PARLIAMENTARY DEBATE
Social Security (Additional Payments) (No. 2) Bill - 21 February 2023 (Commons/Commons Chamber)

I beg to move, That the Bill be now read a Second time.

A hallmark of a civilised society is that it looks after the most vulnerable and those who are most in need. That lies at the centre of this Bill. The House will be aware of the challenges that inflation has presented to millions of our fellow citizens up and down the country—inflation that was there before the Ukraine-Russia conflict but that has been substantially exacerbated by it.

As a newly appointed Secretary of State, some of the first actions that I took were to increase and uprate pensions by 10.1%, to respect and uphold the triple lock, to increase benefits by 10.1% and to increase the benefit cap by the same percentage. Those actions, along with measures such as the increase in the national living wage by more than 9%, which will come into effect in April, have done a great deal to underscore this Government’s approach to looking after those who are most in need.

In 2022 alone, 30 million support payments were made by my Department. Eight million low-income households received £650. Eight million pensioners received a £300 payment along with their winter fuel payment, and 6 million disabled people received a payment of £150. That was alongside various other measures from the recent past, such as the reduction in the taper rate for universal credit, which provided 1.7 million families with, on average, an additional £1,000 per year.

There is a substantial lag between the announcement of the uprating and April when it will be brought in. What steps can be taken to reduce that lag so that people benefit earlier?

The hon. Gentleman will be aware that a series of payments were made last year right up until the autumn. The energy price guarantee and various other payments of which he will be aware will help millions of our fellow citizens come through what is a difficult period. The household support fund administered by local authorities is available, particularly for those who have not benefited from the assistance that I am setting out.

The third iteration of the household support fund has come through. I went down to the Hinckley hub to see how people there were getting on. They expressed their thanks to the Government for this important fund. They have the accountability to be able to give funding to people in extreme circumstances when they need it. It is not heavily red-taped and regulated, so they can use it how they see best to help their clients. Is that something that the Department for Work and Pensions will take forward?

My hon. Friend is entirely right, and I am pleased to hear his personal experience of the measure. He is right to point out that there is great flexibility in how it can be administered by local authorities. We place a particular emphasis on making sure that that assistance goes to those who may not have benefited from the measures I am outlining, but who are still in need.

In addition to the taper, we recognise that pensioners need additional support where it is appropriate. My Department has thrown itself into promoting the uptake of pension credit. The Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman), did such sterling work as the Pensions Minister and, more recently, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott), has promoted pension credit with such vigour on social media and radio that there has been a 73% increase in applications for pension credit compared with this time last year.

My Department has an excellent record on unemployment. Disabled employment is up by 1.3 million since 2017. We have arrived at our target for the employment of disabled people a full five years earlier than originally planned.

I just wonder whether the Secretary of State would like to comment on the disability employment gap.

As the hon. Lady will know, the disability employment gap is a key measure on which we are focused. It has more recently increased a little, which I think is the point that she is alluding to, but generally, prior to that it was on a downward trend. The Department is very focused on making sure that we get it as low as we possibly can.

In the last year we also had the energy price guarantee, which ensured that average energy bills came in at £2,500 on average, and £400 off energy bills directly paid to bill payers. In England, we had the council tax discounts for bands A to D. We had two further extensions to the household support fund, as was just referred to by my hon. Friend the Member for Bosworth (Dr Evans). For the devolved Administrations, there have been Barnett consequentials of £1.5 billion since October 2021. I am very proud of our record and the wide package that has already been deployed, which is valued at £37 billion.

That brings me to this year, when we intend to go still further. As the Prime Minister has stated, one of our key aims as a Government is to reduce inflation by 50% by the end of this year. I am confident that we will achieve that, but we recognise that, despite the relief that that will provide to millions up and down the country, we need to provide further support payments. There will be three payments totalling £900 for around 8 million low-income households. Like last year, there will be a £300 payment alongside the winter fuel payment of £300 to pensioners, and a £150 payment to disabled people. The delivery of the support for pensioners will be via regulation and is not the subject of the Bill, but the other payments will be delivered through this legislation.

The Bill sets out the basis of qualification for the payments and who makes the payments, whether that is me and the DWP or His Majesty’s Revenue and Customs in the case of, for example, tax credits. It makes provision as to how the timing of the payments will be set out and it exempts the payments from charges to taxation. It sets out the arrangements that will ensure that data can be transferred and shared between my Department and HMRC, so that all the payments run smoothly and we avoid duplication and minimise fraud.

Will the Secretary of State give way?

I give way to the Chair of the Work and Pensions Committee.

As I understand it, the eligibility for the payments is based on being in receipt of benefit—at least 1p—in a specific month. There will be people who, for example, are paid every four weeks instead of every month and may get two payments in a particular month, so they do not get any benefit in that month. Would it not work better to base eligibility on a two-month period to reduce the likelihood of that problem arising?

The right hon. Gentleman raises a valid point and we looked at instances where anomalies can occur in what is known in the legislation as the “qualifying period”. The reality is that we cannot iron out all the possible hard edges, but we did break the payments into three for this financial year, rather than the two that we had last year, so that in the event that the circumstances he described were to occur, there would at least be other periods in which someone could qualify. There is also the household support fund, which has already been referred to and is for just the kind of circumstances that he described.

I am glad that the Secretary of State has looked at how to break up the payments. Will he ensure that people who find themselves with an anomaly can swiftly speak to someone to make sure that such issues are resolved quickly? When someone is struggling with their finances, one of the biggest sources of heartache and stress can be trying to get some of these payments.

My hon. Friend makes a characteristically excellent point. Anybody will be able to go on to the gov.uk website for further information, and we will have additional resources in place to ensure that people are manning telephones to answer the type of queries that he and the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), have raised.

The Government are on the side of the most needy. We demonstrated that first in the pandemic, through the furlough scheme and the support that we provided for businesses; and secondly, as I have outlined, with the £36 billion of direct payments last year to support those most in need. As I have set out, this Bill will bring forward yet further support in the coming year to help millions.

The Government will always stand alongside those most in need; the Bill is yet another example of just that. Let the record show that this Government, more than any other, understand that the hallmark of a civilised society is that it looks after those most in need.

