Gender Balance among Non-Executive Directors (EUC Report)

Lord Boswell of Aynho Excerpts

Thursday 10th January 2013 Lords Chamber

Moved By

[Lord Boswell of Aynho]

That this House takes note of the Report of the European Union Committee on the Commission proposal for a Directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures (COM(2012)614, Council Document 16433/12) (9th Report, HL Paper 97).

[Lord Boswell of Aynho]

My Lords, in moving this Motion I invite the House to agree with the proposal of the European Union Committee that a reasoned opinion should be issued. Our report concerns a proposal for an EU directive on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures. This proposal was examined in great detail by our sub-committee on the internal market, infrastructure and employment, which is chaired by the noble Baroness, Lady O’Cathain. I should make it clear, first, that we are very grateful to her. Secondly, while I am moving these Motions that relate to subsidiarity, I will be looking to her to answer any detailed points about the underlying policy issues, for her committee has heard the evidence. I have merely had the opportunity of studying it.

Before I explain our thinking on this proposal I want to make it absolutely clear, for the avoidance of any doubt, that we fully support the aim of increasing gender diversity on boards. There is no backtracking on that. Having studied the report of the debate on a related Motion in the House of Commons earlier this week I was delighted to see that Her Majesty’s Government were of the same mind. In this debate it would be helpful if the Minister could respond by giving us an update on the current position in relation to women’s participation on boards and also, in particular, on Her Majesty’s Government’s initiatives in taking this further forward. I sense that the House is absolutely at one on the strategic objective.

Equally we applaud the achievement of the European Commission Vice-President, Viviane Reding, in bringing this issue to the forefront of political debate in Europe. However, our report is about whether the Commission’s proposal is the right way to respond to this important issue and we have come to the conclusion that it is not. Our view is that the Commission’s proposal is inconsistent with the principle of subsidiarity.

We are frankly not persuaded by the Commission’s suggestion that a figure of 40% should be imposed in order to ensure a so-called critical mass of women on boards in member states where boards are traditionally smaller. The proposal fails to take into account the rate of change and the board structures within each member state, and does not adequately make the case that measures taken at national level are not working. In the UK in just over a year and a half, from February 2011 to November 2012, the proportion of FTSE 100 board members who are female went up by 4.8% and by 4.2% in the case of FTSE 250 board members. There have been concomitant improvements in a significant number of other European member states, though not in all.

A key test under the subsidiarity principle within the Lisbon treaty is whether the European Union can add value. The Commission suggests that its proposal is necessary for the practical and competitive functioning of the internal market. We feel that this justification is weak when balanced against the administrative burdens of the proposal and the varying cultural contexts and practices within differing member states.

As I mentioned earlier the European Union Select Committee, which I have the honour to chair, fully supports the aim of increasing gender diversity on boards. I have a personal interest in this subject and can echo my own support of it. We believe that the European Commission can still usefully complement this by monitoring individual member states’ action and in cases where individual member states fail to comply with their general, pre-existing obligations to combat discrimination the Commission should then consider further action. However, it remains our view that the European Union-wide legislative action at the present time would be unnecessary and could be counterproductive to the Commission’s aim of increasing gender diversity on boards. Action at the member-state level to address these issues would be more effective. We therefore believe that the proposal is inconsistent with the principle of subsidiarity. Under the treaty, we as Members of Parliament have an obligation to consider that and to issue an opinion accordingly if that is our view. In that spirit and context, I beg to move.

[Lord Pearson of Rannoch]

My Lords, I am a strong supporter of women on boards but I offer only qualified congratulations to the noble Lord, Lord Boswell, and to his committee on opposing their imposition on our boards by Brussels. Of course, it is all that we as a national Parliament can do—but we must not make the mistake of thinking that somehow we are taking part in anything resembling a worthwhile democratic process.

The report put its finger on what has always been the fundamental flaw in the whole fraud of subsidiarity. It has always applied only to those areas of our national life that are not already controlled by Brussels. It has never been applicable to the single market and so to commerce and industry, agriculture, fishing, foreign trade and much else. Under the Lisbon treaty, a democratic fig-leaf was delicately placed on this unseemly state of affairs by introducing the procedure that we are using tonight. The transparently unsatisfactory nature of that fig-leaf can be found in Protocol 2 of the treaty, on the application of the principles of subsidiarity and proportionality. It is worth quoting from that protocol to show just how pointless this whole exercise is.

Article 7 of the protocol states:

“Where reasoned opinions on a draft legislative act’s non-compliance with the principle of subsidiarity represent at least one third of all the votes allocated to the national Parliaments … the draft must be reviewed … After such review, the Commission”—

or, where appropriate, other proposers of legislation—

“may decide to maintain, amend or withdraw the draft. Reasons must be given for this decision … Furthermore, under the ordinary legislative procedure”—

that is, qualified majority voting—

“where reasoned opinions on the non-compliance of a proposal for a legislative act with the principle of subsidiarity represent at least a simple majority of the votes allocated to the national Parliaments … the proposal must be reviewed. After such review, the Commission may decide to maintain, amend or withdraw the proposal”.

I will not bore noble Lords further. The treaty goes on to say that in the final crunch, you need 55% of the members of the Council or a majority of the votes cast in the European Parliament before you can stop the Commission doing what it wants.

That is how democratically weak this whole procedure is. If the noble Lord, Lord Boswell, does not agree, will he tell me how many Commission proposals have been withdrawn under the procedure that we are now using? What hope does he hold out for this one? In other words, have we got on our side at least one-third of all the votes allocated to national Parliaments? Will the Commission even have to review this proposal, never mind whether there is any chance of seeing it fall?

I hope that we succeed, because I strongly support the presence of women in the boardroom. However, their presence should be a matter for shareholders, perhaps with a little gentle persuasion from national Governments. It should not be just one more morsel of national sovereignty devoured by the corrupt octopus. To that extent, I support the noble Lord’s Motion and look forward to his answers.

--- Later in debate ---

[Baroness Stowell of Beeston]

My Lords, as this is a debate on a Motion from a Committee of this House, my contribution is purely to set out the Government’s position, not to respond to the debate; I will leave that to the noble Lord, Lord Boswell. As other noble Lords have described what the Commission is proposing and explained eloquently the general principles of subsidiarity, I will not take any time on that but get straight to the matter, which is the Government’s position on the directive.

