PARLIAMENTARY DEBATE
Cost of Living Support - 20 June 2023 (Commons/Commons Chamber)

With permission, Mr Speaker, I will make a statement on the progress of delivery of cost of living support.

The Government understand the pressures that households face in the current climate. We are all familiar with the global factors that are the root causes of costs being higher, including President Putin’s illegal war in Ukraine and the aftermath of the pandemic. We are committed to delivering on our priority to halve inflation, which will help ease those pressures for everyone and raise living standards.

Alongside that important work, we continue to implement our wide-ranging and significant package of cost of living measures to support the most vulnerable during 2023 and 2024. We have increased benefits and state pensions by 10.1%, and increased the benefit cap by the same amount so that more people are helped by the uprating. For low-paid workers, we have increased the national living wage by 9.7% to £10.42 an hour. That represents an increase of more than £1,600 to the gross annual earnings of a full-time worker on the national living wage. That increase, and the increases we made to the national minimum wage in April, have given a pay rise to about 2.9 million workers.

To help parents, we are undertaking a significant expansion of childcare, including a rise, later this month, of nearly 50% in the maximum amount of childcare payments for people on universal credit. For the most vulnerable, the £842 million extension of our household support fund into 2023-24 means that councils across England can continue to help families with the cost of groceries, bills and other essentials. Taking into account the extra money that we have provided through Barnett funding for Scotland, Wales and Northern Ireland, who can decide how they allocate that money, we have committed an extra £1 billion. That is on top of what we have provided since October 2021, and brings total funding to £2.5 billion.

With energy bills being one of families’ biggest worries, the energy price guarantee will also remain in place as a safety net until the end of March 2024, should energy prices increase significantly during that period. Since that energy bills support began in October 2022, the Government have covered about half of a typical household energy bill this past winter, and by the end of June will have saved a typical household around £1,500. We are also building on and extending the one-off cash payments we provided during 2022-23 that saw us make more than 30 million cost of living payments, including a £150 disability cost of living payment to 6 million people, up to £650 for more than 8 million households on means-tested benefits, and an additional £300 on top of the winter fuel payment for more than 8 million pensioner households. Those payments put hundreds of pounds directly, and at pace, into the pockets of millions of people.

However, we recognise that cost of living pressures continue, particularly for the most vulnerable households. That is why we continue to provide targeted support to help those most impacted by rising prices throughout this financial year, including more support for people on means-tested benefits such as universal credit, with up to three cost of living payments totalling up to £900. The Government have already delivered the first £301 payment to 8.3 million households—support worth £2.5 billion. The two further payments of £300 and £299 will be made in the autumn and the spring, and pensioner households will get an additional £300 on top of their annual winter fuel payment this winter, as they did last year.

I am pleased to be able to confirm to the House that from today, to help with the additional costs that disabled people face, more than 6 million people across the UK on eligible extra-costs disability benefits will start to receive a £150 disability cost of living payment. Those cash payments, which we estimate will be worth around £1 billion, will be automatically transferred into people’s bank accounts, with those eligible for the support not needing to take any action. By the end of Monday 26 June, we plan to have made 99% of payments to those already eligible—that is millions of payments being made in just seven days. Most remaining already eligible people will receive their payment by 4 July. We estimate that nearly 60% of individuals who receive an extra-costs disability benefit will also receive the means-tested benefit cost of living payment, and more than 85% will receive either of, or both, the means-tested pensioner payments.

This Government will always protect the most vulnerable, but we are also helping to improve living standards for everyone by getting more people into, and progressing in, better-paid jobs. That is the surest and most sustainable way to raise incomes and grow the economy. The number of people in employment has increased to a record high, but by removing the barriers that stop people from working, we are reducing the number of people who are economically inactive—those who are neither working nor actively looking for work. It is encouraging that last week’s labour market statistics show a further fall in inactivity of 140,000, or 0.4%, on the quarter.

We are tackling inflation to help to manage the cost of living for all households and providing extra targeted support for those that need it. The disability cost of living payments, landing in millions of bank accounts from today as part of our wider support package, underline our commitment to supporting disabled people. That is reflected in how we are stepping up our employment support for disabled people and people with health conditions; ensuring people can access the right support at the right time and have a better overall experience when applying for and receiving health and disability benefits; and transforming the health and disability benefits system so that it focuses on what people can do, rather than on what they cannot. It is also reflected in the fact that we expect to spend over £78 billion in 2023-24 on benefits to support disabled people and those with health conditions, which is 3.1% of GDP.

