Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018
(6 years, 9 months ago)
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20:07 - Division on Lord Bassam of Brighton’s Motion - Ayes: 167 / Noes: 160 - Lord Bassam of Brighton’s Motion agreed.
Lord Bassam of Brighton
That this House regrets Her Majesty’s Government bringing forward changes in entitlement to free school meals through the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018 which will undermine work incentives in Universal Credit and leave up to a million poor children unable to claim free school meals; and calls on Her Majesty’s Government not to implement the Regulations until a full poverty impact assessment has been completed and considered by both Houses, and not before six months has elapsed (SI 2018/148).
Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee.
Lord Bassam of Brighton (Lab)
My Lords, I make no apologies for moving this Motion. I make it plain from the start that I see this in very personal terms.
Back in the 1960s, a time which brings happy nostalgia for many noble Lords, I was a teenager at secondary school, living with my mother and stepfather. Shortly before the start of the 1966 World Cup, he collapsed and died of a heart attack. I was just short of 13 years old and, frankly, my mother’s world collapsed around her. She worked, as she always had. She was then a farm worker on a soft fruit farm that produced plants for sale all year round. She picked soft fruit in the summer months and then worked in the fields, greenhouses and packaging and distribution centre the rest of the year. It was hard, backbreaking work, sometimes with long hours.
The pay was regulated by the old Agricultural Wages Board. Her weekly take home pay was 157 shillings and six pence, the equivalent today of £7.85. The equivalent today, annualised, would be £7,152.60. With overtime, it would have risen close to the threshold set by the Government for cutting off access to free school meals. My mother would have faced a hard choice akin to those who face today a modern cliff-edge judgment. Like most teenagers, I found odd jobs to try to help pay my way, but in 1966 she was what we now call part of the working poor. In fact, until I did some research today, and assuming I have my sums right, I had not realised quite how poor she was.
There were not many silver linings for my mum becoming a widow and she struggled to cope, both financially and emotionally. Eventually, the local council transferred the tenancy to her. The loss of household income led to a housing allowance and, in turn, that triggered entitlement to free school meals. When my mother eventually got her head around it, she asked me to see if we qualified for something called family income supplement—it was a sort of universal credit of its time—but apparently we did not.
Why do I mention this, and why now? Free school meals were, for my mother, a godsend. They were not an add-on, they were an essential. She did not have to spend time packing a lunch for me and it meant I had a hot meal five days a week without her having to worry. It saved her time—if you are working poor, that matters—and it saved her money. That is what makes these regulations so abhorrent. The Government seek to dress up this change as something it is not. They say, as the noble Baroness, Lady Buscombe, did last week, that they are an act of state generosity because, when they roll out universal credit and it is complete, there will be 50,000 additional beneficiaries. This is not because the scheme is more generous; it is simply, as the Children’s Commissioner rumbled last week, because of an increase in the size of the school-age population by nearly half a million by 2022. In fact, as a percentage of the school-age population, fewer will be entitled to free school meals.
Studies show that the educational benefit of good eating habits are profound. Northumbria University’s work on this suggests there is a real benefit in terms of educational attainment of a midday meal for those from low-income households. It was precisely because of this link that school meals were first introduced back in 1906 and why Labour has done so much to encourage breakfast clubs to ensure that kids get fed before the school day begins.
The Government are not making these changes out of the goodness of their heart. These changes are being made as part of the continuing austerity package. Will the Minister enlighten us this evening on the level of continuous savings they produce for the Treasury? However, we know the value of free school meals to individual households: £437 per child for a year and more than £1,300 a year for a three-child family where all are in education. Take those sums away and that represents a significant cut to family income.
We are supposed to be reassured by the transitional arrangements. No family should lose out if they currently receive free school meals except when they move to the next phase of schooling. On transfer from primary school to secondary school, you lose out, and you lose out when you transfer to sixth-form college. Perhaps the Minister can tell us how many will fall out of free school meals eligibility through that route each year. I ask this: how will it feel if you are in a family where the youngest child moves up to secondary school and loses their free school meals as a result of moving phases, but has a brother or sister still in receipt of free school meals? This is a divisive policy in families where some will get the benefit until they finish school and others will not. What are the total numbers who benefit now, and who will benefit at the real end of the rollout? Perhaps the Minister can give us a better and fuller picture of the long-term impact. The Children’s Commissioner suggests that we will not know the difference until 2026 or 2027 because of the protections relating to the educational phases.
I have read the consultation document. At paragraph 4.4 it states that 90% of pupils currently getting free school meals will continue to get them. The 10% who will not amounts to roughly 110,000 children, a not insignificant number. Where is their transitional protection? In the White Paper on universal credit, the Secretary of State for Work and Pensions said:
“At its heart, Universal Credit is very simple and will ensure that work always pays and is seen to pay. Universal Credit will mean that people will be consistently and transparently better off for each hour they work”.
The Children’s Society argues that the introduction of the £7,400 earnings limit for free school meals creates a serious cliff-edge that fundamentally undermines that objective and will mean that many families actually become worse off overall by increasing their earnings. The society estimates that some 200,000 families with half a million children are at risk of falling into a new poverty trap where they seek to increase their earnings, or are forced to do so by their work coach, and they then lose the benefit of free school meals. It also estimates that a further 150,000 families with 400,000 children will find themselves in a position where they could be better off by reducing their earnings.
The best thing that can be said for the Government’s consultation paper is that it is confusing. In it the Government tell us that 1.9 million pupils will be sufficiently in poverty for them to apply the pupil premium formula to schools. If they can apply this number to schools, why not to pupils in poverty? Another DWP report on households with below-average incomes 1994-95 to 2015-16 suggests 2.3 million and 4 million children living in poverty, yet only 1.1 million currently benefit from free school meals and even on the Government’s best estimate, the figure will increase by just 50,000. The Children’s Society states that up to 1 million children living in poverty will miss out, and, as the Children’s Commissioner says,
“under any scenario, many hundreds of thousands and possibly well over a million children living in poverty are already not receiving free school meals”.
