Recent weeks have seen a lot of media focus on Universal Credit. The Government’s decision to bring to an end the £20-per-week uplift to the benefit, introduced in response to the early phase of the Covid-19 crisis, has been widely criticised by poverty charities, Conservative backbenchers and former welfare ministers, and even the UN-appointed special rapporteur on extreme poverty, Olivier De Schutter, who referred to the move as “unconscionable” and suggested it might breach the UK’s international human rights obligations.

On 7 July 2021, the day that the decision to scrap the uplift from the end of September was announced, the prime minister appeared before the House of Commons Liaison Committee, where he defended the move by arguing that the Government’s focus “has got to be on getting people in work and getting people into jobs, and that is what we are doing” [Q73]. However, the Department for Work and Pensions’ own figures for July reveal that just over 40% of claimants are already in work. In the same month, around 22% of claimants had no work requirements attached to their claim, a status typically reserved for people who are long-term disabled or have full-time caring responsibilities.

The prime minister’s rhetoric, suggesting a binary choice between claiming Universal Credit and working, is indicative of a widespread and deeply entrenched misconception about welfare claimants. Moreover, such misconceptions are not of merely abstract concern. They can have tangible implications for the direction of government social security policies, setting up false choices between serving the interests of taxpayers on the one hand and benefits claimants on the other, as Boris Johnson suggested in Prime Minister’s Questions last week. In fact, many benefits claimants are also taxpayers.

In addition to being in the news more often over the past eighteen months, Universal Credit has also been in the courts. A number of recent and ongoing judicial review challenges against different aspects of the current benefits regime have not only called into question whether the system is meeting its stated objectives, but also raised wider political and philosophical questions about the role of social security in society. In the interests of brevity, I will focus on three cases. The first concerns the calculation of housing costs under Universal Credit for tenants who pay their rent on a weekly basis, the second the mechanism for claiming childcare costs under the current system, and the third the decision to exclude claimants on legacy benefits from the £20-per-week Universal Credit uplift during the Covid-19 pandemic.

How can a year have 53 weeks? This question was central to R (on the application of Caine) v Secretary of State for Work and Pensions [2020] EWHC 2482 (Admin), [2020] 9 WLUK 273, which concerned the mechanism by which housing costs are calculated under Schedule 4 of the Universal Credit Regulations 2013 (SI 2013/376).

One of the key features of Universal Credit when it was first introduced was that it was paid monthly in arrears, rather than weekly or fortnightly, as had been the case with most legacy benefits. This was designed to mimic the world of work, in keeping with the government’s aim of encouraging and supporting claimants back into employment. One of the side effects of the decision to pay claimants a month in arrears was the much-debated five-week wait for the first payment for new claimants. However, this frequency of payment also created a less widely acknowledged issue for many claimants in receipt of the housing costs component of Universal Credit.

Schedule 4, paragraph 7(2) of the Universal Credit Regulations provides a formula for calculating how much money claimants should be entitled to each month in housing costs. For claimants who pay their rent on a weekly basis, this formula involves multiplying the amount by 52 and then dividing by 12. In most financial years this will not cause any problems for claimants. However, because a 365-day year is not perfectly divisible by seven, in some financial years the day on which a tenant’s rent is payable will fall 53 times. In such years, the formula in Schedule 4, paragraph 7(2) will leave claimants one week’s housing costs worse off over the course of 12 months.

In Caine v SSWP, the claimant challenged this conversion formula as being both irrational and unlawful under Article 14 of the European Convention on Human Rights, when read in conjunction with Article 1 of Protocol 1. She submitted that the policy unfairly discriminated against tenants who paid their rent on a weekly rather than a monthly basis.

Her challenge was dismissed on both grounds. On irrationality, Mr Justice Knowles held that the formula was not irrational because “the Universal Credit Regulations were not intended or designed to reimburse a tenant for every penny she spends on housing costs, but were only intended to provide a contribution towards them” and could therefore be said to be operating as they were intended to [206]. On the challenge under Article 14, while he noted that even a small shortfall in the amount payable under Universal Credit could be of great significance for people on very low incomes, he found that the interference with claimants’ rights was not disproportionate to the legitimate aims of consistency and simplicity, which underpinned the design of the conversion formula in the Universal Credit Regulations [224].

On the face of it, this decision might not seem very surprising. The bar that must be cleared for an irrationality challenge to be successful is very high. According to Lord Diplock’s famous formulation in Council of Civil Service Unions v Minister for the Civil Service [1984] UKHL 9, [1985] AC 374, for a decision to be held to be irrational or ‘Wednesbury unreasonable’, it must be “so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it” [p. 410]. In cases involving proportionality reviews of restrictions on qualified rights, too, the original decision-maker is usually afforded a fairly high degree of latitude, provided they are pursuing legitimate aims (see, for example, R (Keyu) v Secretary of State for Foreign and Commonwealth Affairs [2015] UKSC 69 [2016] AC 1355, [272]).

