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

David Linden Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[David Linden (Glasgow East) (SNP)]

I am grateful for the opportunity to outline my party’s position on this Bill and express our support for the broad thrust of what it seeks to achieve. To that end, as with His Majesty’s official Opposition, we will not oppose it on Second Reading, but I do believe that the Bill before the House today gives us an opportunity to consider some of the wider issues relating to our social security net and the desperately needed repairs which should be undertaken, but which, sadly, this Bill fails to address.

As I have said countless times before, Members on the Government Benches, and indeed all of us in this place, talk about the cost of living crisis as a recent phenomenon, or a new thing which happens to impede the lives of our constituents, but actually it is not. The cost of living crisis is the cumulative impact of 12 years of austerity policies, mixed with a cocktail of economic scarring from covid-19, and compounded yet further by Russia’s outrageous invasion of Ukraine. But that is precisely why I wish this Bill went further: to support better those who are the most vulnerable financially, the kind of folks I see at my Friday surgeries at Baillieston, Easterhouse, Parkhead and Cranhill.

The harsh yet inescapable reality is that many of the structural problems that the very poorest in our society face are the result of a policy framework put in place by this British Government: policies like the benefit cap, the two-child policy and cuts to universal credit, to name just a few. It is not good enough for Ministers to bring forward substandard legislation to the House which merely tinkers around the edges but will not deal with the source of the poverty that hinders so many of the poorest people who I represent.

We know how dire things are not because of anecdotes and the odd horrifying surgery testimony, but because of indisputable research from the likes of the Joseph Rowntree Foundation and the Resolution Foundation. The Resolution Foundation has made it clear that the poorest 10th of households experienced an inflation rate of 11.7%, and Office for National Statistics data shows that food and drink inflation is running at some of the highest rates since the 1970s, with the price of bread, milk and basic essentials soaring up in price by almost 17% in a year. Data from the Joseph Rowntree Foundation shows that more than 7 million households on these islands have been going without essentials such as meals, heating and showers this winter. This is the sixth richest economy in the world and on these islands people are going without meals, heating and showers—just let that sink in, and think about how that compares with our chat about global Britain. These eye-wateringly high levels of inflation are disproportionately hurting the poorest in our constituencies, which in turn puts yet more pressure on public and third sector agencies which are already at breaking point; I draw attention to my entry in the Register of Members’ Financial Interests as a director of Cranhill Development Trust.

We can and must do more to protect the most vulnerable. That is why the one-off cost of living payments are only a temporary fix and it is clear that permanent solutions are desperately needed. That is why when this Bill goes into Committee next Monday, I will be seeking to bring forward amendments to improve it—for example to the punitive sanctions regime, which currently means cost of living payments cannot be paid to those who are sanctioned. I have to tell the Secretary of State that those who are sanctioned are not immune to the cost of living crisis, and yet currently under the Bill those who have been sanctioned will not get the cost of living payment.

It is deeply concerning to see the DWP announcing that more people are going to risk having their vital universal credit payments sanctioned. For example, the average earnings threshold for UC rose and will affect up to 120,000 more folks. A further 600,000 people who are already working for up to 35 hours each week will be targeted later this year. There is clear and indisputable evidence that sanctions do not work either in getting people into sustainable work or in getting them to increase their hours or earnings; we heard about that recently at the Work and Pensions Committee. As the Institute for Fiscal Studies recently reported, these types of policy produce

“fiscal savings indistinguishable from zero”,

yet conditionality subjects people to untold anxiety and harm. Rather than offering one-off payments to shore up the incomes of struggling families, the British Government should focus on reversing the damaging policies that are impacting on the most vulnerable.

