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Universal Credit

Volume 813: debated on Tuesday 13 July 2021


Asked by

To ask Her Majesty’s Government what steps they are taking to support people on universal credit.

The UK Government’s approach to welfare is to recognise the value and importance of work, making work pay and supporting people into work while protecting the most vulnerable in society. To support those on low incomes through the outbreak, we introduced a package of temporary welfare measures, spending £111 billion on welfare support for people of working age in 2020-21. This included around £7.4 billion of Covid-related welfare policy measures. However, our focus now has to be on the £30 billion plan for jobs, which will support people into long-term employment by helping them to learn new skills and increase their hours or to find new work.

Thérèse Coffey has confirmed that £20 per week will be cut from universal credit in September, overriding objections not just from Labour but from numerous charities and even six of her predecessors. Like the Minister, the Prime Minister argues that the emphasis should be on getting people into work, even though one-third of claimants are already in jobs, including many of the carers, drivers and shop staff who served our nation throughout the pandemic. Rather than repeat the tax credits debacle when the Government were forced into a late U-turn, will Ministers please rethink these questions and do the right thing now?

My Lords, the Government announced in the 2021 spring Budget a six-month extension to the temporary £20 a week increase to universal credit. Eligible working credit claimants also received a one-off payment of £500. However, as we see the economy opening, it is right that the Government should shift our focus to developing and pushing forward excellent schemes for people getting back into work. That is why we are investing £30 billion in the plan for jobs.

My Lords, I am saddened to hear about the phasing out of the £20 uplift in universal credit. Her Majesty’s Government have made a very positive step towards tackling childhood obesity with plans to ban junk food adverts before 9 pm but there is a clear link between poverty and obesity, particularly where financial constraints make cheap, high-calorie food more affordable than healthy alternatives. How then do the Government aim to improve access to healthy food for those on universal credit?

My Lords, we help those most vulnerable in our society with free school meals and with free fruit and veg in primary schools. We are continuing to look at the obesity strategy to make sure that we are doing everything we can to ensure that people can afford to eat healthily.

My Lords, could the Minister give us an update on the contribution that UC work coach activity has made in alleviating workforce shortages in the hospitality and other sectors? How successful have they been in inspiring people to enter vocational careers, particularly in the prison and police services?

My Lords, as I said, we are investing over £30 billion in our ambitious plan for jobs, which is already delivering for people of all ages right across this country. We have fulfilled our commitment to recruit 13,500 extra work coaches who, through our jobcentre network, provide people with the support that they need to move into work across a wide range of sectors and vocations, including access to apprenticeships, vocational and basic skills training, careers advice and sector-based work academy programmes. I am happy to offer a further meeting with my noble friend to discuss these further.

Does the Minister agree that if you are not very good at digital usage, if you find it difficult to get a bank account in spite of all the Government’s good efforts, or if you find it difficult to arrange your budget, this situation is very hard? For a continuous period, almost since the 1970s, we have infantilised people on social security and not given them any support to get off it. Now that we are giving them that support, all these things are happening at once. I meet hundreds of people who are struggling daily because they do not know how to handle the opportunities presented by universal credit.

The noble Lord brings up a very good point. What we need to do, and what we have done, is to train and recruit good work coaches, working from our jobcentres, who personalise the support they give to the most vulnerable in our communities but also help them to get good jobs and reach their potential.

My Lords, the pandemic has been highly unequal in its impact on different sectors, people and geographies. The Government can try to bury the bad news that they are cutting universal credit by £20 a week but they cannot disguise that this is delivering an overnight 5% cut to the incomes of 6 million poorer households. If the £20 cut goes ahead, as the Resolution Foundation points out, it will result in the lowest real-terms level of basic benefits for 30 years. In today’s environment, how does the Minister justify that?

As I have said, when the Government put in the £20-a-week increase in universal credit, it was always going to be a temporary position. We now have a comprehensive plan for jobs. There are jobs out there. We will support people in the short and long term by helping them to get new skills and increase their hours to find new work, whether they are young or old, and to ensure what we know is the best way out of poverty, and that is jobs.

My Lords, further to the question from the right reverend Prelate, is the Minister aware that to afford the cost of the Government’s recommended healthy diet, a family on benefits would need to spend 75% of their income on food? What will the Government do to ensure that the cost of a healthy diet is fully factored into the calculation of benefit payments?

I do not think I can add anything further to what I said to the right reverend Prelate. We are looking at the obesity strategy. We have a great free school meals programme, which is also running through the summer and Christmas holidays. It is important that, through the obesity strategy, we continue to look at making good food affordable.

Will the Minister please explain how cutting £20 per week from universal credit for 6 million of the poorest households, many of whom are already in work, and pushing below the poverty line another 420,000 children who will therefore go hungry, can possibly be delivering on the Prime Minister’s promise of “levelling up” our communities?

As I have explained, what we are doing and what we intend to do is to take away something that was always going to be temporary and invest in making sure that these families get good jobs for the future.

My Lords, I congratulate the Government on their Restart programme, but surely a year of unemployment before that kicks in is not necessary in the case of an enforced career change—for example, returnees from looking after children or those whose livelihoods have been destroyed by Covid.

My noble friend is probably talking about the Restart programme, which looks at referrals on a case-by-case basis with work coaches and can restart jobs for people who have lost jobs through the Covid pandemic. Those work coaches will look for the most appropriate route for an individual. These could be people who now need a career change. The other option for those having to change career could be the sector-based work academy programme, which also looks to invest in reskilling. This offers up to six weeks of training, work experience and a guaranteed interview for a real job to claimants in England and Scotland.

My Lords, the Minister keeps talking as if this is only for people out of work and the solution is to find work. However, this support goes to people on low incomes, including those in work. The level of support is now lower in real terms than it was 30 years ago, and the lowest as a proportion of wages it has ever been. Will she reflect on the fact that every single Conservative Secretary of State for Work and Pensions since 2010—all of the former Secretaries of State—believes that this cut should not take place?

The noble Lord talks about in-work poverty. Our focus today is still on supporting people financially through the Covid pandemic, but our long-term ambition remains to build an economy that ensures that everybody has the opportunity to enter and progress in work. Full-time work dramatically reduces the risk of poverty. We have a commission on in-work progression, which has published its report on the barriers to progressing for those on persistently low pay. The Government will consider its recommendations and respond later in the year.