Universal Credit

Baroness Sherlock Excerpts

Thursday 23rd November 2017 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating the Statement and for advance sight of it. We welcome the concessions, modest though they are. However, we also need to recognise the limitations of what is on offer compared to the scale of the problem, an issue to which I shall return in a moment. The decision to remove the waiting days is particularly welcome. That period was increased to seven days by the Government as a cost-saving measure and it has significantly added to the pressure on universal credit claimants. So that is good news, although it is disappointing that that will not start until next February.

It is good that people who are in receipt of housing benefit when they begin to claim universal credit will have their housing benefit payments run on for two weeks. However, I have a number of questions about that. There is quite a lot of ambiguity in the documentation—one hopes it is not studied ambiguity, but certainly it is not clear quite what a lot of these things will mean. First, can the Minister confirm that that payment will be available to anyone moving on to universal credit, not just those who are going to get moved on en masse by the DWP in what it calls the managed migration programme? I am sure the answer is yes. If it is not, that would of course mean that if you happened to live in a universal credit area and something changed in your life—you had a baby, you started a new job, you got married or divorced—you would be forced on to universal credit, and you would need that money every bit as much as someone who was moved on in a year’s time. So will the Minister clarify that?

Secondly, if it is available to those who are “migrating naturally”—as the jargon has it—as opposed to in a group, what will someone get in housing benefit? Is it two weeks of whatever they happen to be getting? For example, if I were in low-paid work and getting a little bit of housing benefit, do I get two weeks of that, even though the reason why I am going on to universal credit might be that I have lost my job and normally I would get all my rent paid? Is it two weeks of my little bit or two weeks of the amount that I would be entitled to? Who will pay that? Is it the local authority? Is it actually a run-on of housing benefit or is the DWP paying an equivalent amount from the centre? If it is the latter, will anyone have to apply for it?

On the advances, it is good that from January 2018 new claimants will be able to borrow a 100% advance on their first month’s universal credit and that all advances can then be repaid over 12 months, as I believe is the case already for those transferring in from benefits, rather than six months for new claimants. When this is discussed in another place, though, Ministers often sound as if they think that giving people access to money is the same thing as giving them money. My bank gives me ready access to money. Unfortunately, that is called an overdraft; it is not in fact extra money. The Government have created a problem by forcing poor people on to a system where they have to wait six weeks—now five—for money, and the solution that they have come up with is to make them take on more debt. In effect, the system moves them from a six-week wait to a five-week wait and a large extra amount of debt. If you can borrow twice as much money but over twice as long a period, you are still paying back the same amount each month. The fact that UC is less generous than before also means that for a whole year, as well as getting less money, you have to survive on even less because you have to repay each month some of the debt that you were given to enable you to get through the first month.

So I ask for some clarification. Will this higher advance of 100% be offered to all claimants, not just to those coming over through natural or managed migration? Will it be an entitlement? At the moment, the DWP can refuse to give you an advance if it thinks either that you cannot afford to repay it or that you have money anyway or could get it. Will everyone be allowed to do it?

Most obviously, why did the Government not just move to two-weekly payments? There is already provision in DWP guidance for some people to ask, and to be allowed, to be paid fortnightly. Why did they not let everyone choose to do that instead of creating this five-week problem? Most people will not benefit from the housing benefit extra bit and will just get a six-week wait reduced to a five-week wait.

My other big point concerns the rollout. The Minister explained that the Government will slow down the rollout of universal credit, but the various things that she mentioned come on at different times. Some things start in January, there are other bits of help in February and the housing help starts in April. Why do the Government not pause universal credit for, say, six months, so that at least by the time it starts again, all those bits of help are in place? Otherwise, if you have the misfortune to find that it comes to your area in January, February, March or April, you will not benefit from some of them, although that is not your fault. Why do they not just pause it?

The Government pledged that universal credit will be simple to access, make work pay and lift nearly 1 million people out of poverty. In the excellent debate we had last week led by my noble friend Lady Hollis, we heard that it is failing on all fronts. During that debate, with the exception of a few touchingly loyal Members on the Government Benches, Members raised a whole range of problems about universal credit, of which only the most obvious was the six-week wait. None of those have been addressed at all. There was nothing in the Budget Statement to improve the taper or restore work allowances to make work pay, nothing to deal with the mess for self-employed people on UC.

