Asked by
To ask His Majesty’s Government what assessment they have made of
the report by the Trussell Trust and Joseph Rowntree Foundation
An Essentials Guarantee: Reforming Universal Credit to ensure we
can all afford the essentials in hard times, published on 27
February; and in particular, the recommendation to introduce an
‘Essentials Guarantee’ to support those living in relative
poverty.
The Parliamentary Under-Secretary of State, Department for Work
and Pensions () (Con)
My Lords, the department is aware of the report, but no formal
assessment has been made. We have a long-term approach to
tackling poverty and supporting people on lower incomes. The
Government are increasing support for low-income and vulnerable
households, with welfare expenditure forecast to rise from £251.8
billion in 2022-23 to £275.6 billion in 2023-24. As the Spring
Statement made clear, the focus is on supporting workforce
participation, helping people move into work and higher
earnings.
(LD)
I thank the Minister for his Answer. Of course, all increases
will be welcome after years of freezes and below-inflation rises.
However, the key issue is that universal credit levels today are
based simply on the result of historical precedent and subsequent
political assessments of what the Government can afford. Does the
Minister agree that it is time for an objective, independent
assessment based on evidence of real need and actual costs? Does
he agree with the Rowntree analysis that the universal credit
standard rate falls well below what is needed to afford basic
essentials?
(Con)
We are certainly aware of the severe difficulties in some cases
that households are experiencing. Our way of dealing with this—we
are aware of the report, as I said earlier—is that, following the
Autumn Statement announcement, measures directly aimed at helping
households with cost of living pressures in the coming year
2023-24 are now better targeted to low-income households. Support
provided from the £3,000 EPG and cost of living payment is on
average more generous for households in the bottom four income
deciles than our £2,500 cap alone.
My Lords, could the Minister remind the House what the point of
the two-child limit is and what its impact is on the provision of
essentials?
(Con)
The House will be very aware of this subject, which does keep
cropping up. The House will be aware that, since 6 April 2017,
families have been able to claim support for up to two children
and there may be further entitlement for other children if they
were born before 6 April 2017 or if an exception applies. As the
right reverend Prelate will know, there are a number of
exceptions, including any child in a household who is adopted,
any child living long-term with friends or family or who would
otherwise be at risk of entering the care system.
(Con)
My Lords, can the Minister tell us what the Government are doing
to help those having difficulty purchasing essentials due in some
part to mandatory deductions from their universal credit?
(Con)
The Government recognise the importance of supporting claimants
to manage their liabilities. It is true that some households get
into quite severe debt. Under universal credit, there is a
co-ordinated approach to deductions from benefits which supports
claimants to manage their financial obligations. The primary aim
of deductions from universal credit is to protect vulnerable
claimants by providing a last-resort repayment method for arrears
of essential services. The House might be aware that the
Government have reduced the standard deduction cap from 40% to
25% of the standard allowance in recent years.
(CB)
My Lords, quite clearly, the universal credit level in recent
years has not been sufficient to meet the cost of essentials. I
would be grateful if the Minister could clarify what the
Government now include as “essentials” to make sure that people
can survive adequately on universal credit, without accessing
food banks or starving.
(Con)
It is right to say that, although the Government are very aware
of the severe issues at the moment, we do not look at every
single essential item because we think that individuals and
households have the right to spend how they like. The benefit
cap, which is probably the gist of the noble Baroness’s question,
provides a strong work incentive and fairness for hard-working
tax-paying households, and it encourages people to move into work
where possible. Let us not forget that households will still be
able to receive benefits up to the value of gross earnings of
around £26,500, or £31,300 in London.
(Lab)
My Lords, of course households make their own choices, but the
point of this report is that we all need certain things:
somewhere to live, clothes to wear, food to eat and the ability
to heat our homes. The suggestion is that there simply is not
enough money in the system to do that. For most of the last
decade, the Government have not uprated benefits by the rate of
inflation, which results in a disconnect between the cost of
living and what the social security system gives people to live
on. Now, we are seeing poverty, destitution, homelessness and the
use of food banks are all going up. Does the Minister think it
would make a difference if benefits and tax credits were
automatically uprated by inflation, rather than simply being down
to what Ministers want to do that year?
(Con)
The noble Baroness will be well aware that we have raised many
benefits—particularly the benefit cap, by 10.1%, which we think
is pretty generous. But we also acknowledge that it continues to
be tough for households and businesses across the UK at the
moment, which is why we continue to provide support with the cost
of living, as I alluded to earlier. This totals £94 billion over
the next two years, which is equivalent to an average of £3,300
per household this year and next year.
(Con)
My Lords, should we take that as a pledge that the Labour Party
will uprate benefits by inflation, or is this just another
example of the Opposition attacking the Government and having
nothing to say?
(Con)
My noble friend makes a good point. I will add to what I said: we
are still on track to deliver the Government’s pledge, with the
OBR—it has to be the OBR—forecasting that inflation will reduce
to 2.9% by the end of the year. In my newspaper today, I noticed
that there are signs that food prices, which have been
extraordinarily high, are beginning to slip, so I very much hope
that this is going in the right direction.
(Lab)
Is it not correct that the Government have decided to increase
pensions by 10%, for example, but not to do anything to change
the system for families with more than two children? Is this not
a direct choice of the Government? What are the implications for
children living in those families?
(Con)
I think I made my position clear on the two-child limit, as I
have over my three months in this role. Obviously, putting
children first is extremely important, and that is why we have
given huge support, as I said—a total of £94 billion over this
year and the next—to help households and individuals. The focus
on children is a very important point: that is key.
(GP)
My Lords, the Centre for Health Economics found that the cost to
the NHS of poverty in in-patient care alone was £4.8 billion. The
Joseph Rowntree Foundation said that poverty was costing the NHS
and social care, collectively, £28 billion a year. Putting aside
the social and human cost, are the Government not being
penny-wise and pound-foolish by not providing an essential
guarantee, which would take a huge amount of pressure and cost
off our schools, our NHS, our criminal justice system and so many
other parts of public services?
(Con)
I made clear the Government’s position on essentials earlier, and
I do not want to go over that again. On the noble Baroness’s
point about poverty, I remind the House that in 2021-22 there
were 1.7 million fewer people in absolute poverty after housing
costs than in 2009-10, including 400,000 fewer children, 1
million fewer working-age adults and 200,000 fewer
pensioners.
(CB)
My Lords, I will ask the Minister about the Healthy Start
vouchers for the under-fours. They are really important and have
moved from vouchers to a card system. Many people lost those
benefits in the transfer system, because it was not simplified.
Could the Minister look at how we ensure that benefits are
simplified so that people can actually get what they are entitled
to?
(Con)
The very fact that we have been rolling out a universal credit
system over the last few years since 2013 comes to the essence of
what we have been trying to do, which is to simplify the system.
The noble Baroness makes a very good point about putting children
first, as I said previously. One example of that is what we have
done with free school meals.
(Con)
My Lords, I declare a family interest in this Question. Over the
next two years, people with long-term disabilities who currently
receive employment and support allowance will be moved to
universal credit, and there is already an acknowledgement that
there will be some differences in the amount of money they will
receive. What analysis has my noble friend the Minister and his
department done to check whether that particular group—people
with long-term, life-long disabilities—will not become part of
the group we are discussing today, who cannot afford
essentials?
(Con)
My noble friend makes an excellent point, because, apart from the
fact that we spent around £67.9 billion last year on benefits to
support disabled people and people with health conditions, we are
doing more, as the Spring Budget said, to help those who are
disabled, and particularly those who wish to go into work.