I call the shadow Secretary of State.

No, it was not!

Will the right hon. Gentleman give way?

I am grateful to my near constituency neighbour. On his point about the changing of the dates, could I ask what Labour’s plan is? Would it therefore keep the cap in place, and if so, how much would that cost and for how long would they do so?

It is a pleasure to speak in this debate, and I think I agree with nearly everything in the two Front-Bench speeches. There is not a lot to add, except really to welcome the Bill and welcome the additional support that the Government have provided. I think it was absolutely the right thing to do, and it is essential for people with the least that they get these extra supports while energy bills and other inflationary costs remain as high as they are. I have a few observations to make on the Bill, but that should not really take away from the fact that the Government have actually come to the right conclusion. Making this support available is by far the most important decision, and everything else is probably nit-picking around the detail.

However, I would agree with some of the observations of the shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth). Perhaps it would be helpful if the Minister, when she sums up, explained whether the Government did look at temporarily increasing universal credit, rather than rerunning the new benefit three times again this year. That would have allowed for a higher basic payment, which would then taper off for households on a higher income, so those with the very least would have got more than £900 and those with the most would have got a bit less than £900. That would probably have given more help to those households that are going to struggle most with the fact that they are going to get £300 less support this year—if we take into account the energy bills support and the reverse running of council tax we had last year—and be faced with, on average, £500 higher energy bills. It would be useful to know if that was considered, if it was not technically possible and the system could not cope with it, or if there were other good reasons why we preferred the three roughly £300 payments rather than having smoothed that over the year and used the tapering system.

Those of us who did—and do—support universal credit, did so on the basis that having a tapering benefit linked to income is the best way of doing it, because it avoids cliff edges. It stops people having unfortunate behavioural ideas, such as, “If I take the extra hours this month, I’ll lose my £300, so I’d best not do that; I might wait till next month,” or, “Ought I to drop out of a job, or try to somehow reduce my income to get that payment.” I accept that having three payments of £300 is better than a one-off payment of £900, but if we really believe in all the advances of universal credit being linked to income with tapering to avoid cliff edges, we should use it in a time of crisis as well as in a normal situation.

We know from the pandemic that we can very quickly flex the amount of UC, because we did it in about five weeks, so I cannot see a problem with that. That might not be so easy for tax credits and other benefits and we might have wanted one system that works for everything here. If the Minister says that is the reason, perhaps we can understand it, but now that we have had some time—we have had a year of this crisis—we might have produced a slightly more effective solution.

We also know that for the households with the least, getting lump-sum payments is not always best, because if they struggle with budgeting, they might not understand that they have £300 more this month that they will not have next month or for winter. Smoothing those payments through every month might help them ensure they have the money in place for when energy bills will be highest, which I suspect will not be when they get their April payment this year. I accept, however, that there is no perfect solution and that this solution is better than doing nothing.

I also want to reiterate a point made by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), and the shadow spokesman, the right hon. Member for Leicester South. They said—in the debate last year, I think—that needing to have received a UC sum in the assessment month before the payment prevented a large amount of people from getting a payment, not through any fault of their own or because they have got more money, but just because the way they receive their payments from their employer accidentally dropped them out.

A relatively simple solution would be to tweak two words in the Bill and say that if someone has received 1p in either of the two assessment periods before each staging point then they get the £300. That would add one word and one letter to the Bill and would fix the problem for the vast majority of cases. If someone happens to be paid four-weekly and they have two payments in one period, that would fix it; if they happened to have had a bonus once and it hit in one period, that would fix it because presumably they would not have had it for two successive months—and if they did have it for two successive months it is probably fair enough to assume they are now earning more than we thought they would be. That would be a simple change to consider in Committee, which I think will be on the Floor of the House so perhaps we can all get to vote on it—I suspect relatively shortly. I urge the Government to seriously think about making a simple change such as that, which would smooth out one of the rough edges quite easily.

The Secretary of State said that there will be a helpline, but this is primary legislation, and if someone has not received a penny in that month, there is no discretion for the Department to give them the £300, or the £301 or £299; it cannot do so because the Bill says it cannot—they have not received a penny, so they cannot have it. So there is no way of fixing that retrospectively; it needs to be fixed at this stage.

With those observations, I sincerely welcome the Bill, which will provide significant support for people in Amber Valley, who are struggling with high inflation and high energy bills. I repeat my request from the uprating debate, however: I urge the Government to keep the situation under review so that if it worsens and we need to help people more during the year we can come back and do that. It would not be too hard to add a fourth payment if we needed to.

I call the Scottish National party spokesperson.

I am grateful for the opportunity to outline my party’s position on this Bill and express our support for the broad thrust of what it seeks to achieve. To that end, as with His Majesty’s official Opposition, we will not oppose it on Second Reading, but I do believe that the Bill before the House today gives us an opportunity to consider some of the wider issues relating to our social security net and the desperately needed repairs which should be undertaken, but which, sadly, this Bill fails to address.

As I have said countless times before, Members on the Government Benches, and indeed all of us in this place, talk about the cost of living crisis as a recent phenomenon, or a new thing which happens to impede the lives of our constituents, but actually it is not. The cost of living crisis is the cumulative impact of 12 years of austerity policies, mixed with a cocktail of economic scarring from covid-19, and compounded yet further by Russia’s outrageous invasion of Ukraine. But that is precisely why I wish this Bill went further: to support better those who are the most vulnerable financially, the kind of folks I see at my Friday surgeries at Baillieston, Easterhouse, Parkhead and Cranhill.

The harsh yet inescapable reality is that many of the structural problems that the very poorest in our society face are the result of a policy framework put in place by this British Government: policies like the benefit cap, the two-child policy and cuts to universal credit, to name just a few. It is not good enough for Ministers to bring forward substandard legislation to the House which merely tinkers around the edges but will not deal with the source of the poverty that hinders so many of the poorest people who I represent.

