Enterprise and Regulatory Reform Bill

Lord Cormack Excerpts

Monday 4th March 2013 Lords Chamber

[Baroness Hollins]

My Lords, I, too, support these amendments, and I congratulate my noble friend Lady Campbell of Surbiton on her perseverance in this matter.

The lack of respect shown to patients at Winterbourne View and at Mid Staffordshire shocked all of us. Laws must start with values and principles and not rely solely on regulation; nor should they assume, for example, that all public servants automatically hold and understand those values. The Government say that legislation is no place for declaring a mission but I disagree, and there are many people in the Chamber today who also disagree. For example, the Care and Support Bill includes principles which are perhaps individually unenforceable but they are critical because they remind us all that the primary purpose of care and support is ultimately to support the well-being of people. If we want to know how well our care and support system is doing, the well-being of older and disabled people and their families is our litmus test. Section 3 serves the same purpose. It imports these enduring values and principles into the duties of the EHRC and reminds it and us that, above all else, its role is to ensure that, as a society, we are upholding them.

A much celebrated initiative of the EHRC has been its inquiry into the human rights of elderly people receiving care in their own homes. The inquiry uncovered how the human rights of some older people were being placed at risk by care providers who required their staff to carry out tasks such as helping people to wash, dress or eat in time slots of 15 minutes or less. The dignity of older people was not being respected by a system which most assumed to exist principally for that purpose. It also highlighted how, as a consequence of outsourcing home care to private and voluntary sector providers, coupled with a narrow judicial interpretation of the meaning of “public authority” under the Human Rights Act, the majority of older people receiving care in their own homes could not rely on the Act to protect them.

That inquiry looked beyond existing law. It identified anecdotal evidence of an emerging situation, investigated it and made recommendations, including for law reform but equally for practice. It involved a particular constituency—older people—in circumstances where the values and principles of dignity and respect were being placed at risk but in which there were not at that time any legal cases to claim that human rights had been breached. This is not the sort of work that can be undertaken by charities. Charities are not the experts in equality and human rights. They can provide evidence but not leadership. They look to the EHRC to lead and promote.

[Lord Cormack]

My Lords, I shall intervene just briefly. I was in hospital when this was debated in Committee, but I was very taken by the speech of the noble Baroness, Lady Campbell of Surbiton—the Surbiton charioteer, as I think of her—who spoke with a verve and passion and with considerable conviction. Everybody has spoken in like terms and it seems to me that there has to be a convincing answer from my noble friend on the Front Bench if we are not to go along with this amendment in one way or another.

There is a place for the declaratory. This House said that last Thursday, when, by a pretty large majority, it passed what was in effect a declaratory Motion. There is a place for the aspirational in legislation. There are many precedents and it would take too long even to begin to give examples, but I hope that my noble friend will, at the very least, say to the House this afternoon that she will reflect further on this, if she cannot accept the amendment now, and come back on Third Reading with a definitive answer. I hope that the door will not be shut today.

[Baroness Howe of Idlicote]

My Lords, I also intend to be brief. Having listened to all these speeches, which are so resonant of what has been said on many other occasions, I particularly congratulate my noble friend Lady Campbell on her brilliant speech. Equally, we have heard from the noble Lord, Lord Lester, a marvellous argument from the legal viewpoint about why it would be quite absurd to get rid of this clause. Section 3 helps us to achieve that commitment to equal opportunity, and to dignity and respect for others from different ethnic backgrounds, for those with disadvantages and for older people who, as we have just heard, will live much longer and have to cope with increasing disabilities as they grow old.

--- Later in debate ---

[Lord Lester of Herne Hill]

I am most grateful. Contrary to the impression that I might create, I am not simply a cold-hearted lawyer: I value symbols very much indeed.

I finish with this about education and legislation. It is almost 50 years since, in 1967, in its first annual report, the Race Relations Board summarised the role of legislation in this way: First:

“A law is an unequivocal declaration of public policy”.

Secondly:

“A law gives support to those who do not wish to discriminate, but who feel compelled to do so by social pressure”.

Thirdly:

“A law gives protection and redress to minority groups”.

Fourthly:

“A law thus provides for the peaceful and orderly adjustment of grievances and the release of tensions” ,

and fifthly:

“A law reduces prejudice by discouraging the behavior in which prejudice finds expression”.

