Housing Benefit (Amendment) Regulations 2012

Baroness Lister of Burtersett Excerpts

Monday 15th October 2012 Grand Committee

If the Minister were chairing my housing association, what advice would he give me? I can tell him that I have spent hours on this issue. I have set up a working party and had nine streams of sub-committees, including all the staff across Norfolk, trying to address the different issues associated with the provision of information to tenants, the financial inclusion of tenants, budget management for tenants, IT for tenants and all the rest of it to help them address these problems and, frankly, we are screwed. How would the Minister help us manage the problems of my tenants, some of whom are the most fragile and poorest in the community of Norfolk, and help them to cope with the changes that he will land on them as of next April?

[Baroness Lister of Burtersett]

I do not think that either the noble Lord, Lord Shipley, or I want to follow the very powerful case made by my noble friend Lady Hollis. We have rightly focused on the bedroom tax but first I want to refer to the CPI uprating, following a point that was raised with us by Crisis. During the passage of the Welfare Reform Bill the noble Lord, Lord Freud, said that,

“if local housing allowance rates are clearly out of step with rents, they can be reconsidered”.—[Official Report, 14/12/2011; col. 1323.]

That was a welcome statement. I understand that there have been discussions between the department and Crisis, and perhaps other groups, in which it has been suggested that in 2014-15 the Government intend to review the method of uprating used. It would be helpful if the Minister could tell us how this review will take place. Will it be a formal review? Will it be part of the more general review of what is happening to housing benefit? What sort of discrepancy between local housing allowance rates and local rent would be deemed out of step? It would be helpful if the Minister could give us that information.

I turn to the bedroom tax, about which much has already been said by noble Lords. Like the noble Lord, Lord Kirkwood, I had not quite taken on board the extent to which disabled people are disproportionately hit by this measure. In our general discussion, we perhaps lost sight of that at the time. My noble friend Lord McKenzie asked the question, which I hope the Minister can answer: are disabled people expected to use their disability benefits to meet any rent that will not be covered? The briefing we were sent talked about a judgment, Burnip, which I admit I had not heard of before. One of the judges made clear that we should not expect tenants to use disability benefits to meet part of their rent.

The Minister started by saying that the regulations are compatible with convention rights but, as a member of the Joint Committee on Human Rights—I am now but was not then—I refer back to its report on the Welfare Reform Bill in which the committee raised concerns about whether there was a problem here for disabled people. The report said that if such tenants were forced to move into properties unsuited to their needs, this might risk breaching their Article 8 rights—respect for privacy or family life—and potentially be discriminatory. Since then, we have had the announcement, welcome as far as it went, of the discretionary housing payment. However, the noble Lord, Lord Best, has already raised major questions about that payment. During consideration of the Bill, I dubbed it the “loaves and fishes of income maintenance”. It feels as though these loaves and fishes are being stretched ever further, even if there is an extra £30 million there.

As the Secondary Legislation Scrutiny Committee points out, the money is not ring-fenced, and once again we cannot be absolutely sure that it is to be used for the purposes intended. The noble Lord, Lord Best, talked about how the money will be stretched and will help only those whose houses have been adapted, but there may be other disabled people for whom there may be good reasons for why they should not have to move, use other income, take a lodger or go into paid work. The situation is not terribly satisfactory.

The noble Lord, Lord Best, said that this money would last indefinitely. I had not realised that that was the case. It would be helpful if the Minister could confirm that this is an indefinite payment. Can he give a government commitment that that money will definitely be there for the current spending review period and that it will be at the very least inflation-proof, or go up in line with rents? Can he give that kind of assurance? I will be delighted if he can but there is a big question mark over the long-term viability of a policy based on a discretionary payment. Will the individual be able to receive it forever, or will they have to keep re-proving their deservingness in order to continue to receive it? All these questions remain unclear.

I do not think that the Minister will be able to put our minds at rest because of our strong case. We are all very unhappy about the regulations themselves but perhaps he can at least give some assurances that the discretionary housing payment will genuinely go some way to meeting the real problems raised by other noble Lords.

[Lord Shipley]

My Lords, I refer to the Secondary Legislation Scrutiny Committee’s comments at paragraph 13, in which it is pointed out, rightly, that the reduction will apply to,

“the total eligible rent for the dwelling, including any eligible service charges”.

Can the Minister confirm which service charge items will be eligible for universal credit? In consultation, these were different from those covered by the current housing benefit regulations, which provide a list of items that are not eligible. Will the revised regulations prescribe the range of eligible service charges and, in practice, reduce the numbers that may previously have existed? In particular, will the Minister clarify which service charges will be included in the definition of,

“services necessary to maintain the fabric of the accommodation”?

Specifically, will the maintenance of fire safety equipment, lifts, door entry schemes and other communal services be deemed necessary to maintain the fabric of the building and therefore be eligible?

Further, will the service charge currently associated with a furnished tenancy be eligible for housing benefit, as it is now? Finally, on concierge services, which include portering, security, caretaking, CCTV coverage and the cleaning of communal areas, will the service charges for these continue to be eligible? I hope they will because, if they become optional, many tenants will not be able to afford to pay and there will be reduced standards, impacting negatively on communal facilities and health and safety.

--- Later in debate ---

[Lord Freud]

There is an implication in that: who takes priority for those new houses and then who do you take off the waiting list for the larger properties? There is then a kind of order of position that becomes somewhat more manageable. Do not forget some of the examples given, such as that there would be children in these rooms. The reality is that for the bulk of people affected by this, their children have left home. That is why they have too many bedrooms. I think the figure is—I am plucking a number from my memory—70% of the people affected by this. I will be hit hard by someone if I have the wrong figure and I will get the right one in a second but, from memory, 70% of these people do not have their children at home. That is obvious because of the underoccupancy effect.

I responded to the question on DHP use from the noble Lord, Lord Best. We are not talking about a ring-fence system with the DHPs. When you have very hard cases, of the kind discussed this afternoon, local authorities can move in and help.

As to the total figure, I have already given that as £165 million for next year. That is made up of the baseline funding of £20 million, £40 million from the LHA reforms, £30 million from the social sector—under the size criteria that we are talking about—and £75 million from the benefit cap. These are the kind of figures for people who have multiple effects.

I must correct my earlier figure of 70%. My memory was just slightly faulty; the figure is actually 66%, not 70%. I apologise.

This is a good time to answer the question of the noble Lord, Lord Best, about making an assurance. Actually, it was not Lord Best. Who wanted that assurance?

[Baroness Lister of Burtersett]

It was me.

[Lord Freud]

It was the noble Baroness, Lady Lister, who wanted that assurance on the indefinite lasting of DHPs. I clearly cannot make any assurances through into the next spending review. To commit into the next spending review is, I suspect, the shortest way to get yourself fired that I know of, in any political party. However, when it comes to adaptations and foster children, the structure of this is not an eroding factor. It might erode, but only very slowly. Clearly, any Government would have to look very closely at how they maintained that type of support when they looked at the next spending review. So if that is some small reassurance, I leave it with the noble Baroness. I do not think I have got myself fired by saying that.

[Baroness Lister of Burtersett]

I certainly do not want to get the noble Lord fired, but will the department be doing all it can to ensure that that money is maintained into the next spending review period?

[Lord Freud]

We are doing a serious review, as the noble Lords, Lord Best and Lord McKenzie, and others have pointed out. We take reviews very seriously. They are public and they provide information to look at as we consider how we go forward. I certainly can say that the department and I take the information from these reviews very seriously. That is as far as I can go at the moment. The noble Baroness perhaps understands better now than when we were going through the Bill when I am making a move and when I am not.

Perhaps I may pick up on a point made by the noble Baroness, Lady Hollis, about overcrowding. Clearly the primary reason for these regulations, and we have made it absolutely clear, is that this is a huge Bill and we have to look at where we want to spend the money and how we make the half a billion pounds in savings. In other words, if we do not make savings here, where else do we make them?

--- Later in debate ---

[Lord Freud]

I do not want to get into a huge debate about housing policy because it is a huge and complicated area. Clearly, we are dealing with counterfactuals. There are some signs of bearing down on rents. During the middle part of this year, rents were below the CPI increase. As the noble Baroness argues, we are probably fighting supply and demand pressure going the other way. Within that, there are some signs that we are bearing down. Clearly, the Government’s strategies on getting more housing, particularly build-to-let, in the private sector as well as social housing are important initiatives. We have 146 providers delivering 80,000 new homes for affordable rent with government funding of just under £1.8 billion. Over the 12 months to August, private rents went up by 2.9% on the LSL rental measure for England and Wales, which is not hugely out of line with the CPI.

Arrears are clearly a primary concern for housing associations. I am aware of that. It is about managing the different proportions. When you look at the pie chart of the number of tenants who are affected, housing associations will have to watch closely how a proportion of tenants are supported. From going around talking to housing associations, I know they are ramping up their support for those groups. One of the interesting things about the housing demonstration projects is how housing associations are saying, “We thought we knew our tenants and we are finding with these demonstration projects that we did not, but we are now establishing completely different relationships with them”. I am sure that the noble Baroness’s housing association knew its tenants much better than the average, but that is what I am hearing from the demonstration projects.

On the point made by the noble Baroness, Lady Lister, the scheme already recognises the need for an extra room where there is a need for an overnight carer in the private rented sector, and we have carried that over into this scheme.

On the point made by the noble Lord, Lord Shipley, the legislation sets out the types of eligible charges, and guidance will provide more detail. We expect the costs to be met broadly as now.

The noble Baroness, Lady Lister, made a point about human rights. We have DHPs to assist people to move, and local authorities must consider human rights and obligations when making decisions about these kinds of cases.

The noble Lord, Lord McKenzie, asked about households not fit for work, and I think I have dealt with that. The two-thirds figure has not changed, and 56% report a disability that leads to a significant difficulty with one or more areas of daily life. That does not necessarily mean that the daily lives of the two-thirds are affected by their disabilities. I have touched on the question put by the noble Lords about what people can do; there are four or five things that can be done.

