With permission, Mr Speaker, I will make a statement updating the House on the work of my Department. First, I want to pay tribute to the civil servants in my Department as well as our contractors and partners, who have been working tirelessly to provide help and support to those in need. They are the hidden heroes for many people in this country, and they should take great pride in their hard work in and dedication to supporting people through these difficult times.
From16 March to the end of April, we received over 1.8 million claims for universal credit, over 250,000 claims for jobseeker’s allowance, and over 20,000 claims for employment and support allowance. Overall, that is six times the volume that we would typically experience, and in one week we had a tenfold increase. The rate for UC claims appears to have stabilised at about 20,000 to 25,000 a day, which is double that of a standard week pre-covid-19. I am pleased that my Department is standing up to the challenge. We have redeployed a significant number of DWP staff—about 8,000 so far—and staff from other Government Departments, about 500 so far, to process these claims. Our payment timeliness for universal credit is running at a record high.
We have also issued almost 700,000 advances to claimants who felt that they could not wait for their first routine payment, and the vast majority of those claimants received money within 72 hours. Where possible, and mindful of risk, we have streamlined our processes. We will consider learnings carefully from this time in the response phase, and whether any of them can be made permanent.
We have also sought to make it possible for people to work from home, and have deployed 10,000 computers. We are now at a level of deploying 750 new devices a day to enable working from home, and have added to the IT capacity for remote users. However, if staff need to continue to work at the office, we are applying social distancing. Making sure that our claimants and civil servants are safe is a key priority. From 17 March we suspended all face-to-face assessments for health and disability benefits. We automatically extended awards for existing claimants that were due to be reassessed by three months, and will only undertake reviews or reassessments when claimants notify us of changes that could lead to a higher payment. Any claim made under the special rules for terminal illness continues to be fast-tracked—it takes an average of six days to process those claims.
Since 24 March, job centres have not been open for regular appointments, but we continue to offer face-to-face appointments in exceptional circumstances if claimants would not otherwise be able to receive support. Claimants can continue to receive support over the phone or through their online journals. All local jobcentres have been turned into virtual processing teams, prioritising advances and the registration and payment of new claims. We have also paired jobcentres across the country to support one another with processing, using fully our network capacity.
That focus on the processing of claims means that we have stopped checking the claimant commitment on looking for and being available for work for three months. We do, however, want claimants to continue to look for work wherever they are able to do so. Ministers are working hard to make sure that existing vacancies can be accessed by people who have become unemployed. We will continue to support those people while they are waiting for the opportunity for work. We have created a new website to guide people—jobhelp.dwp.gov.uk—and we are advertising 58,200 vacancies.
Although our IT systems have worked—thanks to extensive work by the universal credit team, including our contractors—I know that some claimants experienced significant delays in the verification of their identity. Identity checks are crucial to reduce fraud risk, so we worked closely with the Cabinet Office to increase substantially the capacity of the online Verify system, and average wait times are now below five minutes.
Call volumes have been extremely high, with more than 2.2 million calls in one day at the peak. Having recognised the delays that people were experiencing—or, indeed, that they were not able to get through at all—we turned it around with our “Don’t call us—we’ll call you” campaign. A bolstered frontline team now proactively calls claimants when we need to check any information provided as part of a claim. This has been successful in freeing up capacity and reducing the time that customers need to spend on the phone.
In respect of other departmental operations, although we have redeployed staff we have kept critical work ongoing in child maintenance and bereavement. We are monitoring our performance and will return staff to these areas if the response rate is unacceptable. We have cancelled the pension levy increase, supported defined contributions through the job retention scheme, and worked with regulators to assist defined benefit pensions and to combat scams.
It is worth reminding the House of our financial injection of more than £6.5 billion into the welfare system so that it can act as a safety net for the poorest in society. We have focused on changes that could be made quickly and would have significant positive impact. We have increased the standard rate of universal credit and working tax credit for the next 12 months by around £1,000 per year; we increased the local housing allowance rates for universal credit and housing benefit claimants, so they now cover the lowest 30% of local rents; and we increased the national maximum caps, so claimants in inner and central London should also see an increase in their housing support payments. I have been made aware that some councils have not made the adjustment in housing benefit, and my Department is communicating with them all this week. Furthermore, across England we had already increased the discretionary housing payment by an extra £40 million for this financial year.
The 1.7% benefit uplift was implemented in April, ending the benefits freeze, and the state pension rose by 3.9%, as per the triple lock, reflecting last year’s substantial rise in average earnings. We have introduced regulations to ease access to benefits: we legislated to allow access to employment and support allowance from day one of a claim; we relaxed the minimum income floor so that the self-employed can access universal credit more readily; we have made it easier to access ESA by launching an ESA portal for online applications; and we legislated to ensure that statutory sick pay was available for employees from day one of sickness or self-isolation due to covid-19. I remind the House that statutory sick pay is the legal minimum.
We will continue to look at issues that arise—for example, we are ensuring that maternity pay is based on standard pay, not furlough pay levels—and see what we can do quickly and straightforwardly to fix either unintended consequences or unforeseen issues, but it is not my intention to change the fundamental principles or application of universal credit.