The Minister mentioned in the Statement the problem of cliff edges in the previous system, but there is nothing to deal with passported benefits. A consultation out at the moment suggests that if a family earns over a certain amount, it immediately loses all entitlement to free school meals, so an extra hour’s work can mean that you lose free school meals for all your kids. That is the very definition of a cliff edge. Crucially, there is nothing to deal with the year-on-year cut in the real-terms value of universal credit, which has been frozen, along with most other working-age benefits. So I am sorry to say that there is nothing to stop the inexorable rise in inequality—especially child poverty, which the IFS has modelled so carefully.

I really do welcome these measures, but they are modest. They are worth about £300 million a year in the context of many billions of pounds of cuts. I fear that universal credit is like a great big liner. As it steams along, the Government have put a bit of water on the fire on the deck that everybody was pointing to while not, I am sorry to say, doing anything to stop the ship heading for the rocks, having already been holed by the Treasury in successive, very significant cuts. I urge the Minister to turn her attention next to the substantial problems within universal credit.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am happy to follow the noble Baroness, Lady Sherlock, and I agree that the statement that we had in the Budget deals only with the journey on to—the gateway into—universal credit. I welcome the Statement. To be realistic, if the Government had not said something, it would have been impossible to resist the pressure to delay the further rollout of universal credit, and I do not agree that that would be sensible—I never have.

I have two questions for the Minister. For the reasons that the noble Baroness, Lady Sherlock, set out at length, the delivery of these changes will be difficult. Can she assure us that they will land, be locked in and operate to the benefit of claimants in future, without fear of further disruption, letdown and distress? It is a very tall order. Some of these changes start next month. Given the background to the operational implementation of universal credit, it is not unreasonable to be suspicious about the implementation of the immediate changes that have been announced, welcome as they are. Can the Minister assure us that she personally will ensure that they all work and will make claimants’ lives easier, and that she will report to the House regularly on the success or otherwise of the rollout?

But these are only gateway measures; they are only easing the transition to universal credit. The noble Baroness, Lady Sherlock, is quite right: the rising costs and fixed benefits that low-income households are facing will condemn some of these families to a very bleak future. That necessitates my second question: will the Government start planning to use some of the £3 billion annual savings within UC alone—never mind the other ongoing cuts and freezes—to ease people’s road into work by increasing work allowances and tapers? If we do not do something of that kind, it will be very difficult successfully to promote the programme of progression through work into sustainable longer-term jobs and careers.

Once the difficulties of getting people on to universal credit are overcome, and people are in a steady state of receiving their universal credit payments monthly, the next big political battle will be trying to get the Government to be more realistic about the money available to support people when they are on universal credit.

Mental Health at Work

Baroness Sherlock Excerpts

Wednesday 1st November 2017 Lords Chamber

[Baroness Buscombe]

I entirely agree with the noble Lord and thank him for giving me early notice of his question. The West Midlands commission has undertaken important research into mental health and its impact on the public sector. Government officials are working positively with the West Midlands Combined Authority to explore ideas and undertake work that will support positive action on mental health in the region. The noble Lord is right to say that different things have to be looked at, including different ways of improving people’s health and well-being. Indeed, as the immediate past chairman of the advisory board of the Samaritans, this is something very close to my heart. However, I cannot confirm an answer to his question referring to costs, so I will write to him.

[Baroness Sherlock (Lab)]

My Lords, I, too, welcome this report. The authors state at the beginning:

“We start from the position that the correct way to view mental health is that we all have it and we fluctuate between thriving, struggling and being ill and possibly off work”.


I have to say that I love that; it is a really positive way to understand mental health. I realise that the Minister will need to take time to reflect on the recommendations in the report, but when she comes to respond, will she acknowledge that her department has a couple of specific responsibilities? The first is that it is an enormous employer with more than 80,000 staff: and, secondly, it runs programmes with the unemployed. Will she ask her department to think about recommending how it might go about modelling with its own employees a healthy environment for mental health? More specifically and perhaps more challengingly, will she reflect again on the programmes for assessing whether people who are suffering with mental health problems should be in work? I ask this because there have been a number of concerns that the nature of the assessments is actually making people’s mental health worse rather than better.