One or two noble Lords asked about income from lodgers. The first £20 of weekly income is disregarded entirely, which will usually cover the amount of money in the reduction, and half of the remainder is taken into account. I have made sure that under universal credit, the entire amount is disregarded. That is to be introduced from next year. I was asked by the noble Lord, Lord McKenzie, about the average cost of moving home. DCLG estimates that it is about £500 per move. On questions about the CPI, again that is to keep the pressure on. We froze it a year ago so that we can make the standardised changes with regard to CPI in April 2013. I was asked how long that pressure is likely to last. We have made it absolutely clear that we need to keep it under review. People have made projections up to 2030, but we are in unusual times since earnings normally rise faster than inflation and thus drag up other factoring events. Usually one would expect to have to review the figures as those factors come through. I am not sure yet how we will do the review, so I cannot spell it out. However, as we get closer to the right period, we will look at exactly how it will be done. I repeat, we will take it seriously.

[Baroness Lister of Burtersett]

I am sorry to hold the noble Lord up. I understand if he is not yet able to say how the review is to be carried out, but when the department does know that, could he perhaps tell noble Lords?

[Lord Freud]

I have pleasure in giving a commitment that I will tell noble Lords exactly how we plan to do it when we know. I think I have covered all the issues that were raised—

Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Wednesday 29th February 2012 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, I support Motion A1 as the best outcome we could possibly hope for in the current circumstances. However, I would like to suggest another area that the review should look at in terms of a foreseeable consequence, which is the impact of this measure on social support networks. I was an adviser to a Joseph Rowntree Foundation-funded project carried out by some of the people involved in the review instigated as a result of the noble Lord’s earlier intervention: namely, Sheffield Hallam University, which has been looking at the relationship between poverty and place over a three-year period. It produced a report last year which considered these research findings and set them against various explicit and implicit assumptions in government policy. One of the points made in the report was that if forthcoming social housing and housing benefit reforms obliged low-income households to relocate, this might most affect those with the strongest connection to their existing neighbourhood. Surely this goes against so much of government policy. These reforms will make it harder for people to find work because social networks are very important in helping low-income people find work. They will make it harder for those with children to enter or sustain work because social networks are so important in terms of help with childcare. The reforms will undermine the big society. Social networks are the capillaries of the big society. The report suggests that the reforms will reduce people’s feelings of security, safety and sense of belonging. I am sure that this is not what we want. I do not know whether the Minister will respond positively to my suggestion. However, if he does respond positively, as he did with regard to the suggestion of the noble Lord, Lord Best, for a review, I hope that he will take on board the impact of this change on social support networks.

[Lord German]

My Lords, I commend the thrust of this amendment. However, as has been demonstrated, the way in which it is drafted may mean that it does not include everything that we would wish it to include. I would expect the Minister to comment about the way in which a review should be conducted. I do not wish to sound like a well-worn record but I have a long-standing view about the way in which major shifts and changes should be reviewed. It is absolutely essential that any part of the Bill which has profound implications for change should be reviewed in a proper manner. I wish to use two analogies—a route map and a set of milestones. We use a route map to get a sense of direction, find out where we can turn off a route and make diversions, whereas a milestone signifies the distance that we have travelled. Reviews which rely solely on milestones do not necessarily fulfil the point to which the noble Lord, Lord Best, referred: namely, to make changes on route. That is one of the key issues for any form of review of major change.

The Government’s principal success in this field was their appointment of Professor Harrington to undertake a series of milestone reports. One of his reports was colloquially referred to as his report number one and a half. He continually places on record what he sees as being the changes which are necessary. He has followed different routes and different avenues in looking at the whole issue of the WCA and the way in which it is adopted. That has enabled the Government to make changes as they are going along. I commend the suggestion to the Government that they should think carefully about appointing independent people to conduct a continuous evaluation so that we not only have the milestones when formal reports have to be submitted but changes can be made as the need for them arises. Such a process gives flexibility to the people who are conducting the evaluation to address problems as they emerge.

I make no apologies for returning to the issue of foster carers. I raised it in Committee, on Report and I raise it again today. As we have just heard, the sum of £30 million is intended to support 40,000 households which contain disabled people or foster carers. What analysis has been done of the adequacy of that sum or of whether 40,000 households is the correct figure to cover people who fall into both those categories? I refer specifically to foster carers. We have a distinct shortage of foster carers in our country. Only 65 per cent of children in care are in foster care, which means that many thousands of children who could benefit from this provision if appropriate foster homes could be found for them are missing out. However, it is natural and reasonable that social services departments and fostering services place increasing emphasis on the importance of finding a good match vis-à-vis a child and a foster carer. That has inevitably led to a longer time span in appointing foster carers. Did the Government take that extended time span and the increased demand for foster carers into account when calculating the support that they would make available to the groups I have mentioned? We do not know how many of the 40,000 households include disabled people and how many include foster carers. I should be grateful to my noble friend if he could respond to those points.

In conclusion, I commend to the Minister the review process proposed in the amendment. As has already been pointed out, some noble Lords may think that the amendment should include other matters. Its proposed new subsection (3B)(g) would allow other matters to be taken into account. One might want to refer to the problems caused by disrupted education. I believe that noble Lords have referred to that in previous debates on the Bill. It seems to me that the amendment may not have the right wording but its sense of direction is very appropriate. I hope that my noble friend the Minister will be able to accommodate its main thrust.

Jobseeker’s Allowance (Domestic Violence) (Amendment) Regulations 2012

Baroness Lister of Burtersett Excerpts

Monday 27th February 2012 Grand Committee

[Lord German]

My Lords, I will follow the noble Lord’s questions with a number of other issues that relate to these regulations. The first concerns the title. I am always in favour of government being connected across the piece. The regulations refer to page 11 of the handbook for health professionals. On page 10 there is a straightforward definition of domestic abuse that was provided by the Home Office and adopted across government. I will read the subsequent paragraph because it refers to something that is in the title of these regulations and to a change that it is seeking. Perhaps the Minister will consider it.

The handbook states:

“The term ‘domestic violence’ obviously covers a wide range of abuse—physical and otherwise. It also covers issues that mainly concern women from minority ethnic backgrounds, such as forced marriage, female genital mutilation and so-called ‘honour violence’. Throughout this handbook, we use the term ‘domestic abuse’ instead of ‘domestic violence’ wherever possible, because we are concerned that the latter might be interpreted as physical abuse only. We have, however, made use of information and statistics on ‘domestic violence’ and so have kept to that terminology in those instances”—

of straightforward domestic violence. Over the page are the definitions, which the regulations refer to. They are really a set of examples—physical, sexual, psychological, financial and emotional. If there is a cross-governmental approach to this, why do the regulations not use the term “domestic abuse” instead of “domestic violence”? It is a wider definition. The examples on page 11, which the regulations refer to, are not examples of domestic violence but of domestic abuse—the term used on the previous page. Perhaps my noble friend will consider whether the title of the regulations is wholly appropriate.

My second question concerns the evidence that should be provided. A broad range of people—Members of the House of Lords are not mentioned—can produce evidence on behalf of a claimant. The group includes the police. I presume that this is because when someone has resorted to making a complaint to the police, the police will be required to provide that evidence. Perhaps my noble friend will explain what evidence the police will be expected to provide in order to justify the continuation of a claim before them for discretionary easement.

My third question concerns discretion levels. There is a clear process that moves from four weeks to a total of 11, with individual weeks being added up as necessary rather than being taken en bloc, and with nine of the 13 weeks being taken in blocks as necessary. However, sometimes in the first four weeks that people have to provide the evidence, it may not be possible to provide that evidence if they require a public body such as the police to provide a letter or a pro forma to be completed, because sometimes the public bodies are not quite as quick as you might wish them to be. Is there any discretion for the Jobcentre Plus adviser to ease that four-week period and make it a little longer, if evidence is on its way from a public body that might exceed the four-week exemption period, and extend it to a further nine weeks?

I welcome the order before us. It seems a very sensible and very helpful move, and I commend the Minister for bringing it forward.

[Baroness Lister of Burtersett]

My Lords, I, too, welcome the order. I particularly welcome the very broad consultation that appears to have taken place, and the fact that—for once—there have been changes as a result of that consultation, which is very good to see.

The Explanatory Memorandum says that concerns were raised about some of the detail. In particular, it discusses:

“imposing time limits on the time a claimant can have to obtain evidence, and about having a maximum allowable deferral period”.

Were any other concerns raised that are not discussed in the Explanatory Memorandum? If so, perhaps the Minister could relay them.

The main issue I want to raise is in support of what my noble friend Lord McKenzie said about this being confined to victims of domestic violence or abuse where the perpetrator is living at a different address. Research in the United States shows that it is not unusual for a man who is abusing his partner to use violence to prevent her seeking paid work—for the obvious reason that he wants that woman under his control and if she gets paid work she can be independent of him economically. We know that economic dependence is linked to psychological dependence and makes women much more vulnerable to abuse. I am not aware of similar research having been done in this country but it seems quite plausible, now that partners are subjected to conditionality rules, that there will be situations in which someone may be prevented from seeking work by the violence or abuse of someone they are living with—and this will not allow for that. I would welcome the Minister’s response on that.

[Lord Freud]

My Lords, as one would expect, this has been an interesting debate with some valuable contributions. I shall try to deal with the questions—slightly at random, if noble Lords will forgive me.

The evidence can be supplied by a very wide range of bodies: healthcare professionals, the police, registered social workers, employers, trade union reps, and public, voluntary or charitable bodies. My noble friend Lord German was concerned about the process being slow, but that is probably a pretty rare circumstance. Clearly there is the back-up of the domestic emergency discretion that is allowed to Jobcentre Plus when, after four weeks, the letter has not arrived and it looks as though the body is being slow in supplying it.

