Welfare Benefits Up-rating Bill

Debate between Lord Bach and Lord Bates

Tuesday 19th March 2013 Lords Chamber

[Lord Bach]

My Lords, I very much support what my noble friend has said in moving the amendment. The House seems very quiet this evening, following the shenanigans of this afternoon when it looked very much to some of us as though there was an organised group on the other side—many of whose members are no longer present, of course, it being after dinner time—who found a huge interest in this Bill in order to keep the Report stage going. Be that as it may, those times are obviously past.

If I read correctly, the Minister—to whom I attach no blame at all for what has been going on, of course—said in reply to my noble friend in Committee that the cost in the last of the three years of allowing this amendment would be around £50 million. Let me tell her one way, at least, that that £50 million could be found five times over. The communities department has £250 million to spend, and has done for some time, in order to make rubbish collections weekly rather than fortnightly. No doubt that is a priority for some, and no doubt it has a validity of its own. However, compared to the wrong which is being done by this Bill—and by others too—and in particular the wrong addressed by my noble friend in her amendment, could the Government not get some proper sense of priority as to what does and does not matter, even at this late stage? That is £50 million, compared with £250 million that is sorted away. This was not mentioned, of course, by the noble Lords who were this afternoon defending the Government’s position with such vigour, because it is an inconvenient truth that in government there is spend which could be much better spent on protecting those who are going to be hammered by this legislation. I ask the noble Baroness to answer my question: what is wrong with spending part of that £250 million, and agreeing to my noble friend’s amendment?

[Lord Bates]

My Lords, I was not intending to speak on this amendment, but I rise at the prodding of the noble Lord, Lord Bach, who seemed to suggest that some kind of operation was going on in the conduct of our discussion. If there was any operation, the strangest thing about it was that there was not a single speech from the Back Benches of Her Majesty’s Opposition. It is amazing. We are talking here about what we recognise as being critical issues. On each amendment, there were probably three speeches from the Back Benches here, but not one single speech from the Back Bench of the Official Opposition. If the noble Lord wants to come back on that, I shall be more than happy to give way.

--- Later in debate ---

[Lord Bates]

I take the noble Baroness’s point and shall not pursue it further. I had not intended to make that point, but it is important. Perhaps I may say one other thing. Since I have trodden on a few toes, let me tread on truly sacred ground.

[Lord Bach]

I wonder whether the noble Lord is going to deal with the amendment in what he has to say.

[Lord Bates]

I am going to deal with it. I want to come back to the point that I was going to make previously, because I think it is relevant. For the first six weeks of the 39 weeks of statutory maternity pay, 90% of the benefit that is payable is linked to earnings. The point that I was going to make is that, while benefits have increased in line with inflation by 20% in the past five years, as we have heard many times, average earnings have increased by only 10%. In fact, according to the Centre for Social Justice, that increase for some of the lowest earners, particularly females, has been 7.8%. I wanted to make the point that in terms of helping with maternity pay at that particular point, the best we can do is see a growth in salaries. If salaries grow, it is axiomatic that the statutory maternity benefit in that first six weeks will be enhanced. The problem is that salaries have been suppressed.

The OBR report relating to the Bill that we are debating shows some quite encouraging signs. For the first quarter of 2014, we have a forecast of increases in the order of 4.5% per year, growing to 4.6% during the period of this Bill. Surely increases of that nature, when linked to the statutory maternity pay of which we are talking, must have some effect. In the same way, I inquired of the noble Baroness, Lady Sherlock, who introduced this amendment, whether the stark numbers that she presented to us contained any element that reflected the suppression of wages that we have seen over the past five years. This has been seen particularly in the private sector, although it has been in the public sector as well, where wage increases are subject to a 1% cap. That is the point that I ask the noble Baroness to clarify when she responds.

Welfare Benefits Up-rating Bill

Debate between Lord Bach and Lord Bates

Monday 25th February 2013 Lords Chamber

[Lord Bates]

The noble Lord is saying that the Official Opposition do not intend to make any pledges, which is interesting because I thought I heard last week that there was a proposal for a mansion tax and that that would be funded by other means. I thought that was a specific spending commitment beyond 2015-16.

My second point picks up on one from the noble Baroness, Lady Meacher, who made a thoughtful contribution. We overwhelmingly agree that the most effective way to alleviate poverty and raise standards is to create jobs. I would have thought that there would be some recognition that the Government’s record on that has been quite reasonable. We would of course like it to be very much better, but contrary to some other countries that are wrestling with the same problems our unemployment rate continues to fall. We now have the highest level of private sector employment in our history and a million new private sector jobs since the last election. That suggests that moves to reform taxation and stimulate the economy are beginning to have some effect, and that they are the best way of tackling this.

