Welfare Reform and Work Bill

Baroness Hollis of Heigham Excerpts

Monday 25th January 2016 Lords Chamber

Moved by

[Baroness Hollis of Heigham]

26: Clause 7, page 9, leave out lines 15 and 16

[Baroness Hollis of Heigham (Lab)]

My Lords, guardian’s allowance is not separately listed in the Chancellor’s Excel sheets of benefits and budgets in the Autumn Statement. It is invisible. However, it emerges from obscurity to be included in the benefit cap.

What does guardian’s allowance do? Why does it matter and why should it be exempt? Guardian’s allowance supports those at the sharpest end of kinship care, not where parental care is extremely neglectful or unstable, as it is for many children in kinship care, but where no parental care is possible at all. It goes to those caring for orphans. Usually they are physical orphans whose parents have died but, very occasionally, they are what the Victorians would call moral orphans—the father is in jail and the mother is an addict or on the game, sectioned or imprisoned.

More usually, the mother has died and the father is missing, not known or not registered on the birth certificate. There is no known parent. Sometimes, sadly, both parents have died in a car crash. In one case, a lorry lost its load and killed both parents in the car behind it. In another instance, an 82 year-old grandparent, not of course herself affected by the cap, learned that her daughter had died of an overdose and 24 hours later her son-in-law followed suit. At 82, she was asked to be guardian to four children. Guardian’s allowance is worth just £16.55 a child on top of child benefit. It goes to those caring for those children: the maternal grandparent, sometimes an aunt, often the close friend of the child’s dead mother. Their guardian receives the allowance until the children leave school.

Why do they need it? The children come to them following an extreme, often unexpected and irreversible emergency, and they come for life. This is not revolving-door temporary care. They immediately need extra bunk beds and bedding and, depending on the home from which they have come, clothes, shoes and toys. There are no grants and no social fund for this. They may need a larger home with higher rent and therefore more housing benefit. They will be the most distressed and traumatised of children and usually it is distressed and traumatised adults who will be caring for them, having themselves lost their daughter, sister or best friend. Such guardians, if in work, usually have to give it up.

Few people know about guardian’s allowance. Government certainly seem to discourage any take-up of it among kinship carers, although I am sure that kindly staff do their best. The result is that only around 2,500 people receive guardian payments each year, a figure that has been stable since my time in DWP. No one can find out the total cost because the Chancellor does not seem to publish it. However, I estimate—and I could be wrong—it is in total perhaps £3 million to £4 million a year.

Most guardians will not be affected by the benefit cap. The maternal grandmother may be of pension age, although with women becoming a grandparent at the age of 51 and the raising of the state pension age, many other grandparents will be trapped.

Other guardians may be in a household where an adult works and is therefore not caught by the cap, but there will be some of those 2,500—perhaps 500 or 1,000—who will be caught by the benefit cap because they too, like the children’s dead mother before them, are in straitened circumstances. They will be her mother, her sister, her friend. They may be on benefit themselves. They probably have children themselves. If they are on benefit, have children of their own and become guardians, they will probably be caught three times over. First, they will be caught by the two-child policy: no additional child tax credit payments for them for cherishing these bereaved, traumatised children. Secondly, if they are in the private rented sector, they will be caught by the various housing benefit caps: no larger home for them, but more children cramped into the same tiny bedrooms as their birth children. Thirdly, if they are near or at the benefit cap, there will be no extra child tax credit, no child benefit and no guardian’s allowance either.

--- Later in debate ---

[Lord Freud]

Amendment 26 seeks to remove guardian’s allowance from the list of those that are included within the benefit cap, so that it is disregarded when calculating the total amount of benefits a household can receive before the cap is applied. Guardian’s allowance is paid to those who are responsible for a child or young person and either both parents or in some circumstance one parent have died. The Government recognise the crucial and valuable role that recipients play in helping children to recover from the loss of their parents, but I do not agree that it should be excluded from the benefit cap. That is about the principle that there is a clear limit to the amount of benefits that an out-of-work family can receive.

In the interests of time, I shall not repeat my previous arguments, but will provide the best information that we have, which is that the noble Baroness, Lady Hollis, is right to say that this affects very few people. On our sums, the inclusion of the guardian’s allowance within the cap affects fewer than 50 claimants—those are the figures that I have. Rather than a blanket exclusion of this benefit, it is better that targeted support is offered to those who need it. That is where the discretionary housing payments of £870 million come into play. On that basis, I ask the noble Baroness to withdraw her amendment.