The Children’s Commissioner suggests that the Government should do four things. First, they should release the analysis behind what looks like a spurious claim for increased eligibility. Secondly, they should provide an estimate of the future number of pupils who will be eligible under a range of scenarios, including the old system of benefits-based eligibility, and the current system based on universal credit. Thirdly, they should provide impact assessments beyond 2022 to capture the full impact over the long term. Fourthly and finally, they should publish an estimate of the number of children who were previously ineligible for free school meals who will now become eligible because of the changes as compared against the number of 110,000 whose eligibility will cease as a result of the changes.
My Motion suggests that the Government should delay the changes for six months while they put their house in order, complete a full poverty impact assessment and place it before both Houses so that we get a complete picture. We should then consider these regulations again, otherwise they will penalise many of the working poor, people like my widowed mother who lived and worked in hard times and who asked for little. However, she needed a benign state not to penalise her, but to make life more tolerable so that she could just about manage.
Poverty does not make headlines, although it should. These regulations do nothing to solve the problems of modern poverty—rather, they surely make things worse. I beg to move.
Lord Storey (LD)
My Lords, I thank the noble Lord, Lord Bassam, for tabling this Motion and I was moved by his opening comments about his own circumstances as a child with his widowed mother. For many people, in particular those whose children have left school, it may not seem important for us to debate a tiny piece of secondary legislation that tweaks the regulations about who will be entitled to a free school dinner. But this measure is about children, specifically those who most need our support: children living in poverty—children who through no fault of their own are not well fed, even in one of the wealthiest countries on this planet.
For many children, the 190 hot meals a year they get in school, which on average comes to fewer than four a week, are the only “proper” meals they get. For them, a holiday from school is also a holiday from hot dinners. I can well remember Christopher, who I taught many years ago, telling me that he was always pleased to see the end of the summer holidays so that he could come back to a school dinner once more.
I am sure that we will hear from the Government about how the statisticians with their electronic slide-rules have worked out who should and who should not qualify for a free school lunch, to meet the demands of the small army of government accountants employed to deliver austerity. The reality is that hundreds of thousands of schoolchildren will, each and every one of them, pay the price for our meanness. Children in our poorest communities who are born next month, children whose brothers and sisters have benefited from a free school lunch, will not have that benefit. Why? It is because they will not be four years of age by April 2022.
Margaret Thatcher is remembered for many things, one of which was taking away free milk from children. Mrs May, I am sure, will be remembered for trying to take us out of Europe, but if these regulations get on to the statute book, she will also be remembered for taking away from many children their only hot meal of the day. Marie Antoinette is believed to have said “Let them eat cake” when she was told that the poor had no bread to eat. What will the Prime Minister say to poor children who have no free school meal?
The Liberal Democrats fought hard when in the coalition to deliver universal free meals for infant schoolchildren as we recognised the importance of a nutritious meal in ensuring that children are able to make the most of their education. These regulations, once universal credit is rolled out, will ensure that 1 million children will not be getting that free meal. Last week on 14 March, the Equality and Human Rights Commission published its final report looking at what the impact of changes to the tax and welfare system on families will be in the 2021-22 tax year. It found that children will be hit the hardest, as an extra 1.5 million will be in poverty. The child poverty rate for those in lone-parent households will increase from 37% to more than 62%, and households with three or more children will see particularly large losses of around £5,600. David Isaac, the chair of the commission, which is responsible for making recommendations to the Government on the compatibility of policy and legislation with equality and human rights standards, said:
“It’s disappointing to discover that the reforms we have examined negatively affect the most disadvantaged in our society. It’s even more shocking that children—the future generation—will be the hardest hit and that so many will be condemned to start life in poverty”.
We cannot let this continue if we want a fairer Britain. Appalling though this picture is, I am pretty certain that it does not take into account the additional impact on many poor families of these changes to the free school lunch regulations.
When I taught infant schoolchildren, if they occasionally misbehaved, I would say that I was sad in my heart. I am sad in my heart about these regulations and I regret the lack of humanity that these changes to the regulations demonstrate. Our children are our future and we must cherish and nurture them. On top of the negative impact on children of the tax and welfare reforms, this change adds insult and hunger to injury.
Lord Patten (Con)
My Lords, I do not have a flinty heart, but I am not oversentimental. However, I was moved by what the noble Lord, Lord Bassam of Brighton, said about his own circumstances and his hard-working mother and how people in working poverty suffer. I do not think there is anyone in this House who is not concerned about poverty and about dealing with it properly. But that always has to be based on fact and not on sentiment. What strikes me about what the noble Lord, Lord Bassam of Brighton, said in his speech is that there is a huge gap, not just in alleged or asserted numbers but in credibility, between the alleged 1 million child losers to whom he referred and the assurances given, for example, in a Parliamentary Answer by my noble friend Lord Agnew of Oulton earlier this month that by 2022 there will be an increase in the number of children getting free school meals. There is a seven-figure difference between the Answer from my noble friend and the figures of the noble Lord, Lord Bassam. I am all in favour of building bridges —I would welcome building a bridge with the noble Lord, Lord Bassam of Brighton, if I got the chance—but there is an unbridgeable gap here; a seven-figure gap.
