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

David Linden Excerpts

Committee stage
Monday 6th March 2023 Commons Chamber

[Sir Robert Neill]

I am sure the hon. Gentleman is right. This can apply to particular communities and to particular sectors. I suspect it is not deliberate, as I do not believe Ministers are looking to treat people unfairly, but I genuinely think there is a lack of understanding in how the system works for the self-employed and the degree to which fluctuating incomes are not captured by the scheme, as currently devised. That is why I urge the Government to review the position.

I particularly ask the Government to review how the minimum income floor interacts with self-employed people on varying incomes. I will explain it as briefly and as swiftly as possible. Eligibility for each of the three cost of living payments depends on receiving a universal credit payment of at least 1p during the corresponding qualifying month, as set out in the Bill. The position was the same for the original cost of living payments set out in the Social Security (Additional Payments) Act 2022.

Equity, which represents self-employed people working in the creative industries and the theatre, challenged the 2022 Act as unfair and detrimental to the entertainment industry, and it seems to me that it presented good evidence. I refer to my interest as chair of the all-party parliamentary group on opera and as a member of the all-party parliamentary group on theatre. I regret to say that Ministers did not make any changes, and I ask them to look into this in more detail and to think again as more evidence emerges.

When the minimum income floor is applied to self-employed universal credit claimants, their universal credit payments are, of course, reduced. For some claimants, the MIF reduces their payments to zero. The MIF is assumed earnings for UC claimants who are deemed gainfully self-employed, irrespective of whether those earnings are being received in a particular month. It is a calculation based on the national minimum wage and in a typical case the assumption is 35 times the hourly national minimum wage per week. On 2022-23 figures, that equates to £311.85 a week or £1,351.35 over a UC monthly assessment period.

The effects of that are unduly harsh for the self-employed with variable and unpredictable incomes, because it removes UC payments during periods of low earnings. The difficulty for people in the theatre is that, although they may well have periods when they are busy and above the threshold for any benefits, there may be weeks and months when they are not getting paid and the system does not pick that up. During those months when they are not qualifying they are likely to fall into debt, needing to borrow, and into arrears. That cannot be a fair way to deal with this. At a time when the entertainment industry and the theatre have been particularly hard hit during covid and the lockdowns and are still, in some respects recovering, the position seems to me and to many others to be unjust. It particularly hurts those who are starting out in their careers in the industry. I have been self-employed in the past and I know that at least one of the Ministers on the Bench has, but there is a difference between being in an established set of barristers’ chambers with a significant workflow coming through and being a young actor, musician or creative starting out. The inability to draw such distinctions and to be more nuanced in approach needs to be looked at, and I ask Ministers to do that.

The figures that have been demonstrated by Equity in looking at the DCMS workforce estimates show, for example, that between 2019 and 2021 the number of young people aged 16 to 24 working in music and performing and visual arts fell by 19%, which compares with a 14% drop among people aged 55 to 64. That was probably largely due to people leaving because of the impacts of the lockdown on that sector, but it is happening more among the youngsters, for the reasons I have set out. The number of black, African, Caribbean, black British people—those with minority ethnic backgrounds —in music, and performing and visual arts has fallen by 39%, which compares with a fall of some 9% among people with white ethnic backgrounds. Again, the people who find it harder to access careers in the arts sector to start with are the ones being most hard hit, because their incomes are more precarious, as it often takes them longer, by the nature of the business, to establish themselves. I am sure that is not an outcome Ministers wish to see, but that is the way the system, without any reform, is currently operating.

That situation is likely to get worse. In the first round of cost of living payments some 80,600 UC claimants were subject to the MIF, of whom 4,860 earned below their MIF and received a nil payment—that is about 6% of them. We are likely to be talking about a lot more people in 2023-24, because more claimants are now subject to the MIF than they were in the previous regime. That is simply because some 219,000 claimants were in a 12-month start-up period and therefore exempt during the qualifying period for the first payment. That of course has now ended for that cohort, so they will be subject to the MIF. If we were looking at the same percentages, we would be talking about another 13,000 people. That leaves us with the figure that Equity suggests of about 17,000 being affected.

