Social Security (Additional Payments) (No. 2) Bill

Baroness Lister of Burtersett Excerpts

2nd reading & Committee negatived
Monday 20th March 2023 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, it would be churlish not to welcome this Bill, which will bring much-needed support to those who qualify for the payments it provides. However, I am sure the Minister did not expect unqualified praise from me. The qualifications are twofold: they concern context, or rather a different take on context from the Minister’s, and the shortcomings of one-off payments.

With regard to context, I will not repeat the arguments I made during our recent debate on the uprating regulations, covering the cuts in the real value of benefits since 2010, the current freezing of the local housing allowance, which we will be debating on Wednesday, and the impact of the much higher inflation rate suffered by those on low incomes when the price of basics such as food and fuel is going up faster than average prices. However, I want to go back to the point about claimants having had to struggle this past year on benefits uprated by only 3.1% when inflation was expected by the OBR to average 10.1% over the period. We were told last year not to worry as it would all be smoothed out in the subsequent uprating, but since our debate last month I have seen the following warning from the Institute for Fiscal Studies:

“Astonishingly, it is not until April 2025 that benefit rates are set to recover the ground they lost … due to lags in uprating them with inflation”.


I am sure the department will have seen the IFS pre-Budget briefing in which this was stated, so I would welcome the Minister’s comments on this warning.

This brings me to my second qualification, because no doubt he will respond that the one-off payments will help bridge the gap. But using one-off payments rather than an additional uprating to weekly benefits, to help those on low incomes cope with the cost of living crisis, has a number of limitations, as was made clear during the passage of the Bill in the Commons. A general point, made by the Work and Pensions Select Committee last year, with reference to the last set of cost of living payments, is that

“regular, predictable income”

rather than lump sums is

“better for households trying to manage a budget”.

In other words, a regular income does a better job of providing the financial security that social security is supposed to provide. However, the Government did not heed the committee’s call for options other than one-off payments to be prioritised in future. Instead, other than a small but welcome tweak, they have simply replicated the approach taken last year, with all its limitations. One of these, highlighted by the Treasury Select Committee, is the “cliff edges” it creates so that

“those who earn one pound too much, or become eligible for a benefit one day too late, may not receive it”.

As a result, some of those on low incomes will lose out, with

“implications for fairness, and … work incentives”,

as the committee pointed out. The committee therefore recommended a payment each month for six months, but it seems that “the computer said no” and the only concession has been the tweak that replaces the original two payments with three—mentioned by the Minister.

Unfortunately, some of those “cliff edges” are created by the rigid operation of universal credit’s monthly assessment period, which means some universal credit recipients do not receive the benefit for one month because of the way their wages are paid. Other problems raised in the Commons debate concerned the self-employed, pursued by Conservative Sir Robert Neill, and those who have been sanctioned. According to the Bill’s impact analysis, 7,000 households lost out on the first of last year’s cost of living payments solely due to a sanction.

Nigel Mills MP, a Conservative member of the Work and Pensions Committee, tabled an amendment with Sir Stephen Timms, its chair, that would extend the qualifying period from one to two months, making it less likely that someone would lose a payment arbitrarily. He made, in my view, a very strong case, pointing out that it would be more consistent with universal credit’s objective that work should always pay. He also pointed out that the current rules put UC recipients at a disadvantage compared with those still receiving tax credits, which was unfair. He made a similar suggestion last year, so there was plenty of time for it to be considered.

I found the Minister’s reasons for rejecting the amendment, which referred to

“administrative challenges such as out-of-date contact or bank details”

and extending the time

“between eligibility and payment”—[Official Report, Commons, 6/3/23; col. 99.]

less than convincing. Perhaps the Minister today could make a better fist of explaining why what seemed to me a perfectly sensible amendment was rejected. To say breezily, as the Secretary of State did, that even if someone loses out on a payment because of qualifying period anomalies, there will be one or two others they may qualify for coming along, suggests a complete lack of understanding of how every pound can make a difference when someone is struggling to make ends meet.

Another problem with the way that these one-off payments have been structured is that a single person gets the same amount as a family with children. The Minister in the Commons did at least acknowledge the point, but said they could not find any better solutions. Once again it would seem that policy is driven by technology rather than the other way round. When Barnardo’s finds that almost a quarter of parents polled struggle to provide sufficient food for their child—just one example of the impact of the cost of living crisis on families with children—surely everything possible should be done to ensure that children are adequately protected. Surely this group fits the Minister’s description of those most in need.

Another group in vulnerable circumstances who are losing out are carers not in receipt of means-tested benefits, just as was the case last year. According to Carers UK there are several hundred thousand carers in receipt of carer’s allowance who do not receive means-tested benefits, many of whom are facing serious financial stress. Carer’s allowance is paid at a lower rate than equivalent benefits, yet carers do not qualify for a cost of living payment akin to the disability additional payment included in the Bill—why not? Why are carers being ignored in England when in Scotland and Wales additional provision has been made by their respective Governments?

The stock ministerial response, which we have heard again this evening, to all these criticisms is that those who do not benefit from the payments in the Bill can turn to the household support fund, which has been extended for a year, which is of course welcome. However, a discretionary cash-limited fund is no substitute for reliable payments as of right. In the Commons, Nigel Mills was pretty dismissive of this stock response, pointing out:

“It is far better practice to make the laws we pass work, than to have discretionary funds to try to fix things.”—[Official Report, Commons, 6/3/23; col. 87.]


Both he and Sir Stephen Timms were sceptical that many constituents would know about the fund and would realise they could apply to it if they failed to qualify for a one-off payment even though they were struggling. The Minister tried to reassure them by referring to

“strong communications and engagement with local authorities for anybody who may be missing out”.—[Official Report, Commons, 6/3/23; col. 98.]

Could the Minister give us more information on what exactly the Government will be doing to increase awareness of the fund and its availability in such situations?

A note on the fund from Citizens Advice suggests a degree of growing awareness as more people claim help, but it also indicates a number of barriers to accessing it and difficulties where help is provided by way of vouchers rather than cash. It raises a number of issues with the eligibility criteria, with some local authorities applying more restrictive criteria than others and many rationing access or running out of money. Inevitably, given its discretionary nature, there is something of a postcode lottery. Ultimately, Citizens Advice concludes that the fund is not really suitable to deal with a situation in which huge numbers of households are finding themselves with incomes that cannot stretch to cover their outgoings. CA advisers commented:

“It’s just a drop in the ocean … a very small sticking plaster on a very big wound.”


At the end of the Commons consideration, the Minister said that the DWP

“is planning an evaluation of the cost of living payments … we will consider what further information we can release in future.”—[Official Report, Commons, 6/3/23; col. 101.]

Can the Minister, either now or in a letter, give us more details of that evaluation and an assurance that its findings will be published? We cannot amend this Bill, but given that this is the second year running in which we and colleagues in the Commons have criticised the approach taken, at the very least we can hope that questions will be answered and that the evaluation will lead to lessons being learned.

I have one final practical question. Organisations on the ground are urging the Government to name the date of the first instalment to help struggling families budget. The DWP has responded that it will be in the spring and that specific dates will be confirmed closer to the date. Given that today is the spring equinox and, officially, it is spring until June, can the Minister at the very least tell us whether it will be early, middle or late spring, to give struggling families a little bit more certainty?