Employment and Support Allowance Regulations 2013

Baroness Turner of Camden Excerpts

Wednesday 13th February 2013 Lords Chamber

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

My Lords, I can confirm that in my view the statutory instrument is compatible with the European Convention on Human Rights.

As with the JSA regulations we have just considered, these provisions are designed to work alongside the introduction of universal credit by removing all the existing income-related provisions from ESA. From April 2013, the income-related elements of ESA will gradually be phased out for any cases where universal credit has been rolled out. These regulations will introduce new conditionality and sanctions regimes into ESA benefits to align them with universal credit. The ESA sanctions regime is, following reforms made last year, already significantly aligned with the UC sanctions model. However, beyond these changes, people will find that the effect of the existing employment and support allowance regime is unaltered.

Noble Lords may find it helpful if I provide more detail on how these changes will be applied. ESA is a benefit with which all noble Lords will be familiar and is payable to people on the basis that they have a disability or health condition that affects their ability to work. As with the changes that we are making to JSA, these regulations provide new claimant responsibilities and sanctions for claimants who fail to comply with the conditionality regime.

The requirements placed on ESA claimants are also based on the universal credit model. For example, where appropriate, ESA claimants can be required to prepare for work and attend work-focused interviews. These requirements are broadly equivalent to those placed on claimants in the universal credit work preparation and work-focused interview-only conditionality groups. Therefore, ESA claimants will not be required to look, or be available, for work. I should also stress that ESA claimants can be subject only to the lowest levels of sanctions. These sanctions have an open-ended element that stops building when the claimant complies, so the quicker the claimant engages the shorter the sanction will be.

The two levels of sanctions broadly work in the same way as the equivalent sanctions for universal credit claimants in the work-preparation and work-focused interview requirement groups. The high and medium-level sanctions in JSA and universal credit, which are for longer, fixed periods, do not apply to ESA claimants. Our aim is not to impose sanctions. We want claimants to comply with the reasonable requirements that will prepare them for work. Therefore our focus is on ensuring that the requirements expected of claimants are reasonable and clearly communicated to them. Only if claimants fail to meet a suitable requirement without a good reason will a sanction be imposed.

As with the JSA provisions, these regulations were subject to statutory formal consideration by the Social Security Advisory Committee. The committee decided that formal referral was not necessary, but raised a number of points, which were all considered, and changes were made where appropriate. For example, the committee questioned Regulation 46 of the ESA regulations, which originally provided that the purposes of a work-focused interview included the five things in the list. The committee questioned whether this meant that the interview had other purposes that were not included in the list. We decided that the list should be exhaustive, and therefore amended the wording of the regulation to remove the word “include”.

As the sanctions and conditionality rules for both benefits were being brought broadly into line with universal credit, both sets of regulations were included as part of the Social Security Advisory Committee’s wider UC consultation exercise. We firmly agree with the committee that the key to an effective sanctions regime is clear communication with claimants, delivered by well trained advisers. In line with assurances sought during the passage of the Act, stakeholders were keen to ensure that the sanctions regime incorporates sufficient safeguards for vulnerable claimants.

Noble Lords will know that I share concerns that the sanctions regime incorporates robust safeguards. I would like to assure noble Lords that a number of protections will be in place, for example visiting or calling claimants with a mental health condition or learning disability before a sanction is considered.

In closing, I reiterate to noble Lords that beyond the changes I have outlined, the rules for the new style ESA will be very similar to the existing rules for the contributory element of ESA. I would also like to thank the Secondary Legislation Scrutiny Committee for its earlier consideration and analysis of these regulations. I seek noble Lords’ approval of the regulations here today, and I commend them to the House.

[Baroness Turner of Camden]

My Lords, very briefly, I wish to raise with the Minister the issue of appeals and appeals mechanisms. Where I live, I am often approached by people for advice, particularly by those on DLA. Of course, DLA will be transformed into the personal independence payment under the new system. At present, when people come to me to complain that they do not have the amount of DLA they thought they ought to have, I always advise them to appeal. I tell them what they ought to do, and I advise them to consult the local authorities and to proceed accordingly. The notable thing about appeals against DLA assessments is that 40% of them are successful. That raises a number of questions in my mind about the people who carry out the assessments.

What will happen under the new system? Will a private firm do the assessments, as happens with DLA, and how will the Government ensure that the private firm doing the assessment is capable of doing the job effectively? I have doubts about the way in which the present system operates when so many people are dissatisfied and so many people are successful at appeal. That is very unsatisfactory. From the point of view of those concerned, it makes them feel that the system works not for them but for the Government on behalf of people who want to diminish the amount of money that is spent in support of people who are on benefits.

As regards legal aid, after April that will not be available for anyone who is concerned to contest an appeal. There may be people who are very aggrieved because they are not getting the benefit assessment that they ought to have, even under the new system, but what course will they have to follow, and how can they follow it? Are the Government satisfied that the people doing the assessments are capable of doing them?

Enterprise and Regulatory Reform Bill

Baroness Turner of Camden Excerpts

Thursday 31st January 2013 Grand Committee

[Baroness Turner of Camden]

My Lords, I support my noble friend on this amendment. I sat through the earlier discussions which were not within my particular area of involvement but this certainly is. Of course, transparency is very important in employment relations. My noble friend has just said that my party has no problem with high pay, but we all have problems with low pay. Taxpayers have problems with low pay because it involves the Government paying out welfare. That is the sort of problem that shareholders should be forced to face from time to time, and would be bound to do so under the terms of this amendment. Therefore, I hope that the Government will understand that this is in line with good practice, that it operates throughout the best part of English commerce and industry and that it is something that we should have in the Bill. I hope that the Government will feel inclined to support it.

[Viscount Younger of Leckie]

My Lords, noble Lords are very familiar with the arguments in favour of action on directors’ remuneration in quoted companies. In my opening remarks, I will be echoing many of the sentiments expressed by the noble Lord, Lord Mitchell, and particularly picking up on the transparency aspect, as expressed by the noble Baroness, Lady Turner.

Over the past decade, directors’ pay packages have risen on average by 13% per year, while the value of many of the companies they run has remained broadly static and workers’ wages have risen at a much slower rate. Business and investors recognise that this disconnect between pay and performance is damaging and not in the long-term interests of the economy. As Sir Roger Carr, president of the CBI has said:

“Now is the time to be more transparent, more responsible and more accountable”.

It is not government’s role to micromanage company pay, but there are actions that we can take to address what is a clear market failure.

Eighteen months ago, the Government initiated a broad, national debate on this issue. This has encouraged shareholders to become more engaged as owners of companies during the so-called shareholder spring. In 2012, several firms saw their remuneration reports voted down, including big companies such as Aviva and WPP. We have also seen many companies taking the initiative and engaging constructively in response. This is an important step for encouraging more responsible paysetting.

The Government’s reforms will build on this, and promote better engagement between companies and shareholders. By giving shareholders clearer information about what directors are paid and binding votes on pay policy, shareholders will be better equipped to hold companies to account. Business and shareholders agree that this comprehensive package of reforms strikes the right balance. It will promote a stronger link between directors’ pay and company performance but avoid placing unnecessary or inappropriate burdens on companies. The head of the Association of British Insurers has said that these proposals,

“are practical, workable and should help tackle excessive executive pay”.

The amendment requires that companies report on high and low pay outside the board. The issue of high pay below board level is most prevalent in the financial services industry because poorly designed remuneration structures can incentivise excessive risk-taking—a point alluded to by the noble Lord, Lord Mitchell. The Government are committed to improving remuneration disclosure in banks and achieved progress on disclosure below board level as part of Project Merlin. At the same time, Europe has proposed bringing in its own disclosure rules. We await the outcome of these negotiations before deciding on how to proceed with any domestic proposals for disclosure below board level at banks. The Government will argue strongly for the right outcome and remain committed to ensuring that the UK has a transparent and comprehensive remuneration disclosure regime for all companies, including the financial services sector.