The noble Lord may wish to reflect on his own time as a distinguished Labour Chief Whip. In Division after endless Division, he clicked away, totting up the votes, with the ever-helpful learned clerks counting up on their devices as a back-up—we all like our statistical fact checkers, and there is no hiding place for the eventual numbers of the contents and the not-contents. Yet there are lots of independent authorities which say that his figures asserting massive losses of free school meals are—forgive my uncharacteristic bluntness—wrong. Unlike some of my colleagues, I like experts, and these authorities and experts range from the UK Statistics Authority, which makes it clear that claims that universal credit causes poverty are wrong, through to the “Channel 4 News” FactCheck, which pointed out that no child currently receiving free school meals will lose their entitlement, but rather that more will benefit from the changes.
So, while I understand the strength of feeling, it seems that we have seen the noble Lord, Lord Bassam, with his new-found arithmetical freedom, transmogrify from being an obsessive bean counter—or perhaps I should say Peer counter—of those voting content or not-content into what some might think to be a statistical tearaway, albeit in a good cause. I do not doubt that it is a good cause, but, in the end, hard facts, rather than what some would think of as exaggeration, are best to rely on.
I certainly wish to see all children in all households that are in need get help. But if all children of all households on universal credit were to get free school meals, we would be talking about a cost of billions, and I am not making that up. I wonder what the shadow Chancellor of the Exchequer thinks about that. By comparison, I congratulate Her Majesty’s Government on what they are doing. All children in years 1 and 2 will continue to get free school meals—this was not mentioned in the debate—and no child will lose out as universal credit is rolled out. With respect to the noble Lord, these are facts rather than assertions.
The Earl of Listowel (CB)
My Lords, it is good to hear the noble Lord, Lord Patten, recognising that on all sides of the House we are very concerned about the just-managing families. Two-thirds of all children in poverty live in working families that are working hard to make ends meet and to do the best for their children. It was encouraging to hear the Prime Minister talk so strongly after the Brexit vote about reaching out to those just-managing families in need. So I hope that the Minister will take this golden opportunity offered to us by the noble Lord, Lord Bassam, to give moral support to children and families in poverty today, and to say from the Dispatch Box that, yes, there may be difficulties, but he will look at how we can ensure that all children in poverty get a free school meal.
This morning, I spoke with a mother who endured poverty for several years. She was a victim of domestic violence; she was in a refuge for three months; and, last year, she spent six to seven months in bed and breakfast accommodation, living in one room with her teenage daughter and infant granddaughter. That was a hugely challenging time for her and she needed her friends around her to give her moral support. This morning, she told me that she had been successful in a visa application. She is now in a financially better state, and has found a new relationship with a good man. We need to give support to families when they are struggling through difficult times—and these are difficult times for so many families after years of austerity. Her issue is extreme, but many of the families we are talking about will be suffering severe housing problems. Increasing numbers of children are growing up in bed and breakfasts or hostel accommodation, and even those with more secure accommodation lack clear security of tenure.
Over the weekend, as your Lordships will have heard, a British teacher won the accolade of best teacher in the world. She talked of her experience in Brent, where she was very concerned about housing—so many children living in an overcrowded home and having to work in the bathroom to be able to concentrate.
These families are coping with the stress brought about by years of austerity. They have lost their early intervention services as local services have been cut. This is an opportunity for the Government—yes, perhaps a difficult one—to think about how we can offer moral support to those families. Often, it is mothers bringing up their children on their own, and, as the noble Lord, Lord Bassam, said at the beginning of the debate, giving them the confidence that their child will have a good, healthy, hot meal at the beginning of the day gives them one less thing to worry about. Surely we can reach out to these families and offer them that help. I hope that the Minister will give us that assurance today.
The Lord Bishop of Portsmouth
My Lords, it normally gives me great pleasure to speak in your Lordships’ house, but this evening I speak with some sorrow. I am hoping that the proposals made by the Government—involving, I am sure, the Treasury, the Department for Education and the Department for Work and Pensions—are perhaps the result of the complexity of those interlocking interests and have inadvertently left what surely cannot be intended. The consequences of this policy run counter to everything that the Government have said about the principle of universal credit, which I and many others have supported. If the consequences are unintended then I shall be delighted and relieved to hear the Minister say so.
I have looked at these regulations and concluded that they drive a coach and horses at some speed through the defining principle of universal credit—a principle I wholeheartedly endorse—that work should pay. They create an arbitrary cliff edge at a low-income threshold, off which many risk falling. For working families just below the current threshold, this proposal would very clearly not make extra work pay. They would be better off not seeking more paid work and leaving their children on free school meals, unless their family income increased by some considerable margin. Those just above the threshold will be worse off under the regulations, facing school meal charges. They would be better off working less. That is at best an anomaly, but I am tempted to describe it as an absurdity.
I do not, however, see this as pointing to a flaw or a contradiction in policy design. Rather, it points to the real, pressing and increasingly difficult circumstances that, over the years, families will face. More often than not, this will affect people who are already in work who earn very little—people whose weekly budgets already have little or no slack.
Some Members of your Lordships’ House may recall that recently I chaired a briefing for Members of both Houses. A number of your Lordships may remember Clare, who spoke to us. Her oldest child currently receives free school meals. She and her husband do not want to live on benefits, credits or allowances; they want to get on and get up. Clare’s husband had been made redundant, and after 18 months volunteering in a local school he now works as a teaching assistant and earns £8,000. Clare had worked for 15 years as an NHS dental nurse, but her clinic closed. I quote Clare with her permission. She said:
“We both never, ever thought we would be in this situation. We feel terribly ashamed to have to rely on help”.
Clare is retraining as a solicitor. When she has done so, her husband will complete his own retraining as a teacher; both will incur significant debts. Hers will be £56,000. Clare told me that they have many working years ahead of them and look forward to a future in which taxes are spent helping the vulnerable in society. She feels blessed to live in a society that has a safety net in place for them and others facing short-term difficulties.
These regulations will not help Clare and those like her overcome these short-term challenges. They will add to them and hinder her from creating a long-term future for herself and her family, because Clare has no slack. She told us her family of four,
“survives on £10 a day for our food and petrol … with no luxuries”.