We have undertaken a significant project to support the Ministry of Housing, Communities and Local Government and the national shielding service by establishing the outbound contact centre. Furthermore, we use the contact centre to contact proactively our most vulnerable customers who receive their benefits or pensions solely through Post Office card accounts. I thank the Post Office for helping us to support this group of customers. We have been able to provide contact-free cash payments by Royal Mail special delivery, and we were able to signpost people to extra support from their local council.
I can inform to the House today that the DWP will stop any new benefit and pension claimants from using the Post Office card account from 11 May, as we prepare for the end of the contract. The uptake of accounts in the past year has been exceptionally low, but, in any event, given that we believe the vast majority of people using POCA already have a bank account, the cost of the contract is poor value for taxpayers. Existing customers who currently receive payment through a Post Office card account will see no change and will continue to receive payment into their accounts for the remainder of the contract period. We can use the HMG payment exception service for people who cannot access any bank account.
I thank the Health and Safety Executive—an arm’s length body for Great Britain that is sponsored by my Department—for its work on covid-19. It has been doing crucial work with the Department for Business, Energy and Industrial Strategy and Public Health England to provide guidelines for employers to adhere to once restrictions can begin to be eased. The HSE is working hard, along with local authorities, to enable work to continue safely in the sectors for which it is responsible. It has developed practical guidance on the enforcement of the law where workers are being exposed to unnecessary risk.
In conclusion, my Department is standing up to the challenge of unprecedented demand for its services, and we are getting support to those who need it. We will continue to work across Government to help the nation get through this health emergency. I commend this statement to the House.
I thank the Secretary of State for advance notice of her statement. May I add my thanks to the dedicated frontline staff of the Department for Work and Pensions for everything they have done and are doing during this crisis to ensure that we can process the unprecedented volume of claims that have been made?
I welcome the measures the Secretary of State has announced so far. The social security system we had going into this crisis was a safety net with too many holes in it, and it is good that the Government have recognised that. My questions for the Secretary of State are about how we can widen that net so that everyone who needs support gets it, and about the steps that will need to be taken as we move from response to recovery.
First, the Government have significantly increased universal credit, but people on legacy benefits such as jobseeker’s allowance and employment and support allowance have not seen a corresponding increase in their benefit. More than 100 charities have pointed out that that discriminates against disabled people in particular. When will those benefits be uprated?
Secondly, there are now 100,000 families who will not be able to receive this increase because they are still limited by the benefit cap. The Government say the benefit cap exists to force people to work more hours or move to cheaper housing, both of which are clearly impossible during the crisis. Almost every organisation, from the Institute for Fiscal Studies to the Resolution Foundation and the Child Poverty Action Group, believes it should be temporarily suspended. Does the Secretary of State agree?
Thirdly, anyone who has been saving for a housing deposit, for a rainy day or for a substantial item could find themselves ineligible for universal credit because of those savings. Those people paid into the system when they were in work; should it not be there for them now? I do not believe we should punish those savers, and I believe those saving limits should also be suspended.
Fourthly, the Government say the two-child limit exists so people supported by social security have to make the same family choices as those who are not, but this crisis shows how absurd that claim is. People could not have been expected to make family choices three years ago based on the likelihood of a global pandemic shutting down our economy. The Government have suspended sanctions during the crisis, but the two-child limit is effectively an 18-year sanction on the third and fourth child in a family. Surely it should go too.
Fifthly and finally, those people who are eligible for support from universal credit will still have to wait five weeks for their money or take an advance that will be deducted from future payments. Many people do not appreciate that if they claim universal credit before they receive their final salary payment, their income means they have no entitlement for their first month and could have to wait as long as nine weeks for any payment. Since it was introduced, the five-week wait has been the single biggest driver of housing arrears, short-term debt and food bank use in the country. It should not exist at all, but in this crisis it is particularly egregious, and it simply must go.
May I also raise a very specific issue with the Secretary of State? It has come to light that the universal credit regulations treat maternity allowance, which is received mainly by low-paid women, as unearned income but statutory maternity pay as earnings, which are disregarded by the work allowance. That could result in a low-paid pregnant woman being as much as £4,000 a year worse off. Why is that? Will it change?
I turn to preparations for the recovery. As the Cabinet Minister responsible for the Health and Safety Executive, what conversations has the Secretary of State had with it about the process by which workplaces will be made safe when people are asked to return to work? When the lockdown began, most MPs were inundated with questions from constituents still in work about whether their workplace sounded safe. That simply will not do when lockdown ends. There must be a clear process agreed by the workforce and management, not least because a failure to do so would likely result in significant litigation.
This crisis has confirmed in terms what the UK’s unequal and unfair labour market really means. Although some people have been able to work from home on full pay, others have faced having to go into work and risk their health, or have lost their job through no fault of their own and will receive social security or sick pay set at just a fifth of the UK’s weekly median income. More than 4 million British children grow up in poverty, living in poor accommodation and perhaps without the internet connections many of us take for granted. The lockdown will have a severe impact on their wellbeing. Many have likened our response to coronavirus to fighting a war. If that is true, the aftermath should be equally so, with a renewed national effort to fight the inequality, poverty and insecurity that should have no place in this country at any time.