Both the noble Lord, Lord McKenzie, and the noble Baroness, Lady Lister, raised the issue of not living at the same address. Of course, that is how the primary legislation was framed; it says something about having to leave the address. The regulations provide financial support for a person when they have left the address, and the support is provided in order to help a person to move on. However, this is an interesting point. The noble Baroness, Lady Lister, talked about the interplay between conditionality and violence. I will bear that in mind as we look at universal credit, for which we are ramping up the conditionality. There might be households in which on the one hand the state says “go to work” and on the other hand the partner is using violence to prevent that. I suggest that that is an interesting, although I suspect rather narrow, group, but we need to keep it in mind. Overall, the purpose of this easement is to support changes in individual circumstances. That is what it is for, and clearly staying in the same place would not mean that such a change was made.

Social Security Benefits Up-rating Order 2012

Baroness Lister of Burtersett Excerpts

Monday 27th February 2012 Grand Committee

Nevertheless, can the Minister say whether, should the CPI be refined—and there is some work going on to do this—to show a higher rate for inflation than the current basis, the Government would adopt that?

[Baroness Lister of Burtersett]

My Lords, I will focus on the Social Security Benefits Up-rating Order, particularly its implications for people of working age.

As someone who is always quick to criticise the Government when I think they are doing the wrong thing, it is only proper to acknowledge and applaud the Government when they are doing the right thing. As my noble friend Lord McKenzie said, they have ignored the siren voices calling on them to tamper with the normal uprating mechanism in order to save money simply because inflation happened to peak in the month on which the uprating is based.

One reason why it is so important that the uprating is maintained, as the Minister himself said in a Written Answer on 10 January, is that:

“The increase in the cost of living faced by those receiving benefits is likely to be higher than for other groups, as those on the lowest incomes spend a greater proportion of their incomes on food, fuel and energy, the prices of which are rising particularly rapidly”.—[Official Report, 10/1/12; col. WA 9.]

This was borne out by a recent Resolution Foundation report, which states:

“Because the costs of essential goods and services have been rising much faster than standard rates of inflation for some time, households on modest incomes have fared far worse than official data suggests … With the cost of an essential basket of goods now rising significantly faster than general inflation, more and more low to middle income households will not just fall behind those above them, but also behind what is widely considered to be a minimum acceptable standard of living”.

The report further states that,

“indices based on average spending, like the CPI or RPI, are much more appropriate for households at the average than for households on lower incomes”.

The Resolution Foundation suggests a new index based on the minimum income standard, which, as the Minister will remember, we discussed at some length in Grand Committee on the Welfare Reform Bill. It is an idea that is worth looking at. The Resolution Foundation report also points out how the switch from the RPI to the CPI aggravates the situation. This is where I have to part company with the Minister, as I am sure he would expect.

An Institute for Fiscal Studies press release on the September inflation rate points out that the adoption of the CPI means that many,

“benefit recipients will be worse off than they would otherwise have been … Over time this change will prove to be the biggest change to the welfare system so far implemented by the government”.

Although the impact so far is relatively small, it will compound indefinitely over time. Even a small impact is significant for people on very low incomes.

Like the Minister, I will not go into all the technical arguments that we had on the previous occasion about CPI. The Minister said something about economists being very supportive of this, but after our previous debate I received a letter from a retired economist who had written to the Minister challenging what he had said in the debate about the technical arguments. I will not bore the Committee with it now but I should just remind him that it is perhaps just as well that he did not repeat them today.

My noble friend Lord McKenzie referred briefly to my final point. Steve Webb in the House of Commons talked about the burdens on the low paid. He said:

“That is why we are keen to raise the tax-free personal allowance”.—[Official Report, Commons, 23/2/12; col. 1070.]

In that debate in the Commons, however, no one mentioned child benefit. I talked about this last year. I do not apologise for talking about it this year and I will talk about it again next year. As long as child benefit is frozen, it is crucial that we remind people of its significance and tell those who are too young to know that child benefit replaced personal tax allowances as well as family allowances. It therefore should be treated as the equivalent of personal tax allowances. It makes no sense to freeze child benefit when so much emphasis is being put on raising personal tax allowances as a way to help low income people in work, in particular those with children. Obviously, child benefit will help only those with children, but it helps those whose income from work is too low to pay tax. The more that the Government succeed in raising personal tax allowances, the more people will be in that situation every year and their child benefit will be frozen.

This message is perhaps as much for Liberal Democrat colleagues. I hope that they will take it back to the Deputy Prime Minister in the very public negotiations that are going on about the Budget at present.

[Lord Kirkwood of Kirkhope]

My Lords, I am happy to add that to my long list of things that I will be taking to the Deputy Prime Minister from time to time. I am pleased to make a short intervention in this debate. I, too, was massively relieved that the full uprating undertaking was delivered. It must have been very difficult for Ministers. I was frightened to death that the pressures on them would make them buckle and I am genuinely pleased, as well as massively relieved, that the commitment was held to. It is a very important signal. I do not care who gets the credit in the coalition. Ministers did well and I want to recognise that openly.

I have a couple of technical, almost philosophical matters with which to worry the Minister. We always have these arguments. I know that this is a pay-as-you-go system and that this is not money just lying in a bank. The thing that has changed for me is the table at item 6, where the Government Actuary is looking at projections beyond April 2013. The balance in the National Insurance Fund goes from 55 per cent in 2010-11 to 30 per cent in 2016-17. That is a dramatic drop. Can the Minister explain that? It may be a deliberate contribution to deficit reduction, but the balance in the National Insurance Fund has been quite high for some time. Perhaps that reflects the buoyancy of the economy. I am not an actuary, but perhaps the Minister could say a word about that. If he cannot, a letter would do. The Committee would like to hear a little more about going from 55 per cent to 30 per cent in that relatively short space of time, because we may want to return to it.

--- Later in debate ---

[Lord McKenzie of Luton]

Perhaps I may intervene. I am sorry, but I did not know whether the Minister was about to wind up, so perhaps I could revert to a couple of the questions which are left outstanding.

In relation to the savings credit and passported benefit, the issue is that if there are, as we now know, 30,000 fewer people claiming savings credit, presumably there are some savings in respect of passported benefits that would go with that. The question is whether those savings are factored into the savings needed to produce the guaranteed credit upratings.

There were a couple of other items. In relation to non-dependant deductions, it was asked whether we could be told what the reduction in housing benefit and council tax benefit is estimated to be as a result of those changes. In relation to the small business issue, and the £45,000 threshold, I was trying to determine whether, because of increases in national insurance and fiscal or national insurance drift, the same thing would happen as with tax drift, where effectively more people are being excluded from the benefit of 100 per cent reimbursement, because in real terms it is declining.

There is one other issue—perhaps the Minister could deal with it in writing—which is the relationship between the uprating of guaranteed credit and the basic state pension. I am indebted to my noble friend Lady Drake for bringing to my attention some interesting material produced by the PPI showing the impact of pension credit over several years. The component that would produce the biggest reduction in the percentage of pensioners living below 60 per cent of median income would be if the current policy plus guaranteed credit were indexed to the triple lock. That would have a more beneficial outcome than the current policy, where guaranteed credit is indexed to earnings, although I accept that this year it is earnings-plus, but that is still not the same as earnings plus the 5.2 per cent.

[Baroness Lister of Burtersett]

To save the Minister getting up and down, I would appreciate a comment on the point that I made about child benefit. Perhaps it is more appropriate for the noble Lord, Lord Sassoon. What is the logic of putting so much emphasis on increasing personal tax allowance in real terms and then freezing child benefit, which is the equivalent of a personal tax allowance?

[Lord Freud]

Perhaps I may deal first with the point made by the noble Baroness, Lady Lister, although I am sure that my noble friend Lord Sassoon will provide a much more sparkling answer. My answer is that, as we look forward into a world where the poorest are supported by universal credit, which is very targeted—

Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Tuesday 14th February 2012 Lords Chamber

Moved by

[Baroness Lister of Burtersett]

As an amendment to Motion D, at end insert “but do propose Amendment 23B as an amendment in lieu”

23B: After Clause 53, insert the following new Clause—
“Condition relating to youth: review
In section 1 of the Welfare Reform Act 2007 (employment and support allowance) after subsection (3A) there is inserted—
“(3B) The Secretary of State shall conduct a review of the impact of the provisions of subsection (3A) on such persons as are affected by those provisions.
(3C) The review under subsection (3B) shall commence twelve months after subsection (3A) has come into force; and a report of the review shall be laid before both Houses of Parliament within three months of the review commencing.””

[Baroness Lister of Burtersett]

My Lords, I admit that this is not the amendment that I had wanted to move but I have been prevented from moving that one by the—and I hope that this is not unparliamentary language—sneaky amendment that the Government passed on the evening of 11 January, which ran contrary to the earlier decision made by your Lordships’ House to protect the ESA youth provision. This amendment simply calls for a report on the impact of its abolition so that the young people affected are not left completely in the lurch.

Noble Lords will recall that we are concerned here with the abolition of a provision which has been an accepted and uncontested part of social security legislation since 1975. It enables young people who have been disabled from birth or childhood to access contributory employment and support allowance without having paid the necessary contributions on the grounds that they cannot be expected to have paid them.

I shall not go over all the arguments that have already been made but I want to pick up one point that the Minister made—that young people who do not qualify for income-related ESA have independent means. I find it strange that the Government, who have such concern about so-called welfare dependency on the state, do not seem to understand that in the 21st century an adult who has to depend totally economically on another finds that demeaning. It is not right.

The abolition of the youth ESA provision was originally justified on the grounds of administrative simplification, as the noble Lord has said. That argument did not stand up well to scrutiny, so the Government shifted their ground and argued that its abolition was necessary to protect against the effects of a European Court of Justice decision in the case of Stewart, as the Minister has explained. This decision is dated 21 July 2011. The Grand Committee discussed the youth condition on 8 November—three and a half months later—yet the Minister did not mention it. If the implications of the decision were so significant, surely someone in the DWP would have noticed them during those three and a half months. The first that noble Lords heard of it was in January. Interestingly, in January the department was also rebuked by the UK Statistics Authority for rushing out figures on benefit tourism with insufficient regard to weaknesses in the data. The National Institute of Economic and Social Research argued that these same figures disproved ministerial claims about benefit tourism. I raise this only because I wonder whether the ESA youth condition has not become the victim of a moral panic in the DWP about the much exaggerated problem. That is not to say that I am defending benefit tourism, where it happens.

