Welfare Reform and Work Bill

Lord Bishop of Durham Excerpts

Monday 21st December 2015 Lords Chamber

[Lord Lansley]

Until recently—I do not know what the most recent experience is, but certainly until September this year—the Opposition Front Bench in the other place said that they supported the principle of the cap. I suppose they would say that they support the principle of the cap but at the level that it is currently set.

That brings me to the third reason why we have a benefit cap—namely, that we have to decide our priorities for distributing any given level of public expenditure. Of course, we know that Parliament has supported an overall cap on the welfare budget. Frankly, it is better for it to be distributed in relation to specific need than for some households to accumulate it to a greater extent.

If one were to seek to sustain the benefit cap at the level at which it currently applies, rather than apply it at the level proposed in the Bill—I hope that this House would not go down that path—that begs the question of where that money is to come from. Where else in the welfare budget can that saving be made because this step is still part of a necessary process of reducing the deficit over this Parliament? Where there is public support for this measure, where jobs are available in the economy and where there is scope to deliver an additional step towards reducing the deficit and heightening incentives for work while at the same time focusing the available resources on giving support—as we debated earlier in Committee—to those who we want to assist into work, and giving specific targeted support to the maximum extent we can where people have identified specific needs, Ministers are right to say that we should be doing that rather than allowing this benefit to be accumulated by some households to a greater extent.

[The Lord Bishop of Durham]

My Lords, I wish to speak specifically to Amendment 93, in the names of the noble Baroness, Lady Lister, the noble Lord, Lord Kirkwood, and the noble Earl, Lord Listowel, and Amendment 94, in the names of the noble Baronesses, Lady Meacher, Lady Pitkeathley and Lady Lister.

We all agree that the welfare of children is key in our considerations. I remind the Committee that this is rooted not simply in the modern era of rights but in our Judaeo-Christian history, where the care of the orphan was paramount in Old Testament law. The failure to protect orphans was one of the core messages of the prophets of the Old Testament. Jesus himself demonstrated that welcoming and caring for children lay at the heart of what the Kingdom of God is like. We have not always demonstrated this care of the child well—I include my own church in that—which is why the need to ensure children’s welfare is in our legislation. It is there as a reminder to us all, specifically those who exercise power and authority, that children must be taken fully into consideration in decision-making.

In principle, I accept that a benefit cap is a reasonable approach, partly for the reasons which the noble Lord, Lord Lansley, has just outlined, although I am not wholly convinced by his arguments about why the reduction should be made in the way proposed. Inevitably, whichever level the benefit cap is set at will affect children, so it is surely essential that the Secretary of State is required to consider its impact on children’s welfare rather than leave this as a possible other matter that is considered relevant.

Sadly, in the busyness of economics, politics and high-level decision-making, all of us can lose sight of the child. I see it happening in the House of Bishops, in the General Synod of the Church of England, in local authority decision-making and in national decision-making. Therefore, to ensure that this does not happen unintentionally, I hope that the Minister will seriously consider Amendment 93.

Alongside this, I note the well-documented reality of increased costs for those who live with disability, and for their families and carers. I suggest that we have a slight problem with language here. One reason that many carers are not available for paid work is because, frankly, they are working very hard, caring for their family member. To suggest that they are not working is to demean them. It therefore seems entirely reasonable that since the benefit cap will impact these families, serious consideration should be given by the Secretary of State. As the noble Baroness, Lady Meacher, pointed out, this has no financial costs. It should not be left to his or her discretion.

I have three questions. The first is in relation to the point about disability and Amendment 94. Will the Minister agree to bring a suitable amendment on Report to include this in the review? In relation to Amendment 93, does the Minister accept that in the complexities of political and economic decision-making the child can be forgotten or side-lined? In the light of that, will the Minister accept that the welfare of the child must be at the top of priorities and so should be stated in the Bill?

[Baroness Hollis of Heigham (Lab)]

My Lords, I want to come back on some of the points raised by the noble Lord, Lord Lansley. His first point was about public opinion being concerned about the apparent disparity of income between those on benefits and those in work. My noble friend Lady Lister made a good point on this. She pointed out that families in work also receive additional benefits, which are not taken into account, either by any comparison that the Government make or indeed by those families receiving them. If they looked at their entire income, including not just child benefit but, possibly, child tax credits to top up their wages and housing benefit, and then compared that to the total out-of-work income that will now be received by families hit by a cap—in other words, if they were better informed, and if the noble Lord, Lord Lansley, were better informed, if I may say so—they would have a fairer comparison to make.