Gandhiji is no longer alive, but I have no doubt that his spirit would guide us in a vote if it is decided to divide the House.

[Lord Cormack]

My Lords, I strongly support what has been said. As my noble friend Lord Deben, with whom I do not always agree, made his powerful and convincing speech, I could not help but remember a conversation I had with my father—who loved India and travelled there often before the Second World War—in 1947, 66 years ago when India became independent. I thought of that conversation, too, when the noble Baroness, Lady Flather, was addressing us a few moments ago. My father said, “India will have its independence, and I hope that that will mean the end of the caste system”.

As a young boy of seven, I had not a clue what he was talking about. He sat me down and explained the plight of the untouchables, which had moved him many times in his visits to India. Here we are, 66 years on, and there are people not only in India but in our own land who do not have the protections for which my noble friend Lord Deben and others have argued so articulately this afternoon.

A few months ago, we had a fine debate introduced by my noble friend Lord Popat, who is sitting on the Front Bench now. It was to commemorate the 40th anniversary of the admission of the Uganda Asians. From all sides of the House, people spoke with passion, conviction and affection for the way in which that community adapted and adopted itself and enriched us all in the process. It was right that we should pay our tributes. But is it not sad that there are still 400,000 in this country who do not enjoy the full protection of the law in the way in which the Ugandan Asians rightly do?

I very much hope this afternoon that the House will not need to divide. I hope that it will carry this amendment by acclamation. If there is any chance at all of the Government not being able to accept the amendment, I hope—and here I repeat what I said in an earlier debate and echo what the noble Lord, Lord Alton, said—that at the very least, my noble friend the Minister will think again and come back at Third Reading. If she cannot do that and does not feel that she can discuss with senior colleagues in the Government the need to do that, the House has a duty incumbent on it to strike a blow—brief but effective.

If we wanted to be convinced of the need for that, we need only reflect on the words of the noble Lord, Lord Lester, a few moments ago when he talked about the expense of going to law. Do we wish to create a situation where the only way of seeking redress of the basic grievance of not being treated equal is to go to law? No, we do not. If the amendment cannot be accepted and if there cannot be a promise to come back at Third Reading, I hope that it will be carried.

[Baroness Thornton]

My Lords, it was with enormous pleasure and humility that I put my name to this amendment on behalf of these Benches. It is true what the noble Lord, Lord Lester said. In 2009-10, I attended a meeting of hundreds of Dalits and their organisations and found myself completely convinced that there was a gap in the law. Our equality legislation did not cater for this group and it was something that we needed to resolve. That is all that is before us today.

I thank the movers of the amendment and I particularly want to thank the noble Lord, Lord Deben, because I thought his speech was extraordinary. All we want and all that we need to do is to add “caste” to,

“colour, nationality or ethnic or national origins”,

under the race characteristic of the equality legislation. It is not actually a very big thing to do, but it is a very important thing that we have to do today.

Credit Unions

Lord Cormack Excerpts

Thursday 13th December 2012 Lords Chamber

[Lord Cormack]

My Lords, it is a very real privilege to be able to follow the right reverend Prelate the Bishop of Durham, who has brought a new dimension to our debates on financial matters and will, I trust, continue to do so when he is elevated to an even higher station. We are very fortunate to have him and it is good to have someone in a position of moral authority in our country who is so aware of how society works and aware, too, of the problems surrounding financial institutions.

I was provoked into taking part in this debate because over the past few months the noble Lord, Lord Kennedy, has asked a number of pointed Questions on credit unions and I have chipped in. It is not a subject that I have studied in great detail in the past, although no one can represent a constituency in the other place, as I did for 40 years, and not be aware of the enormous problems faced by so many of those less fortunate in society, not be aware of the appalling activities of loan sharks, not be aware of how families are often torn apart, with distress, disintegration of family units and, sometimes even worse, with people being driven to suicide. That is really the background to the debate we are having today. We have had some fascinating and important contributions, not only from the noble Lord, Lord Kennedy, who introduced the debate so splendidly, but my noble friend Lord Griffiths of Fforestfach, who has tremendous experience in these areas and who injected a new reality into the debate, for which we are all, I am sure, extremely grateful.