More importantly, I have received advice from Dr Charlotte O’Brien, a law lecturer at the University of York. She is an expert in this area and I am very grateful to her. She disputes the department’s interpretation of the implications of the Stewart case. In her view, the Government’s “claim that ‘we could end up paying this benefit, on a long-term unconditional basis, to more people who have never lived in the United Kingdom but who can simply demonstrate a link to it’; and the suggestion that the ruling makes ESA in youth much more widely available are not supported by either the rules on social security co-ordination or by the wording of the judgment”. I shall not wear the patience of your Lordships’ House by going into detail. I just wish to say that it is unlikely that in many such cases the UK will be the “competent state”—a necessary condition of entitlement. However, where it is, it is still open to the UK Government to apply a “real link test”, which would not be deemed to be arbitrary in the way that the residence test was in Stewart. When I put it to Dr O’Brien that it would appear that the Stewart judgment had been seized on as a pretext, she agreed, adding, “I think it is a very flimsy pretext”.

If, however, the department’s interpretation were correct, it might also raise questions about entitlement to DLA/PIP and attendance allowance. Can the Minister please give the House a firm assurance that there will be no attempt in future to abolish those payments using the same pretext?

Finally, I come to the question of money. The impact assessment for this measure did not include financial savings in its list of policy objectives, yet Ministers have subsequently used these savings as an argument to justify it. What savings are we talking about? The amendment overturned by the House of Commons would have cost a mere £17 million by 2015-16. That is a cumulative cost. It would be really helpful if the Minister could stick to annual costings, or are they so minimal as to be unquantifiable on an annual basis? Surely it is an abuse of financial privilege to slap it on an amendment, the cost of which falls easily within the normal margin of error.

I do not blame the Minister, but in both Houses Ministers have tried to justify the abolition of youth ESA as part of what they have called the Government’s “principled approach to reform”. I believe that this mean-minded little measure and the justifications put forward for it, together with the application of financial privilege and the manner in which the Government moved their own amendment on Report, are totally unprincipled. I beg to move.

--- Later in debate ---

[Lord Freud]

My Lords, I am always delighted to take the advice of someone who occupied my room in the department for so many years—although I think that there is a progression and that ignoring it early on does not mean that it will not come back. I will not go into this in too much detail. I am sure that the noble Baroness did not mean to say that I was making it up, because I was not.

[Baroness Lister of Burtersett]

Before the noble Lord moves off the point, will he give us the assurance I asked for that, whether or not this is a pretext this time, the argument will not be used to bring forward proposals to abolish attendance allowance, DLA or PIP on the grounds that it is the only way to deal with such cases?

[Lord Freud]

My Lords, that is an enormous question. In this context, I am in no position to give the undertaking. We will have to look very carefully at how we frame our benefits if we do not want them all to be very freely and widely used. That is all I am saying. How we will frame them in the years ahead I do not know. I have not started to think about it. Clearly, we are going through a huge exercise to introduce PIP and it is very unlikely that anything will reverse it for many years. I cannot answer the question because it is too big. However, these are real concerns.

I will go back to a narrower point. We want to modernise and simplify the welfare system. We want to avoid duplication of provision, and to redefine the basis of the contract between the individual and the state. We need to do that in advance of universal credit coming in. We want to place claimants on the same basis as everyone else. All those who do not qualify for contributory benefits will qualify for income-related benefits. The effect in practice will be a streamlined system for these youngsters to receive passported benefits.

The amendment does not work, but I take the point. We will monitor this very closely and keep the outside world, including the Chamber, informed.

[Baroness Lister of Burtersett]

My Lords, I am grateful, first, to my noble friend Lady Hayter of Kentish Town for her very helpful and supportive speech. I also thank the Minister. Of course he is right that the amendment in its current form is not appropriate. As I said, it is not the amendment that I wanted to table. However, it has done what I hoped it would do. It has elicited from the Minister a commitment to monitoring. That is very welcome.

The Minister has acknowledged that monitoring cannot be simply statistical. I hope that it will pay particular attention to the nine out of 10 people who will qualify for income-related ESA. We will want to know how much money they will get relative to what they would have received under a contributory scheme. As my noble friend said, the income assessment suggested that there would be an average loss of £25 per week for some young and vulnerable people. That is a lot of money for them. We will want to know about the situation of the one in 10 who will not qualify. Will it be because of the great inheritance they have received? Or will it be the case, as I suspect, that their parents have scrimped and saved to ensure that when they die, their son or daughter has a financial cushion—as a result of which they could lose all entitlement to benefits. I cannot believe that the House would want that.

I hope that the monitoring will look at that and will include research to find out how young people feel when they have a partner and no entitlement and so come to depend economically on their partner, on whom they may already depend for physical assistance. Their dependence will become total. I hope that the Minister will discuss with researchers and others—perhaps including Members of this House and the other place—the appropriate monitoring that will take place. I very much welcome what he said about monitoring, and the fact that he will report to the House and to the other place. The time period of three months is too short and we do not want just a one-off report. I hope that there will be a mechanism for enabling us, on a regular basis, to hear what is happening to this group of young people. As my noble friend said, they are very vulnerable.

One thing I found worrying in the Minister's reply was that he was not able to give the assurance that I asked for about the other benefits. I thought that I was asking for a simple thing. It makes me worry about whether there is a plan—I will put on the record that the noble Lord is shaking his head to indicate that there is no such plan—to abolish these benefits. However, I would have felt much happier if we had had a clear assurance that it simply would not happen and that the Government's interpretation of EU law would not be used in that way.

It is not with a heavy heart that I withdraw the amendment because I completely accept, as the Minister said, that it is not terribly good. However, it is with a heavy heart that I feel that we in this House and the other place have let down young disabled people who look to Parliament to preserve their independent income. I feel disappointed that we have not been able to protect that group of people. Having said that, I beg leave to withdraw the Motion.

Motion D1, as an amendment to Motion D, withdrawn.

Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Tuesday 31st January 2012 Lords Chamber

[Lord Freud]

My Lords, let me cut straight to the chase. We have the powers in regulation to do whatever we or any future Government want to do to raise sanctions, so I can provide reassurance to that extent. I will go into a little detail about our plans and what we intend to do, but first I pay tribute to noble Lords because some really interesting and useful ideas were expressed in Committee that we took on board, although I do not think that we took them on board quite as much as some noble Lords would want. We moved a long way and thought about this again more specifically, so I thank noble Lords a lot for that.

We are trying to create a sanctions regime to provide at one level—probably the most important—a deterrent against behaviour that damages a claimant’s and indeed others’ employment prospects. Ending sanctions when a claimant complies with requirements can clearly play a role in incentivising sanctioned claimants to do the right thing. That is why we are moving in the direction of open-ended sanctions for lower-level failures, such as the failure to participate in training or to attend work-focused interviews. In essence, these sanctions apply only until the claimant re-complies, with a short fixed period of a week or a few weeks.

This amendment is about the higher-level sanctions: sanctions imposed for failing to comply with the most important requirements. These are employment-related failures, such as the failure to apply for a job when specifically asked to do so, the failure to accept a job offer, or the failure to leave employment voluntarily. By failing to do these things for no good reason, a claimant is fundamentally breaking the agreement that sits at the heart of jobseeker’s allowance: that they do everything possible to find work in order to be able to support themselves. That is why we believe it is vital that there are clear consequences for such failures. Fixed, substantive sanctions reinforce the message that these requirements absolutely must be met.

As I said on Report, we propose to wipe the slate clean by terminating any outstanding sanctions once a claimant has moved into employment for six months, but we believe that going further and ending these critical sanctions after a few weeks or months of compliance would undermine the clarity of our message and the effectiveness of the sanctions regime. It is worth noting that in the current system sanctions can be imposed for up to six months and are typically not lifted at all on re-compliance.

As I said at the beginning of this debate, we have the powers to end sanctions following re-compliance—we have defined the levels of re-compliance—so if, after a period of live running, we or future Governments wish to change the position, we have the powers to do so. Indeed, this is one area in which it might be very interesting to do some piloting work on how incentives and deterrents actually work.

Just to be techie about this, the powers that I mentioned are in this Bill and in the Jobseekers Act 1995. Clause 19(4)(b) provides a broad regulation-making power to set the duration of a sanction. Existing Section 36 of the Jobseekers Act allows for any regulations made under that Act to be subject to particular exceptions. I am not absolutely surprised that no one could piece that together.

[Baroness Lister of Burtersett]

I thank the Minister for the techie stuff, but what happens to someone who has been subject to a sanction, goes into paid work, through no fault of their own loses that job before the six months is up, then assiduously looks for work daily, just as they are supposed to do?

[Lord Freud]

My Lords, under this construct, they will have to do the six months to wipe off the sanctions. Let us not forget that the sanctions that we are talking about do not involve the full amount of support but the equivalent of the JSA—£63-odd. There will be a very strong incentive on that person to take absolutely anything to fill in the rest of the time.

As I said, this is a very interesting area of deterrence and compliance and how we influence behaviour, which is exactly why I wanted to have the powers to pilot all these things. This is our starting point. Noble Lords have influenced us into making the lift at the six-month level, and it is clearly our best view today on what the reasonable balance is. No one can know yet as we have not done the live testing, but we will do it and we will be able to look at this and get the balance absolutely right. It might need to be milder, it might need to be tougher, but noble Lords will appreciate that if we pilot and test and look at these things in the way that I am describing, we will start to get answers on what works and move away from some of the rather more excited commentary and pressures from some of the media in this area. It could be of great interest to noble Lords if we start to move this into a social science area where we know the answer as opposed to an area where everyone has an opinion.

With those thoughts, I urge the noble Baroness to withdraw her amendment.