With the Government’s significant package of cost of living support, worth over £94 billion in 2022-23 and 2023-24, we are ensuring that those most in need are protected from the worst impacts of rising prices, putting more pounds in people’s pockets and providing some peace of mind to the most vulnerable in society.

I call the shadow Secretary of State.

I thank the Minister for advance sight of his statement, but let us be clear: he has come to the House today and is asking us to congratulate him on this payment when, after 13 years, the number of disabled people living in poverty is up by over 1 million. He is asking us to congratulate him on this payment when, almost every day now, we hear stories of disabled people cutting back on hot meals, showers and washing their clothes, because otherwise they would not be able to afford to use the equipment that helps them get by in life. He is asking us to congratulate him when, after 13 years of Conservative Government, child poverty is up by 600,000 and pensioner poverty is up by 400,000. He is asking us to congratulate him when we have a cost of living crisis now so severe that the Joseph Rowntree Foundation today reports that nearly 6 million of the poorest households are forced to skip meals and 7 million of the poorest families are going without food, heating or even basic toiletries.

The Minister talks about employment, but there are 2.5 million people out of work for reasons of sickness or disability. The working-age disability benefit bill is going to go up to around £25 billion, but many people out of work want to work. That is why we proposed an “into work guarantee” welfare reform to help people to move off sickness benefits and into work. Instead of offering help now to people out of work, the Government are actually cutting disability employment advisers by 10%. Because the Government are failing to do their part in helping to tame inflation, disabled people in work and families are seeing the value of their wages ravaged by inflation. In fact, the value of this disability payment is worth £5 less in real terms than when the Chancellor announced it in the autumn statement because of inflation.

The Government are failing to play their part in helping to tame inflation. When combined with them running the economy off the cliff last autumn, policies that led to turmoil on the markets and a run on pension funds, that means that thousands of disabled people, thousands of working families and even pensioners are living in fear of the letter they will soon be getting this year telling them it is time to remortgage. Disabled people and families are facing hundreds or indeed thousands of pounds more on their refinanced mortgage over the coming years, with 1.3 million homes this year collectively paying £10 billion extra on mortgages—a Tory mortgage premium. Disabled homeowners and families are paying the price—literally paying the price—for 13 years of Tory economic failure. So my question is very simple: when so many disabled people and so many families are facing more on their mortgage because of decisions taken by this Government, how on earth does the Minister expect them to cope?

I obviously appreciate the shadow Secretary of State taking the time to come to respond to this statement today. On the fundamental point of supporting people properly, I do not think that there is disagreement between us. We disagree on the detail of this and I think it is substantial and significant that, as I set out earlier, we are providing £94 billion of comprehensive cost of living support to people over 2022-23 and into 2023-24. That is structured support that is hitting people’s bank accounts in the way I have described, including the latest tranche of support through the disability cost of living payment, but there is also the discretionary support that can be provided through local authorities to meet the needs that exist, where they do not necessarily neatly fit into those structured support packages. That is significant support and he should welcome it.

I was very interested to hear what the shadow Secretary of State had to say about our employment-related measures. I would be absolutely delighted if he were to come forward and welcome the structural reform that this Government are determined to make to help to support more disabled people and people with health conditions into work, removing the jeopardy they feel around the benefit system to smooth that journey.

There is also the tailored support that we want to provide alongside that to improve the journey through the system and to unlock people’s aspirations—namely, universal support, that tried and tested supported employment model through individual placement and support in primary care in the first year, but growing beyond that. That is welcome support that will identify people’s needs and support them on a case-by-case basis to meet those objectives, with of course all the benefits that that brings, as well as keeping people well in work.

The Work Well partnerships are building capacity alongside NHS services. They are meaningful interventions on the supply side that this Government are making, and I think they are to be welcomed. It would have been nice for him to welcome the structured and more permanent support that we want to provide to help people to live more fulfilling lives, with employment at the heart of that.

