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.