(8 years, 10 months ago)
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Lord Freud
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I will first speak to Amendments 1 and 2, which seek to pave the way for the introduction of an exemption from the benefit cap for all households where a member receives carer’s allowance or guardian’s allowance. We will bring forward regulations to give effect to these exemptions later this year. The exemption will mean that households where someone receives carer’s allowance or guardian’s allowance will be exempt from the cap. For carer’s allowance, this means that the claimant’s household will be exempt from the effect of the cap regardless of whether the cared-for person is part of that household or not.
Providing an exemption from the cap where a member of the household receives carer’s allowance fits within the wider government strategy to do more to support and invest in carers. Both carers and carers’ organisations have welcomed this change, with Carers UK, one of many organisations that work tirelessly to support the needs of carers, describing it as “fantastic news”.
Following the eloquent arguments on guardian’s allowance put forward by the noble Baroness, Lady Hollis, on 25 January, I said during the debate on Report on 27 January that this was an issue I wanted to explore further. Having considered the issue carefully, I can now confirm that we intend to exempt all households in receipt of guardian’s allowance from the benefit cap.
Guardian’s allowance is paid to someone who is bringing up a child whose parents have died, or in cases where one parent has died and the other parent cannot look after the child, for example where the other parent is untraceable, unknown or serving a long prison term. As noble Lords will appreciate, this is a very difficult time both for the guardian and for their family, who are not only dealing with their own grief over the loss of a family member or friend, but also helping a bereaved and possibly distressed child come to terms with their loss while settling them into a new family home.
By tabling this amendment we are leading the way for the introduction of an exemption, and we will bring forward regulations to give effect to that later this year. An exemption from the cap emphasises that the Government both recognise the difficult circumstances these families face and strongly value the role of guardians in enabling vulnerable and bereaved children to continue living with their relatives or close family friends.
Amendment 3, as I explained on Report on 25 January, was tabled in response to a recommendation by the Delegated Powers and Regulatory Reform Committee that regulations made under the powers introduced by Clauses 8 and 9 should be submitted to the Social Security Advisory Committee for consideration. We have decided to accept the committee’s recommendation in part.
During the debate on 25 January, the noble Baroness, Lady Sherlock, asked for a clarification of what regulations might be available to be sent to SSAC, as well as an explanation of why the Government do not think that the level of the cap should be referred to SSAC. I will explain that now. But before I do, I should like to put on record the fact that the Government greatly value the role that SSAC undertakes in providing impartial advice on social security and related matters. This is why consultation with SSAC may extend to cover regulations relating to the key features of the benefit cap policy. For example, we would discuss with SSAC any proposed changes to the grace period or exemption criteria, the introduction of new disregards, or changes to which level of the cap applies to the different household types.
Regulations relating solely to changes in the level of the cap are not included in this amendment. Changes in the level of the cap require a broad assessment of the most significant long-term developments and trends that might affect our economy and are important to households up and down the country. Factors such as inflation, benefit rates, the strength of the labour market, and any other matters that may be crucial and relevant at that time, need to be considered. This is why we have maintained throughout that it is important to allow the Secretary of State the ability to consider the context of the cap in a broad and balanced way. Maintaining this approach means that the Government can respond quickly in the light of any significant economic events that occur unexpectedly but will have long-term consequences for the national economy, and can take steps to adjust the cap level accordingly.
Equally importantly, let us not forget that any changes to the level of the cap are subject to the affirmative procedure, as agreed on Report on 25 January, when government amendments to that effect were accepted. So noble Lords will have the opportunity to ask the Government to explain any changes in the level of the cap before voting to accept those changes. I believe this approach substantially addresses the committee’s recommendation, but also enables the Secretary of State to respond to economic circumstances by considering a broad range of factors when considering the cap level.
Amendment 4 is a consequence of Amendment 3. Its purpose is to make clear that the new clause inserted by Amendment 3, which brings regulations under the benefit cap provisions within the remit of SSAC, extends to England and Wales, and Scotland.
