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Published online by Cambridge University Press: 28 June 2021
As part of its response to Covid-19 the government paused the use of the ‘Minimum Income Floor’ (MIF), which restricts the Universal Credit (UC) entitlement of the self-employed. This paper places the MIF in the wider context of conditionality in the social security system and considers a judicial review which claimed that the MIF was discriminatory. The paper focuses on how UC affects the availability of real choices for low-income citizens to limit or escape from wage labour, with two implications of the move to UC highlighted. First, the overlooked labour decommodifying aspect of tax credits, which provided a minimum income guarantee and a genuine alternative to wage labour for people who self-designated as ‘self-employed’, even if their earnings were minimal or non-existent, has been removed. Secondly, UC has in some respects improved the position of low-paid wage labourers in ‘mini-jobs’, who are not subject to conditionality once they work for the equivalent of approximately nine hours a week on the minimum wage.
Many thanks to both reviewers for very helpful comments.
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4 Lord Freud, Minister of Welfare Reform, in a debate on the Welfare Reform and Work Bill, HL Deb vol 767, col 1939 (14 December 2015).
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8 ‘Universal Credit statistics’ (Official Statistics, 23 February 2021), available at https://www.gov.uk/government/statistics/universal-credit-statistics-29-april-2013-to-14-january-2021/universal-credit-statistics-29-april-2013-to-14-january-2021.
9 K Loach I, Daniel Blake (BBC Films, 2016).
10 House of Commons Work and Pensions Committee ‘In-work progression in Universal Credit Tenth Report of Session 2015–16’ (HC 549, 2016) p 25.
11 Universal Credit Regulations 2013, SI 2013/376, reg 99(6).
12 [2019] EWHC 2356 (Admin).
13 D Cameron ‘Official email from the PM about Universal Credit, the benefit cap and changes to housing benefit’ (1 March 2012), available at https://www.gov.uk/government/news/prime-ministers-message-on-welfare-reform.
14 Ibid.
15 The Universal Credit (Miscellaneous Amendments, Saving and Transitional Provision) Regulations 2018, SI 2018/65, reg 3.
16 ‘Theresa May to scrap universal credit helpline charges’ (BBC News, 18 October 2017), available at https://www.bbc.co.uk/news/uk-politics-41659504.
17 The Chancellor of the Exchequer ‘Autumn statement to Parliament’ (23 November 2016).
18 The Jobseeker's Allowance and Universal Credit (Higher-Level Sanctions) (Amendment) Regulations 2019, SI 2019/1357.
19 ‘Universal credit: Roll-out timetable’ (revenuebenefits, 2 June 2020), available at https://revenuebenefits.org.uk/universal-credit/guidance/who-can-claim-universal-credit/roll-out-timetable/#completing-full-service-roll-out.
20 Welfare Reform Act, ss 9–12.
21 HM Treasury ‘Budget 2021’ (HC 1226, March 2021) p 17; Explanatory Memorandum to Social Security (Coronavirus) (Further Measures) Regulations 2020, SI 2020/371. Current amounts listed in the Universal Credit Regulations 2013, reg 36, as amended.
22 Welfare Reform Act 2012, s 13.
23 Universal Credit Regulations, reg 90.
24 Welfare Reform Act 2012, ss 19–22.
25 Ibid, s 4(1)(e).
26 Guidance states: ‘The expectation is that this safeguard will be 25 hours a week. Where the child is aged three to four, the expectation is that this safeguard will be 16 hours a week’: ‘ADM Work-related Requirements – Chapter J3’, para J3058, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/963801/admj3.pdf.
27 Welfare Reform Act 2012, s 26.
28 Universal Credit Regulations 2013, reg 93.
29 DWP ‘Guidance Universal Credit for the self-employed’ (18 June 2020), available at https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide#contents.
30 Universal Credit Regulations 2013, reg 63.
31 Ibid, regs 62–64. The Welfare Reform Act 2012, Sch 1, para 4(4) provides ‘Regulations under sub-paragraph (3)(a) may in particular provide that persons of a prescribed description are to be treated as having a prescribed minimum level of earned income’.
