Welfare Reform Bill

Lord Bishop of Ripon and Leeds Excerpts

Monday 21st November 2011 Grand Committee

Moved by

[The Lord Bishop of Ripon and Leeds]

99ZA: Clause 93, page 62, line 16, after “couple” insert “or family with children”

[The Lord Bishop of Ripon and Leeds]

My Lords, as we come to the consideration of the cap on welfare benefits, the amendments in my name in the next two groupings concentrate on the needs of children. They are concerned not with the existence of the cap but with the way in which it operates for families with children.

Amendment 99ZA in my name and that of the noble Baroness, Lady Tyler, makes families with children a specific category within Clause 93. The clause currently has no reference at all to children. The distinction that it makes is between single people and couples, yet children are most deeply affected by any restriction of benefits. My amendments are an attempt to find ways in which families with children can be helped to care for them where there is unemployment or circumstances which make the parents dependent on benefits.

I am particularly indebted to the Children’s Society for its Good Childhood report on the condition of children and the pressures on them in this country. I am also indebted to it for its work to ensure that children in deprived families are protected from the effect of capping and that the capping arrangements do not damage the needs of children and the way in which they grow up in our society. As the Bill stands, children are disproportionately affected by the cap. The Children’s Society estimates that some 210,000 children will be affected by it compared with some 70,000 adults.

The amendment promotes fairness because it compares like with like. If we are to set a cap for families with children, that should be compared with working families with children—probably those with someone working more than 16 hours a week, as suggested in Amendment 99ABB. That fits with, for example, the Chancellor of the Exchequer’s remarks at the 2010 Conservative Party conference that the cap should be at the level of the earnings of the average working family. I believe that most of us would see an average working family as meaning a family with children, whereas household earnings include those of childless single people, for example. This simple alteration in Amendment 99ZA could remove something like 25,000 children from the cap.

Linked in this group of amendments are those seeking to produce a fair definition of income. Amendment 99ABB aims to relate the cap to the income of working families rather than simply to their earnings. The principle behind the cap is that households should not be better off living on benefits than they would be in work. Income, for a family that is in work, includes, for example, child benefit or council tax benefit. If we are looking for an equitable comparison, then it is the amount that comes in to the household which is relevant, and not simply that which is on the payslip. To replace earnings by income, as Amendment 99ABB suggests, could remove some 38,000 children from the effects of the cap. Again, the concern is with provision for the growth, development and support of children as they grow up within our culture, and those who need the support of a welfare system as they grow up.

The last of the amendments in my name in this group concerns the maths by which “average” is calculated. The word “average” contains a studied ambiguity and I hope the Minister will be able to enlighten us as we look at this. At present, Clause 93(8) gives freedom to the Secretary of State to choose what he means by an average. That seems to me to be a slightly Humpty Dumpty-ish way of looking at the whole issue. It is unsatisfactory because it causes uncertainty. The mean, which is what is proposed by this amendment, is what, in my experience, is normally meant by an average. The figures are added up and then divided by the number of people concerned. It is like a cricket batting average, where the number of runs is divided by the number of dismissals to get the average. The other common so-called average is the median—the middle number. If you have a cohort of 1,000, it is number 500 in that 1,000. That is a remarkably arbitrary figure because it takes no account of the way in which there may be clustering at one end or the other of the total number of 1,000 in that particular example. However, it might well tempt future Secretaries of State, since at least, as figures are at the moment, it would be lower than the mean under current calculations. It may be that exploration could pursue a trimmed mean, which omits the highest paid 5 per cent and the lowest paid 5 per cent of working households when calculating the mean. We need some definition of average if this clause is going to make sense.

These are simple amendments, which do not challenge the basis of the benefits cap. They acknowledge the cost of bringing up children, which is at the heart of the need for family income. They recognise the struggle of parents unable to find work as they seek to care for their families. They could be crucial in helping to avoid plunging children back into poverty. I hope that the Government and the Minister will be able to explore some of these possibilities. I beg to move.

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[Lord Freud]

I should like to engage in a detailed debate on this, but all I can tell noble Lords at this stage is that we are looking at how we ease the transition for families, and we are looking at providing assistance in hard cases.