We set that out in the Explanatory Memorandum, which was sent to the European Scrutiny Committee by my honourable friend the Minister for Employment Relations, Consumer Affairs, Women and Equalities. We gave the Government’s assessment of whether the Commission’s proposal meets the principle of subsidiarity. Since submitting that memorandum, the Government have had an opportunity to further analyse the directive from the Commission and we have concluded that its proposals do not meet the test of subsidiarity. We believe that there is no reason why member states cannot achieve these objectives acting alone, and there is no evidence of any value added by the involvement of the EU in the way put forward in that directive.

However, the Government are committed to increasing the number of women on boards; and, as the noble Baroness, Lady Thornton, and other noble Lords have said, it is very important that we, as a Government, make it absolutely clear that the fact that we do not believe that the Commission’s proposals meet the test of subsidiarity in no way dilutes that commitment. We believe that increasing the number of women on boards is the right thing to do because it is the right thing for women, for business and for our country’s wider economic success.

We pledged to promote gender equality on the boards of listed companies in the coalition agreement. An independent review in 2011, led by the noble Lord, Lord Davies of Abersoch, identified the barriers preventing women from reaching senior roles in business and recommended to the Government a business-led strategy to bring about the necessary change. We have been working with business to implement this strategy and we believe that the results already demonstrate that national-level solutions are working.

The Government believe that this voluntary business-led approach is right for the UK. We need to see a real culture change taking place at the heart of business if progress is going to be sustainable and long-term. Companies need to understand and believe that diverse boards are better boards. We want a business environment where women can and do take their seats at the boardroom table on merit and without the spectre of tokenism. I have always believed that, to attract not just more women but the best women with a wide range of experience, businesses need to show that they want them to join the team for what they bring, not because of who they are, and certainly not just because they have been told they have to.

The Government believe that member states must retain the flexibility to respond to their own individual circumstances. Likewise, businesses need to be able to respond to the varying needs of the sector, size and type of business. None the less, the Government agree that the EU has an important role to play in improving the representation of women on boards, which is the point made by the noble Baroness, Lady Thornton, my noble friend Lady O’Cathain and others. We share the Commission’s view that in the member states and throughout Europe, fair chances and opportunities for women in executive posts should and must be promoted. The EU has done a good job of highlighting the issue and raising member states’ awareness of its importance. As a result, many countries are developing their own individual programmes of initiatives. The Government agree that the EU should continue to show leadership on this issue, shining a light on and disseminating good practice across member states.

However, in line with the subsidiarity principle, it is first and foremost up to member states to find their own national approach to achieving this goal. Many member states are considering, or have implemented, various differing national measures on a voluntary basis to facilitate raising the proportion of women in boardrooms. Some have decided that domestic legal action is appropriate for their own circumstances. It is our view that these efforts must be granted more time in order to establish whether they can achieve fair female participation in economic decision-making on Europe’s company boards.

In the case of the UK, the Commission has projected that only 17% of UK listed companies would have at least 40% women directors by 2020. The Commission’s analysis is based on extrapolating the increase in the number of women on boards between 2003 and 2011 forward to 2020 using a linear progression. Of course, 2011 is when the noble Lord, Lord Davies of Abersoch, published his report on increasing the number of women in British boardrooms. Since his work started, we have seen nearly a 50% increase in the number of female non-executives in the FTSE 350. While we have therefore not forecast the number of individual companies that might have 40% female directors by 2020, we would expect it to be significantly in excess of the 17% projected by the Commission. Indeed, research by the Cranfield School of Management shows that should the current pace of change be maintained, we are on a trajectory to achieve 27% on FTSE 100 boards by 2015 and 37% by 2020.

As I have said, we believe that we need to see a real culture change taking place at the heart of business if progress is to be sustainable and long term. Companies need to understand and believe that diverse boards are better boards. Voluntary measures that businesses can truly buy into, such as the business-led approach that the UK is taking, can help to bring about this change in a way that blunt legal measures never can. We believe that prescriptive measures such as quotas or binding targets run the very real risk of undermining women and their contribution at the most senior levels in our economy. They will more than likely be counterproductive to our overall aim of seeing more women reach the boardroom. We do not want to see the spectre of tokenism.

We agree with the Committee that all parties need to work together to achieve gender-balanced boards via measures that focus on bringing about real, lasting change for the benefit of women, business and the economy in a way that is sustainable and achievable. The negotiations in Brussels on the Commission’s proposals have not yet started but we are already discussing them with a number of stakeholders. Clearly, today it is a matter for the House to decide whether to send a reasoned opinion to the Commission but the Government welcome this debate and the support expressed for our approach to addressing the very important matter of women’s reputation on corporate boards. This is clearly something on which we will continue to focus and seek to make good and strong progress.

[Lord Boswell of Aynho]

My Lords, I am very grateful to all noble Lords who participated in this debate and for the general message of support for this reasoned opinion. I am also grateful to the Minister for reiterating the Government’s support. The support has not of course been unqualified and it is right that the reasoned opinion be questioned but, if nothing else, it at least provides a mechanism for sending a message to the Commission to reconsider where it is and to look at the difficulties within its own proposals.

Perhaps I may take two points of substance from the report and the debate. One, which is in the substantive report prepared by Sub-Committee B, is on how there can be a distinction between executive and non-executive directors. There is none in English law, as I understand it. To meet the obligations being suggested by the Commission, it would be necessary to introduce one. The other, which I think did not get considered by the committee—although I am prepared to stand corrected on that—would be on the relations between subsidiary companies and the main company. The proposals from the Commission bear on the main quoted company, so one could have a situation where it was entirely compliant but where every single subsidiary had a ridiculously skewed structure without apparently breaching the proposed obligations. I mention those only as points of example on the substance of the matter.

Given that there has been strong support on what might be termed the constitutional or procedural issue about the reasoned opinion, I think I can turn my remarks to those of the noble Lord, Lord Pearson of Rannoch. His views on the European Union are perhaps well known to the House; he is, shall we say, not too keen on it. By extension he may therefore be, and is reasonably entitled to be, sceptical as to the use of a reasoned opinion procedure. He asked me first a specific question, which I will do my best to answer, on the progress of this proposal. As I understand it, as of yesterday the score among national Parliaments was 7:7. If we were to accept this Motion, those wishing a reasoned opinion would take a short-head lead on the matter. Whether the magic number of 14 would be reached in time to trigger the formal yellow card is of course still open to speculation and by no means certain.