As we draw to the end of debate on the benefit cap clauses, may I take this opportunity not just to thank noble Lords for their contributions on this subject, but to focus on the fact that they have helped to ensure that the work incentive principles of the cap are fairly balanced with that of protecting the most vulnerable. We will bring forward new exemptions for those in receipt of carer’s allowance and guardian’s allowance, and, as I have said, we have increased the level of parliamentary scrutiny by extending the affirmative provisions for any change to the cap level in the future.
Subject to the will of Parliament, the department will now press on with implementing these changes, and will continue to work closely with local authority partners. In spring, after Royal Assent, we will notify households that may be capped at the lower level and advise them of the support available to move into employment, as well as budgeting and housing support that they can access. This will give households several months to take up any support they might need and prepare for the new cap coming in from the autumn. I beg to move.
Baroness Pitkeathley (Lab)
My Lords, when the Minister made this welcome concession about carers on Amendments 1 and 2 on Report—it is indeed fantastic news—I promised no more vituperation, and there will be none. I just have a couple of points on which I would like clarification.
To exempt carers in receipt of carer’s allowance from the benefits cap, the Government will need to amend not only the Bill but the housing benefit and universal credit regulations. Can the Minister confirm that that is what the Government intend to do? I also want to refer to carers who have an underlying entitlement to carer’s allowance. The Minister has announced that all carers in receipt of carer’s allowance will be exempted from the benefits cap. Although that covers the majority of carers, a small number of working-age carers have an underlying entitlement to carer’s allowance but do not receive the payments because they are already in receipt of another income-replacement benefit. That means that carers who have an underlying entitlement to carer’s allowance but are in receipt of benefits—such as jobseeker’s allowance, employment support allowance, maternity allowance and so on—may still be affected by the cap. I should like the Minister’s assurance that he intends this to apply to all carers. If he is unable to give me that assurance now, perhaps he could write to me.
I end by thanking the Minister again for this extremely welcome concession and recognition of all that carers do for the nation, and offer the support of the carers’ organisations in getting the information out there. Anything that can be done to help the Government convey that news will be done.
Baroness Hollis of Heigham (Lab)
My Lords, I, too, thank the Minister. I am truly grateful that he has responded in such a compassionate and sympathetic way to the situation of people who are at the hardest edge of kinship care, when bereaved family members are seeking to look after bereaved children. What the Government, and the Minister in particular, have done is remove an additional pressure that we would have been putting on them of financial strain. As I understand it, he has confirmed that not only will such families be exempt from the benefit cap, the entire income, not just the guardian’s allowance, will not come under the benefits cap—in other words, as a group, they will be excluded. That is so important for those families to give the children they are caring for—as well as their own children, perhaps—the stability and security they need if, out of the wreckage of their lives and the damage that has been done to them, they can hope to build a secure future. I am very grateful to the Minister and thank him enormously.
Baroness Manzoor (LD)
I add my thanks from these Benches. It is great and really welcome. To have these two allowances removed from the benefits cap is essential. We have had long debates and this was pointed out very clearly and forcefully by the noble Baroness, Lady Hollis. We on these Benches are really grateful.
Of course, I remain concerned about other areas, such as the additional children of women who are fleeing domestic violence. I implore the Minister to look again at that issue, and perhaps we could come back to it, so that those women, or indeed partners, could be exempted from the two-child tax credit limit.
The Lord Bishop of Portsmouth
My Lords, without wanting to detain the House, I add on behalf of this Bench our thanks to the Minister and offer our support and gratitude for the amendments he has brought forward today. The concerns that have been expressed around the House on many occasions for those who are most vulnerable in society have been passionate and heartfelt. It is good and reassuring when they are heard, and we offer our thanks as well.
Lord Kirkwood of Kirkhope (LD)
My Lords, I add my note of congratulation to the noble Baronesses, Lady Pitkeathley, Lady Hollis and Lady Drake, on the splendid work that they have done not just on this Bill but long before and since. They deserve the credit for these hard-fought and well-won amendments, as does the Minister. This has not been an easy Bill at all. Indeed, I do not want to spoil the tone but I join the noble Lord, Lord McKenzie, in saying that this is the worst Bill that I have ever come across in 35 years of working in social security. This group of amendments is extremely welcome, but taking £12 billion out of the social security system for the rest of this Parliament is going to continue to be a hard-fought business at all levels, particularly in this House.