Clare does not understand how the figure of £7,400 has been arrived at. Nor does she understand how introducing an earnings threshold as low as that could possibly benefit people in her situation. I do not understand either. She knows her eight-year-old daughter will, for now, continue to receive free school meals, but what of her son, who starts school in September and other children of their ages? As she observes, initially it seems nobody will lose out, but in the long term more and more people—and more specifically, more and more children—will.
We are potentially creating anxiety, even despair, when we should offer hope and support. We are creating a cliff edge so that work does not pay. The job of this House is often to ask the Government to think again about what may be the unintended consequences of policy. The outcomes of this one are severe. I ask the Government to think again this evening, and I do so from the bottom of my heart.
Baroness Sherlock (Lab)
My Lords, in his very moving opening speech, my noble friend Lord Bassam quoted lain Duncan Smith when he was Secretary of State, saying that universal credit would always make work pay and people would be better off for every hour they work. I want to focus specifically on the question of work incentives. I reassure the noble Lord, Lord Patten, that I trade in facts, which I offer to the House for its consideration.
Iain Duncan Smith’s quote was not a throwaway comment. It was in the foreword to the White Paper which explained why the Government were planning to abolish all the main means-tested working-age benefits and replace them with universal credit. That process is now ongoing. It has had its challenges, as we all know. There have been problems with the system and computers, design and implementation challenges and severe delays. It has been subject to repeated budget cuts with the result that it has gone from being what was originally designed as a benefit to claimants to being a net saving to the Treasury. The whole point of this enormous exercise, which will eventually include some 7 million people, was that it would always “make work pay”. Even small amounts of work and every extra hour would pay. That quote was the aim of the system in a nutshell.
Yet this SI reintroduces the mother of all cliff edges into universal credit. At the moment, if parents work, there comes a point when they lose free school meals, but at that point they gain access to working tax credit, which is worth more. Under this system it would mean if a parent were offered a pay rise—like the mother of the noble Lord, Lord Bassam—or the chance of an extra hour a week working which would take their earnings over a cash limit of £7,400 a year, they would either have to turn that down or take it knowing their children would all lose free school meals.
The excellent briefing from the Children’s Society and the CPAG modelled the impact on a single parent in 2022 at the then-expected minimum wage raising two children in a rented house. She wants to raise her hours from 12 to 16 a week, exactly the kind of thing universal credit is meant to help. Her earnings would go up by £1,893 a year but she would end up £174 worse off by the time she had lost universal credit and free school meals. Other families would actually be better off by cutting their hours or taking a pay cut. This undoes all the progress made by tax credits and all the aims of universal credit of getting away from precisely those problems in the old-fashioned benefit system. Does the Minister acknowledge that there is a problem here?
Baroness Walmsley (LD)
My Lords, I too echo the concerns of the noble Lord, Lord Bassam, about the Government’s proposals to introduce an earnings threshold for eligibility for free school meals and milk. This is very unfair, because it takes no account of the number of children who the parents have to feed. It is a cumbersome way of doing things which will make it very difficult for families to plan their budgets and, as we have heard, will cause a poverty trap for many. This comes on top of recent cuts in benefits which have already made many working families worse off and the food banks busier.
Let me say first why free school meals are so important. There is plenty of research showing that nutrition levels in school meals are vastly better than those in either the average packed lunch, only 1.6% of which reach the same nutritional standard, or certainly those in a cheap bag of chips and a fizzy drink from the shop on the corner. One of the best services we have for school-age children is the provision of a nourishing meal at lunchtime. For some children in poverty, this is the only decent meal they will get all day, and it is essential that it is provided for them if their parents cannot afford to pay. Many teachers will tell you that they have children in their class who come to school without any breakfast. One local authority has taken this so much on board that it has decided to offer free meals for poor children every day of the year. That is because teachers notice evidence of malnutrition in some children when they come back to school after the holidays.
A nourishing, balanced meal containing fruit and vegetables is important not just for the health of the child, providing the vitamins needed for healthy growth and helping to prevent obesity; it is important also for the child’s behaviour and academic attainment. Pilot studies on the effect of universal provision of free school meals for key stage 1 children when they were introduced by the coalition Government showed a distinct improvement in behaviour, and attainment advanced by as much as two months. This was particularly so with children from disadvantaged backgrounds. So it is clear that free school meals are one of the major tools in our armoury for closing the attainment gap between the rich and the poor.
The main objective of our education system must be to help all children attain their maximum potential, and good nutrition is one foundation of this. A hungry child is not a learning child. Anything that has the potential for reducing the number of poorer children who receive such meals should be rejected. Indeed, we should provide free meals for more children, not fewer, because a free meals regime increases uptake, decreases stigma and reduces the number of children bringing in sandwiches and biscuits or going to the chip shop. That in turn improves the attainment of all children.
The Government have told us that 50,000 more children will receive free meals under the new regulations than under the old and promise that no child already on free school meals will lose their meals while at their current stage of education. The problem with that is that children grow up. They get to the end of primary school or secondary school and, suddenly, children who were formerly eligible for free meals will no longer get them. There needs not to have been any change in their parents’ earnings for this to happen because there is now an earnings threshold which takes no account of the size of the family.
Every mum and dad knows that it takes twice as much money to feed two children as one, and three times as much to feed three. That is £10 a week for lunches every week of term, or £20 or £30 for bigger families, which could easily be enough to make it not worth taking a few extra hours’ work. Where then is the fundamental work incentive that is supposed to underpin universal credit? Where now is the mantra “making work pay”?