We know how dire things are not because of anecdotes and the odd horrifying surgery testimony, but because of indisputable research from the likes of the Joseph Rowntree Foundation and the Resolution Foundation. The Resolution Foundation has made it clear that the poorest 10th of households experienced an inflation rate of 11.7%, and Office for National Statistics data shows that food and drink inflation is running at some of the highest rates since the 1970s, with the price of bread, milk and basic essentials soaring up in price by almost 17% in a year. Data from the Joseph Rowntree Foundation shows that more than 7 million households on these islands have been going without essentials such as meals, heating and showers this winter. This is the sixth richest economy in the world and on these islands people are going without meals, heating and showers—just let that sink in, and think about how that compares with our chat about global Britain. These eye-wateringly high levels of inflation are disproportionately hurting the poorest in our constituencies, which in turn puts yet more pressure on public and third sector agencies which are already at breaking point; I draw attention to my entry in the Register of Members’ Financial Interests as a director of Cranhill Development Trust.

We can and must do more to protect the most vulnerable. That is why the one-off cost of living payments are only a temporary fix and it is clear that permanent solutions are desperately needed. That is why when this Bill goes into Committee next Monday, I will be seeking to bring forward amendments to improve it—for example to the punitive sanctions regime, which currently means cost of living payments cannot be paid to those who are sanctioned. I have to tell the Secretary of State that those who are sanctioned are not immune to the cost of living crisis, and yet currently under the Bill those who have been sanctioned will not get the cost of living payment.

It is deeply concerning to see the DWP announcing that more people are going to risk having their vital universal credit payments sanctioned. For example, the average earnings threshold for UC rose and will affect up to 120,000 more folks. A further 600,000 people who are already working for up to 35 hours each week will be targeted later this year. There is clear and indisputable evidence that sanctions do not work either in getting people into sustainable work or in getting them to increase their hours or earnings; we heard about that recently at the Work and Pensions Committee. As the Institute for Fiscal Studies recently reported, these types of policy produce

“fiscal savings indistinguishable from zero”,

yet conditionality subjects people to untold anxiety and harm. Rather than offering one-off payments to shore up the incomes of struggling families, the British Government should focus on reversing the damaging policies that are impacting on the most vulnerable.

My party stands by our calls to Ministers to reinstate the uplift to universal credit, and indeed to increase it by £25 a week and extend it to all means-tested legacy benefits, as well as ending the benefit cap and the two-child limit. We know, for example, that disabled people are far more likely to live in poverty than non-disabled people, and are particularly vulnerable to the rising cost of living—a point that Ministers have repeatedly ignored to the detriment of my disabled constituents. Likewise, 86% of households trapped by the benefit cap are families, often headed by single mothers. It is the job of Government to support families, not subject them to further hardship. I completely agree with John Dickie of Child Poverty Action Group Scotland who calls for this “cruel and irrational” benefit cap to be scrapped at source by the UK Government as a matter of utmost urgency

The continued refusal by Ministers to fix the extensive and well documented problems with universal credit is unacceptable and it is unequivocally subjecting vulnerable people to additional unnecessary hardship. A recent report from the Commissioner for Human Rights at the Council of Europe found that the level of support provided under universal credit was a key contributing factor to child poverty. The report stated that policies such as the two-child limit and benefit cap

“restrict the amount of benefits a household can receive, regardless of their specific needs, and thereby continue to exacerbate child poverty.”

That is the Council of Europe saying that the UK Government’s policies exacerbate child poverty, and that is the fundamental problem here. The Bill tinkers around the edges with temporary fixes, however welcome, but it fails to deal with the root causes of the poverty that the Government are inflicting on their own citizens.

Meanwhile, in Scotland my colleagues in the SNP Scottish Government continue to do everything within their limited powers and fixed budgets to ensure Scottish people and communities are supported through this crisis as far as possible. In line with the Scottish Fiscal Commission’s forecasts, Scotland’s Government are set to invest £5.2 billion in benefits expenditure in 2023-24, providing support to more than 1 million people. Indeed, in 2027-28, that is forecast to increase to £7.3 billion—money that will go directly to people who need it most and to support people to live independent lives. But the Scottish Government are doing all this with both hands tied behind their back, because every additional £1 that my colleagues in Holyrood spend on measures to help with rising costs and the mitigation of Tory cuts must be funded from reductions elsewhere, given their largely fixed budget and limited fiscal powers. We do not have the bedroom tax in Scotland because we spend huge amounts of money on discretionary housing payments to try to nullify the impact of that tax, but that comes at the expense of the education budget, the health budget, the transport budget, the justice budget and so on. Members in this House have failed to confront the fact that devolution was never meant to be a sticking plaster for detrimental decisions made here.

Despite repeated requests, the Chancellor has thus far failed to provide any extra assistance to help Scotland’s Government manage this year’s budget. With every passing day that the British Government fail to use their reserved powers to adequately tackle the cost of living and its long-term impact, they demonstrate that independence is the only way for Scotland to boost incomes and build the fairer society that so many people in my community strive to see. The simple truth is that Westminster is not working and it is time for Scottish independence.

I rise to support this enabling Bill, which will enable the payment of additional cost of living support for many millions of the poorest in society. Before I go into the detail of the proposals, it will be useful to set the debate into context, which is of course that the best welfare, where it is accessible, is access to a job. We know the obvious financial implications of being in employment, but there are equally important mental health benefits.

Can the hon. Gentleman explain then why 4.2 million people in work are in poverty and six out of 10 people in a low-paid job will still be in a low-paid job 10 years later?

I am not saying that employment of any description is the silver bullet. We have phased movement under universal credit, because it is a tapering benefit from unemployment through additional support from Government that diminishes as pay rates increase. Most hon. Members would accept that that is the right approach, but I also accept that the hon. Lady rightly drew attention earlier to the disability employment gap. Although I recognise the recent unwelcome upward tick in that, the direction of travel and the long-term trend is downward, which I wholeheartedly welcome.

