedule 5, that Regulation 20(9)(c) refers to an enhanced
disability premium of £25.35 concerning polygamous marriage. My
reference is not an objection but an instance of facts buried in
the necessary but challenging minutiae. But it is heartening to
read of increases, for example, in adoption, maternity,
bereavement and disability benefits. The late Lord
McKenzie—Bill—is surely watching over this Committee. All this
was made for the late, lamented Bill. He always mastered
regulatory detail.
4.30pm
I hope that that wretched, bullying, cruel Kremlin gangster does
not launch true cyberwarfare, which might immobilise the great
department that the Minister represents, because that department
delivers these vital benefit payments. They are so welcome, so
necessary and so important to personal well-being for tens of
thousands—perhaps many millions—of people. Millions of our
hard-pressed fellow citizens are in need of these benefits. Soon
they will be engulfed in a great wave of price increases: the
supermarket food, the gas and electric heating bill, the diesel
motor tank to fill. In this respect, for example, I paraphrase
Charles Dickens’s iconic Oliver: Minister, I want some more.
I refer to the levelling-up document and the Prime Minister’s
foreword—sincerely meant, I am sure. He says that we are
“one of the most unbalanced”
economies. He goes on to say:
“I am determined to break that link between geography and
destiny, so that it makes good business sense for the private
sector to invest in areas that have for too long felt left
behind.”
On the next page, there is a foreword by the Secretary of State,
Mr Gove. He says:
“There are stark geographical inequalities between and within our
cities, towns and villages. For every local success, there is a
story of scarring and stagnation elsewhere.”
I thank the Minister for her introduction. Professionally,
outside your Lordships’ House, she was always for those in need
of help, and is always sincere at the Dispatch Box; that goes
without saying. I also acknowledge my noble friend who leads for
us, from whom one always learns, and her expertise and
commitment. My regret is that this debate is not on the Floor of
your Lordships’ Chamber, where it should be, given the supreme
importance of these benefits to so many people who are hard
pressed.
It is noticeable that in Part 1, the introduction, some
provisions are extended to England and Wales only; Scotland is
excepted. In the helpful Explanatory Memorandum, at paragraph
6.11, we are told of benefit payments devolved to the Scottish
Parliament, although they are the same benefits. Inevitably, one
asks—as I do, concerning my homeland, the lovely land of
Wales—why not devolve to Wales also? There is a very able and
competent Government in Cardiff. Did the excellent Welsh
Government ask or did they presume that the challenge of a new
executive agency infrastructure was not for this time—or did Her
Majesty’s Government refuse a Welsh request? It is an excellent
Welsh Government and I would be grateful, whether this is by
letter or in response, for the Minister’s insight: to devolve or
not to devolve? Always now, when governance is the issue, the
question, the issue, the very matter—the future of devolved
government—crops up, as it has in the memorandum’s reasoned,
informative page 5.
This debate is about benefits and pensions, but devolution de
facto is in the order’s spirit, as it is in its pagination. The
crisis of Covid-19 stretched British governance to the limit. It
was clear that there were unforeseen consequences of devolution.
That stared Her Majesty’s Government, the Prime Minister and the
Cabinet in the face frequently. It came from several First
Ministers—and, indeed, paragraphs 6.11 and 6.12 of the
Explanatory Memorandum refer to the Scotland Act. It was clear
during Covid-19 that the First Ministers took different views
from the Prime Minister’s. What are the assessments by the
Minister’s department as to future consequences to the task of
distributing and assessing benefits? The Minister might give a
reply by letter, if not in the debate.
To conclude, soon a great wave of price increases across the
board will engulf the most vulnerable of our fellow citizens.
Already inflation stalks the land—and I refer to those of our
fellow citizens who are not “just getting by”. We had those noble
and thoughtful words from Prime Minister Mrs May outside No. 10,
at her lectern, on being elected. She said that she was concerned
for those just getting by. I am asking the question also for
those who are not getting by—and millions of our fellow citizens
now are not getting by. The Minister can be proud that her
department is offering help, and more help, but the predicament
for so many is massive and the challenge thundering up is even
bigger. It is going to happen and it is not necessarily the fault
of a given Government. It is going to happen and so I say, like
the iconic Oliver: I would like some more. Are these welcome
increases to benefits enough? I think that there is an important
answer to give.
