Welfare Reform Bill

Debate between Baroness Meacher and Lord Williamson of Horton

Thursday 6th October 2011 Grand Committee

[Baroness Meacher]

My Lords, it is difficult to follow the fantastic contributions of the noble Baroness, Lady Hollis, and the noble Lord, Lord Kirkwood. Most of the points have been made, but there are a few things that I want to add. I have a cynical mind because I fear that the real rationale behind this proposal is to somehow split council tax benefit away from housing benefit because this is one of the proposals which will open a gap between the costs faced by the individual or householder and the benefit payable. If you add that gap to the housing benefit or housing allowances gap, it becomes very embarrassing because there is no way that people on JSA or reduced levels of ESA and all the rest of it as time goes on will be able to cover their costs. That perhaps makes it easier for the Government—I know this sounds cynical and a bit unreasonable, but I fear that it is true—to devolve some of that responsibility on local authorities rather than have the lot at government level. That is the only possible rationale I can think of for demolishing one of the great pluses of this whole reform—the 65 per cent take-up.

What we are going to see, undoubtedly, is a growing level of debt across the land. Council tax debt is already the largest type of debt dealt with by citizens advice bureaux. There were 170,000 cases last year, before we even start on this new reform, and the level will surely soar. That is one of my big concerns and the Minister will not be surprised that I mention it. Of course, the big group most likely to be in debt is people with learning difficulties and mental health problems. I can envisage many of these people coming to our door in need of in-patient care because they will be under such stress that they cannot deal with it. They will have bailiffs at their door and they will not be able to handle it. The CAB cites the example of someone with mental health problems coming along with a £518 bill in debt for council tax and a £183 bailiff charge. I would be very distressed in that situation and, clearly, our particular group cannot cope.

That is one of my issues. Another one is the work incentive, which I understand, respect and support, but you have to have a situation where the people who are given that incentive can actually work. The state has a special responsibility for those groups who, however much they may want to work, will find it extremely difficult to find an employer to take them on. All the talk about the importance of incentives to work, which we all subscribe to, has to be balanced by that recognition. The state cannot just abandon responsibility for people who simply will not be able to get into work; they will be on JSA because they will have been excluded from disability benefits. They will then have these gaps opening up and they will have incredibly little money to live on.

My last point is a question for the Minister. What will it cost local authorities to set up these administrative systems to run council tax benefits? How much of the apparent saving of £490 million will be lost in the cost of the administration of all these systems, plus the costs of bailiffs, debt collection and so on? I would be interested to hear the Minister’s response.

[Lord Williamson of Horton]

My Lords, I support the amendment proposed by the noble Baroness, Lady Hollis—not perhaps with quite the same vehemence, but I definitely support it. In fact, I am getting into the habit of supporting the noble Baroness; that may not continue, but for the moment it seems to be well established on my part.

Those of us who strongly support the introduction of the universal credit recognise that the clause we are discussing is the most important one of the whole operation. That is because there can be nothing more important than deciding and making clear what it is by reference to which the award is to be calculated. This is the part of the Bill that says what the award is to be calculated by reference to. At the moment, the current text is “housing”. That is open to quite a bit of discussion and dispute until we are absolutely clear about what is going to happen on council tax.

This is the clause in the Bill that beneficiaries may actually read; they will want to know how their award is calculated, and council tax is an essential element. If they are told, as appears to be the case, that the level of benefit and the calculation of council tax is to be based on everyone else in their locality, whether they are pensioners, disability sufferers and so on, that will give rise to quite a lot of concern about the complexity of the arrangements that are apparently being proposed. I am concerned about that.

Those like me who have a child with a disability know that it is extremely important that, as far as possible, we should find some form of independent living for them. It is extremely important on the social plane. These people are considerably affected by how the universal credit is going to relate to housing and council tax costs. The standard rate will not prove so difficult, but this element of housing and council tax will be controversial. They will feel worried about it—I think that some are worrying about it already—and that is liable to reflect on the universal credit, which I strongly support.

I hope that the Minister will look favourably at the battery of comments on the issue of council tax which, if we follow what is set out in the consultation paper, seems to be complicated to an amazing degree. That is why I support the clarity of the amendment brought forward by the noble Baroness, Lady Hollis.