In my constituency of Broadland, the universal credit claimant rate is only 2%. Bearing in mind that a percentage of those will be in employment, in my part of the country at least we benefit from full functional employment. It is a feather in the Government’s cap that the national average universal credit claimant rate is just 3.6%; we see that in particular when we look at youth unemployment. In Broadland, the rate among the 18 to 24-year-old cohort—who are often hard to employ and most quickly affected by economic downturn—is just 3.6%, whereas nationally it is 4.6%. It is worth taking a moment to make some international comparisons. In France, the rate of unemployment among 16 to 24-year-olds is more than 20%, and the equivalent figure for Spain is about 35%. Something is happening in the United Kingdom that is not happening on the European mainland. My submission is that it is because Conservative policies are leading to fuller employment, particularly in those cohorts that have traditionally found it harder to gain and retain employment. That is down to the brave decisions of this and former Conservative Administrations in creating a dynamic labour market that has allowed and encouraged employment and, yes, the ability to reduce the employment count for employers. That has led to fuller employment in this country than there has been in areas that are perhaps more unionised, where once someone is in the club their job is protected but that comes at the cost of the young and the poorest.

The Government have been right to focus on a dynamic labour market, in addition to direct Government support in schemes such as the £2 billion kickstart scheme, which worked so well in the aftermath of the pandemic, and the restart scheme. It cost an eye-watering £2.9 billion, but UC claimants of nine months or more got additional focus from their Jobcentre Plus work coaches to help them step back into employment, countering the terrible drain on the country and the individual cost to people’s lives of long-term unemployment.

On work coaches, this Government have doubled their number in 2021, increasing it by 13,500. I have seen these work coaches at work in my constituency, at the Jobcentre Plus in Fakenham. I pay particular tribute to all the staff members there, who have a huge amount of enthusiasm and expertise, and are going the extra mile day in, day out to get the long-term unemployed in my area into jobs. The total number of UC claimants in Broadland is 1,130. They are not all long-term unemployed, but, in a period of full employment, we just need an extra bit of help to get that hardcore group into the jobs, which are available. The additional work coaches are exactly the right way to go, which is bearing fruit.

The apprenticeship schemes are also being supported and encouraged by the Government. Members from around the House will recall that two weeks ago it was National Apprenticeship Week. To celebrate that and encourage its further uptake, I visited a business in my constituency, Ben Burgess, which many in the east will recognise as agricultural machinery suppliers of great repute. At any one time, the company has about 30 apprenticeships, which, typically, start at the age of 16. The apprentices get taken through training both on the job and at a national training facility in the midlands, where they have university-style education as well as on-the-job training in their place of employment. They come out of that scheme with a machinery technician qualification, a job and a career, leading to a really fulfilling lifestyle. That is exactly the kind of thing that the Government should be and are supporting.

I cannot move on from this area of my speech without a little plug for my jobs fair, which is taking place at Taverham High School on 10 March. It is one of a series that I have been holding and will continue to hold. My first one was in Fakenham, in the aftermath of the covid pandemic, when my assumption was that we would have a tidal wave of unemployment. The estimate at the time was that we would have 12% unemployment. I set in place a jobs fair to try to solve that problem, but because of the incredible intervention of the then Chancellor, now Prime Minister, we did not have 12% unemployment. The Government put their arms around the economy, supported people in their jobs and the potential crisis did not materialise.

On the detail of the proposed legislation, I fully support the uplift in the national living wage by 9.7%, taking it to £10.42 an hour, and not just for those whose employment is at the national living wage. As a former employer, I know very well that the national living wage is the base upon which many, many layers of employment judge their own job offers. We have created the conditions where there is full functional employment in the vast majority of the country, so employers are having to compete for staff. One way—it is not the only way—to compete is on pay. As the national living wage base rises, the gradated competition in pay rises as well, and that has a really beneficial effect.

I do not know whether the hon. Gentleman has seen the Budget submissions from both the CBI and the TUC. It is not often that they both sing from the same hymn sheet, but one key theme they complain and raise concerns about is staffing shortages. I accept that the national living wage is one factor, but does he also accept the concerns of both the CBI and the TUC that the Government have a problem with staffing issues, which cannot necessarily be helped by something like Brexit?

I am really grateful to the hon. Member for making that intervention, because we had a similar discussion in an earlier debate and he gives me the opportunity to say what I kicked myself for not saying last time. As a former employer, if one has access to—let us call it this—unlimited cheap labour then there is no incentive to increase productivity or invest in further plant and machinery. As a result, we have what he was also complaining about, which is the low productivity conundrum. On access to labour, I recall him saying in an earlier intervention a couple of weeks ago that in Scotland the problem is not having too many people, but an exodus of people from Scotland. I just wonder what is the difference between Conservative-run England, where people in their hundreds of thousands are seeking to come into this country, and SNP-run Scotland, where they are leaving in their tens of thousands?

I thank the hon. Gentleman for giving way. I am hopefully allowing him to sit down and think about that just a little bit more. That might help him.

The reality is that immigration policy is controlled by the United Kingdom Government. The Scottish Government and huge swathes of civic society have said that our problem has never been emigration, but immigration. We are looking to get more people to come to live and work in Scotland. It is the UK Government and the Home Office who make that more difficult. On Friday, I had an asylum seeker at my surgery, somebody who is incredibly well qualified and who has something he wants to offer this country, but because of a decision taken in 2002 by the Labour Government he is restricted from working here. He wants to work in Scotland, but he cannot do so because of an intransigent UK immigration policy. That is the reality of our immigration problems. It is not some mini-tartan issue that he might want to dress it up as.

This probably strays a little far from the topic of the debate, Mr Deputy Speaker, which is not about immigration policy, but I note in passing that if the hon. Gentleman wants to encourage people to work in his country, having a supertax on employment is probably not the best way to go about it.

Cost of living inflation hits working families too, so I welcome the £900 cost of living payments that will benefit fully 8 million families, as well as the disability payment of £150 to help with the higher cost of equipment needs. That will also benefit some 6 million people. If a job is the best form of welfare, then reducing inflation is the best way to tackle the cost of living crisis. My commendation to the Minister is that we should stick to our guns that reducing inflation during the course of this year, halving it as the Prime Minister has promised to do, is absolutely the right way to do it. The Bank of England currently predicts that inflation will dip below 4% by the end of this year, so that, overwhelmingly, is the best way to deal with these longer-term problems—not one-off payments which seek to address a symptom rather than dealing with the cause. While it is necessary to address the symptoms in the way the Bill does, I am grateful to the Government for also dealing with the cause of the cost of living crisis—inflation resulting from Putin’s illegal invasion of Ukraine—because that is the long-term solution to these problems.

