Social Security (Up-rating of Benefits) Bill

Baroness Stroud Excerpts

2nd reading
Wednesday 13th October 2021 Lords Chamber

[Baroness Stroud (Con)]

My Lords, it is interesting that this is the Social Security (Uprating of Benefits) Bill. It could have been a Bill on pensions and the uprating of benefits, but it is not; it is the Social Security (Uprating of Benefits) Bill. While much of the discussion today has been focused on the triple lock, as has been implied, I want to focus on a different element of social security: namely, the universal credit £20 uplift. In a recent poll undertaken by iPolitics, only 3% of the British public said that the cut should come in this year and at this time. This is a staggeringly low number, particularly in the light of the twin instabilities caused by the rising cost of living and the global pandemic from which we are just emerging.

Let us just take a moment to look at each of the arguments put forward for dismantling the uplift and those against. I have heard it said by many that this £20 was for a crisis moment only, but we need to be honest here. The reality is that the pandemic made visible what had been invisible to many: that our safety net is in fact at its lowest value ever since its creation. Having been founded at 20% of the median wage, it is now at a value of 12%. This became visible to people whose lives would normally never have been touched by the welfare state, so the Government stepped in to protect new claimants and the public at large from being shocked by the level of welfare. But it is right to be shocked by the level of welfare, which creates a permanent state of crisis for many. Let us not delude ourselves that the crisis is over, particularly as energy prices and inflation both rise, creating a perfect storm.

We have an opportunity to think again and do something about this in the Bill. All six Conservative former DWP Secretaries of State since 2010 have written to say that this £20 uplift investment should remain. I have heard it said that the £20 uplift has to go to protect work incentives. This is a totally specious argument if you understand anything about universal credit. It may be an argument for increasing the work allowance, or lowering the taper rate, but it cannot be an argument for protecting work incentives. The work allowance always makes it pay to take work, and the taper rate always rewards progression in work. To be honest, if you wanted to strengthen work incentives, you would put the £20 into the work allowance and lower the taper rate from 63% to 60%, or even 55%, as was in the original design.

I have also heard it said that there are no poverty impacts from the removal of the £20 uplift. To be honest, this is the most staggering of all arguments. It can be said in only a technical sense because, in 2016, the Government abolished their official measure of poverty and have yet to replace it. But, by any measure of poverty, relative or absolute, if you take £20 a week away from those on low incomes, a proportion of them will move into poverty. If you use the measure recommended by former Secretary of State for the DWP Amber Rudd, the Work and Pensions Committee chairman, Stephen Timms, and the Office for National Statistics—namely, the Social Metrics Commission measure of poverty, in which I declare an interest—to analyse the removal of the £20 uplift, you will see in the cold light of day the impacts on 840,000 people, 290,000 children and 450,000 people in a family that includes a disabled person, either an adult or a child. Granted, a proportion of these will take the 1 million available jobs, and many will take advantage of any upskilling that is available, building this high-wage, high-skill economy.

But if the Government really believe their own narrative, they know that they would never need to pay the £20 uplift because people would move beyond it. The fact that they say that they cannot afford the £20 uplift reveals that they know that it will take time to get there and, in the meantime, many vulnerable households will experience a cost-of-living storm and very real hardship.

But my real concern is for those to whom we say, “The welfare state is your safety net”: those with disabilities that my noble friend Lord Shinkwin so eloquently referred to and those with children aged two and under, with whom we have a social contract. We say, “You are valued by our society, and we want to support you, even though we do not expect you to work”. Those in this group have just lost £20 per week, are not expected to work and are about to experience rising inflation and higher energy bills in the midst of a pretty dark winter. If we do nothing else, the £20 uplift must be restored for this group. My other concern is that this seems to be news to those in government when I tell them, although not to my noble friend the Minister, who has spent a lifetime seeking to protect those who are vulnerable.

