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

Nigel Mills Excerpts

2nd reading
Tuesday 21st February 2023 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to speak in this debate, and I think I agree with nearly everything in the two Front-Bench speeches. There is not a lot to add, except really to welcome the Bill and welcome the additional support that the Government have provided. I think it was absolutely the right thing to do, and it is essential for people with the least that they get these extra supports while energy bills and other inflationary costs remain as high as they are. I have a few observations to make on the Bill, but that should not really take away from the fact that the Government have actually come to the right conclusion. Making this support available is by far the most important decision, and everything else is probably nit-picking around the detail.

However, I would agree with some of the observations of the shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth). Perhaps it would be helpful if the Minister, when she sums up, explained whether the Government did look at temporarily increasing universal credit, rather than rerunning the new benefit three times again this year. That would have allowed for a higher basic payment, which would then taper off for households on a higher income, so those with the very least would have got more than £900 and those with the most would have got a bit less than £900. That would probably have given more help to those households that are going to struggle most with the fact that they are going to get £300 less support this year—if we take into account the energy bills support and the reverse running of council tax we had last year—and be faced with, on average, £500 higher energy bills. It would be useful to know if that was considered, if it was not technically possible and the system could not cope with it, or if there were other good reasons why we preferred the three roughly £300 payments rather than having smoothed that over the year and used the tapering system.

Those of us who did—and do—support universal credit, did so on the basis that having a tapering benefit linked to income is the best way of doing it, because it avoids cliff edges. It stops people having unfortunate behavioural ideas, such as, “If I take the extra hours this month, I’ll lose my £300, so I’d best not do that; I might wait till next month,” or, “Ought I to drop out of a job, or try to somehow reduce my income to get that payment.” I accept that having three payments of £300 is better than a one-off payment of £900, but if we really believe in all the advances of universal credit being linked to income with tapering to avoid cliff edges, we should use it in a time of crisis as well as in a normal situation.

We know from the pandemic that we can very quickly flex the amount of UC, because we did it in about five weeks, so I cannot see a problem with that. That might not be so easy for tax credits and other benefits and we might have wanted one system that works for everything here. If the Minister says that is the reason, perhaps we can understand it, but now that we have had some time—we have had a year of this crisis—we might have produced a slightly more effective solution.

We also know that for the households with the least, getting lump-sum payments is not always best, because if they struggle with budgeting, they might not understand that they have £300 more this month that they will not have next month or for winter. Smoothing those payments through every month might help them ensure they have the money in place for when energy bills will be highest, which I suspect will not be when they get their April payment this year. I accept, however, that there is no perfect solution and that this solution is better than doing nothing.

I also want to reiterate a point made by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), and the shadow spokesman, the right hon. Member for Leicester South. They said—in the debate last year, I think—that needing to have received a UC sum in the assessment month before the payment prevented a large amount of people from getting a payment, not through any fault of their own or because they have got more money, but just because the way they receive their payments from their employer accidentally dropped them out.

A relatively simple solution would be to tweak two words in the Bill and say that if someone has received 1p in either of the two assessment periods before each staging point then they get the £300. That would add one word and one letter to the Bill and would fix the problem for the vast majority of cases. If someone happens to be paid four-weekly and they have two payments in one period, that would fix it; if they happened to have had a bonus once and it hit in one period, that would fix it because presumably they would not have had it for two successive months—and if they did have it for two successive months it is probably fair enough to assume they are now earning more than we thought they would be. That would be a simple change to consider in Committee, which I think will be on the Floor of the House so perhaps we can all get to vote on it—I suspect relatively shortly. I urge the Government to seriously think about making a simple change such as that, which would smooth out one of the rough edges quite easily.

The Secretary of State said that there will be a helpline, but this is primary legislation, and if someone has not received a penny in that month, there is no discretion for the Department to give them the £300, or the £301 or £299; it cannot do so because the Bill says it cannot—they have not received a penny, so they cannot have it. So there is no way of fixing that retrospectively; it needs to be fixed at this stage.

With those observations, I sincerely welcome the Bill, which will provide significant support for people in Amber Valley, who are struggling with high inflation and high energy bills. I repeat my request from the uprating debate, however: I urge the Government to keep the situation under review so that if it worsens and we need to help people more during the year we can come back and do that. It would not be too hard to add a fourth payment if we needed to.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Scottish National party spokesperson.

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

Nigel Mills Excerpts

Committee stage
Monday 6th March 2023 Commons Chamber

[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.