I should perhaps explain to the House for completeness that it is complicated by the fact that roughly half the Chambers or the Parliaments of the member states are unicameral and the other half are bicameral. In fact, one requires to produce a third of 14 votes, one of which will come from the other place and one of which will come from our House, whichever way we choose to cast our decision or to abstain from doing so, which amounts to not playing a reasoned opinion. That is the state of play on this particular matter.

There is one case so far in what is still a relatively untried procedure—and the noble Lord, Lord Pearson, referred to this—in relation to the Monti issue and the right to strike, which has resulted in the Commission withdrawing its proposal on the presentation of a reasoned opinion. I just say to the House and to the noble Lord by way of advice that, whatever view he may take on the merits of this procedure, it is the best weapon we have. To borrow a motto from another context, we should either use it or lose it. I think it is right that where the circumstances so well set out in the report and by the noble Baroness, Lady O’Cathain, demonstrate the argument, we should say so. It is our constitutional duty to say so; that is what tonight’s debate is about.

As far as I am concerned, I am relaxed and very much support the committee’s approach for the issuing of reasoned opinions as and where they are appropriate. If passed tonight by the House, this would be the fifth reasoned opinion which this House has issued. I claim no credit for the fact that two of those would have been in the past three weeks. Equally, I do not wish to speculate that we are likely to produce a strike rate of anything like that amount. It very much depends on what comes forward from the Commission, but it is important.

I also point out to the noble Lord that when he suggests that the Commission might, in some cynical way, retire from this and come back with the same thing in a different form, in my view the formulation of policy within Europe is not a binary exercise—is neither one thing nor another. It is very much a matter of influencing opinion. The fact that, if this Motion is carried tonight, eight Parliaments within the European Union have said, “Hang on a minute—we are not happy about this”, is a very important political factor in the circumstances.

Finally, from the meetings I have had with colleagues in other countries, I think that there is a growing interest and appetite among national Parliaments to rebalance the policy debate, both within the remit of the Lisbon treaty and anyway because of the size of the European Union and the complexity of the issues it deals with. Picking up the points that the noble Lord, Lord Elton, made, we need to look very seriously at irredentism by the centre. We need to make sure that things that do not have to be decided by the centre—even if they are desirable as objectives—can be dealt with by the member states and by a process of dialogue and iteration rather than by the imposition of a centralised solution. It is on that—the constitutional issue, rather than the merits of women on boards or greater diversity generally, where I think there is a unanimous view across the House—that we should concentrate tonight.

Motion agreed.

Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived: EUC Report

Lord Boswell of Aynho Excerpts

Thursday 13th December 2012 Grand Committee

Moved By

[Lord Boswell of Aynho]

That the Grand Committee takes note of the Report of the European Union Committee on the Commission proposal for a Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived.

[Lord Boswell of Aynho]

My Lords, the intention is that after today’s debate a Motion will be moved in the Chamber on Monday inviting the House to agree that a formal reasoned opinion should be issued.

Our report concerns a proposal to create a European Union fund to provide aid to deprived people, which was examined by our Sub-Committee on the Internal Market, Infrastructure and Employment, chaired by the noble Baroness, Lady O’Cathain, whom I am delighted to see in her place today. Before I explain our thinking on this proposal, I will briefly explain the background because the committee has considered earlier versions of the policy twice before.

The European Union’s food distribution programme began as far back as 1987 as a way to make use of agricultural surpluses. As the report explains, in both 2010 and 2011 the committee considered proposals relating to the programme to distribute food products. On both occasions the committee suggested that the House should issue a reasoned opinion under the Lisbon treaty because the proposal was not consistent with the principle of subsidiarity—in other words, that this was something that was better done at member state or regional level—and that no compelling argument had been put forward that the European Union was better placed than member states to ensure a food supply to its most deprived citizens. Our view was not shared by a sufficient number of other national parliaments so no so-called “yellow cards” were triggered, which would have inhibited the scheme that the Commission had put forward in those years, and the current scheme was extended to the end of 2013.

The proposal before us today is to create a new “Fund for European Aid to the Most Deprived” to operate from 2014 to 2020 in order to address food deprivation, homelessness and the material deprivation of children. The proposed fund would support and co-finance national schemes to provide non-financial assistance to the most deprived persons. I make it clear that we share the Commission’s concerns about EU citizens suffering from deprivation, and that we recognise the very serious impact of the economic crisis. Our report, though, is about whether the European Commission’s proposal is the right way to respond to these important issues.

The Commission has provided little by way of justification that its proposal complies with the principle of subsidiarity. Our committee had to derive some indication of the Commission’s reasoning by looking at the accompanying impact assessment, which argues that European-level action is necessary because of,

“the level and nature of poverty and social exclusion in the Union, further aggravated by the economic crisis, and uncertainty about the ability of all member States to sustain social expenditure and investment at levels sufficient to ensure that social cohesion does not deteriorate further”.

After careful consideration, our committee concluded that such uncertainty could better be met by action through the existing European Union cohesion programmes, from which money would have to be diverted to fund this scheme, without burdening member states with the extra administrative obligations introduced by the proposal. The committee also concluded that the Commission had failed to put forward any convincing argument that the European Union was better placed than member states to undertake this role, and had therefore failed to justify its implied assertion that the proposal meets the principle of subsidiarity.

In summary, this is an issue of concern about process rather than one of substance. We are not seeking to deny that the substantial matter is important and of interest to all Governments—indeed, to all citizens, in our current economic difficulties—but the principle of subsidiarity is a powerful one. It should be complied with, and our view is that it has not been met on this occasion, hence our proposal to issue a reasoned opinion. I beg to move that the Grand Committee take note of the report.

[Lord McKenzie of Luton]

My Lords, I find myself, somewhat surprisingly, dealing with this for the Opposition, but I think it is because the Secretary of State for Work and Pensions has lead responsibility. I thank the noble Lord, Lord Boswell, for the very clear way in which he introduced the report and its recommendations.

The specific issue before us is the recommendation that support should be given to a reasoned opinion to the effect that the draft regulation does not comply with the principle of subsidiarity. As we have heard, a similar issue was considered two years ago and the same conclusion reached, although that proposed regulation was withdrawn after the European Court of Justice ruling that purchases from the market, rather than use from intervention stocks, could not be made under agricultural legislation. This generated an amended proposal a year ago on which the UK took the same position, although that did not, as we heard from the noble Lord, prevent the life of the scheme being extended until 2013.