32 Ibid, reg 62(5)(b).
33 The Social Security (Coronavirus) (Further Measures) Regulations 2020.
34 HM Treasury, ‘How to access government financial support if you or your business has been affected by Covid-19’, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878995/Covid-19_fact_sheet.pdf.
35 HM Treasury ‘Budget 2021’ (HC 1226, March 2021) p 46.
36 Parkin, above n 12, at [7].
37 Ibid, at [111].
38 National Audit Office Benefit Sanctions (London, 2016) p 7.
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44 Parkin, above n 12, at [7].
45 Ibid, at [103].
46 Ibid, at [107].
47 Ibid, at [103].
48 AL (Serbia) v Secretary of State for the Home Department [2008] UKHL 42, at [25]; In the matter of an application by Siobhan McLaughlin for Judicial Review (Northern Ireland) [2018] UKSC 48, at [24]–[30].
49 Parkin, above n 12, at [112].
50 See https://www.gov.uk/government/publications/universal-credit-in-work-progression-randomised-controlled-trial for an overview and the reports from the various stages of the trial so far.
51 Universal Credit Regulations, reg 99(6), as amended by the Universal Credit and Miscellaneous Amendments Regulations 2015, SI 2015/1754, reg 2(7). The applicable amount of Jobseeker's Allowance is set out in the Jobseeker's Allowance Regulations 1996, Sch 1 Pt 1, as amended. It is currently £74.35 for singles aged over 25.
52 For example, UC Guidance ‘Labour market regimes v 11’, available at http://data.parliament.uk/DepositedPapers/Files/DEP2019-0980/71._Labour_Market_regimes_v11.0.pdf.
53 See above n 50.
54 DWP ‘In-work progression trial: further impact assessment and cost benefit analysis’ (October 2019) p 19.
55 UC Guidance ‘Light touch regime v 9’, available at http://data.parliament.uk/DepositedPapers/Files/DEP2019-0980/75._Light_Touch_regime_v9.0.pdf.
56 P Butler ‘DWP “punishing” low-paid full-time workers under new benefits rule’ (The Guardian, 14 April 2016).
57 [2019] UKSC 2, at [65].
58 [2019] EWCA Civ 1271.
59 Parkin, above n 12, at [104]–[106].
60 Alston, above n 41, para 11.
61 For fuller accounts see J Meers ‘Problems with the “manifestly without reasonable foundation” test’ (2020) 27(1) JSSL 12; M Cousins ‘Social security, discrimination and justification under the European Convention on Human Rights’ (2016) 23(1) JSSL 20.
62 (1986) 8 EHRR 123, at [46].
63 (2006) 43 EHRR 47 (earlier withdrawal of workplace injury compensation for women due to an earlier pension age).
64 [2007] ECHR 373 (exclusion of men from widow's pension).
65 (2010) 51 EHRR 13 (pension uprating for people living abroad).
66 The claimants in the bedroom tax: R (Carmichael) v SSWP [2016] UKSC 58; benefits cap: R (SG) v SSWP [2015] UKSC 16; DA and DS, above n 57; two-child limit: R (SC) v SSWP [2019] EWCA Civ 615.
67 T Bingham Speech at Liberty 75th anniversary conference (6 June 2009).
68 Perhaps most deplorable was the attempt by the Daily Mail and the then chancellor, George Osborne, to present the manslaughter of six children by the notorious Mick Philpott as a ‘vile product of Welfare UK’. For discussion, see Tyler, I and Jensen, T ‘Benefits “broods”: the cultural and political crafting of anti-welfare commonsense’ (2015) 35(4) Critical Policy Studies 470Google Scholar.
69 Verdict of Collins J in R (DA) v SSWP [2017] EWHC 1446 (Admin), at [43], who did issue a declaration of incompatibility, later overturned.
70 J Bradshaw ‘Why the two-child policy is the worst social security policy ever’ (Social Policy Association, 1 Nov 2017), available at http://www.social-policy.org.uk/50-for-50/two-child-policy/.
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75 R (Steinfeld) v SSID [2018] UKSC 32, at [26]–[29].
76 (32949/17 and 34614/17) [2020] HLR 5, at [89].
77 Recovery of Medical Costs for Asbestos Diseases (Wales) Bill – Reference by the Counsel General for Wales [2015] UKSC 3, at [44], [54], [118].