--- Later in debate ---

[Baroness Lister of Burtersett]

My Lords, I support the amendment. It is important that there has not been a change in meaning. I know that the Government have their doubts about targets and so forth but they are very important in terms of accountability. I talked a lot last week about accountability in relation to the Social Fund. This is accountability in terms of organisations which are very concerned about what is happening as regards child poverty and enabling them to know what progress the Government are making and are intending to make. I know that certain voluntary organisations are very concerned about child poverty and that there has been a slight shifting here in meaning that could make their job that much harder.

[Lord Freud]

My Lords, Amendment 14 is designed to place a caveat on the amendment to Section 9 of the Child Poverty Act which is already included in the Welfare Reform Bill. As I discussed on Report last week, the amendment to Section 9 is a clarification which confirms the Government’s existing understanding that the requirement in Section 9(7) of the Child Poverty Act for a UK strategy to describe progress can be met with a description of progress in narrative or policy terms, rather than in numerical or statistical terms.

This amendment appears to seek clarification that the changes already agreed by the House will not undermine three requirements on the Secretary of State which are included in Section 9 of the Child Poverty Act; namely, first, that he must publish and lay before Parliament a child poverty strategy; secondly, that he must describe in that strategy the progress that he considers necessary to meet the four child poverty targets by the target year of 2020-21; and, thirdly, that he must describe in that strategy the progress he intends to make over the period of the strategy to reduce socioeconomic disadvantage as far as possible.

I can state clearly on the record that our amendment to Section 9 is not designed to remove the requirement on the Secretary of State to do any of those things. The Secretary of State will continue to have a duty to produce a strategy every three years which sets out the measures that will be taken, and the progress that needs to be achieved, in that period in order to meet the targets by the target year and reduce socioeconomic disadvantage as far as possible. The purpose of our amendment to Section 9 is not to change the substance or effect of the law. The amendments simply clarify how progress can be described—in particular, that it can be described in policy or narrative terms rather than statistical or numerical terms if the Secretary of State so wishes.

I discussed on Report the reasons why we think that this clarification is important. We believe that a requirement to set out the progress required in statistical terms is equivalent to a requirement for interim targets on child poverty towards the 2020 target. Interim targets incentivise the short-term, income-transfer approach that we have seen in the past. That approach has not worked and completely fails to address the underlying problems. This can lead therefore to small amounts of money being given to families just to lift them over the poverty line.

The Government remain committed to eradicating child poverty and improving social mobility. We do not believe, however, that the right way to achieve these aims is by using income transfers to move people above an arbitrary line, so we must focus on tackling the root causes of poverty and changing behaviour. In the long term, those with the lowest level of income can only improve their life chances by keeping pace with those at the top. This is why we must take long-term sustainable measures to improve skills, abilities and aspirations. An income-transfer approach does not work because it is unsustainable and does not deal with or address the underlying causes of long-term deprivation. We will continue to monitor progress through the annual publication of the Household Below Average Income Statistics, the beloved HBAI. However, we think it is very important to clarify that the law does not require the child poverty strategies to set out interim income targets. It is because of this that we cannot accept the amendment. By reintroducing the wording of the original Child Poverty Act, in effect it would remove the clarification that we introduced using the amendment to Section 9.

I emphasise that we remain fully committed to eradicating child poverty, and that amendment does not alter current government policy. We will continue to be required to produce a strategy every three years which sets out the measures that will be taken and the progress that needs to be achieved over the period. This amendment is unnecessary and unhelpful. The requirements it seeks to place on the Secretary of State already exist. All it will do is reintroduce lack of clarity regarding how progress is to be described, and I therefore urge the noble Lord to withdraw it.

Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Wednesday 25th January 2012 Lords Chamber

Moved by

[Baroness Lister of Burtersett]

62BJA: After Clause 132, insert the following new Clause—
“Information sharing in relation to the Social Fund
Before sharing information regarding eligibility for services under section 69(3) of this Act, the Secretary of State shall satisfy himself that the Local Authority is intending to deliver these services in accordance with the purposes set out in the settlement letter that accompanies any payments made from the Consolidated Fund under section 69 and that arrangements have been made to report on the use of these payments.”

[Baroness Lister of Burtersett]

My Lords, this amendment has the support of the noble Lords, Lord Kirkwood of Kirkhope and Lord Blair of Boughton, to whom I am grateful. The noble Lord, Lord Blair, asked me to say that he is lecturing in Oxford and, if he is unable to reach the House in time, to assure your Lordships that he means no discourtesy by his absence. He also asked me to remind the House that he has spoken twice in support of the Social Fund earlier on Report, seeking the Government’s commitment to require councils to preserve this money and account for its spend on the objects of the Social Fund. I know that the noble Lord, Lord Kirkwood, is chairing a committee of the House and I am hoping that, like the cavalry, he will come over the hill—or through the Bar—to my rescue. If not, though, his strong support for an amendment along these lines is on the record both in Committee and on Report.

I apologise for returning once more to the Social Fund, and I will not rehearse all the arguments again. The reason why I have tabled yet a further amendment is that I felt in our previous debate that Members of your Lordships’ House were disappointed with the Minister’s response to the concerns raised around the House—disappointed because the Minister clearly agrees with the central underlying objective of these amendments. As the noble Lord, Lord De Mauley, assured your Lordships’ House, we are equally committed to ensuring that this money is targeted on and reaches the most vulnerable people. Previously, the Minister said that it was quite clear that we need to ensure, if we are putting money out for vulnerable people, that it goes to vulnerable people and is not diverted elsewhere.

The money that we are talking about is that which is currently paid out in community care grants and crisis loans under the discretionary Social Fund to provide vital cash assistance at times of acute need. I note that in today’s Guardian the Minister, Steve Webb, writes:

“To say the social fund is set to be abolished is completely false”.

However, in response to a Written Question from Karen Buck MP on 5 May 2011, he stated:

“The Social Fund is not being devolved to local councils. The Welfare Reform Bill includes proposals to abolish the discretionary Social Fund”—[Official Report, Commons, 5/5/11; col. 898W]—

in other words, the part of the Social Fund that we are debating here today.

The vulnerable people to whom the Minister referred include women who have fled domestic violence, young people who have left care and people with chronic health conditions or disabilities who need help with household items in order to live independently in the community. Family Action, to which I am grateful for all its hard work on this issue, has provided noble Lords with a number of examples of the value of the Social Fund to people in such circumstances. I shall quote just one:

“Lisa was awarded a Community Care Grant after being forced to leave her furniture and most of her possessions behind when she fled a violent partner with her three sons. She lived in a refuge and then temporary accommodation. When she moved into permanent accommodation, she had hardly any belongings and no money to furnish the partially-furnished house. Lisa’s fear of being isolated and lonely in her unfurnished, unpainted room was exacerbating her mental health problems, making her unable to unpack any of the items from her move. She slept in the bed of her middle son and her social worker emphasised how important it was to furnish her room, so she could sleep alone and move towards an independent and organised life. Lisa was awarded a grant for a bed, bedding and drawers, which helped her feel more at home, gave her the emotional strength to start unpacking her boxes, and meant her and her middle son were able to sleep comfortably, alone. She said ‘I’ve been waiting for this flat for six-and-a-half years, and for once in my life I can call a place home for the first time. For once in my life, my kids and I have a home… I just want to get myself better’”.

Family Action says that thanks to this help,

“Lisa was able to start rebuilding her shattered confidence”.

The noble Lord, Lord De Mauley, tried to convince your Lordships’ House that the safeguards that he had offered in response to an earlier amendment would,

“ensure that the money intended for vulnerable people goes to vulnerable people”—[Official Report, 11/1/12; col. 215.]

But there are no real safeguards. There will simply be a detailed settlement letter—and I thank the noble Lord for clarifying the contents of it—a specific revenue grant, and a review of a cross-section of local authorities in 2014-15 to see how they have spent the money. While these are all welcome, they are not by any stretch of the imagination genuine safeguards. There is nothing to prevent hard-pressed local authorities spending the money on other pressing demands—and authorities admitted as much in their responses to a DWP survey. It could be to make up the shortfall from the money being devolved for council tax benefit or even, as the noble Lord, Lord Newton of Braintree—now officially crowned hero on this matter—suggested, be spent on a swimming pool. I note that the noble Lord, Lord Fowler, is now in his seat. The irony of my standing on this side of the House, defending the Social Fund, which I attacked when the noble Lords, Lord Fowler and Lord Newton, introduced it, is not lost on either of us.

--- Later in debate ---

[Lord De Mauley]

My Lords, during the passage of the Bill there has been much discussion of the reform of the discretionary Social Fund, and how we can ensure that the money intended for vulnerable people goes to them—an aim with which, as the noble Baroness, Lady Lister, generously acknowledged, I am completely in agreement. However, imposing restrictions on local authorities through data sharing, as the amendment seeks to do, would take us a little away from the central issue of how best to ensure that the funding achieves its intended purpose.

The noble Baroness’s Amendment 62BJA would mean that the Secretary of State would have to ensure that he was satisfied that a local authority planned to use the funding, which will replace community care grants and crisis loans for general living expenses, for the purposes set out in the settlement letter, before he could share information with a local authority about eligibility for assistance under the new local provision. The Secretary of State would also have to be satisfied that arrangements had been made to report on the use of the funding.

I appreciate the noble Baroness's intentions in moving the amendment. Despite its drafting, and despite what the noble Lord, Lord McKenzie, said, I read it as another approach to the issue of ring-fencing the funding that will go to local authorities. Although I do not think that it will achieve that, I will say, as I said before, that a ring-fence is not the best way to ensure that the money reaches vulnerable people. Ring-fencing would mean that local authorities could be constrained, for example, from investing in existing services, or pooling the money with funding from pre-existing services to provide a comprehensive and effective support system for the most vulnerable people in their communities.

The Government fully agree that it is very important to have adequate controls in place to ensure that the funds are used in the way intended. We have clear agreement on that point. However, I will explain why the amendment is unnecessary. Other controls are in place to provide checks and balances before, accompanying and following the initial allocation under the new provision. Perhaps I have not been adequately clear about these so far.