The shadow Secretary of State also said, effectively, that the United Kingdom stands alone in these challenges. That is absolutely not the case. I was at the United Nations last week representing our country and it is fair to say, from many of the conversations I had with others, that the challenges we are facing are repeated in their countries—not just in Europe, but much further afield. For example, in the US, the Federal Reserve has increased rates at the fastest pace since the 1980s and in Europe interest rates are at their highest level in more than two decades. What we will do is take a responsible approach. The Chancellor of the Exchequer set that out in questions just now. What we will not be doing is making unaffordable spending pledges that will simply lead to higher rates in the long term. That is not the way to address these issues effectively.

On the specific issue of mortgages, again, we must not do anything that only fuels the challenges that households face. We have made a number of changes, including through support for mortgage interest and the scheme around that. For example, from April this year, claimants can be eligible for SMI from three months instead of nine. We have also abolished the zero earnings rule to allow claimants to continue receiving support while in work and on UC. The interest rate we pay is based on the Bank of England-published average mortgage rate, which increased from 2.09% to 2.65% on 10 May 2023. We of course continue to have important and receptive engagement with lenders about that support.

What is clear is that the Opposition have either no plan or an uncosted plan. The latter would simply fuel inflation and make matters worse. In contrast, what we will get on and do is provide the support that we have outlined, which is comprehensive and is meeting people’s needs, but of course we keep that package under constant review. We are also focused on our fundamental mission, which is to bring inflation down in the way we have described.

I congratulate the Minister on what is a meaningful package, which particularly will be of help to disabled constituents of mine in Rossendale and Darwen, but will he accept that the measures that put money back in people’s pocket when they rely on benefits will not dent the challenges people are facing when it comes to their mortgage going up by hundreds of pounds a week or a month? Will he talk to his friends at the Treasury about reintroducing mortgage interest relief at source, which is a true Conservative way of tackling the cost of living crisis by cutting taxes and putting money back in the pockets of the squeezed middle?

My right hon. Friend is trying to tempt me to make commitments on behalf of the Treasury today that of course I am not able to do, but what I am able to do is ensure that the point he has made in this debate is relayed to Treasury colleagues. Again, there are ongoing conversations being had involving the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), who leads on housing within the Department for Work and Pensions, and colleagues in the Department for Levelling Up, Housing and Communities, for example, around some of the challenges that people are facing with housing. She is working proactively on this, along with colleagues elsewhere.

I call the SNP spokesperson.

I too thank the Minister for advance sight of his statement, although in reality it is a nine-page press release rehash of previous Government announcements. The only new thing today is the £150 disability payment. Will the Minister reflect on the excellent report from Scope, “Disability Price Tag 2023: the extra cost of disability”, which shows that, on average, disabled households have expenditure that is £975 higher per month? We know that, for example, as a result of specialised diets, higher transport costs, higher energy costs and higher insurance premiums, there is a cost to disabled people.

Unfortunately, the Government do not have a good record when it comes to disabled people, particularly the 2.5 million legacy benefit claimants who were so cruelly overlooked during the pandemic and did not get the equivalent of the £20 uplift. I welcome the £150, but I ask the Minister to reflect on the wise words of Scope, which says that that will not touch the sides. To that end, as the Government are not quite getting this, may I invite the Minister to come to Glasgow to meet me and the Glasgow Disability Alliance, where he will hear the message, loud and clear, that this simply does not go far enough and that far too many people are going to struggle unless the Government up their game?

The key point I would make, which I set out in my introductory statement, is that there is a significant alignment; people receiving the disability cost of living payment are also receiving various other parts of the support package. Eight-five per cent of those who qualify for the disability cost of living payment are also receiving a mean-tested or the pensioner cost of living payment. They are receiving various parts of the package of support. We continue to keep those matters under constant review, as Members would expect. I have a meeting later today with a Minister in the Scottish Government and no doubt matters relating to the cost of living will come up. As a Minister in the Department for Work and Pensions, I am committed and determined to visit all parts of the United Kingdom and I will take away the hon. Gentleman’s suggestion about where I might go.