This issue has been raised before, including by the right hon. Member for East Ham (Sir Stephen Timms), the Chair of the Select Committee on Work and Pensions. He raised it with Ministers back in November 2022, and I am grateful to him for doing so. He asked the Secretary of State to consider a way to rectify the position of claimants who had had a nil payment during that period, but I regret to say that the Secretary of State rejected that request. He said that, among other things, simplicity of processing in the timeframe required and an inability to readily identify people affected were the reasons. I am not sure that simplicity of processing is, of itself, a good justification for causing unfairness to people. I thought that the Government were about fairness, more importantly, than they were about administrative simplicity. The suggestion that having the three qualifying periods reduces the risk of someone missing out completely does not work for every sector. It may work in some industries, but it does not work for the theatre and other sectors. The lack of flexibility and the rigidity need to be addressed.

Against that background, I hope that the Government will reflect on this matter. We want to encourage people into our creative industries, which is a thriving sector that does a great deal for this country. They work well for us economically, in social matters and for our cultural heritage, but it is hard for young people, in particular, to start out and this is a precarious life. We ought to have a system that more readily recognises that. It is not, as has been suggested, that the MIF is dealing with cases of fraud here; these are not fraudulent people, and we can sometimes worry so much about fraud that we exclude the honest from the system. We ought to get a balance on that. It has also been suggested that this was to weed out hobbyists who cannot sustain themselves in self-employment. I know lots of people in the creative industries who are not hobbyists. They work immensely hard to sustain themselves in self-employment but their incomes fluctuate to such a degree that they lose out on supplements and benefits that others who happen to be in slightly different forms of work with a slightly different pay structure get. That does not seem to be fair, which is why I tabled my new clause. I hope that the Government will reflect on it and undertake at the very least to review the matter again, look again at the evidence and meet people in the sector. I am not sure how often Ministers have face-to-face meetings. They should meet the people affected. Let us try to find a fairer way of making the Government’s objectives work for those people.

[David Linden (Glasgow East) (SNP)]

It is not often that I find myself pleased in this place, but may I say how genuinely pleased I am to see you back in your place, Dame Eleanor? It is just right to see you in that place, so it is great to see you back.

I rise to speak to the amendments and new clauses that stand in my name and those of my hon. Friends. I am also happy to offer support for the amendments tabled by members of the Select committee, namely the hon. Member for Amber Valley (Nigel Mills) and the right hon. Member for East Ham (Sir Stephen Timms), as well as for new clause 7, which stands in the name of the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). I also support new clause 12, which was tabled by the right hon. Member for Hayes and Harlington (John McDonnell) but not selected.

The House will recall that when I spoke on Second Reading, I stated my party’s support of the broad thrust of what the Bill seeks to achieve but was clear that it fails to address some of the wider issues impacting our social security system, which have only been highlighted further by the cost of living crisis. It is important to remind ourselves that these amendments, and in fact this entire Bill, are the product of the continuing cost of living crisis, which remains the single biggest priority for my east end constituents. We cannot forget that all of this comes against a backdrop of households continuing to face extremely challenging economic conditions. As such, there should be no doubt that my party welcomes the support laid out in this Bill, but we think that it does not go far enough to meet the needs of the poorest households struggling with the cost of living crisis. We have therefore tabled these amendments, in good faith, to try to make the Bill better.

The one-off cost of living payments in this Bill, as set out in the Chancellor’s autumn statement, are only a temporary fix, when it is clear that more permanent solutions are needed. Rather than offering one-off payments to shore up the incomes of struggling families, the British Government should reverse the damaging policies that are impacting the most vulnerable in our communities. They should be ending benefit sanctions, ending the benefit cap, ending unfair assessments, ending the rape clause, ending the five-week wait, ending no recourse to public funds. That list sometimes feels endless, but it is not, and the social security system is fixable if we have the political will. The amendments we have tabled today show that and highlight just some of the ways in which the British Government can point the social security system towards the people who actually use it and ensure they have adequate support, perhaps taking a leaf out of the Scottish Government’s book.

My amendment 2 ensures that universal credit claimants who have been sanctioned are not denied the vital cost of living payments. As the Bill currently stands, to qualify for the cost of living payment, claimants must be entitled to at least 1p in the month preceding the date specified by the Secretary of State in clause 2. However, if a claimant is sanctioned, their full entitlement could be taken away for a period of time. Many of those who have a sanction imposed will receive a nil award, which means that they do not receive the payment despite having an underlying entitlement to universal credit for that period. I have heard of cases where claimants have missed the bus or had to drop their children off at school, which has resulted, I am afraid, in their being late or missing an appointment at the jobcentre. That in turn has led to their being sanctioned and losing their universal credit for a number of weeks.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend makes a telling point about the universal credit uplift. Does he not think that, when it was made, it was a welcome admission that universal credit was not enough to live on, whereas the removal of the uplift has re-established that deficit for people and their families?