I am not going to go through the case studies in the briefing, as the noble Baroness, Lady Sherlock, has already done so, but there is clear potential for making a lot of families worse off. The Government need to look at the disposable income of a family once the 63% withdrawal of universal credit for every extra pound earned has been taken account of and school meals paid for. If they do that, they may come up with a fairer system.
School lunches are not a luxury; they are an essential of life for those families who find it hard to feed their children. Of course, we are talking not only about meals; many other passported benefits are linked to free school meals which help make bringing up children bearable. They currently include the early years pupil premium. I beg the Minister to decouple that at the very least, because, again, it is in the interests of closing the attainment gap.
Universal credit was supposed to avoid the cliff edge and make it worth while going to work. By introducing a lower earnings threshold, the Government are creating a cliff edge at a very low earnings level where it will hurt most and undermine the whole point of universal credit. In doing so, they are putting at risk the health and academic attainment of the poorest children. Will the Minister please think again?
Lord Lexden (Con)
My Lords, the noble Lord, Lord Bassam, made his case with characteristic vigour and force, and with deep feeling as he recalled life in the 1960s in a part of Essex with which I was very familiar myself. The Motion states that up to 1 million poor children could be deprived of free school meals as a result of government policies. As my noble friend Lord Patten has shown, independent experts have urged us to treat this truly alarming prediction with considerable caution. We should be wary about rushing to the conclusion that a crisis is in the making.
It is accepted on all sides that the introduction of universal credit throughout our country, so vital in helping more people into jobs, will affect the number of children eligible for free school meals while ensuring that poor families, whose needs must be safeguarded, remain at the centre of policy. Interim arrangements were announced last summer to secure free school meals for all pupils whose parents were at that time recipients of universal credit. Future recipients will be subject to a means test as regards the provision of free school meals to their children. There is nothing new or unexpected about this. It has been a feature of the plans for this major, constructive reform of our welfare system since 2013.
What are the implications? The Department for Education estimates that, in the years ahead, some 50,000 more children will be entitled to a free school meal than under the arrangements which universal credit is replacing. That is welcome reassurance, but the Government should perhaps consider some form of monitoring. I wonder whether arrangements could be made to publish at regular intervals between now and 2022 authoritative figures for the number of children actually receiving free school meals so that the effects of this hugely significant change of policy can be assessed. We need to be sure that the poorest families in our country continue to receive the help they need.
Lord Freud (Con)
My Lords, I want to pick up on two statements made by the noble Lord, Lord Bassam, one of which I agree with and one of which I do not. The first and possibly more substantial statement is the claim that 1 million children will lose out and that the new threshold of £7,400 changes where the line is between when people have free school meals and when they do not. This figure was chosen to try to find the right level for continuing to make that provision, so I disagree with the noble Lord there.
However, where I agree with the noble Lord, as well as the noble Baroness, Lady Sherlock, and the right reverent Prelate the Bishop of Portsmouth, is on the disincentivising effects of what is almost the only cliff edge—rather than a cliff edge, it is almost a waterfall effect; it is more waterfall than the cliff edge that we are used to. Nevertheless, it is there. SSAC produced a report four years ago, which I commend to the House, looking at what we could do with passported benefits generally in order to incorporate them within universal credit and eliminate not just free school meals—there are others, such as prescriptions—and put them within the taper in a way that did not have a cash-flow impact. The report suggested a structure that the DWP response endorsed.
As SSAC pointed out, we have the most passported benefits of any country—they have proliferated—and we need a mechanism to add to universal credits and put them on a taper so that we do not have a disincentive effect. The DWP and this House care about disincentivising work, but other departments do not—they worry about feeding children and so on—so it is important to keep up the pressure in the years to come so that we do not allow these cliff edges or waterfalls to be reincorporated into the system. To do that we will have to design a way of putting the passported benefits into universal credit.
Baroness Lister of Burtersett (Lab)
My Lords, I am very pleased to follow the noble Lord, Lord Freud, because it fits well with what I want to say—but first I pay tribute to my noble friend Lord Bassam for his powerful introduction.
The Government have prayed in aid the report of the Social Security Advisory Committee to suggest that there is not a problem about work incentives. Last week in Oral Questions the noble Baroness, Lady Buscombe, said that when SSAC looked at the issue it found that there was no rigorous research evidence to show that the provision of passported benefits acted as a work disincentive. I am not sure whether the Ministers have read the report—I have it here; it is a right door- stopper—but it actually says that very little is known, which is slightly different.
However, the response to SSAC from the coalition Government was interesting. It said in its introduction to the report:
“The coalition Government endorses the SSAC’s view that the design of passported benefits under Universal Credit can have a key impact on incentives to work ... SSAC notes that there is mixed evidence about the impact of passported benefits on work incentives. However, it is important to highlight that the responses gathered in the review focus on the impact of passported benefits within the current benefits and tax credit system rather than the impact under Universal Credit. This is an important distinction as, currently, at the point some passported benefits are withdrawn, recipients often receive an increase in working tax credits that helps compensate for the loss of the value of the passported benefits”.
Quite—as my noble friend Lady Sherlock pointed out. But this was ignored by the Secretary of State when last week he told the House of Commons that there had always been a cliff edge. He seemed to interpret that as meaning “meal or no meal”.
SSAC’s fears have been borne out by the analysis by Professor Jonathan Bradshaw and Dr Antonia Keung, the Children’s Society and the Child Poverty Action Group—I declare an interest as its honorary president—which has already been referred to. I look to that report also to address a point made by the noble Lord, Lord Lexden. We have always known that what is happening currently is an interim arrangement, that is true, but the SSAC report was six years ago, in 2012. It is not surprising that some noble Lords have forgotten about that, because it was a long time ago.