Can I re-emphasise the point made by my right hon. Friend the Member for Rossendale and Darwen (Sir Jake Berry)? Huge numbers of constituents are coming to me about the mortgage changes. They are absolutely terrified. I know that the Government are doing all they can, but can I ask them to redouble their efforts because this is going to have a huge impact on the cost of living?

I thank my right hon. and gallant Friend for his question. This is a significant issue in his constituency and a challenge in constituencies across the country. Ministers across the Government are mindful of it. It draws focus back to the key, overarching mission of this Government and the economic plan that the Chancellor and Prime Minister are advancing. That is why it is so critical that we tackle the inflationary pressures. We must not add to those inflationary pressures. If we can deal with that root cause, that is the best way to help people in that situation.

I call the Chair of the Work and Pensions Committee.

The cost of living payments have made a vital contribution to millions of families in supporting people through the current crisis and I welcome the contribution they have made. However, the need for them does reflect, particularly following the removal of the £20 a week uplift from universal credit, the historically low headline level of benefits—at the moment, in real terms, the lowest for 40 years. What consideration are the Minister and his colleagues in the Department giving to consolidating those occasional one-off payments into the mainstream benefits— universal credit and the rest—so that people can budget with confidence, week by week?

The right hon. Gentleman will recognise that my right hon. Friend the Secretary of State has his annual review of benefits and pension levels, where all matters are properly considered in the usual way. Decisions are made and announced through those formal processes. It is worth saying in relation to disability spending more generally that in 2027-28 total disability spending is forecast to be over £41.6 billion higher in real terms compared with 2010. We are spending very significant sums of money on support for disabled people. We also have those cost of living packages of support in place for them. We will continue to be on the side of helping people through this difficult time, supporting where we can and cushioning the impacts of those challenges. Again, I invite Opposition Members to join the support for the overarching mission of this Government, which is to get inflation down and to relieve those pressures.

I welcome my hon. Friend’s statement and the £150 that is going into the bank accounts of 6 million people, including many of my constituents in Newcastle-under-Lyme. I welcome all the support that he outlined, including on energy bills for the entire country, households and businesses, over the winter. I welcome that energy bills are about to start falling at last, which I know will be welcome to everybody across the House. However, does he agree that the best way for us to help the most vulnerable is to help them into well-paid, sustainable jobs, whether part-time or full-time? We should look for support from employers for adaptations and managing conditions in doing that.

I totally agree with my hon. Friend. Work is such an important part of relieving some of those pressures, but it is also important for people in the longer term. We want more people to unlock their potential and access all the benefits and opportunity that work brings. We see that as a partnership, and we want to continue to deepen that commitment as a Government, working collaboratively with employers to unlock those opportunities. Schemes such as Access to Work Plus, which we have piloted, evaluated, and are now rolling out, are all about crafting roles, working with an individual and an employer, where there is a determination to employ a disabled person. We see massive benefit to that approach, not just for the business and our economy, but also for the disabled person in question.

I rise to support what my right hon. Friend the Member for East Ham (Sir Stephen Timms) has just said. We cannot underestimate the impact of the last 12 years of cuts to the baseline in support and social security, with £33 billion taken out of working-age budgets. The temporary one-off payments do not even touch the sides, and that is resulting in one in three disabled people living in poverty, which is twice the number of non-disabled people. Let me again ask the question that my right hon. Friend the Member for East Ham put to the Minister: when will he be increasing the uplift?

I repeat what I said in response to the Chair of the Work and Pensions Committee. We are determined to try to get to grips with the longer-term pressures that people face. The hon. Member for Glasgow East (David Linden) mentioned the “Disability Price Tag” report by Scope. One of those pressure is energy costs, and one thing that colleagues in the Department for Energy Security and Net Zero are currently looking at is the wholescale market reform of our energy market. As part of that, they are considering the issue of social tariffs and support, to see how we best support those costs in the longer term. The best way to tackle those issues in the round and get those pressures down, is by addressing the inflationary challenge that we are currently experiencing. That is what the Government are focused on at the moment, and that is the right approach. On the wider matter in response to the question from the Chair of the Committee, we will take that away and it will be considered in the usual way as part of the annual process.