My party stands by our calls to Ministers to reinstate the uplift to universal credit, and indeed to increase it by £25 a week and extend it to all means-tested legacy benefits, as well as ending the benefit cap and the two-child limit. We know, for example, that disabled people are far more likely to live in poverty than non-disabled people, and are particularly vulnerable to the rising cost of living—a point that Ministers have repeatedly ignored to the detriment of my disabled constituents. Likewise, 86% of households trapped by the benefit cap are families, often headed by single mothers. It is the job of Government to support families, not subject them to further hardship. I completely agree with John Dickie of Child Poverty Action Group Scotland who calls for this “cruel and irrational” benefit cap to be scrapped at source by the UK Government as a matter of utmost urgency

The continued refusal by Ministers to fix the extensive and well documented problems with universal credit is unacceptable and it is unequivocally subjecting vulnerable people to additional unnecessary hardship. A recent report from the Commissioner for Human Rights at the Council of Europe found that the level of support provided under universal credit was a key contributing factor to child poverty. The report stated that policies such as the two-child limit and benefit cap

“restrict the amount of benefits a household can receive, regardless of their specific needs, and thereby continue to exacerbate child poverty.”

That is the Council of Europe saying that the UK Government’s policies exacerbate child poverty, and that is the fundamental problem here. The Bill tinkers around the edges with temporary fixes, however welcome, but it fails to deal with the root causes of the poverty that the Government are inflicting on their own citizens.

Meanwhile, in Scotland my colleagues in the SNP Scottish Government continue to do everything within their limited powers and fixed budgets to ensure Scottish people and communities are supported through this crisis as far as possible. In line with the Scottish Fiscal Commission’s forecasts, Scotland’s Government are set to invest £5.2 billion in benefits expenditure in 2023-24, providing support to more than 1 million people. Indeed, in 2027-28, that is forecast to increase to £7.3 billion—money that will go directly to people who need it most and to support people to live independent lives. But the Scottish Government are doing all this with both hands tied behind their back, because every additional £1 that my colleagues in Holyrood spend on measures to help with rising costs and the mitigation of Tory cuts must be funded from reductions elsewhere, given their largely fixed budget and limited fiscal powers. We do not have the bedroom tax in Scotland because we spend huge amounts of money on discretionary housing payments to try to nullify the impact of that tax, but that comes at the expense of the education budget, the health budget, the transport budget, the justice budget and so on. Members in this House have failed to confront the fact that devolution was never meant to be a sticking plaster for detrimental decisions made here.

Despite repeated requests, the Chancellor has thus far failed to provide any extra assistance to help Scotland’s Government manage this year’s budget. With every passing day that the British Government fail to use their reserved powers to adequately tackle the cost of living and its long-term impact, they demonstrate that independence is the only way for Scotland to boost incomes and build the fairer society that so many people in my community strive to see. The simple truth is that Westminster is not working and it is time for Scottish independence.

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[Jerome Mayhew]

I am not saying that employment of any description is the silver bullet. We have phased movement under universal credit, because it is a tapering benefit from unemployment through additional support from Government that diminishes as pay rates increase. Most hon. Members would accept that that is the right approach, but I also accept that the hon. Lady rightly drew attention earlier to the disability employment gap. Although I recognise the recent unwelcome upward tick in that, the direction of travel and the long-term trend is downward, which I wholeheartedly welcome.

In my constituency of Broadland, the universal credit claimant rate is only 2%. Bearing in mind that a percentage of those will be in employment, in my part of the country at least we benefit from full functional employment. It is a feather in the Government’s cap that the national average universal credit claimant rate is just 3.6%; we see that in particular when we look at youth unemployment. In Broadland, the rate among the 18 to 24-year-old cohort—who are often hard to employ and most quickly affected by economic downturn—is just 3.6%, whereas nationally it is 4.6%. It is worth taking a moment to make some international comparisons. In France, the rate of unemployment among 16 to 24-year-olds is more than 20%, and the equivalent figure for Spain is about 35%. Something is happening in the United Kingdom that is not happening on the European mainland. My submission is that it is because Conservative policies are leading to fuller employment, particularly in those cohorts that have traditionally found it harder to gain and retain employment. That is down to the brave decisions of this and former Conservative Administrations in creating a dynamic labour market that has allowed and encouraged employment and, yes, the ability to reduce the employment count for employers. That has led to fuller employment in this country than there has been in areas that are perhaps more unionised, where once someone is in the club their job is protected but that comes at the cost of the young and the poorest.

