Considered in Grand Committee
My Lords, I am required to confirm that the draft Social Security Benefits Up-rating Order 2022 and the draft Guaranteed Minimum Pensions Increase Order 2022 are compatible with the European Convention on Human Rights and I am happy so to do.
The Social Security Benefits Up-rating Order increases state pensions and benefits by 3.1% from April 2022, in line with the increase in the consumer prices index in the year to September 2021. This represents an additional £4 billion of expenditure on benefits for pensioners and £2.6 billion on benefits for people below state pension age in 2022-23. In November 2021, Parliament passed the Social Security (Up-rating of Benefits) Act, which made amendments to the Social Security Administration Act 1992, setting aside the earnings link in the state pension triple lock for the year 2022-23. This was in response to exceptional circumstances caused by the distorting effects of the pandemic on the earnings statistics used in the triple lock formula. Setting aside the earnings element is temporary, only for one year. We are committed to reapplying the triple lock in the usual way from next year and for the remainder of the Parliament.
From April 2022, the basic state pension will rise to £141.85 a week for a single person. This means that the basic state pension will be over £2,300 per year higher in cash terms than in April 2010. The full rate of the new state pension will increase to £185.15 a week and additional state pensions and protected payments in the new state pension will also increase by 3.1%. The pension credit standard minimum guarantee for a single pensioner will rise to £182.60 a week and the rate for a couple will rise to £278.70 a week. The personal and standard allowances in jobseeker’s allowance, employment and support allowance, income support and universal credit will increase by 3.1%. Certain elements linked to tax credits and child benefit will be increased in line with those payments. The monthly amounts of universal credit work allowances will also increase in April to £344 and £573.
Benefits for unpaid carers and those who have additional costs as a result of a disability or health condition will increase by 3.1%. These benefits include disability living allowance; attendance allowance; carer’s allowance; incapacity benefit; personal independence payment; the carer and disability-related amounts in pension credit and other means-tested benefits; the employment and support allowance support group component; and the limited capability for work and work-related activity element of universal credit.
I am aware that the noble Lord, Lord Davies of Brixton, has tabled a regret Motion against the uprating order and I respect his position on the matter. The regret Motion will be debated at a later date, but today we must agree the uprating order to ensure that my department can introduce the new rates of benefits and pensions from 11 April.
The Guaranteed Minimum Pensions Increase Order provides a degree of inflation protection for members of formerly contracted-out defined benefit occupational pension schemes. It requires schemes to increase guaranteed minimum pensions built up from April 1988 to April 1997. As set out in primary legislation, a guaranteed minimum pension in payment must be increased in line with the increase in the general level of prices as at September 2021, which was 3.1%, or 3%, whichever is less.
To conclude, with the Social Security Benefits Up-rating Order, the Government propose to spend an extra £6.6 million in 2022-23 on increasing benefit and pension rates. Furthermore, the Guaranteed Minimum Pensions Increase Order increases the guaranteed minimum pension by 3% in line with primary legislation. I beg to move.
My Lords, it was tempting to do no more than recite the contributions from the Conservative MPs who spoke on the social security order in the Commons, as they said much of what needs saying about this shamefully low increase in social security benefits in the face of forecast inflation of 6% to 7.25% this April, which will go even higher later this year following the horrifying assault on Ukraine. It does not take a mathematician to work out how a 3.1% increase will mean a significant cut in benefits’ real value, without even taking account of the differential impact of inflation on people on low incomes, who spend a disproportionate amount of their income on the basics of fuel and food.
The Government’s answer to the cost-of-living crisis has been widely criticised as inadequate and poorly targeted towards those who will suffer most, including by the Conservative MP Peter Aldous in the Commons debate on the order. A huge increase in fuel poverty is now predicted, despite the measures taken. Why have the Government ignored the calls from a wide range of organisations, including the Institute for Fiscal Studies, the Resolution Foundation, Citizens Advice and the Joseph Rowntree Foundation, to raise benefits by 6%, 7% or even 8% in line with the anticipated inflation rate? At the relaunch of the book by the noble Lord, Lord Freud, Neil Couling of the DWP said that it would be technically feasible to do so for universal credit. Even if it is not possible to do this for other benefits immediately, recipients could presumably be given a delayed uprating or a lump sum grant in lieu.
