Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013

Debate between Baroness Lister of Burtersett and Lord German

Monday 21st October 2013 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, there are many issues raised by the claims and payments regulations, but I plan to focus on the two that I raised in our debates on the Bill itself: monthly payments and payment into single accounts. These are lumped together in the guidance on personal budgeting support in a way that is not very helpful, because there are different issues at stake—a point to which I will return. Nevertheless, some questions relate to both matters: most fundamentally on both, the Government have rejected the arguments made by many noble Lords for choice about payment arrangements in favour of a convoluted system of personal budgeting support, which I suspect is going to be pretty difficult and staff-intensive to administer.

The clear injunction in the guidance that alternative payment arrangements are not available through choice would appear to contradict the earlier claim in the guidance that they would be claimant-centric—that is, done with, rather than to, the claimant. While I am pleased that the policy is no longer couched in the language of exceptions and vulnerability, designed to make a claimant feel different, this still appears to be the underlying philosophy.

This is also revealed in the argument that alternative payment arrangements should be temporary, to avoid labelling claimants as financially incapable. However, it is the Government who are in effect labelling them as such, by requiring claimants, who may be managing as well as can be expected, to adapt to payment systems that might simply be inappropriate for their circumstances. This determination to change claimants’ behaviour smacks of the kind of social engineering that sits uneasily with both traditional Conservative and liberal philosophy.

In our previous debate on regulations, the Minister said that he would be able to provide more information about the department’s working assumptions on the number and proportion of claimants likely to be deemed to require personal budgeting support,

“as we work our way through”.—[Official Report, 13/2/13; col. 755.]

As that was eight months ago, is the Minister now in a position to provide more information, as requested by my noble friend Lord McKenzie of Luton in his excellent and passionate opening speech? In particular, will he provide the information regarding those requiring monthly or split payments? Does he accept SSAC’s warning that the range of claimants who require these facilities may be greater than anticipated?

Will the Minister also explain how personal budgeting support will work with couples? In the case of joint claimants, will just one or both need to demonstrate the facts as listed in the annexe to the guidance? Will the decision about whether it is needed be based on a joint interview? Will money advice be offered to both members of a couple and will the Minister also advise us about the progress made with financial products such as jam jar accounts, which he earlier presented as a solution to just about all payment problems?

In July, the Minister was still able to tell the Work and Pensions Select Committee only that he hoped to be,

“coming up with something in the not-too-distant future”.

That is not very encouraging. Has he also taken on board the Social Market Foundation’s warning that jam jar accounts, while potentially beneficial,

“have only partial applicability across the claimant population”,

because of strong resistance from a significant number? Part, though not all, this resistance was because of the likely cost to the claimant. As the Communities and Local Government Select Committee observed:

“More information is needed … on how these accounts would work and who would pay for them”.

The Social Market Foundation cites evidence from the financial inclusion taskforce of the lack of appetite for financial products among about half of the unbanked. Those without a bank or Post Office account will be able to use the Simple Payment service to receive their benefit. As the Minister confirmed in a Written Answer, the problem with this is that it requires claimants to withdraw the whole amount, and not part, of each benefit payment at the same time, up to a limit of £600. This is potentially a lot of cash to withdraw in one go and leaves the claimant vulnerable to both robbery and temptation. Although it is estimated that only about 60,000 working-age claimants will be paid in this way, it is a cause for concern. Why is it not possible to draw part of the payment, as this would surely often be the responsible thing to do?

This brings me to the question of monthly payments, because if it were a more frequent payment, this would not be such an issue. Since noble Lords from across the House first raised concerns about monthly payments, evidence has been mounting to demonstrate just how un-claimant-centric this policy is. It is clear, from both government and independent research, that a significant number of claimants—particularly those out of work—see this as posing a real risk to their financial security. They fear it will upset their budgeting strategies and leave them running out of money.

In a DWP press release about early findings from the direct payment demonstration projects, the Minister acknowledged that the findings,

“show that most people on low incomes manage their money well.”

As SSAC has noted, one of the key lessons was that:

“Budgeting support needs to recognise that people on low incomes often budget on a fortnightly or weekly basis.”

Has it not occurred to the noble Lord that there is a connection here? As the demonstration projects show, many people on low incomes use fortnightly or weekly budgeting strategies as a means of managing their money well. Research shows that mothers, in particular, often take great pride in doing so. By forcing them to change their budgeting strategies, the Government could be setting them up to fail, a message that comes across clearly from the SMF study cited by my noble friend.

That is likely to have an adverse impact on morale, as well as living standards and, in doing so, could undermine the very objective of making claimants more work-ready. Where a more frequent payment is agreed, it will be paid in arrears, in addition to the new seven-day waiting period for some claimants. As the Women’s Budget Group has pointed out, this means that,

“claimants would be paid only half what they are owed for the month seven days after the end of that month and will then wait another half month for the remaining half. This would seem to contradict the Government’s wish to help those who find monthly payment most difficult and can result in hardship cases and requests for advance payments.”

