Benefits system supported Wales through the pandemic, but action needed to support people with rising cost of living
17 March 2022
In light of the rising costs of living, the Welsh Affairs Committee has today called for further support for people as it publishes its report, the Benefits system in Wales.
The Committee received evidence that the weekly £20 uplift to Universal Credit payments had supported claimants throughout the pandemic, but heard concerns about the ending of the temporary uplift. In light of the rising costs of living, the Committee has called for the £20 uplift to Universal Credit payments to be reintroduced. The Committee’s report also calls upon the UK Government to increase the level of statutory sick pay.
With the rising costs of living, now more than ever people need to know what benefits they may be eligible for. The Committee heard that there is a lack of awareness around Pension Credit. As such, the Committee has called for the DWP and Welsh Government to work with local authorities to boost take-up. More widely, work is needed by both governments to improve the signposting of benefits, grants and allowances.
The Committee’s report details Wales’s unique socio-economic profile and its implications for the benefits system. For example, Wales has a higher rate of long-term unemployed, and has the highest poverty rates of all the UK nations. Demographic features also presents Wales with greater challenges such as the high rate of disability and an older population. Connectivity is also difficult for many living in Wales, particularly in rural areas where claimants may struggle to attend appointments or work. The Committee concludes that the UK Government needs to properly consider the Welsh context when deciding welfare policy.
Much of this can be addressed by close working between the UK and Welsh governments. As such, the Committee has recommended that a UK-Welsh Government Interministerial Board be established, which can consider the Welsh specific needs in welfare policy. It can also be a forum where – prior to announcing welfare policy – the UK Government can consult the Welsh Government on policy that links closely to devolved areas of competence such as housing and skills.
The Committee also collected evidence on the Welsh Government’s Basic Income (UBI) pilot and has called for the DWP and the Welsh Government to work together to conduct an impact assessment on the benefits received and the amount of taxes paid by the average potential participant.
Ben Lake MP's comment
Ben Lake MP, who chaired the report’s consideration meeting in the absence of Rt Hon Stephen Crabb MP, said:
“Wales has unique characteristics and welfare policy must be designed with this in mind: from its unemployment and poverty statistics to its challenging connectivity for rural communities. The UK and Welsh governments supported many through the covid-19 pandemic, and we pay tribute to the hard work by DWP staff and leadership. However, the rising costs of living could amplify struggles in the benefits system encountered by claimants pre-pandemic, and it is therefore imperative that steps are taken to support them in making ends meet.”
Some of the Welsh Affairs Committee’s recommendations are:
- The DWP should run a consultation with welfare rights advisors on Universal Credit's explicit consent model and examine whether any changes are necessary.
- The UK Government must commit to increasing the level of Statutory Sick Pay (SSP). The DWP should write to the committee with an update on progress within 6 months.
- The £20 Universal Credit uplift should be reintroduced at the Budget in March 2022 and extended to legacy benefits.
- We urge the UK Government to use nearer-term forecasts to increase benefits in line with the actual rate of inflation that will apply in April 2022. Longer term, the DWP should outline what the benefit system is trying to achieve and how this can be measured, particularly in relation to ending poverty.
- The UK and Welsh governments should establish a UK-Welsh Government Inter-ministerial Advisory Board on Social Security.
- UK Government ministers should consult with the Welsh Government in advance of new social security policies being implemented, especially in areas linked closely to devolved areas of competence such as housing and skills.
- The DWP and Welsh Government should work together with local authorities to run a take-up campaign on Pension Credit. The DWP and Welsh Government should work together to improve the signposting of benefits, grants, and allowances by producing a toolkit for Work Coaches.
- The UK Government should accept the In-Work Commissioner’s recommendations: to provide a credible in-work offer for all working benefit claimants; and review how the taper rate and work allowances can best support in-work progression.
- In the interests of the young people considering taking part in the Welsh Government's Basic Income pilot, the DWP and the Welsh Government should work together to conduct an impact assessment on the benefits received and the amount of taxes paid by the average potential participant.
- The UK-Welsh Government Inter-ministerial Advisory Board on Social Security should undertake an assessment of the potential merits of devolving the administration of the same benefits to Wales as have been devolved to Scotland.
Image credit: Tyler Allicock/UK Parliament