My second point is that, understandably, a lot of the public do not understand how social security works. The majority of people surveyed think that 40% of the benefit budget goes on JSA—on the unemployed, who should be working. That is the common perception. Actually, it is 4%. That is the size of the disparity. Therefore, our job is to make sure that people understand the facts of it, not to cloud the argument by saying that because they were misinformed we should follow where they go. That has never been the position of honourable parliamentarians. By all means, when the public are well aware of the situation, we should respect that, but we should ensure that any such views are well based on information.

That brings me to my third point. The noble Lord, Lord Lansley, referred—and I think this was echoed by the right reverend Prelate the Bishop of Durham—to the value and the ethic of work. I agree. He is absolutely right that it changes the dynamic of the household. Although I am disappointed that only 4% or so of people were incentivised into work as a result of the higher cap, the hopes the Government may have of encouraging more people into work by making the cap tougher seem remote.

In particular, I remain completely baffled by one point. I hope that the Minister will help me on this. It was raised by the noble Baroness, Lady Meacher, and by my noble friend Lady Pitkeathley. I think that we all accept that where people can work, they should. We should help them through jobcentre advisers and with appropriate benefit support for getting back into work. I do not think there is any dispute around the House that if work is there, where people can work, they should work. But the Government are quite explicit that any lone parent with a child under three is not required to work. They are expected to attend interviews when the child hits two but not to work until the child is three. Yet that lone parent with a child under three will be caught by a benefit cap which is supposed to propel her into work, even though the Government have expressly said that she is not expected or required to work—and many would think that that was very wise.

My noble friend Lady Pitkeathley made the same point about full-time carers: they are indeed working very hard. Their work is unwaged but it is full-time work. Yet they, too, are being caught, even though the Government recognise, by virtue of the payment of carer’s allowance, that they are working more than the 35 hours a week that entitle a person to get their carer’s allowance—and on top of that, they may well be supporting a second person as well. The Government have accepted that both these groups of people should not be expected to work, which is why they have the benefits. They then argue that the cap should apply to them none the less, in order to incentivise them into work. I am completely baffled by this morally, as well as politically and economically, and I hope very much that when the noble Lord, Lord Freud, comes to respond in a moment he can help me answer that question.

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[Lord Freud]

There is a difference between having a specific provision that does not require people to work and having one that actually financially incentivises people to work. That is the difference. As the noble Baroness pointed out, we do not require anyone with a child under three to go to work, but people often go into work with a child much younger than that. When people look at this measure on balance, they may think that it is the appropriate thing for them. That is my best answer to this question.

This is a peculiar process and I am running incredibly late now, but I think that noble Lords would prefer me to finish. I have just had so much dialogue, and that is rather unusual.

[The Lord Bishop of Durham]

Will the Minister accept that he has just proved my point that children get ignored? I asked him a specific question about whether or not that happens, and he has not answered it.

[Lord Freud]

I apologise to the right reverend Prelate. The only reason why I have not answered by now is that I am taking an intolerably long time to get through this speech. I will come to his point. I crave noble Lords’ indulgence to let me get through and then, right at the end, if they have some outstanding questions, we will have another—

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We must reach a point where we say, “Let’s just wait and see how this works out”. If the country trades itself out of austerity, then we should be more generous and think about re-establishing the link. If the country goes in the opposite direction, of course, there may be more adversity that we all must face. My point is that everybody needs to face it more equally. I do not care what is said: we are not all in this together. If anybody ever wanted evidence of that fact, Clauses 9 and 10 demonstrate that beyond peradventure. I will resist these clauses as strongly as I am able during the rest of the Bill’s proceedings.

[The Lord Bishop of Durham]

My Lords, I support these three amendments. I do not wish to repeat what has already been said but the passion of the noble Lord, Lord Kirkwood, echoes in my heart because I, too, am deeply concerned by the impact these freezes will have on the poorest.

Most of us were delighted when the Chancellor of the Exchequer decided in the spending review that the national economic situation meant that we could, after all, as a nation afford not to make the previously determined cuts in tax credits. If this House had not voted the way it did, I presume he would not necessarily have been given the opportunity so to reassess in the light of the national economic situation. If the Bill is passed as it stands, the Chancellor has no option but to enact a freeze for the next four years.