However, the Government also said then that they would consult on new criteria that year to put in place the new system in October 2013. We have had to wait six years. What took them so long? I suspect that it was because they could not find a way round the cliff- edge problem, because SSAC repeatedly drew attention to the fact that if you go down the route of introducing an income threshold it creates a cliff-edge problem. It did not have an answer to it because there is no answer if you are not prepared to pay for free school meals for all those on universal credit. As has already been said, that undermines the foundational principle of universal credit. Perhaps that is why the noble Lord, Lord Freud—who did so much work on that benefit—is so concerned.
Yes, the Government made this clear in 2012—but the living standards landscape is very different from what it was then. For example, we did not know then that there was going to be a two-child limit on benefits for families. We did not know then that universal credit was going to be subjected to cut after cut. The CPAG has suggested that the average loss for working families on universal credit will be more than £400 a year. We did not know then that working age benefits were going to be frozen. Child benefit is particularly relevant here. Professor Jonathan Bradshaw kindly did some calculations for me—I am not very good at calculations—and calculated that for a two-child family child benefit is worth £2.66 a week less than it was in 2012 when the Government first suggested that they were not going to give it to everyone on universal credit. It is £5.44 less if we go back to 2010. That is in the context of the Resolution Foundation pointing out that for a two-child-plus family, child benefit is less generous than at any point since it was fully introduced in 1979. So, as they say, when the facts change, perhaps the policy should change as well.
Many of these matters come down to how things work in practice, so perhaps I may ask a few practical questions. We know that the earnings of people at the lower end of the labour market fluctuate repeatedly. The Government have addressed how they are going to estimate what those earnings are, but if they are going to be recalculated every month—as in the briefing referred to by the right reverend Prelate from the representatives of the Children’s Society—this will be an absolute nightmare. I cannot see any reference to what will happen to people on zero-hours contracts or self-employed people. Can the Minister explain how their earnings will be calculated?
On the point made by the noble Baroness, Lady Walmsley, have the Government given any consideration to decoupling free school meals eligibility from pupil premium eligibility? As I understand it, it is the latter that costs so much, not free school meals. So it would be possible to pay for free school meals for everyone on universal credit at not a huge extra cost and treat the pupil premium separately.
Finally—I hope this is not too cheeky—when the Minister responds, will he respond to what has actually been said here today? Last week in Oral Questions I got the sense that officials had expected us to say the same things that had been said in the House of Commons the day before. We did not, but that was what the response was to.
I say the same to the noble Lord, Lord Patten. My noble friend Lord Bassam made it very clear what he was talking about. He produced facts from the Children’s Commissioner which showed that the facts that the Government have been presenting over and over again—that 50,000 children will be better off—are fake facts, to quote a certain President. So let us get our facts right and address what people are saying in this House rather than what we expect them to say.
Lord Polak (Con)
My Lords, I also pay tribute to the noble Lord, Lord Bassam. His words about his experiences and circumstances as a child were very moving. However, change is often difficult to deliver. As George Bernard Shaw said, progress is impossible without change, and those who cannot change their minds cannot change anything.
The introduction of universal credit transforms the benefits system by making work pay. At the same time, public resources can be targeted at the families most in need, and that must include setting a threshold for free school meals.
I was particularly struck by the contribution to the debate in the Commons by my honourable friend the vice-chairman of the Conservative party Maria Caulfield. She too talked about her experiences of being brought up in a working-class background where there was no hope and no ambition for working-class kids other than a future life on benefits. Universal credit, I am sure noble Lords will agree, will help such families and such individuals. I will not repeat the arguments made and the reply to the Labour smears of last week; suffice it to say that as a result of the changes we are told—facts—that 50,000 extra children will get free school meals by 2022. I have called them facts; we cannot call them facts because only in 2022 will we know the real facts on any of the projections, but those will be as a result of changes brought about by the Government. As Maria went on to say last week, what some Labour Members did was to spread fear in a political, point-scoring way and use working-class families, shamefully, as a political football. That was clear. It was clear if you read what was in the press.
I was absolutely sure that it must be right that free school meals are intended for the most disadvantaged families on low incomes. Thus, targeting taxpayers’ money at those most in need is the right thing to do. I support the Government’s position, which is good for all, and I remind those who will not accept change of the words of the late Harold Wilson:
“He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery”.
Lord Watson of Invergowrie (Lab)
My Lords, I thank my noble friend Lord Bassam for opening this debate so effectively and, like other noble Lords, I was certainly moved by his personal story. These regulations have brought widespread resistance from opposition parties and Cross-Benchers, as evidenced in this debate, as well as from the children’s welfare and education sectors in recent weeks and months. Apart from the effects of the regulations, anger has increased with the realisation that, inexplicably for such an important matter, no impact assessment was carried out by the Government. Can the Minister explain why?
I agree with the wording of the regret Motion regarding a six-month delay while that impact assessment is carried out; if it was not seen as necessary at the start, when the Government first devised these regulations, it certainly is now, because of the issues that have been raised in debates in the other place last week and in your Lordships’ House this evening. When they were debated in the other place last week, when the Opposition prayed against them, the Government lost the argument that day but fended off the Motion to Annul with the help of the Democratic Unionist Party—hardly surprising, since the Prime Minister had enlisted their support, I would say cynically, by producing a rabbit from a hat by announcing that the regulations will not apply in Northern Ireland. The Government have no such cover in your Lordships’ House.
As noble Lords have said, not receiving free school meals would cost a family around £430 a year for each child. Labour policy is that the children of all families in receipt of universal credit should receive free school meals, and of course that comes at a cost. However, not providing free school meals to the children of families stuck in poverty despite one or both parents being in work also comes at a cost, a cost of a different kind, because a key issue from the education point of view is that free school meals often act as a passport to other support, such as help with school clothing, trips, music lessons or discounted access to leisure facilities. This means that entitlement to free school meals can be worth significantly more to struggling families than the direct value of the meal itself.