What is to be done? I have, first, a question for the Government and, secondly, a possible way forward. Following my noble friend Lady Altmann’s speech, I have a question: could my noble friend the Minister clarify whether there are any savings from the Bill and, if so, what figure is being scored? My understanding is that there are no or low savings scored against the Bill. It has been laid before this House because of a concern that earnings are at around 8%—but it is also my understanding that the Treasury and OBR earnings are scored at 4.9% and that the ONS adjusted earnings may even be as low as 3.2%. Given that CPI is anticipated to be about 3.2%, apart from the Bill possibly being unnecessary, there appear to be no or low savings connected with it.

However, it is also my understanding that, were the Bill to be delayed, the basic state pension would be uprated by actual earnings, at about 8%, in which case, by the DWP’s own admission, savings would be worth between £4 billion and £5 billion, which could be reinvested into UC, were it to be saved. It would help those of us seeking to lay amendments, and those advising us, to have an accurate understanding of the savings from the Bill.

I now move to a possible way forward. It is no secret that I am seriously concerned about the removal of the £20 uplift, but I am also really concerned about the democratic deficit connected with the removal of this uplift. The removal of it was brought about by the sunset clause on secondary legislation, which means that it just died, without a vote in the other place. If Brexit was about anything, it was about taking back control—about active democratic decision-making. If Members of the other place actively want to make this choice to let the £20 uplift die, then this House would respect that, but it should be an active choice because they are the ones answerable to their constituents.

So it is my understanding that there are two ways of giving the other place this active choice. One is through an amendment to the Bill, and the other is through an amendment to the process Motion of the Bill. Either way, it is likely that there will be much discussion about scope and precedent but, ultimately, scope and precedent are servants of the democratic process, and this is a social security uprating Bill, not just a pensions uprating Bill. This is a self-governing House, and this is a moment for us to work across party divides to uprate our social security in order to protect the most vulnerable of this nation at a time when the cold winds of inflation and high energy bills are swirling around them. If there is a way to bring forward such an amendment—and I believe that there is—it is my intention to do so in Committee.

Social Security (Up-rating of Benefits) Bill

Baroness Stroud Excerpts

Committee stage
Tuesday 26th October 2021 Lords Chamber

Moved by

[Baroness Stroud]

9: After Clause 1, insert the following new Clause—
“The universal credit uplift
(1) Within the period of one month beginning with the day on which this Act is passed, Ministers of the Crown must make arrangements to move a motion for resolution as set out in subsection (2) to be debated, and voted on, by both Houses of Parliament.(2) The resolution is to decide whether it is desirable to reinstate the £20 uplift into Universal Credit as per the modification of the standard allowance of universal credit under the Social Security (Coronavirus) (Further Measures) Regulations 2020 (S.I. 2020/371).”

[Baroness Stroud (Con)]

My Lords, I should like to open with one preliminary point, which is to say that, in moving this amendment, as I do, I intend no disrespect to the clerks, for whom I have the greatest of admirations. This morning, I wrote to them to tell them that I wanted to put on record how much I respect and honour the work they do, and that any action I would take today would in no way undermine that. In fact, I could not have got here without their support and advice. Moving an inadmissible amendment is not a straightforward process. Several weeks ago, I was not even aware there was such a thing as an inadmissible amendment. However, there is a serious, genuine difference of opinion which I believe should be exposed to the view of this self-regulating House.

Accordingly, I rise to move the amendment tabled in my name and the names of my noble friend Lord Freud, and the noble Baronesses, Lady Janke and Lady Boycott, whom I thank for their support. It is with a heavy heart that I have tabled this amendment to the Social Security (Up-rating of Benefits) Bill. I do not take lightly the idea of disagreeing so fervently with my Conservative Government or of stretching parliamentary convention in an elastic way, as my noble friend Lady Evans, the Leader of the House, so delicately put it. But the removal of the £20 uplift is a grave misstep and risks undermining the levelling-up agenda, leaving behind society’s most vulnerable people and putting at risk the stability of many homes up and down the country as we enter an unpredictable winter. If this House stands for anything, it is to check and challenge the work of the Government, and this is all I am seeking to do here today.

