Skip to main content

Cost of Living

Volume 814: debated on Tuesday 12 October 2021

Private Notice Question

Asked by

To ask Her Majesty’s Government, following the end of the Universal Credit uplift, increasing energy prices and rising inflation, what steps are they taking to avoid a cost-of-living crisis for households.

My Lords, we recognise that there are transitory global pressures on costs, including energy. We are maintaining the energy price cap and helping low-income households with fuel bills, and our new £500 million household support fund provides vulnerable households in England with additional help to cover essential costs this winter.

My Lords, is that it? I was expecting a bit more from the noble Baroness. Every home in the country is facing sharply rising costs, with hikes not just in energy bills but in food and fuel prices. A lack of HGV drivers has led to empty supermarket shelves, and there are queues outside petrol stations. Ministers are reported to fear that their Government’s inaction could lead to the country facing “a nightmare Christmas”. Families and businesses are struggling. I know that the Minister is not unsympathetic, but she knows that for some this winter it will be a choice between heating and eating, and for some families it will be a choice between the parents eating and the children eating.

I have two questions for the Minister. First—I heard the Answer she gave but it did not fully answer my Question—what will the Government do to protect, for example, the family of four hit by inflation to the tune of £1,800 by the end of the year, or pensioners having to find an extra £1,000? In addition, given this unfolding cost-of-living crisis, how can she, as a DWP Minister, think that this was an appropriate time to cut universal credit?

We are quite aware of the difficulties that inflation and rising food and energy costs present. We have introduced this household support fund—I am not being difficult—which is worth £500 million and which covers up to the end of March, which is six months, and, as ever, the Government will continue to assess the situation. That is the best that I can give the noble Baroness right now. On the universal credit uplift, I and others are absolutely aware of the angst and frustration about this decision. I have to repeat myself: it was temporary and it has come to an end. For people who are not able to work, there is one job to do. However, for people who can work, the labour market has never been so optimistic and we must work with them through that.

My Lords, would it not make sense this coming winter, in the face of all the hardship, to consider temporarily suspending all the green levies and carbon charges and the idea, which has been mooted, of a further tax on gas, until at least the spring and at least until the present explosion of prices is over?

My noble friend makes a valid point and I will take it back to not just my department but the relevant department to see whether I can get an answer to his question.

Can the Minister confirm from the Dispatch Box the simple proposition that all these changes will impact disproportionately on the least well off? That inevitably means that the gap between rich and poor will increase. Can she explain to us how that fits into the Government’s levelling-up agenda?

I quite understand, but for those people to whom the noble Lord refers with a health condition or a disability who cannot work, there is also a chance to get the £350 a month top-up of the universal credit standard allowance to help with their everyday costs. I say again: while this is a difficult position and we, not least my ministerial team, understand the potential challenges for people in this field, we are listening and assessing. I am unable to make any other policy commitments on that.

On the levelling-up agenda, the Government are quite committed to levelling up. Andy Haldane has been appointed to head up the task force. This is an economist from the Bank of England who knows what this is about, and we must work with him to make sure that levelling up works.

My Lords, I wish that at the beginning of our proceedings this afternoon I had decided to count how many times the phrase “unintended consequences” would be heard in a ministerial voice. As someone who has long been a campaigner for and volunteer with homelessness charities, I wonder what assessment Her Majesty’s Government have made of the unintended consequences this change will have on the level of homelessness among our people. We did so well with the Everyone In scheme; it seems a shame if we are now putting that at risk. What will the Government do to mitigate that?

My Lords, the right reverend Prelate makes the very good point that at the time of Covid, the Government responded very well and made the terms of that response very clear. On the unintended consequences, I think I said in a previous answer that assessment of the universal credit uplift has not been made because it was a temporary change and facility, so we were not required to do that. I know that that answer will not please many people.

My Lords, circumstances have changed significantly in the past few months, as others have said. The Bank of England is predicting inflation of 4% for the fourth quarter of this year and above 4% for the first and second quarters of next year. Pressures such as those, the national insurance increase, the public sector pay freeze and rising food prices from energy costs all squeeze the poorest, so, in the light of them, does the Minister agree that the Government are gambling with family finances by ending the £20 uplift? If she does not, will she assure us that they will come forward with a comprehensive package to address those pressures, including reinstatement of the £20 uplift?