The proposal considered by the committee was for a new fund for European aid to the most deprived with the fund to address food deprivation, homelessness and material deprivation of children. It would run from 2014 to 2020. It is different from the previous programme, which grew out a need to make use of the then agricultural surpluses. It has the three strands that have been outlined. It is understood that it did not propose any additional overall expenditure, but the cost, which would be some €2.5 billion, would be met from the proposed cohesion policy—structural funds—the budget total for which is some €339 billion, or less than 1% of the total. If adopted, it would to that small extent divert funds from the structural funds.

The Commission’s impact assessment sets out that the EU has the objective of reducing by at least 20 million the number of people at risk of poverty or social exclusion by 2020. However, it reports that poverty and social exclusion are rising in many countries. The explanatory note states that in 2010 nearly a quarter of Europeans were at risk of poverty or social exclusion, which was 2 million up on the previous year, with later figures confirming a worsening trend, and this at a time when the ability of member states to support the disadvantaged is in some cases diminishing. In our own country, we see a rise in homelessness and rough sleeping. The latter is up by 23% in the past year alone. According to the IFS, the number of materially deprived children is increasing, and we have the well publicised growth of food banks, and we are one of the richer countries in the EU.

Paragraph 11 of the committee’s report states that it considers that the uncertainty about cohesion can be met by action through existing EU cohesion programmes. I understand that point, but will the Minister—I am not sure whether I should be addressing the noble Lord, Lord Boswell, the Minister or perhaps both of them—expand a little on that belief? How does it address the comment made in the explanatory note that some of the most vulnerable citizens who suffer from extreme forms of poverty are too far removed from the labour market to benefit from the social inclusion measures of the ESF? Would it propose any changes to the ESF programme?

Will the noble Lord please explain whether there is something inherent in the nature of the expenditure proposed in the programme—food deprivation, homelessness and material deprivation of children— which makes this a social policy matter where member states must act on their own accord or does it depend on the ability in practice of member states to resource appropriate individual country programmes? If the latter, can we hear the evidence base for the assessment that each member state is in a position to do what is necessary for its own people? Indeed, is there any point or any scale of food deprivation, homelessness and materially deprived children where the committee would accept a role for such a fund and an EU dimension?

I do not ask these questions to be difficult, but to understand the routes to addressing this awful poverty. I think the noble Lord, Lord Boswell, made the point that this is not about the substance but about the mechanisms available to deal with it.

--- Later in debate ---

[Lord Boswell of Aynho]

My Lords, in responding briefly, I join the Minister in thanking all noble Lords who have participated in or attended this debate. I was not sure whether she was going to make a separate contribution but I thank the noble Baroness, Lady O’Cathain, and the members of her sub-committee for the detailed consideration that they gave to this matter, as they always do. We are grateful to them and to the staff of our committees when they look at it.

I also thank the noble Lord, Lord McKenzie. It is rather nice to be debating with him again, as it were, because I am very used to doing so in a social security context and he always asks very penetrating questions, but I did not anticipate finding myself in the position of necessarily having to respond to them. He has touched on one of what we might call the constitutional procedural issues, which is central to this debate, just as much as the real world issues about whether there is poverty and deprivation and how to meet it.

The position is that our committee can consider only those proposals emanating from the Commission that are actually received by the committee, and we will then form a judgment on them in relation to European Union legislation. We cannot, as the Government might be able to at certain stages, negotiate with the Commission or suggest alternatives; it is up to us to look at what it has produced. The central point about this debate on the procedural side is that it is entirely for the Commission to justify how a proposal that it is making at that time meets the principles of subsidiarity. It is the judgment of our committee that it failed to do that convincingly on this occasion—indeed, not for the first time but for the third.

If we begin to touch on some of the points of substance, it is interesting that all this had its genesis in a move to dispose of agricultural surpluses—nearly two and a half decades ago now—and yet it is now being presented as some kind of all-singing, all-dancing fund for the relief of deprivation and social hardship. I make no comment on that, other than to record it and then at least ask what is the best way of dealing with it. That, in a sense, is part of the argument about subsidiarity.

I bring two points to the attention of the Committee. First, the Commission’s proposal does not by itself help to evaluate the social problems of the most deprived in any particular member state, because those are logged, perceived and, to be honest, administered or dealt with at the levels of the national or even local government administrations within those member states. The Commission is not, as it were, adding value, because it is dependent on the member state producing the assessment.

There is an underlying issue there. I take the most extreme case, which we have seen on the television, of Greece—although it is of course not the only country in social difficulties and noble Lords have been quite right to refer to the difficulties in our own country; I am not denying those. If the implied suggestion of the Commission is that Greece has not got the money even to meet the extreme relief programmes because it has no money in its Treasury—or, possibly more sophisticatedly, it is dependent on some other member state donor or other putting it there—our argument would be that it would be more appropriate to consider a wider appraisal through the cohesion fund to see whether the money could be found rather than creating a special vehicle for this purpose. I think that somebody has the idea that a special vehicle is appropriate, but it is still our firm contention that that case has not been made. Rather, it is just moving money around and would of course cost more, as the Minister said in her remarks, to move that money around.

We all know that there is a social problem; it is hardly possible to overlook it. It is certainly a common view that we would be distressed by it. However, the Commission has to be aware, and the treaty requires us to be able to evaluate and come to our conclusions on, whether its proposals meet the obligation of subsidiarity. It remains our contention that they do not. In that spirit, I beg to move.

Motion agreed.

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Wednesday 29th February 2012 Lords Chamber

[Lord Boswell of Aynho]

My Lords, having listened to this debate and many of the discussions in Committee on the Bill, I commend the amendment of the noble Lord, Lord Best. I hope that the Minister will accept it, first, because the noble Lord has performed a considerable service in bringing his expertise to bear on the issue. I need not go on about that, other than to say that as someone who has no claim to expertise in housing policy I have increasingly come to the view that in many areas of social policy and social advance housing policy is cardinally important because it impacts on all the other areas. Therefore, by extension, the review that the noble Lord proposes will begin to consider some of the ripple effects of these changes on other situations or aspects.

Secondly, perhaps the most relevant analogy that I can make is that we never quite know when we embark on a major element of social change how it will end up. We all have political positions, we ground them in advance, and we then have to sit back and wait for the consequences. Generally, it is unwise to go for the big bang, although Ministers have to do that. I give as an example the changes made in industrial relations policy unsuccessfully in the 1970s. They were then brought in successfully and seriatim in the 1980s rather than in one big advance. We are not in that situation today and I can understand where the Minister finds himself.