The Government say they want to target the families that need free school meals most, and that is understandable and perfectly acceptable, but what about the families that may need it slightly less, but nevertheless genuinely need the benefits of free school meals? The Minister may not appreciate this fact, nor indeed some of his colleagues, but for too many children in poverty, free school meals are the difference between getting a hot meal during the day and going without. As the noble Baroness, Lady Walmsley, and my noble friend Lady Lister said, teachers know only too well that an undernourished child is in no fit state to be taught effectively. The Government should adopt the policy of the Opposition and support all children living in poverty by continuing with the transitional arrangements.
The government position is that it would cost too much: by most estimates around £3 billion a year. But if free school meals were decoupled from universal credit, as other noble Lords have suggested, and as has already happened with infant school meals, which are universally free, then the cost would be substantially reduced, probably to around £500 million a year. That is not an insignificant amount of money, I am not suggesting it is, but is the Minister going to get to his feet and tell your Lordships’ House that his Government cannot afford that relatively modest amount to ensure that children from poor in-work families—I repeat that these are in-work families—are provided with a nourishing meal each school day? If so, then the Prime Minister’s claim to be supporting the “just about managing” will be demonstrably empty rhetoric. If their aim is to target the families that need free school meals most, the Minister has to answer the point made very well by the noble Lord, Lord Storey, as to how children should be treated during school holidays: in many cases they suffer considerably without any access to free school meals in that period.
The Parliamentary Under-Secretary of State, Department for Education (Lord Agnew of Oulton) (Con)
My Lords, I congratulate the noble Lord, Lord Bassam of Brighton, on securing this important debate. I also thank many noble Lords for their contributions today. I will attempt to deal with the important points raised. This Government are committed to providing a healthy free school meal to the most disadvantaged children. I reassure the House that, contrary to some reports, no child will lose a meal as a result of these changes. In fact, more children will benefit by 2022 compared to the previous system.
Let me discuss the technicalities behind these regulations. As your Lordships will be aware, we are reforming the welfare system to ensure that work always pays by replacing a complex and fragmented system with one benefit—universal credit. Since April 2013, all families receiving universal credit have been entitled to free school meals. As my noble friend Lord Lexden said, we have on several occasions flagged up that this was a temporary measure—for example, in the Social Security Advisory Committee report on passported benefits in March 2012 and as repeated in April 2013. As the national rollout of universal credit accelerates, we are replacing this temporary measure with clear eligibility criteria for free school meals to ensure that they continue to be targeted at disadvantaged families.
Under the new eligibility criteria, we have estimated that by 2022 around 50,000 more children will benefit from a free school meal. I want to address the concern expressed by the noble Lord, Lord Bassam, that this included population growth—it does not. In addition, our protections will ensure that no child receiving free school meals now, or gaining them during the universal credit rollout, will lose their entitlement until the end of the rollout, and beyond that until the end of their primary or secondary education. Children protected in this way are in addition to the 50,000 I have just mentioned.
Lord Bassam of Brighton
I am interested in this phasing argument. Say you are in primary school now, and get free school meals. If you fall outside the eligibility criteria, am I right in thinking that when you go to secondary school, in maybe two or three years’ time, you will then lose entitlement to that free school meal?
Lord Agnew of Oulton
The protections are in place until 2022. It is the longer of the period of being in a phase of education or 2022.
Lord Bassam of Brighton
So if you go to secondary school in 2023—which is quite possible if you are in primary school now—you will lose your free school meal. Is that what the noble Lord is telling us?
Lord Agnew of Oulton
My Lords, it will depend on the circumstances of the family at that time.
I turn to the comments about the Office of the Children’s Commissioner, which published a briefing which assumed that the number of 50,000 more pupils who will benefit from free school meals does not take into account population growth. This is incorrect. Our analysis compares 2022 under a universal credit system to 2022 under the legacy benefits system, and population growth is by definition captured within this comparison. Furthermore, the Government have just published an updated equalities impact assessment, on 7 February. The majority of respondents to the consultation agreed with us that there would be no adverse impact on those with protected characteristics.
It is important to add that the £7,400 threshold relates to earned income. It does not include additional income through universal credit. A typical family earning around this threshold, depending on their exact circumstances, would have a total annual household income of between £18,000 and £24,000 once benefits are taken into account.
I take this opportunity to bust a myth. Some have claimed that these reforms will take away free school meals from 1 million children. This is simply not true. As my noble friend Lord Patten said, Channel 4 made this clear in its FactCheck article. It highlighted that this claim is based on an entirely hypothetical scenario in which universal credit was to continue being an automatic eligibility criteria. This was never going to be the case. Contrary to some people’s claims, this Government’s plan will result in more children benefiting, not fewer, and is more generous than the old system.
I also acknowledge the report published by the Secondary Legislation Scrutiny Committee on 1 March this year. We have listened to the committee’s comments and have responded to its report requesting that we publish the methodology supporting the modelling of the 50,000 children who will benefit by 2022. This has been published as part of the report.
The noble Baroness, Lady Lister, expressed concern about fluctuating income. We recognise that some households see their earnings fluctuate on a regular basis and have written into regulations that earnings should be checked over a period lasting up to three months, where the assessment period data is available. We are also exploring ways to ensure that families with very low incomes can receive free school meals during the initial assessment period for universal credit.
Baroness Lister of Burtersett
What will happen with self-employed people and those on zero-hours contracts? I could not find that in the document.
Lord Agnew of Oulton
As I mentioned, we are assessing those who are on very low incomes to ensure that they can receive free school meals. That information will become available in due course.