(LD)
My Lords, I thank the Minister for introducing this uprating
order. The problem is that the combination of rising inflation
and tax rises is creating a cost-of-living crisis that will
affect practically every household in the UK but will be
especially difficult for those on low incomes who make use of
welfare payments.
Before the crisis in Ukraine, the Resolution Foundation reported
that an average family will see household budgets reduced by
£1,200 a year through a combination of soaring energy prices, the
freezing of the income tax personal allowance and the rises in
national insurance and council tax. Those on low incomes will
find it hardest to make ends meet, because the major benefits are
due to go up in line with a lagged measure of inflation. The
September CPI rate had it at 3.1%, whereas the Bank of England
expects inflation to peak at 7.25% in April and to average around
6.2% in the course of 2022—and all that is before the impact of
the crisis in Ukraine is taken into account. Many commentators
are forecasting an inflation rate for the UK of more than 10%
later this year.
The Government really must not allow a situation to develop that
means a deep cut in benefits year on year for people less able to
withstand the impact of the rising cost of living. For example,
those who must use meters to pay for their gas and electricity
will be put under even greater financial strain because of their
high cost compared with other methods of payment.
Even before the impact of the Ukraine crisis on the cost of
living, this policy would have led to a £290 real fall in benefit
income year on year for the 10 million households in receipt of
these benefits. That would be an unacceptable cut in the incomes
of millions of people who are already among the most vulnerable.
The Spring Statement later this month provides an opportunity for
the Chancellor to do something about this crisis, which was
unnecessarily deepened by the removal of the £20 per week boost
to universal credit.
Paragraph 12.1 of the Explanatory Memorandum on impact is
hopelessly out of date. The assertion that the
“impact on business, charities or voluntary bodies is
negligible”
is flawed. The impact will be very great, particularly on
charities and voluntary bodies, which will see a huge increase in
demand for their help as prices rise steeply and real incomes
decline for millions of households.
I hope that the Minister will agree that this uprating order is
out of date and that the Spring Statement needs to bring proper
solutions to the deepening crisis in our cost of living and its
impact on those with low incomes.
(Lab)
My Lords, I thank the Minister for introducing these orders and
all noble Lords who have spoken. I agree with my noble friend
that it would have been
preferable had the uprating order been taken in the Chamber. Many
of the orders that we deal with are technical; this one affects
the incomes of some 20 million people at a time when we have
never seen a cost-of-living crisis like this. Had it been taken
in the Chamber, we perhaps would not have had a regret Motion,
but here we are.
I thank my noble friend for mentioning my late and much-lamented
noble friend Lord McKenzie. Every time we gather here, we miss
him very much. I just wanted to read his name into the
record.
First, a word on the guaranteed minimum pensions order, which is
rather more technical. I have raised the question of equalisation
in most previous years, but we have had a new development. A new
Private Member’s Bill has just arrived in the Lords from the
other place that aims to address the legal uncertainty that the
current legislative situation can pose when a pension scheme
tries to adopt a process for addressing GMP equalisation. The
Government smiled on it at the other end. At Second Reading in
the Commons, the Pensions Minister, , accepted that what the Bill does is key because
it
“gives the Government the ability to set out in regulations the
details of how survivor benefits will work for surviving spouses
or civil partners of people with guaranteed minimum
pensions.”
He also made the point that the Bill
“gives the Government the ability to set out in regulations
details about who must consent to the conversion of guaranteed
minimum benefits.”—[Official Report, Commons, 26/11/21; col.
627.]
The Minister confirmed, at col. 628, that the Government backed
the Bill. However, when the Commons got to Third Reading on 25
February—a long gap—he said:
“The reality is that there is no real way for my hon. Friend’s
Bill to get through this House and the House of Lords in the time
allowed”.—[Official Report, Commons, 25/2/22; col. 659.]