I congratulate the Social Security Advisory Committee, whose work is exemplary; it supports a lot of the work that many of us in this House do. I also congratulate the Delegated Powers and Regulatory Reform Committee, which was absolutely correct in its 13th report when it strove to draw to the Government’s attention the fact that the SSAC needed to have a role in these clauses. I agree with that, and now we have a compromise. I do not understand why the Government decided not to allow the whole of the DPRRC’s recommendation; it would not amount to much, and keeping the level out of the hands of the SSAC just encourages Treasury Ministers to say daft things after Budget purdah without any consultation or anticipation by anyone—there have been examples of that in the recent past.
It also detracts from the established annual procedure for updating the social security levels that Parliament has always had in the uprating statement. I note, for example, that there is no sign of the uprating statement coming to your Lordships’ House this year; it is being done by the other place. I look forward to the powers that be allowing at least a Moses Room debate because it is the one occasion when you can look at the national insurance accounts, the Government Actuary’s recommendations and the totality of social security and tax credit expenditure. If this House cannot find time to discuss that annually, that is a matter of very great regret.
My final point is about the SSAC and the policy around the benefit cap. It is one of the most regressive policies that I have ever come across in any social security system, but I understand that I am in a minority of maybe one in the country on that question now. Maybe the Minister will confirm this because I think that the answer to this question is yes: once, as I hope it will be, austerity is dealt with and as a nation we get into a more favourable set of economic circumstances, I believe that the SSAC could use its discretion to undertake a report into the whole policy. I do not think it is excluded by anything in these amendments from looking at the impact and eventual outcome, after the introduction of universal credit. I understand that that may be a few years down the line, but am I right that nothing in the amendments precludes the committee, on cause shown, if it really believes that it needs to make recommendations to the Minister?
I pay tribute to everyone who has been involved in this Bill; it has been one of the hardest fought and most difficult, and people have worked hard on it. We have got results today, and I welcome that as much as anyone. Still, I think that the Bill will cause damage in future, although I know that as long as the noble Lord, Lord Freud, is in his position he will be monitoring that carefully. If he believes in the fullness of his consideration that some of this stuff needs to be amended in future, we rely on him to come to the House and tell us so. I would be one of the first to support him if he did.
Lord Mackay of Clashfern (Con)
My Lords, I join those who have congratulated the Minister on recognising the special needs of this particularly deserving group. I also congratulate those who have brought these matters to his attention. I feel that this demonstrates very clearly that, when a good argument is put forward, it will be listened to.
Baroness Howarth of Breckland (CB)
My Lords, I am sorry that I cannot join totally in the congratulations, although obviously the noble Baronesses, Lady Pitkeathley and Lady Hollis, have achieved great things. However, the noble and learned Baroness, Lady Butler-Sloss, and I were very keen that those adopters of difficult children who join their families should also be excluded from the cap. In his reply, the Minister accepted that, where sibling groups were adopted, that would be an exclusion, but where there was one child, his words were, I think, that they would be not unlike any other family.
I suggest to the Minister that any adopted child is not like any other family. Children in care who are going to be adopted are not sweetness and light on the whole. They have had very difficult childhoods and are going to need extraordinary care. I express my disappointment. We have written to him to say that we are disappointed that adopted children have not been included in the list. Having said that, I am extremely grateful for those who are.
Baroness Sherlock (Lab)
My Lords, I, too, thank the Government for the concessions that they have made, and I share the view expressed by the noble and learned Lord, Lord Mackay of Clashfern, that, on this occasion, when a good argument was mounted, it was listened to. However, I say to the Minister that, if he liked those, I have plenty more where they came from, so I look forward to future useful conversations. I also promise him no vituperation at all. Perhaps he will permit me a mild sulk when I come to the third of his amendments, but I promise to be gentle about it.
I welcome wholeheartedly the decision to exempt all those in receipt in carer’s allowance and also to go a step further and not just to exempt guardian’s allowance, as had been hinted at at a previous stage, but in fact to exempt all households containing someone claiming guardian’s allowance. That is a generous response to the pressure from this House. In particular, I pay tribute to my noble friend Lady Pitkeathley for all the work she has done on carers, of whom she is such a tireless champion, and to my noble friend Lady Drake for emphasising the position of carers of different kinds.
