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

Baroness Thornton Excerpts

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

[Baroness Thornton (Lab)]

I thank the Minister for his introduction to the Bill. I also thank my noble friend Lady Lister for her contribution, which makes my job of inadequately filling in for my noble friend Lady Sherlock much easier. My noble friend posed many of the key questions, which I will try not to repeat.

On these Benches we of course welcome this Bill for what it is, and for the much-needed help it will provide to families up and down the country who are encountering some of the toughest financial conditions in a generation. The OBR has confirmed that the hit to living standards over the past two years is the largest since records began: inflation in recent months has reached a 40-year high; food rose by 16.8% over the past year to January 2023; gas and energy prices have risen to levels we would have thought unthinkable only two years ago; and wages, which are lower in real terms than they were 13 years ago, are expected to remain below 2008 levels until 2026. The gap between income and expenditure for many people who were already struggling before has now hit breaking point and is causing very real hardship.

Those in receipt of benefits and pensions are some of the hardest hit. Although the payments in the Bill recognise this fact, taken alone they represent a highly inadequate one-off provision that simply will not touch the sides of the deep crisis forcing families to choose between food and heating, and wrecking the physical and mental well-being of families up and down the country.

The Bill is rightly being criticised in the same way that its predecessor was, with the addition of how disappointing it is that the Government have not addressed the issues that Members across both Houses raised last time, and which have been raised again by the noble Lord, Lord Shipley, and my noble friend Lady Lister in their speeches. Last year, the previous Minister argued that help needed to be delivered swiftly. If the Government are committed to bringing short-term support through this one-off provision, they should have taken the time to bring in changes to make the support more effective this time round. They could also tell us when the first payment might be due.

A flat payment cannot take into account a range of circumstances that effect someone’s needs, with household size being the most obvious one. Children in larger families are at far greater risk of living in poverty. Over the summer, academics at the University of York estimated that 90% of large families would be experiencing fuel poverty at the start of this year. The cliff edge involved in these payments, which has been referred to by my noble friend, is also incredibly concerning.

Linking this cost of living payment to the receipt of means-tested benefits means a sharp cut-off for anyone earning above the limit. Being £1 over the threshold should not mean missing out on £900; that is a huge disincentive for people who might otherwise look to take on more hours or look for better-paid work to lift themselves off universal credit. The number of payments was increased from last year from two to three, but has the Minister considered increasing the spread of payments further in order to reduce this cliff edge?

The Bill will not sew up the holes growing ever larger in our social security net, but the £900 will be welcomed as an increase on last year’s payment. However, the £150 payment for those in receipt of certain disability benefits has stayed the same, despite the huge increase in inflation. Can the Minister explain why this payment has not also been increased?

There are other good questions about the Bill that need to be and have been raised. Having a one-month assessment period for recipients means some may not qualify in a specific month—which I think has also been referred to—because of the way they are paid. This same issue was raised last year with the previous Bill. Does the Minister have any information from last year on how many people who are paid every four weeks missed out last year on receiving payments because of the short assessment period? Does the Minister have a similar answer for those who are self-employed but will miss out because of the operation of the minimum-income floor? Again, this was raised last year. We were told that the payments were an admittedly blunt instrument that needed to be got through quickly—that argument works less well a year later.

These payments are welcome as a one-off help, and so we are happy to support them in that capacity, but we need to make it crystal clear that they are not a long-term solution that will reform our social security net, address our broken labour market and fix the dire living standards that are dragging families down. Anything less is simply papering over the cracks.