The Government have accepted that there are problems to be
addressed on the matter of GMP equalisation, so can the Minister
assure the Committee that if that Private Member’s Bill fails to
get through, the Government will none the less speedily moved to
address the outstanding issues?
I turn to the Social Security Benefits Up-rating Order, which we
gather to debate every year, except of course during the years of
shame, when the Government refused to update social security
benefits as they should have done. I cannot remember a year when
the context was so worrying for so many people. The cost of
living is rising so fast that even those on middle incomes are
struggling and it is a catastrophe for those on lower incomes.
People are genuinely frightened about how they are going to
manage. Demand for help from food banks is already skyrocketing,
as it is for financial advice and debt support. The noble Lord,
, made a good point that the
Explanatory Memorandum had not taken account of the impact on
those organisations.
4.45pm
On 25 November, the Secretary of State announced her decision to
raise pensions and most benefits by prices—3.1%, as the CPI
12-month rate was in September—but that inflation was already out
of date as she made the statement. CPI had hit 4.2% in October.
By January it was 5.5%. A year earlier, it was 0.7%. As noble
Lords have said, the Bank of England’s latest Monetary Policy
Report suggests that it will hit 7.25% in April, but that was
before the war in Ukraine, so goodness knows how high it will go.
We have not seen a cost of living rise of this scale for more
than 30 years. As a result, pensions and benefits will be uprated
by less than half the rate of inflation.
My noble friend Lady Lister is quite right that it is worse again
for poor families, who spend more of their income on basics such
as food and fuel. During the debate on the Social Security
(Up-rating of Benefits) Bill, the Minister said that
“we are not currently expecting widespread, significant and
sustained increases in consumer food prices in the coming
months.”—[Official Report, 26/10/21; col. 740.]
Does the Minister still think that? Grocery prices rose in
February at their fastest rate for more than eight years, and
market analysts predict that that is not going to get better any
time soon. In three weeks’ time, the energy price cap rises to
almost £2,000, and it will go further. Consumers have this week
been quoted £3,500 a year to fix their tariff. That is £67 a
week. A single person’s JSA is only £74 a week. How are people
supposed to manage?
Noble Lords have commented on the lag between the release of the
inflation data used as a reference point and the uprating taking
effect. As my noble friend Lady Lister mentioned, Ministers tend
to argue that it all comes out in the wash because if inflation
were, say, 6% next September, benefits would go up by that much
in April even if inflation had come down again, but she is quite
right that when inflation is this high, people on benefits cannot
afford to wait a year. They simply do not have that kind of money
lying around to subsidise them in the meantime. What if inflation
were to come down in September, or just happened to dip at that
point? People would then have had a whole year of spiralling
prices while their benefits lost value.
The other argument that is made is that it is technically
impossible to use inflation data from later than the previous
September because it takes a long time to programme the
computers. I would love to hear the answer to the universal
credit question. We are always told how flexible, dynamic and
instantly responsive universal credit is, so surely it can spring
into action and change things at a moment’s notice. We were told
during the passage of the Social Security (Up-rating of Benefits)
Bill that there was a hard deadline on that Bill because the
computer had to be changed. I twice asked what would happen if
the computers were changed and subsequently one or other House
were to reject an uprating order. I did not get an answer, so I
shall try again. First, can the Minister tell the Committee
whether the computers that set the levels of benefits covered by
these orders have already been adjusted to reflect the price
increases contained in them? If so, what happens if either House
were to reject the order? Secondly, would it be technically
possible for the Secretary of State, if she chose, to raise any
of these benefits by an amount greater than 3.1%?
In responding, the Minister may tell us of the various steps the
Government have taken, but the truth is that they do not come
close to addressing the scale of our cost of living crisis. The
energy scheme they have produced actually means that customers
will face higher bills for the next four years, and the council
tax rebate will be welcomed by those who get it, but it is based
on an unfair and out-of-date system and it goes only to those who
pay their council tax bills directly, and those who do, but do
not pay by direct debit, will have to make a claim for it. I
thought that the chief executive of Citizens Advice put it very
well. She said:
“Energy rebates are a buy now pay later solution which only
provide temporary relief later this year. And linking financial
assistance to Council Tax will result in a complicated lottery
that means support is not targeted at people who really need
it”—
quite.