Had the Government listened to us in the autumn when we debated the triple lock Bill, this would of course have been less of an issue, though at that point we had not anticipated inflation going quite so high. It is clear that the current uprating mechanism, based on inflation around half a year earlier, is not fit for purpose, as the Resolution Foundation, the IFS and Nigel Mills MP, in the Commons debate, have argued. Will the Minister undertake to take back the message that there needs to be a review of the uprating procedure?
To return to the immediate crisis, in order to understand just how damaging this uprating will be, we need to put it into context, as the noble Lord, Lord Freud, made clear in the debates on the triple lock Bill. It is a context in which benefits have been cut or frozen for much of the period since 2010. Families with children have been particularly badly hit, thanks to the two-child limit and benefit cap, described by the noble Lord as “excrescences” that should be got rid of. It is worth noting here that, according to the Child Poverty Action Group, of which I am honorary president, 180,000 families will see no benefit increase next month because of the cap, which has not been uprated at all since it was set in 2016.
Moreover, the withdrawal of the welcome £20 uplift means that the Government will have been responsible for two cuts in the real value of benefits in under six months, as pointed out by the JRF. It estimates that 400,000 people could be pulled into poverty by the April cut. However, the underlying issue is the inadequacy of benefits to meet people’s needs. I quote the Tory MP, Nigel Mills, who is a member of the Work and Pensions Committee:
“I genuinely fear that many of the benefits we have are now lower than people need, so a lower than inflation rise for benefits that are already too low leaves people in an impossible position … It should not be a big challenge or a contentious point of debate to want to ensure that the benefits we are giving the poorest in society are enough for them to live on”.—[Official Report, Commons, 7/2/22; cols. 723-24.]
There is plenty of research that shows that all too often they are not. It was a recurrent theme in the Covid Realities research, conducted by a number of universities in association with the CPAG. It underlined that inadequate benefits contribute to the insecurity that many people living on benefits feel. One participant, when asked how she felt about the withdrawal of the £20, answered that she was “terrified”. She explained:
“We only started to claim universal credit in the middle of the pandemic due to my husband being made redundant, so up until recently I had no idea we were in receipt of any ‘uplift’ … To be told that now all of a sudden £86 per month will be taken is horrifying.”
Another participant commented:
“I’d like people to think about why it was necessary to introduce a £20 uplift … Surely this is an acknowledgement in itself that the support given to low-income households just isn’t enough for them to live on.”
Evidence about the inadequacy of the benefits received by disabled people can be found in the NatCen report on the uses of health and disability benefits that the DWP tried to suppress but which was eventually published in an unprecedented move by an exasperated Work and Pensions Committee, although a whistleblower revealed that some references to “unmet need” had already been excised following pressure from the department. While overall the ability to meet needs depended on the extent to which recipients had other sources of income, those of limited financial resources reported often not being able to meet not only health-related needs but also essential day-to-day living needs such as heating their house or buying food.
The Minister in the Commons, Chloe Smith, disputed such a reading of the research, arguing that it showed that
“health and disability benefits … help to meet almost all identified areas of additional need.”—[Official Report, Commons, 7/2/22; col. 666.]
But helping to meet needs is not the same as being sufficient to meet them. The health and disability Green Paper made no mention of the question of benefits adequacy. As Minister with responsibility for research in the DWP, will the noble Baroness give us an assurance that the White Paper will do so, taking account of this research which was commissioned by the DWP? Will she take back the message that we need a proper review of the adequacy of social security benefits more generally?