Benefit Rate Freeze

Baroness Sherlock Excerpts

Monday 30th October 2017 Lords Chamber

[Baroness Buscombe]

My Lords, we do care, and that is why we are incentivising people into work. All our research shows that workless families are most likely to drive children into poverty. In terms of our reforms, we introduced 15 hours of free childcare for working families. From September this year, we have doubled that from 15 to 30 hours a week in England, worth on average up to £5,000 a child. Since April 2016, the universal credit childcare element has covered up to 85% of eligible childcare costs compared with 70% with working tax credits.

[Baroness Sherlock (Lab)]

My Lords, these benefit freezes are not reforms; they are simply a cut. Benefits used to rise in line with inflation every year until the Government decided that in future they would not. They have been frozen in cash terms, so all that happens is that people have the same amount of money to pay for food and rent in 2020 as they did in 2015 while inflation goes up. That simply cannot be right. These are people who are too sick to work, who have small children or who are in work but cannot earn enough to pay for the running costs of their household. Therefore, I ask the Minister again: do the Government care about the poorest in our society? If they do, what are they going to do about it, because fine words butter no parsnips?

[Baroness Buscombe]

My Lords, as I have said to noble Lords opposite, we do care, but we are absolutely clear that work is the best way to get children, in particular, out of poverty. That is why we want to incentivise work, which is the best route, but we need to focus on making sure that people see their wages rise and take home more of their pay packet once they are in work. Our reforms include increasing the national living wage for workers aged 25 and over, cutting income tax for over 30 million people and extending free childcare for working parents.

Grenfell Tower: Tenants

Baroness Sherlock Excerpts

Wednesday 5th July 2017 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, may I unpack this a little bit? I add my welcome to the Minister; I am just sorry that her first outing in this brief is in the circumstances, but I look forward to engaging with her on other subjects.

My noble friend is trying to explain that if, as the Government have promised, they rehouse families who were living in Grenfell Tower nearby at the same rent, because they are having to rehouse a lot of people very quickly in an expensive area, there is a reasonable chance that somebody will end up in a bigger house than they would normally have. At that point, the bedroom tax will kick in and they will end up having their benefit cut.

I understand the Minister wanting to say that local authorities have discretionary funds. The only problem with that is that they are temporary and discretionary. If the family is going to move into a permanent house, they want the reassurance that they can stay there for as long as they want—as long as the kids are in school—to carry on being able to make a new home. I know that her department is trying very hard to work with these families, but will she look again at this and try to find a permanent solution?

[Baroness Buscombe]

I thank very much the noble Baroness for her question and her welcome. I absolutely understand where she is coming from. First, I make it absolutely clear that all emergency and temporary accommodation is rent free for everyone affected. The noble Baroness will know that it is very difficult for us to compel local authorities to ensure that there is no shortfall but, that said, we are doing everything in our power to ensure that that simply does not happen.

As for the benefit cap and the removal of the spare room subsidy, it is for the Department for Communities and Local Government to manage the accommodation, but we can say that those placed in temporary accommodation are not subject to the removal of the spare room subsidy. We have already relaxed the benefit rules for anyone affected by the Grenfell Tower fire, and our staff are handling people’s claims with sensitivity. All I can say is that we are doing everything that we can in our power to ensure that people will not have to suffer a shortfall if they are moved on a permanent basis into a larger property.

Bereavement Benefits

Baroness Sherlock Excerpts

Thursday 6th April 2017 Lords Chamber

[Lord Henley]

My Lords, I am aware of the letter that my noble friend refers to. My right honourable friend will answer it in due course. I can give an assurance that we have consulted on these matters—my noble friend will be aware of this because she was a part of it—legislated on them and consulted on them again. We made changes to the regulations before we introduced them and we have made a commitment in the impact assessment that there will be a further review. Nevertheless, I will convey my noble friend’s concerns to my right honourable friend, and I am sure that, his door always being open, he will be more than happy to see her.

