Baroness Sherlock (Lab)

My Lords, I shall get through as many points as I can, and if I cannot, I will check Hansard and write to noble Lords. I am delighted to find that writing to members of the Committee is now a bipartisan activity, rather than just on the government side, so it is all very interesting. I will start with the overall critique from the noble Baroness, Lady Stedman-Scott. As she said, this is what the shadow social security team throw at the Government on a regular basis: that they are not doing enough to bring down welfare spending, and that everything is terrible. I start by saying that the system the Opposition critique is of course a system that we inherited from them. All the things we are often told are wrong with it are things that were entirely in the gift of the previous Government. They did not address any of those problems. The only attempts they made were struck down by the High Court for being illegal, whereas this Government have actually taken action. As the noble Baroness alluded to, we have already taken action to make the health and disability system more sustainable by rebalancing rates of universal credit from this April to tackle some of those inappropriate incentives in it. Our investment in pathways to work will help many more people with health conditions back into meaningful work. We have started the Timms review to make sure that we find a sustainable way forward. On timing, I can say to the noble Baroness that we anticipate that the review will report in autumn of this year. I have no reason to believe that it is not on track to do that. I will come on to some of the critique from the other side. Noble Lords have said that we are either not doing enough to reduce social security spending or not doing enough to increase it, so let me try and lean in the other direction to be balanced. My noble friend Lady Lister is absolutely right: we are in Grand Committee, and many of us have been in Grand Committee on a regular basis—annually—to do this. Some of us have moved positions from one side to the other, but now we are here. This point is that this debate is heard, it goes on the record, and I always look very carefully, whether in government or opposition, at the comments made by noble Lords. I am grateful for them; it is a debate well worth having. I understand the point my noble friend is making about the adequacy of benefits, but from April, this Government are delivering the first ever sustained above-inflation rise in the basic rate of universal credit since it was introduced. Just under 4 million households will benefit overall from that change, which is estimated to be worth £760 a year by 2029-30 in cash terms for a single parent aged 25 or over, or around £250 above inflation. We have also done other things. We introduced the fair repayment rate from April last year, reducing overall universal credit deductions from 25% to 15%, which again benefited approximately 1.2 million of the poorest households. I respect my noble friend for constantly pushing us to go further, but I put on record that the Government have done something significant, and I thank her for acknowledging this. In terms of the rebalancing, my noble friend Lady Lister is right that, unusually this year, the personal allowance rates of universal credit are not covered by these because the Universal Credit Act, which did the rebalancing, took them out for the relevant period. They will therefore be made by regulations but when we discussed the primary legislation, the Universal Credit Bill, the formula was made really clear. The only reason the numbers were not in there is because they relate to CPI, so the actual numbers depend on what CPI turned out to be. The percentage relationship to CPI was made clear and there was the opportunity to debate that in the Bill. Hopefully, that reassures her on that front. I understand my noble friend’s concerns on the local housing allowance point, but we have to step quite carefully in this area. DWP currently supports renters by spending around £34 billion a year on housing support for low-income renters, including £12 billion in the private rented sector. The April 2024 one-year LHA increase cost an extra £1.2 billion in 2024-25. It will be approximately £7 billion over the next five years. This is an area where the changes cost a lot of money. We know that LHA rates will not meet all rents in all areas, but it has always been acknowledged that they would never be able to do that. This Government are trying to address the underlying problems driving some of these issues by prioritising the fundamental issue of the lack of housing supply, through the £39 billion investment in the social and affordable homes programme, which is still the biggest boost to social and affordable housing in a generation. For those who need additional support and have a shortfall to meet their rent costs, our new crisis and resilience fund replaces discretionary housing payments in the household support fund from this April, supported by £1 billion a year, including Barnett impact, through the spending review period. Importantly, we have been able to give a multi-year reassurance to local authorities that the money is coming through. On the benefit cap, I know that my noble friend will never be a fan of it, and I understand her concerns, but this Government believe that entering or returning to employment is best for individuals and the economy; we have taken significant steps to help them do so. The benefit cap encourages personal responsibility while maintaining a strong safety net. On uprating, this has to be reviewed every five years, and 2027 is the next time it will definitely have to be done. It is up to the Secretary of State when it is reviewed, and that is the latest it can be.