However, we do not believe that high pay below board level is a major issue in other sectors. Through our consultations with investors, we learned that there is no demand for such a disclosure, which, if adopted, would place an unnecessary regulatory burden on companies.

Regarding the pay of employees more generally and how directors’ pay compares to that of lower-paid workers, the Government recognise that this is an issue of concern for shareholders, employees and the public in general. We want remuneration committees to consider the broader context when setting top pay. That is why, under government proposals, companies will have to say more about how they have taken into account pay of employees at all levels, and publish the percentage increase in pay of the chief executive officer compared to that of the workforce.

Last year, we published a draft of the regulations that will implement these proposals. These regulations will determine the content of remuneration reports in future. We invited people to comment on the draft regulations and a copy is available in the House Library. Noble Lords will have the opportunity to debate this matter thoroughly later this year when these regulations are brought forward.

Amendment 58BB would mandate that regulations prescribing the content of directors’ remuneration reports must require companies to disclose information about fees paid to remuneration and recruitment consultants in respect of directors’ remuneration. Noble Lords will be aware that the Secretary of State already has the power to require companies to disclose this type of information in the directors’ remuneration report and that we have published draft regulations that would give effect to this. Under these proposals, companies would be required to explain how consultants have been appointed, what services they have provided and how much they have been paid. By way of an update for the noble Lord, Lord Mitchell, we invited comments on these draft regulations and are currently considering the responses.

The noble Lord, Lord Mitchell, rightly drew attention to pay in banks, which I alluded to in my remarks. However, it is worth re-emphasising that high pay outside the boardroom is most prevalent in financial services, and we want to see greater scrutiny of how senior executives in large banks are incentivised because their behaviour can have a material impact on a firm’s risk profile. That is why we have committed to extending pay disclosure in large banks to highly paid non-board executives. This would mean that the UK had the most transparent bank pay of any major financial centre, but we do not propose to apply this in other sectors, as mentioned earlier, where it is less relevant. We consulted on this and found that there was no demand from investors for this extra information. Indeed, it would be an unnecessary extra reporting burden on companies.

I thank the noble Lord for raising this issue, but I suggest that the amendment is unnecessary, given that the Government already have the power to do this and have proposed considerable action in this area. I therefore ask the noble Lord to withdraw the amendment.

Enterprise and Regulatory Reform Bill

Baroness Turner of Camden Excerpts

Monday 14th January 2013 Grand Committee

[Baroness Turner of Camden]

My Lords, I put my name to this question when I first read the Bill and I have recently had some contact with the TUC in regard to this particular clause.

As we have just heard, Clause 57 repeals Section 40 of the Equality Act, which makes an employer liable for repeated harassment of their employees by third parties, such as customers, clients or service users. The liability is triggered only if an employee has suffered such harassment on three or more occasions and the employer knew of the previous incidents and had failed to take reasonable practical steps to prevent it recurring. This is an important protection. I am opposed to the repeal unless the Government can justify it. I do not think that they can.

Trade unions have provided us with many examples of their members in publicly funded and service sector jobs, such as care work, teaching, and rail and bus transport. These people routinely suffer prejudice-based harassment in the course of their work. The introduction of Section 40 of the Equality Act led to a step change among some employers, with actions undertaken to make clear to service users that harassment of their staff would not be tolerated.

The one tribunal case of which I am aware was brought under Section 40 and demonstrates the importance and workability of this provision. A care worker in a residential care home suffered repeated sexual harassment by a resident. When she complained to her employer she was told just to be patient and to wait for the resident to stop touching her. The tribunal, however, held that the employer could have taken a number of reasonable steps to protect the care worker, such as ensuring that she was always accompanied by another member of staff, speaking to the resident’s social worker or psychiatrist for advice, or adjusting the rota to minimise contact with a particular individual offering this sexual harassment. That is an example where, quite properly, this provision in the legislation worked.

People should be able to work in an environment in which they are free from harassment, whether from fellow workers, managers, employers, customers, clients of their employers or others who come on to their employer’s premises. After all, the Government accept that it is necessary to provide protection from harassment in relation to fellow workers, managers or employers, so why should employees be unprotected from harassment by customers, clients of their employers or others who come on to their employer’s premises?

Furthermore, we should bear in mind that many public sector workers face harassment from members of the general public, often from those with grievances. For example, I remember going to an office where a lot of advice on social benefits and so on was provided. The staff there were quite concerned about the way in which members of the public with grievances would make threats against them. That was a government office and steps to protect the staff there were taken. Why should that not apply in the private sector? Why should we not ensure that people acting often on behalf of public issues, sometimes on legislation that we in Parliament have introduced, are protected from members of the public who feel that they have grievances? I hope that the Government can justify what they are doing but I do not think that they can. Therefore, I oppose inclusion of Clause 57 in the Bill.

--- Later in debate ---

[Baroness Turner of Camden]

My Lords, originally I put my name down in support of the clause not being included. As we have heard, Clause 58 repeals the statutory procedure for obtaining information to support discrimination proceedings under the Equality Act. The TUC opposes this clause. This procedure has been a vital part of ensuring access to justice for victims of discrimination since our first sex discrimination and race relations Acts were passed more than 35 years ago. Legislators back then understood just how difficult it would be for an individual to enforce their rights without access to information about how others were treated in a similar situation or statistics on the impact of policies or practices of different groups. This is information that the employer holds, hence the importance of questionnaires.

In trade unions’ experience, these questionnaires help individuals to access evidence at an early stage, which leads to an early clarification of the issues involved and, if the case proceeds to tribunal, greater efficiency in the tribunal proceedings. The questionnaires have the added benefit that they may prevent claims going to tribunal because they often lead to early settlement of any potential claim or they produce evidence that shows that discrimination was not actually the reason for the individual’s treatment. Therefore, it seems to me that these questionnaires are of value to the employers as well as to the employees. I have no idea why the Government should think it a good idea to exclude them in future.

The Discrimination Law Association, whose members comprise lawyers and people who work on behalf of trade unionists and workers, has said that without the kind of information that individuals can obtain only from written questionnaires, in many cases it would be almost impossible to prove discrimination. It should be noted that 83% of those responding to the consultation that proposed repealing this provision, opposed the repeal, including unions, equality NGOs, the judiciary and members of the public. This seems to be a really strange stance for the Government to take. This provision helps both sides in a dispute and I cannot really understand why the Government should be proceeding against it, when it is against the recommendations of the TUC and the unions who are very active in this area.

[Lord Ouseley]

My Lords, I support the question and seek to clarify the context in which I offer support. It is one in which we have seen light-touch regulation being promoted by the previous Government and by this Government to get us to a point where, as has already been stated, we want employers to be in a position to hire and fire as they wish. That in itself will add greater discrimination for those who are likely to be discriminated against, on no reasonable basis.

The context is also one in which we see increasing tribunal fees being imposed along with the cutting of legal aid and funding for advice agencies to help individuals, who are relatively powerless in seeking to get redress if they feel that they have been discriminated against in employment. The situation with discrimination is that the employer always has the whip hand and the employee has very little knowledge, other than a feeling of being treated unfairly. Sometimes it is with evidence but they are unable to have information which places them in a position where they can argue and justify their claim for compensation.

The discrimination often occurs, in my view, for three main reasons. First, employers are lazy and it is a very quick fix to get rid of someone. Secondly, it is incompetence or, thirdly, it is just straightforward prejudice and bias. Those are the three main areas that appertain to discriminatory claims. The victim can move forward only with evidence and the respondent would like to be in a position of not having to disclose any information.

