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

Stephen Timms Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[Mel Stride]

As the hon. Lady will know, the disability employment gap is a key measure on which we are focused. It has more recently increased a little, which I think is the point that she is alluding to, but generally, prior to that it was on a downward trend. The Department is very focused on making sure that we get it as low as we possibly can.

In the last year we also had the energy price guarantee, which ensured that average energy bills came in at £2,500 on average, and £400 off energy bills directly paid to bill payers. In England, we had the council tax discounts for bands A to D. We had two further extensions to the household support fund, as was just referred to by my hon. Friend the Member for Bosworth (Dr Evans). For the devolved Administrations, there have been Barnett consequentials of £1.5 billion since October 2021. I am very proud of our record and the wide package that has already been deployed, which is valued at £37 billion.

That brings me to this year, when we intend to go still further. As the Prime Minister has stated, one of our key aims as a Government is to reduce inflation by 50% by the end of this year. I am confident that we will achieve that, but we recognise that, despite the relief that that will provide to millions up and down the country, we need to provide further support payments. There will be three payments totalling £900 for around 8 million low-income households. Like last year, there will be a £300 payment alongside the winter fuel payment of £300 to pensioners, and a £150 payment to disabled people. The delivery of the support for pensioners will be via regulation and is not the subject of the Bill, but the other payments will be delivered through this legislation.

The Bill sets out the basis of qualification for the payments and who makes the payments, whether that is me and the DWP or His Majesty’s Revenue and Customs in the case of, for example, tax credits. It makes provision as to how the timing of the payments will be set out and it exempts the payments from charges to taxation. It sets out the arrangements that will ensure that data can be transferred and shared between my Department and HMRC, so that all the payments run smoothly and we avoid duplication and minimise fraud.

[Sir Stephen Timms (East Ham) (Lab)]

Will the Secretary of State give way?

[Mel Stride]

I give way to the Chair of the Work and Pensions Committee.

[Sir Stephen Timms]

As I understand it, the eligibility for the payments is based on being in receipt of benefit—at least 1p—in a specific month. There will be people who, for example, are paid every four weeks instead of every month and may get two payments in a particular month, so they do not get any benefit in that month. Would it not work better to base eligibility on a two-month period to reduce the likelihood of that problem arising?

[Mel Stride]

The right hon. Gentleman raises a valid point and we looked at instances where anomalies can occur in what is known in the legislation as the “qualifying period”. The reality is that we cannot iron out all the possible hard edges, but we did break the payments into three for this financial year, rather than the two that we had last year, so that in the event that the circumstances he described were to occur, there would at least be other periods in which someone could qualify. There is also the household support fund, which has already been referred to and is for just the kind of circumstances that he described.

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

Stephen Timms Excerpts

Committee stage
Monday 6th March 2023 Commons Chamber

I urge the Government to accept this simple amendment, which I suspect would not cost very much. It is entirely consistent with the policy intent of providing support to households who desperately need it. It is more consistent with the overall aims and objectives of universal credit to ensure that work always pays. I commend the amendment to the Minister, and I hope that she will accept it when she speaks again.

[Sir Stephen Timms (East Ham) (Lab)]

I add my very warm welcome back to you, Dame Eleanor; like everyone, I am delighted to see you back in the Chair.

I will make a few brief remarks. Initially, I will follow up the speech from the hon. Member for Amber Valley (Nigel Mills) in favour of amendment 3, which I have signed alongside him. The amendment relates to an intervention that I made on Second Reading, when I highlighted—the hon. Member just mentioned this—that people who are paid every four weeks instead of monthly, of whom there are quite a large number, receive 13 payments a year rather than 12. That means that in one month of the year, they receive two salary payments instead of one. Very often, that means that even though they will normally receive universal credit, they will not in that particular month, because their income is deemed to be too high for them to be eligible for universal credit. If that month happens to be one of the months when eligibility for the cost of living payment is assessed, they will lose their payment. No one is going to argue that they should not receive a payment, because their annual income is exactly the same as it is in every other month of the year. However, because of universal credit’s rigid approach to assessing people on a monthly basis, they will miss out. By arguing that eligibility should be based on looking at two months, not one, the hon. Member’s amendment entirely overcomes the problem for people in that situation.