I thank the hon. Gentleman and welcome him to his position. We are in an unusual place today—literally, as he is appearing virtually for our first exchange in a statement—but we will be seeing each other again next Monday at questions.
On legacy benefits, I should stress that the increase to working tax credits and universal credit is only temporary —until 12 months from when it was applied. There are two things here. First, we have a digital UC system. The working tax credit system is digital. It is far more straightforward and it was quick to change that. It would take quite some time to change the legacy benefits system—I am talking about several months—with the process we have. When we make changes to benefits, they tend to happen four or five months before the actual changes come through, because that is how long it takes our computer systems to work.
Secondly, the statutory sick pay weekly rate is about £95. The change to UC is about £94. We anticipate and hope that people will be on UC for a quite a short time while we go through this significant emergency. It was, as I pointed out, straightforward to change that. There are other things that people will benefit from, including the work we have been doing on mortgage holidays, on stopping renters being evicted due to issues connected to covid-19, and on electricity pre-payment. No utility supplier will restrict supply due to issues at this time.
On the benefit cap, I said in my statement that it is not the intention to change fundamentally the process, principles or application of universal credit. I am conscious of the benefit cap, but we are still talking about a potential yearly income outside London of £20,000, or £23,000 in London, being given to benefits claimants. I am conscious that that could effectively be something like a £25,000 to £30,000 take-home salary after we take into account taxation and similar, so I do not think it is necessary right now to change the benefit cap. What I do want to point out to the hon. Gentleman is that claimants may benefit from a nine-month grace period, where their UC will not be capped if they have a sustained work record.
On the savings threshold, there is no universal credit eligibility where people have savings of £16,000. UC is designed to help the poorest in society. I am conscious that, if any changes were contemplated, they would have taken some time to process. We have decided to focus our efforts on those who are the poorest in society. I should also say that money saved for taxation payments, such as by the self-employed, will effectively be treated as business assets, and so would not be included for consideration or be deemed personal savings.
On the five-week wait, there is no intention to change that. In fact, in terms of the largest number of people who have claimed, this will be our biggest payment week going ahead. I am aware of what the hon. Gentleman says about people who have been paid in the last month. My understanding is that there is a phasing issue in terms of the calculation of universal credit payments that people would be entitled to with regard to the standard allowance. One of the benefits of having the advance is that it is designed to spread an annual income over 13 payments, instead of 12. For people who are going through that right now, my recommendation is that they should consider getting the advance. As I say, the total annual payment will be spread over the year.
On universal credit regulations relating to maternity allowance and statutory maternity pay, I will look into that for the hon. Gentleman and write to him. I know that quite a lot of consideration has been given to the different rates supporting people in maternity, but I will write to him on that.
On people only receiving statutory sick pay, I point out to the House that that is a legal minimum, but one of the purposes of the furlough scheme was that people, instead of being made unemployed, had this opportunity. Of course, if people are sick, an employer is entitled to do statutory sick pay. I should also point out that the furlough scheme can be applied straightaway for people who have been shielded and cannot go to work and cannot work from home, and we are encouraging employers to do so.
The extraordinary level of support that my right hon. Friend has described is certainly welcome in Aylesbury and it is undoubtedly assisting thousands of households. I join others in paying tribute to all the staff in the Department and branches of Jobcentre Plus for making that happen.
It would be helpful if my right hon. Friend could describe the ways in which these unprecedented levels of support from the DWP can help owner-directors of small limited companies, many of whom have written to me because they are mainly paid by dividends, so they are not entitled to the assistance scheme for the self-employed. To be clear, these are not multimillionaires, but hard-working hairdressers, make-up artists, decorators and electricians. They have lost their income and would really welcome her assistance.
My hon. Friend is right to speak up for the people he represents, and especially small business owners, who have set up their companies in particular ways—I am sure that they were well advised by accountants at the time on the optimal way to do that. It is fair to say that the self-employed income support scheme is expected to cover 95% of people who receive the majority of their income from self-employment, but if not, I recommend that those other people look online at their potential eligibility for universal credit. We have removed the minimum income floor—an assumed level of income in universal credit for self-employed people—so that should no longer be considered when trying to calculate the benefits for which they may be eligible.
I thank the Secretary of State for advance sight of her statement. I wish to put on record my thanks to the DWP staff, who are continuing to work hard to deliver social security benefits as quickly as possible in very difficult circumstances, but the circumstances have been made more difficult by the decisions of the UK Government, who have introduced bureaucratic support schemes instead of a far simpler universal basic payment with a longer view towards universal basic income. Millions have been forced on to still inadequate universal credit, and despite DWP staff being moved to cope with the UC demand, over 200,000 people had their UC claim paid late, according to the UK Government’s best estimate. Because DWP staff have been moved to help process UC claims, MPs and other advice organisations are not getting casework inquiries answered in the normal way, which is also causing unfair hardship.