While accepting that welfare spending must be controlled, we need to look very seriously at the impact on the poorest. I do not want to see the Chancellor’s hands tied to a freeze if the national economic situation continues to improve as forecast, or perhaps even more significantly. Suppose it does: who should be the beneficiaries? Surely, it should be the poorest. If the economic situation improves in 2017 and the Chancellor realises that actually, the nation could afford a slightly higher rate of child benefit or other benefits, that is what he should allow—not give it to people already perfectly well off because we earn enough. As the noble Lord, Lord Kirkwood, said, austerity, frankly, is not hitting large numbers of us. Surely, then, the Chancellor should value the freedom to once again say, “Well, we didn’t think we would be able to afford this but the national economic situation is better than expected so we are delighted to be able to offer a small—or perhaps large—amount of extra support for the well-being of children and the most needy in our country”. Does the Minister not think that would be a good position for the Chancellor to be in, rather than having to stick with a freeze without exception?

[Baroness Evans of Bowes Park]

My Lords, I thank the noble Baronesses, Lady Sherlock and Lady Lister, and the noble Lord, Lord McKenzie, for these amendments. I will first set out why we believe a four-year freeze of certain social security benefits, child benefit and elements of working tax and child tax credits is necessary.

In total, measures to freeze benefits and tax credits are projected to contribute £3.5 billion of the £12 billion welfare savings the Government are committed to by 2019-20. The Government need to make these savings to reduce the deficit and to manage welfare spending. Spending on welfare increased by 54% in real terms between 1999 and 2010, and tax credit expenditure more than trebled over the same period. Despite the progress made in the last Parliament to increase incentives to work and reduce reliance on benefits, there is still more to do.

Some 7% of global expenditure on social protection is spent in the UK, despite the fact that the UK has only 1% of the world’s population. Between 2008 and 2015, average earnings rose by 12%, and the minimum wage increased by 17%. At the same time, benefits such as jobseekers’ allowance increased by 21% and the individual element of child tax credit rose by 33%. The benefit freeze will begin to reverse this trend. However, we are clear that we must continue to protect the most vulnerable. That is why we ensured that certain benefits are exempted from the freeze, such as pensioner benefits, benefits which contribute to the additional costs of disability and care, and statutory payments.

Concerns have been raised about the level of benefit rates after three years of 1% rises, to now be followed by four years of the freeze. Successive Governments have always sought to strike a balance between the needs of claimants and affordability, and I can reassure noble Lords that when introducing this freeze we have had due regard to these issues, but we believe we have struck a balance that protects certain key benefits and generates the savings I have set out.

There are no cash losers with this policy, and the continued growth in wages will help to mitigate the impact of the freeze for working families. The OBR expects wage growth to reach 3.9% by 2020. Around 30% of households will face a notional loss but, as I have said, the other things we are doing in the broader economy should go some way to mitigate it, and I will go through a couple of them in a second. We have also fully assessed the Bill’s impacts on equality and the wider budget meeting our obligations, as set out in the public sector equality duty.

The purpose of the amendments is to replace the freeze with a duty on the Secretary of State to review those benefits, having regard to inflation and the national economic situation. This Government’s overall approach is to give a level of certainty to taxpayers, employees and benefit claimants. As well as setting out the four-year freeze, we have also set out a clear plan to raise the national living wage to £9 an hour by 2020, to increase the tax-free personal allowance to £12,500 by the end of the decade and to double the free childcare available for working parents of 3 year-olds and 4 year-olds to 30 hours a week, which is worth £5,000 a year. The amendments would take away the certainty that we are attempting to implement, and for that reason we cannot support them.

The noble Baroness asked what happens after the four-year period.

Welfare Reform and Work Bill

Lord Bishop of Durham Excerpts

Monday 14th December 2015 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, I will speak very briefly in support of my noble friend Lady Nye, who has made such a good case about gender. She made most of the points I want to make, but I have been sent information by City & Guilds, which has done research into careers advice, which shows how gender-biased careers advice is channelling young women into a very gender-biased labour market. So it is being reinforced. It is crucial that the apprenticeship system does not reinforce and aggregate that gender bias which we have heard about from my noble friend. As other noble Lords have said, it is about not just quantity but quality. From a gender perspective, quality is about the sectors within which young women and young men are being channelled.

