Baroness Lister of Burtersett (Lab)

My Lords, I start by thanking the noble Lord, Lord Verdirame, for tabling this amendment, which, as he said, follows up on the one I tabled in Committee, to which he spoke so eloquently. I too thank my noble friend the Minister and her officials for the very useful meeting we had recently and the Public Law Project for all its help. Through the universal credit system, the Government determine the minimum amount that people and families need to live on. As has been evidenced by the Joseph Rowntree Foundation, for many that amount is not sufficient to meet their essential needs. As acknowledged by the DWP’s own policies, any deduction that takes people below that amount will result in hardship. A Public Law Project survey of 500 people who had deductions applied found that a third of respondents became destitute as a result. Some 97% of Citizens Advice advisers reported that overpayment or advance loan deductions negatively affect people’s ability to afford essentials, while analysis by Policy in Practice found that, in addition to lowering income, deductions increased income volatility, “making it harder for low income households to budget and plan ahead”, with “far reaching consequences, particularly for housing affordability and the risk of homelessness”. The need to address the impact of deductions on poverty and financial instability was recognised by the Government at last year’s Autumn Budget, when they introduced the fair repayment rate. This move, which reduced the maximum amount that can be taken from someone’s universal credit payment to repay debt from 25% to 15%, was very welcome, but it is not enough to address the issues associated with overpayment recovery. The 15% rate is the rate that already applied for recovery of overpayments where individuals do not have earned income. Further, while it is helpful to have a maximum cap, it is not a substitute for assessing what constitutes an affordable rate of repayment for individuals. A recent report from the Money and Mental Health Policy Institute, while welcoming the fair repayment rate, expressed concern that the 15% rate would continue to drive hardship. Its research found that the current system for overpayment recovery “disproportionately affects people with severe mental health conditions … who are eight times more likely to have been overpaid benefits”. The result, the charity says, is “serious financial and psychological harm for many people already struggling with money and mental health problems”. One research participant commented on the deduction, saying, “some days I have been not eating because I can’t afford to, which is leaving my mental health in tatters”.