First, I turn to the current element of the steps that we are taking—what I might call the “before” steps. Departmental officials have already conducted a great number of meetings and workshops with local authorities to support them in preparing to deliver the new local provision. We will continue with this support by holding a series of workshops with all upper-tier local authorities over the coming months. The workshops will consider in detail how transferred funds could be used to maximum effect from April 2013. Through the sharing of ideas and best practice, they will assist the development of new services and will help local authorities identify how the funds can be used to best effect to support the most vulnerable. The participants and outcomes of the workshops will be published on the DWP website as part of our ongoing package of advice and information for all local authorities.

The settlement letter—what I might call the “accompanying” step, because it will accompany the funding that local authorities receive for delivering the new provision—will set out, as we discussed at some length last week, what the funding is to be used for and the underlying principles, and will describe the outcome that must be achieved. On 17 January this year, having further considered our debate of the week before, I laid out exactly what the settlement letter would contain. My noble friend Lord German made the point that local people and communities can hold their local authorities to account. The detailed settlement letter will help them do that. Furthermore, as I explained, in order to underline its purpose the funding will be distributed to local authorities through a specific revenue grant rather than being included with the rest of their general expenditure in the main revenue support grant.

I shall move on to the “following” steps. Following the introduction of localised assistance, the department has already made plans to conduct a review in 2014-15 to obtain appropriate information from a representative cross-section of at least 50 local authorities, which represents one-third of the total, in order to help inform future funding levels. We have committed to using this opportunity to gather further information about the way in which local authorities have used the funding. I contend that this review will be more valuable than the information required under this amendment. It will tell us about how the provision is working and what the funding is being used for, whereas this amendment would require a judgment to be made about the intention of a local authority before it delivers the new scheme. In addition—and this is critical—as local authorities will not know in advance which of them will be involved in the review, the risk of scrutiny and exposure from the review work will also help to drive their behaviours and, in theory, they may otherwise have been tempted not to comply in full.

Turning to the amendment itself, I suggest that it would be unreasonably burdensome to expect the Secretary of State to make a case-by-case check on every local authority that requires information about eligibility from the Department for Work and Pensions. As I said a moment ago, we estimate it would be approximately 150 local authorities. Indeed, the amendment presumes that local authorities will approach the department about eligibility for their local schemes, but this may not happen in every case. It will be for each local authority to decide which vulnerable people in its area would most benefit from the new local provision. This is the point. This is about trusting local authorities. They are best placed to make these decisions, as they will already be working with vulnerable people in their area through the other services that they provide. This local knowledge will help them to decide how to tailor support, and they may not feel that they need to approach the department for any information in order to do this.

Even if the obligation contemplated by the amendment were necessary, which, as I have explained, we contend it is not, primary legislation would not be the place for it. Regulations under Clause 129 will prescribe the purposes for which the department can share benefit information with local authorities, and the agreements reached with local authorities will make clear that the information is to be supplied only if it is for a prescribed purpose—in this case, determining eligibility for the new local provision.

We are already working with local authorities to make sure that they are ready to deliver this support. The settlement letter will make explicit that the funding is to provide a replacement provision for community care grants and general living expenses crisis loans. It will be clear that the funding is meant for vulnerable people and about the outcomes that should be achieved. The review will offer a check on what local authorities have done with the funding they received and will provide accountability.

The noble Baroness, Lady Lister, asked why a light-touch reporting system cannot be set up. Local authorities will be using money in a variety of ways, all directed towards meeting the needs of vulnerable people. Any system, no matter how straightforward, would, by its very nature, have to be complex to capture and assimilate all the money and the varied information.

The noble Lord, Lord McKenzie, and other noble Lords raised Supporting People as a demonstration, in their eyes, of how non-ring-fencing produces a risk. The Supporting People funding was deliberately incorporated into the main formula grant in order to provide local authorities with maximum flexibility. Our funding will not be included in the overall grant. It will be part of a special revenue grant. In addition, we are working and will continue to work with local authorities before the funding is allocated to devise plans for using and targeting the money and, as I have said before, we will review over one-third of them to ensure that the money has been spent appropriately.

My noble friend Lord German, who must have no idea how grateful I am to him for his very helpful words, asked the important question about Wales and Scotland. The funding will not be transferred under the Barnett formula; it will be allocated through a special grant. The funding will be based on the equivalent Social Fund spend for 2012-13, and it should be noted that Scottish policy is also not to impose a ring-fence.

The noble Baroness, Lady Hollis, asked about the tension between upper-tier and lower-tier authorities. The funding is allocated to upper-tier local authorities in order to provide the greatest possible flexibility to local areas. From our discussions with local authorities, we know that a range of delivery models are being considered, some of which will result in some funding being devolved to lower-tier services such as housing. Decisions about the ultimate funding for each area will be determined by a range of local factors, including the location and nature of existing services, and how these align with areas of deprivation and need and the level of funding that will be devolved. In some less deprived areas it may not be necessary or practical to operate a number of services.

Local authorities have been enthusiastic and engaged with this process and I am confident that, given what I have said, they will continue to act in a responsible and fair way to protect the most vulnerable in their communities. I hope I have addressed the issues noble Lords have raised, and I ask the noble Baroness to withdraw her amendment.

[Baroness Lister of Burtersett]

My Lords, I am very grateful to all noble Lords who have spoken. I have to say, when I was calling for the cavalry, I had not expected its generals to be two former social security Secretaries, the noble Lords, Lord Newton and Lord Fowler. I am very grateful to them for what they have said. I particularly thank my new hero, the noble Lord, Lord Newton, for his strong words in favour of the amendment.

The noble Lord, Lord Skelmersdale, rightly said that the key is the settlement letter and what happens if a local authority does not abide by it. I do not know about the noble Lord, but I have not heard an answer to that question. In Committee, the noble Lord, Lord Kirkwood of Kirkhope, and I came to a great defence of the principle of the Social Fund. I would not say that we had been wrong at the time, but we accepted that the Social Fund had worked out better than we had expected. We all agree that it needed reforming. The problem is that reform is not the same as the partial abolition that is taking place now. I would still have preferred the old system of statutory single payments, but that is history and that is not what we are here to discuss.

I am very grateful to the right reverend Prelate the Bishop of Manchester for the point he made about accountability. It is interesting that the noble Lord, Lord German, made the same point in Committee, where I felt that he was not convinced that accountability would be achieved. I know a letter was written to him, and I was not convinced by that letter that accountability would be achieved. The noble Lord, Lord German, raised a question about the local electorate holding local authorities to account. The people for whom the Social Fund is so vital are the people who are least likely to vote in local elections and be on the electoral register. As much as I would like to think that other members of the community will put the interests of potential Social Fund users at the top of their concerns when voting, I am afraid that it is simply not going to happen. Local organisations should not have to prise the information out of local authorities to try to make them accountable at the ballot box.

Yes, we do trust local authorities. This amendment is not about bashing local authorities. This is not an amendment that says, “I do not trust local authorities”. However, local authorities are under huge pressure in terms of spending. We trusted them with the Supporting People grant, but, as I have said, they are making disproportionate cuts in it—not because they want to hurt vulnerable people but because it is easier to make cuts in the money that goes to marginalised groups than it is in, say, weekly bin collection.

I am very grateful to the Minister. I get the sense that his heart is not really in what he is saying today.

[Noble Lords]

Oh!

[Baroness Lister of Burtersett]

He has put up a very noble defence of the Government’s position. But the noble Lord, Lord Newton, put his finger on it. I did not like to say this myself as a member of the Opposition. The resistance to an amendment on these lines is not coming from the Department for Work and Pensions; it is coming from the Department for Communities and Local Government. As the noble Lord said, we should not allow the localism agenda to trump the needs of some of the most vulnerable people in our society.

I very much welcome the full and strong steps that the department is taking to try to engage local authorities in seminars and so forth. That is all very valuable. But ultimately there will be no come-back if local authorities do not use the money for the purposes voted for by Parliament.

I have listened carefully to noble Lords on three or four occasions and each time we inch a little further towards where we are trying to get. But on none of these occasions have I been satisfied that we will achieve genuine accountability and that any mechanisms are in place to ensure that the money voted for vulnerable people will be spent on them. As my noble friend Lord McKenzie said, at a time when we are all being told about public spending being under such pressure, surely it is that much more important that the money is spent on the purposes for which it is intended.

Given that nearly everyone who has spoken has spoken in favour of the amendment and that I do not feel that the Minister has addressed questions put by his own side of the House, I wish to test the opinion of the House.

Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Wednesday 25th January 2012 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, we form a select few still in the Chamber. I remind noble Lords that the Child Poverty Act 2010, which established the Child Poverty Commission, was passed with cross-party support. We believe that there is now similar support for the proposal to expand its remit to deal with social mobility. We welcome that move. However, our Amendment 62F seeks to ensure that the commission has a duty, an obligation and a right to advise Ministers so that the fruits of its expertise, research, understanding and work are put at the heart of decision-making. This is not to replace the Government’s role in decision-making but to input at the appropriate level into the intelligence available to the Minister, as strategies to tackle child poverty are developed and implemented. Amendment 62CZA seeks to ensure that the child maintenance and enforcement policies similarly do not fly in the face of objective, evidence-based advice. The Child Poverty and Social Mobility Commission may be a very valuable think-tank, academic centre of excellence and great publishing venture but without this duty to advise it will not be guaranteed a voice in Whitehall.

We naturally warmly welcome the Government’s Amendment 62JA, which appears to meet our request in Amendment 62K, and which enables Ministers to provide the commission with any resources, including research, which Ministers think are required for it to carry out its functions. Perhaps the Minister will confirm that this will enable the commission to request research directly where it believes that there are important gaps in the data available to it. Will the Minister also outline what might happen if the commission believes that such research is necessary but the relevant Minister does not? While we are delighted that the Government have seen the need for such research, it would be useful if the Minister could also say when exactly he expects the new commission to be established, as we need its input. These amendments are needed to strengthen the role of the Child Poverty and Social Mobility Commission. Amendment 62F is central, not an add-on, to the work of the commission. It would restore the duty for the commission to give advice to Ministers on the preparation of their strategy. The DWP note states:

“The Government believes that policy development should be the responsibility of Ministers … and should not be delegated to arm’s length bodies. The Commission’s current advisory role inadvertently provides a route for Ministers to avoid accountability if the Strategy proves ineffective by shifting responsibility to the Commission”.