78 In the matter of an application by the Northern Ireland Human Rights Commission for Judicial Review (Northern Ireland) [2018] UKSC 27.
79 R (Nicklinson) v Ministry of Justice [2014] UKSC 38.
80 Her revenues were £25,504 and £16,383.96 in the two years reported: Parkin, above n 12, at [4]. Of course, there is every reason to think Parkin did no such thing given her willingness to undergo the scrutiny involved in bringing legal action, but it is understandable why policy-makers might believe that supporting such enterprises with such low profitability rates as a class will encourage some to underreport earnings.
81 ‘Harman: Labour will back benefit cap and welfare changes’ (BBC, 12 July 2015), available at https://www.bbc.co.uk/news/av/uk-politics-33498738.
82 DA and DS, above n 57, at [88].
83 People receiving disability benefits or carers allowance are exempted from the cap.
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86 Celebs on Benefits: Fame to Claim (ITN, 2015), available at https://www.dailymotion.com/video/x7oweby.
87 ‘“We need to check your Tax Credits Claim” HELP!’ (Anonymous post by ‘Moneytalk’, 15 October 2016), available at https://www.consumeractiongroup.co.uk/topic/397422-quotwe-need-to-check-your-tax-credits-claimquot-help/.
88 S Wright et al ‘Punitive benefit sanctions, welfare conditionality and the social abuse of unemployed people in Britain: transforming claimants into offenders?’ (2020) 54 Social Policy & Administration 278 at 282.
89 Grover, C ‘“Personalised conditionality”: observations on active proletarianisation in late modern Britain’ (2012) 36(2) Capital & Class 283CrossRefGoogle Scholar. A critique that Grover has since strengthened: ‘Violent proletarianisation: social murder, the reserve army of labour and social security “austerity” in Britain’ (2019) 39(3) Critical Social Policy 335.
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92 A DWP research report carried out in preparation for the move to UC – the only study carried out on self-employed tax credit recipients – found: ‘Most people in the study group said that they had not had problems in either making an initial or a subsequent claim for TCs. When asked what information they had been asked to supply to HMRC people still within their first claim period could not recall being asked for any specific information at all. (This is consistent with first awards being made on an estimate of future earnings for which no documentation would exist.) Among those who had been re-assessed, some recalled supplying profit and loss accounts in particular; others referred variously to having supplied details of partners’ earnings, tax returns, proof of earnings and outgoings, timesheets, business plans and passport information. None of these respondents reported any difficulties in supplying this information. An equally common response from the respondents who had made re-applications for TCs was that they had not been asked to supply any written information at all, but had completed their claim by telephone’: R Sainsbury and A Corden ‘Self-employment, tax credits and the move to Universal Credit’ (DWP Research Report No 829, 2013) p 39.
93 Sainsbury and Corden identified a group ‘who explained that they were content with the balance of (self-employed) work and spending time with their family or following other pursuits that receipt of tax credits allowed them. They did have the capacity to work some more hours (that is, within their current caring and health constraints), but chose not to’, but perhaps unsurprisingly did not appear to find anyone who was simply not engaged in any self-employment: ibid, p 60.
94 Explanatory Memorandum to The Working Tax Credit (Entitlement and Maximum Rate) (Amendment) Regulations 2015, SI 605/2015.
95 The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, SI 2005/2002, reg 2.
96 The Working Tax Credit (Entitlement and Maximum Rate) (Amendment) Regulations 2015, SI 2015/605, reg 3.
97 HMRC, above n 3.
98 Sainsbury and Corden, above n 92, p 60, identified a group of ‘long-term, low earners’. It is important to note that the aim of the research was not to understand the experience of self-employed people on tax credits, but to consider the attitude of recipients to changes such as the MIF that UC would introduce. Hence, the description of the study participants’ incomes, occupations etc is very limited.
99 JW v HMRC [2019] UKUT 114, at [16] (citing Wannell v Rothwell (HM Inspector of Taxes) [1996] STC 450 and Seven Individuals v Revenue and Customs Commissioners [2017] UKUT 132 respectively).
