Social Security (Additional Payments) Bill

Karen Buck Excerpts

Committee stage
Wednesday 22nd June 2022 Commons Chamber

[Ms Buck]

I thank the Minister for that introduction. There is clearly no need for me to cover the points that we discussed on Second Reading, but I will make a few comments about new clauses 1 and 2.

As the Minister said, the Bill as drafted states that the second qualifying date is to be no later than the 31st of October, which allows for a span of several weeks during which the date could be set. In her introductory remarks, the Secretary of State talked about the need to keep that open because of the potential behavioural impact. It would be helpful if the Minister told us a little about why the Department reached that conclusion.

As we know, families and household are looking for clarity. We expect the energy cap to rise significantly again in the autumn, and there is real fear and anxiety in the country about what energy price inflation, and general inflation, are doing to household incomes. People are looking for certainty, and the sooner they are able to know exactly when their qualifying period will be and when the payment will be made, the better it will be for those families. It would also be helpful for us to know what the implications are of a qualifying date that could be one month early, so as to cover the span of options for that date. Although, we will not be seeking to press these amendments to a vote, can the Minister advise on whether he will be able to pick up that point and come back to us with answers?

New clause 2 would address the distribution and the equality impact assessment. We have indeed had some analysis from the Treasury, and we have had some looks at the economic distributional impact and the decile impact. As we would expect from measures heavily directed towards means-tested benefits, they are indeed progressive, and that is absolutely right, but the single most important topic that we discussed in the short Second Reading was the downside of single payments that are household unit payments and therefore do not reflect differences in household composition. The impact assessment does not give us that information, and it is critical that we have it, so I will press the Minister on the point. We need a much fuller assessment of what the Treasury expects to be the impact of a reliance on single payments, rather than an accurate updating within the benefits system. We also need, as soon as possible after the first payments have been made, an assessment of the actual impact in terms of the distribution.

Household composition is probably the single most important of the areas of analysis that we need to track. It is the one that is worrying people the most and where the disparity between a direct payment through the social security system and a one-off payment is most marked. We want to see analysis that looks at different recipient groups and at the impact on pensioners, on people with disabilities, on families, on single people and on working people of the distribution of the payments as they go out. It would be helpful also to look at how different working groups are affected, such as the self-employed, who we have discussed, and working households as opposed to households on out-of-work benefits.

The other area on which I will spend a couple of minutes in the context of analysis is the various payments that have been distributed through local government and how we can look at their impact. The Minister has repeated that his principal aim was to try and get benefit payments out as quickly as possible to those who need them most. In fact, the February announcement of the distribution of income through local authorities, through council tax, does the exact opposite. As I am sure he is aware, local authorities have had to go to the considerable length of writing to every household that pays council tax other than through direct debit, wait for them to respond, wait for them to provide information confirming who they are and their entitlement, and then to send the payment out. That of course means that large numbers of people reliant on that £150 have not yet had it, and it is likely to be weeks and weeks still before those families actually get the payment.

The payment requires people to deal with official correspondence, and I do not know whether Ministers have seen some of the letters that have gone out from local authorities, but I certainly have, and I struggle to understand them. A number of those forms have gone out without any reference to people on council tax support, for example, so people do not know that they are likely to be covered by the scheme. It is important therefore that we understand a distributional impact of the household support funds and of the distribution of funds by local authorities.

The Government have been keen to stress the value of those schemes, that they are locally sensitive and that local government has an important role to play in delivering them. That may be the case, but as the Opposition have said all along, it is undoubtedly a more complex and bureaucratic system for delivering help into people’s hands than uprating and delivering that directly through the social security system. Given what we know about inflation and energy costs soaring and the likelihood that we will have to return to this place to consider more emergency support later in the year, it is critical that we understand exactly how the delivery of the Government’s support package affects people, who it affects and whether it is the best way to provide help to people in need.

[Kirsty Blackman]

I have a few things to say about the specifics of the Bill and the points that have been raised in the debate. I understand the Minister’s point about the second qualifying date and the Secretary of State’s earlier point about not wanting to make clear what that is. I will not argue with that, but I have a question about the timelines for the payment.

We had a qualifying date of 27 May and we are looking at the payment being made on 14 July, which is a significant lag. If there is a similar length of time between the second qualifying date and that additional payment, people may not get it until nearly Christmas. The Minister was clear that the support is being given in two payments partly to help with budgeting, and people would like some certainty about the dates on which the payments will be made. I will not press him on the qualifying date; as I said, I do not necessarily disagree with the choice to not publish that now and to bring it forward through negative delegated legislation, which makes some sense.

The other issue for people relates to the other payments that they may be able to receive. We have heard from the hon. Member for Westminster North (Ms Buck) that people have not necessarily received a council tax payment and do not know when they might receive that money. For people who are struggling now, it would help to have some certainty about when the payments will come. I do not think the legislation has even been brought forward for the £400 for energy bills; I am not aware when that will happen or when those dates will be. The Government are saying that there will be £1,200 for some families, and it would be really helpful for people to know when they are likely to receive that potential income so that they can plan.

On the negative resolution that will be brought forward to set the second qualifying date, I assume that we are not likely to see that until after the summer recess. If the Minister can confirm that that is the case, it would be helpful for us to understand that. If he cannot do that, that is fine.

The hon. Member for Amber Valley (Nigel Mills) talked about people who get two payments in a month, because they are paid on a four-weekly basis or because they receive bonuses or anything of that sort. It would be helpful if the Minister, when he sets the second qualifying date, tries to ensure that it is not in a cycle that will disadvantage the same people twice. If the date means that people whose universal credit is paid on a cyclical basis—for a significant number of people, it is clear that there is a regular cycle every three months—lose out on the £324 and the £326, even though they are regular universal credit claimants over the year, I would be concerned that the Government were not doing that in the right way. The hon. Gentleman’s suggestion of doing it over a two-month period would probably have been a better way to do it than the way that the Government are proposing. As was stated, if further additional cost of living payments need to be made to people in future, perhaps it would be helpful for the Minister to consider that.

In the context of making payments too quickly, the Minister mentioned the recovery of incorrect payments and how that might work, or need to work. He said that if payments are made too quickly, people might receive a payment that they are not entitled to and then it would need to be clawed back. Given how he phrased that, I am slightly concerned that we might end up with people through no fault of their own receiving payments in error that they think they are entitled to, who then have them clawed back from future payments from the DWP. We have seen that over the years with tax credits and how people are still paying back legacy benefit overpayments that they received, and we have seen the pain and suffering that that can cause people.