Social Security Benefits Up-rating Order 2015

Countess of Mar Excerpts

Wednesday 25th February 2015 Grand Committee

[Lord Bourne of Aberystwyth]

My Lords, I am grateful to noble Lords who have participated in this informative debate. I shall try to deal with the points in the order in which they were raised. The noble Lord, Lord Rooker, rightly has a reputation for being independent and honest, as was indicated by the reference to the 75p amount. That took me completely by surprise. I have spoken to officials and we obviously take it very seriously. We will look at it in some detail and I will make sure that the Minister for Disabled People—Mark Harper—the noble Lord, Lord Freud, and the Secretary of State are aware of it, and will write to noble Lords accordingly.

Coming to the points raised by the noble Lord, Lord Kirkwood—although not necessarily in the order in which they were raised, as Eric Morecombe might have said—first: why is CPI used over RPI? I knew that I was not going to agree with much of what the noble Baroness, Lady Sherlock, said when she said that she was going to be a good girl but then changed her mind at the last minute. I know her sense of humour, so I regard that as having been said tongue in cheek. I will come back to her points about RPI.

The CPI is now the correct index for use, as recognised by the Paul Johnson review which was commissioned by the Office for National Statistics. Internationally, it is now the recognised medium for adjusting benefits. I have not heard the Labour Party commit itself to going back to RPI, but perhaps the noble Baroness wants to intervene at this stage to say that of course it will. Perhaps she wants to keep her tinder dry—understandably. The CPI is internationally recognised as the right way to review benefits.

In relation to the three-year welfare order of 1%—I phrased that somewhat clumsily—it will obviously be a matter for the next Government what processes are followed in future. I cannot give any undertaking on that, for obvious reasons. It will depend on the shape of the next Government what the policy is. I cannot anticipate that.

In response to the comments of the noble Lord, Lord Kirkwood, on the state pension, I welcome the fact that he welcomed the growth of the state pension—at least I think he did. It has grown—if we accept that there would have been a move away from RPI to CPI—it has undoubtedly grown positively. Many pensioners are very vulnerable and poor, and they do not have the same access to the jobs market at that age as other people. Necessarily, they are in a different position from people of working age. I recognise what the noble Lord says, and there are many cases where one wishes that we could do more, but these are the economic times in which we live. If it was a time of great expansion, no doubt we would be looking at it differently.

The number of JSA sanctions actually decreased in the year to September 2014, the last year for which we have figures, but the Oakley review stressed that they are a key element of the mutual obligation that underpins the effectiveness and fairness of the social security system. We need to recognise that they are an essential part of the system. On food banks, as the most reverend Primate the Archbishop of Canterbury has said, this is a complex issue. It should not be a party-political issue. It is far more complex than just the level of benefits. There is high take-up of food banks—higher than in the UK, I believe—in the US and in Germany, for example, so it is a complex issue. I pay tribute to the work that food banks have done and continue to do.

On universal credit, it is right to say that we have taken a softly softly, test-and-learn approach. It is also fair to say that the evidence is pretty irrefutable, certainly in the north-west, where it has been rolled out more substantially than elsewhere, that it is working. There has been very successful work with local authorities, for example, in getting people into jobs. We are having some success. On rollout, we are hoping that the great bulk of those affected by universal credit will migrate to it by 2019.

Using evidence from claimants in the north-west of England, the analysis found that compared to similar claimants on jobseeker’s allowance, universal credit claimants are more likely to enter work and spend more time in work. They are consistently more likely to be in work and to earn more. The results are statistically significant. It is only early evidence and we cannot be totally complacent, but it is very encouraging. I hope that noble Lords will welcome that.

Points were raised about housing benefit—I forget who raised the issue; perhaps it was the noble Lord, Lord Kirkwood—and house building. I could not agree more: that has to be part of the solution. We are committed to that in projects such as Ebbsfleet, which will help.

I do not have the points raised by the noble Baroness, Lady Sherlock. The figures for savings credit used by the Labour Party—

[The Deputy Chairman of Committees (The Countess of Mar) (CB)]

My Lords, there is a Division in the Chamber. We will adjourn for 10 minutes, so we will come back at 10 minutes past seven.

--- Later in debate ---

[The Deputy Chairman of Committees]

My Lords, it looks as though everyone who is meant to be here is back, so shall we continue?

[Lord Bourne of Aberystwyth]

I was dealing with the point about savings credit, raised by the noble Baroness, Lady Sherlock. An assessment has been made regarding helping the most vulnerable, which we took to be those people who were not on savings credit. It is worth noting that, while no detailed assessment has been made of the number of people affected, there are more than 500,000 savings credit customers who qualify for other payments, which are being uprated by CPI, so a significant number of them are getting other benefits, as it were.