Universal Credit

Baroness McDonagh Excerpts

Monday 2nd March 2020 Lords Chamber

Asked by

[Baroness McDonagh]

To ask Her Majesty’s Government what assessment they have made of (1) the debt levels, (2) the mental health, and (3) the ability to work, of people in receipt of Universal Credit.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

The noble Baroness’s Question recognises issues experienced by many people in our society. The department has made no official assessment of universal credit’s effect in these three specific areas. We often find that people experience debt and mental health issues that existed prior to claiming universal credit. We think that attempting to make an accurate assessment could be difficult—but not impossible.

[Baroness McDonagh (Lab)]

I thank the Minister for her Answer. She is very straightforward, and I know she will want to get this right. I know too that the majority of people in this House agree that individuals are better in work—better for themselves, their families and the broader society—and benefits need to be simplified. However, we are spending billions of pounds of public money here. Theory is one thing, but practice is another. I ask the Minister to attempt again to persuade the Government to conduct an assessment, so that we can see whether there are any unintended consequences for mental health well-being, work mobility and indebtedness, and that we can properly debate this issue and recommend any changes and improvements where needed.

[Baroness Stedman-Scott]

I am so glad that we agree on the principle that people should be, and in the majority of cases are, better off in work. I like the noble Baroness’s idea, and I am touched that she thinks my powers of persuasion are so good. In order that I can deploy them to the maximum, let us meet prior to me going back to work the magic. I would like to go with the best case possible to see if we can do this, to get the information that helps us help people more.

Housing Benefit: Social Housing Units

Baroness McDonagh Excerpts

Monday 25th January 2016 Lords Chamber

Asked by

[Baroness McDonagh]

To ask Her Majesty’s Government what assessment they have made of the additional expenditure on housing benefit paid to private sector landlords as a result of the reduction of social housing units.

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

The latest data show that the number of social and affordable rented housing units in England has increased by 46,000 since 2010 and now stands at more than 4 million. Over the last two years, overall real spending on housing benefit fell for the first time in a decade. In 2014-15, housing benefit expenditure in the private rented sector was £9.1 billion, the lowest figure since 2010-11. This year, it is forecast to fall to £8.9 billion.

[Baroness McDonagh (Lab)]

Unfortunately, I have to say to the Minister that my understanding of the figures is very different. Is it not correct that, in the last year of the Labour Government, 33,000 social housing units were built, renting out at 40% to 50% of market value? Last year, 9,500 units were built—a drop from 33,000 to 9,000. Is it not the case that most families are being pushed into expensive “affordable” housing or private renting? Will the Minister confirm that, as of last year, the housing benefit bill had increased by £2 billion over the last five years? Does the Minister not agree with me that the Government’s affordable housing strategy should be renamed unaffordable—unaffordable for the British taxpayer and unaffordable for families?

[Lord Freud]

I am afraid there were a lot of inaccurate figures there. Under the last Labour Government, the number of social and affordable rented houses fell by 420,000. Since 2010, it has gone up by 46,000. We have just seen the expenditure come down, because we have got people into work: people in work do not require support from housing benefit, and their numbers have come down. The numbers in the social rented sector are down 2% in the last year and the numbers in the private rented sector are down 5%. The figures that the noble Baroness was promoting are really quite wrong.

Youth Unemployment

Baroness McDonagh Excerpts

Monday 7th April 2014 Lords Chamber

Asked by

[Baroness McDonagh]

To ask Her Majesty’s Government what action they have taken to tackle youth unemployment.

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

The Government provide support to young people through Jobcentre Plus as well as through the youth contract and the Work Programme. Our approach continues to work. The youth claimant count has fallen for the 21st consecutive month.

[Baroness McDonagh (Lab)]

Why then has long-term youth unemployment doubled since 2010 and why, according to a recent Local Government Association study, were 40% of young people underemployed? Does the Minister agree that the Conservative Party has form on this? It is what it did in the 1980s, causing long-term generational unemployment with catastrophic social and economic consequences, only now it is being aided and abetted by the Lib Dems.