The hon. Member for Bromley and Chislehurst (Sir Robert Neill) made some telling points about the situation for self-employed people. He was right to query how the minimum income floor works. There did not used to be a minimum income floor in tax credits. The Department for Work and Pensions introduced that innovation into universal credit and the case for it is, at best, debatable. But again, I do not think anyone would argue that the operation of the minimum income floor should deprive people of a cost of living payment when they would otherwise be entitled to receive it.

The hon. Member made a telling case for musicians and actors. Self-employed people may well have a good month and receive a significant amount of income, so they would perhaps not receive universal credit in that month. However, if they did not receive anything like as much in the month before or the month after, they would receive universal credit in that month. Most would agree that people in that situation—self-employed people with very fluctuating incomes, as he described—should receive a cost of living payment if their income across the year made them eligible. Therefore, looking at two months instead of one would help in that situation as well.

The hon. Member for Glasgow East (David Linden) made some telling points about people who have been sanctioned. It is very hard to argue that someone who happens to have had a sanction in a particular month, and therefore does not receive a penny of universal credit in that month, should not be entitled to a cost of living payment. A lot of sanctions last for a month. If we looked at two months, that would help to overcome that problem. I note from the briefing that 7,000 people lost out on the previous cost of living payments because they were subject to a sanction when their eligibility was assessed.

The Minister may say in response that people who are in this difficult situation can apply to their local authority for a payment from the household support fund. However, as we all know, the reality is that the household support fund is very little known by our constituents. It is extremely unlikely that anyone in the situation that I described would know that they should apply to the local council for a payment from the household support fund. It would be much better and simpler to extend the assessment of eligibility from one month to two months. It would mean adding an extra line of code in the computer system, which is a very easy thing to do to deal with a significant part of this clear unfairness in how the system works.

I want to make a point to the hon. Member for North East Fife (Wendy Chamberlain), who tabled the amendments on behalf of the Liberal Democrats. My worry about saying that all the payments should be in one would be that the whole assessment for eligibility for that therefore annual payment would be based on receiving universal credit in one month. There is a benefit in dividing this across three months, as the Government have: if someone misses out on the payment in one month, at least they will still get the other two, whereas if it was all done at one time, there would be a danger of losing the whole year’s payment.

I will say a few words in support of new clause 7, which my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) tabled. I commend her contribution to the work of the Work and Pensions Committee. Indeed, all the amendments that I have spoken in favour of are tabled by members of the Committee. My hon. Friend correctly highlights the public health impacts, for better or for worse, of our social security arrangements, and it is absolutely right to take account of them.

At present, the headline rate of social security benefits—the typical universal credit standard allowance—is the lowest in real terms that it has been for four decades. As a percentage of average earnings, it is probably the lowest that it has ever been. It is certainly much lower than it was when Lloyd George introduced unemployment benefit in 1911. He did so at a significantly higher proportion of then average earnings than the standard allowance of universal credit today. There are significant public health impacts of this low level of social security support, making a contribution, for example, to the mental health crisis, which has hit so many people of working age in the UK since the pandemic. The hon. Member for Glasgow East referred to the fact that the Work and Pensions Committee will conduct an inquiry on the adequacy of benefits and the question of what the level of benefits should be. Public health impacts are a very important part of that debate.

[Paul Bristow (Peterborough) (Con)]

Let me add how wonderful it is to see you back in your place, Dame Eleanor.

I rise to speak to amendment 4, which was tabled by the hon. Member for North East Fife (Wendy Chamberlain). I will also comment on one or two other amendments and clauses that have been mentioned, because this has been a very worthwhile debate.

Before I do so, I want to qualify the reason why I am here speaking to the Bill. I am doing so because in my city of Peterborough the Bill will impact and benefit so many of my constituents. It will benefit 21,900 people in my constituency, and that is a significant number of people. The difference that these payments and this legislation will make to their lives is considerable. On top of that, we are looking at 13,100 individuals who will be eligible for the disability payment.

This Government are committed to supporting families, and this legislation will be a good thing. It will get many, many of our constituents through, let us be honest, a difficult time, and that should be applauded. The people of Peterborough will benefit from this. It is a sign that the Government are doing exactly what they said they would do, supporting families across the UK during a global cost of living crisis.