[David Linden]

I agree with my hon. Friend. I tend to take the view that if the British Government concluded in March and April 2020 that social security was inadequate for the then economic climate, social security is indeed inadequate in the current economic climate. I welcome the fact that the Select Committee is looking at benefit provision. The all-party group on poverty, which I co-chair with Baroness Lister, is taking evidence on this separately tomorrow.

As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey has outlined, it was a huge disappointment when the British Government decided against retaining the uplift. Since its removal, I have heard anecdotally that many people have struggled with the sudden loss of income—the largest drop in support in the modern welfare state. Any of us who interact with our constituents can outline how challenging that has been.

Similarly, new clause 5 would require the Secretary of State to produce an assessment of the impact on household incomes— as well as on fuel and food poverty—of the Government’s failure to extend the equivalent uplift to legacy benefits. As with the previous iteration of the Bill relating to cost of living payments, it is welcome that the British Government have included Scottish payments for disability in the eligibility criteria. Although I wish sincerely that the London Government would look towards Holyrood as a guide for more of their social security policies, I appreciate that Ministers have been working with my colleagues in Edinburgh and have ensured that people in receipt of Scottish disability payments will also get the additional payment.

It is widely acknowledged 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. For instance, I have heard testimony in my constituency, in the Lilybank area, of vital medical equipment—not something that can be turned off or turned down a wee bit to take cognisance of energy prices—leading to extortionate electricity bills. Despite that knowledge, legacy benefit claimants, many of whom are long-term sick or disabled, were unjustly denied that uplift during the pandemic. That was a monumental injustice, and it certainly adversely financially impacted many people throughout the pandemic, which was already causing heightened health anxiety. It is only right that an assessment be made of the failure to extend the uplift to legacy benefit claimants.

We must also consider where inflation will be at the time that payments are made. In January this year, the consumer prices index was still in double digits and near the highest levels in about 40 years, at 10.1%. However, we know that the poorest often experience a high rate of inflation; according to the Resolution Foundation, the poorest tenth of households experienced an inflation rate of 11.7%. What is more, recent Office for National Statistics stats show that food and drink inflation remained close to the highest rates since the 1970s, with the soaring price of milk, bread and other basic essentials pushing prices up by almost 17% in a year.

Recently, the British Government rightly increased social security benefits and the state pension in line with the CPI, so it seems only logical that that should apply to the cost of living payments that the Bill makes provision for. Therefore, our new clause 6 would ensure that

“all payments due under this Act are increased by the rate of inflation as measured by the latest Consumer Prices Index at the time of payment, if that is higher than the original amount.”

We do not know what the economic landscape will be later this year, so the new clause was tabled as an insurance policy in the event that inflation does not fall as has been forecast. It is unfortunate that some of the amendments are not in scope; the money resolution was so restrictive that it prevents our bringing forward amendments that would assist our constituents in a more meaningful way.

However, I have highlighted some of the inadequacies in the UK’s social security system, mainly the punitive sanctions regime. Instead of providing a robust safety net for millions of households, the surge in sanctions demonstrates the uncaring approach of a Westminster Government who Scotland did not vote for and who are pushing people further into poverty during a cost of living crisis. People across Scotland are paying a very steep price indeed for poor economic decisions made in this Palace of Westminster.

It does not have to be like this. We can make better policy if the Government accept that they do not have a monopoly on wisdom. I have tabled the amendments in good faith and I believe they would vastly improve the Bill. I hope the Minister can come to the Dispatch Box later and confirm the Government’s support for amendment 2, which I believe can make this legislation much better for not only the people that I represent, but the people that we all represent in this House.

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to see you back in your position, Dame Eleanor. I rise to speak to amendment 3, which stands in my name and the name of the Chair of the Select Committee. It is an attempt to ensure that what the Government are legislating for is consistent with what they are generally trying to do with universal credit and with these payments: to ensure that we do not create a cliff edge and a lumpy system in which people miss out through no fault of their own.

Under the amendment, rather than looking back and seeing whether someone has received 1p of universal credit in the previous month, we could simply check the two previous months and, if they received a payment in either or both those months, they would still get each of the individual £300 payments. It is designed to prevent a situation where somebody misses out on the individual payments because they have had some kind of strange anomaly in their UC record.