[The Lord Bishop of Durham]

My Lords, in the north-east I get to see apprentices in the car industry, the subsea industry, traditional industries such as stonemasonry, farming, and all kinds of sectors in schools. It is brilliant to be able to see them face to face, to meet them and talk to them. There are brilliant apprenticeships and we need to grow them. Therefore, the 3 million target is fantastic, but I have to say that where the Bill refers to,

“information about the progress made in the reporting period towards the apprenticeships target”,

which is simply the figure of 3 million, that does not give the information about the types of apprenticeship that there are. In the light of the previous comments, I add that in two particular manufacturing industries I went to there were fantastic apprenticeships with brilliant young men, but no young women at all. I am told that there have not been any. We need this kind of information to ensure that apprenticeships are of the quality and standard needed. Because of the lateness of the hour, I will stop at that.

[Baroness Evans of Bowes Park]

My Lords, I will attempt to respond to various points, but again, due to the lateness of the hour, I will try to keep my remarks brief. Where I do not respond to points I will endeavour to get further information to noble Lords relatively quickly.

The Government are committed to reaching 3 million apprenticeship starts in England in 2020. Clause 2 will place a duty on the Secretary of State to report annually on progress towards meeting that target. The amendments that have been tabled would place additional reporting requirements on the Secretary of State to publish a range of information as part of the annual apprenticeship reporting requirement set out in the Bill.

Welfare Reform and Work Bill

Lord Bishop of Durham Excerpts

Wednesday 9th December 2015 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I had not intended to speak in this debate. I am no social security expert, but I did have quite a lot to do with these issues when I worked in 10 Downing Street as Tony Blair’s Europe adviser. My intervention was prompted by what my noble friend Lady Blackstone said.

It is not very popular today to talk about the admirable things that new Labour did, but I am certainly happy to do so. In 1997, we inherited a situation where, I think, 25% of children were living in poverty. That was the new Labour inheritance. It was the result of de-industrialisation, the downgrading of social security and all that had happened in the Thatcher years. We did not run away from the fact that 25% of children were living in poverty; we tried to do something about it. What is more, as members of the European Union, we were very happy to measure ourselves against the performance of other members of the European Union on the score of tackling poverty and social exclusion.

Actually, Britain’s record in this area is pretty deplorable and, I am afraid to say, still is not very good. One of the things we did was support a comprehensive set of indicators that was devised to measure poverty and social exclusion. This was done by a working group under the leadership of probably the most distinguished economic statistician of his generation, Sir Tony Atkinson. We were glad to see this comprehensive set of measures, including the standard measures of child poverty and lots of other measures of social inclusion, because we wanted to learn from the experience of other countries about how best to try to tackle the deeply embedded problem of child poverty.

It seems to me now that the Conservative Government appear to be trying to treat Britain, as it were, as a special case. They no longer want to see Britain compared to other countries on the standard measures. They want to devise their own measures in relation to what they think matters. This is deplorable because all of us in this House ought to share those ambitions and we all ought to be able to see how we are doing in relation to other countries and learn from the experience of other countries.

The second point I will make about what I remember from 20 years ago is that when we came in, I was certainly very convinced by the argument that the best answer to poverty was a job. I think that the noble Baroness, Lady Stroud, shares that view. There is a lot of truth in that proposition, but as time has gone on and we have seen how polarisation in our labour market has increased—and it has increased dramatically in the last two decades—and we have seen the spread of low-paid and insecure work, it is much more the case now than it was 10 or 20 years ago that people can be in poverty and have a job at the same time. That is why I thought that the speeches made about the importance of measuring in-work poverty were so right. This is a problem of our times: it has become a much more serious problem, and if we try to turn our back on it, we will betray the cause of a more socially just society.

[The Lord Bishop of Durham]

My Lords, I will speak in support of Amendments 24, 25 and 26. I know that everyone in this House, and indeed in the other place, is committed to protecting those children in our society who are vulnerable to suffering the worst effects of poverty. Indeed, I know that there is a broad recognition across the House that some form of statutory reporting on the issues of child poverty and children’s life chances is an important tool in driving initiatives that will combat that poverty. The questions about what should be included in Clause 4 are questions of best practice, rather than questions of best intention.