No one in public life who is concerned about the welfare of the less fortunate can fail to be full of admiration for those pioneers of Christian socialism and the Co-operative movement in the 19th century. That is part of the warp and weft of our civilisation, and I honour those people. As a young Conservative, I was just as inspired and motivated by the great speech made in 1872 by Benjamin Disraeli—of course, Mr Miliband is on to this now—when he talked about the need for the Conservative Party to have as one of its prime objectives the elevation of the condition of the people. Those two things march side by side.

One can say, here in 2012, that although credit unions have been around for quite a long time they are an idea whose time has come. We need to have an ambitious acceleration of this movement in the way that my noble friend Lord Griffiths sketched in his speech—as did my noble friend Lord Stoneham, who brought to the debate his great experience of the housing association movement. When my noble friend the Minister comes to reply, I hope that we will hear a sense of real determination to be more ambitious. We are all grateful for what the Government have done and are doing but we need to be more ambitious. The two figures that stuck in my mind from the speech of the noble Lord, Lord Kennedy, were that two-thirds of the population of the Republic of Ireland and something like a third of the population of the United States are involved in credit unions.

At a time when people are often bemused by the advance of technology and the impersonality of the technological society, we need people who can talk to people. How many of your Lordships have not been exasperated when ringing a bank or some other institution on being confronted with a metallic voice instructing you to press button one if you want to inquire about a debit balance and button two for something else? It is bad enough for those of us who have had reasonable educations and think that we are moderately intelligent, but for people who are struggling in the face of debt and difficulty, that sort of thing can be daunting to the point of destruction. The great thing about the credit union, when properly administered, is that people are talking to people.

I was greatly taken by the suggestion of the noble Lord, Lord Kennedy, endorsed by others in this debate, that some of the brightest and the best from our banking system—I speak as the father of a banker—should give some time or be seconded to assist the development of these extremely important parts of society. Our bankers should believe, as I hope the best of them do, in responsible capitalism. Like my noble friend Lord Griffiths, I believe in the market economy and in capitalism, but I believe in responsible capitalism.

I have had the privilege, for the last 10 or 12 years, of being involved in the annual award run by First magazine for responsible capitalism. The first chairman of our judges was Lord Dahrendorf and our present chairman is the noble and learned Lord, Lord Woolf, the former Lord Chief Justice. Each year, we try to give an award to somebody who has really demonstrated responsible capitalism. In the last two years, we have instituted a second award for the SME sector and named it after Lord Dahrendorf. If we believe in responsible capitalism, we believe that the benefits of the market should extend to all our people. It is through the intelligent development of credit unions that that can happen.

Although debates in your Lordships’ House are not always as widely and as well reported as we would like, I hope that people will read today’s speeches by the noble Lord, Lord Kennedy, my noble friends Lord Griffiths and Lord Stoneham, the noble Lord, Lord Graham, with whom I worked often in the House of Commons many years ago, and of course the right reverend Prelate the Bishop of Durham. Running through all their speeches is a coherent thread, saying that those who are among the least fortunate in our society must not be overwhelmed by that society. Because of the rapid advance of technology, there is a real danger that that happens, just as there is a real danger that many of our children and grandchildren will grow up with myriad virtual friends and very few real ones. We have to be aware of these things.

The intelligent development of the credit union movement can help inject a new sense of belonging and community in and throughout our land, so perhaps my noble friend the Minister should ask my noble friend Lord Griffiths to head another inquiry into how we can accelerate the development of the credit union. I would like to see that. My noble friend Lord Griffiths talked about the banks paying these enormous fines and asked whether they could not find relatively small sums of money to augment the development of the credit union. Yes, they could and they should—especially as the taxpayer has such a large stake in those banks. From this debate, a message should go out to those in charge of our great financial institutions, saying that they have an obligation and a responsibility to make it possible for people who are perplexed, and very often greatly worried, to understand the system and to be able to have those in whom they can trust.

The importance of trust is another theme of this debate. That importance runs right through our society, which at the moment is, frankly, in danger. We have had so many examples in recent years of people feeling let down. I will not go into details because your Lordships know the sort of things that I have in mind, However, there is a real chance for the development of this movement, not only in areas such as the diocese of Durham—we had a very good account of that a few minutes ago—but throughout the country. Whether it be my in own rural county of Lincolnshire or the county of Staffordshire, which I had the honour to represent for so long, all over the country there are people who can benefit.