We need a process and I shall pick up just two points from the debate. One is from my noble friend Lord German who stressed in his very happy analogy of the Harrington report the importance of independence. The amendment specifically states as a rubric that the review should be independent. As a government supporter, I am entirely relaxed about that; we should follow where the argument goes, look at the consequences and amend them.

I also pick up a point made by my noble friend Lord Kirkwood. He talks about in-flight corrections. We have two stages to this process—the regulations to come, which might be called pre-take-off corrections, and the review following the experience of the initial running of the system, which we should look at carefully. The Minister should do that with a measure of flexibility. We know that resources are very limited. The noble Lord conceded that when moving his amendment, but we should be ready. It is very much in the spirit of the discussion that we have had throughout this long saga, in which the Minister and other noble Lords have played a commendable part. We have done our best in limited circumstances. We sort of launch in hope without certain knowledge of where we will go but, given the noble Lord’s amendment, with a determination to keep our eyes open as to what is happening and to make such corrections as may be appropriate and just.

[Baroness Sherlock]

My Lords, I shall say just a brief word. Barristers always say that you should never ask a question in open court unless you know what the answer will be. I fear that Ministers often take a similar attitude to research: do not ask a question unless you know what the answer will be and you know that you will like it. I commend the Minister, because I have had the impression throughout the passage of the Bill that he is not that kind of Minister but is genuinely interested in information. Because of that, I hope that he will feel able to give a generous response to the encouragement of many Members of the House to look for information.

I have two things for the Minister to think about. One is to follow up the point made by the noble Lord, Lord Kirkwood, which is that if the Minister is right and rents change as a result, we will all be interested to learn that. If they do not, we will have learnt something about the market. If that is the case, that creates a question rather than just answering one: what is happening with the state of the housing market and what other levers are available to the state? It would be extraordinarily helpful to the country as a whole if the Minister would use his position in government to commend that set of questions to his colleagues, rather than stopping at that point.

My second point is in response to the comments made by the right reverend Prelate the Bishop of Ripon and Leeds, which concerned the broader effects, particularly on families with children. Many noble Lords will be aware that when the United States engaged in significant welfare reform, one fear expressed at the time was that many people would simply disappear from the system altogether. Research was undertaken and that proved to be the case. I have expressed concern at different points during the Bill's passage about what happens to vulnerable children, in particular, and, more broadly, to vulnerable families. Perhaps the Minister can take this opportunity to reassure the House that the Government will do all that they can to track what is happening to individuals so that they do not fall out of the notice of the authorities.

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Tuesday 14th February 2012 Lords Chamber

Moved by

[Lord Boswell of Aynho]

As an amendment to the Motion that this House do not insist on its Amendment 73, at end insert “but do propose Amendment 73BA as an amendment in lieu”

73BA: Insert the following new Clause—
“Fees
In section 6 of the Child Maintenance and Other Payments Act 2008 (fees), in subsection (2)—
(a) in paragraph (d), at the end there is inserted “(including provision for the apportionment of fees and the matters to be taken into account in determining an apportionment)”;
(b) in paragraph (g), “waiver” is repealed;
(c) after paragraph (g) there is inserted—
“(h) about waiver of fees (including the matters to be taken into account in determining a waiver).””

[Lord Boswell of Aynho]

My Lords, in moving this amendment in lieu, I am all too painfully conscious of the unavoidable absence of my noble and learned friend Lord Mackay of Clashfern. I am equally aware that on the occasion when he moved his amendment, which was dramatically endorsed by this House with an eloquent and decisive majority, I myself was unable to attend, not as a matter of self-absenting but because I was then engaged in Strasbourg on parliamentary duties with the Council of Europe. I seek to rectify that omission not only by studying the past amendment but by returning to the case which was so eloquently put by my noble and learned friend on an amendment to which, for the record, I had been a co-signatory. We have subsequently discussed the course of events. I also say for the avoidance of doubt that I have no difficulty at all with the alternative amendment in lieu, which is being put forward by the noble and learned Baroness, Lady Butler-Sloss.

This is one of the most difficult areas of social policy. Successive Secretaries of State, from my noble friend Lord Newton of Braintree—whom I have known for many years and with whom I have discussed this matter in extenso—onwards, regardless of their politics, have been united in their inability to find a satisfactory answer to situations where parental relations have broken down or where any suggestion of maintenance is aggravating that breakdown. We are all trying to find an approach which overcomes this. I say to the higher students of these matters that this is now my third version of an amendment in an effort to get some thoughts right. We want to meet the case of substance: how to help parents with care and their children. At the same time, we do not want to impose significant strain on the public finances or, taking up the point that the Minister made in explaining the case tonight, to set any perverse incentive towards intransigence on the part of either parent concerned. I know that Ministers are as anxious to avoid that as we all are.

--- Later in debate ---

[Lord Freud]

I am very grateful to my noble friend for that. In that spirit, I turn finally to my noble friend Lord Boswell’s Amendment 73BA. In doing so, I thank him for his contribution to today’s debate, which, as one would expect, was thoughtful and wise, as many other contributions have been, even those I have not necessarily agreed with.

We absolutely acknowledge the concerns around vulnerable groups, particularly parents with care. Although we will not further amend our current proposals, we want to ensure that, going forward, especially at the time of the review, we have the powers to evolve charges in line with evaluation. As I have stated, we especially want to consider the behavioural responses of parents and the outcomes they reach as part of our review. If in the light of evaluation and review we need to change our approach, I believe that Amendment 73BA clarifies that we would have the ability to do so under the 2008 Act. Therefore, I welcome Amendment 73BA and the Government wish to accept it.

[Lord Boswell of Aynho]

My Lords, in view of the tenor of this debate, and specifically what has just been said, I can be very brief and merely express my thanks. Our thanks go first to all those who have participated in this debate and to the non-government organisations and other interested parties that have briefed us and encouraged us on our way. We are grateful to the Minister for the way in which he has set out a response to my noble friend Lord Newton in relation to the consultation exercise and, more specifically, because he has gone even further than his earlier “sweetness and light” and has now actually accepted an amendment from the Back Benches. I am very grateful to him for accepting my amendment. It is not something I do very often, or at least I do not succeed in getting an amendment accepted, although I may try.

