Universal Credit

3. Topical Questions – in the Senedd on 6 October 2021.

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Photo of Sioned Williams Sioned Williams Plaid Cymru

(Translated)

1. What does the Welsh Government intend to do to mitigate the effects of the UK Government's decision to remove the universal credit uplift from today? TQ569

Photo of Jane Hutt Jane Hutt Labour 3:04, 6 October 2021

Well, diolch yn fawr, Sioned Williams. Thank you for this very important question. The UK Government has committed the greatest act of levelling down by cutting the £20 universal credit uplift, condemning hundreds of thousands of hard-working families to life on the poverty line. We shall not abandon families in Wales. Our discretionary assistance fund will help them keep their homes warm and children fed.

Photo of Sioned Williams Sioned Williams Plaid Cymru

(Translated)

Thank you, Minister, and thank you, Llywydd, for accepting this important topical question. 

Photo of Sioned Williams Sioned Williams Plaid Cymru

The £20 uplift in universal credit comes to an end today. This cruel decision by a heartless Westminster Tory Government will affect over 275,000 of the poorest households in Wales. That's one in five households. According to the Bevan Foundation, the impact will be worse for Welsh families, as a higher proportion of families here claim universal credit or working tax credit. And for families with children, four in 10 will be affected; that's four in 10 families with children in Wales who will  suddenly find their safety net looks a whole less safe from today onwards. Today's cut comes as living costs in Wales are rising, household energy costs are rocketing—there's a record price today for gas prices in the UK—and household debt is deepening.

The solution according to the Westminster Government: just work two more hours. Aside from the absolute callousness of this statement, it's also utterly false. Universal credit is a tapered benefit, which means for every pound you earn, your payment reduces by 63p, so for a job that pays £10 per hour, it'll take a lot more than two hours to earn £20 more. Furthermore, 38 per cent of people claiming universal credit in Wales do have a job. They rely on universal credit because their work simply does not pay enough. I was listening to a mother being interviewed on Radio Wales this morning; her and her husband work full time. They are on universal credit; they're going to be worse off. She said the cut is going to be the equivalent of four weekly shops of food.

As the duty of the Welsh Government is to the people of Wales, I'd like to know what specific new plans the Welsh Government has to mitigate the effect of this disastrous decision on our poorest families, which will of course also see £286 million taken out of our local economies. The UK Government has announced £500 million for a household support fund to help vulnerable households this winter, resulting in £25 million being made available to the Welsh Government. This money, of course, goes nowhere near to plugging the hole so cruelly torn in poorest households' income by ending the uplift, and will not meet the needs of the inevitably increasing numbers of those facing fuel poverty, which is a life-or-death issue as winter approaches. I'd therefore like to know if the Welsh Government will be using some of this money to help fuel-poor indebted energy customers in particular, many of whom will have been affected by today's decision.

And lastly, when will the Welsh Government finally back widespread calls for the devolution of welfare powers to Wales, so that we can ensure a decent life for all, rather than forever leave the most vulnerable in our society at the mercy of Westminster, which will never have the best interests of the Welsh people at heart? Westminster has never cared about the people of Wales, and it never will. Introducing this cut has been a political choice; forging a better system requires political will. When will you as a Government decide that enough is enough?

Photo of Jane Hutt Jane Hutt Labour 3:07, 6 October 2021

Diolch yn fawr, Sioned Williams, and very powerful words, which are shared and echoed in terms of what you said on this side of the Senedd. I know, and you are right, this is a cruel decision, and the Chancellor's response, as you say, to end the increase is the focus must be on jobs, but over 97,000 people receiving universal credit in Wales are working, and 76,000 people on universal credit are in the no work-related requirement group. Those are people who are disabled and have caring responsibilities that the DWP have said cannot work; they're in the no work-related requirement group. How cruel is it that those people are also going to be losing that all-important £1,040 annual income, and around 275,000 low-income families who in total lose £286 million? And I have to say, yes, of course, that's taking it out of our economy as well.

The planned reduction means the biggest overnight reduction to a basic rate of social security since the modern welfare state began more than 70 years ago. And I do also thank all those, not just here in this Senedd, but across Stormont, Westminster and Holyrood, where all of the committees have met and condemned this; the children's commissioners from each nation; numerous charities and faith groups; not to say also all of those Conservatives who are against this, including former Secretaries of State for Work and Pensions.

Can I just respond to your specific questions by saying that the announcement last week of the £500 million household support fund was derisory? Twenty-five million pounds to Wales. No way will it make up for the money that's been lost by hundreds of thousands of families across Wales, so we are working out proposals to ensure that the money is spent in the most efficient way in terms of the impact of this brutal cut to their household incomes. So, I'm grateful that you have raised this point today. Because actually Trussell Trust said, as a result of this, one in four people now say they will very likely need to skip meals—64,000 people in Wales, that is. And one in five say they will very likely be unable to afford to heat their homes this winter—61,000 people in Wales—and that's before the latest fuel increase.

So, just also very quickly, you know, and I have already announced, that we are extending the discretionary assistance fund, which we have in Wales—an additional £25.4 million during the pandemic. We're extending that and we're also including the flexibilities that we built into DAF. That will continue till next spring, but we're also going to have a national—again—income maximisation benefit take-up, working with local authorities and Citizens Advice. We've got to make sure that everyone takes up their entitlements.

So again, on your final point, we must make sure that we have a social security system that is delivered with compassion and is fair in the way it treats people. You know that we're carefully assessing this in terms of our situation in Wales, and of course devolving certain powers relating to elements of social security could provide us with a wider range of tools to tackle poverty. We of course have responded to that, and to the recommendations of the Equality, Local Government and Communities Committee that John Griffiths formerly chaired. So, I hope that is helpful in showing how we are trying to respond to this cruel, unnecessary cut to the incomes and the lives of our poorest people in Wales, who are, as I said, contributing to our economy, to our communities, to our society.

