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Covid-19: Universal Credit

Volume 810: debated on Tuesday 2 March 2021


Asked by

To ask Her Majesty’s Government what steps they are taking to support claimants of Universal Credit during the COVID-19 pandemic.

My Lords, in January 6 million people were on universal credit, up from 3 million last March. Does the Minister accept—

I am so sorry; I am out of practice. I beg leave to ask the Question standing in my name on the Order Paper.

My Lords, where do I start? I am so proud of the work that my department has done in supporting people during the pandemic. Time does not allow me to reel off everything that we have done, but I shall list these: our plan for jobs; a £2 billion kick-start scheme; increased support for 40,000 jobseekers of all ages; sector work-based academies; the job-finding support service; the help that we have given to 160,000 people; and our £238 million job entry targeted support. There is much more that I could say to the whole House. The department has done an outstanding job.

I am grateful to the Minister for having got that list out of the way, because now she can answer one very simple question from me. Does she accept that cutting £20 a week from the incomes of people on universal credit, whether now or in six months, will push children into poverty and leave out-of-work support at its lowest level in decades, just when unemployment is set to peak? Will she take back to the Chancellor a clear message that he should cancel this cut, extend the £20 to legacy benefits and ensure that our social security system offers a proper safety net to everyone who needs it?

The £20 uplift in universal credit has done an outstanding job. The Chancellor put it in place in a temporary way, and I guess tomorrow we will find out the intentions for the future. But please be assured that I am very happy to go back to the Chancellor and share the views of the noble Baroness and many others who have made that point.

My Lords, I congratulate the Government on what they have done in this respect in supporting so many vulnerable people during the pandemic. However, does the Minister agree that the danger of the cut that taking away the £20 a week would be is that the Government would get a short-term saving, but would pay far more in the longer term because of some of the social costs? Given the number of people we see using food banks in my diocese and around the country—including working people—and the number of children in poverty and likely to go deeper into it, the remedial costs of supporting them into the longer-term future will far outweigh anything paid now.

The right reverend Prelate makes an important point. The £20 uplift has made a significant difference and, like the noble Baroness, Lady Sherlock, he has outlined some of the impacts that would happen should that be stopped. I am terribly sorry, and I wish it were not the case, but I do not have the Chancellor’s ability to make a commitment today.

My Lords, an analysis by the Social Metrics Commission found that, without the universal credit uplift, nearly 1.4 million people would have been pushed into poverty due to the pandemic. With the £20 uplift and other government interventions, however, 700,000 people have been protected, 150,000 of whom are lone parents. Does my noble friend agree that this is a remarkable achievement? What plans do the Government have for ensuring this continued support?

I thank my noble friend for her acknowledgement of the difference that the £20 has made. I had better say now: “Message received, over and out”. I will relay it and replay it to my colleagues in the department and the Chancellor.

My Lords, on a previous occasion the Minister was extremely sympathetic to the plight of freelancers, especially musicians, who have been caught in the government net and unable to get through it—that is, they were not eligible for universal credit or the SEISS. As I say, she was very sympathetic and said that she would look at this with her department. Has she made any further assessment?

A number of groups of individuals have been impacted by Covid and their incomes have been put under stress. The department continually reviews the impact on people but this is a timely reminder for me to go back and make some more representation, which I will do.

My Lords, does the Minister agree that the £20 uplift for universal credit should be extended to include claimants receiving legacy and related benefits, the majority of whom are disabled or carers, or have a long-term illness? These people are suffering great hardship and the Government need to take action now. Will she support that?

Legacy benefits and the £20 uplift have been the subject of lengthy and great discussions in the department. To be absolutely straight and truthful, the only thing I can say is that the Government have no plans to extend the temporary £20 uplift. I know that that will be a disappointment.

My Lords, further to the question of the noble Baroness, Lady Primarolo, I draw to the Minister’s attention the fact that many people still on legacy benefits have had their finances hit hard by the pandemic. The need to reduce health risks, such as by taking taxis to appointments to avoid public transport, purchasing more PPE for those with respiratory conditions and using more heating to reduce the risk of complications from Covid-19 all incur high costs. In previous questions, we have heard that the costs of disability and sickness are considerable, particularly to people who have little at the moment and are on legacy benefits. I know that the Minister has answered by saying that the Government have no commitment to add the £20 uplift to legacy benefits, but will she commit to looking into the circumstances of people on legacy benefits and their carers—disabled people, particularly—to see what action can be taken to improve their circumstances?

I give an assurance to the noble Baroness that I will speak to her in more depth about the points she raises. Once I have done that, I will of course go back to the department and talk to those there.

My Lords, the number of vacancies in the period November 2020 to January 2021 is up by 64,000 from the previous quarter to almost 600,000. What are work coaches doing to ensure that claimants take these vacancies up, and what plans do the Government have to incentivise moving into work by reducing the taper rate and increasing work allowances?

I say to my noble friend and the whole House that we should thank God that we have work coaches. Their training has been enhanced, they are focused on the individual and they make sure that those individuals get the support and access to the benefits that they need. More importantly than anything else, they are getting access to the help they need to get back to work. Universal credit was designed to make work pay, so not all of a person’s earnings are deducted from UC. The department has made changes to improve the financial incentives to work by reducing the taper rate to 63% from 65%. All these things are continually looked at.

My Lords, a little while ago there were widespread reports that fraudsters were illegally claiming public money from the universal credit uplift. The Government moved quickly and took steps to tackle this. Can the Minister update the House on the latest position?

The noble Lord is right to raise the point about people who try to abuse the system with no right to do so. The situation with fraud and recovering sums is being dealt with in the department. To give the best response in the time I have available, I will write to the noble Lord and place a copy of the letter in the Library.

When universal credit was first put together, one big thing was to cut through bureaucracy and waste. I would like to think that we have moved towards reducing the ways in which people can get on universal credit. Obviously, there are many problems for people who want to go on to it, and they are still having to wait a long time. My question is more about the long-term effect of universal credit. How much does it cost to actually deliver £1 of social support, because in the old days it used to be about a fiver to deliver that £1?

I not sure where the noble Lord gets his figures from; I do not dispute them, but I will have to go back and have a good look. The universal credit business case was agreed in 2018 and demonstrated that it remains deliverable and affordable, and provides value for money. In a steady state, universal credit will generate economic value of £8 billion per year, and it is doing a great job.

Sitting suspended.