[The Lord Bishop of Ripon and Leeds]

I have two points. First, do I understand that now, in contrast to the research done some months ago, a far lower proportion of those affected by the cap are in social housing? If so, where have they gone—the people who were in social housing a few months ago but who no longer are?

Going back to the original amendment that we are, in a way, discussing, my second, unconnected, question is that I have still not quite understood why it is inappropriate, when looking at the cap, to look at families with children separately from couples. We have the distinction between singles and couples. Surely, in any discussion of how a cap should operate, children are fundamental and families with children are fundamentally different from those who do not have children. Should that not somewhere come into the way in which the cap, and therefore this clause, are established?

[Lord Northbourne]

I support that view.

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[Lord Freud]

It is for local authorities to make decisions on individual homelessness applications, as they do now. Under homelessness legislation, if the only reason for the person’s homelessness is a reduction in benefit that is outside their control, they should not be considered intentionally homeless by their local authority.

[The Lord Bishop of Ripon and Leeds]

Perhaps I may just thank everyone for all the contributions that have been made. I also thank the Minister for his engagement with the collection of questions that have been asked of him over the past half-hour or so. I retain considerable disappointment in terms of moving forward in this area. There is clearly considerable disquiet among your Lordships over how this is developing. We have not yet pursued far enough issues such as the couple penalty, which the noble Baroness, Lady Tyler, spoke about. We have been exploring homelessness but have not got all that far. It might grow as a result of the cap. The noble Lord, Lord German, and others made points about children. I do not detect any likelihood that the amendment will be accepted unanimously by this Committee but it is with considerable reluctance that I withdraw it. I know that a number of these debates will need to go on behind the scenes if we are not to have the debate all over again on Report. I beg leave to withdraw the amendment.

Amendment 99ZA withdrawn.

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Moved by

[The Lord Bishop of Ripon and Leeds]

99ZB: Clause 93, page 62, line 19, after “benefits,” insert “with the exclusion of child benefit”

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[The Lord Bishop of Ripon and Leeds]

My Lords, the amendment seeks to remove child benefit from the calculation of benefit income when determining the cap. We had a bit of discussion about that in the previous grouping. The argument for this is really quite straightforward: child benefit is a non-means-tested benefit paid to all families, working or non-working. It is not at all an employment benefit and has no effect on whether a person would be better off in work than out of work. It is far better to regard it as a grant to children. It represents the most effective way in which we as a society invest in the next generation, or the next but one.

It is manifestly unfair if child benefit is to be counted as income for non-working families but not counted as income for working families, because there we have talked about earnings. I hope that we can simply remove it from the calculations. If we do, that will release perhaps another 20,000 children from poverty. That discussion has taken place already. We have heard that 99 per cent of families with children claim this benefit, but I do not see what that has to do with the present discussions or with any of the Government’s purposes in establishing the cap. If I am wrong about that, no doubt the Minister will tell me, as well as telling me what effect it can have.

The group also includes Amendment 99C, a compendium amendment to which the noble Baronesses, Lady Taylor and Lady Hayter, and the noble Lord, Lord McKenzie, have added their names. It seeks to put a number of exemptions in the Bill so that they are not subject to the whims of future Secretaries of State. As I understand it, there has been movement by the Government to exempt people in three groups: those in work, those with disability living allowance and widows. What I seek here is simply to get those exemptions into the Bill, and others will speak about them in particular.

Those who have recently left employment—one of the other groups mentioned—are vulnerable, particularly if their leaving employment is the result of developing a disability, and earlier we had a discussion about just how the transitional arrangements work. They are still going to have to wait for six months before qualifying for personal independence payments. To go back to something that the noble Lord, Lord German, was saying, giving people time to find another job is likely to help to keep them in touch with the labour market. Much the same goes for those who are unable to make work pay, which is particularly the case where childcare costs are very high. A small but very vulnerable group of families will be unable to escape poverty by moving into work but they will face poverty through the cuts if they remain unemployed.

The exemption of lone parents with children under five is particularly important. The current system and all our arguments and discussions recognise that those additional commitments make it hard for them to move into work and, indeed, recognise that they are not expected to seek work, which also goes back to the Government’s purpose in having the cap. If they are not expected to seek work—and I absolutely agree with the argument that lone parents with children aged under five should not be expected to seek work—it seems unreasonable to place a cap on the benefits that they should receive when we acknowledge that they should not be put under pressure to seek work.