So let us look carefully at the effect of this amendment and at what has been said about it. The amendment states:

“Within the period of one month beginning with the day on which this Act is passed, Ministers of the Crown must make arrangements to move a motion for resolution as set out in subsection (2) to be debated, and voted on, by both Houses of Parliament.”


The resolution is to decide whether it is desirable to reinstate the £20 uplift in universal credit, as per the modification of the standard allowance of universal credit under the Social Security (Coronavirus) (Further Measures) Regulations 2020. The amendment, if accepted in this place and then in the other place, would require the Government to bring forward a vote on the desirability of the reinstating of the uplift in universal credit.

Two concerns have been levelled at the amendment that I will take a moment to address. The first is on the basis of scope and the impact on admissibility, and the second on the basis that it asks the House to decide how the House of Commons should conduct its business. Let us look at these in turn.

It has been said that the amendment is inadmissible. Chapter 8 of the Companion to the Standing Orders and Guide to the Proceedings of the House of Lords states:

“The Legislation Office advises on whether an amendment is admissible and it is expected that this advice will be taken. If a member insists on tabling an amendment which the Legislation Office has advised is inadmissible, that Office writes to the Leader of the House, copying the advice to the other Leaders, the Chief Whips and the Convenor.”


That happened according to due process, and the clerks were good enough to show me exactly what both letters would look like. The Companion continues:

“The Leader of the House draws the House’s attention to the advice when the amendment is called, and asks the House to endorse the advice of the Legislation Office.”


That too duly happened. The reason for this is as stated by the Companion, that

“the admissibility of an amendment can ultimately be decided only by the House itself, there being no authority that can in advance rule an amendment out of order.”

The process through which an inadmissible amendment becomes an admissible amendment is through the decision of this House. We as Members of the House have to decide.

It will be no surprise to anyone who knows me well that this is not an issue on which I have taken action lightly. I am not a natural rebel. I have spent a lot of time looking at the previous occasion on which an inadmissible amendment became an admissible amendment, which was in 2013 when Lord Hart moved an amendment on the boundaries Bill. It is the reason why we still have 650 MPs.

I have looked carefully at the arguments that were made then. Speeches made by two ennobled former Speakers of the House of Commons helped me understand this more clearly. The first was by the noble Baroness, Lady Boothroyd, who said this at the time when Lord Hart moved an inadmissible amendment that became admissible:

“If there was any success in the Speakership of the Commons during my period of office, much of it was due to the advice and support that I received from the clerks. I have to admit that there were a couple of occasions when I overruled that advice, one of which was against convention. But I did so because I thought that it was right to provide an opportunity for debate on a contentious issue which was of public interest and of concern. The roof did not fall in.


We have no such arbitrator with authority to make a decision in your Lordships’ House but we are often reminded that we are a self-regulating House. While, of course, we must examine the advice of the Public Bill Office and the clerk, there can be no authority that can in advance rule an amendment out of order. The bottom line is that the admissibility or otherwise of an amendment ultimately can be determined only by the House itself. When I spoke last year, I suggested that the Government allow this House to determine the issue for itself and I am delighted that we have the opportunity of so doing today.”—[Official Report, 14/1/13; col. 510.]


So, first, the sky did not fall in and, secondly, the admissibility or otherwise of an amendment can be determined ultimately only by the House itself. That is what I am seeking to do today.

The second speech was by Lord Martin of Springburn, who said:

“My Lords, I, too, received advice from the clerks of the House and I valued it. At the end of the day, although I did not ignore that advice, there were occasions when I said, ‘I will go in another direction’. In effect, I did not accept 100% of what the clerks had said.”—[Official Report, 14/1/13; col. 514.]


The amendment before noble Lords, which asks that the Commons thinks again about protections for some of our most vulnerable people, does exactly what this House should do: asks the Commons to think again. We have the authority to make that decision ourselves.

--- Later in debate ---

[Baroness Stedman-Scott (Con)]

My Lords, we will have to wait until the Chancellor gets up to speak to find out what he has to say in his Statement. I thank my noble friends Lady Stroud and Lord Freud, and the noble Baronesses, Lady Janke and Lady Boycott, for their amendment. My noble friends Lady Stroud and Lord Freud were, of course, prominent architects of universal credit and noble Lords will, I am sure, join me in appreciating their depth of knowledge and strength of feeling on the issue. I know from all that has been said that others in this House share many of their concerns. I will not take time to repeat them now.