In conclusion, the Minister in the Commons tried to reassure MPs that there was nothing to worry about because of the smoothing effect, which meant that this April’s inflation rate would be reflected in next year’s uprating. However, Torsten Bell of the Resolution Foundation dubbed it more of a “rollercoaster” on yesterday’s “Today” programme—anything but smooth. The Minister demonstrated his complete lack of understanding of what it is like to struggle on a low income. If you are already facing difficulties feeding your children adequately and keeping your home warm, it is no help or comfort to know that today’s rocketing inflation rate will be smoothed out in benefit rates in a year’s time. Indeed, some of those affected might not even be claiming some of those benefits in a year’s time, so they will, in effect, have been cheated of what is arguably rightfully theirs. I urge the Minister not to use the smoothing argument in her response because, frankly, it is cruel when parents and others on benefits are worried sick about how they are going to manage and she is not a cruel woman.
My Lords, it is good to follow an informed speech. The uninitiated may find, as I do, these many details in so many pages difficult to follow. One finds on page 34 of the order, in Schedule 5, that Regulation 20(9)(c) refers to an enhanced disability premium of £25.35 concerning polygamous marriage. My reference is not an objection but an instance of facts buried in the necessary but challenging minutiae. But it is heartening to read of increases, for example, in adoption, maternity, bereavement and disability benefits. The late Lord McKenzie—Bill—is surely watching over this Committee. All this was made for the late, lamented Bill. He always mastered regulatory detail.
I hope that that wretched, bullying, cruel Kremlin gangster does not launch true cyberwarfare, which might immobilise the great department that the Minister represents, because that department delivers these vital benefit payments. They are so welcome, so necessary and so important to personal well-being for tens of thousands—perhaps many millions—of people. Millions of our hard-pressed fellow citizens are in need of these benefits. Soon they will be engulfed in a great wave of price increases: the supermarket food, the gas and electric heating bill, the diesel motor tank to fill. In this respect, for example, I paraphrase Charles Dickens’s iconic Oliver: Minister, I want some more.
I refer to the levelling-up document and the Prime Minister’s foreword—sincerely meant, I am sure. He says that we are
“one of the most unbalanced”
economies. He goes on to say:
“I am determined to break that link between geography and destiny, so that it makes good business sense for the private sector to invest in areas that have for too long felt left behind.”
On the next page, there is a foreword by the Secretary of State, Mr Gove. He says:
“There are stark geographical inequalities between and within our cities, towns and villages. For every local success, there is a story of scarring and stagnation elsewhere.”
I thank the Minister for her introduction. Professionally, outside your Lordships’ House, she was always for those in need of help, and is always sincere at the Dispatch Box; that goes without saying. I also acknowledge my noble friend who leads for us, from whom one always learns, and her expertise and commitment. My regret is that this debate is not on the Floor of your Lordships’ Chamber, where it should be, given the supreme importance of these benefits to so many people who are hard pressed.
It is noticeable that in Part 1, the introduction, some provisions are extended to England and Wales only; Scotland is excepted. In the helpful Explanatory Memorandum, at paragraph 6.11, we are told of benefit payments devolved to the Scottish Parliament, although they are the same benefits. Inevitably, one asks—as I do, concerning my homeland, the lovely land of Wales—why not devolve to Wales also? There is a very able and competent Government in Cardiff. Did the excellent Welsh Government ask or did they presume that the challenge of a new executive agency infrastructure was not for this time—or did Her Majesty’s Government refuse a Welsh request? It is an excellent Welsh Government and I would be grateful, whether this is by letter or in response, for the Minister’s insight: to devolve or not to devolve? Always now, when governance is the issue, the question, the issue, the very matter—the future of devolved government—crops up, as it has in the memorandum’s reasoned, informative page 5.