[Lord Freud]

There is a great deal of confusion about long-term youth unemployment. The actual figures, rather than the fantasy figures made up on the opposite Benches, show that before the coalition came to power long-term youth unemployment had doubled. Since then, that increase has slowed and the figure has now started to fall—it was down 38,000 this quarter and 59,000 this past year—and the long-term count has fallen for the 12th consecutive month. Those are the unemployment figures. One of the sources of the confusion is the JSA claimant count for long-term youth unemployment. The reason for that confusion is that the previous Government hid long-term unemployment by introducing training allowances, which took people off. So those figures are distorted. The right figures, which show the underlying position, are the ILO unemployment figures which I have just given.

Leveson Inquiry

Baroness McDonagh Excerpts

Friday 11th January 2013 Lords Chamber

[Baroness McDonagh]

When I saw my name listed as 50th on the List, I promise the House that I was ready to strike it out at any moment, but I feel that one area that has not been fully explored and that is the benefits to the press of the Leveson proposals, were they to be underpinned or recognised in statute.

I am a lifetime lover of newspapers. I have also never complained about the editorial content of a newspaper. When my party was attempting to get elected in the 1980s, newspapers did us a service; they reflected the views of the public. I also have to declare an interest as a former general manager of Express Newspapers, so I can see the arguments from both sides within the industry and outside.

I believe that as politicians we now have a duty to help the newspaper industry. They have lost the trust of the public, their readership is plummeting, journalists have been arrested, illegal actions have been admitted, lives have been destroyed and the industry is in serious financial difficulty. Yet newspapers have become so deeply entrenched in ideology and dogma that they are unable to hear that what is proposed for them is good for them.

I understand that their hysteria is not exclusive to them. It is a universal truth that none of us believes that we should be regulated ourselves, but that everyone else should be. It is in the industry’s interest to have statutory regulation and it does not bother me whether it is called underpinning or recognition.

The most important of these proposals is for the industry to embrace the statutory underpinning of a complaints system which includes ensuring we have a fit and proper arbitration service and which allows the courts to recognise whether a defendant or claimant has gone to the arbitration service prior to undertaking a court action.

I was surprised at the comments of the noble Lord, Lord Hunt, earlier, as I agree with his evidence to Leveson. When he was talking about an arbitration service he said:

“In my view the system would need statutory backing to operate meaningfully”.

Secondly, regulation would protect newspapers against powerful and wealthy people. Today, we have rightly concentrated on the damage that the press has done to members of the public but there is an untold story. Many powerful and wealthy people go straight to court as soon as their name is printed. Soon, newspapers back off those individuals as they can afford neither the time nor money to pursue them.

However, Leveson’s proposals would save newspapers a lot of money. Individuals would have to use the arbitration service or find their refusal published. Courts could recognise such behaviour in their judgments. Both would lead to a spotlight on the behaviour of these individuals and would enhance, not detract, from free speech.

Next, regulation would persuade investors that newspapers were a safe investment. What individual now without a blind passion and £1 million to waste would put their money into newspapers? There is no clear line of sight for what goes on in these organisations because of a lack of regulation.

Many of us in this house are non-executive directors. We represent the views of shareholders. What is one of the first things we do as soon as we get our board pack? We look at the complaints. We look at the complaints within a company. We look at the regulator in our industry. We ask questions.

This is not possible in the newspaper industry. We know that most newspapers suffocate complaints. Editors, executives, journalists and internal lawyers do their utmost to squash complaints and make it really, really difficult for any member of the public to raise a complaint. When they do apologise, invariably it is done begrudgingly and tucked away. Only statute will force a change in this culture, which is now so corrosive that it cannot be changed from the inside.

We talk much about how hacking was illegal and how legislation would deal with it, but I tell your Lordships that the journalists guilty of hacking did not start with criminal activity; they began with writing stuff about people that was inaccurate and they were never checked. None of us wants a situation where our criminal law deals with journalists. We all want bad behaviour to be nipped in the bud at the earliest opportunity.

Lastly, these measures would bring confidence in the press. We say that newspaper readership is in decline because of the internet, but readership was in decline long before the development of those sites. It began with the public feeling that they could not rely on what was written, so restoring public confidence must be the number one priority of the newspaper industry.