100 Ibid, at [25.4].
101 Ibid, at [29].
102 Atkinson, A ‘The case for a participation income’ (1996) 67(1) Political Quarterly 67 at 69CrossRefGoogle Scholar.
103 Until 2008 lone parents with a youngest child up to the age of 16 could claim Income Support as a lone parent, with a further cut to five years by the Coalition government. New social security applicants though must now apply for UC.
104 Federici, S Wages against Housework (Bristol, 1975)Google Scholar.
105 A pdf of the issue (New Musical Express, 14 March 1998) is available at https://wingsoverscotland.com/a-little-bit-of-history/.
106 Under 25s had to be either disabled or have a child in order to qualify for tax credits, along with meeting the other criteria.
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111 Arguably the most important individual – his name occurs 59 times in Timmins’ contemporary history, far more than any other actor (Cameron and Duncan-Smith approximately 20 times each): N Timmins Universal Credit: From Disaster to Recovery? (Institute of Government, 2016).
112 P Waugh and S Macrory ‘Freudian analysis’ (Politics Home, 23 November 2012), available at https://web.archive.org/web/20160419004828/https://www.politicshome.com/news/uk/economy/house/67295/freudian-analysis.
113 Macmillan, L ‘Intergenerational worklessness in the UK and the role of local labour markets’ (2014) 66(3) Oxford Economic Papers 871CrossRefGoogle Scholar.
114 House of Commons Work and Pensions Committee ‘In-work progression in Universal Credit Tenth Report of Session 2015–16’ (HC 549, 2016) p 19.
115 Puttick, in one of the very few articles to discuss in-work conditionality, references a ‘right not to work’ as a possible solution. His article focuses on the interaction of labour law (especially the minimum wage and sectoral minimums) with the social security system and their capacity to prevent poverty: the focus is different in this paper since self-employed people with minimal earnings receiving tax credits and wage labourers simply earning the AET will generally earn a poverty wage or live below the poverty line. Some people will nonetheless prefer this to full-time menial wage labour – a choice for the self-employed that UC takes away: Puttick, K ‘From mini to maxi jobs? Low pay, “progression”, and the duty to work (harder)’ (2019) 48(2) ILJ 143 at 171CrossRefGoogle Scholar.
116 R (Reilly and Wilson) v SSWP [2013] UKSC 68.
117 The Labour Party ‘It's Time for Real Change’ (2019) pp 72–76.
118 Ibid, p 60.
119 This was the view given to the Social Security Committee of the Scottish Parliament by the Public and Commercial Services Union, representing job centre staff, in response to a question about the feasibility of in-work conditionality: ‘The current number of work coaches simply would not be able to do that work in any meaningful way’: Scottish Parliament Social Security Committee Official Report of Meeting 1 November 2018 (Social Security and In-work Poverty).
120 M Goodwin and O Heath ‘Briefing: low-income voters, the 2019 General Election and the future of British politics’ (Joseph Rowntree Foundation, 2020).
121 ‘Government confirms plan to double the number of work coaches in jobcentres by March 2021’ (Rightsnet, 7 July 2020), available at https://www.rightsnet.org.uk/welfare-rights/news/item/government-confirms-plan-to-double-the-number-of-work-coaches-by-march-2021.
122 DWP ‘Universal Credit: in-work progression randomised controlled trial: summary research findings’ (September 2018) pp 5–6.
123 DWP ‘In-work progression trial: further impact assessment and cost benefit analysis’ (October 2019) p 3.
124 DWP ‘Universal Credit: in-work progression randomised controlled trial: findings from quantitative survey and qualitative research’ (September 2018) p 39. Concerns have also been raised regarding the credibility of any evidence generated from the trial due to the lack of research protocols published prior to the trials commencing, in line with SPIRIT reporting guidelines to guard against selective reporting. The DWP has also been unwilling to share administrative data-sets to enable independent researchers to evaluate the wider impact of UC. See ‘Written evidence from MRCSSO Social and Public Health Sciences Unit University of Glasgow (UCI0009)’ provided to the Work and Pensions Committee inquiry on In-Work Progression Universal Credit, available at http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/universal-credit-inwork-progression/written/100771.html.
125 Alston, above n 41, para 30.
126 Fletcher and Wright, above n 42, at 323.
127 See, for instance, in a huge literature the recent ‘Special Issue on Gig Work’ edited by A Bogg et al (2020) 31(2) KLJ.