[Baroness Hollis of Heigham]

First, I thank my noble friend who spelled out the devastating situation in which these children find themselves, and how those who care for them—on kinship care, usually—are therefore entitled to receive guardian’s allowance.

The Minister made two points. First, he said that the principle was that there is a clear limit to benefits that out-of-work families can receive, even when that out-of-work family has taken on the joyless but essential and necessary task of caring for another family’s children. Why does the Minister not consider that therefore they are entitled morally—I am not saying practically, but morally—to benefits for two families, because that is what they are doing? We are not talking about families of their own children; we can argue for that, as my noble friend did, and she was absolutely right to do so.

I am talking about a situation at the extreme end of kinship care, when somebody has taken on responsibility for another family’s children. To say that, on principle, that out-of-work family should not get additional money for doing that—that is not a principle. A principle usually has some sort of moral quality to it. That, I am afraid, is a Treasury statement. I cannot believe that the Minister believes that it is the right policy to uphold in this situation. We should be hugging those kinship carers who are entitled to guardian’s allowance and giving them every support we can. Instead, what we do is to make them poorer.

The Minister’s second point was that he reckoned there were 50 families. I would love to see how he got to that figure. I could not work it out—obviously, because I could not work out how many people were grandparents, how many were in-work families and how many were below the limit, and therefore exempt, because they did not already have children of their own.

If we are really talking about 50 families, why on earth are the Government not conceding? How much does the Minister think this will cost? Let us assume that the average number of children taken on by a guardian is one and a half—in some cases one child, in others two children, and in a few cases three or more. I estimate that that would work out at about £1,000 to £1,200 a year. For 50 families that would be about £50,000 to £60,000 a year. The Minister cannot find £60,000 a year—or £65,000, if we push it—to address this problem? I am going to sit down and ask him whether, in the light of the information he has so far given, he is willing to reconsider his position.

[Lord Freud]

No, I am not in a position to reconsider at this stage.

--- Later in debate ---

[Baroness Hollis of Heigham]

What does that mean—“at this stage”? Is the Minister willing to come back at Third Reading with a little amendment just taking out this group of people, who are among the poorest of the poor, who are taking on the hardest of hard tasks—caring for bereaved and traumatised children—at a time when they themselves are probably also bereft?

[Lord Freud]

Regrettably, as I said, I am not in a position to make any kind of commitment.

[Baroness Hollis of Heigham]

I guess it is my fault. I should have brought this up in Committee and perhaps given the Minister more time to think about it. Perhaps he will look back on today’s proceedings. He absolutely rightly responded to my noble friend Lady Pitkeathley on a situation that we all recognised it was important that he should respect and meet—and not just because of the court case. I suggest to him that this is another such case—and I think he may wish to do otherwise. Obviously I shall withdraw the amendment now, but I would hope, none the less, that on reflection he will feel able, for 60,000 quid a year, to take guardian’s allowance, at the extreme end of kinship care, out of the benefit cap. He will not even notice it—but they will. I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Moved by

[Baroness Hollis of Heigham]

26A: Clause 7, page 9, line 37, at end insert—
“except in the case of persons who are at least 29 weeks pregnant or who are responsible for the care of a child aged under nine months, in respect of whom “welfare benefit” means any prescribed benefit, allowance, payment or credit.”

[Baroness Hollis of Heigham]

My Lords, this amendment relates to a situation that we touched on earlier, when we were debating the amendments tabled by the noble Lord, Lord Ramsbotham. Gingerbread reports that if a single parent with two primary school children is expecting a baby next month, just at the time when her needs increase she will lose £32 in housing benefit because of the benefit cap. The amendment is tightly targeted and would exclude women in late pregnancy—at 29 weeks or beyond—and for nine months following the birth of a child, from the benefit cap.

There are three reasons for this, which I hope the Minister will address. The first is parity with the rights of women in work, the second is consistency with the DWP’s own benefit conditionality rules, which do not apply when a child is under two, and the third is concern for the health and well-being of mother and baby.