Usually, in my experience, most employers—particularly small employers—have no policies or procedures. Of those who have, the moment that you go back to them to try to explain that they may have breached anti-discrimination legislation and to ask them whether they have complied with their procedures, if they have any, they usually find very quickly that they want to come to an arrangement to conciliate or settle with a claimant. That is because they recognise that they are being challenged on a basis which has justification and that they have clearly failed to follow their own procedures, where they exist. In the case of very small employers, hiring and firing takes place very informally. There is usually a lot of nepotism, with family and friends being involved in the employment within small firms.

That said, it is quite important that we recognise that, notwithstanding all that I have mentioned about context, this repeal has come forward based on inaccurate and misleading information. There is no evidence of the burdens that have been created for employers. The original purposes of the questionnaires, from the Sex Discrimination Act 1975 and the Race Relations Act 1976, have been fulfilled because they enabled assessments to be made on the basis of facts and information provided. That enables that assessment to determine the strength or weakness of a case and may seek to persuade a complainant to withdraw because their case is so weak, or at least to put pressure on an employer to demonstrate that they are in an unsustainable position of seeking to defend the indefensible.

Evidence has shown throughout the years that the use of the questionnaires has helped us to reduce the costs and the burdens on both employers and employment tribunals. Without a questionnaire, a claimant could bring proceedings themselves and apply for disclosure or further information and such an order, when made, will bring considerably greater burdens on an employer. That is something that we should consider as a counterbalance to getting rid of the questionnaire—the real burdens that would be placed on employers if that process was pursued.

It cannot be overstated how crucial statutory questionnaires are to enable people to prove genuine discrimination claims. They offer a structured, time-bound way for a potential claimant to find out the employer’s or service provider’s reasons for taking certain action, and to gather evidence that the claimant cannot access in any other way. Without this kind of information, which individuals can obtain only through written questionnaires, in many cases it will be almost impossible to prove discrimination or a breach of an equality clause. The many individuals who have approached me about cases of alleged discrimination are at their wits’ end and give up in frustration. This will put us back many years, to the situation that preceded the Sex Discrimination Act 1975 and the Race Relations Act 1976.

Questionnaires are not a problem for employers who have nothing to hide. They are alerted at the earliest stage to the strengths and weaknesses of a possible discrimination or equal pay claim and generally take action swiftly to settle the case if need be. Conversely, repeal of the questionnaire procedure will mainly serve the interests of employers or service providers who do not wish to expose their potentially discriminatory policies and practices or cover up the misdemeanours of individuals in their employment. That is why it is important that we consider again whether this repeal has any justification and whether there is no better way in which to enable us, if necessary, to modify the questionnaire where it may be seen to be excessive and reduce it in a way that employers may see it as less burdensome, if that is the case, as a way of retaining it. In that way, we can ensure that we maintain the basis of helping to determine which cases have no basis to go forward to an employment tribunal, and persuading those complainants to withdraw, and seeking to impose the maximum pressure on those employers to settle with those complainants.

--- Later in debate ---

[Baroness Turner of Camden]

My Lords, I have listened with interest to the exchange that we have just had, but it really does not make much difference to the way I feel generally about Clause 61. If the Health and Safety at Work etc. Act 1974 is amended in accordance with this clause, the laws relating to workplace health and safety could be returned to where they were almost a century ago. Since a landmark case, the law on claiming compensation for workplace injury where the employer has breached his statutory duty has been very clear. If this change is implemented, the law will return to being complex and uncertain. It will be more difficult and more risky for people who have been injured just because they went to work to claim proper redress. More meritorious cases will be lost, which means that the burden of caring for those injured workers will be borne by themselves, their families or the state, rather than by the wrongdoer. The litigation process will be more protracted and expensive, which is exactly what the Government are trying to avoid. The costs of bringing claims will inevitably increase, which means that there is every chance that insurers will increase premiums—something which I think that the Government are also anxious to avoid.

Currently, Section 47(2) of the Health and Safety at Work etc. Act states:

“Breach of a duty imposed by health and safety regulations shall, so far as it causes damage, be actionable except in so far as the regulations provide otherwise”.

In practice, this means that if a worker is injured and he can prove that the employer has breached his statutory duty, he is entitled to claim compensation. This is the basis on which workplace injury claims are usually brought. The law on this is clear, it is well understood by all parties, and legal appeals in this field have been almost unheard of in recent years. It has also been the basis upon which health and safety legislation has been drafted and passed by Parliament, with a dual purpose of setting out the criminal law, and giving people injured as a result of breach of that law a right to compensation.

Without this legal provision, the injured person would be obliged to rely only on the law of negligence to claim compensation. However, the law of negligence is much more complex, as the burden of proof lies with the injured worker, when it is the employer who holds all the knowledge about the workplace systems, tools, procedures and so on. This means that much more evidence has to be gathered, more witnesses interviewed, and more documents provided if the case is to succeed. This is time consuming, and can be a very difficult situation in which to succeed, because the guilty employer holds all the cards.

--- Later in debate ---

[Viscount Younger of Leckie]

I have certainly noted the point that the noble Lord has made. I was clearly of the understanding that that was the reason but I will certainly revert and check, given the dates that I have just received from him.

[Baroness Turner of Camden]

In responding to the Minister, I begin by thanking everybody who has participated. We had an excellent debate, drawn from a lot of experience and expertise. It really has been very good indeed, and I am very grateful to everybody who has contributed. However, I am sure that the Minister will not be surprised to learn that I do not accept very much of what he has got to say. I still think that Clause 61 should not become law. I cannot understand why he says that it will help good employers. A good employer is helped by the existing legislation, and if the Government are concerned to improve health and safety at work arrangements, then they should be supporting the Health and Safety Executive instead of diminishing its resources. If they think they need to do more on health and safety, the HSE is highly respected and ought to have more resources, rather than fewer—which is what the Government’s present policy seems to be.

I really do not accept a great deal of what the Minister has said today. I cannot understand why he is going on about compensation culture. I have made some contributions about my experience in that situation when I worked for an insurance company. We have been talking about claims by employees which often take years to settle, particularly if it is a death; frankly, what sort of compensation culture is that? There is a case for looking at aspects of our legislation, but certainly not via this clause, which takes away some of the support that people currently have in the area of health and safety at work.

I am not at all in favour of what the Minister has said. Of course, in Committee we do not have votes. However, I can assure the Minister that this will be back again at Report, because a number of us feel very strongly about it. I certainly do and I am sure that my noble friends do as well. He has not heard the last of this. In the mean time, I do not press this question.

Clause 61, as amended, agreed.

Enterprise and Regulatory Reform Bill

Baroness Turner of Camden Excerpts

Wednesday 9th January 2013 Grand Committee

[Baroness Turner of Camden]

My Lords, I recently put my name down to this amendment at the instance of the TUC. It is one of the many bodies that have written to us, including the Law Society and other organisations, which are very concerned at the requirement in this Bill to remove the general Section 3 duty from the Equality and Human Rights Commission.

The general duty is very important. It is essential because it requires the EHRC to encourage and support a society based on freedom from prejudice and discrimination; individual human rights;

“respect for the dignity and worth for each individual”;

and on having an,

“equal opportunity to participate in society”,

and a,

“mutual respect between groups based on understanding and valuing of diversity and on shared respect for … human rights”.

A recent report from the European Commission on national equality bodies said:

“In order to … realise their potential in promoting equal treatment for all, equality bodies should develop a vision of their role within the administrative culture and society”.

This is exactly what Section 3 does. Furthermore, it provides a guiding vision for the EHRC that unifies equality and human rights.