I welcome the Government’s commitment to tackling the disadvantage that can arise from worklessness and poor educational attainment. It is certainly true that children growing up in long-term workless households are placed at a significant disadvantage to their peers when it comes to their future working lives, as are those who leave school with low educational attainment. A thorough reporting on these indicators should help drive initiatives to combat these two factors, which can be so detrimental to the life chances of children. I welcome the Government’s focus on these two priorities.

However, it is my belief—and the belief of the vast majority of organisations working in this area, as we have already heard—that measuring workless households and educational attainment alone is insufficient as a method of measuring a child’s life chances and exposure to poverty. There are, of course, all sorts of other factors that can influence the future prospects of children: problem debt, substance abuse, family breakdown and substandard housing. The list of life-chance indicators should be extended to include these. We also know that children’s life chances are shaped very early on in their lives, so we need to be looking at cognitive and social development at a younger age.

Most significantly, however, the current set of life-chance indicators completely fails to capture income poverty and material deprivation, particularly in relation to in-work poverty. I think that we have to keep on repeating this: some 64% of the children defined as living in poverty under the current measures are in working households. This should give us cause to stop and think about how effective these new measures will be when no assessment of in-work poverty is facilitated. It is particularly problematic given the well-established body of evidence demonstrating the strong link between material deprivation and the wider life chances of the child.

The Government talk confidently about focusing on the root causes of poverty rather than the symptoms, but I think that the reality is a little more chicken and egg than perhaps they would like to admit. Let us take as an example educational attainment. Does poor educational attainment make it more likely that children will experience poverty and deprivation in later life? Yes, of course it does, but income poverty and deprivation also make it far more likely that children will do less well at school, lacking the resources they require to compete with their peers on an even footing.

As it stands, Clause 4 is inadequate. In the right desire to move away from an overly simplistic definition of child poverty rooted in money alone to a broader-based, root-cause understanding, I fear that a tap-root cause is being lopped off, and that will make the other roots less stable. We all know that if you take out the tap-root, the danger is that the whole tree will fall. We must retain some assessment of income poverty, and particularly in-work poverty, in the life-chances measures. Given that at Second Reading the Minister, the noble Lord, Lord Freud, committed the Government to the continued publication of the HBAI measures that are currently enshrined within the Child Poverty Act 2010, it seems odd that the Government are so reluctant to include those measures on a statutory basis in this Bill, which would cost almost nothing. I and most organisations working in the area of child poverty would like to see this happen. At the very least, a report of in-work poverty that draws on those figures must be included within the reporting obligations, as has been suggested by the noble Baroness, Lady Lister. A failure to report on in-work poverty would be a real failure by a Government who have prided themselves on combating low pay and making work pay.

[Baroness Hollis of Heigham (Lab)]

My Lords, I am keen to follow up on the speech of the noble Baroness, Lady Stroud. She has asked the right questions, if I may say so, but I do not go with her on some of her responses. First, she criticised relative poverty as a measure for assessing income poverty and is therefore throwing it out and retaining only worklessness and the educational attainment of children at the age of 16 as her main drivers. She did not remind the Committee that relative poverty is one of four indicators that include persistent poverty, absolute poverty and material deprivation. She is right to say that relative poverty reflects what is happening to the broader economy, but you need the other considerations and measurements as well, which we have. Taken in the round, they—particularly persistent poverty—are an appropriate, proper and dynamic snapshot of what is happening to families. I think that she will recognise that.

Secondly, the noble Baroness asked exactly the right question, which is this: why is it that half of people in poverty come out of it the following year but the other half are stuck, and how do we get to those who are stuck? If we look at what the Government are proposing in this Bill, and have been proposing through the summer, we will see that the reasons people are going to be stuck in poverty and therefore move into persistent poverty are being made worse on almost every count. People in work and in poverty who have poor skills certainly need job progression; that is well established. However, the primary reason why people are in work and have low pay and therefore are in poverty is because their work is part-time, insecure, or based on zero-hour contracts where from one week to the next they do not know whether they will be working for 10 hours or 30 hours, or they have young children. Most of us would not wish to see lone parents being forced, against their judgment of what is best for their family, to leave a two or three year-old in professional childcare while they work on a supermarket till when they feel that they should be trying to balance their work and life responsibilities—rightly so in terms of working part-time, but also in terms of bringing up their children so that those children can respond to the fact that simultaneously they have a parent at work and a parent at home. It can be hard for children, so we should not make it harder. That is a debate which I do not doubt we shall return to.