One point that has not been taken up since the noble Lord, Lord Kennedy, mentioned it is the need for people of all financial classes, if I can use that word, in society to take part in this movement. This is not merely a helping hand for the poor. It can help those who are in poverty and encourage them to save, making them cope with their debts in a realistic and proper way. We should indeed all be in this together and I would hope that when my noble friend comes to respond on behalf of the Government, a new sense of urgency will have been injected into government quarters and that he will be able to give us a rather more encouraging response than he gave to the last Question from the noble Lord, Lord Kennedy, on the Floor of the House. Although that answer was entirely benign, it indicated progress that would be far too slow. We have a duty to speed it up.

Equal Marriage Consultation

Lord Cormack Excerpts

Tuesday 11th December 2012 Lords Chamber

[Baroness Stowell of Beeston]

There is only one form of marriage and what we are setting out here is that it will remain a matter for religious faiths as to how they define marriage within their own faith. There is only one legal type of marriage and that will apply both to couples of opposite sexes as well as to couples of the same sex.

[Lord Cormack]

My Lords, notwithstanding what was said by the noble and right reverend Lord, Lord Harries, and my noble friend Lord Deben, the fact is that for the majority of Christians in this country, at the heart of their religious belief is the belief that marriage is between a man and a woman. In that context, can the Minister assure us, first, that the 500,000 people who signed the petition that was reported in today’s press will be taken into account? Secondly, will she assure us that every member of Her Majesty’s Government, as well as Back-Benchers, will have a free vote on this issue?

[Baroness Stowell of Beeston]

I have tried to make clear that in bringing forward our proposals we recognise and respect the religious freedoms of those who are committed to their faith and the position that their respective faiths take with regard to marriage. Perhaps it is worth reminding my noble friend that the consultation was about how we bring about same-sex marriage and not about whether we should. The huge response was the largest that we have ever had to a consultation. In the consultation document that has been published today, we are very clear that in addition to the 228,000 who responded many others signed their names to a petition. We are firmly of the view that we are moving forward in the right way and taking account of everyone’s position on this. On my noble friend’s final point, I can confirm again that it will be a free vote.

Health: Atos

Lord Cormack Excerpts

Monday 26th November 2012 Lords Chamber

[Lord Freud]

I am not aware of the fine print of that particular contract, as it was done under a previous Government. A proportion of the assessment centres—currently 31, I believe—are not on the ground floor and lifts must be used. If there is then an emergency, such as a fire, those people will have to go down the stairs, which is obviously not satisfactory. To the extent that people are concerned about that, we make other arrangements: they are visited on the ground floor, somewhere else or at home.

[Lord Cormack]

My Lords, did anyone prior to seeing the Order Paper know what Atos was?

[Lord Freud]

My Lords, Atos is not an acronym in this case; it is the name of the company that does these assessments.

Children: Child Protection

Lord Cormack Excerpts

Thursday 22nd November 2012 Lords Chamber

[Baroness Corston]

My Lords—

[Lord Cormack]

My Lords—

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, it might be worth pointing out that there are only three Questions today, so there is plenty of time left. I think it is probably the turn of the Labour Party.

Credit Unions

Lord Cormack Excerpts

Thursday 19th July 2012 Lords Chamber

[Lord Freud]

My Lords, we have a procurement function going on with the credit unions, which will start shortly, in terms of how they can modernise and improve. It may well be that there are contributions that are not financial but intellectual that the credit unions can add. We are currently having a series of working parties with the retail banks as we develop the requirements for universal credit and financial inclusion.

[Lord Cormack]

My Lords, I greatly welcome my noble friend’s commitment, but can we accelerate things? In this age of rapacious loan sharks, credit unions could be of real help to many people who are struggling on very low fixed incomes. Could we please have a little more expedition?

[Lord Freud]

My Lords, the whole point of this exercise is to expedite the growth of the movement. There are currently 1 million members of credit unions. The target that we have set is to double that within five to seven years and to make credit unions self-sustaining, which they currently are not.