This debate is about benefits and pensions, but devolution de facto is in the order’s spirit, as it is in its pagination. The crisis of Covid-19 stretched British governance to the limit. It was clear that there were unforeseen consequences of devolution. That stared Her Majesty’s Government, the Prime Minister and the Cabinet in the face frequently. It came from several First Ministers—and, indeed, paragraphs 6.11 and 6.12 of the Explanatory Memorandum refer to the Scotland Act. It was clear during Covid-19 that the First Ministers took different views from the Prime Minister’s. What are the assessments by the Minister’s department as to future consequences to the task of distributing and assessing benefits? The Minister might give a reply by letter, if not in the debate.
To conclude, soon a great wave of price increases across the board will engulf the most vulnerable of our fellow citizens. Already inflation stalks the land—and I refer to those of our fellow citizens who are not “just getting by”. We had those noble and thoughtful words from Prime Minister Mrs May outside No. 10, at her lectern, on being elected. She said that she was concerned for those just getting by. I am asking the question also for those who are not getting by—and millions of our fellow citizens now are not getting by. The Minister can be proud that her department is offering help, and more help, but the predicament for so many is massive and the challenge thundering up is even bigger. It is going to happen and it is not necessarily the fault of a given Government. It is going to happen and so I say, like the iconic Oliver: I would like some more. Are these welcome increases to benefits enough? I think that there is an important answer to give.
My Lords, I thank the Minister for introducing this uprating order. The problem is that the combination of rising inflation and tax rises is creating a cost-of-living crisis that will affect practically every household in the UK but will be especially difficult for those on low incomes who make use of welfare payments.
Before the crisis in Ukraine, the Resolution Foundation reported that an average family will see household budgets reduced by £1,200 a year through a combination of soaring energy prices, the freezing of the income tax personal allowance and the rises in national insurance and council tax. Those on low incomes will find it hardest to make ends meet, because the major benefits are due to go up in line with a lagged measure of inflation. The September CPI rate had it at 3.1%, whereas the Bank of England expects inflation to peak at 7.25% in April and to average around 6.2% in the course of 2022—and all that is before the impact of the crisis in Ukraine is taken into account. Many commentators are forecasting an inflation rate for the UK of more than 10% later this year.
The Government really must not allow a situation to develop that means a deep cut in benefits year on year for people less able to withstand the impact of the rising cost of living. For example, those who must use meters to pay for their gas and electricity will be put under even greater financial strain because of their high cost compared with other methods of payment.
Even before the impact of the Ukraine crisis on the cost of living, this policy would have led to a £290 real fall in benefit income year on year for the 10 million households in receipt of these benefits. That would be an unacceptable cut in the incomes of millions of people who are already among the most vulnerable. The Spring Statement later this month provides an opportunity for the Chancellor to do something about this crisis, which was unnecessarily deepened by the removal of the £20 per week boost to universal credit.
Paragraph 12.1 of the Explanatory Memorandum on impact is hopelessly out of date. The assertion that the
“impact on business, charities or voluntary bodies is negligible”
is flawed. The impact will be very great, particularly on charities and voluntary bodies, which will see a huge increase in demand for their help as prices rise steeply and real incomes decline for millions of households.
I hope that the Minister will agree that this uprating order is out of date and that the Spring Statement needs to bring proper solutions to the deepening crisis in our cost of living and its impact on those with low incomes.
My Lords, I thank the Minister for introducing these orders and all noble Lords who have spoken. I agree with my noble friend Lord Jones that it would have been preferable had the uprating order been taken in the Chamber. Many of the orders that we deal with are technical; this one affects the incomes of some 20 million people at a time when we have never seen a cost-of-living crisis like this. Had it been taken in the Chamber, we perhaps would not have had a regret Motion, but here we are.
I thank my noble friend for mentioning my late and much-lamented noble friend Lord McKenzie. Every time we gather here, we miss him very much. I just wanted to read his name into the record.