The world has changed and so, too, must regulation. Power is simply not concentrated in big institutions as it once was. The media are now available seven days a week and 24 hours a day, and their budgets are under pressure. Without the proper regulatory measures in place, it is so easy to ruin people’s lives at the stroke of a key.

If the Leveson proposals are enacted with statutory backing, they will help the newspaper industry. It will save them money, improve the quality of their product and begin to repair their reputation. Even though the industry is hostile to the proposals right now, it is our duty to protect newspapers from themselves, just as we would for any other industry.

I take up the challenge of my good friend—my noble friend Lord Alli—as a Back-Bencher. If the parties in the other place fail to reach agreement, I will certainly be prepared to introduce or amend legislation as appropriate. I hope that other Members will be prepared to do likewise.

Credit Unions

Baroness McDonagh Excerpts

Thursday 13th December 2012 Lords Chamber

[Baroness McDonagh]

My Lords, I thank my noble friend Lord Kennedy for bringing about this debate. I also thank him for all the support and advocacy that he gives to the credit union movement. I declare an interest as a member of the Merton & Sutton Credit Union. This debate is so timely. In the last year alone we have seen the average family’s indebtedness increase by 50% in unsecured loans—credit cards, overdrafts and so on. We have seen people retiring £5,000 more in debt. Yet we are spending millions of pounds on financial capability and debt advice, which in itself does nothing if people have nowhere to go. We know that those on low incomes pay the most for everything: for fuel, food, energy bills and housing, and they have the least access to financial services. If they go to a cash withdrawal machine near where they live, they have to pay a fee—often £1.50 for getting out £10.

We also know that those living on the breadline in our country are most likely to be in employment, working very hard and are most likely to have children. Let us think of the individual who may not have access to credit or whose credit may be maxed out. Think of them needing their car for their work. What happens if that car needs fixing? If today they go to a payday company like Wonga and borrow £300, within four weeks they have to pay back that £300, plus £50 interest. We know that this is not possible and they cannot afford to pay £350 within four weeks, so what happens is that they borrow more and get further into debt, often leading to unemployment—a thing they had tried to avoid. However there are alternatives in credit unions. If that same person were a member of a credit union and went today to borrow that same £300, they would be entitled to pay it back over six months and would be charged £20 interest.

The Minister does not need a long litany of stats and facts from me. He will understand all too well these problems and know that every day people have to grapple with indebtedness and everything that it brings: the misery, stress, ill-health, unemployment, poor outcomes for children, homelessness and the overall cost to our society. Instead, I will make some practical suggestions of the sorts of things we might do. First is to encourage employers to bring credit unions into their organisations and organise check-off, so that people can make small regular payments. My second suggestion is to understand the nature of government as one of the biggest employers in this country. Credit unions and check-off should be made known and available to all civil servants. Half of civil servants work in administrative grades. Women earn on average £17,000 a year and men £17,500. They would really benefit from check-off and access to a credit union. The Civil Service also has the beauty of grades where people earn more money and are able to save.

Furthermore, will the Minister support the initiative by my noble friend Lord Kennedy in persuading the authorities at the Houses of Parliament to set up a credit union here at Westminster—which is due to happen soon—and to encourage staff here to save with this credit union by check-off? Will he also extend that facility to Members of this House and of the other place? The noble Lord, Lord Cormack, extended praise to Christian Socialists and to Disraeli for understanding these problems and issues. I would broaden this praise out to all parties, by reminding ourselves of the lesson that Beveridge taught us: that a service for the poor will always be a poor service. It is really important that we ourselves join and understand credit unions. With that experience we can take this knowledge into all the organisations that we work in. We all have an individual as well as a broader responsibility for them.

Lastly, it is fantastic that the Government have made money available for credit unions to bid for, but as a preference I ask them to support all sustainable bids, which brings about greater access to the credit unions, whether it be through the post office system or the internet. I am not for a moment suggesting that any of these recommendations are a panacea or a magic wand. If you are on a low income, raising a family and working hard, it is really tough in today’s environment, but these things will make credit easier to access at reasonable amounts of interest. I thank the Minister for thinking about these suggestions and I would like to thank my noble friend Lord Kennedy again for bringing about this debate.