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[Baroness Maddock (LD)]

My Lords, I shall speak to my Amendment 35. Observant noble Lords may have noticed that the last part of the sentence in proposed new Section A1AH(2), “its fuel strategy”, should read “its fuel poverty strategy”, as in the rest of the amendment.

The purpose of the amendment is to ask the Government to record and report on the effects of the proposed changes in the Bill on their fuel poverty strategy. I am concerned about this on three counts. The first is the effect of cold homes on children, the elderly and the disabled. Many of them will be pushed further into fuel poverty by the changes in the Bill. Secondly, I do not want to see the possible undermining by the changes in the Bill of the fuel poverty strategy agreed by the last Government. My third concern is the effect of the Bill on the already large numbers of people who are in fuel poverty in the area of the country where I live, Berwick-upon-Tweed in north Northumberland.

The effects of cold homes on people are well known. If people cannot afford to pay their fuel bills and their income goes down, more people are going to be in cold homes and more will be in fuel poverty. Of those who are over 60, over 1 million are at present in fuel poverty. We know that poor and cold housing costs the National Health Service nearly £1.5 billion every year. We have levels of excess winter deaths here that are higher than in most of western Europe, particularly the Scandinavian countries where, as we all know, temperatures are very much lower. The inability to keep warm leads to ill health, not just to early death.

I turn to disabled people. As we heard in debates on Monday, disabled people generally require higher levels of warmth than most of us but generally have a lower income to cover the extra costs. That was very well laid out in the discussions we had on Monday evening. There are proposals in the Bill, which we have yet to discuss so I shall not go into them now, to reduce the income of certain disabled people by 30%. If their income is to be reduced by 30%, there are going to be a whole lot more people in the category of fuel poverty.

I turn to children. Cold homes in Great Britain are more likely than not to be damp homes. This leads to very poor health for young children living in them, particularly with instances of asthma and chest infections, and therefore these children will take more time out of school and nursery and will have lower attainments in school and reduced life chances, which is what the Government are concerned about. Someone earlier—I think it was the noble Baroness, Lady Blackstone, who is not in her place now—mentioned the fact that children trying to do homework in the cold is one thing that we know affects their ability to keep up at school.

As was also said earlier, the Government are not very keen on strategies these days. But the second child poverty strategy, covering 2014 to 2017, aimed to improve living standards and prevent poor children from becoming poor adults through raising educational attainment. The Government are still talking about that but—I think this has been well set out in the discussions we have had—this Bill dismantles many elements of that strategy. The Minister has explained a little to us today, but he needs to explain a little more about the mismatch of this policy with other policies.

The statistics on the effects of cold homes are very stark. The risk of experiencing severe ill health and disability during childhood and early adulthood is increased by 25% if an individual lives in poor and cold housing. Children living in inadequately heated houses are more than twice as likely to suffer from conditions such as asthma and bronchitis as those living in warmer homes, and 40% of vulnerable households are faced with the stark choice of heating or eating. This has been looked at and we know that 20% of parents in that situation will often go without food so that their children can eat.

Cold homes are currently a bigger killer across the United Kingdom than road accidents, alcohol or drug abuse. For the statistics that I have laid out this afternoon I am grateful to Age UK; National Energy Action’s fuel poverty strategy, of which I am vice-president; Friends of the Earth; and the Association for the Conservation of Energy.

During the last Parliament, I and many others worked very hard to persuade the Government to adopt a fuel poverty strategy. I do not want to see that work undone. Currently, there are 13 million low-income individuals who, after housing costs, have incomes well below £16,000 a year. Just under half of them are in employment but are still struggling to meet living costs, including utility bills. We have heard more about that this afternoon. We know that increasing household incomes is an essential part—it is not the only part—of tackling fuel poverty. So what figures do the Government have about how the changes in this Bill will affect low-income households that are at present in fuel poverty?