Although no one will oppose the Bill today, it is important to put it in the context of what many of our constituents are experiencing at the moment, because it does mean that they will bear a significantly greater burden.

Last year the household energy cap was £2,500, and people on means-tested benefits received £650 plus the £400 universal payment. This year the cap will be £3,000, and yes, people on means-tested benefits will receive £900, but the universal payment is not being renewed, which means that they will suffer a 45% increase in their cost burden. For households that are not entitled to means-tested support, the average household energy bill will rise again by at least 43%. So although we will not be voting against the Bill today and will support the benefits to be distributed by the Government, there will, as I have said, be a significant increase in the burden for many of our constituents.

According to National Energy Action, in October 2021 there were 4.5 million households in fuel poverty, in October 2022 the figure was 6.7 million, and by April 2023 it will have risen to 8.4 million, which means that about one in three households will be in fuel poverty. The Bill will not relieve that fuel poverty. Of those 8.4 million households, 1.8 million will be carers, 5.9 million will be low-income and financially vulnerable households, 3.6 million will be people with a disability, and 1.6 million will be households in off-gas homes—as some Conservative Members have mentioned in other debates. As we heard from my right hon. Friend the Member for Leicester South (Jonathan Ashworth), this poverty is due to the fact that, for a considerable time, social security support has not kept up with either the cost of living or the rise in earnings.

I am pleased that some benefits will rise by 10.1%, but in recent decades they have fallen in real terms. I supported the triple lock, which I considered to be an excellent policy, but that was in the context of the breaking of the earnings link by Mrs Thatcher, which I opposed in the 1980s. If the earnings link had been retained, pensions would be £50 a week higher. However, it did not apply only to the state pension; it also applied to carer’s allowance. A group of carers whom I have been meeting over the last year have explained their own financial plight. If the earnings link had been retained, carer’s allowance would be almost double what it is today. With those protections, there would be fewer households in poverty and fewer dependent on the benefits that the Bill will provide. The time has come, I think, when we need to consider the advantages of applying the triple lock to all benefits in future, thus protecting people from poverty and hopefully lifting some of them out of poverty as well.

However, the origins of the current fuel poverty are not just our immediate problems with the Ukrainian war and what has happened post covid. It stemmed from the policies of Mrs Thatcher in the 1980s and the asset-stripping of our country, particularly in respect of energy and the subsequent introduction of a weak market-protecting form of regulation. Today we have Ofgem, a regulator that I and many others believe serves the interests of the companies, not the consumers. The energy companies have made excess profits, and I fully support the call from the Labour Front Bench to extend the welfare tax, because it cannot be right that we have an energy system in which companies are raking in massive profits and another 1.7 million households will be condemned to fuel poverty from April.

In addition to supporting the £900 proposed today, the hon. Member for Glasgow East (David Linden) suggested that he would be tabling amendments in Committee. I would suggest that he table an amendment that doubles the scale of support that is being provided today. The cost of providing the £900 is £7.2 billion, but the Chancellor has today been given an extra £30 billion in headroom from the outturn with regard to debt, so doubling the support provided as an emergency measure to lift people out of poverty could easily be accommodated.

I would also like to back the proposal from the former Prime Minister Gordon Brown, who said last August in the negotiations with the energy companies for lower prices that those companies that could not meet the lower prices would be given equity loans up to and including taking them into full public ownership if necessary. In that way, we would protect consumers facing fuel poverty as well as protecting them by operating energy companies in the public interest, not in the interest of their shareholders.

We are spending billions of pounds on bailing out families who are being ripped off while protecting the profits of the companies that are ripping them off, and I think there is a better way. The better way is to support the extension of the windfall tax, to ensure that we cap prices at a rate that is affordable to people, to provide greater assistance to those most in need and to provide equity loans for those companies that cannot deliver. In that way, we might be able to lay the foundations for a fuller debate about how we reform our social security system.

I agree with the hon. Member for Broadland (Jerome Mayhew), in that I have consistently argued that we should tackle poverty by enabling people to go to work, but that work must be paid at a level that will lift people out of poverty. The tragedy for me is that I did not believe we would reach this era and have 4 million children in poverty, with two thirds of those children in families where someone is at work. I think that says something about the way in which we distribute the rewards of work in our society. Some of the people who work the hardest in some of the most difficult jobs have tragic levels of low pay. We will be voting to enable this Bill to go through, but so much more has to be done to tackle poverty in our society, and there is an opportunity to improve this legislation in the coming weeks to enable at least some people to heat their homes in this coming period.

I rise to speak in support of this legislation. I warmly welcome the extra cost of living measures that it provides, which will benefit my constituents in Guildford and Cranleigh and in our villages. Colleagues across the House have mentioned the context in which we are debating these necessary measures, which is that we are facing tough economic headwinds because of global energy and food supply shocks resulting from the appalling Russian invasion of Ukraine. The Chancellor was right to take tough but necessary decisions in the autumn statement and subsequently, in order to put our public finances on a sustainable path while ensuring that those in need are supported. An inflation rate not seen since the early 1980s, fuelled by the rise in energy and food prices, has had a disproportionate impact on lower income households across the country, and I know that the Chancellor will do all he can to ensure that they are supported through this challenging period until inflation is back at a sustainable level. This Government understand the current pressure and are taking unprecedented steps to protect households from the rising cost of living, spending almost £70 billion to help households through to 2024.

Although my Guildford constituency is thought of as an affluent area, I know from my surgeries, from my inbox and from speaking to residents on the doorstep that there are many who, over the past few months, have faced rising bills with great anxiety. However, they are always incredibly grateful for the important financial help provided by this Government.

As this Government and Prime Minister work diligently to halve inflation by the end of this year and to ease the pressure of price rises on families, we must support those facing challenges in the here and now, but we also know that economic growth is what gives people financial security. The Prime Minister is right to make growth one of his five key priorities.

This Bill will support more than 8 million families across the country, including almost 7,000 families in Guildford, with at least £900-worth of cost of living payments split into three instalments. These payments, the first of which will be received at the end of April, followed by payments in October 2023 and February 2024, will go to households on means-tested benefits.