Yet earlier this year, another High Court challenge to an aspect of the Universal Credit Regulations on very similar grounds was successful. R (on the application of Salvato) v Secretary of State for Work and Pensions [2021] EWHC 102, [2021] PTSR 1067, was a challenge brought by a single working mother, Nichola Salvato, against Universal Credit Regulations 2013, reg. 33 — the so called ‘proof of payment rule’ — whereby Universal Credit claimants have to pay for childcare costs up-front and provide proof of payment in order to be reimbursed. Like Ms Caine, Ms Salvato submitted that the regulation was irrational and also indirectly discriminatory on grounds of sex under Article 14 ECHR, read this time in conjunction with Article 8, as well as Article 1 of Protocol 1. Unlike Ms Caine, her challenge was successful on both grounds. Mr Justice Chamberlain held that a rule which required proof of payment, rather than proof of liability to pay, in order to secure reimbursement for childcare costs was “antithetical to one of the underlying principles of the overall scheme”, that of supporting claimants with children into work, and was therefore irrational [177d]. Moreover, he held that such a system was incompatible with Article 14, since there was no evidence that ministers had considered the ‘liability to pay’ model as an alternative method of achieving their legitimate aims, and the infringement on benefits claimants’ rights was therefore disproportionate [174].

Given how infrequently decisions are found to have met the threshold for irrationality in judicial review proceedings and how reluctant the courts usually are to be seen as making politicised judgments, this ruling on a flagship Government policy seems surprisingly radical. Although, it should be noted that the Court of Appeal has since heard an appeal by DWP in this case and its judgment has not yet been handed down.

Even were the Court of Appeal’s judgment in Salvato v SSWP not currently pending, it would be dangerous to try to extrapolate too much from just two cases. Yet the contrasting outcomes in Caine v SSWP and Salvato v SSWP do raise some interesting questions about what choices by ministers over the design of the benefits system may be deemed to be so outside the realms of logic or accepted moral standards as to be irrational in the eyes of the law. Might it be that the courts are more willing to find that a decision about welfare payments is irrational or a disproportionate infringement on claimants’ rights where it directly affects their ability to seek or secure employment? If so, could this reflect the fact that ministers and the public are more comfortable with the idea of a benefits system which promotes the search for work and disincentivises long-term dependency?

These questions are also raised in the final ongoing case that I wish to briefly touch upon. It is another Article 14 claim, this time by two people in receipt of Employment Support Allowance, one on Jobseekers’ Allowance and one on Income Support. It was granted permission by the High Court in a decision dated 27 April 2021, with a substantive hearing scheduled for 28–29 September 2021. The Claimants are challenging the government’s decision not to extend the £20-per-week Universal Credit uplift to people on legacy benefits, arguing that they were unlawfully denied £1040 per year, to which they should have been entitled. If the claim is successful, then millions of legacy benefit claimants could be entitled to substantial back-payments. A spokesperson for DWP has responded that “it has always been the case that claimants on legacy benefits can make a claim for universal credit if they believe that they will be better off.”

This challenge highlights open questions about what the primary purpose of the Universal Credit uplift was. One obvious answer is that it was designed to support people who had lost their jobs due to Covid-19. There is some polling evidence to suggest that public attitudes towards welfare claimants softened somewhat during the first wave of the pandemic, before hardening again in the summer of 2020, according to a report by major national research project Welfare at a (Social) Distance. Within this overall picture, however, the researchers found evidence of what they termed ‘Covid exceptionalism’, with survey respondents more likely to say that people who lost their jobs specifically due to the pandemic were not to blame for being out of work. The polling data seems to indicate that stereotypes about the ‘deserving’ and ‘undeserving’ poor persisted throughout the crisis, and it may be these stereotypes in part which motivated the decision to confine the £20-per-week uplift to those claiming Universal Credit, a conditional benefit with a particular focus on moving people back into work, as opposed to people on long-term disability benefits.

None of this is to suggest that the courts share the view that some welfare claimants are inherently more deserving than others. Rather, if such an assumption can be argued to underpin aspects of government welfare policy, it might also influence which individual policy decisions are to be regarded as rational or irrational on their own terms. The cases touched on very briefly here all raise questions about whether the primary role of benefits in society is as a stop-gap to support people back into work, or a longer-term solution to guarantee everyone a decent standard of living. For as long as that question remains current, we are likely to see tricky legal questions around the administration of Universal Credit and other benefits making their way through the courts.

What I have been watching this week…

This weekend I was lucky enough to score a free ticket to a matinee performance of Hamilton in the West End. Being back in a theatre for a live performance for the first time since before the pandemic was quite a thrill, and the show itself was every bit as intelligent, funny, and joyous as I’d hoped it would be. I feel like I’d have to listen to it through several more times to properly pick up on all the jokes and references, but I especially enjoyed the sly dig at modern electoral politics when one member of the ensemble suggested that the infamous Aaron Burr seemed like someone “you could grab a beer with”.