[Baroness Sherlock (Lab)]

My Lords, I also signed the letter and was pleased to do so. There is genuine feeling around the House that the Government have made a mistake on this. What will happen in practice is that a six year-old who lost her father last year will be supported until she leaves school; if her father dies next year, that support will stop after 18 months. That cannot be right. I know that I gave the Minister a hard time a few weeks ago when the regulations were in Grand Committee, but I do not blame him; I know that he did not make the decision. I think that we are now at the point where the whole House recognises that the Government have made a mistake. These cuts were simply part of an attempt to cut £12 billion off social security. The House does not believe that the Government should be taking money away from bereaved children. Will he please tell his Secretary of State that?

[Lord Henley]

My right honourable friend will obviously listen to what the noble Baroness has had to say, but I reject her allegation that these are cuts. There will be no savings to the taxpayer in the first two years; thereafter, as was made clear in the impact assessment, there will be some savings. The important point to get over is that we have increased the initial payment, which was frozen by the previous Government in 2001 and remained frozen for many years, from £2,000 to £2,500. We then make payments for 18 months to those with children. Obviously, no element of money will resolve the problems that individuals who have lost one or other parent will have. This is designed to help with the immediate costs of that bereavement. That is why we think that, by increasing the initial payment, we have made a very real change and provided some support for those with children.

Local Authorities: Relationship Support Services

Baroness Sherlock Excerpts

Wednesday 5th April 2017 Lords Chamber

[Lord Henley]

I am grateful to my noble friend for that question and I can give her an assurance that we will be evaluating phase one of the programme, which has been completed, and then phase two, about which I have just given details. We aim to publish an evaluation of phase one later in the summer, whenever that might be, and in due course we will consider an evaluation of phase two.

[Baroness Sherlock (Lab)]

My Lords, I should like to return to the answer given by the Minister to my noble friend Lady Lister. Perhaps he should go back to his own paper entitled Improving Lives: Helping Workless Families, which came out yesterday. Paragraph 33 cites evidence that problem debt and financial burdens can put pressure on relationships. It attributes those issues to persistent low income and income shocks. Will he think again not only about the damage that has been done by cutting £12 billion off social security for those out of work? Also, given that this is aimed at workless families, if the DWP wants to get them back into work, why is the department persisting in cutting in-work benefits, the very things that make work pay? Before the Minister tells us more about the living wage, perhaps I may remind him of what he knows already. Most of the living wage for the poorest people goes straight back to the Treasury in taxes and lower benefits. Will the department look again at its strategy and make work pay?

[Lord Henley]

There is no need for the noble Baroness to try to answer my question because I will answer it in my own way.

Disabled People: Independent Living

Baroness Sherlock Excerpts

Thursday 30th March 2017 Lords Chamber

[Lord Henley]

My Lords, I understand the problems to which the right reverend Prelate refers. The department is looking at these matters. My honourable friend the Minister for Disabled People, Health and Work is well aware of them. As the right reverend Prelate will know, schemes are available for one-off cash payments to help those who are losing their cars. We shall certainly look at speeding up the whole appeals process to make sure that the problems to which the right reverend Prelate referred do not get any worse.

[Baroness Sherlock (Lab)]

My Lords, to pursue this a little further, I appreciate that the Minister may be thinking about this but the point made by the right reverend Prelate is that people cannot wait. Between October and December last year, 800 people a week were having to hand back their Motability cars because they did not have the money to pay for them any more as a result of PIP reassessment. The Motability website says clearly that you get only six weeks from that decision to hand back your car. Frankly, the DWP is a long way off speeding up assessment to the point where appeals are concluded within six weeks. Will the Minister please look at this a little more urgently?

Child Support: Unpaid Maintenance

Baroness Sherlock Excerpts

Thursday 30th March 2017 Lords Chamber

[Lord Henley]

My Lords, as I said, this goes back a long way. It covers Conservative Governments, Labour Governments and the coalition Government. We have all tried to sort this out. I am afraid that a lot of this money is lost for ever. We are looking at a new arrears scheme and will consult on that to try to get what we can, but I am sure the House would agree that the first priority should be to get money that can still benefit the children of today rather than trying to get the money that was owed yesterday, or the money that is owed to the department. The bulk of the money is very historic.