It goes on to state that the commission will henceforth only be able to give advice on technical issues around the measurement of poverty and social mobility.

We welcome the strengthened accountability whereby the annual report of the commission will report on progress towards the target. Far from being incompatible with the commission providing advice on the strategy, part of that advice comprises being able to input into Ministers’ thinking on matters beyond just technical issues around measurement. A serious commission with quality members and staff will be hard to establish if it is denied the existing duty of advising Ministers. What, after all, will be the point of it as opposed to having this work done by a university department? There is no chance that Ministers would simply delegate development of a strategy to an unelected commission. It is clearly Ministers on whom the ultimate duty to eradicate child poverty falls, and who will be answerable in this House and elsewhere for the success of that strategy. Placing on the commission the duty to give advice to the Government would strengthen its role and status, allowing it to provide the independent scrutiny, intellectual challenge and source of expertise that were envisaged in the original Child Poverty Act, which passed with cross-party support. I beg to move.

[Baroness Lister of Burtersett]

My Lords, I rise briefly to support the amendment of my noble friend Lady Hayter. However, her case was made on the assumption that the commission will have expertise. The original requirement that commissioners must have expertise relevant to the work of the commission has been taken out by this legislation. Apparently, the Government have argued that, because the commission will be a reviewing rather than an advisory body, the expertise requirement is no longer needed in the schedule. However, as End Child Poverty points out, this makes no sense. Reviewing requires just as much expertise as advising.

I should therefore be grateful if the Minister could give a rather better explanation as to why that provision has been taken out, because it is in danger of weakening the commission. I understand that the commissioners will be appointed through the non-departmental public body appointing process. Can the Minister explain how the process will work in this instance? What type of expertise do the Government believe is necessary for the commission, taken as a whole, to have? How will the NDPB appointment process ensure that the commission has such expertise? We are of course talking about expertise on both child poverty and social mobility. It is perhaps also worth considering not just traditional academic forms of expertise but the expertise born of experience.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, at the start of these two groups of amendments on the child poverty commission, I want to make it clear that this Government are absolutely committed to tackling child poverty. Our child poverty strategy, published in April last year, set out the package of reforms that we are implementing to ensure that no child faces a life trapped in poverty. As part of this, we want to create a new and more powerful commission that can assess the progress made as reforms are implemented.

Amendment 62F seeks to ensure that the commission continues to provide advice to the Minister as to how to eradicate child poverty. As noble Lords are aware, the new Social Mobility and Child Poverty Commission differs from the original child poverty commission in a number of important aspects. First, it will have a broader remit that will encompass social mobility as well as child poverty. Secondly, it will for the first time have the power to publicly assess government progress. The previous child poverty commission’s role was simply to provide advice to government. The new commission is required to produce an annual report that assesses whether the Government are taking the steps that they said they would in their strategy, and it will therefore have the opportunity to hold the Government to account for the steps that they are taking and point out where they are falling behind. This will ensure that Ministers are still responsible for developing the strategy, as is right, but that there is external examination to ensure that it is being implemented.

Finally, the commission will no longer play a direct role in the development of the Government’s child poverty policy. This third change is crucial if we are to maintain our commitment to ensure that unelected public bodies are not established unless there is a clear need for their work to be carried out independently of government. This is one of the three key principles of the review of public bodies carried out by the Government last year. It is the role of the Civil Service, directed by Ministers, to develop policy. This is not a job for external bodies.

We cannot justify establishing a public body to provide advice when there is already a wide variety of ways in which government can access such guidance. Indeed, many of the organisations that we might expect to see represented on such a body provided recommendations on the current child poverty strategy via our extensive consultation exercise. Giving a single public body a statutory power to provide advice to government on child poverty policy also risks undermining ministerial accountability. It offers a degree of scope for Ministers to shift responsibility for their policy to an external body. When publishing its report each year, the commission will have the opportunity to advise the Government on steps that they should be taking to implement the strategy. As an independent body, the commission would be able to respond to government consultations and put points to Ministers, alongside other organisations with an interest. It is a fundamental principle of this Government that Ministers are accountable for the policies and strategies they put forward. Therefore, while we will continue to consult widely on this policy area, we do not believe that the commission should be given a special, statutory role in providing advice.

I can tell the noble Baroness, Lady Hayter, that we are committed to establishing the new commission as soon possible, once the necessary legislative changes are made. That means, given that I need to define “as soon as possible”, that as soon as the amending legislation has been passed we will begin to put the new commission into place.

If the commission thinks research is required but the Minister does not, whether or not a particular request is granted will be a matter for private discussion between the Government and the commission. The commission will be able to request research directly; there is provision for it to do that.

On the issue of the expertise on the commission, raised by the noble Baroness, Lady Lister, we intend that it have the appropriate balance of expertise in child poverty and social mobility and we agree that a commission without specific expertise in these areas would not be effective in carrying out the functions set out in the Bill. How will we conduct the appointment process? All members of the commission, including the chair and the deputy chair, will be appointed using a fair and open recruitment process which meets the standards required by the office of the Commissioner for Public Appointments.

[Baroness Lister of Burtersett]

I am sorry to interrupt, but I also made a point about expertise born of experience. I sat on the Commission on Poverty, Participation and Power, half of whose members had experience of poverty. It was one of the most rewarding experiences of my career, because the insights of those with experience of poverty were such that I could not bring to the subject. Will the Government be open to such expertise?

[Lord Freud]

Yes, my Lords. I hope that I was making clear that our intention is to get people who are experts in the area. It is hard to overspecify what that means, but people in that category could provide a powerful insight. I am not going to write the job spec in detail tonight, but clearly those would be attractive sets of experience for the commission.

Amendment 62CZA would require that any steps taken in relation to collecting child support maintenance should be consistent with advice given by the Social Mobility and Child Poverty Commission. I will stick precisely to the point in relation to the commission rather than straying back into some of the discussions we had earlier this evening. Our view is that the commission should not be involved in developing policy. From that it follows that we do not think that it should develop policy on child maintenance. That is something for which Ministers alone should be responsible—or perhaps responsible for alongside the House of Lords.

Moreover, where payments are reliable and regular, child maintenance provides parents with care with a separate income stream that may improve the lives and life chances of some children in or near poverty. We have concluded that child maintenance payments are estimated to have a small, non-reportable impact on the number of families living in relative income poverty as currently measured and with current data sources.

Amendment 62JA, the government amendment, and Amendment 62K, would both create an explicit provision in the Bill for the Government to carry out research at the commission's request if it so wishes. We addressed that issue briefly in Committee. I gave assurances that having that provision in the Bill is unnecessary. The Bill already enables Ministers to provide the commission with any resources, including research, which Ministers think are required for the commission to carry out its functions. However, given that the issue has arisen again, we decided to table an amendment to allay any remaining concerns. The government amendment provides that Ministers have the power to carry out or commission research at the request of the commission if they so wish.

Before I ask the noble Baroness to withdraw the amendment, I make it clear that the Government do not consider any of the amendments consequential. I commend Amendment 62JA.

--- Later in debate ---

Moved by

[Baroness Lister of Burtersett]

69: Clause 144, page 108, line 41, at end insert—
“(2A) Section 57 (entitlement of lone parents to income support etc) will come into force no earlier than 1 April 2013, and not before the implementation of universal credit.”

[Baroness Lister of Burtersett]

My Lords, yesterday the noble Lord, Lord Kirkwood, said to me, “Trust you to have the last amendment”. I am not sure that it was a compliment. Amendment 69 relates to the implementation timetable for Clause 57, which ends entitlement to income support for lone parents whose youngest child is aged five. This is to be introduced as soon as possible after the Bill receives Royal Assent. This modest amendment seeks only to introduce a delay to the implementation of the proposed change to ensure that it aligns with the planned introduction of universal credit, and to encourage the Minister to put on the record some concessions that would ease the situation of the lone parents affected.

Moving an additional 100,000 lone parents off income support and on to jobseeker’s allowance when their youngest child reaches five is a short-sighted measure in the current economic climate. Increased conditionality and tougher sanctions serve only to add unwarranted pressure on lone parents, when suitable employment opportunities remain sparse and access to further education is curtailed by work-related requirements. Critically, lone parents who find work of less than 16 hours per week will be unable to take advantage of the new childcare support provisions for at least 18 months. This potent mix could leave lone parents stranded on out-of-work benefits and unable to secure the foothold they need to enter the labour market on a sustainable basis.

Longitudinal research with lone parents who had elected to move into employment and with their children underlines the importance of such a secure foothold. The research was carried out for the department and was indeed cited in a note that the Minister kindly circulated on the impact of maternal employment on schoolchildren. This note referred to the evidence in the research of how lone parents’ employment can provide a good role model for their children. However, the research also found that that is not always the case. One of the researchers, Tess Ridge of Bath University, writes that,

“encouraging lone mothers into unstable and insecure labour markets runs the risk of alienating children from the values of employment. For these children work had held out the promise of something better and that promise had not been kept, so they also experienced disappointment and for some an apparent loss of confidence in the value of work”.

In light of such findings, my advice to the Minister is: more haste, less speed. The long-term gains associated with requiring the lone parents of younger children to be available for paid work might be better achieved by adopting this amendment.

As I argued in Grand Committee, gaining a level 3 or higher qualification makes a significant difference to the amount of money a lone parent can earn and increases their chances of upward mobility. Work search and work availability requirements will severely limit the ability of lone parents to gain qualifications and skills that could help them find higher paid employment that is sustainable, and to make the most of opportunities to progress once working. Currently, lone parents can receive a fee remission if claiming JSA. However, they are also required to continue to seek work while studying and be prepared to leave a course if offered employment. If they refuse, they face a payment sanction. It seems to me that in these circumstances work-related requirements inhibit, rather than enable, a claimant’s ability to find better paid employment. This is an unintended consequence, I am sure, and is in fact preventable. Previously, lone parents on income support could complete a full-time further education course, up to and including level 3, when their children started school, and crucially before moving on to jobseeker’s allowance—a benefit with significantly higher conditionality.