Health: Pneumoconiosis

Lord Cormack Excerpts

Wednesday 29th February 2012 Lords Chamber

[Lord Freud]

My Lords, the 1979 and 2008 Acts were drawn very precisely to cover certain diseases. I am sure that noble Lords know that these range from asbestosis through mesothelioma, relevant silicosis and other illnesses contracted from cotton, clay, and so forth. The Acts that cover these diseases are very precise. Other industrial diseases are covered by the Industrial Injuries Advisory Council, and industrial benefits are based on those diseases.

[Lord Cormack]

My Lords, while strongly supporting the pleas made by noble Lords who come from Wales, could I, who represented many thousands of coal-miners in England, emphasise to my noble friend that the problem is by no means confined to the Principality, and that there are people in Staffordshire, Yorkshire and all over England who will want to hear what he says and who will hope for a positive result?

[Lord Freud]

My Lords, if there are discrepancies between miners and quarrymen, I will go back and look at them. I was not aware that there were such discrepancies. I will look at them and take whatever measures are required.

Credit Unions

Lord Cormack Excerpts

Thursday 2nd February 2012 Lords Chamber

[Lord Freud]

My Lords, we have made clear that we are prepared to support this industry, but we are determined to support it in such a way that it becomes viable in the long term. We are attacking illegal loans, which are coming down a bit. There are various supports for poorer people, such as payday loans, rent-to-buy and home credit. It is a very complicated picture, but we are determined to push this new factor as hard as we can.

[Lord Cormack]

My Lords, my noble friend said that the aim is to double from 2 per cent to 4 per cent in between five and seven years. Can we not do better than that? Can we not have a more ambitious aim?

[Lord Freud]

My Lords, it is very difficult to grow an industry from an organisational base that is not yet viable. We need to make sure that individual institutions are able to handle the growth that we want them to take on. That is not just about money; that is about trying to make the right changes to management and organisation. It is not an easy thing to do.

Welfare Reform Bill

Lord Cormack Excerpts

Wednesday 25th January 2012 Lords Chamber

[Lord De Mauley]

My Lords, I am grateful to all noble Lords who have spoken. Let me turn directly to the issues raised by noble Lords. The noble Baroness, Lady Sherlock, asked, under the amendment, exactly what will happen during the gateway conversation. This also addresses the point made by the noble Lord, Lord McKenzie. We want parents to pause for thought when contacting us, before deciding whether to proceed with making an application to the statutory service.

We believe that the best way to achieve this is for parents to undertake a telephone call with a specially trained adviser. The only requirement on the parents contacting us before entering the statutory scheme will be to engage in this conversation and to discuss whether they have considered their alternatives. The adviser will be able to provide advice and signpost the parent to other support available, if required. Parents can then, if they wish, take time to consider the alternatives and discuss collaboration with the other parent. However, I stress that engaging in the conversation when first contacting us is the only requirement to enter the scheme. Everything else is voluntary. There is no question of us seeking to direct parents to take any specific steps. Where a parent identifies during the conversation that they need to make an application to the statutory service, the adviser will help them to do so. I hope that that addresses the point of the noble Lord, Lord McKenzie.

[Lord Cormack]

Can my noble friend assure the House that the telephone will be answered by a human being and that there will be a direct line to an individual, not to an automated “press this, press that” system?

[Lord De Mauley]

I share my noble friend’s horror at being asked to “press 1” and so on for different things. I cannot absolutely guarantee that the very first answering of the call will not be that, but the key point is that it will be possible to have a conversation with a human being. That is the gateway.

My noble friend Lady Tyler has much experience in this area and I am extremely grateful for her supportive comments, particular about the additional resources.

The noble Baroness, Lady Howarth, also has a lot of experience in this area. I hope that my answer to the noble Baroness, Lady Sherlock, has addressed the nub of what the noble Baroness, Lady Howarth, was asking. Our reforms will mean that maintenance flows more certainly and more quickly. If someone presented and told us that they had an aggressive partner, we would immediately help them to make a maintenance application.

--- Later in debate ---

[Baroness Butler-Sloss]

My Lords, in the family courts the welfare of children is paramount. It is particularly important to remember that in relation to the amendment that the noble and learned Lord moved, which I very strongly support. I have absolute, practical experience as a family barrister and judge, from long before the CSA came into being and took that work from judges. I have vivid recollections of a certain group of parents, principally fathers but occasionally mothers, who absolutely would not pay. There was no point in even asking them—although I understand why the Minister thinks that they should be asked. They would do everything in their power not to pay. The only way they can be got at now is through the commission. It can only do a better job than the CSA, which profoundly failed at the task it was set.