The Government have been right to focus on a dynamic labour market, in addition to direct Government support in schemes such as the £2 billion kickstart scheme, which worked so well in the aftermath of the pandemic, and the restart scheme. It cost an eye-watering £2.9 billion, but UC claimants of nine months or more got additional focus from their Jobcentre Plus work coaches to help them step back into employment, countering the terrible drain on the country and the individual cost to people’s lives of long-term unemployment.

On work coaches, this Government have doubled their number in 2021, increasing it by 13,500. I have seen these work coaches at work in my constituency, at the Jobcentre Plus in Fakenham. I pay particular tribute to all the staff members there, who have a huge amount of enthusiasm and expertise, and are going the extra mile day in, day out to get the long-term unemployed in my area into jobs. The total number of UC claimants in Broadland is 1,130. They are not all long-term unemployed, but, in a period of full employment, we just need an extra bit of help to get that hardcore group into the jobs, which are available. The additional work coaches are exactly the right way to go, which is bearing fruit.

The apprenticeship schemes are also being supported and encouraged by the Government. Members from around the House will recall that two weeks ago it was National Apprenticeship Week. To celebrate that and encourage its further uptake, I visited a business in my constituency, Ben Burgess, which many in the east will recognise as agricultural machinery suppliers of great repute. At any one time, the company has about 30 apprenticeships, which, typically, start at the age of 16. The apprentices get taken through training both on the job and at a national training facility in the midlands, where they have university-style education as well as on-the-job training in their place of employment. They come out of that scheme with a machinery technician qualification, a job and a career, leading to a really fulfilling lifestyle. That is exactly the kind of thing that the Government should be and are supporting.

I cannot move on from this area of my speech without a little plug for my jobs fair, which is taking place at Taverham High School on 10 March. It is one of a series that I have been holding and will continue to hold. My first one was in Fakenham, in the aftermath of the covid pandemic, when my assumption was that we would have a tidal wave of unemployment. The estimate at the time was that we would have 12% unemployment. I set in place a jobs fair to try to solve that problem, but because of the incredible intervention of the then Chancellor, now Prime Minister, we did not have 12% unemployment. The Government put their arms around the economy, supported people in their jobs and the potential crisis did not materialise.

On the detail of the proposed legislation, I fully support the uplift in the national living wage by 9.7%, taking it to £10.42 an hour, and not just for those whose employment is at the national living wage. As a former employer, I know very well that the national living wage is the base upon which many, many layers of employment judge their own job offers. We have created the conditions where there is full functional employment in the vast majority of the country, so employers are having to compete for staff. One way—it is not the only way—to compete is on pay. As the national living wage base rises, the gradated competition in pay rises as well, and that has a really beneficial effect.

[David Linden]

I do not know whether the hon. Gentleman has seen the Budget submissions from both the CBI and the TUC. It is not often that they both sing from the same hymn sheet, but one key theme they complain and raise concerns about is staffing shortages. I accept that the national living wage is one factor, but does he also accept the concerns of both the CBI and the TUC that the Government have a problem with staffing issues, which cannot necessarily be helped by something like Brexit?

[Jerome Mayhew]

I am really grateful to the hon. Member for making that intervention, because we had a similar discussion in an earlier debate and he gives me the opportunity to say what I kicked myself for not saying last time. As a former employer, if one has access to—let us call it this—unlimited cheap labour then there is no incentive to increase productivity or invest in further plant and machinery. As a result, we have what he was also complaining about, which is the low productivity conundrum. On access to labour, I recall him saying in an earlier intervention a couple of weeks ago that in Scotland the problem is not having too many people, but an exodus of people from Scotland. I just wonder what is the difference between Conservative-run England, where people in their hundreds of thousands are seeking to come into this country, and SNP-run Scotland, where they are leaving in their tens of thousands?