I hope your Lordships will agree when I state the importance of targeting public resources where they are needed the most. If free school meals were extended to all families on universal credit, as some suggest, this would mean that by the end of the rollout around half of all pupils would become eligible. Some universal credit households are on middle incomes, sometimes exceeding £40,000 a year. We estimate that extending free school meals to all these families would cost in excess of £3 billion more a year by 2022, including the cost of the extra meals and associated school deprivation funding. The additional meals alone would cost in excess of £450 million a year. As the noble Baroness, Lady Walmsley, said, fairness requires Government to direct resources to where they are needed most. These are not the low-income families that we want to target with free school meals, and this is not a sensible or indeed fair use of public money.
The noble Baroness, Lady Walmsley, was concerned about the decoupling of free school meals from the pupil premium. The Government are very committed to providing equality of opportunity so every pupil, irrespective of their background, can realise their academic potential. Since the introduction of the pupil premium in 2011, the difference in the relative attainment of disadvantaged children and their peers has reduced across both the primary and secondary phases. It has narrowed by 10.5% at key stage 2 and 10% at key stage 4. This means better prospects for disadvantaged pupils and a more prosperous life as an adult.
Concerns were raised about conditionality and the use of sanctions. Sanctions are only ever used as a last resort. When considering whether a sanction is appropriate, a decision-maker will take all the claimant’s individual circumstances, including any health conditions or disabilities, and any evidence of good cause, into account before deciding whether a sanction is warranted.
I want to address some of the comments made by the right reverend Prelate the Bishop of Portsmouth and the noble Baronesses, Lady Sherlock and Lady Lister, dealing with cliff edges. Universal credit is designed to be more generous to claimants who take on additional hours, and the smooth taper rate gives incentives to do so because, unlike under the old system, people see more money in their pocket for every extra hour that they work. As my noble friend Lord Polak said, change does involve some disruption, but in general we are seeing a better system for people who want to achieve more and to work harder or to be able to have the opportunity to work. In addition, the well-established links between employment and improved health and well-being mean that there are considerable non-economic benefits for parents who increase their working hours.
Lord Kirkwood of Kirkhope (LD)
I do not think that the Minister has dealt with the absolutely crucial point raised by the noble Lord, Lord Freud, because if we do not have a mechanism that assimilates and deals with passporting benefits, there may be other outstanding issues that will come along and prove to be not cliff edges but waterfalls—I like that description. Will the Minister commit to refer the concerns of the noble Lord, Lord Freud, to the Social Security Advisory Committee? That is the best vehicle for coming up with an evaluation of the work-disincentive effect that these waterfalls and cliff edges are guaranteed to introduce long-term and in perpetuity into universal credit, which is a bad thing for the Government’s own policy.
Lord Agnew of Oulton
My Lords, I am happy to relay those concerns and to take the matter away for further consideration.
Finally, I would like to highlight the five key improvements made by this Conservative-led Government for early years and child care. I give credit to the noble Lord, Lord Storey, as part of his party’s involvement in these important reforms, but I believe that it is incredibly important to put these into context. First, there is the 15 hours a week of free early education for disadvantaged two year-olds, which did not exist before 2010. Secondly, there is the universal 15 hours a week free childcare for three and four year-olds, now with the early years pupil premium. Thirdly, there are an additional 15 hours a week of childcare for working parents. Fourthly, through universal credit, up to 85% of childcare costs can be reimbursed, which is a higher percentage than was ever available under tax credits. Finally, nearly 1 million more families will gain support through tax-free childcare than through the existing voucher scheme.
I hope these five elements exemplify the efforts this Government have made to support vulnerable families. The continued provision of free school meals to children in households that might not be able to afford them remains of the utmost importance, and I would stress that—the utmost importance. Free school meals have always been provided to children who need them most, and we want to make sure that as many eligible children as possible continue to claim them.
Lord Bassam of Brighton
My Lords, I am grateful to the Minister for that rousing conclusion. I have not really heard anything that convinces me that the Government have got their policy on this right. The Minister failed and ducked the issue of the cliff-edge point that was so eloquently addressed by my noble friend Lady Sherlock and others. The Minister actually supplemented and aided my argument on phasing when he said that, yes, it would depend on the individual’s circumstances in 2023, but if they move from one phase of education to the other then of course there would be an issue about whether they continue to have eligibility for free school meals.
I was grateful to the noble Lord, Lord Patten, for reminding us about fact-checking because, for me, he added to the confusion about figures. Part of the argument that we have been pushing over these last few weeks about free school meals is that nobody has quite got to the bottom of the Government’s policy because nobody can be absolutely certain about the data on which it relies. I was very heartened to hear the noble Lord, Lord Freud, express some concern about the waterfall and cliff edge, because that cuts to the core of the issue. We just do not know.
I have tabled a lot of Written Questions on this issue; most of them have not yet been answered. Most of them were directed at trying to find out at what stage of the rollout of universal credit we can expect to have hard numbers and data about the overall impact. I find that most worrying and troubling because the Government have not done a poverty assessment in this whole process. We do not know what the real impact will be of taking away free school meals from people, or what impact the new system will have on populations in the future. The failure to do a proper poverty assessment fatally flaws this new system.
I agree with the Minister and I agree with other noble Lords on the Benches opposite when they say that work should always pay. That is a laudable objective of universal credit, but I am not convinced that the levels are right or that the policy is set in the right direction. I am grateful to my noble friends Lady Lister and Lady Sherlock, the noble Baroness, Lady Walmsley, the noble Lords, Lord Storey and Lord Kirkwood, and my noble friend Lord Watson for their support in this debate.
I have done a bit of a fact check since I have been sitting here. The noble Lord, Lord Patten, went to Wimbledon College; the noble Lord, Lord Lexden, went to Framlingham College; the noble Lord, Lord Freud, went to Whitgift School and the noble Lord, Lord Agnew, went to Rugby. I bet there were not too many free school meals at those schools. This evening we should stand up for those who benefit from this, and I therefore wish to test the opinion of the House.