These parents will not pay, and the idea that a mother in very poor circumstances, left with young children by the father, may find herself having to seek social benefit from the state, which she may not have sought before, when the father may have money while she has nothing that the state does not provide, and may then have to pay a fee to try to get money for the welfare of her children, particularly where she has no money and the father may have some, is profoundly unfair. I respectfully and strongly support the noble and learned Lord, Lord Mackay of Clashfern, and hope that the House will support him, too.

[Lord Cormack]

My Lords, I, too, very much hope that the House will support my noble and learned friend. I hope that those on this side of the House who are inclined to support him will not consider that they are acting as rebels against the Government. This does not knock the central plank out of the Government’s Welfare Reform Bill, which I am proud to support. I listened to what my noble friend Lord Newton said on Monday and wish more noble Lords had heard it. He spoke eloquently in support of the principles of the Bill. His speech was widely and rightly commended. However, here we are dealing with something very different. We are not torpedoing the Bill. We are injecting a little bit of extra fairness into it.

The noble and learned Lord, Lord Morris of Aberavon, spoke as a former constituency Member of Parliament. I was in the other place for 40 years and saw countless women who came to me in great distress, who would have regarded a fee as a deterrent and who considered that this was further evidence that the system was against them. They often came in despair and because they were in true need; but also because the child for whom they were responsible, and for whom the father was responsible, was in need. We are talking here about children, who are not party to whatever dispute might have divided the marriage, relationship or whatever else. Saying to a woman who comes in distress and despair, “Fill in form X and pay your fee”, would be nonsense. What they need is help, contact with human beings—which is why I made my brief intervention on the Minister's speech a while ago—and support.

The noble and learned Baroness, Lady Butler-Sloss, was quite right to say that some people have no intention of owning up to their responsibilities and paying. The Government's general philosophy is one that I hope that most Members of the House can support. We all know that our welfare system is in need of overhaul and reform and it is a courageous act to face up to that. However, this does not mean that everything in the Bill is right, and this clause needs amending in line with what my noble and learned friend said. He is a man of infinite wisdom and great experience, and is held in the highest respect in all quarters of the House and all parts of the country. He is no rebel; he is a man of common sense and compassion and he deserves support.

[Baroness Howarth of Breckland]

My Lords, I will make a simple and straightforward intervention. I will not repeat what I said earlier, but the points I made then were pertinent. I wholeheartedly support the noble and learned Lord, Lord Mackay, and will make two points. It is right that when the noble and learned Lord brought forward legislation that separated maintenance from contact, it took us forward. However, the two things are not separate. A man—it is mainly men; only 3 per cent are women—may feel that he should have contact with his children despite the fact that he has been found not to be safe, not only in relation to domestic violence but to child protection issues. He may believe that he has a right to contact. However, if the court has said, “No contact”, he will definitely not feel that he has to make any payment whatever. One cannot separate the two issues.

I have one further question. Being of a practical turn of mind, I am still trying to work out how the system will proceed. There will be a telephone call with a human being. I do not know whether the human being will have any training or understanding of the issues; where they will come from; or what their background will be. These situations are extraordinarily complex. In the children and family court service, our staff make this kind of assessment when cases come through to ensure that there are no protection issues. They are our most experienced staff; not the least experienced or the clerical staff. Who will do that in future?

After the phone call, who will make a decision? What sort of assessment will be made, in cases of violent marital dispute and child protection, to determine whether someone has to pay? I have not gone into all the issues that were eloquently put forward by other noble Lords around the House about the justice of the matter. Women who may have been abandoned after horrific incidents with men will find themselves being held responsible. As the noble and learned Lord, Lord Mackay, said, this will not affect everybody but only that group. How will we identify them and who will make the assessment?