There is a real concern about getting this matter right and not disadvantaging vulnerable parents or children. We need to have a fairly intense dialogue about that and a much clearer understanding of the rationale of what is being done. We want to make sure that we do not do the wrong thing and then regret it later because that has been—with respect to all those in this Chamber who have been involved—something of the history of the CSA and CMEC to date. We have a chance to build on that. We start in a very good spirit. We have even had the indulgence of the usual channels and the Scottish interests in enabling us to prolong not just our consideration of this amendment but our detailed consideration of all these Lords amendments.

In conclusion, I wish to say two things. First, I approached this issue by putting a pair of gloves in my pocket which I was prepared to leave on the Bench as a gesture of dissatisfaction if we had to fight our way through to the regulations. I have now metaphorically repocketed them because I think that we can now have a constructive discussion which will lead to a satisfactory outcome. Secondly, and finally, I express my thanks to my colleague in this endeavour—the noble Lord, Lord Newton of Braintree. I dedicate this minor success to our noble and learned friend Lord Mackay of Clashfern in his absence. He took the House with him and got something done, for which we are very grateful. In that spirit and to enable a positive response, I commend the amendment.

Motion H1A, as an amendment to Motion H, agreed.

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Tuesday 17th January 2012 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, I make a brief intervention to support the amendments, as I did in Committee. Clause 69 is very important for a relatively small but very vulnerable group of people. The discretionary Social Fund has been part of the furniture, if you like, of social security for a long time, and during the period that it has been deployed, people have been able to take advantage of it to save the public purse considerable sums. One of the main purposes behind the discretionary Social Fund is to prevent people being institutionalised in various ways, and it has done that very successfully. There is cross-party agreement that reform of the Social Fund is long overdue, but to abolish or decentralise it like this raises many questions, which remain unanswered. I hope that the Minister will take the opportunity to try to assuage the concerns that some of us continue to have.

First, the process that will now unfold is less than clear to me. Reading the penultimate subsection of Clause 69, I think that an affirmative resolution will be required to give effect to the power that the Government are seeking in the clause, but I should like reassurance about our ability to have ongoing discussion about how the Social Fund Commissioner’s assets and the apparatus that we have in place at the moment will be dismantled in a way that makes sense, and that the allocation formula for the disbursement of these moneys is carefully considered and consulted on, because the discretionary Social Fund spend obviously has a very spatial dimension to it because some communities need it much more than others. We need to be careful about how we make that decision in the first instance. That is another reason why Parliament, by virtue of affirmative resolution or statutory instrument, must be continuously approached for advice and reassurance. The sample of local authorities being lined up for the welcome review process needs to be carefully considered because of the point I have just made: the decentralisation process will affect some dramatically differently from others.

I still have serious misgivings about this. If we are going to do this, we need to be really careful that we are getting it correct in the first instance and that the client group who have relied on discretionary payments from the Social Fund in crisis situations are not left wanting, completely abandoned and without access to liquid cash in circumstances where they find it difficult to survive.

[Lord Boswell of Aynho]

My Lords, I wish to raise briefly the question of whether to centralise payments to people in extreme difficulty or whether to leave that to the discretion of local authorities or, as was originally suggested prior to the First World War, friendly societies, or others. That idea has subsisted for at least 100 years and I think it will continue. I am generally supportive of the localism agenda and I can see material benefits in devolving this opportunity to local authorities. However, the amendments raise two issues that need a little reflection.

The wider question, which has been touched on by a number of noble Lords, is whether this money, which was intended for people in severe difficulties, will continue, albeit with local administration, to be applied to such people in general. I think that on the whole the Government are facing in the right direction here, but I look forward to the Minister’s assurances on it.

The specific twist that I want to add was prompted by something that the noble Baroness, Lady Lister, said about whether there should be a local connection. Clearly there is the subtext that there could be some discrimination in favour of the local boy or girl against someone from outside, someone who was felt to be in some sense the architect of their own distress or someone in some way morally unworthy. I do not want to go on about that now, but we can see the argument developing.

I should like the Minister to consider—and it may be helpful to him to do so—the fact that since the passage of the Housing Act some 16 years ago, we have had all the equality duties, including the public sector equality duty. Certainly local authorities, in exercising the discretion being offered them, will have to operate within the framework of that duty. I wonder whether that is indeed helpful in obtaining the assurances that I think we want with regard to making sure not only that the money goes where it is intended to go but that it goes to the people who need it most within that category of difficulty, rather than being siphoned off to people who are more acceptable or who come more within the interest of the local authority concerned.

[Baroness Sherlock]

My Lords, I want to speak in favour of all these amendments and to ask a question about Amendment 50ZB. When we discussed the Social Fund on our previous day on Report, I raised the fact that the Office of the Children’s Commissioner had published the Child Rights Impact Assessment of the Welfare Reform Bill. I understand that at that point the Minister had not had the opportunity to read the assessment in any detail, but I wonder whether he has had the chance to read it since then and, if so, whether he can assure the House about the line that says:

“In failing to guarantee that crisis support is available for children fleeing an abusive home with their parent/carer, the clauses abolishing the Social Fund fail to take all appropriate legislative measures to protect children from domestic abuse and we therefore believe they are in breach of Article 19”,

of the UN Convention on the Rights of the Child. That goes to the heart of the point which the noble Lord, Lord Boswell, has just raised. People might have a very good reason to cross boundaries. If one were fleeing domestic violence, that would be a good reason not to move to the neighbouring street, as I am sure the noble Lord would accept. How can the Government guarantee that local authorities will give appropriate support to children and families in that circumstance, and how can they prove that the UK will discharge its responsibilities under this convention?

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Wednesday 11th January 2012 Lords Chamber

[Lord Blencathra]

My Lords, it is with some trepidation that I intervene briefly in this debate in view of the learned comments that one has heard from both sides. I seldom contribute to debates of this nature because it is outside my areas of expertise, but I am prompted to do so as the result of a speech made yesterday. I heard the leader of the Opposition say that,

“in these times, with less money, spending more on one thing means finding the money from somewhere else”.

He went on to say that:

“When someone wins, someone else loses”.

I have looked briefly at the amendments before your Lordships’ House today and I had not intended to say anything on them because I knew that they had considerable spending implications, but I am tempted to speak out because of what the leader of the Opposition said yesterday.