The context of this uprating is a decade of terrible cuts.
Remember that in 2011 uprating switched from RPI to CPI, which
switched billions of pounds from the poor to the Treasury. In
2013-15, uprating was capped at 1% and most working-age benefits
were frozen in cash terms for the next four years. The result of
that is that between April 2010 and April 2021 the value of JSA
and ESA fell by 8% and that of child benefit by 16%. It is
astonishing that in real terms the value of the basic
unemployment benefit is now 10% less than it was in 1965. This
matters because the choices the Government made have left
families today in a very weak position to deal with the kind of
rapidly rising inflation we are now facing because we came into
this crisis with child and pensioner poverty rising and many
families already in fuel stress. This cost of living crisis did
not start last autumn; it has been building for years.
My noble friend Lady Lister mentioned the bedroom tax, the
two-child limit and the benefit cap, all of which hit people’s
living standards in unpredictable ways. The rationale for the
benefit cap was meant to be to limit benefits to the same amount
as the average income of working families. That was always
dubious but, if we take it at face value, can the Minister
explain why that value has been frozen at its cash level since
2016? If it is meant to be set at the level of the average
working family, why is it at the 2016 level?
Finally, pensioners were also badly let down by this Government,
when they broke their manifesto promise by suspending the triple
lock and severing the earnings link. Almost one-fifth of
pensioners are living in poverty, more than a million are missing
out on pension credit, there are unacceptable delays in
reimbursing pensioners who were underpaid, and I keep hearing
more and more cases of newly retired pensioners waiting months to
get their state pension.
The Opposition will not oppose this order, of course, but the
Government are offering no solution to the severity of our cost
of living crisis. Many people are now desperate; I hope the
Minister will tell us what more the Government will do to help
them.
(Con)
My Lords, I start with an apology. In my opening comments, I said
the Government propose to spend an extra £6.6 million in the
uprating order; it is actually £6.6 billion. Forgive me.
I thank all noble Lords who took part in today’s debate. I am not
a bit surprised by the points that have been raised and
completely agree with all noble Lords that we are in a difficult
position. People are struggling and it is not nice to see.
The noble Baroness, Lady Lister, gave me my homework to take back
to the department. I give her my word that I will take back every
issue and make sure that people understand the sense of injustice
that the noble Baroness and others feel. She and other noble
Lords mentioned the cost of living. We have begun our recovery
from the pandemic, but things have been exacerbated by the
ongoing conflict in Ukraine, which is putting an additional
strain on households. We are coming out of the pandemic and
trying to work on that but have been further hammered by that
position.
We have taken steps to ease financial pressures. The noble
Baronesses, and the noble Lords, and , will tell me that we have not
done enough, but we have not done nothing. We have raised the
national living wage, reduced the universal credit taper rate,
increased work allowances and provided £140 million a year in
discretionary housing payments and cold weather payments of £25 a
week to up to 4 million people. These will have made a
difference, but there is clearly more to do in the current
situation.
The noble Baroness, Lady Lister, raised the point about the
justification for using the September CPI figure. The Secretary
of State undertakes an annual review of benefits and pensions,
and the consumer prices index for the year to September is the
latest figure the Secretary of State can use to allow sufficient
time for the required legislative and operational changes before
new rates can be introduced at the start of the next financial
year. All benefit uprating since April 1987 has been based on the
increase in the relevant price inflation index in the 12 months
to the previous September.
As noble Lords have already said, uprating affects over 20
million customers and there are interdependencies across
government. The DWP needs all benefit rates to be confirmed by
the end of November, plus all the subcomponents of those
benefits, so that the first IT system can be uprated in December.
Any deviation will have significant implications for citizens,
potentially resulting in underpayments or no payments being made.
Given the volumes involved, the technical and legislative
requirements and the interdependencies across government, it is
not possible to undertake the uprating exercise any later than
currently timetabled.