I have certainly raised the question of guardian’s allowance to precisely no effect whatever, but when my noble friend Lady Hollis gave a speech and made a report, the Minister ran the white flag up the flagpole at once, and said, “I now know how to deal in future with matters on which I have good arguments.” I commend him for having listened carefully to that one.
The question on which I am still a little unhappy is related to government Amendment 3, raised by the noble Lord, Lord Kirkwood. As the Minister said, I pushed on this on Report, and I would have brought another amendment back, had I been permitted, but I am afraid the Companion does not allow me to do it. I am glad the Minister has explained why the Government took the view to accept only in part the recommendation made by the Delegated Powers and Regulatory Reform Committee. However, I think it is worth while reminding ourselves that the committee could not have been much stronger. It actually said that it considered it inappropriate,
“for this Bill to confer the highly significant regulation-making powers in Clauses 7 and 8 without the application of the SSAC scrutiny requirement”.
When the Government decided not to accept that in full, that is quite a strong statement. It is worth remembering why. Although the benefit cap is a matter for Parliament, all regulations are a matter for Parliament. All that happens is that they go there via an expert Social Security Advisory Committee which will then give advice to us and to Ministers about the way in which the Government should proceed. The Executive are entirely at liberty to ignore that advice and to press ahead, but they really ought to listen.
The reason that the level of the cap is important is that it is not just a matter for the economy. For example, it would be perfectly possible for a Minister to bring forward regulations saying the cap should be set at £500 a year. I am not suggesting they would, but they could. In doing so, that would render completely pointless the entire array of social security legislation, specifying the entitlement people have to a range of benefits by simply saying, “You may be entitled to all of those—however, anything over £500 we just will not give you”. I am not suggesting the Government would do it, but that is an extraordinarily important power, and therefore a very good reason that the SSAC should have been invited to use its powers in scrutinising it before the Government were able to go ahead and do it. However, all I can do at this point, as I say, is sulk mildly, register my disappointment and urge the Government to go away and think again, because I would not want to break the mood of general congratulation, in which I share.
I take the opportunity to ask the Minister a couple of practical questions. He mentioned that the Government will be bringing regulations back later in the year to legislate for those parts of the concessions that are not covered by the amendments today. He has explained he would do that in relation to the amendments on the benefit cap. Will the Minister also tell the House when and how the Government will legislate to deal with their concessions in relation to the two-child policy for kinship carers and adoptive carers? I understand that the regulations will be subject to the negative procedure. Is that correct? If so, will he commit to publishing draft regulations before anything is laid in Parliament? A lot of debate has gone on and in the light of that debate and, indeed, in the light of the comment that he made on Report to the right reverend Prelate the Bishop of Portsmouth in relation to domestic violence, it would be helpful to the House if he were willing to offer that.
Lord Freud
I thank noble Lords very much for the lack of vituperation all round, which is deeply appreciated, and for their thoughtful speeches, although I think that this debate has been thoughtful all the way through the different stages. I have appreciated very much what noble Lords have said.
Let me try to answer some of the specific questions. The noble Baroness, Lady Pitkeathley, had forensic queries about the underlying entitlement. As she understands, that is quite complicated. We will go through these issues carefully and bring forward the regulations that allow us to frame the required exemptions, but I make it absolutely clear that our intention is that the exemptions should cover all the carer’s allowance underlying entitlement group, caring for at least 35 hours a week, and equivalent groups in universal credit. I hope that I have satisfied her on that. I confirm also that we will amend housing benefit and universal credit regulations in line, so I think that I have answered affirmatively—indeed, I always answer the noble Baroness affirmatively, as the House has now noticed.
Let me pick up the specific questions put by the noble Baroness, Lady Sherlock, on the two-child policy, when she skilfully asked me to make huge commitments. On the regulations and sight of them, I hope she will take this in the spirit in which I am presenting it. This will be a rather transparent process. The regulations are not straightforward. They are very sensitive in some areas and we will be working with stakeholders to get them right. I am not talking about an overly formalised consultation process, but I am talking about a transparent process—much more open than you will see with some of the other regulations. I hope that that satisfies her. I will allow her the indulgence of accusing me of not honouring the spirit of what I have said if she thinks I have not.