Section 3 of what became the Equality Act 2006 was extensively debated within Parliament during its passage and its final drafting, from which this Bill takes a piece away, was agreed by all the parties participating. There is very general agreement around what we are proposing. I hope therefore that the Government will think very seriously about what was set before us so eloquently, if I may say, by my noble friend Lady Campbell of Surbiton. It really is terribly important for all kinds of groups to ensure that the general duty in the Equality Act is maintained in this Bill. To leave this provision in the Bill would threaten a lot of the work that the EHRC has done. That would be an awful shame. Certainly, a lot of bodies have written to us to say, “Please, please don’t let them get away with this. We don’t want this to happen”. I therefore hope that the Minister will listen very seriously to what has been said and accept what we are proposing.

[Lord Low of Dalston]

My Lords, I put my name to this amendment because I do not support the removal of the commission’s general duty. The Government say that it is too broad, then go on to say that there is nothing in Section 3 that is not sufficiently covered elsewhere in the Act—in other words, that it adds nothing. Yet if it adds nothing, it cannot be too broad. You cannot have it both ways. Again, the Government say that Section 3 is aspirational and that there is no way that the commission can accomplish all that is encompassed in it but, again, that is at odds with the argument that the same ground is covered elsewhere in the Act.

No institution can achieve all that it was set up to do all at once; there would otherwise be no reason for it to go on existing. Yet that is no reason not to have a statement of aims or objectives to indicate the direction of travel or guide the commissioners in framing their actions. On balance, the commission concludes that removing Section 3 is unlikely to have much practical effect. The Government have made great play with that, but the commission agrees that a unifying statement of principle is important and that it is beneficial to have a vision or mission statement, such as is provided by Section 3, for symbolic if not for practical reasons. However, if its inclusion has symbolic value, is it not the case that its removal will have symbolic significance also?

This, I think, is the nub of it. The repeal of Section 3 is just part of the Government’s broader attack on the EHRC. The commission’s statutory remit was the product of cross-party agreement when the Equality Act 2006 was passed. Indeed, the original wording was amended in the House of Lords to take account of Conservative concerns that it was too broad.

What has changed in the past six years to make it no longer appropriate for the commission to have the general duty set out in Section 3? I will tell you what has changed. The Government have changed. The commission is charged with championing the cause of those who are the victims of prejudice and discrimination on the part of those in positions of power and privilege and with promoting a more egalitarian society. This does not always go down too well with those in positions of power and privilege. We all know that anything with the words “human rights” in it is like a red rag to a bull to the right-wing of the Conservative Party. The Government have decided to throw the dismantling of the EHRC as a bone to their right-wing. Labour in another place has described this as abolition of the EHRC by stealth, but I am not sure what is so stealthy about it. Already, in relation to its grant-making function, the commission’s helpline and conciliation functions—the very things which ensure that it remains anchored in the realities of life with which it needs to engage—have been removed. The Bill proposes also to remove its good relations duty—something else which helps it to remain grounded. By 2014-15, it will have had its budget reduced by 62%, a far bigger cut than is being imposed anywhere else in the public sector, and will have lost 72% of its staff.

Separately, the review of the public sector equality duty, one of the most powerful engines for change and progress on the equalities front, has been brought forward. Taken together with those changes, the removal of the general duty can be seen for what it is: part of a sustained attack on the equality agenda in our society and the institutions which exist to promote it. Of course, the Minister will tell us that the Government are fully committed to equality and that the Bill is just about housekeeping and legislative tidying up, but I am reminded of an occasion when I had been rather critical of someone’s organisation. When he challenged me about it, I replied—rather lamely, I fear—that I meant no ill will, to which he said, “But if you tell me something is chocolate pie but it tastes to me like cardboard, what am I supposed to think?”.

The heads of justice, the Fawcett Society, Mind, the Refugee Council, the Equality Trust and others have expressed opposition to those changes in an open letter, stating that they will leave the EHRC a weaker body. In their consultation paper of March 2011, the Government state that Section 3 has no specific legal function, but that is not correct. The eminent lawyer, Professor Sir Bob Hepple QC, who was co-author of the Cambridge independent review of the enforcement of UK anti-discrimination legislation, which is the foundation stone of much of the equality legislation of the past decade, has issued to a memorandum in which he set up three reasons for thinking that.

First, in the absence of a purpose clause in the Equality Act 2010, the courts and others enforcing the Act were able to use Section 3 as a guide to the interpretation of the single Equality Act, enabling them to fill gaps and resolve ambiguities. The absence of a purpose clause in the single Equality Act is less important than it might otherwise have been because of the EHRC’s general duty set out in Section 3 of the 2006 Act. He says that the repeal of Section 3 will deprive those applying the law of interpretive principles and will leave equality law rudderless. It increases the likelihood of inconsistencies in the way in which the single act is applied.

Secondly, repeal will remove the unifying principle linking equality and other fundamental human rights. Respect for and protection of each person’s human right is at the core of the EHRC’s general duty and implicitly underlies the specific rights against discrimination, harassment and victimisation, and the positive duty to advance equality, which are set out in the Equality Act 2010. Professor Hepple cites the noble Lord, Lord Lester, who was chair of the advisory committee to the Cambridge review in the debates on the Equality Act 2006, as emphasising the importance of equality as a fundamental human right to be enjoyed together with other human rights—civil and political, and economic and social—and of promoting a culture of human rights. The Equality Acts 2006 and 2010 seek to overcome the fragmented approach to different strands of discrimination, which Professor Hepple says has characterised British legislation in the past. Repealing Section 3 will undermine the historic unification of equality and human rights law which was achieved under those Acts.

Thirdly, taken in the context of all the proposed changes, the proposed repeals are likely to further weaken the EHRC’s case for accreditation by the International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights, the ICC, as an “A” status body in full compliance with the Paris principles, which Ministers have consistently said is a high priority for the UK Government. The International Council on Human Rights Policy has emphasised:

“The most effective national institutions generally have a broad and non-restrictive mandate … an all-encompassing jurisdiction”,

and “adequate budgetary resources”.

The EHRC’s “A” status is already being questioned. In a letter from the ICC chair, Dr Mousa Borayzat, to the Home Secretary, Dr Borayzat suggests that the Government should use the opportunity of the present Bill not to weaken the EHRC but to strengthen the provisions in the Equality Act 2006 related to the commission’s independence. This letter was part of correspondence between the UN and the British Government, centring on the UN’s concerns that the Government’s approach to the commission might compromise its independence and thus jeopardise its national human rights institution status.

The Government argue that Section 3 does not cover any ground that is not perfectly adequately covered by the EHRC’s core equality and human rights functions in Sections 8 and 9. But there are reasons for thinking that repeal of Section 3 could well have the effect of making the commission’s duties at Sections 8 and 9 more vulnerable to judicial review on the ground of challenges based on the proper statutory remit of the commission, thus handing power to the courts to determine the EHRC’s scope and weakening the influence of Parliament.

Of course, Section 3 is susceptible to judicial review. But the lesson from elsewhere, particularly Northern Ireland, is that the more specific and less general the duty, the more susceptible to challenge it becomes. Related to this point, in the absence of Section 3, there is little by which to judge whether the duties under Sections 8 and 9 are sufficient as they become freestanding and detached from any specified outcomes or overarching purpose, thus making further reform of the commission’s duties and powers more straightforward. This is of particular concern given that the terms of reference of the review of the public sector equality duty include the EHRC’s duties and powers in relation to the duty.

The appeal of Section 3 signifies that the Government have no great love for the EHRC. It is opposed by many highly reputable organisations that are in a good position to know about these things. The courts will be deprived of a road map for interpreting the legislation. That legislation will be stripped of its unifying principle linking equality and other fundamental rights. The commission’s standing as an “A” status national human rights institution will be weakened. The commission will also be rendered more liable to judicial review. In the light of all that, I do not believe that the repeal of Section 3 has anything at all to be said for it.