First, a word on the guaranteed minimum pensions order, which is rather more technical. I have raised the question of equalisation in most previous years, but we have had a new development. A new Private Member’s Bill has just arrived in the Lords from the other place that aims to address the legal uncertainty that the current legislative situation can pose when a pension scheme tries to adopt a process for addressing GMP equalisation. The Government smiled on it at the other end. At Second Reading in the Commons, the Pensions Minister, Guy Opperman, accepted that what the Bill does is key because it
“gives the Government the ability to set out in regulations the details of how survivor benefits will work for surviving spouses or civil partners of people with guaranteed minimum pensions.”
He also made the point that the Bill
“gives the Government the ability to set out in regulations details about who must consent to the conversion of guaranteed minimum benefits.”—[Official Report, Commons, 26/11/21; col. 627.]
The Minister confirmed, at col. 628, that the Government backed the Bill. However, when the Commons got to Third Reading on 25 February—a long gap—he said:
“The reality is that there is no real way for my hon. Friend’s Bill to get through this House and the House of Lords in the time allowed”.—[Official Report, Commons, 25/2/22; col. 659.]
The Government have accepted that there are problems to be addressed on the matter of GMP equalisation, so can the Minister assure the Committee that if that Private Member’s Bill fails to get through, the Government will none the less speedily moved to address the outstanding issues?
I turn to the Social Security Benefits Up-rating Order, which we gather to debate every year, except of course during the years of shame, when the Government refused to update social security benefits as they should have done. I cannot remember a year when the context was so worrying for so many people. The cost of living is rising so fast that even those on middle incomes are struggling and it is a catastrophe for those on lower incomes. People are genuinely frightened about how they are going to manage. Demand for help from food banks is already skyrocketing, as it is for financial advice and debt support. The noble Lord, Lord Shipley, made a good point that the Explanatory Memorandum had not taken account of the impact on those organisations.
On 25 November, the Secretary of State announced her decision to raise pensions and most benefits by prices—3.1%, as the CPI 12-month rate was in September—but that inflation was already out of date as she made the statement. CPI had hit 4.2% in October. By January it was 5.5%. A year earlier, it was 0.7%. As noble Lords have said, the Bank of England’s latest Monetary Policy Report suggests that it will hit 7.25% in April, but that was before the war in Ukraine, so goodness knows how high it will go. We have not seen a cost of living rise of this scale for more than 30 years. As a result, pensions and benefits will be uprated by less than half the rate of inflation.
My noble friend Lady Lister is quite right that it is worse again for poor families, who spend more of their income on basics such as food and fuel. During the debate on the Social Security (Up-rating of Benefits) Bill, the Minister said that
“we are not currently expecting widespread, significant and sustained increases in consumer food prices in the coming months.”—[Official Report, 26/10/21; col. 740.]
Does the Minister still think that? Grocery prices rose in February at their fastest rate for more than eight years, and market analysts predict that that is not going to get better any time soon. In three weeks’ time, the energy price cap rises to almost £2,000, and it will go further. Consumers have this week been quoted £3,500 a year to fix their tariff. That is £67 a week. A single person’s JSA is only £74 a week. How are people supposed to manage?
Noble Lords have commented on the lag between the release of the inflation data used as a reference point and the uprating taking effect. As my noble friend Lady Lister mentioned, Ministers tend to argue that it all comes out in the wash because if inflation were, say, 6% next September, benefits would go up by that much in April even if inflation had come down again, but she is quite right that when inflation is this high, people on benefits cannot afford to wait a year. They simply do not have that kind of money lying around to subsidise them in the meantime. What if inflation were to come down in September, or just happened to dip at that point? People would then have had a whole year of spiralling prices while their benefits lost value.
The other argument that is made is that it is technically impossible to use inflation data from later than the previous September because it takes a long time to programme the computers. I would love to hear the answer to the universal credit question. We are always told how flexible, dynamic and instantly responsive universal credit is, so surely it can spring into action and change things at a moment’s notice. We were told during the passage of the Social Security (Up-rating of Benefits) Bill that there was a hard deadline on that Bill because the computer had to be changed. I twice asked what would happen if the computers were changed and subsequently one or other House were to reject an uprating order. I did not get an answer, so I shall try again. First, can the Minister tell the Committee whether the computers that set the levels of benefits covered by these orders have already been adjusted to reflect the price increases contained in them? If so, what happens if either House were to reject the order? Secondly, would it be technically possible for the Secretary of State, if she chose, to raise any of these benefits by an amount greater than 3.1%?