On the last day that I contributed in this House—18 March—before lockdown, I said that people needed help in hours, not days, yet the people applying for universal credit in that week will have only just received their first payment a few days ago. The British Government must finally stop the five-week wait. They claimed that they cannot solve it by making the advance payment system a grant rather than a loan because of vulnerability to fraud, so why not make the advance a grant when the applicant is confirmed as eligible for universal credit? I would appreciate proper consideration of that proposal. Airdrie food bank in my constituency has reported a 47% increase in demand for its services since the onset of covid-19. That should focus minds.
The Prime Minister said that nobody would get left behind, so why has there not been an uplift in legacy benefits, such as employment and support allowance, as there has been to universal credit? Finally, will the Government scrap the immoral, poverty-inducing two-child limit, the bedroom tax and the benefit cap, and will they uprate all benefits to make up for the years of cuts that came through the benefit freeze? 1.7% just does not come close.
I thank the hon. Gentleman for his questions. In terms of bureaucratic schemes, the Government have worked at pace to introduce brand new schemes in order to protect people right across the country. We have seen the success of the job retention scheme. The self-employed scheme is under way. Significant flexibility has been put into that system to help people who may not have had three years of earnings to give them time to submit their latest tax return promptly to get support.
There is a variety of analysis on universal basic income. The latest report I saw estimated it would cost over £400 billion a year. It is not targeted at the poorest in society and is not an appropriate way for us to try to distribute money. Instead, our schemes are focused on making sure that the poorest do get help.
On DWP staff being moved from department to department, we have made sure that we are monitoring performance and where there are increases in how long it takes to process certain kinds of payments I have made it clear to my officials that we then need to move people back. We are in the key peak of payments this week, with the largest uptake of applications, and I am confident that we will get through that with at least 90%, if not an even higher rate, of people getting their payments on time.
I have already answered the question about why the legacy benefits have not increased. On the question about making an advance a grant, that comes back to the principle that getting an advance effectively means people have 13 payments in a year instead of 12 to cover the annual allocation to which people are entitled. Nearly 700,000 people have received an advance, while nearly 1.8 million people have applied for universal credit and those others have not sought to have an advance. So it would not be fair to the other new claimants if one group of people got more money than they did simply because they had applied for an advance.
On the increasing use of food banks, extensive work is going on across Government. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince), is involved in a taskforce on helping vulnerable people. I am conscious of the increase in food bank usage and the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Banbury (Victoria Prentis), and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs are doing excellent work in making sure we can work with them to ensure food can get to the most vulnerable people in society. While recognising the increase in food bank usage, I point out that we have had a sixfold increase in the number of people claiming UC and we are making sure we get our money to them.
I thank the Secretary of State for her statement and join my colleagues in paying tribute to the excellent DWP staff who have been working unprecedented hours to try to get support to the people in our country who need it.
The impact of coronavirus means more people in Bishop Auckland and across the country have been applying for UC, so what steps is my right hon. Friend taking to ensure that new claimants in Bishop Auckland and beyond receive their first payments swiftly?
The UC approach remains the same: we make an assessment of people’s incomes, and those already on UC whose income fell substantially will have seen their UC payment increase as a result. So it is working for new claimants once they have got through the initial claim. That is straightforward. I appreciate that there were difficulties early on in getting online identity verification, but the process should be very smooth now, and for those people who cannot make ends meet the advance option is there, and people can get that money very quickly.
I join the Secretary of State and others in commending the Department’s staff for handling the recent surge. I also welcome higher UC, working tax credit and local housing allowance, and it sounds from the Secretary of State’s earlier answer that she agrees that jobseeker’s allowance and employment and support allowance should have been increased as well; it is unfair that they have not been. The unchanged benefit cap is now blocking increased support the Government have decided people should receive, and that is having a particular effect in London. It could be increased, so will the Government now be more consistent in supporting people’s extra costs during this crisis?
I should point out to the right hon. Gentleman that we were trying to make a short-term increase, we went through with the Treasury how we could do this quickly, and the quickest ways were by increasing the local housing allowance and UC, rather than other benefits, as I have mentioned. On the situation in London, I am conscious that aspects of the housing benefit regulations went through a month ago, but not all councils have applied them. What we have done with the thresholds means that people in London should be able to see an increase in the amount of money they get in housing support, but otherwise it is not the Government’s intention to change the current threshold of the benefit cap.
I wish to follow on from the point made by my hon. Friend the Member for Aylesbury (Rob Butler) about directors of small companies. The Government have done very well to protect people on PAYE and people who are self-employed, but directors of small companies fall through the cracks and it really is not good enough just to say, “They can fall back on universal credit”, because in many cases they will not qualify and because we have protected other sectors. We must do better, and we must sort out how we are going to protect the directors of small companies.
My hon. Friend will know, having been an accountant, that a variety of people will potentially receive dividends from a company, and it is not currently possible for Her Majesty’s Revenue and Customs to know whether somebody has given this to themselves in lieu of a salary or whether it is a payment to an investor. It is a different situation where people have chosen to finance their income from the business in that way, and he will be aware that the rate of tax on paying dividends is 7.5%, once someone goes above the dividends allowance. How people who are self-employed through a normal PAYE scheme would pay aspects of national insurance and tax directly is quite different. The Treasury, in devising the scheme, has sought to try to identify as many people as possible it could help, and achieving that for 95% of self-employed people is a pretty good outcome.