Will the hon. Lady comment on the adequacy of social security, including the additional payments in this Bill, given that 4.2 million people in work, many of whom receive support, are still in poverty?

The hon. Lady is right to ask that question, but across these many measures, the Government are having to work within quite constrained parameters. I know that the Chancellor and the Secretary of State for Work and Pensions will be looking at it as we head into the next fiscal event. It is right that we are providing this extensive support, but we also have the equal challenge of making sure we get inflation down so that people are able to use their funds more effectively, rather than being hit by the very high food and energy prices we have discussed.

In addition to the 8 million families supported with further payments, more than 6.5 million people in receipt of disability payments, including 6,300 in Guildford, will receive £150 to help tackle the rising cost of equipment. I urge struggling households and families in my constituency to check the Government’s website to see what support they are able to access. My office is always on hand to guide constituents towards the appropriate support channels.

This Bill is part of the Government’s wider package of measures to ease the cost of living, which will be worth £26 billion in 2023-24. I welcome the fact that pensioners who are entitled to the winter fuel payment will receive an extra £300 this winter, providing certainty to many households through to spring 2024. I urge all pensioners to check their eligibility for pension credit so that they can unlock these cost of living payments.

I also welcome the announcement of an extension to the household support fund, including more than £10 million of extra funding for Surrey, which will help local authorities to support the most vulnerable households. In the period from October 2022 to March 2023, Surrey County Council used its allocated funding from the household support fund to enable the continued provision of food vouchers during the October, December and February school holidays; to provide energy support to care leavers; to place additional funding into the Surrey crisis fund; to give money to food banks and community fridges; to provide payments to families with disabled children; and to give funds to charities that work with vulnerable and less well served communities. The remaining funds will be distributed by borough councils to households identified as financially struggling.

It is important to think back to covid and this past winter, to understand that it was right that the Government gave money directly to councils that know which are their most vulnerable families and can get support directly to them.

In recent months, the Government have: put in place the largest cash increase in the national living wage, to £10.42 an hour, benefiting 2 million workers; announced the uprating of benefits, with the state pension and the benefit cap increasing by 10.1% from April; and delivered the energy price guarantee, protecting households from sky-high energy bills caused by Putin’s barbaric war in Ukraine, which represents one of the largest support packages in Europe.

The cost of living payments being introduced today will go some way in easing the rising costs facing families and those on disability benefits, but, in the longer term, we must combat the challenge of inflation. This Government’s plan to halve inflation by the end of 2023 will benefit everyone across the country, including my constituents in Guildford, Cranleigh and our villages. I am confident that this Government will continue to support those who are in need, and I welcome the steps that are being taken here today.

These continue to be some of the hardest times in recent living memory for so many of our fellow citizens. Few have been entirely immune. Millions are struggling, but for far too many, these hard times have brought them close to, or even into, destitution.

Given the importance of energy prices to the cost of living crisis, the fall in the price of wholesale gas futures over recent months is immensely welcome, but let us not imagine that this crisis is about to come to an end. Forecasts consistently suggest that this is, at best, the end of the beginning, not the beginning of the end, not least as consumers face a rise in their costs as the energy price guarantee gap is raised this year, with no continuing energy bills support scheme to cushion the blow.

The Resolution Foundation estimates that working-age household incomes have fallen by an average of 3% this year, but will fall by an average of 4% next year—the biggest single fall since 1975. As food inflation hits 16.7%, food banks, such as those run by the Trussell Trust and the Independent Food Aid Network, are overwhelmed by demand. This week, IFAN said:

“Our fasted growing client group are working people on low wages who cannot make ends meet.”

We have had references today from several Members, including my right hon. Friend the Member for Hayes and Harlington (John McDonnell), about the rise of in-work poverty. IFAN went on to say:

“The majority have always managed on a low income.”

It said that they

“know how to budget and to live frugally, but, with costs rising, there simply isn’t enough money in their pockets. It’s soul destroying.”

This weekend, we heard that the Co-op store group has resorted to putting packets of formula milk behind the counter as a security measure, as though they were precious stones in a Mayfair jeweller’s. We have seen the impact of these price rises devastating families and pensioners. We have seen that a quarter of people on means tested benefits now report food insecurity, even with the special payments that were made last year—that compares with just 4% in food insecurity before covid. We have seen how costs have risen this year, driven by energy costs, but we have seen them being felt in the weekly food shop just as acutely.

We understand how much of this is attributable to factors beyond our control. We know that the catastrophic shocks that the economy experienced, first from covid and then from the energy price spike, were felt most severely by those least able to withstand them. As we debated just two weeks ago in this House, most working age benefits where uprating was not fixed by statute were not fully uprated over a period of seven years from 2013 to 2020, with nominal increases limited to 1%. or with rates frozen altogether.

Child benefit, which was uprated only once between 2010 and 2019, lost a fifth of its value between 2010 and 2022. The value of jobseeker’s allowance and employment and support allowance fell by 12.5% in real terms. The value of universal credit, the Government’s flagship benefit, fell by 12% in value between 2013 and 2022.

However, the extreme vulnerability experienced by so many of our fellow citizens is not just because of what has happened within the social security system. It is because of sluggish wage growth and the failure to protect workers in insecure employment. It is because of the failure to prepare this country for energy price rises by investing in home insulation and renewable energy, or by extending the energy price guarantee into the summer when prices may actually be falling. It is because of the failure to build new homes—especially affordable homes—and to protect those who are being hit by spiralling private sector rents. It is because of over a decade’s neglect of the childcare sector, which is seeing providers fold, costs escalate and too many parents forced to consider whether work is even a realistic option in the face of their childcare bills.

Of course, we do not oppose the payments; they are welcome so far as they go, but one-off provision of that kind is not, and can never be, the answer to the deep cost of living crisis stalking the country, with in-work poverty at record levels and destitution wrecking the physical and mental health of far too many people. Emergency responses, inevitably somewhat rough and ready, are never going to be able to take into account the full range of individual circumstances, not least household size, which determines additional need. In this short but important debate, we have also had reference to how people with nil awards are treated, the impact of cliff edges on incomes, and anomalies linked to qualifying periods.