In responding, the Minister may tell us of the various steps the Government have taken, but the truth is that they do not come close to addressing the scale of our cost of living crisis. The energy scheme they have produced actually means that customers will face higher bills for the next four years, and the council tax rebate will be welcomed by those who get it, but it is based on an unfair and out-of-date system and it goes only to those who pay their council tax bills directly, and those who do, but do not pay by direct debit, will have to make a claim for it. I thought that the chief executive of Citizens Advice put it very well. She said:
“Energy rebates are a buy now pay later solution which only provide temporary relief later this year. And linking financial assistance to Council Tax will result in a complicated lottery that means support is not targeted at people who really need it”—
The context of this uprating is a decade of terrible cuts. Remember that in 2011 uprating switched from RPI to CPI, which switched billions of pounds from the poor to the Treasury. In 2013-15, uprating was capped at 1% and most working-age benefits were frozen in cash terms for the next four years. The result of that is that between April 2010 and April 2021 the value of JSA and ESA fell by 8% and that of child benefit by 16%. It is astonishing that in real terms the value of the basic unemployment benefit is now 10% less than it was in 1965. This matters because the choices the Government made have left families today in a very weak position to deal with the kind of rapidly rising inflation we are now facing because we came into this crisis with child and pensioner poverty rising and many families already in fuel stress. This cost of living crisis did not start last autumn; it has been building for years.
My noble friend Lady Lister mentioned the bedroom tax, the two-child limit and the benefit cap, all of which hit people’s living standards in unpredictable ways. The rationale for the benefit cap was meant to be to limit benefits to the same amount as the average income of working families. That was always dubious but, if we take it at face value, can the Minister explain why that value has been frozen at its cash level since 2016? If it is meant to be set at the level of the average working family, why is it at the 2016 level?
Finally, pensioners were also badly let down by this Government, when they broke their manifesto promise by suspending the triple lock and severing the earnings link. Almost one-fifth of pensioners are living in poverty, more than a million are missing out on pension credit, there are unacceptable delays in reimbursing pensioners who were underpaid, and I keep hearing more and more cases of newly retired pensioners waiting months to get their state pension.
The Opposition will not oppose this order, of course, but the Government are offering no solution to the severity of our cost of living crisis. Many people are now desperate; I hope the Minister will tell us what more the Government will do to help them.
My Lords, I start with an apology. In my opening comments, I said the Government propose to spend an extra £6.6 million in the uprating order; it is actually £6.6 billion. Forgive me.
I thank all noble Lords who took part in today’s debate. I am not a bit surprised by the points that have been raised and completely agree with all noble Lords that we are in a difficult position. People are struggling and it is not nice to see.
The noble Baroness, Lady Lister, gave me my homework to take back to the department. I give her my word that I will take back every issue and make sure that people understand the sense of injustice that the noble Baroness and others feel. She and other noble Lords mentioned the cost of living. We have begun our recovery from the pandemic, but things have been exacerbated by the ongoing conflict in Ukraine, which is putting an additional strain on households. We are coming out of the pandemic and trying to work on that but have been further hammered by that position.
We have taken steps to ease financial pressures. The noble Baronesses, and the noble Lords, Lord Jones and Lord Shipley, will tell me that we have not done enough, but we have not done nothing. We have raised the national living wage, reduced the universal credit taper rate, increased work allowances and provided £140 million a year in discretionary housing payments and cold weather payments of £25 a week to up to 4 million people. These will have made a difference, but there is clearly more to do in the current situation.