There is growing support for a recovery universal basic income, and it is being considered in other parts of the world. I would dispute what the Secretary of State has said about the costings, and stress to her that it can be supported through wider changes to the taxation system. Given the current cliff edge on the job retention scheme, the danger of vast redundancies, pressures on UC and the need to inject spending into the recovery to kick-start recovery, will she at least urgently work with the Treasury to explore that option?
No, I will not, and I have already set out why I do not think a universal basic income is the right approach. The hon. Gentleman is a Northern Ireland Member and will be aware that responsibility for welfare is devolved, so if he wanted he could lobby the Northern Ireland Executive, and they might be able to devise a scheme that they think is more appropriate locally.
May I join in thanking all the staff at the DWP, and indeed the Secretary of State and her team, and in particular, the staff at Epsom jobcentre, for dealing with the current crisis as effectively as they have? Will she look again at the issue of LHA for the areas immediately outside London, as there are still anomalies that particularly affect my constituency, and of course there will be a greater need for housing support. Will she look at the level of support to make sure that it really is related to the local rental market?
LHA is done on the basis of certain housing areas, and the Chancellor announced a significant change in order to bring this up to the 30th percentile. I say to my right hon. Friend that councils across the country have been receiving discretionary housing payments—separate from the hardship fund. That was ongoing, and we added £40 million to it for this financial year prior to this situation. I encourage anyone who is still struggling in his local area to go directly to the council for some support.
During this crisis, the Government have rightly stopped recovering overpayments from universal credit recipients, but they are still deducting money from those who are given an advance payment. We need the five-week wait to be scrapped, so that people do not need advance payments. Will the Secretary of State confirm today that the Government will defer any recovery of advance payments until after the crisis has passed?
The way that advance payments are recovered is by treating it in effect as a phasing issue, so that people have 13 payments over a year, instead of 12. As a consequence, elements will be removed from the following 12 payments so that the annual total is the same.
May I begin by heartily congratulating the Secretary of State and all the staff at the DWP on the astonishing achievement of handling 1.8 million applicants for universal credit and clearing 1 million? I draw her attention to those people, many of them self-employed, on working tax credits. They were encouraged by the Government to apply for universal credit, not knowing that at the moment they applied for universal credit, they automatically lost by law working tax credit. Some of them now find that because they have been prudent—they had set aside money for pensions and they had savings—they do not qualify under current rules for universal credit and cannot go back and claim for working tax credits. I have had letters from her Department talking about new-style employment and support allowance and the new self-employment income support scheme, which are very welcome. Will she go back to those people and make it clear that they have the right to apply for these schemes, because many of them are not accustomed to dealing with the benefits system and only went through the process under Government encouragement?
First, I thank my right hon. Friend for praising staff at the DWP. He is right to do so, and I thank him for that. I am very aware of the issue he is bringing to my attention, and I am actively looking at that particular scenario, where people, not realising some of the eligibility rules, have then made the application and are no longer effectively going to receive working tax credits. I cannot give an answer to my right hon. Friend or the House today, but I assure him that I am looking very carefully into what changes we could make to address that situation. I have already asked for the website to be updated, so that people are crystal clear when they apply.
May I, too, thank the staff at the DWP for their very hard work? The hospitality, arts and tourism sectors, which are vital industries in my constituency, will not recover overnight, even when the restrictions are lifted. Many of my constituents will have no option but to go on universal credit, with no job prospects any time soon. Does the Secretary of State think—she has even been reminding company directors of their eligibility for universal credit —that the current universal credit allowance of just under £5,000 a year for the over-25s is enough to live a dignified life?
With regard to the hospitality and tourism sector, the hon. Lady will be aware of the generous approach taken by the Government, whether that is grants, the furlough scheme or the other reliefs that are being applied. The figure that she quotes is solely the standard allowance. There are other elements of universal credit that people may be entitled to, such as if they have children or housing costs. It is the rolling up of six benefits into one. She focuses only on one, which equates currently to about £94 a week. I think that is a reasonable assumption, disregarding the other costs.
I recognise the exceptional work that the DWP is doing at this time. I also want to applaud the work that everybody in Wolverhampton is doing, from following the Government guidance to caring for loved ones. What plans does my right hon. Friend have to provide support for people who have informal carers who are having to shield themselves during the covid pandemic?
My hon. Friend is right to praise people who have been undertaking that role. My Department has introduced two important temporary measures to recognise changes to caring during the current emergency. First, unpaid carers will be able to continue to claim carer’s allowance if they have a temporary break in caring because they or the person they care for gets coronavirus or has to isolate because of it. We have also made sure that, rather than just more traditional forms of care, providing emotional support to a disabled person will now count towards the carer’s allowance threshold of 35 hours of care a week. This recognises that the nature of caring might have to change during the current emergency.
Thank you, Mr Speaker; it is always a pleasure to ask a question. I thank the Secretary of State for her energy and commitment and her responses to the questions so far. I also thank the DWP staff across the United Kingdom of Great Britain and Northern Ireland, and in particular those in Strangford, who have done a whole lot to help people.