I live in Berwick-upon-Tweed. Every week, when I come down to London, I find that it is at least 5 degrees centigrade warmer. Therefore, it is not surprising that the area I live in has high figures of fuel poverty. In Berwick itself, we have 1,800 households in fuel poverty, which is 15% of our population. In the whole constituency of Berwick-upon-Tweed, there are nearly 4,500 people in fuel poverty, which is 13%. Across Northumberland, there are 16,000 people in fuel poverty. To add to that, we have some of the lowest levels of take-up of further and higher education in the country. We are also an area of low wages and low skills. No one from our local high school has gone to Oxford or Cambridge for over 10 years, unless their parents paid for them to travel 67 miles to further education colleges and sixth forms in Newcastle. I believe that the changes in this Bill may work against the already poor life chances of many young people in Berwick-upon-Tweed and north Northumberland.

I hope that the Minister will be able to tell me whether the issues that I have raised were taken into account when drawing up the Bill. He mentioned life chances earlier and outlined some of the Government’s thinking, but I hope he can assure me that they will look a bit harder at this. Whatever his answer is, it is clear—and has been made clear in the discussions we have had this afternoon—that this amendment merits serious consideration by the Minister today.

[The Lord Bishop of Durham]

My Lords, I rise to speak first to Amendment 31. Given the serious enthusiasm that the Government have for introducing “life chances” as a title and theme, it would make complete sense for the Government to want to report on improvement in children’s life chances in the future. So I commend this as being entirely in line with the purpose of the whole Bill—it would make sense to report.

I will speak now to Amendments 36 to 40 and 42 to 45, and I would like to keep us in the north-east of England. Yesterday, it was my privilege to open the new building for Holy Trinity primary school in Seaton Carew in Hartlepool, and to then go to Prior’s Mill primary school in Billingham, both of which are Church of England schools. I add that I have visited the school in Berwick that the noble Baroness mentioned and can confirm what she said; it is a very fine school but it has not produced people for higher education in the way that it should.

The proposal to change from a “Social Mobility Commission” to a “Life Chances Commission” gives us a very rare opportunity to change the title of a government commission so that it is understood by the very children whom it seeks to serve. Most of our departments and so on do not resonate with the life, language and conversations of children themselves. However, in both the schools I visited yesterday, I found myself talking with those children about their hopes and their dreams and their fears, but they were longing to talk about the chances and hopes that they had in life. Those were not purely about money: they were about work and home and family and so forth. Not once did I hear any of them talk about social mobility possibilities.

In all seriousness, I say that it would be a much more sensible heading and title for the commission and it would fit much more accurately with the aims and purposes that the Government have stated for life chances, so I would seize this with every opportunity. It would please the children of the nation if they understood what the commission was about.

[Lord McKenzie of Luton]

My Lords, I shall be brief because I know that we want to make progress today. I support wholeheartedly my noble friend Lady Lister, with her brilliant exposition as to why we should substitute “life chances” for “social mobility”. I join her in opposing the proposition that Clause 5 stand part of the Bill. We have a very specific amendment in this group, Amendment 41, which is merely to delete the words, “on request”, so that the commission, whatever its final title and remit, can be proactive in offering advice to the Minister. That obviously carries the implication that the commission must be appropriately resourced. Perhaps the Minister will tell us what is intended in this regard. I hesitated to raise that issue, because I feared that the Minister was going to tell me that we put it there when we were in government, but I hope that he will not. Even if we did, it seems to be entirely reasonable that it should now be expunged from the provision.

I also support those who argue that there should be proper strategies, so that you do not just have odd reporting obligations: there must be an intent to come forward with a strategy focused on life chances and on fuel poverty. As the noble Baroness, Lady Grey-Thompson, said, if we do not have a strategy, where is all this reporting going to lead? Given the hour, I think I will leave it there.

Welfare Reform and Work Bill

Lord Bishop of Durham Excerpts

Tuesday 17th November 2015 Lords Chamber

[The Lord Bishop of Durham]

My Lords, I support many of the principles underlying this Bill: the importance of personal, as well as collective, responsibility; the value of decent work, not just financially, but for human dignity; the role of the welfare system in encouraging positive behaviours; the recognition that poverty is not simply about lack of income; and the desire for fairness for those who receive from and contribute to the system, including the vast majority of us who do both at different points in our lives. None of these is completely new, but the Government’s approach to welfare reform has certainly reinvigorated the debate about poverty, helping to challenge implicit assumptions and some very tired thinking. Governments naturally want to distinguish themselves, but in seeking to introduce a fresh perspective on old problems, there is always a danger of going too far or of throwing out the good with the bad. That is my concern about some of the measures being discussed today.