[Baroness Sherlock (Lab)]

My Lords, I am happy to take the Minister at his word. Let us look at today, but in doing so I declare an historic interest as a member of the board of CMEC before I came into the House. The Government are closing the CSA and if you have an active case on the CSA, instead of transferring it to the new system, it is shut down and you are invited to apply to the new system. The Government estimated that two-thirds of parents would apply to the new system. The NAO has found that only one in five is doing so. The Government have said that most of the rest would make private, family-based arrangements. More than half of families have no arrangement at all in place. This matters because it is not just important for tackling child poverty: a decent child support system sends out a message to the world at large that you might divorce your spouse or separate from your partner but you do not stop being responsible for your kids. Will the Government sort this out?

GovCoin

Baroness Sherlock Excerpts

Monday 27th March 2017 Lords Chamber

[Lord Henley]

My Lords, I wondered whether the noble Baroness would want to get in to highlight the fact that she produced the report that came out on Saturday. I think the report was embargoed until midnight on Friday and I have not yet had the opportunity to read it. I glanced at it but assure the noble Baroness that the Government will give it due consideration.

[Baroness Sherlock (Lab)]

My Lords, I am tempted to invite the Minister to explain how bitcoin and blockchain technology work, but I will take pity on him. For people like me, it is much simpler. I understand that volunteers were given an app through which, essentially, electronic, digital money was paid to them and they could spend it only in certain ways which were tracked and recovered. Obviously, that raises significant issues about privacy and data. My understanding is that the Government’s own report on what is called distributed ledger technology said that it clearly needs a regulatory, ethical and data framework. In the absence of that, when the DWP started this, how did its Ministers assure themselves that benefit claimants were genuinely giving free, informed consent to be able to use this? If it is now to be a much larger-scale project, what kind of parliamentary oversight and scrutiny will there be?

[Lord Henley]

My Lords, as I said, we have not yet decided to move on to a fuller and larger trial, but if we did, no doubt that would have the appropriate checks and balances and be examined by the noble Baroness and others in due course. This is a simple, small-scale trial involving some 20 or 30 people. I am assured that they all gave full and proper consent to it, and that some of them found it very useful indeed. I am grateful to the noble Baroness for not asking me to explain the more technical matters, which are probably beyond her—and me. As she knows, it is a very simple app designed in the form of jam jars into which one can put one’s money and then take it out for specific tasks. As I said earlier—and the assurance I gave on this would apply to any further trials—the department and the Government will have no access to that information; that is, what has come out of the jam jars and gone into housing or whatever.

Universal Credit

Baroness Sherlock Excerpts

Thursday 9th March 2017 Lords Chamber

Asked by

[Baroness Sherlock]

To ask Her Majesty’s Government what assessment they have made of the impact on claimants of the time taken between applying for Universal Credit and receiving payments.

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

My Lords, the universal credit assessment period and payment structure is a fundamental part of its design, reducing welfare dependency by mirroring the world of work. Safeguards are in place to help the minority of claimants who are in genuine need to transition to universal credit. This includes advances and budgeting support. We continue to work closely with landlords, local authorities and other organisations to ensure claimants are supported.

[Baroness Sherlock (Lab)]

My Lords, if only it were that simple. In 2013 the Government introduced a rule that when you first claim benefit you are not entitled to any money for the first seven days. The problem is that universal credit is paid monthly in arrears so it means you get no money at all for six weeks. That does not sound very long, but the typical family in social housing has only £200 in savings and some people are in debt. Social landlords are now saying that tenants are getting into big arrears and people are turning to payday lenders and even loan sharks. Even the noble Lord, Lord Freud, recently told the Work and Pensions Select Committee that the seven-day waiting period should be dropped. Please can the Minister not be complacent about this. Will he go back to his department, look again at the evidence and please take action before anyone else is pushed into debt?

[Lord Henley]

My Lords, I repeat what I said in my original Answer. It is a fundamental part of the design. That argument was put forward by my noble friend Lord Freud during the passage of the Bill and was debated at great length. We recognise that this does not necessarily suit everyone. That is why I again made clear in the second part of my Answer that there are safeguards in place. We introduced universal credit advances for new claimants. Claimants can apply for an advance immediately if they are in need and can receive up to 50% of their indicative award soon afterwards. To go back to the original point, it is important to make sure that we mirror the world of work where 75% of employees are paid monthly.