The noble Lord, Lord Patel, has made a powerful and compelling speech, and it would be easy for me and no doubt for other noble Lords to vote for his amendment and feel morally good. But the sting lay at the tail end of his remarks when he said, I think, “Of course, this could have some enormous cost implications”, and then he came up with not what I would say is a formula but a suggestion, which I must admit I did not quite understand, about how one could try to save on some of those considerable costs. However, I am informed that his amendment as it stands has serious cost implications. I believe that it would cost up to £200 million next year, maybe £400 million the year after and again the year after that. I hope that my noble friend the Minister has the correct figures, but I believe that it will be around £1 billion of expenditure over the next three years. The House needs to know exactly what those figures are.

Perhaps I may turn to the Opposition and say this. If the Opposition are tempted to support this amendment —I hope that I am not being too political here—I hope, in view of what the leader of the Opposition said yesterday, that they will spell out where the money is to come from. At this stage I am not concerned about whether the Commons will reject the amendment or whether there will be ping-pong, although that is a valid debate to have in due course, but it is incumbent on the Opposition or on those who are arguing for this amendment to say where the £1 billion, if indeed it is £1 billion, is to come from. Is to come from higher taxation or from a cut in public spending somewhere else? Is it to come from increased government borrowing? Someone somewhere will have to pay for this.

[Lord Boswell of Aynho]

I am most grateful to my noble friend for allowing me to intervene. Having listened to the debate this afternoon, does he not acknowledge that whereas the previous amendment, which was supported by noble Lords, was in comparative terms a relatively small matter of cost, this is of a different level and magnitude of costs—at least 10 times as great? Whatever might have been said about the previous amendment being comparatively trivial, this could not be possibly be so described.

[Lord Blencathra]

My noble friend is correct. The last amendment would cost around £70 million, and no doubt the Government will say that that is going to hurt and that the money will have to come from somewhere. But if the costs of this amendment are £700 million, £800 million or £1 billion, as I have read somewhere, we need to know that before we go into the Lobbies in support of the powerful speech made by the noble Lord, Lord Patel, in which he spelt out some of the difficulties that a large number of people will face if this cut is made.

I conclude with these remarks. It is easy to feel morally good because we have done something to help those who will be affected, but we have to bear in mind the others who will lose £1 billion of expenditure, or wherever that £1 billion will come from.

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Monday 12th December 2011 Lords Chamber

I very much hope that the Minister can respond to these questions, because on that basis, we can all be clear whether we have the system in place which will give us the assurance that these arrangements will not lead to the most massive debt problems.

[Lord Boswell of Aynho]

My Lords, all those who participated in the deliberations of the Grand Committee will regard it as a rather extraordinary process in two respects. First, for those of us who do not claim huge expertise—though it was represented elsewhere in the Committee—it was a remarkably informative process, and that applied across all quarters. Secondly, there was a high degree of understanding, if not consensus, and it is entirely proper of course that the process of refining the difficulties comes forward to this Report stage and we then get to the moments when the rubber hits the road.

I intervene briefly for two reasons. The first is in a sense to express my gratitude to the noble Baronesses, Lady Lister of Burtersett and Lady Meacher, for their contributions in Committee. As the forenamed has actually been kind enough to quote me in terms in support of her argument I probably owe her a response. The second reason is that it is understood by all sides of this House that there is a real problem. I have an odd facility about which I do not boast, which is the ability to craft titles for books that I never get round to reading—writing, I mean. One of them would have been “Life After Tuesday”. There is clearly a difficulty for people, where they have limited means, in budgeting and in managing themselves. I will quote two points about that. First, as in previous occupations I have run farms and paid farm workers, I am fairly familiar with people who are typically paid at the lower end of the pay spectrum. Secondly, I have recently chaired on behalf of the National Institute of Adult Continuing Education an inquiry into adult literacy. I do not of course confuse that with numeracy, but the problems of the two are somewhat conjoined. An estimate of something like 5 million people who would have difficulty in functioning is a real worry. The question is what we do about that.

On reflection, having listened to the Minister’s remarks both in Committee and indeed at the meeting of some of us on Thursday, I think that the Government’s strategy is the right one. It is right, and it also avoids any suggestion of patronisation, to say people should try to budget on the same basis as those who now receive a wage. I make the point in passing that many of the people—the farm workers and other people in relatively low-paid occupations—have transitioned fairly effectively towards monthly payments or salaries and arrangements of that kind. It is not conceptually impossible and we certainly should not set out to preclude it in advance.

The question is how it works. That was behind my remarks in Committee and will be behind my interest in my noble friend the Minister’s remarks when he comes to respond. It is clearly important that we are able to engage in a sensible package which enables people to find a way through this. If we were simply to say it is a month unless you deem it to be otherwise, or unless some special arrangements are invoked by way of a legal right, then that would be giving something of a green light towards people falling back into shorter periods—perhaps when that is not necessary or appropriate for their circumstances. But at the same time, picking up my non-written book, it clearly is important that people should be able to manage through this, not only for themselves and other adults in their household but also for children who need sustaining and maybe should not be expected to pay the price for parental or other failure.

We look to the Minister to explain very carefully the ideas which he has begun to develop, and which are very positive, for saying we start with a month, but of course like everybody else you need in effect to be able to navigate through that month, and this is how we will help you. That is, as it were, an approach of principle. Secondly, there is an issue of practicality here, which again I slightly touched on in Committee. If this system does not work comfortably and there is a huge increase in the use of pay-day loans, crisis payments or whatever, then there will be problems with the credibility of the universal credit system, which, to judge by the Committee, we all want to see, as I certainly do.

The Minister has to find a practical way of doing this but I suggest, with respect to the noble Baroness whose amendments we are considering, that the way of finding a practical solution should not lie through derogating from the principle of moving towards the monthly payment of credit with the necessary safeguards.

[Lord Wigley]

My Lords, we delved into this issue in quite considerable depth in Committee, and I do not want to rake over areas that we have covered. However, I suspect that there is a fundamental question here, which I think the Minister accepts—namely, that there will always be some people who find it difficult, if not impossible, to handle a lump-sum budget that is meant to cover a month. In those circumstances, some mechanism—whether it is a voluntary one making a facility available, as suggested by the noble Baroness, Lady Meacher, a moment ago, or some other mechanism—has to be brought forward by the Government to ensure that these people are helped to avoid getting into financial difficulties. That must be in the interests of the Government and everybody who is concerned about children, in particular, who may be vulnerable as a consequence of such action. I think that the House would be very glad to hear from the Minister how he sees the operation of a mechanism that will ensure in a minority of cases where the monthly pattern does not fit that a system is in place to answer the needs of these vulnerable families.