(Lab)
If that is the case, how come it was possible to add £20 to
universal credit at such short notice? If such a long lead-in
time is needed, and I recognise that a longer time is needed for
legacy benefits—but not necessarily that long—how come it was
possible to uprate universal credit by £20 in a matter of weeks
during the pandemic? As I said, according to Mr Couling of the
DWP, universal credit can be uprated at very short notice. As my
noble friend said, that is supposed to be part of its agility.
There is growing pressure on the department to look again. I
quite understand that it has been like this for X number of
years, but we now have more powerful computers and so forth. I
really think that the DWP should look at it and see what might be
possible, because we may well be going into a longer period of
volatile inflation.
(Con)
I think that the noble Baroness appreciates that the UC system is
more modern and able to do things, but her point about the £20
uplift is already on my list to take back to the department. I
will write to the noble Baroness and place a copy of the response
in the Library.
The noble Baroness, Lady Lister, the noble Lord, , and others raised the issue
of inflation and anticipating peaks. Benefits are paid over the
course of the year and looking at the peak alone is a little
misleading. Any move to implement a mechanism to anticipate peaks
would require a mechanism to do the same to account for troughs.
DWP believes that this kind of complex adjustment mechanism is
not appropriate. For shorter-term shocks such as the current
energy price increases, the Government have other responses which
do not permanently commit the taxpayer to fund higher
benefits.
The noble Baroness, Lady Lister, mentioned disability benefits.
The department is considering contributions to the Green Paper
and it would not be right for me to prejudge now what might be in
the White Paper later this year. I shall talk to the Minister for
Disabled People, , and pass on the points.
The noble Lord, , as ever, took us on focused
journey to Wales. It is a wonderful country—I am sure that my
noble friend Lady Bloomfield, who is no longer in her place,
would agree. I would get myself into a lot of trouble, which I
know the noble Lord would not want, if I started talking about
devolution and what might happen.
(Lab)
So as to avoid trouble, would the Minister undertake to write as
best she might on the points that I have raised, having put on
the record not only points about devolution?
(Con)
I shall certainly write about the points raised by the noble Lord
in relation to the uprating order, but I shall also try to do a
little better and write to DLUHC and ask it to answer those
points, if that is all right with him.
The noble Lord, , made a valid point about people
not getting by. While I cannot promise anything—I can promise
only to talk to colleagues—I am absolutely confident that the
Secretary of State and others realise the difficulties that
people are in. More than that I cannot say because I do not know,
but the point will be made.
I say to the noble Lord, , that the impact assessment
refers to direct costs to charities and private sector
organisations as employers. The order brings direct costs to the
Exchequer but not to employers. The noble Lord spoke about people
who use meters, the keys and how much more expensive that system
is. I know that people are fully aware of that. It is not
ideal.
5.00pm
The noble Baroness, Lady Sherlock, talked about GMP equalisation
and the tax issue. I have an extensive response here; perhaps I
may write to her and, again, copy it to everybody. She says that
she has asked me twice and I have not responded. I am sorry about
that; I really thought that I had. Let there be no doubt about
the situation. The conclusion of the Secretary of State’s annual
review is announced in a Written Statement ahead of the hard IT
deadline at the end of November for all systems other than
universal credit. DWP needs all benefit rates and subcomponents
to be confirmed by the final week of November to enable the
programming of the IT system in time for the new benefit rates to
come into force in April. If we were to wait for final
parliamentary approval, we would need either to make the IT
changes in March, which would mean payment of uprated pensions
and benefits delayed until October, or to have parliamentary
approval in November, meaning that we would have to use an even
earlier CPI than September’s. It is a question of balance.
If the order is voted down, the 3.1% increase will still go ahead
in April, because the IT process cannot be changed at this stage.
The increase will, however, have no legal underpin. That is why I
urge the House to approve the order, so that there can be
certainty of outcome for the 20 million people who receive state
pensions and benefits from DWP.
(Lab)
I thank the Minister; I definitely have not had that answer
before. In her mind, then, what is the point of this debate?
(Con)
The point of the debate is to approve the order. Here we go.