Women’s Aid, to which I am grateful for its briefing, warns that most survivors fleeing domestic violence will have no alternative to claiming a budgeting advance. I appreciate why the Government are not keen to make a half payment in advance, but does the Minister accept that it would create fewer problems than paying in arrears?

As I said earlier, the question of payment into a single account versus a split payment raises rather different issues to that of monthly payment, even if both are likely to have adverse gendered impact. It is about access to, and control over, money rather than about managing it. The erroneous treatment of split payments as a management issue is illustrated by the guidance on when to review alternative payments. It says that the adviser,

“will decide that the claimant is now capable of managing the standard monthly payment.”

Where a split payment has been granted because of domestic violence, as opposed to a partner’s financial mismanagement, such advice is surely irrelevant. On what basis will a decision whether to continue a split payment be made? Does the Minister accept that there may be some situations where it cannot be treated as a temporary measure?

At present, the guidance seems to suggest that split payments will be an option only in cases of financial abuse or domestic violence. Can the Minister confirm that they will not necessarily be restricted to such cases? With whom will an adviser discuss this question and, even more importantly, the initial decision to make a split payment? Will it be both partners, and if so, will it be discussed separately or together, or will it be just the partner in need of diversion? If the latter, what will the other partner be told about the interview? How will advisers negotiate with gendered power relations which are likely to be at work between the partners to ensure that they have a true picture of the situation?

The department’s study of the implementation of JSA DB easement revealed a reluctance to disclose domestic violence to advisers, a concern that was raised by SSAC. This is likely to be the case here too. How will advisers detect domestic abuse, particularly when it is not manifested physically? Where a male partner uses the threat of abuse of various kinds to control a female partner, it could well be kept hidden. What steps can be taken to ensure that a split payment, which reduces the money paid to the perpetrator, does not provoke further domestic violence? Will the Minister indicate what training in financial abuse and domestic violence is proposed for universal credit advisers? More generally, what is the department’s response to SSAC’s recommendation for an effective training programme designed to ensure that advisers have a sufficient understanding and capability to manage the complex and dynamic nature of risk and vulnerability within universal credit?

It is important that the evaluation does not conflate the effects of wrapping up a number of benefits in one payment with payment into a single account under the rubric of a single payment, as did earlier departmental research.

At present, the guidance seems to suggest that split payments will be an option only in cases of financial abuse or domestic violence. Can the Minister confirm that they will not necessarily be restricted to such cases? It is not always possible to foresee situations in which they might be appropriate, and it would therefore be wrong to rule out other scenarios in advance. Indeed, Fran Bennett, to whom I am grateful for her briefing, suggested adding the scenario where a lone parent with children from a previous relationship takes an unemployed new partner into her rented accommodation. It may not be conducive to the success of a new relationship if one partner has control of all their joint universal credit.

I apologise for asking so many questions, but I cannot find the answers in the public advice and guidance. Reading that guidance, I am not convinced that the department fully appreciates how delicate and difficult an issue this is in any couple where there are difficulties of any kind with regard to control over money. Indeed, only last week, in discussing other regulations, the Minister drew attention to the extent of domestic abuse. If the fears of organisations such as Women’s Aid are realised, I suspect that the Government will have to revisit the policy and rethink the default position to ensure that both members of a couple have direct access to their share of universal credit, if they want it.

The Government’s refusal to listen to reason on these key payment issues could derail the successful implementation of universal credit, which is already looking somewhat shaky, to put it kindly. During the passage of the Bill the noble Lord, Lord Boswell, said,

“if this is the nail in the shoe that gets the whole thing discredited because it does not work or gives rise to disturbing social consequences, we will have lost the great prize of universal credit that many of us want”.—[Official Report, 10/10/11; col. GC 434.]

We should remember the lessons from the child support legislation, when widespread consensus about key principles meant that insufficient scrutiny of the practical details led to one of the worst examples of social policy-making in recent history. I hope that even at this late stage, the Minister will take heed and remove the payments nail from the universal credit shoe.

[Lord German (LD)]

My Lords, I agree with some of the sentiments that we have just heard from the noble Baroness, Lady Lister, and with some of those that we heard in the opening speech of the noble Lord, Lord McKenzie. It seems that there are questions which need to be asked and questions which are still outstanding. However, perhaps some of the clues to the answers that we need to those questions can be found within the noble Lord’s opening speech. He said that we do not yet have the evidence from the rollout of universal credit to give us the learning pattern that we need to establish the route forward for some of the detailed questions which lie before us. They are real issues.

Welfare Reform Bill

Debate between Baroness Lister of Burtersett and Lord German

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

Debate between Baroness Lister of Burtersett and Lord German

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.