Universal Credit

Debate between Lord Clinton-Davis and Lord Freud

Wednesday 10th December 2014 Lords Chamber

[Lord Clinton-Davis]

To ask Her Majesty’s Government what is their response to the recent analysis by the Office for Budget Responsibility on the rollout of universal credit.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

In the OBR’s independent forecast of public spending, it has assumed a modest adjustment to the rollout for universal credit, which it says has a comparatively small impact on forecast expenditure. We maintain our determination to deliver the plan already set out which has been assured by the Major Projects Authority and signed off by the Treasury. The plan is on track. Universal credit will bring economic benefits of £7 billion every year.

--- Later in debate ---

[Lord Clinton-Davis (Lab)]

Both eminent bodies, the OBR and the IFS, forecast that the policy of the Government is reducing the state to its lowest level since the early 1930s. That is utterly different from what the Minister is predicting. Is not that dire consequence possible? It is utter madness, is it not? Does the Minister dispute the conclusions of both bodies? What is his prognosis?

[Lord Freud]

Well, my Lords, I will talk about universal credit and what it aims to do for the people who need support from the state system. It directs our funding far more efficiently to people who need that support. It produces economic benefits of £7 billion every year and it does so at an investment cost of £1.8 billion. That investment cost is down from the £2.4 billion that we originally envisaged.

Poverty and Social Exclusion

Debate between Lord Clinton-Davis and Lord Freud

Thursday 17th July 2014 Lords Chamber

[Lord Clinton-Davis]

To ask Her Majesty’s Government what is their response to the recent findings by the Poverty and Social Exclusion in the United Kingdom research group.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

This report was published back in March 2013. It says that people were deprived if they could afford less than 42 out of 44 necessities. Under the Child Poverty Act, which this House spent much time on, 1.8 million children are in combined low-income and material deprivation, which is far lower than the 4 million children reported to be deprived in this report.

[Lord Clinton-Davis (Lab)]

It is not only the Poverty and Exclusion research group that has highlighted what certainly was a catastrophic increase in the percentage of households that fall below society’s minimum standard of living. Does the Minister understand that the concern expressed by that organisation has also been expressed by the Joseph Rowntree Foundation, Barnado’s, and many others, and that it still exists? I prefer the joint views that they have expressed to those of the Government.

[Lord Freud]

The previous Government put through the Child Poverty Act, which we on this side of the House supported. It is based on some research that comes out regularly on households below average income. That came out last week, and it showed that the proportion of children in relative poverty is at its lowest level since the mid-1980s.

Pensions: Britons Living Abroad

Debate between Lord Clinton-Davis and Lord Freud

Wednesday 9th March 2011 Lords Chamber

[Lord Freud]

My Lords, the figures for non-frozen pensioners are 610,000 and for frozen pensioners 550,000. The difference in payment is currently between £57 for the non-frozen and £32.70 for the frozen. I am satisfied, as are the courts, that what we have is objective and justifiable in this area.

[Lord Clinton-Davis]

Would the Minister apologise for yesterday’s tantrum? I am very concerned about his mental health.

[Lord Freud]

My Lords, the expert in thumping Palace woodwork, who is Black Rod of course, suggested that I did not make a habit of maltreating the furniture. I am happy to take that advice to heart.

Welfare Reform

Debate between Lord Clinton-Davis and Lord Freud

Thursday 11th November 2010 Lords Chamber

[Lord Freud]

I thank my noble friend Lord German for raising the issue of the impact on poverty. I have a much shorter word on record: it is not “complex”, “cumbersome” or “inefficient”; I call it a mess.

How will this work? In effect, by having more generous tapers and disregards we are putting money into the pockets of people doing small amounts of work. So there is the direct economic impact of that money going in. There will be a second order impact, which will be twice as large because we will simplify the system and have only one form. This will encourage a much higher take-up rate and, in practice, will almost eliminate the scourge of in-work poverty. So that is where the figure of 850,000 comes from.

There will also be the dynamic or incentive effect of always knowing that it is worth working, and being incentivised to work will reduce the number of workless households by about 300,000. We have not put that poverty impact in the Statement; it is in addition to it. Some households will be pulled above the artificial 60 per cent median line, and we expect the poverty impact to be even greater than the 850,000 we have referred to. These are big figures. I remind the House that, on conventional analysis, the reduction in child poverty during the 13 years of the previous Government was about 600,000 children, so we are looking at making a big relative effect in one go.

[Lord Clinton-Davis]

I wish I could share the Minister’s optimism. I believe that immense difficulties will arise in practice.

I wish to ask about handicapped people. Are any changes envisaged in this approach in regard to those claiming to be handicapped? Will they have a right of appeal if they are turned down—after all, experts can be wrong—and will legal aid be available in the vast majority of cases? If it is denied, that will not be fair—and, after all, fairness goes to the heart of what we are talking about.

[Lord Freud]

I thank the noble Lord, Lord Clinton-Davis, for his question. I hope I am not being too optimistic. On the handicapped issue, there are a few concepts buried in the question and I shall try to disentangle them.

First, how does the universal credit look to a disabled person? In the present system we have a conflation between disability and inactivity in the labour market. It is one or the other; you can do a little work, but not much. The beauty of the universal credit is that people on disability benefit will be on the same taper as others, with generous disregards, so that they are not in the desperate position of being inactive on disability benefit or working. We should remember that 40 per cent of people with disabilities are in the workforce—they want to be in the workforce—and that some of the most heavily disabled people want to work. We want to build up a system to help them to do so.

The second element of the noble Lord’s question deals with the work capability assessment process that we are now trialling. There will be an independent and elaborate tribunal process through which people can go. They can bring in legal support if they want but, in reality, most people do not need it because it has been accepted as a relatively balanced process, and robust systems will be in place to make sure that people do not get put into the wrong category. However, putting the money aside for one minute—clearly one likes to have more money than less and to be on a higher rather than a lower benefit—the reform will unlock the inactivity that we are in effect forcing on too many disabled people.