I must inform your Lordships that this amendment, if passed, would challenge the broader constitutional balance between the two Houses of Parliament. I am sure it is not the intention of noble Lords to open such a Pandora’s box, but I would be failing in my duty to your Lordships’ House if I did not clearly spell out the unintended effects.

Since the other place has already approved the Bill, I urge your Lordships not to risk its effects being negated by ping-pong between the Houses that takes us beyond the hard deadline for reprogramming the relevant DWP IT systems. This amendment deals with matters of public expenditure which are the province of the elected Chamber. It also effectively asks this House to decide how that Chamber should conduct its business, what it should debate, what it should choose to vote on and when that should be done—in this case, within one month of Royal Assent.

Taking into account all the constitutional points I have raised, I invite my noble friend to withdraw her amendment and, if she feels unable to do so, I strongly urge noble Lords not to vote in its favour.

[Baroness Stroud (Con)]

My Lords, I thank all noble Lords for their contributions this evening, particularly at this late hour. Who would have thought that such a gentle amendment on an issue so close the public’s heart could have generated quite so much debate?

I have listened carefully to the words of the Leader of the House and I commit myself to keep listening. It has been really helpful to have everybody’s feedback tonight. It is, however, as we all know, the eve of the Budget and I am still hopeful that inside No. 11 there may be ears to hear what we are saying tonight. It would cause me great sadness to divide the House on an issue on which we should all be so firmly united—the protection of the poorest in our society—and to do so under such contentious circumstances.

I will step back and beg leave to withdraw this amendment. But the care of the most vulnerable in our society is the rightful concern of this House. For if we stand for anything, it is to check and challenge the work of the Government, and that is all I am seeking to do today. I beg leave to withdraw my amendment.

Amendment 9 withdrawn.

Social Security (Up-rating of Benefits) Bill

Baroness Stroud Excerpts

Report stage
Tuesday 2nd November 2021 Lords Chamber

[Lord Freud (Con)]

I ask your Lordships’ indulgence to make a few observations following events last week, in the context of Amendment 5 on poverty, in the name of the noble Baroness, Lady Sherlock. My noble friend Lady Stroud and I are not pursuing our amendment on universal credit at this time.

I was delighted with the Chancellor's decision to improve work allowances and reduce the universal credit taper to 55%. According to my intelligence, this was very much a last-minute decision. I have always felt that there is a tipping point in terms of encouraging people to work more, and a taper of 55% is much more likely to be near that point than the 65% at which we were forced to start the new welfare system. However, I am much more concerned that the Chancellor did not feel able to improve the standard allowances, which have been eroded by 9% in real terms over the last decade, and which are now too low. There would be no point in an amendment which sought a vote on the standard allowance, since I believe that the Chancellor has done enough to eliminate any risk of rebellion among Conservative Back-Benchers on the issue. I am conscious, also, that Lady Stroud and I have tried the patience of the House by moving an amendment considered inadmissible by the Clerks.

Nevertheless, I sense that a sea change in public attitudes to welfare is now under way. In my account of the traumatic reform of the welfare system Clashing Agendas, I quote Rupert Harrison, the then-Chancellor’s chief of staff, on why the benefit cap was introduced. He told me:

“I know it didn’t make much in the way of savings but when we tested the policy it polled off the charts. We’ve never had such a popular policy.”

That was in 2010. This year, there have been a number of polls showing that most people in the country support extending the universal credit uplift. I do not believe that turn-round in attitudes has been purely because of the perceived meanness of the standard allowance. Universal credit is perceived as a fair and rationale safety net which eliminates the arbitrary nature of the legacy systems.