[David Linden]

I thank the hon. Gentleman for giving way. I am hopefully allowing him to sit down and think about that just a little bit more. That might help him.

The reality is that immigration policy is controlled by the United Kingdom Government. The Scottish Government and huge swathes of civic society have said that our problem has never been emigration, but immigration. We are looking to get more people to come to live and work in Scotland. It is the UK Government and the Home Office who make that more difficult. On Friday, I had an asylum seeker at my surgery, somebody who is incredibly well qualified and who has something he wants to offer this country, but because of a decision taken in 2002 by the Labour Government he is restricted from working here. He wants to work in Scotland, but he cannot do so because of an intransigent UK immigration policy. That is the reality of our immigration problems. It is not some mini-tartan issue that he might want to dress it up as.

[Jerome Mayhew]

This probably strays a little far from the topic of the debate, Mr Deputy Speaker, which is not about immigration policy, but I note in passing that if the hon. Gentleman wants to encourage people to work in his country, having a supertax on employment is probably not the best way to go about it.

Cost of living inflation hits working families too, so I welcome the £900 cost of living payments that will benefit fully 8 million families, as well as the disability payment of £150 to help with the higher cost of equipment needs. That will also benefit some 6 million people. If a job is the best form of welfare, then reducing inflation is the best way to tackle the cost of living crisis. My commendation to the Minister is that we should stick to our guns that reducing inflation during the course of this year, halving it as the Prime Minister has promised to do, is absolutely the right way to do it. The Bank of England currently predicts that inflation will dip below 4% by the end of this year, so that, overwhelmingly, is the best way to deal with these longer-term problems—not one-off payments which seek to address a symptom rather than dealing with the cause. While it is necessary to address the symptoms in the way the Bill does, I am grateful to the Government for also dealing with the cause of the cost of living crisis—inflation resulting from Putin’s illegal invasion of Ukraine—because that is the long-term solution to these problems.

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[Mims Davies]

I thank my hon. Friend, who is standing up as ever for his constituents. There is a cost of living website, there will be details on gov.uk and of course there is the benefits calculator on gov.uk. Those who are entitled will not need to do anything, because payment will be made to them. I hope that reiterates the point. There will be a rounded communications campaign on that. In fact, I made a video just this morning. I hope that is helpful—I promise the video was on this issue.

The key principle that has guided our approach to the Bill this time is to make those further payments to millions of vulnerable people over the coming year. Keeping the rules simple means that people on a qualifying benefit will receive the cost of living payment. That is why we are introducing the Bill. I reassure hon. Members across the House, including on the Opposition Benches, that we did take our time to look at addressing some of the hard edges. Ultimately, we concluded that introducing any significant policy changes would risk delaying payments to millions of people and introducing unacceptable levels of fraud and error. I will go into detail on that shortly, if I may.

We will be delivering the means-tested cost of living payments in three separate payments in 2023-24, as discussed, reducing the chances of someone’s missing out altogether. For those who miss out on a cost of living payment, and for others who may need further support with the costs of essentials on top of our statutory provision, we are extending the household support fund throughout the next financial year. The details have been confirmed today.

The extension allows local authorities in England to continue to provide discretionary support with the cost of essentials, particularly energy and food. The devolved Administrations will receive consequential funding, as usual, to spend at their discretion and with their expert local knowledge—[Interruption.] Sorry, I thought someone was interrupting there. The household support fund guidance and outlines have been released today. It is our expectation that local authorities will prioritise those in particular need and consider supporting those who may, through no fault of their own, have missed out on those cost of living payments but nevertheless are in need.

There have been a number of contributions to the debate and I will to try to respond to some of the points made in turn. The right hon. Member for Leicester South (Jonathan Ashworth) talked about the energy price cap. He welcomed our uprating, which is significant. I remind him that childcare on universal credit is more generous than on legacy benefits and the way we have drawn the household support fund will cover many of the points he raised; I hope he will have a chance to look at those interventions. The personalised support with the Help to Claim service, working with the supporting families programme from the Department for Levelling Up, Housing and Communities, will help the families with complex needs that the right hon. Gentleman spoke about.