(Lab)
Perhaps the Lord Chairman will allow me a little licence. I
understand why the Minister said that, but I want to get to the
bottom of what it is we think we are doing here. So the computers
are changed in December and, if either House rejects this order,
the increase goes ahead anyway; it just does not have any legal
underpinning. Perhaps I have been spoiled, but I am accustomed to
thinking that, when the House is asked to take a decision, that
has a consequence: if we say yes, something happens; if we say
no, something does not happen. This is the first time that I have
been aware of being asked to take a decision and being told that,
if we said no, it would not make any difference. Does the
Minister not think that that is a little unusual?
(Con)
Further information: if the House votes the order down, that is a
sign that the Government must change the process.
(Lab)
May I suggest a pay rise for whichever member of the cavalry sent
a note in her direction? To be clear, we will not oppose the
order. I just wanted that point to be clear and I thank her very
much.
(Con)
I am not giving pay rises, I can assure the noble Baroness.
(LD)
Before the Minister sits down, she raised two matters in response
to what I said. Perhaps she would arrange to write about the high
cost of meters. That might be able to be adjusted in the
interests of those who are paying higher costs. It is the kind of
thing that would sit very nicely in the Spring Statement.
Secondly, I take up the issue of the impact on businesses,
charities and voluntary bodies. Paragraph 12.1 of the Explanatory
Memorandum states that it is negligible, but of course all those
organisations will have to employ more staff to deal with the
huge rise in queries that they will get.
(Con)
As I said, I fully appreciate the issue of people who use keys to
pay their energy costs, which are higher. Let me take that back
as a special project. I will speak to the Secretary of State, who
I will see tomorrow, and she may well have a thought on that.
When it comes to the Spring Statement, all noble Lords tell me to
speak to the Treasury. I have nothing to tell your Lordships
about the Spring Statement; we will have to wait to see what, if
anything, comes out in relation to this. I take the point of the
noble Lord, , about charities, but that is
an indirect effect, if it happens. I cannot add more than that at
this stage.
The noble Baroness, Lady Sherlock, talked about poverty, a
subject that we have discussed many times. The Government are
committed to a sustainable long-term approach to tackling
poverty, and to supporting people on lower incomes. We will spend
£110 billion on welfare support for people of working age in
2021-22. With around 1.29 million vacancies across the UK, our
focus is firmly to support people to progress into work as the
best way to substantially reduce the risks of poverty.
I know that there are people who cannot work, and I know the
passion with which the noble Baronesses, Lady Lister and Lady
Sherlock, and others talk about us wanting to help that group.
Our multi-billion-pound plan for jobs, which has been expanded by
£500 million, is helping people across the country into work. I
know that our new Way to Work programme has raised some issues.
As I have said before, when I opened the jobcentre in Hastings,
the staff were alive with the freedom that it would give them to
do more, and in more detail, to help people at the lowest point
of their lives. I trust those work coaches implicitly to do what
they can and, more importantly, to feed back if something is not
working so that we can fix it.
The noble Baroness, Lady Sherlock, asked whether I still believed
a Statement that I made. Perhaps she can write to me, as I did
not quite catch the context. I will be very happy to write
back.
(Lab)
If the Minister reads Hansard, that might cut out a stage.
(Con)
I shall do so. The noble Baroness also raised the benefit cap not
being increased. Again, there is a statutory duty to review the
levels of the cap at least once in each Parliament. I am advised
that this will happen at the appropriate time.
(Lab)
Given that we have asked about the benefit cap a few times during
this Parliament, can the Minister tell us what the “appropriate
time” will be?
(Con)
I am afraid that I cannot. I am sorry.
On support for people affected by the benefit cap, as I have
said, our work coaches are cognisant of all these things, and I
am sure they will try to find people work that helps them and
alleviates some of the impact of the cap. Claimants can also
apply to their local authority for a discretionary housing
payment if they need help to meet rental costs.
The noble Baroness, Lady Sherlock, talked about the Private
Member’s Bill. The Government continue to support this Bill and
hope that it achieves Royal Assent in due course. I thank all
noble Lords for their contributions.
Motion agreed.
Guaranteed Minimum Pensions Increase Order 2022
Considered in Grand Committee
5.08pm
Moved by
That the Grand Committee do consider the Guaranteed Minimum
Pensions Increase Order 2022.
Motion agreed.