The hon. Lady and I have previously had exchanges on carer’s allowance, and the approach we take is to consider that when we have our deliberations on annual uprating. We will make modification to that when it is affordable and appropriate, but I hear her representation. I also congratulate her on the Carer’s Leave Act 2023, which introduces an important change. I know that a lot of effort went into that behind the scenes, and I congratulate her on it.

I cannot recall a time when so many families and individuals have contacted my office because they cannot afford to live, whether that is being able to buy food, heat the house, or do other things as a family. We have seen the start of a fall in energy prices, but the fact remains that for the foreseeable future they will be much higher than they were before the start of this crisis. We are also seeing problems with interest rates and various other pressures on families. In particular, rents are outstripping local housing allowance by a considerable amount in my local area, and people are being evicted. On the housing front, pressures from interest rates are starting to bite, and people cannot afford the rents that are now being charged in the private sector. What is the Minister going to do about that?

On that specific point, I draw the hon. Gentleman’s attention to the points I made earlier about some of the ongoing work, but I will also ask my hon. Friend the Member for Mid Sussex (Mims Davies) to provide him with a response to that question, because I know she is engaging with colleagues elsewhere in the Government around those challenges.

The Minister has already acknowledged the additional costs of nearly £1,000 a month that disabled households have over able-bodied households, but those costs are disproportionately higher in rural areas such as the highlands, which I represent with my constituency. People there have extra costs for transport, energy and so on. Is it not time that the Government did more to compensate people with those extreme costs? Would a start not be to make up for what they lost with the universal credit mismatch during the pandemic and, indeed, to restore the £20 a week on universal credit immediately?

There is no plan to restore that £20 uplift in the way that the hon. Gentleman describes, but in relation to disability benefits, I draw his attention to the statistics and figures I set out earlier. There will also be, as I have announced, an evaluation of the cost of living payments in the autumn, which will no doubt take into account a whole host of factors and be thoroughgoing in that. I am also working with the disability unit to take a close look at the costs that people are experiencing during this cost of living challenge, because we want to learn from those challenges for the future.

When visiting schools, I am told by young children that it is not their turn to eat tonight. Schools tell me that pupils take leftovers from school friends so that they can eat a lunch. Rents are rocketing and households are paying almost £1,000 a year more on food than they did in 2021. Does the Minister honestly think that the support that the Government are offering is enough to stop rising hunger in constituencies such as mine?

I of course recognise that food prices are a challenge not just here in the UK, but abroad, too. For example, I am aware that food inflation here is 19%, but within the EU it is 19% and in the euro area it is 18%. People are experiencing these significant challenges not just here, but abroad.[Official Report, 16 October 2023, Vol. 738, c. 2MC.] I have seen reports just today of retailers discounting products to try to help with some of these pressures, which goes beyond the package of support that the Government are providing. That £94 billion figure is not insignificant. We also continue to support families on a case-by-case basis through the household support fund, and I encourage the hon. Lady to signpost her constituents to that support, because where people have particular needs and challenges, they can be supported through that help.

In his statement, the Minister mentioned support with energy bills. Earlier this week I received an email from a constituent in the village of Capel Hendre in my constituency, which is on the mains gas network, but a large proportion of households use alternative fuels such as heating oil. The payment on alternative fuels was not made directly through electricity bills, but people had to apply for it. She has missed the deadline for the alternative fuels payment scheme. I know this is not the Minister’s direct responsibility, but will he raise with the responsible Minister the fact that a cohort of people have missed out? Is there a possibility of reopening the scheme so that constituents can get the support to which they are entitled?

I commend the hon. Gentleman for his nifty way of getting that important question into the proceedings this afternoon. If he could share those details with me, I will gladly make sure that that reaches the Minister responsible at the Department for Energy Security and Net Zero.

It is worth noting that the UK Government were the first Government to be investigated by the UN Committee on the Rights of Persons with Disabilities for their treatment of disabled people. We all know the additional costs that disabled people face—they are a fact—with higher energy bills and so forth. The disability price tag is around £975 extra a month. The woeful support of the cost of living payments will not go anywhere near meeting those additional needs, so why on earth does the Minister think it is enough? We do not need any more analysis—the evidence is there, so why can he not take action now?