The noble Baroness, Lady Lister, raised the point about the justification for using the September CPI figure. The Secretary of State undertakes an annual review of benefits and pensions, and the consumer prices index for the year to September is the latest figure the Secretary of State can use to allow sufficient time for the required legislative and operational changes before new rates can be introduced at the start of the next financial year. All benefit uprating since April 1987 has been based on the increase in the relevant price inflation index in the 12 months to the previous September.
As noble Lords have already said, uprating affects over 20 million customers and there are interdependencies across government. The DWP needs all benefit rates to be confirmed by the end of November, plus all the subcomponents of those benefits, so that the first IT system can be uprated in December. Any deviation will have significant implications for citizens, potentially resulting in underpayments or no payments being made. Given the volumes involved, the technical and legislative requirements and the interdependencies across government, it is not possible to undertake the uprating exercise any later than currently timetabled.
If that is the case, how come it was possible to add £20 to universal credit at such short notice? If such a long lead-in time is needed, and I recognise that a longer time is needed for legacy benefits—but not necessarily that long—how come it was possible to uprate universal credit by £20 in a matter of weeks during the pandemic? As I said, according to Mr Couling of the DWP, universal credit can be uprated at very short notice. As my noble friend said, that is supposed to be part of its agility. There is growing pressure on the department to look again. I quite understand that it has been like this for X number of years, but we now have more powerful computers and so forth. I really think that the DWP should look at it and see what might be possible, because we may well be going into a longer period of volatile inflation.
I think that the noble Baroness appreciates that the UC system is more modern and able to do things, but her point about the £20 uplift is already on my list to take back to the department. I will write to the noble Baroness and place a copy of the response in the Library.
The noble Baroness, Lady Lister, the noble Lord, Lord Shipley, and others raised the issue of inflation and anticipating peaks. Benefits are paid over the course of the year and looking at the peak alone is a little misleading. Any move to implement a mechanism to anticipate peaks would require a mechanism to do the same to account for troughs. DWP believes that this kind of complex adjustment mechanism is not appropriate. For shorter-term shocks such as the current energy price increases, the Government have other responses which do not permanently commit the taxpayer to fund higher benefits.
The noble Baroness, Lady Lister, mentioned disability benefits. The department is considering contributions to the Green Paper and it would not be right for me to prejudge now what might be in the White Paper later this year. I shall talk to the Minister for Disabled People, Chloe Smith, and pass on the points.
The noble Lord, Lord Jones, as ever, took us on focused journey to Wales. It is a wonderful country—I am sure that my noble friend Lady Bloomfield, who is no longer in her place, would agree. I would get myself into a lot of trouble, which I know the noble Lord would not want, if I started talking about devolution and what might happen.
I shall certainly write about the points raised by the noble Lord in relation to the uprating order, but I shall also try to do a little better and write to DLUHC and ask it to answer those points, if that is all right with him.
The noble Lord, Lord Jones, made a valid point about people not getting by. While I cannot promise anything—I can promise only to talk to colleagues—I am absolutely confident that the Secretary of State and others realise the difficulties that people are in. More than that I cannot say because I do not know, but the point will be made.
I say to the noble Lord, Lord Shipley, that the impact assessment refers to direct costs to charities and private sector organisations as employers. The order brings direct costs to the Exchequer but not to employers. The noble Lord spoke about people who use meters, the keys and how much more expensive that system is. I know that people are fully aware of that. It is not ideal.
The noble Baroness, Lady Sherlock, talked about GMP equalisation and the tax issue. I have an extensive response here; perhaps I may write to her and, again, copy it to everybody. She says that she has asked me twice and I have not responded. I am sorry about that; I really thought that I had. Let there be no doubt about the situation. The conclusion of the Secretary of State’s annual review is announced in a Written Statement ahead of the hard IT deadline at the end of November for all systems other than universal credit. DWP needs all benefit rates and subcomponents to be confirmed by the final week of November to enable the programming of the IT system in time for the new benefit rates to come into force in April. If we were to wait for final parliamentary approval, we would need either to make the IT changes in March, which would mean payment of uprated pensions and benefits delayed until October, or to have parliamentary approval in November, meaning that we would have to use an even earlier CPI than September’s. It is a question of balance.