Welfare Reform Bill

Lord Cormack Excerpts

Wednesday 14th December 2011 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, I shall speak briefly in support of the amendment moved by the noble Lord, Lord Best, from a slightly different perspective, and repeat what I said in Grand Committee. In Grand Committee, I congratulated the Government on their research, Perceptions on Welfare Reform and Universal Credit, which sounded out various stakeholders about what they thought about some of the reforms. One thing that came from that from people who will be affected was that although they welcomed the one-stop shop approach of universal credit—to the extent that it is a one-stop shop—there were real fears about putting all the eggs in one basket. If all the money goes together in one lump sum, if anything goes wrong, people are left insecure—high and dry. If some of the rent payment is going to the landlord, where the tenant wishes it, that is mitigated. That is why that choice should remain

Not expressed in this research but by a number of outside organisations is the worry about what happens to the money in the family. I know that the Minister argues that budgeting accounts will sort this out. I hope that they will, but I think that he knows that I am still slightly sceptical about the magical powers of the budgetary accounts. There are fears that the money may not be paid into the account of the person responsible for paying the rent and that they may not then have control over how the money is spent by their partner. That is a slightly different perspective from that of the noble Lord, Lord Best, who understandably and powerfully is relaying some of the concerns about housing providers, but we have to think about the extra burden that this might be placing on some families.

[Lord Cormack]

My Lords, the noble Lord, Lord Best, has made a powerful case. He made it very gently but forcefully. I was also struck by what the noble Baroness, Lady Howe of Idlicote, said. As one who held MPs’ surgeries for about 40 years and saw people come in who were often in considerable distress, I know that it is not just the feckless who get into financial trouble. Many decent people get into financial trouble. The ability to say that this money should go direct to the landlord could be of enormous help to someone who suddenly has a sick child and feels that they must spend the money on that child. If the money has gone to the landlord, the landlord is secure and the tenant is secure. That must surely be wholly desirable.

Those of us who have been constituency Members of Parliament know how difficult it is to persuade private landlords to consider tenants in this general category. We need an abundant supply of privately rented accommodation. Anything that may detract from that is to be regretted.

I admire my noble friend, because he is thoroughly the master of his brief and because his underlying aim, which is to create a more responsible society, is one to which we can, surely, all subscribe, but there are exceptions and times when it is right to give a choice.

Another point, which the noble Baroness, Lady Howe of Idlicote, made, struck a chord with me. There are many elderly people in receipt of benefit who get confused. I am not talking about people who suffer from dementia, but we all know—the noble Lord, Lord McAvoy, knows from his constituency experience—that elderly people sometimes get confused. They think, very genuinely, that they have paid something when they have not. It would be a great blessing to give those people that choice.

I would urge my noble friend the Minister to give very careful thought to this. I hope that the House will not divide on it tonight, but I hope that he will be able to give some thought perhaps even to putting down an appropriate amendment at Third Reading.

[Baroness Hayter of Kentish Town]

My Lords, dinner beckons. Nevertheless, there are seven good reasons for accepting this amendment.

First, it is cost free. The facility to pay rent directly to landlords is there for certain beneficiaries, so it would simply be a case of using this for others.

Secondly, it helps to give financial responsibility and decision-making to claimants, as it would allow them to choose to have the rent paid in this way.

Thirdly, it is what the rest of us do with our mortgages or rent: it goes straight out of our bank accounts, normally the day after payday—in my case, usually the same day—so that we cannot get our hands on it in the mean time. The difference is, of course, that many of these claimants do not have bank accounts, or a joint bank account if they are a couple, and therefore do not have the ability to make such arrangements for direct payments. Furthermore, if they have a basic bank account, such accounts cannot go into the red, and so if there is not money to pay the rent, it simply will not be paid, even with a direct debit mandate, leading to the build-up of arrears.

Fourthly, this amendment is strongly supported, as has been said, by housing associations and by local authorities. Both know that arrears will build up more quickly without this amendment. For housing associations, the interest on borrowing will increase as their assured-rent income will decrease. To give the example of one housing association, 85 per cent of Riverside tenants choose to have their rent paid directly, as many of its tenants do not have bank accounts, and many more fear the bank charges if they go overdrawn. This is an important way for low-income households to manage their finances. If this existing facility is withdrawn, pilot studies show that, as has already been mentioned, rent arrears are likely to rise sharply, putting tenancies at risk. In addition, funders have indicated that they are likely to regard lending to housing associations as higher risk and thus to increase the cost of funding. In the long term, it will mean that social housing providers will simply be able to do less. Income streams to local authorities will similarly be threatened if direct payments, which exist now without any problems, are ended. CoSLA, the association for local authorities in Scotland, estimates that this will cost about £50 million a year in Scotland alone.