On the sibling group question—the sequential question—clearly, our intention is that sibling groups are kept together. As we draft the exemption we need to work with stakeholders and colleagues to get this exactly right because it is quite complicated. We will take the point made by the noble Baroness absolutely on board.
I think I ought to write to the noble Lord, Lord Kirkwood on the SSAC’s powers, which are rather wide. As the noble Lord knows better than anyone else, there is the power to have independent reviews, but I shall put in writing the exact status of what it can and cannot look at, so that others are able to see it. I can tell the noble Baroness, Lady Howarth, that our approach has been that it is not fair to treat parents adopting a child more advantageously than other parents, but we recognise the value of having sibling groups together. That is where we have concentrated our exemption.
I hear the point about domestic violence from the noble Baroness, Lady Manzoor. We have a series of measures to support victims who flee violent households, and I will write to her, laying out what those are. I am in absolutely no doubt that, as we get closer to defining the regulations, this is an issue to which various Members of this House will want to come back. I have probably said all that I can at this time on that. I beg to move.
Lord Freud
Lord Freud
“Benefit cap: Social Security Advisory Committee
(1) In section 170 of the Social Security Administration Act 1992 (Social Security Advisory Committee), in subsection (5)—
(a) in the definition of “the relevant enactments”, after paragraph (al) insert—“(ala) sections 96 to 97 of that Act;”;(b) in the definition of “the relevant Northern Ireland enactments”, after paragraph (al) insert—“(ala) any provisions in Northern Ireland which correspond to sections 96 to 97 of that Act;”.(2) In Schedule 7 to the Social Security Administration Act 1992 (regulations not requiring prior submission), in Part 1 (Social Security Advisory Committee), after paragraph 3 insert—
“Benefit cap3A Regulations under section 96A of the Welfare Reform Act 2012.””
Lord Freud
Lord Freud
(a) the amount that would be found under sub-paragraph (4)(a) if sub-paragraph (4)(a)(iii) were disregarded, and(b) the amount that would be found under sub-paragraph (4)(b) if the period in question were the whole of the relevant year in which the tenancy begins,”
Lord Freud
My Lords, the amendment to paragraph 3(5) of Schedule 2 is to address ambiguity in the drafting and clarify that, in a case where the tenancy begins after the beginning of the first relevant year but not at the beginning of the second or third relevant year, the rent should be calculated in the following relevant year. The amendment also removes a redundant cross-reference to paragraph 3(2), which is a drafting error we had regrettably not spotted previously.
I would like to inform the House that a number of social housing providers have alerted us to an unintended consequence of the government amendment brought forward on Report, which sought to enable continuation of existing policy that affordable rents are inclusive of service charge when determined on the percentage of market rent principle, but exclusive of service charge when determined on the social rent model. We have looked at this and agree there is an issue in the drafting that we need to address. The Government will therefore be seeking to do so during Commons consideration of Lords amendments. I thank the providers who raised that issue with us, and apologise to the House that this has come up at such a late stage, and that we are dealing with it in this way.
The Bill returns to the other place without the proposed changes to the ESA WRAG, and the limited capability for work element in universal credit. It also now places a requirement on the Government to publish and report on income measures of child poverty. In sending these amendments back, the Cross-Benchers, in particular, have sent a clear message and I will say only this: there will now be a process between the two Houses, as is conventional. We have discussed many other matters during the passage of the Bill. Many of them are important and we will continue to reflect on them and seek to obtain the best outcomes we can. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for his explanation of Amendment 5. It makes the drafting of this area somewhat less impenetrable. I was going to say that it would be churlish, given the occasion, to point out that this is the third or fourth attempt to get this drafting right but clearly there will need to be a fourth or fifth, from what the Minister has said, and we welcome the point to which he has alerted us.
I take this opportunity to welcome the Minister’s action in deferring the impact of the rent reduction policy for a period and holding back on the local housing allowance. We will have to see where that leads. Of course, this point was pursued rigorously by the noble Lords, Lord Best and Lord Kerslake. My understanding is that this has not necessarily allayed the concerns of providers sufficiently and there is the risk of holding back on some key projects in relation to supported accommodation, which would be a great pity. So I think there is a task for the Government there.