The Secretary of State referred to self-employed directors. Hospitality, retail, fishing, construction and bus companies invest their profit back into their companies, as well as self-employed directors. Many of these are family businesses creating many jobs in the high street. Exactly what can be done to help the self-employed directors in shops in Newtownards, Comber, Ballynahinch, Saintfield and villages across the constituency of Strangford?
It is good to see my hon. Friend doing well over in Northern Ireland. I want to stress again that the scheme established by the Treasury will cover about 95% of people who receive the majority of their income from self-employment. I have tried to share with the House some of the approach taken in order to support people who pay themselves only, in effect, by dividends. As I pointed out earlier, a small percentage of people get the majority of their income in that way, on which, in effect, they pay only 7.5% tax. I am conscious that it cannot be decided whether dividends are solely for substitute pay or whether they are a return on investment, but I encourage those people to consider other forms of support that may be available at this time.
I join the acknowledgement of the superb effort of all the staff at the DWP, who have processed 1.8 million universal credit applications. I also want to acknowledge all the financial support that the Treasury has brought forward, including the bounce-back loans today. Will my right hon. Friend please look at what can be done to support self-employed limited company directors, as well as freelancers and those who started a new job in March and therefore cannot be furloughed? There are other groups who need extra support.
Several of those groups of people who are seeking support may well be able to get support through universal credit. I am conscious that the design of the furlough scheme and the self-employed scheme does not address every single worker or self-employed person in this country. I know that the Treasury worked at pace to establish those schemes, and they do cover the vast majority of people who are now seeking support.
Last week, I was contacted by a constituent who has a heart condition. He is also immobile because of a problem with his spine, and he has had a liver transplant. He applied for personal independence payments in October 2019 and has still not had a reply. When I contacted the DWP, I was told that, because of covid-19, there would be delays in responding to me, but that application was from October. I am sure the Secretary of State agrees that that is unacceptable, so what is she going to do to ensure that benefits are processed in a reasonable timeframe?
In the light of what has been happening, we have tried to streamline the process. I do not know the details of the individual case to which the hon. Lady refers, and I am sure that my hon. Friend the Minister for Disabled People, Health and Work would be happy to look into that situation. I do not know whether no assessment had been made at all or whether the outcome was being contested. I want to make sure that we are not ignoring situations and that new claims are still being processed, but I accept that there may be people we need to follow up on, and I would be happy for my hon. Friend to do that on the hon. Lady’s behalf.
I am pleased that we have added to the jobs website on dwp.gov.uk, and there are about 58,000 vacancies currently advertised there. I am supportive of all the work that has gone on under my right hon. Friend the Secretary of State for Education, such as on how people can get new skills, including through courses that are being made available online. There are, therefore, opportunities to consider upskilling while people are, sadly, not working, and people can also speak to their work coaches about potential further assistance.
It cannot be fair that families on the benefit cap are not benefiting from the uprating of payments that has happened during this crisis. The Resolution Foundation has predicted that, in over two thirds of local authority areas, a couple with two children in an average three-bedroom house will be affected by the cap. We know that covid-19 will affect poorer families more than other sections of our community. Is it not time that we moved the benefit cap to stop this situation getting worse?
As I have already said to the House, there may be claimants who could benefit from a nine-month grace period, where their universal credit will not be capped if they have a sustained work record. On other raises that have happened in terms of housing, changes have been made that should help people, particularly in central and outer London. However, in general, the principle is not to remove the benefit cap.
We rightly hail all our health workers for the amazing job they are doing, but it is good that we are hearing praise for DWP staff this afternoon. Down in Bexhill and Hastings, they have been absolutely amazing, as they have been across the country. When I asked my office what cases we had outstanding, the answer was zero. When I asked how the performance level rated, I was told, “Better than ever.” On that basis, will the Secretary of State look at whether we are using more discretion now that could also be used in future? Obviously, we have to keep a cost-control mindset and commonality of decision making, but it seems there are positive lessons that can be learned, and I thank my right hon. Friend and her team for everything they have done.
It is kind of my hon. Friend to thank DWP. I think it deserves, universally, credit. We are trying to learn from the streamlining we have done on the potential for permanent future changes, so that we see the enhanced processing we have successfully undertaken over the last few weeks.
Many of my constituents suffered financial hardship and poverty before covid-19 struck, with the delays in universal credit, the processing of personal independence payments, the child benefit cap, low wages and insecure employment. That has been multiplied by the coronavirus, with communities, individuals and businesses seriously affected. Our local citizens advice bureau has been inundated with welfare benefit queries, and I thank it and all local agencies for their hard work. It is time the Government began to face the financial realities and hardship of people’s lives. Will the Minister please agree to consider introducing a recovery universal basic income to help achieve a sustained economic recovery? It could become the foundation for a future social security system that provides financial security for everyone.
Rugby jobcentre plus was one of the first to go to full-service universal credit, and the staff there have been providing support to their colleagues in other offices, which is very important at a time when registrations are running at six times their usual level. I know the Secretary of State will join me in thanking all the staff for their hard work to make certain that the system runs smoothly. What is her assessment of what might have happened if we had not taken the tough decisions to modernise and streamline the welfare system and we were still operating under the highly complicated legacy system?