On parity, the Government want parents on benefit to face the same choices as parents in work. The Minister has repeated that several times today. Yet when those in work—better-off people—enter late pregnancy or care for a newborn, they rightly get protection and income that reflect their situation. Those on benefit may instead face a benefit cap and therefore an income cut. Parents in work have pregnancy and maternity rights. They can commence maternity leave at 29 weeks, at which point a mother will be eligible for statutory maternity pay or maternity allowance, both of which run for 39 weeks; maternity leave is of course for 52 weeks.

--- Later in debate ---

[Lord Freud]

My Lords, as I have already set out, those with a sustained work history benefit from a nine-month grace period before the cap is applied to them. Therefore, those households that have been in employment for at least 50 out of 52 weeks will be exempt from the cap. This gives time for households, including those with a new child, to adapt to their new circumstances before the cap is applied to them.

Households in receipt of working tax credits or which meet the UC earnings threshold will be entirely exempt from the cap. Although some single mothers will not be immediately able to move into work, for those households consisting of couples, the partner need work only 24 hours a week for the household to qualify for the exemption. Around 45% of households that include a maternity allowance claimant who will be affected by the new cap levels are households consisting of a couple, meaning that a partner can help to exempt a household from the cap through work. Households that include a claimant in receipt of maternity allowance may also be entitled to working tax credits and so be exempt from the cap.

Although I am grateful to the noble Baroness for speaking on this issue and for the research that she has put into it, I am not sure that the amendment would do what is intended. It would not create a disregard or exemption from the cap for the specified group; it would, however, appear to make the group subject to a different prescribed list of benefits to be defined by the Government in regulations. That would of course go against the approach that the Bill adopts of providing certainty about the capped benefits by including them in the Bill. I therefore ask the noble Baroness to withdraw the amendment.

[Baroness Hollis of Heigham]

I thank my noble friend Lady Sherlock. The Minister’s answer is that if a woman has a partner, he can increase his hours and she will be okay; if she does not, the amendment is technically deficient and so she cannot be helped. Is that a fair summary of what the Minister has argued? I think it rather is. But what about the situation of a deserted mum? She has one or two children already, she is now pregnant and the man has swanned off. What then? She has no partner who can increase his hours, she already has the care of children and she is up to or at the point of the benefit cap. She is now 29 weeks pregnant and trying to manage a budget, given she is in the private sector, that means she is probably unable to follow the nutritional guidelines and all the rest of it that is heavily recommended for her at this stage. I ask the Minister the same question that my noble friend asked: what is she supposed to do—apart from find another man?

[Lord Freud]

One of the things we have tested rather thoroughly through the courts is the role of discretionary housing payments for the kind of hard cases that the noble Baroness is so adept at finding. This is precisely where one would anticipate that provision, which is quite substantial, being used. The courts have found, again and again, that it is appropriate to use those payments for such cases because they are so hard to define in statute. Because of that difficulty, the flexibility of the DHP is the way to address the issue.

[Baroness Hollis of Heigham]

In that case, why do such women not fall within the Government’s guidelines as having high priority for DHPs? As my noble friend says, they do not. Although I have not been able to verify it myself, I understand that, as a result of that, in most local authorities they do not get such money because the money is not there. They certainly, I suspect, would not get it for nine months after and up to two months before, or something like 11 months’ continuous payment, because local authorities cannot run it. They use DHPs to deal with temporary, immediate emergencies. Therefore, if the Minister means what he says, he should be giving guidance to local authorities that this should be a priority consideration and he should back that with the necessary money, which is not there at the moment, to do so. However, I see that he is standing up, perhaps to respond to that.

[Lord Freud]

I just want to make the point that DHPs can be used for the long term. They are not just a temporary thing and the guidance says that very precisely.

[Baroness Hollis of Heigham]

I do not know how many local authorities the Minister has spoken to about their use of DHPs, but that is not my experience. Obviously, I have not been able to test the opinion of the entire local authority movement, but certainly this is what I am assured. I have crawled over some of the priority considerations of certain local authorities and can assure the Minister that what he is saying does not hold good: there is simply not enough money.

As far as I can see, the only advice the Minister is offering is that these women should throw themselves on the mercy of non-existent DHPs from local authorities whose money is already spent, cross their fingers and hope. I do not think that is a policy. I do not even think it is appropriate for the Minister to possibly suggest that that is what they should rely on. However, at this point, and given the time of night, I beg leave to withdraw the amendment.

Amendment 26A withdrawn.