Fifthly, many vulnerable families will be at risk. To quote again from CoSLA:

“COSLA is deeply concerned that Housing Benefit paid direct to claimants without sufficient safeguards will result in an increase of rent arrears and evictions, sending households spiralling into debt and facing homelessness”.

We know the families for which the risk of not paying the rent directly will be the greatest: those with debts, where the pressure to pay these off—whether to the gasman or to the loan shark—will be pressing; those with a family member with a drink, drug or gambling habit, where temptation to use the rent money will be high; and those with immediate demands, as the noble Lord, Lord Cormack, has said, for money to feed their children and yet who want to ensure that the roof over those children’s heads, albeit not today’s problem, is equally vital, so want to have that rent assured. While we know some vulnerable groups will have their rent paid directly, we can see no reason to wait until borderline cases get into problems, struggle and get into rent arrears, before we allow them to have the rent paid directly. Why risk that for no good reason?

Sixthly, it will make sure that we do not dissuade private landlords from coming into this sector.

Seventhly, the strongest argument: the noble Lord, Lord Best, who chairs the Local Government Association and has forgotten more about housing associations than most of us will ever learn, tells us it is the right thing to do. We concur.

--- Later in debate ---

[Lord Freud]

That is exactly what we need to ensure and that is exactly what we are discussing with the banking groups. Specific banking support is exactly the issue that we need to get right.

[Lord Cormack]

My noble friend is trying to be helpful and I appreciate that very much. Is he saying that this amount of money that is earmarked for paying the rent will be used for paying the rent and for nothing else, and that, unless he is assured that he has the product that will deliver that, he will not move in this direction?

[Lord Freud]

I am saying that we are working really hard with the banks and the banking community to make sure that we have an escrow arrangement of that nature, and we are doing this at several levels. We can have a general agreement, which I shall discuss with the banks as a whole, to provide a generalised protection. However, I am quite interested in getting particular banking products that will provide a simple bank account and elaborating on what could be a new level of support for some of the poorest people in our community. We have a one-off chance with universal credit to ramp up support for the poorer people in our community, and we are putting a lot of energy into achieving that. I have talked about this before. It is one of the hidden gains that we can get out of the introduction of this new system. Rather than people living on drips of money from here and there, we can really start to help them, supporting them in managing their finances and getting true independence. This is a core part of what we are going to be doing with universal credit, and part of that relates to housing. Housing will be a major part of people’s total income stream. We are not doing this for fun or to annoy anyone; this is absolutely part of what we are trying to do with universal credit.

I need to deal with one other point—the issue of safeguards raised by the noble Baroness, Lady Lister. We are concerned about the safety and welfare of claimants and, where we have a concern, we need to put direct payments in place. There are vulnerable groups who are not able to manage the potential freedoms, and for them we will make sure that we go on with existing arrangements for direct payments.

We have commissioned a consortium led by Professor Paul Hickman—I am sorry, but this is a bit of an announcement late at night—from the Centre for Regional Economic and Social Research at Sheffield Hallam University to evaluate the effects of direct payments to claimants in the six demonstration project areas, which I shall announce soon. The other key team members are Dr Kesia Reeve, Peter Kemp of the Oxford Institute of Social Policy, and Stephen Finlay from Ipsos MORI, names that I know that the noble Lord, Lord Best, approves of. That will give us a cumulative understanding of the impacts of direct payments and inform the detail of delivery under universal credit.

Research published by the Joseph Rowntree Foundation in 2007, Paying Housing Benefit to Claimants, on both private and social tenants’ experiences of and their hypothetical attitude toward the management of their own housing benefit confirms that a significant proportion of social tenants have the potential to manage their own housing benefit payments. We will also have an advisory group for the demonstration projects and a wide range of local government, money advice, voluntary sector and other external stakeholders who will be invited to join that group.

We had a slight exchange about what “choice” means and we have been teasing each other about the imbalance of power when you have choice. It concerns us that while there is theoretical choice today, only 5 per cent of people take it. As it stands, tenant choice does not go far enough, which is why I am concerned about it. I hope that the noble Lord, Lord Best, will accept that we are making incredible efforts here to be transformative and not to undermine the housing sector, and on that basis will feel that there is enough going on for him to withdraw this amendment.