I reiterate the point that people often receive multiple parts of the comprehensive cost of living support that we are providing. The hon. Lady also made a point about the UN, but my experience from speaking to counterparts from across the world at the UN last week and being involved in the discussions there was that people often look to the United Kingdom as being a world leader on these matters. It is important to make that point in the context of the comment she just made. The fact is that we are continuing to keep under review the package of support that is provided, but it is worth recognising that people often receive multiple parts of the package alongside the disability cost of living payment.

It was a real pleasure to listen to the hon. Member for Battersea (Marsha De Cordova), who is always eloquent when it comes to disabled people. We have heard already about the support with the £150 extra. I thank the Minister for that; it is literally better than nothing. Many disabled people are trying to get into work, because they have to work to be able to afford the basics in life. There is a disability income gap, as the Minister will be aware. Will he look back on his White Paper, because he missed out the delays that people are now facing to get support from Access to Work? It is impossible, almost. Disabled people are losing jobs daily, because they cannot get the support they need when they need it. Will the Minister review that and try to help disabled people be able to afford more?

The hon. Lady knows, because we meet regularly to talk about these issues, my absolute determination to deliver on greater employment opportunities for disabled people. In fact, as I said earlier, I am meeting the Scottish Minister later today, where this issue is on the agenda. I hope that we can move forward with our reforms in a constructive, collaborative manner, so that they benefit people across the United Kingdom to their fullest extent. We are putting additional resource into Access to Work to get through applications quicker, and a number of process changes have also been made. Those are in the early stages, but the anecdotal commentary I am receiving from officials is that with some of these changes, we are seeing cases processed much more quickly.

The Resolution Foundation estimates that mortgage payers will pay an average of £2,900 more in the next year due to increases in interest rates. Some 13% of retirees are still paying mortgages at the time of retirement, and 770,000 households are not claiming pension credit, so do not qualify for pension credit payments. This Government have been a disaster for pensioners, particularly those with mortgages. If the Minister has done his research, can he tell us how many people on pension credit applied for mortgage interest support? How many pensioners are facing interest rates rising faster than their pensions?

I do not have those figures to hand for this debate, but I will take that request away and ask ministerial colleagues in the Department to respond.

There is no room for complacency. Our constituents are absolutely desperate. On Saturday night, I got another email from a constituent who literally had no money left. She was spiralling into debt, and she could not afford her rent, food or energy. Today’s announcement will do nothing to help her, and it will do nothing to help so many of my constituents who are in such desperation. What steps has the Minister taken to look at the essentials guarantee that the Joseph Rowntree Foundation is putting forward, which would see a consistent uplift in all benefits to help people such as my constituent?

I am obviously not familiar with the circumstances of the individual in question, so it is impossible for me to comment on the support that he or she may or may not be eligible to receive. I always encourage people to apply for any support to which they might be entitled. Benefit calculators are available on the gov.uk website to help people to do that. The household support fund is being delivered in the hon. Lady’s community, but if she wishes to share some details with me about that specific case, I will gladly take that away to look at. As I said earlier, there is also the opportunity, with the annual decisions taken within the Department, for all these issues to be considered.

The Minister said rather dismissively to my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) that the Government have no plans to reinstate the universal credit uplift. Has he done any analysis of the really positive impact that that uplift had on people and the negative impact of taking it away? At the very least, will he look at replicating across the whole of the UK the Scottish child payment of £25 a week, which is made to the people who need it most?

We have no plans to replicate the Scottish child payment here in England. I will happily look at the wider report to which the hon. Member referred.

The cost of living crisis has had an impact on businesses in my constituency such as Lomas News, whose energy bills went up by 400%. In April, it got relief of £4.93. With food inflation up, rents up, mortgages up and bills still high, the support is not enough, is it?

We are continuing to provide comprehensive support to both individuals and businesses to get them through this difficult time, and we have done that consistently. Of course, the hon. Member stood on the same manifesto that I did, so I very much hope that he will subscribe, as I do, to the Government’s overarching mission to get inflation down, which will relieve the very challenges to which he alludes.

Bill Presented

Outdoor Education Bill

Presentation and First Reading (Standing Order No. 57)

Tim Farron presented a Bill to require that every child be offered at least one outdoor education experience during primary school years and at least one such experience during secondary school years; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 24 November, and to be printed (Bill 329).