We have an Urgent Question coming up on the rating agency decision: the noble Lord, Lord McKenzie, and the noble Baroness, Lady Meacher, referred to this. I was reading through the decision and thinking of making a contribution to the Urgent Question, which I will not now do having secured the Floor in this debate. Moody’s statement,

“explains that the UK’s creditworthiness remains extremely high … because of the country’s significant credit strengths”,

chief among which are,

“a strong track record of fiscal consolidation and a robust institutional structure”.

That is quite interesting. In fact, going beyond that, we are again warned about what could happen to the country’s inflation and the cost of borrowing if the country were to be downgraded again.

Further down, on what could move the rating up or down, Moody’s statement says that,

“downward pressure on the rating could arise if government policies were unable to stabilise and begin to ease the UK’s debt burden during the multi-year fiscal consolidation programme”.

So there is a case for fiscal consolidation. There needs to be a recognition that the Government’s policies of raising tax thresholds and increasing employment are beginning to have some effect.

Notwithstanding that, I come to a point of agreement, which I made at Second Reading: no one on any side of the House is cheering on this measure. It is an economic necessity. It is certainly not something that anyone takes pleasure in.

[Lord Bach]

My Lords, although I am delighted to support these amendments, believing the Bill to be yet another attack by the coalition on the poorest and those in the squeezed middle, I confess to feeling more than a little hard done by being obliged to speak at all to the amendments in this group. The reason for this is that a draft amendment in my name was refused as not being in scope. The draft amendment was to the commencement part of the Bill, on page 2 at line 38, and says:

“Except that no commencement shall take effect until the Secretary of State is satisfied that legal help is available for all claimants who seek legal advice on the validity of the decision on their benefit entitlement”.

At first sight, it sounds as relevant to the Bill as other amendments that grace this Marshalled List, but there it is. My amendment has for some reason ended up on the wrong side of the line. It is not for me to speculate on whether any part of government was asked its view as to the status of my amendment, but I venture the opinion that it may be something of a relief to the Government that my amendment does not stand to be debated or to be voted on at a later stage.

However, I would argue that the principle behind it clearly is relevant to this group of amendments. It could be called a pursuit of justice or, to put it the other way around, the avoidance of unfairness. Because the concentration is rightly on the measures themselves, what is so often left out of the arguments about welfare reform, whether in relation to this Bill or the regulations that we were debating before our half-term break—in this case, the 1% uprating—is what potential real remedy the citizen will be left with if the department’s decision is wrong. Surely the fact that it is wrong in many cases is not in question. We all know that, with the best will in the world, decisions made by the department are often wrong and very much to the disadvantage of those who want to claim them.

For a long time, this has not been a pressing problem. For those requiring legal advice on their benefit entitlements, legal aid has been available—if, of course, these people came within the criteria for legal aid, and many did. For a small amount of legal aid, quality advice has been available, having the effect of both stopping—this is important in cost terms—hopeless claims and establishing good claims where appropriate. It is a system that worked. Putting it at its highest, it has allowed access to justice for all. At a slightly lower level, it has meant that tribunals have not been faced with an impossibly large number of cases, many of which should never have been brought in the first place. It has cost a fraction of the total legal aid budget and is paid to lawyers who are not by any standards well paid. Yet from 1 April, as a deliberate act of government policy, this legal help will no longer be available for anyone in cases relating to welfare benefit entitlements, whether under this Bill or under the regulations and the larger Act passed by Parliament last year.

Thus, people will not be able to get the advice to which they are entitled. Their access to justice will be gone. The department will get away with wrong decisions and tribunals will be overburdened with what I can only describe as rubbish cases—all to save £25 million per year on welfare benefit advice. Perhaps I may remind the House and this Committee that that is one-tenth—I repeat, one-tenth—of the amount set aside by the Department for Communities and Local Government so that there can be weekly rather than fortnightly collections of rubbish. Is this really a proper sense of priorities for a time of austerity?

Further, everyone who knows anything about this agrees that this is not likely to be a saving at all in the end. The state—I fear that it will be the department as much as any other department and perhaps the Treasury—will eventually have to pick up the pieces when things get much worse than they need to. What does the Minister, for whom I have a high regard, have to say about this? What does he say to those who under this Act will not be able to query a wrong decision about their entitlement? They will not be able to do that because they will not be entitled to legal aid for legal advice as to whether a mistake has been made. How can the Minister or any Government justify this either in terms of common decency, which should appeal to this House and normally does, or even under the rule of law?