That anomaly might be that they are paid four-weekly and happened to get two payments in one assessment period, that they got a bonus or a few extra hours that tipped them out for that period, or that the employer has made a mistake, has not processed their payroll in time and has then managed to process two payments in the same month, as occasionally happens. Those are not really the intended position. I think we all expect that, for most people in a job, their monthly income is relatively stable—subject perhaps to a bit of overtime or the odd bonus here or there—and so their UC claim over a year is not affected; they get a bit more one month, a bit less the next and it all averages out over the year.

With the impact of these payments—not quite one-off payments, but three-off payments—that will not quite be the situation. If someone happens to have a month where they earn a bit too much, they could miss out on £300, which could be a material part of their annual income. That might drive people to be careful about whether they take extra hours and thus enforce the wrong behaviour. Having to plan for whether they will be £300 worse off if they get another £50 of wages or similar is not the behaviour that universal credit was designed to drive. It was designed to make clear that work would always pay, and we are in danger of doing something that goes against that.

I welcome the Government’s bringing forward these payments and the fact that we are debating them in March. That means that we have a plan for the year and people know what they are going to get, unlike last year when—perhaps for some good reasons—it was all a bit haphazard and we kept announcing new things all over the place. As some other hon. Members have said, I would have preferred this year to have an increase in UC; this £900 works out at just under £18 a week, and with the tapering effect we could have given a higher starting point to achieve the same costs, so those less well-off households got a bit more than the £900 and those who earn a bit more got a bit less. That would have been a better use of funds and a better way of doing it.

--- Later in debate ---

I now turn to amendments 2 and 3, tabled by the hon. Member for Glasgow East (David Linden) and my hon. Friend the Member for Amber Valley (Nigel Mills), respectively. Amendment 2 asks us to change our eligibility criteria to include those who have no benefit payment due to a sanction. I want to reiterate to the Committee and to anybody listening that people are only sanctioned if they fail, without good reason—and we have heard tonight some that sound like good reasons—to meet the conditions they have agreed to.

[David Linden]

Will the Minister give way?

[Mims Davies]

I will just make a little progress, and I am sure the hon. Gentleman will want to jump in again shortly.

Ultimately, this is about parity between taxpayers and those people who are seeking support. As I say, we have targeted communications in place to make it clear to customers that our work coaches are there to help, whatever their circumstances. Whether it is getting advice, boosting people’s skills, or identifying opportunities for progression, anybody looking for support should speak to their work coach to access all the help that the DWP can offer.

[David Linden]

On amendment 2, the fact of the matter is that people have already been punished once by being sanctioned. This is a cost of living payment in recognition of inflation and high energy bills. Why on earth does the Minister think it is appropriate for 6,600 households to have been sanctioned and punished twice last year, and why is she allowing legislation to go forward that allows people to be punished twice again? That is the simple question.

[Mims Davies]

I thank the hon. Gentleman for making his points, and I simply do not agree with the point about punishment. Conditionality works on both sides, and I think it is important that people play their part. I will come on to further comments about that shortly.

--- Later in debate ---

[David Linden]

In rising to conclude this Bill, I also want pay tribute to the Clerk of Legislation and to Linda Nagy and Nansi Morgan from my own team for their help with the amendments. My position on the Bill remains that it is welcome but could have gone further. I say to the Minister—whom I genuinely respect; we have robust debates in this place, but they are just that—that the reality is that last year 6,600 people who should have had a cost of living payment did not get one because they were sanctioned. All that the amendment was trying to do was to ensure that the law had a safety net, which is the very purpose of social security, and it is regrettable that the Government voted against that tonight. I hope that, when the Minister and I are jousting about this in a year’s time, we will not look back and see an even higher figure of households that have been sanctioned. As much as the Minister and I can have robust debates, we should never lose sight of the fact that the legislation that we pass in this place, imperfect though it is, impacts some of the most vulnerable people in our constituencies, and I fear that the Government will come to regret rather hastily rejecting amendment 2 tonight, because those people will be at the Minister’s surgeries on a Friday morning, as I am sure they will be at mine. On that basis we will let the Bill go off, and look forward to the progress that it will make for those that it does include.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Genetic Technology (Precision Breeding) Bill (Programme) (No. 3)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Genetic Technology (Precision Breeding) Bill for the purpose of supplementing the Order of 15 June 2022 (Genetic Technology (Precision Breeding) Bill (Programme)) as varied by the Order of 31 October 2022 (Genetic Technology (Precision Breeding) Bill (Programme) (No. 2)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

Subsequent stages

(2) Any further Message from the Lords may be considered forthwith without any Question being put.

(3) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mark Spencer.)

Question agreed to.