If the order is voted down, the 3.1% increase will still go ahead in April, because the IT process cannot be changed at this stage. The increase will, however, have no legal underpin. That is why I urge the House to approve the order, so that there can be certainty of outcome for the 20 million people who receive state pensions and benefits from DWP.
Perhaps the Lord Chairman will allow me a little licence. I understand why the Minister said that, but I want to get to the bottom of what it is we think we are doing here. So the computers are changed in December and, if either House rejects this order, the increase goes ahead anyway; it just does not have any legal underpinning. Perhaps I have been spoiled, but I am accustomed to thinking that, when the House is asked to take a decision, that has a consequence: if we say yes, something happens; if we say no, something does not happen. This is the first time that I have been aware of being asked to take a decision and being told that, if we said no, it would not make any difference. Does the Minister not think that that is a little unusual?
Before the Minister sits down, she raised two matters in response to what I said. Perhaps she would arrange to write about the high cost of meters. That might be able to be adjusted in the interests of those who are paying higher costs. It is the kind of thing that would sit very nicely in the Spring Statement. Secondly, I take up the issue of the impact on businesses, charities and voluntary bodies. Paragraph 12.1 of the Explanatory Memorandum states that it is negligible, but of course all those organisations will have to employ more staff to deal with the huge rise in queries that they will get.
As I said, I fully appreciate the issue of people who use keys to pay their energy costs, which are higher. Let me take that back as a special project. I will speak to the Secretary of State, who I will see tomorrow, and she may well have a thought on that. When it comes to the Spring Statement, all noble Lords tell me to speak to the Treasury. I have nothing to tell your Lordships about the Spring Statement; we will have to wait to see what, if anything, comes out in relation to this. I take the point of the noble Lord, Lord Shipley, about charities, but that is an indirect effect, if it happens. I cannot add more than that at this stage.
The noble Baroness, Lady Sherlock, talked about poverty, a subject that we have discussed many times. The Government are committed to a sustainable long-term approach to tackling poverty, and to supporting people on lower incomes. We will spend £110 billion on welfare support for people of working age in 2021-22. With around 1.29 million vacancies across the UK, our focus is firmly to support people to progress into work as the best way to substantially reduce the risks of poverty.
I know that there are people who cannot work, and I know the passion with which the noble Baronesses, Lady Lister and Lady Sherlock, and others talk about us wanting to help that group. Our multi-billion-pound plan for jobs, which has been expanded by £500 million, is helping people across the country into work. I know that our new Way to Work programme has raised some issues. As I have said before, when I opened the jobcentre in Hastings, the staff were alive with the freedom that it would give them to do more, and in more detail, to help people at the lowest point of their lives. I trust those work coaches implicitly to do what they can and, more importantly, to feed back if something is not working so that we can fix it.
The noble Baroness, Lady Sherlock, asked whether I still believed a Statement that I made. Perhaps she can write to me, as I did not quite catch the context. I will be very happy to write back.
I shall do so. The noble Baroness also raised the benefit cap not being increased. Again, there is a statutory duty to review the levels of the cap at least once in each Parliament. I am advised that this will happen at the appropriate time.
I am afraid that I cannot. I am sorry.
On support for people affected by the benefit cap, as I have said, our work coaches are cognisant of all these things, and I am sure they will try to find people work that helps them and alleviates some of the impact of the cap. Claimants can also apply to their local authority for a discretionary housing payment if they need help to meet rental costs.
The noble Baroness, Lady Sherlock, talked about the Private Member’s Bill. The Government continue to support this Bill and hope that it achieves Royal Assent in due course. I thank all noble Lords for their contributions.