So, as the Chancellor contemplates the £25 billion of headroom that he is reported to have built into his Budget arithmetic, I urge him to use a small proportion of that figure to alleviate the real hardship being suffered by our very poorest citizens as soon as possible. My three-point recommendation to him is: first, restore the 9% erosion in standard allowances; secondly, tie the standard allowance to average earnings, something that we are debating in the context of pensions right now; and, thirdly, start getting rid of the excrescences such as the two-child policy and the benefit cap.

There is no need for late-night reactive decisions by a UK Chancellor on the shape of our welfare system. One of the clauses that I inserted into the Welfare Reform Act 2012 allows comprehensive trialling by the DWP of all the major elements within universal credit to discover the econometric impact of changes. For instance, the department can discover the exact optimal point of the taper, among many other aspects of the benefit. It may be that the point at which the Treasury makes the most tax and loses the least welfare revenue is a taper of 50%, for example, rather than 55%. The department can test and keep testing as society changes.

I thank my long-time colleague, my noble friend Lady Stroud, for her indefatigable efforts to find a way to help the most vulnerable in our society. Without all her energy and passion, I do not believe we would have achieved the progress that we have.

[Baroness Stroud (Con)]

My Lords, I shall speak to Amendment 5 in the name of the noble Baroness, Lady Sherlock. I thank and pay tribute to my noble friend Lord Freud, who I believe did a huge service in putting his weight behind the amendments last week.

This amendment speaks to the impact that changes to social security have on those who are in poverty, and it is that poverty impact which I want to focus on here. I want to put on record my thanks to the Minister for all that she did to work with the Chancellor to ensure that as we stand here today the universal credit taper rate is being lowered to 55% and the work allowance increased by £500. Those who are doing everything they can to ensure that they and their families work themselves out of poverty will benefit hugely from this budgetary intervention.

However, it goes without saying that, as my noble friend Lord Freud has just alluded to, there is a group who will not benefit from this change: those on the standard allowance, those who cannot work, those with sicknesses and disabilities. It is to that group that this House must now turn its attention. Testing this House with inadmissible amendments late at night is not the business for today, but we need to keep our focus on this issue.

The challenges that we and many across this House highlighted were the rising costs of inflation and rising fuel bills at the same time as the removal of the £20 uplift. The NICs increase will not impact on that group. A new Social Security (Uprating of Benefits) Bill is coming to the House shortly. It will cover universal credit and focus on the annual uprating of universal credit in line with inflation. We have an opportunity to argue that this should be in line with where inflation will be at the time when it is laid rather than where it was in September, in order to protect these households. There is also a fund of £500 million that has gone to local authorities to cover the colder months of the year. That should be ring-fenced and allocated to those who are on the standard allowance and unable to work or, better still, put through universal credit for that group.

Speaking specifically to the amendment, one of the reasons why the Government are struggling to deliver poverty impact assessments on pensioner poverty or working-age poverty is that they have yet to decide how they are going to define and measure poverty. This matters, and it is one of the key reasons why they have so frequently walked into trouble on issues of poverty. If only the Government realised that poverty measurement can be their friend and guide. It could have guided them through their decision-making during the pandemic and through the challenges of free school meals. I have heard it said that this cannot be done in real time, but with RTI we are so much closer to being able to measure real-time impacts and make informed choices to protect our most vulnerable people.

However, today is a day to say thank you to the Government for their investment in the lives of those who are in work and on low wages, but also to ask them to be watchful for the poverty impacts on those who cannot work—those with disabilities, children and pensioners—and to take action where vulnerability is visible.

[Baroness Greengross (CB)]

My Lords, I support these amendments as they support the very poorest and most vulnerable people of pension age, who are going to face the same rising costs of living as everyone else. When we come to group 3, I hope to speak in more depth about what I believe should happen with overall pension policy, but for this group, I want to focus on the most vulnerable.

When I headed up Age Concern England, we ran many campaigns calling for an end to pensioner poverty—a problem that sadly still exists today. Part of the problem is the low uptake of pension credit, something that the noble Baroness, Lady Altmann, has worked tirelessly on, building support across the House. These two amendments would ensure that, at a time when we are likely to face rising prices, our most vulnerable pensioners are supported.