Photo of Mark Isherwood Mark Isherwood Conservative 3:12, 6 October 2021

In April 2020, as a one-year response to the COVID-19 pandemic, the universal credit standard allowance received a temporary uplift of £20 a week. In his March 2021 budget, the UK Chancellor announced an extension of this temporary uplift for a further six months, alongside other advances to universal credit. The temporary uplift was always time-limited and it is misleading to pretend otherwise.

As the First Minister said yesterday in regard to an NHS pay rise, Government can't just magic money out of the air. The UK Government, which delivered a £407 billion COVID support package, including a £9 billion injection into our welfare system, and an additional £2.14 billion to the Welsh Government for 2021-22, is now focused on investing in jobs and skills as we bounce back from the pandemic. Further, as we heard, the UK Government has also announced a new £500 million household support fund available to help those most in need as we enter, hopefully, the final stages of recovery, which will support millions of households. Devolved Governments will receive £79 million of this, so how will the Welsh Government ensure that its full share of this money ends up helping those most in need in Wales?

Photo of Jane Hutt Jane Hutt Labour 3:13, 6 October 2021

I am surprised that Mark Isherwood hasn't listened to my answers to the questions that have been put so powerfully by Sioned Williams this afternoon. I can perhaps remind him that, actually, it was Stephen Crabb, the Conservative MP, who actually pointed to the fact that the reality is that even if the £20 per week payment is maintained it will not make up for the income that our poorest households lost, because of severe cuts year on year to their benefit payments, introduced by years of welfare cuts—years of welfare cuts, Mark Isherwood. Stephen Crabb admitted that he was part of that team that pushed more workers into poverty. That is one of your colleagues in Westminster.

Also, can I just point out the fact that I'm looking at north Wales and Aberconwy, just one constituency, where 4,750 households are claiming universal credit, of which 45 per cent are working? There'll be 2,756 children in households that will lose that £20 per week. You are someone, Mark, who always stands up and always speaks in support of the third sector in your community. Are you listening to them in north Wales?

Photo of Joyce Watson Joyce Watson Labour 3:14, 6 October 2021

I thank the Member for putting this question forward, because it's really, really important, and this is happening today, now, to families. It is, as the Minister said, the largest single benefit cut since 1945—one of the largest ever, in fact. After more than 10 years of Tory cuts—[Interruption.] I've only just started. And you can't make an intervention anyway.

Photo of Elin Jones Elin Jones Plaid Cymru 3:15, 6 October 2021

Janet Finch-Saunders, if you wish to ask a question, put a request in. 

Photo of Joyce Watson Joyce Watson Labour

Yes, please do—after more than 10 years of Tory cuts, when workers are already facing choices between eating and heating. I read the letter from the devolved administrations to the Prime Minister asking him to reverse that decision. I know he's been busy cracking jokes in Manchester, but has he actually bothered to reply to that letter? Because those families that he is making poorer today deserve answers, and not a clown routine. I heard Mark Isherwood say that Governments can't magic money. Well, I'd like him to consider how people are going to magic food on their table and money to put in their gas meters, because that's what we're really talking about here today.  

Photo of Jane Hutt Jane Hutt Labour 3:16, 6 October 2021

Diolch yn fawr, Joyce Watson. I have responded to many of the important and valid points that you've made. I think it is important to recognise this joint letter that went from the First Minister of Scotland, the First Minister of Wales and the First Minister and deputy First Minister of Northern Ireland to Boris Johnson, calling on him, urging him, not to proceed with this completely unnecessary cut. In that letter, they say that

'this will increase poverty and hardship without delivering any tangible social or economic benefits. The UN Special Rapporteur on Extreme Poverty and Human Rights said—when calling upon you to reverse this cut—that for a healthy and well-qualified workforce to emerge, your Government must provide adequate levels of social protection. Years of a freeze on benefits means Universal Credit has not kept pace with rising living costs.'

And, of course, as I said, the £500 million fund that's been handed out on a discretionary basis is wholly inadequate to making up the £6 billion shortfall in social security expenditure that will result from this cut. 

Photo of Jenny Rathbone Jenny Rathbone Labour 3:17, 6 October 2021

It's absolutely clear that the UK Government is just turning a deaf ear even to the pleas from people within their own party and former Secretaries of State for Work and Pensions. So, I think we have to fall back on what we can do. Obviously, the increase in the discretionary assistance fund is very welcome, but I just wondered what conversations you might be able to have with your colleagues in the climate change ministry about how we could accelerate the retrofitting of social housing. Because, obviously, that is where a very large number of universal credit recipients are living, and they are therefore going to be £20 a week worse off. Also, what can we do to somehow rectify the total imbalance in the food that's rotting on the trees and is about to be culled in grotesque images on the farms, simply because we cannot get the right skills to rectify the problems that we have with our food security? So, what can we do to ensure that food that's currently not being collected reaches the people who most need it? 

Photo of Jane Hutt Jane Hutt Labour 3:18, 6 October 2021

I thank Jenny Rathbone for that important question. We've got £25 million allocated—as I said, a derisory amount—to Wales. What I have sought to do—. As soon as we heard about that allocation, I've gone across the whole of the Welsh Government to say, 'What is it?' It's a one-off sum of money; it's not recurrent. It's a one-off sum of money, which is the hardest to spend sustainably. So, all Ministers are responding in terms of how they think we can most effectively use that funding, and, of course, I'm sure that your points today will be very valuable for the Minister for Climate Change.