The first is the proposal to replace the existing child poverty measures and targets with an obligation to report on a set of life chances indicators. Where I agree with the proposal is that poverty is not simply a matter of economics and the possession of material goods. Unemployment, low skills, poor housing, addiction and family instability are all tied up with people’s experiences of poverty, so it is right to acknowledge this in some way in our understanding of poverty and our approach to tackling it.

However, to scrap all of the income-based measures ignores the importance of money in meeting people’s basic needs. It also ignores the wealth of evidence pointing to the damaging effects that income poverty has on children’s lives in terms of their health, education and future opportunities. Life chances are affected by a multiple of factors, and basic income is one of them. When the coalition Government carried out a public consultation on child poverty measurement in 2013, more than 200 public, academic and voluntary organisations responded. The overwhelming majority argued that poverty is defined by lack of income and that other non-income-based indicators should be used to supplement the current income-based measures. Only one respondent did not think that income should be included in the child poverty measures, yet this is what is proposed in the Bill.

If the Bill goes through in its current form, there will be no recognition of in-work poverty in spite of the fact that around two-thirds of children in poverty have at least one parent in paid employment and there will be no targets for the new indicators and no duty on central and local government to publish strategies to tackle child poverty, simply an obligation to report on the listed indicators. With child poverty projected to rise by up to a million over the next five years, it is convenient, but unacceptable, for the Government to abandon the commitment they made to these targets when the Child Poverty Act was voted through in 2010 with cross-party support.

Last week, I wrote to noble Lords to express deeply held concerns—I am grateful to the noble Lord, Lord Hodgson, for having read the letter and commented on it—about the limit that this Bill would introduce on the support for families with more than two children, so noble Lords will not be surprised that I am raising them now. We firmly believe that children are a blessing and strongly resist anything that implies that an additional child is unwanted or burdensome. Every child is valuable; every child matters. We are also very concerned about the practical consequences for the families affected who are already struggling to make ends meet. Larger families will lose up to £2,780 for each additional child beyond the first two. Two million children will be affected by the end of the Parliament, many of whom are already in or at risk of poverty. The majority of these live in working families with limited scope to increase their income. Also affected will be many families who had their children in good times, but who are unlucky enough to lose their job, become ill or disabled or experience a divorce. The Treasury is unable to forecast its own finances accurately more than a year ahead, yet parents are expected to anticipate their own future income for the next 16 years.

As faith leaders, we believe that this measure is fundamentally anti-family and surely fails the Government’s own family test. In extreme circumstances, older children may be forced to leave home before they are ready and large families may break up in order to avoid the two-child penalty. Vulnerable parents who are bereaved or fleeing domestic violence often require extra support at a time of acute need, but they will not be adequately supported if they have more than two children. Kinship carers and private foster parents—there are around 215,000 in the UK—may be unable to take on this vital role if they are no longer eligible for additional support.

This measure will also have a disproportionate impact on particular faith communities where large families are the norm, perhaps because of parents’ devout desire to avoid contraception or abortion. If the two-child limit is designed to encourage lower-income families to have fewer children there is very little evidence that it will be effective. Instead, the impact will be to increase child poverty, penalising children in a largely futile attempt to influence the behaviour of their parents.

A parent from the St Chad’s Community Project in Bensham in my diocese had this to say about the changes: “I receive Working Tax Credit as a single parent with three young boys to support. I feel that making these changes would be adding more pressure to my family. I already have to be very careful with my spending budget — rent, council tax, electric and gas all have to be paid before everything else. My children would suffer as a result. The extra money I get goes towards the children’s school uniform, trips and extras”. She is worried that she will not be able to manage if her benefits are cut, having only recently turned her life around when she was offered a job as a part-time support worker. This particular family may be protected in the short term, but future clients will find life gets even harder if these changes are introduced. Already, this project refers five to 10 families a week to the local food bank, because they are struggling so much, even though the majority of its clients are in work.

This situation will almost certainly get worse as a result of this Bill. I therefore urge the House to support amendments that would relax the limit on support for larger families—or at least reduce its impact by protecting the most vulnerable families—and look very carefully at ensuring that income is included as a factor in child poverty.