I have to say some unkind words: judging by my hon. Friend’s new attire, I wonder whether he is seeking his pension. However, he asks a serious question which deserves a serious answer. The reality is that—and I have been told this by my senior officials—there is no way that the legacy benefits system would have been able to cope. The move to universal credit has been successful. We still want to make sure that it rolls out universally, but I think it has shown that it has absolutely stood the biggest test of all.
Small increases in universal credit allowances are not enough, particularly because many people will lose that uplift due to the benefit cap. I appreciate that the Secretary of State has noted in previous answers that she sees no need to move the benefit cap, but I see the need for it in my constituency of East Dunbartonshire. Will she review the decision and finally lift the benefit cap so that people will actually receive the temporary increase in support that they so desperately need?
I thank the Secretary of State for visiting the Longbridge jobcentre with me back in March. We both saw at first hand that work coaches do a fantastic job supporting people into employment, but their ability to meet people in person has, quite rightly, been restricted due to the lockdown. Can my right hon. Friend update the House on the support being given to work coaches so that they can continue to provide support to claimants despite those restrictions?
As well as having a relationship with claimants, many work coaches have been deployed into processing claims. Both those things are critical to making sure that the 1.8 million people can get paid on time, and they deserve a tribute for that. As we get over this peak, I think we will see work coaches being able to resume other work with their claimants.
There have been more than 82,000 new claims for universal credit in Wales. That is unprecedented and I echo the thanks to DWP staff, but some people are still struggling to get support with their new claims, including the constituent who could not get through on the phone and had to walk for 45 minutes to get help because she cannot afford internet access. May I urge the Secretary of State to make it much easier to access support with new claims, including by ending the five-week wait?
We do not intend to end the five-week wait—that is where advances can help. The hon. Lady is right to point out the difficulties people have with telephony. We have turned that system around, so it should be more straightforward now that the DWP calls claimants rather than the other way around.
May I join colleagues in thanking DWP staff, particularly those in West Worcestershire who have worked so hard throughout this crisis? The Secretary of State has been asked a number of times about universal basic income and has resolutely rejected it. Can she confirm that a universal basic income would have to be paid universally —to everybody—including people like us?
My hon. Friend is absolutely right. We know that it is not a well-targeted system, and that is why we will continue to say that it is not the approach that this Government will take. May I also wish a belated happy birthday to my hon. Friend, who turned a significant age at the weekend?
Recently the Secretary of State said that she was confident that the system was working. Prior to this pandemic, more than 8 million people struggled to access food, and now a further 8 million households with children have lost their income. With food banks reporting increased footfall of more than 100%, can she please explain what possible grounds she had for that misplaced confidence and her continued justification for the five-week wait for universal credit, the two-child policy and the benefit cap?
The fundamentals of universal credit do not change. The reason for the assessment period is to understand people’s general income and use that as a basis, but that is where the advances come in: to help people who cannot make ends meet in between. As I said, fewer than half of people who have applied for universal credit have also wanted an advance. We are getting the vast majority of that money to people within three days and I think that that shows that the system is flexible enough to help those who need it most.
The Secretary of State has made very clear how the system is working, and it is working very well, but will she take the chance to address some of the issues for self-employed people, who are still waiting for money from the announcement, and to reiterate the rules and the way in which they will be paid over the next few months? I think that it would be useful and helpful to let people understand just what the Government are doing to make sure that they are looked after and paid for the long term.
My hon. Friend will be aware that self-employed people will have 80% of their profits reimbursed in the form of a grant. I know that it will take some time for the system to be delivered; my understanding is that payments will start within a month, but in the meantime, there may be people who are currently self-employed who could seek support from universal credit.
I was horrified to discover that, contrary to the announcement that personal independence payment recipients would be entitled to a three-month extension, my constituent—a lone parent with severe mental health problems—will not be. Why not? Because, as the PIP hotline confirmed to my caseworker, if someone’s award was decided by a tribunal—in other words, if they were forced to fight the DWP for that lifeline and that entitlement —they will again be treated differently from all other PIP recipients, and the three-month safeguard will not apply to them. Can that seriously be true? If so, why?
As I set out, where people were due to have a reassessment, the situation would arise in which we extend the award automatically by just three months. People who are in a tribunal process are those who have challenged the decisions; therefore the question of what award they have received will be the one that is under debate and review.
We know that coronavirus has seen the loss of loved ones in many families across the UK. What steps are being taken to ensure that widows, widowers and their families are being supported? What improvements are being made to bereavement benefits for widows and widowers?
The bereavement support payment supports working-age people who have lost a spouse or civil partner after 6 April 2017 by contributing to the more immediate additional costs associated with bereavement. People without children get an initial payment of £2,500 and 18 subsequent monthly payments of £100; those with children receive an initial payment of £3,500 and 18 subsequent payments of £350. Bereavement support payment is not taxable, and the least well-off will gain the most, as they receive the payment in full alongside any other benefit entitlements.
Mental and physical health conditions should not be a barrier to finding work. That is why, working with the Department for Work and Pensions, we launched Working Win, an employment programme that has now helped 3,000 people across South Yorkshire. Does the Secretary of State recognise the value of programmes such as Working Win? Will she commit to providing funding to support our most vulnerable workers through the covid-19 crisis?