Personal Independence Payment

Baroness Turner of Camden Excerpts

Thursday 13th December 2012 Lords Chamber

[Baroness Turner of Camden]

My Lords, the noble Lord will no doubt remember that I have raised the issue of Remploy on a number of occasions in the past. My current information is that most of the people who were made redundant as the result of the closure of the Remploy factories remain unemployed now. So getting rid of them has not increased opportunities for them to become independent—quite the contrary. I am sure the Minister knows that the unions involved are still protesting about it and still believe that the closure of the Remploy factories has certainly not helped the disabled people who once worked there and had the opportunity to make some sort of living. There are also, of course, the people who supervised their work—looking after disabled people is a specialist kind of supervision which requires a bit more training perhaps than ordinary supervision—and they also have been made redundant.

I am glad to note that the Government are continuing with their consultation and paying some attention to the way in which the transition from DLA to PIP will take place. That is very important because I have received a number of letters from disabled people expressing a great deal of concern about the transition. Although it is very nice to talk about independence and so on, one of the first things one loses when one becomes at all disabled is a feeling of independence. I speak from some knowledge because I am partially, although not very, disabled myself. Things that you used to do for yourself you have to rely on other people to do for you. It is all very well if you can afford to pay someone else to assist you but that is not the case for very many people. I am fortunate enough in that I can pay for others to assist me, but if I were not able to and relied on DLA, I would be very concerned about whether my independence would continue to be looked after if I had to rely on a different kind of benefit. So it is going to be very important to look at the transition because, as far as I can see, people who are disabled are very worried about moving from one benefit to another.

I ask the Minister: is there an appropriate system of appeal? If people are assessed in a way that they feel is not correct and does not maintain their independence, it is very important that there is a system of appeal. My understanding is that, in the current situation where there are appeals, roughly 40% have been successful. This indicates that the people doing the assessing have not been very skilled in their assessment. It is, therefore, necessary to have an appeal system.

[Lord Freud]

On the noble Baroness’s key question, clearly there will be an appeals system, as there is for the WCA. The reason behind the 40% success rate for those who go to appeal—and that figure is roughly right—is usually that there is new information, either oral or written, which was not originally available. On that basis, I do not think it is fair to say that the original WCA and Atos were at fault. Clearly that is not an appropriate charge if one is looking at a different set of information. The real question is whether all the relevant information can be made available at an early stage. We are looking to make sure that there is not additional information which would mean a claimant going to appeal, as that is expensive. The question is whether we can ascertain that earlier in order to truncate the process.

Housing Benefit (Amendment) Regulations 2012

Baroness Turner of Camden Excerpts

Tuesday 6th November 2012 Lords Chamber

[Lord McKenzie of Luton]

My Lords, for many people who are out of work, disabled or on low incomes, housing benefit is a crucial safety net and a vital support to help pay the bills at the end of the month. I am moving this Motion of Regret at the measures to introduce size criteria restrictions in the calculation of housing benefit for working-age claimants living in the social rented sector because we see this as a very important issue.

It is but one of the changes to housing support introduced by the coalition which overall will result in around 2 million households receiving lower benefits. The National Audit Office tabulates the range of losses as running on average from £5 a week for those affected by the CPI uprating of local housing allowance to £91 a week for those affected by the overall benefit cap. The size criteria restrictions—called the bedroom tax by the noble Lord, Lord Best—are estimated by the DWP to affect 660,000 claimants with an average weekly loss of £14. Most underoccupy, as defined, by just one bedroom with the average weekly benefit loss being £12. Half of those affected will lose between £10 and £15 per week. Of those affected, 390,000 will be local authority tenants and 270,000 will be housing association tenants. Alarmingly, 420,000 of the households contain a family member with a disability. Noble Lords will recall the extensive and intense debates on this issue and the strong views expressed by your Lordships’ House in opposing these measures. The Minister referred to them a moment ago.

The overriding issue is fairness. The arguments have not changed and will not go away. Hundreds of thousands of tenants have been penalised for the circumstances in which they find themselves, with no ready means, for most of them, to mitigate what is perceived to be their alleged offence. Of course we recognise the need to deal with the deficit, but it is who you choose to bear the burden that is at issue here. In an era when we are producing tax cuts for millionaires, we are asking 660,000 of the poorest people in our country to bear a cut of £14 a week. Most people deemed to underoccupy will not have a smaller alternative property to which they can move. All housing benefit claimants of working age considered to have spare bedrooms will see their benefit cut by 14% for one extra bedroom and 25% for two or more extra bedrooms. The reality is that this is not a serious attempt to address underoccupancy but is about cutting people’s benefit.

Of course underoccupancy must be addressed. We agree with the Minister on that. Many councils have imaginative schemes to do so for the elderly, who are not affected by these regulations, as well as for working-age tenants. The DWP’s own impact assessment is clear that there is a mismatch between household size and the availability of suitable houses in the social sector for underoccupying claimants to downsize to. The NAO’s report reached the same conclusion, noting that there is a mismatch between need and availability. Modelling by the National Housing Federation found that while 180,000 social tenants in England are underoccupying two-bedroom houses, only 85,000 one-bedroom social homes became available for letting in 2011-12. It concludes that the lack of mobility in the sector is not a product of tenants needlessly underoccupying larger homes but rather of the logjam created by a national shortage of affordable homes.

What choices do tenants have if they are to avoid the benefit hit? The Government say that they can make up the shortfall by using their other income or their savings, which is the same argument we heard in relation to the benefit cap. Is this really living in the real world? What level of savings do the Government think these families may have? An alternative is that tenants can move into work or work longer hours. This is notwithstanding that many are not, under the stringent rules that apply to conditionality, required to be available for or seeking work. For those who are, it presupposes that they are not already trying to, that the current claimant obligations are somehow deficient and that the level of support available via the work programme is not helping them. As for taking in a lodger, for many, this will be an unworkable and unreasonable option putting the safety and privacy of the family at risk.

The alternative is to take the hit or move to accommodation that better suits the current size of the household, assuming that it is a stable size. But where? It is not very likely in the social rented sector, where there is not only a shortage of supply but, as has been identified, a dearth of one and two-bedroom properties. A move to the private rented sector would inevitably lead to higher rents and higher benefits. There would be no certainty of that being cancelled out, as I think the Minister suggested, by a move in the opposite direction to a cheaper area, but given the allocation policies of local authorities, that is likely to be only in the private rented sector.

The Housing Futures Network found that 50% of claimants would not be likely to move home when they were faced with a cut. Over one-third considered that they would be likely to run into arrears, so we have a certain recipe for driving the poor into greater poverty and debt. We have seen the now-familiar tactic of the bit extra in the discretionary housing payment fund each year, albeit funded by bumping up the percentage reductions for underoccupancy. While this will undoubtedly give some help where the properties of disabled claimants have been subject to significant adaptations and to foster carers between placements, it should be compared with the annual cut of half a billion pounds that the Treasury is seeking.

A review of the consequences of this is right, but it will not help with the misery that these provisions will cause in the mean time. The discretionary housing payment fund has a fixed budget and is having to cover an increasing range of circumstances, as we discussed on the benefit cap when my noble friend Lady Lister referred to it as “the loaves and fishes” concept. We challenge whether it is an appropriate or sufficient method to deal with disability issues. The DWP’s equality impact assessment shows the disproportionate effect the size criteria measure will have on the 420,000 sick and disabled tenants. An additional £25 million of discretionary housing payment for tenants whose homes have been adapted will undoubtedly be challenged as being insufficient mitigation, and rightly so. It is not a reliable safeguard against rent arrears, evictions and homelessness for chronically sick and disabled tenants.

True to form, the Government seek to offer some justification for this approach by juxtaposition with some other group, in this case, those in the private rented sector. As we have heard, the argument goes that private rented sector claimants receive housing benefit for accommodation based on the reasonable needs of their household, while in the social rented sector, it is based on the accommodation that they occupy. This is not comparing like with like. The nature of the tenancies is different and, in any event, when tenants are first placed in accommodation in the social rented sector, it would typically have regard to the size of the family. The reality is that household composition and need can change over time. The changes may not be permanent. Families grow with children and reduce as children fly the nest. The logic of underoccupation provision is that each change should drive a change of home; what a nonsense. It is a back-door way of undermining security of tenure in the social rented sector.