The commitment I can give to the noble Baroness is that on a daily basis, these things are being assessed and discussed—they really are. I cannot give any other commitment, and I certainly cannot give any commitment that the £20 will be reinstated.

My Lords, I was really proud of this Government when we took steps to protect the most vulnerable, and the £20 uplift had a poverty reduction impact of 840,000—290,000 of those were children and 450,000 were those with disabilities. I understand that this provision was temporary, but, as my noble friend said, there is a new circumstance of rising inflation and cost of living. Can she say, if not the £20 uplift, what alternative mitigating strategy will be put in place to protect those who cannot work and/or those in work to progress in work?

I thank my noble friend for the time that she has given us in talking about the ideas put forward as a result of the £20 uplift being removed and other ways in which that can be mitigated. It really was a pleasure to sit down in a most positive way and discuss this. My noble friend will understand that I cannot make any commitments on that.

Let me finish. I am not able to say what might happen but the ideas that my noble friend has put forward are in the melting pot. As for in-work progression, a lot is going on and the labour market should make it really possible for people who can work to work more and earn more.

My Lords, will the Minister return to her department and request that, at the very least, free school meals are accounted for over the summer and Easter holidays by additional payments to families in need, so that students who have suffered so badly through Covid can study on a full stomach over their holiday periods?

The noble Baroness makes a good point. I will take that straight back to the department and do as she requests.

My Lords, the upgrade was introduced to deal with the crisis. Families are now facing a bigger crisis than they were before. The Government’s £500 million goes nowhere near dealing with this problem. Will they go back and think about how they are going to support those families through a difficult winter?

I am not sure why the noble Lord says that the £500 million “goes nowhere near”. It is for a six-month, not 12-month, period. I will go back and make the points, as I have already done regularly—as have other colleagues—about the dire circumstances of the situation.

Does my noble friend agree that anybody who, like she, is a genuine one-nation Tory, is somewhat embarrassed?

Sometimes we find things more difficult than others. That is how I would answer that but I am very proud of how this Government have responded with our plan for jobs. I hope all noble Lords will agree with that.

My Lords, in a Statement in the other place on 20 September, Kwasi Kwarteng pledged to MPs that

“protecting consumers is our … primary focus”

and was shaping

“our entire approach to this … issue.”—[Official Report, Commons, 20/9/21; col. 23.]

He then, of course, went on to say that universal credit and other support were matters for the Chancellor and the Secretary of State for Work and Pensions. There is no dispute that the poorest families are most likely to receive universal credit and other benefits. They are also the most likely to spend the great majority of their income on food, gas and electricity, so they will be hit the hardest and £500 million goes nowhere in dealing with that. What does the pledge mean in the absence of sufficient support for vulnerable households? That is all we ask for—sufficient support for vulnerable households.

I know for a fact that the Department for Work and Pensions, the Treasury and BEIS are in dialogue daily. I honestly cannot say what the outcome of that will be and I shall certainly not try to do so, but this Government will try to do all they can to mitigate these difficult circumstances, especially on the energy issue.

My Lords, more than a million children have been affected by the Government’s two-child benefit cap limit during the pandemic. Does the noble Baroness appreciate that the level of child poverty has risen dramatically, especially during the pandemic? What is being done to help those families who have already taken the hit on that to enable them to cope during this winter? Will the Government have a look at and revisit the issue of families with more than two children, given that the Prime Minister is a good example of that? What can be done to address this matter?

My Lords, I can again confirm to the noble Baroness that there are no plans to change the two-child limit. However, I can say that we will try to do things, and are committed to doing things, about the national living wage so that it reaches two-thirds of the median income for those aged 21 and over by 2024. We have put in place an energy cap, which will remain in place—although I expect that there will be some increases in cost. We have the warm home discount scheme, which provides a rebate of £140, and the cold weather payment. These are all things that we are doing to try to mitigate the effects.

My Lords, does my noble friend the Minister agree that one way to help people is to get them into work? Can she inform the House of how many job vacancies there are and how we are helping people to get those jobs?

My noble friend asks a really interesting question—[Interruption.] No, it is interesting. Let me preface my answer with the fact that most of the questions asked are about people who are unable to work. I accept that. On my noble friend’s question, there are 1,102,000 vacancies. The labour market has never been as buoyant. Our work coaches are turning themselves inside out and upside down to get people into work and into work that pays. That commitment will continue, and our liaison with employers is paramount.