The prescribed circumstances in Clauses 22 and new Section 6F—inserted by Clause 49—should, I would argue, permit access to further education up to and including level 3, and training for responsible carers claiming JSA or universal credit. This means that, if undertaking a further education or training course, they should be treated as fulfilling work search and work availability requirements until their course ends or their child turns seven. This would allow responsible carers to “skill up” and increase their earning potential when their youngest child starts full-time education. This is entirely consistent with the Government’s anti-child poverty and social mobility strategies, which emphasise the importance of education and training and the contribution they can make to ensuring that paid work represents the best route out of poverty. The Minister expressed some sympathy with the arguments presented in Committee when he was pressed by the noble Baroness, Lady Meacher, to write greater flexibility into the Bill. I wonder whether he has been able to give further thought to this and perhaps go rather further than he was able to in Committee.

Lone parents require jobs that allow them to be there for their children when they need them. With only one parent to do the school run, care for children when they are ill and support them with their school work, jobs with flexible working patterns are absolutely vital, as is access to affordable, high-quality childcare. On this point, the announcement that the Government will extend support for childcare costs to those working under 16 hours is very welcome. This is due to be implemented as part of universal credit from October 2013 onwards. The demand for jobs of less than 16 hours per week, so-called “mini jobs”, is likely to increase as lone parents of five and six year-olds look for work that dovetails with their caring responsibilities. The extended help with childcare costs will be of particular benefit to this group of lone parents. However, unless the implementation of Clause 57 is delayed, 100,000 lone parents of younger children will be unable to access it for up to a minimum of 18 months, if offered a job of less than 16 hours a week.

Finding the money to pay for childcare can be a significant hurdle for lone parents and is often the straw that breaks the camel’s back when it comes to making work pay. Until very recently, responsible carers in short-hours jobs could access financial help towards childcare costs. Prior to April 2011, a time-limited discretionary in-work childcare subsidy payment was available for lone parents and partners on the New Deal and who worked less than 16 hours. This provision has since been abolished and incorporated into the flexible support fund. This is a generic pot of money for discretionary use by advisers to cover a wide range of claimant’s needs and is available only when all other avenues of possible financial support have been explored.

Might I suggest that introducing an interim payment akin to the previous in-work childcare subsidy would be a positive work incentive for this group of claimants during the interim period? I am sure that Gingerbread, to which I am grateful for help with this amendment, would be keen to discuss the possibilities with the Minister, who has said that he always has an open door.

To conclude, there is a strong case for delaying the implementation of this policy to coincide with the introduction of universal credit in order for the Government to achieve their objectives. However, if this policy goes ahead as planned, it would require the kind of additional interventions that I have outlined, and I therefore hope that the Minister will look favourably on them and at the very least make a commitment to give them serious consideration. I beg to move.

[Lord Freud]

My Lords, as noble Lords are aware, our focus is on supporting and helping to lift children out of poverty and improve their life chances by encouraging lone parents to enter paid work. Evidence shows that paid work is good for lone parents and their children in nearly all circumstances. Indeed, just under 80 per cent of lone parents with a youngest child aged five or six are either in employment, looking for a job, or would like to work.

Many lone parents consider making the transition to work when their youngest child starts school, and it is for these reasons that we announced our intention to align the age at which lone parents could reasonably be expected to look for work to when their youngest child reaches the age of five. This means that once a lone parent’s youngest child reaches the age of five we would want the parent to claim jobseeker’s allowance if they are capable of work. If they have limited capability for work, they would claim employment and support allowance, unless they are entitled to income support on some other ground, for example as a foster carer. If we delay carrying out this change and wait for the introduction of universal credit, we delay bringing these lone parents closer to the labour market, delay making any benefit savings but, more importantly, delay lifting more children in lone-parent households out of poverty.

Picking up the point on the current economic situation, it is important that we do not repeat the mistakes of past slowdowns and allow people to slip into inactivity. In fact, one of the best things about this economic slowdown—and there are not many good things about it—is that we have not let more people fall into inactivity. In fact, there is less economic inactivity now than a couple of years ago. Maintaining our active labour market policies will ensure that people, including lone parents, do not become detached from the labour market and are well placed to benefit when the economy picks up again.

As noble Lords are aware, this is especially significant because, compared to a child of a lone parent who is not working, a child of a lone parent who works part-time is almost three times less likely to be living in poverty, and a child of a lone parent who works full time is five times less likely to be living in poverty. While we want lone parents to enter work, we do not want them to do so at the expense of their caring responsibilities. This is why we maintained the right for lone parents to restrict their availability for work to school hours, and we will retain all other flexibilities within jobseeker’s allowance to ensure that lone parents can balance caring for their child while working. I described all those measures in Committee, and I shall not do so again given the lateness of the hour.

I stress that this initiative is an important lever in lifting lone parent families out of poverty. If it were delayed until October 2013, it would result in about 17,000 fewer lone parents being in work, which in turn would prevent increases in household income for up to 25,000 children. However, in response to the noble Baroness, Lady Lister, I am conscious of the importance of putting together training and employment strategies. When I wrote my report in 2007, the two strategies were so far apart that they never met. They are moving together, and my view is that we should move them as close as we possibly can, so the door is particularly wide open to discuss with the noble Baroness and, perhaps, with Gingerbread how we can achieve that in the months and years to come.

With that explanation, I ask the noble Baroness to withdraw her amendment.

[Baroness Lister of Burtersett]

I beg leave to withdraw the amendment.

Amendment 69 withdrawn.

Child Poverty

Baroness Lister of Burtersett Excerpts

Tuesday 24th January 2012 Lords Chamber

[Lord Freud]

My Lords, we are concerned about the slow way that people on ESA are moving into the work programme and we are looking closely at how to accelerate that process. Clearly, one of the ambitions of the programme is to get the hardest-to-help people back into the workforce, and there has been a rather slow start in that area.

[Baroness Lister of Burtersett]

My Lords, can the Minister explain why the Government dismissed the projected 100,000 increase in child poverty due to tax credit cuts as a “statistical quirk” arising from the relative nature of that poverty when, in opposition, the Prime Minister promised,

“loud and clear … the Conservative Party recognises, will measure and will act on relative poverty”?

[Lord Freud]

My Lords, one of the recent decisions we have taken was to up-rate benefits by the CPI at 5.2 per cent, when average earnings in the period have increased by 2.8 per cent. Interestingly, that is the core reason why the IFS projections for this year and next show a decline on last year. Looking further ahead, we clearly have a lot of work to do in maintaining any reduction in child poverty and the IFS warns us that we need to have government policies to do that. However, I should point out that what we are driving towards is behavioural change, whereas the IFS measures concrete changes of income transfer.

Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Monday 23rd January 2012 Lords Chamber

[Baroness Corston]

My Lords, I want to speak briefly about child benefit. I was very proud of the fact that in 1977 the then Labour Government, under Jim Callaghan, brought in child benefit. At the time, there was a huge campaign saying that it was taking money out of the wallet and putting it in the handbag. We said, “Yes, that’s exactly what it is going to do and it is exactly what it should do”. My noble friend Lady Gould, who was my boss at the time as chief women’s officer for the Labour Party, and I played our part in making sure that Jim Callaghan knew what the women of the Labour Party thought about child benefit.

I want to address my comments to a particular part of this argument about child benefit being a benefit that is paid to the carer of the child. It is money that goes to women. In my work with women in prison, I have more than once come across a tragic phenomenon where a woman shoplifts. I know of a case in the south-west of England where a woman shoplifted 99 times in a year, each time for food for her children. Her husband had control of the family income—whatever that family’s income is, and it might be benefits. The only money she had was the child benefit and all of it went on feeding her children, but it was not enough and she therefore stole food. I say to the Government: you think very carefully about the effect that any incursion into child benefit—as a universal benefit payable to the carer of the child, irrespective of income—will have, and that is a hugely important principle. If people do not need the benefit, then use the income tax system to make sure that there is a redress, but please do not, without thinking very carefully, attack a benefit that is the only means whereby some women can feed their children.

[Baroness Lister of Burtersett]

My Lords, the noble Lord, Lord Hamilton, asked questions about the morality of the current situation. I should like to ask this House, following the point made by the noble Lord, Lord Kirkwood: is it moral that we are deliberately pushing families with children below the level of income that Parliament has decided is necessary to meet their most basic needs? Research shows that that money is not sufficient to meet those basic needs, as determined by the wider population.

A number of noble Lords, including the noble Lord, Lord Fowler, on the government Benches, have asked questions about costs—I had a wonderful vision of the noble Lord wearing his “Action for benefits” badge in front of the mirror. In the other place, the Minister said that this is not primarily a cost-saving measure. What is it? He said it is primarily about changing behaviour, but my noble friend Lady Sherlock pretty well demolished those arguments.

The Minister also said that this is about restoring the credibility of the welfare benefits system. However, that credibility is being undermined by the misinformation being put out by Ministers about that system—in particular, the way that they slide between talking about average incomes and average earnings as if they are the same thing, when they are not. The median family in work receives £33.70 in child benefit as well as various other in-work benefits. The point was made that child benefit replaced child tax allowances. If that had not happened and we still had family allowances and child tax allowances, the median earnings of the average family would be that much higher because of the effect of child tax allowances. It is therefore really unfair that we are not comparing like with like and, as my noble friend pointed, when the Minister was pushed on this issue in Committee regarding how he could justify the fact that we are not comparing like with like, he simply did not have an answer.

[Baroness Wheatcroft]

My Lords, I did not join your Lordships' House in order to kick the underprivileged, particularly children, but I did believe that the Government were committed to healing the broken society. I do not think that any of us can doubt that society is broken, and we would all agree that there is a need to heal it and that dealing with the dependency culture is an important part of that. That is something that I believe in absolutely. That is at the heart of this legislation. To my mind, the worst sort of child poverty is poverty of aspiration.