The National Housing Federation is deeply concerned that no flexibility has been given to social rented sector landlords to define whether a property is underoccupied. For example, if a home has a double bedroom and two box rooms, according to the regulations it would be underoccupied if a couple and two children were living in it, despite the reality being that the home is fully used. If the landlord reclassifies the property as a two-bedroom unit, it would lose money, which simply does not seem right. This is just another anomaly of the system.

This is a grotesque experiment in behavioural economics. The department has no idea how tenants will react, and the Government do not seem to care. Indeed, they hope that tenants will sit tight and take the hit because that way the Treasury maximises its saving. It is a callous piece of public policy that will put people into debt, drive increased homelessness and fracture communities, and we should have none of it. I beg to move.

[Baroness Turner of Camden]

My Lords, I rise to support my noble friend in his amendment. I agree with him fully that the new regulations before us are unfair to vulnerable people. They are being introduced at a time of a housing crisis that is particularly acute in places such as London. The situation in London is that rents are too high and wages are too low. The right to buy was fine for some, but it reduced the number of social homes available for rent. The social homes should have been replaced but, of course, that did not happen. Now local authorities are already looking to acquire premises for alternative social housing, often on sites very many miles away from where the individuals concerned are actually living and where they have some sort of support. This would be particularly difficult for people who are disabled, for disabled people require the support services that are often where they happen to live. It is quite unfair that they should be placed in the position of having to worry about future housing.

As far as London is concerned, my own neighbourhood has a particularly acute situation. When I first moved to West Hampstead, the area in which I now live, it adjoined Kilburn and was never regarded as a very posh area. Unfortunately that is no longer the case. The rents now being charged are absolutely enormous, and I do not understand how ordinary working people can be expected to afford them. It is quite common for large houses to be converted into one-bedroom flats, and the landlords charge as much as £500 a week for a one-bedroom flat. That is the kind of area and range of accommodation that is available in the area, and I do not see how working people on very low incomes can possibly afford it.

As for underoccupancy, quite frankly domestic circumstances for people change. Children move away; sometimes, nowadays, they move back because they cannot find anywhere to live. There are people who require support because they are ill. Sometimes they die. Domestically the whole situation changes for people, and it is unfortunate that they should be placed in the position of worrying, every time there is a domestic change, about what is going to happen to their living accommodation. It really is quite unsatisfactory.

As for general housing, I well remember what the situation was like at the end of the war—I am old enough to remember that. There was an acute social housing crisis because a lot of London had been bombed and there was no accommodation available. So what did the then Labour Government and the subsequent Governments do at that time? They had a very bold policy of social housing that was radically put up; we used to call these houses prefabs, and some of them are still in existence. There was a set of regulations that involved rent tribunals. In those days, if you were overcharged, you could go to a rent tribunal and your rent would be reduced. That meant that you could go on living in your accommodation. If you were concerned about it, the rent tribunal had the final say about what the rent should be. That meant that your rent had some relationship to the general level of wages, and therefore people were able to go on living in their homes because they had legislation to support them.

Unemployment: Older Women

Baroness Turner of Camden Excerpts

Tuesday 16th October 2012 Lords Chamber

[Lord Freud]

My Lords, the crude facts of the matter are that more older women are employed than ever before—3.5 million—and the rate of employment is also at an all-time high of 60.6%. Older women are doing extraordinarily well in the workforce and the reason for that is that they are very valuable employees. Even the BBC seems to have got round to recognising that.

[Baroness Turner of Camden]

My Lords, does the Minister not appreciate that many older women have not only the job of going out and trying to build up the family income but a valuable role as carers in many families? What can be done to assist women who have this double responsibility, both of working to boost the family income and providing much-needed carers in the family?

[Lord Freud]

My Lords, this is clearly of great concern to this Government and all Governments. We are taking significant steps to help carers. About one in six of older women who are inactive are inactive because they have caring responsibilities. Creating a far more flexible carer’s allowance and a universal credit element is one of the ways in which we are looking at that issue. We are also introducing flexibility in our conditionality regime at Jobcentre Plus.

Housing Benefit (Amendment) Regulations 2012

Baroness Turner of Camden Excerpts

Monday 15th October 2012 Grand Committee

[Baroness Turner of Camden]

My Lords, I support my noble friend’s analysis of these regulations. As the Minister said, we have already debated this issue in detail when we discussed the Welfare Reform Bill and many of us voiced our objections at that time. Nevertheless, I still oppose what is proposed in the regulations because it seems to me that, when they are implemented, very vulnerable people may be placed at an enormous disadvantage.

There are particular problems in certain areas. I am particularly concerned about the area of London in which I live. At one time there was a fair amount of reasonably priced property available in that area. However, that is no longer the case. As soon as a large house becomes available, developers move in and turn it into flats. Houses that once housed two or three families are now filled with masses of people living in the same block. It is all enormously charged for. A number of people are making an enormous amount of money. I am told that a small two-bedroom flat in the area in which I now live would cost £500 a week. When you remember that the median rate for employment in London is £26,000 a year, how do people on those rates afford that kind of rent?

I know that the regulations will not take account of the local rents only. On the other hand, the fact that these kinds of development are going on in large parts of London and people are making quite a lot of money out of them means that the amount of housing available at reasonable rents has decreased because the developers move in and make a lot of money. As a result, there is a shortage of the kind of housing that would normally be available for people on much lower incomes.

The problem is that people now in receipt of benefit may find that they are underoccupying—that they do not need two bedrooms and so on—and they may have to move. If people have to move, that is a great disadvantage for them. In particular, it is a disadvantage for disabled people, who usually have some support mechanisms in the area in which they live—they may belong to groups that look after their needs and so on. To have to move is a great disadvantage to them. It is a great disadvantage to them if they want to work, and some of them do want to work. The Government are already closing the Remploy factories in which some of them could work. If they have to move, there is nowhere for them to obtain suitable employment. That is a great disadvantage.

For all these reasons, I believe that the regulations before us this afternoon are to the disadvantage of numbers of people whom we ought to protect. My noble friend has already indicated that in some detail and I do not want to repeat it, but I emphasise that I am not at all happy about these regulations. I am not the only one—so are many people and so are the organisations particularly concerned with disabled people, which have already made representations to us on these grounds.

[Lord Best]

My Lords, the Minister is well aware of my disquiet, and I am unlikely to be satisfied in relation, in particular, to underoccupancy—the bedroom tax. I know that he has made some important efforts and I think that he is going to be able to be reassuring on one or two points that noble Lords have raised. I am sure that we will hear that full-time students will not have to lose their bedroom and regain it by a convoluted process while they are away at university. Also, I think that we now have a date when it will be the case that taking in a lodger will not mean that benefit will be cut by the amount received in rent, which will be helpful to some people. These measures are not going to change the world, but they are good things to do and I am grateful to the Minister for putting them in place. There may be more.

I want to talk about discretionary housing payments, which are the way out when you can see that a situation is quite untenable and any reasonable person would say, “Of course, in that particular case, this whole business is a complete nonsense and we must allow those people to stay where they are”. I am now getting the kind of letters that hundreds of MPs are going to get when this really big change gradually dawns on the world outside. I shall read to the Committee from a letter and will give the kind of reply that I would like to be able to give and explain the difficulties I have in giving it.

There is a woman in a relatively rural area of Norfolk who lives with her husband. They are not of pension age. He is a bit disabled. She looks after him, and she also looks after her elderly mother in the village. She sees her mother in the morning, at lunchtime and in the evening. She does a great job with her 81 year-old mother. She is in a three-bedroom council house. They have been there for 23 years and have brought up their children, who have gone. She uses two bedrooms because she and her husband do not sleep in the same bedroom. She will be paying another £25 a week because she is deemed to have two empty bedrooms.