With regard to the amendments that go back with the Bill to the other place, all we can do is urge the Minister to send it on its way with his wholehearted support.
Baroness Manzoor
My Lords, we broadly support Amendment 5. It is a positive change. I take this opportunity to thank the Minister for the very constructive way in which he has allowed us to meet him, because there have been great challenges in the Bill. It has been a very difficult Bill and he has been a master at defending a very difficult piece of legislation. I sensed at times that he himself felt, “My gosh, what are we doing here?”. I may be putting words in his mouth but that is the sense I got.
Obviously, there are significant financial cuts to some of the most vulnerable in our society. As the Minister is aware, I have been very concerned about the issues relating to the work allowance and the cuts that will affect working people. We have looked at the Bill through the prism of work. I am also very concerned about the cuts to employment allowances for people with disabilities and progressive illnesses. I state again that I really cannot understand how cutting £30 a week from the employment allowances for people in the ESA group is going to make them better and fitter and enable them to go back to work. I say to the Minister: this is going back to the House of Commons but please could the Government look at this? It is so important as a sign of a compassionate, caring society that we look after the most vulnerable. But I thank the Minister, and the Bill team, for the time he has given to the Bill and the very constructive dialogue he has held with us.
Lord Low of Dalston (CB)
My Lords, the Minister made reference to the Bill going back to the other place without the provisions relating to the removal of the ESA WRAG premium and the comparable allowance under universal credit, and to the fact that he would be working to achieve the best outcome in relation to these provisions. I wonder if he would be prepared to meet my noble friends Lady Meacher and Lady Grey-Thompson and me so that we could work together on achieving the best outcome in relation to these provisions. My office is in touch with his office to see if we can set up a meeting with him and Priti Patel, who I believe has also been involved in these issues. I very much appreciate the support of the noble Baroness who spoke before me, and her plea for the Minister to give earnest consideration to this issue, with a view to achieving a better outcome than was in the Bill originally.
Lord Freud
I hear what the noble Lord, Lord Low, has asked for—a meeting on this matter. Of course I would be pleased to meet him, and other colleagues, to discuss this as it wends its way back to the Commons, and perhaps back to us, depending on what happens.
May I take this opportunity to place on formal record my thanks to noble Lords throughout the House? They have discharged their duties to look at the Bill really conscientiously, and have worked hard on some difficult and sensitive issues. They have brought out some unintended consequences, and they have described them and expressed their case in calm, clear language, which means that we can take the points and aim to address them. Indeed, both today and on Report we have tackled some of them.
The Bill has been insulted by one or two noble Lords. I have to reflect back that it has raised some profound issues around what the benefit and welfare system does and how it works. Pinpointing where it affects the most vulnerable and how we can ameliorate that and sort it out has been really valuable.
I thank the Bill team, a handful of whom are in the Box now. They have been formidable in supporting me all the way through the progress of the Bill. I know that they have also been assiduous in briefing noble Lords, because we set up the system, which I have used with previous Bills, whereby there is a briefing ahead of Committee stage, so that when we debate these issues we do not waste time but are able to deal with the issues. The Bill team have done a really good job, and I believe noble Lords think so, too. I am sure I express the view of the whole House in thanking them for all their support.
Baroness Sherlock
May I, on behalf of the Opposition, thank the Minister for giving us access to his officials? I thank the Bill team and some very impressive policy people who have been briefing Peers from all over the House. We appreciate his generosity in giving us access to them, and their expertise and willingness to explain to us patiently—sometimes, if necessary, more than once —precisely how the Bill works. We are grateful for that. They have also been helpful in working with the wonderful Muna Abbas, from our Whips team, who has done a brilliant job in supporting us from this side.
We have not been persuaded by the Minister that this is anything other than a bad Bill—but now, as a result of what this House has done, it is less bad than it was. I pay tribute to Peers throughout the House, who have shown the House of Lords doing what it does best—being a revising Chamber which, even when it does not like legislation, focuses its attention on improving it and sending it back to the other place much better than it was. Long may we do so.