The hon. Member for Glasgow East (David Linden) called this “substandard legislation”, which I take severe issue with, but he took the opportunity to make wider points about social security and talked about the “punitive sanctions regime”. I think we will always beg to differ on that. I make the point very strongly that this is a reserved matter. We are delighted to be making the payments for Scotland and today providing the Barnett consequentials in relation to the household support fund and further assistance—[Interruption.] I am sure he cannot resist intervening, so I will let him.

[David Linden]

Indeed not. I very much enjoyed being told to eat my cereal today. On the question of sanctions, how many people in Mid Sussex tell the Minister how wonderful the sanctions regime is? It is clearly increasing.

[Mims Davies]

I will come onto the point about sanctions shortly. I know there is confusion among those on the Opposition Benches about whether they support sanctions, but this is about a safety net; it is about progressing and supporting people and helping them to go forward. In reality, when people are sanctioned, it does not just happen. There are processes to go through where work coaches try to engage and support people. If people are disconnected and they fail to attend, that is why they are sanctioned, which is often the reason they then re-engage, talk to their work coach and get involved with what is going on. That helps us to get under the skin of what is holding them back, and I think that is important. I assume from his question that there is a fundamental disagreement, but I will not hold it against him.

My hon. Friend the Member for Broadland (Jerome Mayhew) very kindly turned the focus on to employment. Having been Employment Minister for three years, how can I resist responding to that? A dynamic labour market is important, including the work around furlough, the plan for jobs, and the kickstart and restart schemes—I designed many of those programmes, so it is always nice to have a compliment. In reality, our talented new work coaches—those who we found, recruited and brought into the DWP because of the impact of the pandemic—have been transformational. The other side of this debate is important—it is jobs, it is livelihoods, it is careers, it is opportunities, and it is making sure that people, when at their most vulnerable, know that they have that safety net. I wish my hon. Friend good luck with his jobs fair on 10 March. I have my second in Burgess Hill—this is a great opportunity to mention it.

The right hon. Member for Hayes and Harlington (John McDonnell) spoke up for his constituents and their fuel requirements. Of course, the energy price guarantee will be key to protecting customers and our constituents, and the household support fund will be a key driver as well. It is absolutely right to focus on our constituents. I have worked very strongly on the household support fund to complement this piece of legislation, working with the Local Government Association, to ensure that we support everyone who comes to us in any situation. I was pleased to hear him talk about the rewards of work and why they matter too. We know that it is more than just a pay packet that we are looking for.

My hon. Friend the Member for Guildford (Angela Richardson) spoke about households being squeezed, the cost of living website, and, of course, the fact that the help-to-claim service is there and that all constituencies—no matter how leafy and lovely they may seem—have pockets of challenge. It is absolutely right that we act when we see the impact of a global squeeze. That is absolutely the mark of what we stand for at the DWP. There is the £10 million going to Surrey, and the almost £10 million going to West Sussex just next door to my constituency. What has come out of this and the work that we have done during covid? It is our work with local authorities, which I must commend for stepping up and doing a magnificent job in helping people. They know where those pockets of support are needed. I thank those local offices.

I will quickly whip through some of the challenges made about the legislation. On the adequacy point, inflation is forecast to remain high over the next few months, meaning that many people will need this additional support, but it is important to remember that these payments are just one element announced by the Chancellor back in November. The broader uprating will make a difference.

On the points about housing support, I am working with colleagues at the Department for Levelling Up, Housing and Communities on quality and provision. My party strongly continues to focus on opening up the benefits and freedom of home ownership and all that it gives. The 2020 local housing allowance rates were raised to the 30th percentile—a significant investment of £30 billion—and we have since maintained that increase. Of course, we know that housing costs are incredibly challenging, particularly for renters. That is something that we are working on and taking forward in through the housing taskforce.