The council has said that it has some one-bedroom flats in the nearest town, which is 16 miles away, that it may be able to move her into, but not now because the one-bedroom flats in the town are rather precious. Later, it might be able to move her in, but in the mean time, she will have to stay where she is. She says, “I can’t afford the extra £25 a week bedroom tax. What am I to do?”. In my letter back to her, I should like to say that there are things called discretionary housing payments. I am hinting at it but what hope can one give to people in such circumstances? It would clearly be completely foolish to move her out, although she cannot afford to stay; she cannot afford the extra £25 a week. However, moving her 16 miles away would mean that her mother had to be looked after by social services at considerable cost and her husband will not be properly housed—it is a nonsense. I should like to be able to say that the local authority should have the opportunity, where anyone can see that it would be sensible, to fill that gap and pay the bedroom tax, enabling her to stay where she is.

We know about discretionary housing payments that take care of some of the local housing allowance and the private rented sector. We know about the sums that relate to the total benefit that people can get from the universal credit—the £500 limit. We know about these other aspects of using discretionary housing payments. However, I cannot find anywhere any money for discretionary housing payments to pay the bedroom tax, except in respect of two special categories. These are thoroughly commendable, although I was startled to hear that the money was taken from the rest of the bedroom tax payers.

There are two kinds of special case. One covers adapted properties that have been physically changed for the people who live there. It would be a nonsense to move them out because there is a spare bedroom. It would cost everyone an arm and a leg. The other exception is a case where there are foster children. They do not count as part of the family but, obviously, they must have a bedroom. There is £30 million a year, which will continue indefinitely, for those two exceptions. That is great but they are very restricted categories. My middle-aged couple in Norfolk would not fall into either group.

I am afraid that noble Lords and, in particular, Members of the other place will all get such e-mails and letters, so they should be prepared. I had another letter from someone with two daughters, one aged 11 and one aged 13. One daughter is severely disabled. She needs a very large bed and, therefore, her own bedroom. However, the two girls are expected to share because they are aged under 15 and are therefore underoccupying by having two bedrooms. That will cost the family £14 a week from their disability allowance. They do not have £14 a week; they have great difficulty in getting by on what they do have. Everyone says that they must stay where they are. This is where a discretionary housing payment could come in. However, as I read the numbers I can see nothing. What does the Member of Parliament say in replying to his constituent?

I hope that the Minister has up his sleeve the opportunity to put in place more discretionary housing payments to get us through what I suspect will be rather a large number of cases in which anyone would agree that it would be best to let people stay put. I do not think it requires more legislation. We will not get the results of the very important, thoroughgoing research—I have congratulated the Minister on it—until some way down the line. Then we will see how things are working out. If it is not already the case, I advise the Minister to talk to his Treasury colleagues and provide a bit more discretion for local authorities to pick up cases that otherwise will just be hopeless. I have no idea how we and the people concerned will be able to cope.

Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) (No. 3) Regulations 2012

Baroness Turner of Camden Excerpts

Monday 15th October 2012 Grand Committee

[Lord Freud]

My Lords, I think I will end up writing a letter, but I ought to try to answer the questions in general terms, thus saving a little effort in terms of letter writing. The first point made by the noble Lord, Lord McKenzie, concerned the potential changes to CPI and RPI. About a year ago we had the most glorious debate on this matter, for which I enjoyed researching probably more than any other topic. I think I am pretty comfortable in saying that the authorities are looking at these two measures and that there are likely to be some changes. RPI has had a very bad press lately, as some noble Lords who are aficionados will have noticed. If and when that change happens, we will have to take a decision, but it is pretty premature to take two hypotheticals and jump to a conclusion ahead of time. We will engage closely with the ONS to ensure that the potential impact on pension re-evaluation is fully considered.

On relying on trustees, my noble friend is absolutely right that there will be trustees here. This is just a technical change. The way it was drafted would have excluded these particular schemes, so that is the way that that has been addressed. This is moving into where schemes go into deficit and the question from the noble Lord, Lord McKenzie. They will be required to find funds for the minimum revaluation rate. Section 75 debt will continue to be calculated on the basis that the minimum revaluation rate will apply. The sums go on, even though the scheme has a problem which needs to catch up.

On the schemes that revalue benefits by reference to earnings, we are committed to considering further how that kind of revaluation could be allowed for. Historically, earnings have gone up faster than inflation so it is a lower risk, although that has not necessarily happened in recent years. On the question of whether the provision for discretionary revaluation would be required to be at least that necessary to meet the minimum rate—CPI, RPI or whatever is lower—the answer is yes. Regulation 36(3)(a) stipulates that a scheme with benefits to be revalued on the exercise of the discretionary power can be a qualifying scheme if,

“the funding of the scheme takes account of the exercise of the discretionary power and does so on the assumption that accrued benefits would be revalued at or above the minimum rate”.

That figure is CPI or RPI, whichever is the lower.

I may have answered all the questions without the need for a letter. That would be one of the miracles of our time. I will make sure and, to the extent that we have not absolutely locked this down, I will send a letter over because it is a very technical area.

[Baroness Turner of Camden]

I have a question. There has been a report in the newspapers recently that a number of small employers have no idea how to operate the new scheme. Of course, the problem is that if it is not operated, a lot of people will not get the choice of whether to go in, opt out or whatever. I am interested to know whether the Government are taking on board the problems with smaller employers who really do not understand what is actually involved in getting people into the automatic scheme.

[Lord Freud]

Yes, I can pick that up. Clearly, there is a staging going on. Smaller employers are towards the end of that, and are two or three years out from now. It would clearly be hugely counterproductive to send them an early letter which tells them that in two years’ time this or that will happen because they will tend not to look at it. It is really important in a communication exercise that we time it right. It is somewhat encouraging that quite a few knew that this was coming. A communication exercise is integral to us launching this properly. That is a key point.

To sum up, the point of this measure is to make sure that good-quality career-average pension schemes can be used for automatic enrolment. It allows flexibility without compromising individual protection and closes a particular gap in the legislation that we would not have wanted to see. On that basis, I commend the instrument to the Committee.

Motion agreed.

Jobseeker’s Allowance (Sanctions) (Amendment) Regulations 2012

Baroness Turner of Camden Excerpts

Monday 8th October 2012 Grand Committee

We have supported much of the thrust of the Government’s welfare reforms and the broad architecture of the universal credit, but we have seen how these reforms include aspects that have no credible policy outcomes. They have a political objective: being seen to be tough on welfare. Indeed, we heard that directly earlier. The three-year sanction is, in our view, one such measure, which is why we oppose it.

[Baroness Turner of Camden]

My Lords, I rise to support my noble friend in relation to these regulations. They are extremely complicated and it is not surprising that the Government have thought it necessary to include a long Explanatory Memorandum. At a time when sometimes, in certain areas of the country, there are 50 applicants for every vacancy, it seems pretty impossible to introduce such complicated regulations. I think the Government should not be moved by a lot of the media coverage about scroungers. In fact, in my view, people on benefits are mostly not scroungers and would be very happy to have work if it were possible to find it. It is often very difficult indeed to do so.

I am particularly concerned about the effect on disabled people because I understand that assessments of people who are currently on DLA have already begun. A number have been in touch with me because they are concerned about what will happen if it is ruled that they are capable of some work when they feel that they are not. There is an appeals mechanism, which they then put into operation, and it often results in a change in the decision, but there is a long gap before the appeal can be heard, so what happens to people who are caught between two benefits? There is the DLA, which they want to remain on, and the jobseeker’s allowance, to which they will be transferred if they lose their appeal on DLA. This is a cause of a great deal of worry among people who are already very vulnerable and very concerned. I am not certain what consultation has taken place in relation to these regulations as far as the Government are concerned, but they are far too complicated. They do not give any indication about appeals. I am not quite certain how people will appeal if they are told that they are to be dealt with under various articles. Can they appeal it and, if so, what are the arrangements?