The Department supports a number of schemes around the country; I am not aware of the specific one to which the hon. Gentleman refers. They will continue, I am sure, to be supported more broadly, but each and every one will be evaluated, because we need to make sure that the money that we have has the best reach. I am sure that he will continue to lobby for that case in South Yorkshire.
It is clear that confusion remains about who can and cannot go to work. I receive questions every day about whether any given company is essential and, if it is not, whether it should be closed. What steps is my right hon. Friend taking to make the current guidance and any future guidance clear? May I suggest that some kind of public information campaign be considered?
My hon. Friend is right to raise that matter. Our communication about staying at home has been very effective, but we have also said from the start that people should try to work from home, but that if they cannot and are able to go to work, they should go to work. The Government will provide further advice in the coming weeks to employers and trade unions about how to make workplaces safer. We have set out how work must be done in the workplace, including tailored advice for different scenarios, as examples of how employers might implement social distancing and other measures to help protect their workforce and customers. We continue to learn from each other, including in this House.
I am pleased to hear that the Secretary of State is fixing some of the glitches in universal credit—a system that many of us thought was woefully inadequate, and we have perhaps the biggest unemployment increase since the ’30s on the way. Will the right hon. Lady consider the matter in the round and do two small things: relax the savings threshold, because many people losing their businesses find that prohibitive; and replenish some of our reservoirs for discretionary housing payment in Ealing? A housing crisis was already under way in Ealing, Acton and Chiswick, and it is only getting worse.
On the question about the self-employed, where people have assets—for example, savings set aside for paying tax—they need to check carefully and go through that as they make their claim, because it will not be considered part of savings with regard to the £16,000 threshold. On housing, we have increased the local housing allowance, and I am sure that the discretionary housing payments have gone to Ealing Council. It is open for councils to come back to central Government if they would like that to be raised substantially.
It is clear from the Secretary of State’s statement and her answers to questions from Members that universal credit has been much more effective at scaling up to deal with the unprecedented level of claims arising from the coronavirus pandemic. I know from my constituents’ experience that we get half the number of problems that we got with the legacy benefits. May I therefore take the opportunity to thank all the staff, including those in my constituency, who have delivered universal credit? May they continue to do so.
May I remind the House that back in March, when I wrote to the Secretary of State to ask what emergency measures were in place to allow the Department to cope with the increase in new universal credit claims, I was told that the Department would redeploy staff and review priority of work? The Secretary of State has repeated that today. However, I am afraid to say that, months into the crisis, I still have constituents who are being told that the waiting time is eight hours when calling the claim line. As a result, many have been forced to use food banks for the first time. Given the ongoing issues that my constituents are experiencing, will the Secretary of State give resolving the technical and capacity issues the highest priority by providing clearer guidance to the public and the hard-working DWP staff on the correct process for making digital and non-digital universal credit claims?
We did have telephony issues, but I am led to believe that they have been significantly addressed, particularly with the “Don’t call us—we’ll call you” campaign. I recommend that the hon. Lady considers asking her constituents to use the journal when necessary. I appreciate that they do not all have internet access, but the average waiting time should now be considerably lower. The last I heard, it was, on average, about five minutes. I ask her to look into that.
May I add my thanks to the DWP team, particularly those based in Warrington, who have helped process claims swiftly for my constituents in the last six weeks? On Friday, I visited Warrington foodbank to meet the volunteers who are working hard to support families in my constituency who have fallen on difficult times. One of the concerns they raised is the speed of recovery when universal credit is advanced. Does my right hon. Friend agree that it is important to ensure that anyone who receives an advance of their benefits is given a reasonable timeframe to pay it back?
The advance is currently recovered over 12 months, so in a year, somebody will get 13 payments instead of 12. I should also point out to my hon. Friend that any deductions are made at a maximum of 30% of the UC payable. That will help several people as well.
Many people have had to apply for universal credit for the first time, but it is clear that, despite DWP staff working hard, the system simply cannot cope, and it was never intended to operate under such extreme circumstances. Constituents are waiting weeks for DWP phone calls and those unable to verify their identity online are told that the application does not exist, and therefore they cannot claim. What is the Secretary of State doing to prioritise new claims for universal credit, many of which are from people who have paid money into the system for decades and now find that their contribution means next to nothing?
I do not agree with the hon. Gentleman; I think UC has reacted very well to the increased challenge. However, I would say to him that there were initially problems with the online verification. There is an additional scheme called “Confirm your identity”, and between that and “Verify” it should be very straightforward for people to get through that part of the claim. I can assure him that he can also arrange for constituents to contact the DWP helpline and be processed that way, too.
Our new estimates are being published today or tomorrow, I believe, so I will refer my right hon. Friend to that for the particular element of delegated spend. Overall, however, we estimate an increase of about £6.5 billion in welfare benefits for the nation.
More than two hours having elapsed since the commencement of hybrid scrutiny proceedings, the Speaker brought them to a conclusion (Order, 21 April).
On resuming, the House entered into hybrid substantive proceedings (Order, 22 April).
[NB: [V] denotes a Member contributing virtually.]