The additional payments policy, a flat-rate payment triggered simply by whether people are in receipt of means-tested benefits, is cruder than it needs to be. When this was discussed last year, it would not have been beyond the capability of Government to take into account actual household size in setting entitlements, or to sort out some of the other anomalies—all of which were debated when we discussed special payments a few months ago. Let us speed this essential help to households in need, of which there are so many, but let us not pretend that this is the very best that could have been done.

I begin by thanking all those who have contributed to this debate, which has been, as the hon. Member for Westminster North (Ms Buck) said, short but important. As my right hon. Friend the Secretary of State for Work and Pensions has said, the Bill legislates for two key elements of the £26 billion package of further support announced by the Chancellor in November. It builds on last year’s £37 billion package of support to help with the cost of living, and demonstrates our continued commitment to ensuring that people continue to get the help that they need throughout these challenging times.

The Bill plays a vital role in ensuring that, over the next financial year, we can continue to help the most vulnerable to cope with the increased cost of living brought about by global pressures. We look forward to and welcome continued support from hon. Members across the House, including from Front Benchers, to ensure that the legislation progresses quickly. That ensures that we can begin to make the first payments to those people on means-tested benefits in the spring.

The focus of the debate is on the provisions in the Bill that will give additional support of up to £900 to households on means-tested benefits, and on the separate payment of £150 for people on disability extra costs benefits. The Secretary of State already noted that last year we successfully, at unparalleled pace, delivered tens of millions of payments to people across the UK. That was in addition to our normal benefit processing operations. I pay tribute to my officials at the Department for Work and Pensions and all the civil service teams across Government who worked tirelessly to ensure that happened.

We were able to achieve that delivery because we deliberately kept the eligibility criteria for the payments as simple as possible. Let me respond to hon. Members who asked why. We were keen to avoid introducing complexity, which could ultimately lead to delays and unacceptable levels of error or fraud.

I applaud the additional benefits, but how can my constituents in Watford find out about them? Will there be a communications campaign?

I thank my hon. Friend, who is standing up as ever for his constituents. There is a cost of living website, there will be details on gov.uk and of course there is the benefits calculator on gov.uk. Those who are entitled will not need to do anything, because payment will be made to them. I hope that reiterates the point. There will be a rounded communications campaign on that. In fact, I made a video just this morning. I hope that is helpful—I promise the video was on this issue.

The key principle that has guided our approach to the Bill this time is to make those further payments to millions of vulnerable people over the coming year. Keeping the rules simple means that people on a qualifying benefit will receive the cost of living payment. That is why we are introducing the Bill. I reassure hon. Members across the House, including on the Opposition Benches, that we did take our time to look at addressing some of the hard edges. Ultimately, we concluded that introducing any significant policy changes would risk delaying payments to millions of people and introducing unacceptable levels of fraud and error. I will go into detail on that shortly, if I may.

We will be delivering the means-tested cost of living payments in three separate payments in 2023-24, as discussed, reducing the chances of someone’s missing out altogether. For those who miss out on a cost of living payment, and for others who may need further support with the costs of essentials on top of our statutory provision, we are extending the household support fund throughout the next financial year. The details have been confirmed today.

The extension allows local authorities in England to continue to provide discretionary support with the cost of essentials, particularly energy and food. The devolved Administrations will receive consequential funding, as usual, to spend at their discretion and with their expert local knowledge—[Interruption.] Sorry, I thought someone was interrupting there. The household support fund guidance and outlines have been released today. It is our expectation that local authorities will prioritise those in particular need and consider supporting those who may, through no fault of their own, have missed out on those cost of living payments but nevertheless are in need.

There have been a number of contributions to the debate and I will to try to respond to some of the points made in turn. The right hon. Member for Leicester South (Jonathan Ashworth) talked about the energy price cap. He welcomed our uprating, which is significant. I remind him that childcare on universal credit is more generous than on legacy benefits and the way we have drawn the household support fund will cover many of the points he raised; I hope he will have a chance to look at those interventions. The personalised support with the Help to Claim service, working with the supporting families programme from the Department for Levelling Up, Housing and Communities, will help the families with complex needs that the right hon. Gentleman spoke about.

The hon. Member for Glasgow East (David Linden) called this “substandard legislation”, which I take severe issue with, but he took the opportunity to make wider points about social security and talked about the “punitive sanctions regime”. I think we will always beg to differ on that. I make the point very strongly that this is a reserved matter. We are delighted to be making the payments for Scotland and today providing the Barnett consequentials in relation to the household support fund and further assistance—[Interruption.] I am sure he cannot resist intervening, so I will let him.

Indeed not. I very much enjoyed being told to eat my cereal today. On the question of sanctions, how many people in Mid Sussex tell the Minister how wonderful the sanctions regime is? It is clearly increasing.

I will come onto the point about sanctions shortly. I know there is confusion among those on the Opposition Benches about whether they support sanctions, but this is about a safety net; it is about progressing and supporting people and helping them to go forward. In reality, when people are sanctioned, it does not just happen. There are processes to go through where work coaches try to engage and support people. If people are disconnected and they fail to attend, that is why they are sanctioned, which is often the reason they then re-engage, talk to their work coach and get involved with what is going on. That helps us to get under the skin of what is holding them back, and I think that is important. I assume from his question that there is a fundamental disagreement, but I will not hold it against him.

My hon. Friend the Member for Broadland (Jerome Mayhew) very kindly turned the focus on to employment. Having been Employment Minister for three years, how can I resist responding to that? A dynamic labour market is important, including the work around furlough, the plan for jobs, and the kickstart and restart schemes—I designed many of those programmes, so it is always nice to have a compliment. In reality, our talented new work coaches—those who we found, recruited and brought into the DWP because of the impact of the pandemic—have been transformational. The other side of this debate is important—it is jobs, it is livelihoods, it is careers, it is opportunities, and it is making sure that people, when at their most vulnerable, know that they have that safety net. I wish my hon. Friend good luck with his jobs fair on 10 March. I have my second in Burgess Hill—this is a great opportunity to mention it.