Secondly, I feel that people ought to have a much clearer idea of what is involved regarding sanctions and what is meant by “hardship”. The hardship point has already been raised by my noble friend. What actually is hardship? Many of the people on the benefits already feel that they are subject to hardship. Of course, even under the present circumstances, the regulations do not allow for what might be described as anything that is not hardship. In fact, everything possible is done to encourage people to look for work, and many people are only too happy to have work if they are capable of doing it and if they can get it. Unfortunately, we are not in that happy situation. In these circumstances, I really do think that the Government should take these sanctions regulations away and rethink the situation; otherwise, a lot of vulnerable people are going to get hurt when they should not be.

[Lord German]

My Lords, this set of regulations applies to changes that came out of the Welfare Reform Bill and the prospect of universal credit. I should like to explore three issues with your Lordships this afternoon. The first relates to proportionality, the second relates to clarity and the third relates to the timetable for bringing together the various parts of the sanctions regimes which now exist and the prospective sanctions regime for universal credit.

There have obviously been concerns about proportionality and about the three-year sanction, which clearly is very extensive. The Explanatory Memorandum says that it will be used only in the most extreme circumstances but can my noble friend, whom I welcome to the Dispatch Box today, give us an example of the type of case that would attract a three-year sanction of that sort?

I understand that clarity is needed, and this is the second issue. However, having read the documentation that accompanies these regulations, as well as the Explanatory Memorandum, I do not think that anyone under the threat of the sanction would instantly know precisely where the sanction would fall. There is clarity regarding 13, 26 and 156 weeks, but if noble Lords look at paragraph 7.6 of the Explanatory Memorandum, they will see that a certain degree of mathematical skill is required to be able to balance the variety of options. I do not object to that but can my noble friend tell us whether this whole sanctions regime could be set out in a chart on a single piece of paper, which would allow the people whom it might affect to truly understand it? That would be very helpful in aiding people to understand it.

In my view, the problem with clarity is where it leads in terms of direction to Jobcentre Plus staff, who make the decisions based on interpreting these regulations. On many occasions in relation to other aspects of assessment by Jobcentre Plus assessors and decision-makers, we have asked what the current regime is for allowing those decisions to be made more accurately. In response, both in the Chamber and in correspondence, the Government have told me that stress is laid on the importance of empowerment—empowering officials to make decisions and giving them discretion. Empowerment and discretion can sometimes conflict with clarity if the decision is so laid down and so restricted that there is no room for a decision in a particular circumstance.

Therefore, can my noble friend tell us whether the discretion that will be offered to Jobcentre Plus staff and their empowerment—which is the watchword, with which I entirely agree—in making decisions will sit comfortably with the clarity regime that has been outlined to us today? Will that be in some form of guidance? We have already heard from the noble Lord about the “good reason” concept. I could interpret “good reason” and I hope that I would do it effectively. However, I am not so certain that that would be without some form of interpretation and guidance, which would be a concept well understood to apply in these circumstances. A “good reason” has been a phrase used very commonly for making decisions. If it is still the intention that that allows discretion for Jobcentre Plus staff to be able to make decisions, perhaps that would be sufficient on its own if it was a well enough understood concept. Would my noble friend like to comment on that?

The third area that I would like to explore is the joining together of the three parts of the sanctions regime—the ESA regime, the jobseeker’s allowance regime and the universal credit regime that is to come—given that all three will be overlapping and running alongside each other during the course of the coming years until universal credit finally takes over. If this is an interim step, is it the one that is describing what will happen under universal credit? I wonder why we have not been able to do the same for employment and support allowance and why that has not been brought before us at the same time. Am I correct in understanding that that will be brought before us by a negative procedure in another set of regulations, which we will perhaps have to examine against this set of regulations? Perhaps it would have been more advisable to bring them both together.

However, it seems that the crucial issue is whether this actually lays down a pathway for what will be the regime applied under universal credit or whether we are to treat this as an interim regime, in which case we would be moving forward to another set of changes in the years to come as we apply universal credit. How far can we go along that road? It seems to me that an interim situation would be inadvisable but that a situation which was as close as possible to universal credit would be advisable.

Finally, having got from the Printed Paper Office before the Summer Recess a copy of the Explanatory Memorandum, I read paragraph 7.7 with interest until I got to the last sentence, which read:

“Under the revised regime claimants who re-apply for benefit following disentitlement for not being available for or actively seeking work will be subject to a”—

at which point the paragraph ended. I was so pleased on coming into the Room today to see that the Printed Paper Office has now completed the sentence with the words,

“loss of benefit period of 4 weeks”,

so that I do not need to ask about that. However, it would be helpful if either the authorities in this House or in the DWP were to make sure that when we have a lengthy Summer Recess before us, we can read the documents as they should be rather than as they should not.

--- Later in debate ---

[Baroness Stowell of Beeston]

Yes, they still apply.

The noble Lord, Lord McKenzie, also asked about people with health conditions. These regulations do not change the requirements that are on claimants as of now. Through Jobcentre Plus and the work programme, we will provide claimants with health conditions with the personalised support that they need to overcome their barriers to employment. All requirements will take their health into account to ensure that they are not asked to do something which would be unreasonable.

The noble Baroness, Lady Turner of Camden, asked in her remarks about those disabled people who may be moving from DLA to JSA or a version of that under universal credit. Today, we are obviously concentrating on JSA, which is very different to DLA. However, I take on board the point that she makes about ensuring that people have a clear understanding of what is changing and how they are affected by those changes. That is certainly something which needs to be addressed.

[Baroness Turner of Camden]

I thank the Minister for that response, but what is the situation for appeals generally in relation to this legislation? People will miss out on benefits if they receive a decision stating that sanctions will apply to them? Is there any appeal mechanism here and, if so, what is it?

[Baroness Stowell of Beeston]

There is no change in the appeal measure. I will come on to sanctions in a moment and give more specific information on appeals but the short answer to the question is “no change”. Safeguards were raised by the noble Lords, Lord McKenzie and Lord McAvoy, and the noble Baroness. I do not want to take up the Committee’s time as I clearly spelt out the safeguards in my opening remarks. They will be very much as they are now. That area will not change.

The noble Lord, Lord McAvoy, asked about people with mental health issues. The decision-makers will receive in-depth training to ensure that they are able to make the decisions that are required of them as they affect people with mental health issues. The noble Lord, Lord McKenzie, asked whether a jobseeker’s period of sanction counting towards the 182 days contribution-based entitlement will be changed. No, because a person is still entitled to JSA during a sanction period. Therefore, entitlement continues for that 182 days, including any sanction.

I think that I have covered most of the points that have been made. The noble Lord, Lord McKenzie, asked whether Jobcentre Plus has any targets for sanction referrals. I can say categorically that it does not. The noble Baroness, Lady Turner, asked about the appeal process, as did other noble Lords. Claimants may appeal any decision to reduce or stop their benefits arising from the First-tier Tribunal within one month of being notified of their sanction or disentitlement. Claimants can also ask Jobcentre Plus to reconsider the decision to sanction or disentitle. Jobcentre Plus will reconsider all decisions before any appeal so that only unresolved disputes have to go to an appeal hearing. Of course, we will ensure that all new claimants receive clear information about the sanctions regime and the appeal process.

I think that the noble Lord, Lord German, asked about ESA and whether the measure aligned JSA with universal credit. That will be introduced by a separate statutory instrument through the negative resolution procedure. It is not part of the measure that we are discussing. I take on board the points he made about the Printed Paper Office. I think that—