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Monday 12th December 2011 Lords Chamber

[Baroness Wilkins]

My Lords, I strongly support the amendment and urge all noble Lords to do so. Are we really becoming such a mean-spirited nation that we are willing to take away funding from less disabled children as the only means by which more severely disabled children can benefit? That is what the Government are proposing to do with this clause, although we know from a recent Children’s Society report that 40 per cent of disabled children live in poverty, and that if there is more than one disabled child in a family the poverty rate increases to 50 per cent. As the noble Lord, Lord Wigley, suggested, might there not be some people with broader shoulders who could contribute and endeavour to raise all disabled children out of poverty?

In order to be eligible for the higher rate, a child must require care both day and night. Many disabled children with significant needs will not qualify. Think what the loss of that money means for a family on a very low income—that £1,400 a year would amount to £22,000 over the life of a disabled child. It can mean not buying another box of incontinence pads when your allocation runs out, so that the mother spends exhausting hours changing and washing bed sheets, day after day. It can mean not being able to replace a sibling’s toy that the disabled child has broken, perhaps in a temper tantrum or frustration or because he or she cannot control their movements. It means intolerable strains on families that too often lead to family break-up.

Much of the Bill is about changing behaviour by the imposition of penalties. However, having a disabled child is not a lifestyle choice. Parents desperately need financial help in order to give their disabled child an equal chance in life, or are we really willing to let this legislation increase the shameful number of thousands of disabled children already living in poverty?

[Lord Boswell of Aynho]

My Lords, it would be impossible to have served, as I have for a number of years, as party spokesperson on disability issues and maintain a continuing interest in my party’s disability group without a degree of sensitivity to the problems of disabled children and, of course, to those of their families. The noble Baronesses and noble Lords who have spoken about this issue are clearly right in drawing the House’s attention to it. All that I would say is that we need to pause for a moment in looking at the overall implications of these proposals, because my understanding of the position is that relatively—broadly over the past decade, and it may properly be attributed to the previous Administration—there has been significant acceleration in the support given to disabled children, reflecting the pressures to which we have referred that have caused their benefit rates to increase faster than those of adults.

The Government’s proposal is not, and indeed was not presented as being, simply a matter of cutting back the support for disabled children. The other aspect of the Government’s proposals is the alignment of rates, reflecting the position of adults and including some with more severe disabilities. All I would say, with respect, to those who have moved this amendment is that if we are going to make proposals that will increase or maintain the public cost in relation to children, it will be very difficult to provide the equivalent or additional increases for adults. Given the economic state of the country, we cannot proceed through the Welfare Reform Bill with what I might call the “highest common factor” approach to benefits of all kinds. We need the most appropriate and targeted system. I say that not in derogation of the case that has been made but simply with reservation about its sustainability.

There may be a glimmer of hope—indeed, there is already a chink of precedence—in relation to the arrangements for transition and run-on to the new system. I know that the Government have already indicated that they will maintain DLA with its three levels in relation to children rather than transfer them all to the personal independence payments. That is a start. The key to this—and this will not be the only case in the matters that we will hear tonight—is that there should be appropriate and sensitive transition arrangements so that people do not lose significant or very large sums in years one or two, but that nevertheless the overall objective—rebalancing the system and maintaining some coherence in public revenues and expenditure—is maintained.

[Baroness Howe of Idlicote]

My Lords, I support the views that have been expressed today. They were not as clearly enunciated in Committee, as we have already heard, but they have been spelt out pretty effectively today. I also accept that the money has to come from somewhere. The important thing may be the transition period and keeping an eye on just what the effect of the transition period is. However, when one thinks that 100,000 disabled children will be less well off as a result of some of these changes, one becomes worried. Four in every 10 lives will be lived in poverty—that was the figure given by the Children’s Society.

Although I accept that it is a difficult decision for the Government to make, I would like to think that there are other pockets from which rather more could be produced. I urge the Minister to look hard in those directions.

Young People: NEET

Lord Boswell of Aynho Excerpts

Tuesday 29th November 2011 Lords Chamber

[Lord Freud]

There has been a substantial increase in the number of apprenticeships with, as I said, 442,000 starting in 2010-11. We are putting a lot of money towards supporting them, and this is something that other advanced economies such as Germany have concentrated on. I, for one, welcome the rebalancing of our education and support systems in this country.

[Lord Boswell of Aynho]

My Lords, given that I used to employ people, I think that I would feel more comfortable, as I hope the Minister would, about employing a person with a decent apprenticeship which has captured their imagination and given them educational attainments than somebody with a questionable degree from a less good and less vocationally related university, which may well be an inappropriate direction for their talents.

[Lord Freud]

My Lords, we have a real problem in our education system which we are aiming to correct. One of the most shocking things in the report on vocational qualifications from Professor Wolf was the number of youngsters whom we are failing with regard to vocational qualifications—350,000 16 to 18 year-olds a year. If we can get that sorted out and get those young people into good apprenticeships, we will have done a lot to solve the problem that we are all worried about.

Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Wednesday 23rd November 2011 Grand Committee

[Lord Freud]

My Lords, I acknowledge that we are not comparing like with like. We are looking at a sensible level at which to put the maximum benefit payment. The level that we are looking at is the equivalent of a household earning £35,000. I think that one can overelaborate the logic, which I will not attempt to do here.

Amendment 99AA, in the name of the noble Lord, Lord Best, would introduce a grace period. I accept that there will be occasions when changes occur that are beyond a household’s control. We have said that we are looking at what transitional arrangements might be appropriate. The arguments that I was laying around the PIP are equally applicable here.

[Lord Boswell of Aynho]

Perhaps my noble friend will assist me. I have been worried a couple of times in this debate, both the other day and today. I would be grateful if he could clarify what seems to me to be a certain ambiguity in the use of the word “transition”—of course, not necessarily from his lips. This can mean one of two things: it can mean either a running-in arrangement to make it softer and more acceptable, and better understood before the policy is introduced, as it were, in macro; or it can mean the micro issue about how one deals with the individual case which is to be handled in a humane way. Does he agree that those are both important but distinctive characteristics? As we develop this argument perhaps into the next stage of the Bill, can we make sure that we keep them both in mind and address them separately?

[Lord Freud]

Yes, my Lords. Empson wrote a book called Seven Types of Ambiguity and my noble friend has cited two of them. I can clear up this particular dual ambiguity: the word “transition” here applies both to the running-in of the system and to the timing of how it will affect particular people when the system is fully run in.