The right hon. Member for Hayes and Harlington (John McDonnell) spoke up for his constituents and their fuel requirements. Of course, the energy price guarantee will be key to protecting customers and our constituents, and the household support fund will be a key driver as well. It is absolutely right to focus on our constituents. I have worked very strongly on the household support fund to complement this piece of legislation, working with the Local Government Association, to ensure that we support everyone who comes to us in any situation. I was pleased to hear him talk about the rewards of work and why they matter too. We know that it is more than just a pay packet that we are looking for.

My hon. Friend the Member for Guildford (Angela Richardson) spoke about households being squeezed, the cost of living website, and, of course, the fact that the help-to-claim service is there and that all constituencies—no matter how leafy and lovely they may seem—have pockets of challenge. It is absolutely right that we act when we see the impact of a global squeeze. That is absolutely the mark of what we stand for at the DWP. There is the £10 million going to Surrey, and the almost £10 million going to West Sussex just next door to my constituency. What has come out of this and the work that we have done during covid? It is our work with local authorities, which I must commend for stepping up and doing a magnificent job in helping people. They know where those pockets of support are needed. I thank those local offices.

I will quickly whip through some of the challenges made about the legislation. On the adequacy point, inflation is forecast to remain high over the next few months, meaning that many people will need this additional support, but it is important to remember that these payments are just one element announced by the Chancellor back in November. The broader uprating will make a difference.

On the points about housing support, I am working with colleagues at the Department for Levelling Up, Housing and Communities on quality and provision. My party strongly continues to focus on opening up the benefits and freedom of home ownership and all that it gives. The 2020 local housing allowance rates were raised to the 30th percentile—a significant investment of £30 billion—and we have since maintained that increase.[Official Report, 1 March 2023, Vol. 728, c. 6MC.] Of course, we know that housing costs are incredibly challenging, particularly for renters. That is something that we are working on and taking forward in through the housing taskforce.

Can the Minister say to what extent the measures in the Bill will replace or add to the £34 billion that has been taken out of support for working-age people since 2010?

I understand the hon. Lady’s point, but it is not necessarily this Bill that will answer the challenges that some of our constituents face. It deals with issues that they face in skills, progression and other areas that have been holding them back. Tax credits, for example, quite often trap people in 16-hour contracts when they would be much better off moving on to universal credit and taking more hours, training and opportunities. I say to anybody listening: “Take the opportunities to see what is out there.”

The hon. Member for Glasgow East talked about the disability cost of living payments in the Bill. They are not disability benefits themselves, but rather payments relating to the cost of living increases that a disabled person may face. I hope that answers his point. I have covered some of the issues regarding Scotland, so I will move on swiftly, if I may.

In regard to the point from my hon. Friend the Member for Amber Valley (Nigel Mills) about the 1p payment, we successfully delivered tens of millions of payments in 2022 by keeping the rules simple. That included a simple and clear rule that the person must have been entitled to a payment of at least 1p, as he pointed out. That ensures that those with other income sources are not eligible for means-tested benefits and are not included, nor are suspended benefit claims that include risk of fraud.

I reiterate the point around the household support fund and the three payments. They hopefully mean that if people have fluctuating payments, they have a chance to be eligible once again. That was pointed out by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), who is not in his place, in terms of how we address those hard edges. Extending the eligibility dates would involve making more payments to those who had permanently increased their earnings, and that is the challenge. That is not the intention of the cost of living payments, which are deliberately targeted at those on the lowest incomes.

My hon. Friend the Member for Amber Valley also mentioned making more payments, and I would like to address that these payments are being made outside our usual benefit processing systems, using our ad hoc payment system. That system has a limit on the number of payments it can make each day, and it can only make one type of payment at one time. That means a team of specialists have to extract and clean the data to make the payments. Having three means-tested cost of living payments and a single disability cost of living payment balances the spread of support throughout the year, but it does not compromise the core benefit delivery, and I hope that answers my hon. Friend’s questions.

I will just quickly answer the question on larger families and then conclude. In regard to how we look at supporting larger families, as I hopefully have outlined, families on means-tested benefits will benefit from our planned uprating of 10.1% from April, meaning that families subject to the benefit cap will also see an increase of 10.1%. In reality, for families who need additional help, we are extending the support through the household support fund. Again, that is linked to the issues around the ad hoc payment system.

I think I have covered most of the points in the debate, but I just quickly mention the sanctions point and reiterate my earlier point to the hon. Member for Glasgow East that sanctioned claimants who re-engage will be supported.

I will conclude, because I feel that people are desperate to be in the Lobbies. This Government demonstrate our commitment to supporting those in the greatest need and going through the greatest challenge with the increased cost of living. It is vital that we move ahead quickly with the legislation, so that we can begin to make those first payments in the spring. I look forward to further discussion as the Bill proceeds through its next stages, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Social Security (Additional Payments) (No. 2) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Social Security (Additional Payments) (No. 2) Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and on Third Reading

(2) Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.

(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.

Other proceedings

(5) Any other proceedings on the Bill may be programmed.—(Mike Wood.)

Question agreed to.

SOCIAL SECURITY (ADDITIONAL PAYMENTS) (NO. 2) BILL (MONEY)

King’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Social Security (Additional Payments) (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) a sum not exceeding £301 to anyone who is entitled, in respect of a day (the “first qualifying day”) not later than 30 April 2023, to–

(a) universal credit or state pension credit,

(b) an income-based jobseeker’s allowance, an income-related employment and support allowance or income support, or

(c) working tax credit or child tax credit;

(2) a sum not exceeding £300 to anyone who is entitled, in respect of a day (the “second qualifying day”) after the first qualifying day but not later than 31 October 2023, to a benefit mentioned in paragraph (1);

(3) a sum not exceeding £299 to anyone who is entitled, in respect of a day after the second qualifying day but not later than 29 February 2024, to a benefit mentioned in paragraph (1);

(4) a sum not exceeding £150 to anyone who is entitled, in respect of a day not later than 30 June 2023, to–

(a) a disability living allowance,

(b) a personal independence payment,

(c) an attendance allowance or a constant attendance allowance,

(d) an adult or child disability payment,

(e) an armed forces independence payment, or

(f) a mobility supplement.—(Mike Wood.)

Question agreed to.