Welfare

Debate between Lord Davies of Stamford and Lord Freud

Monday 21st March 2016 Lords Chamber

[Lord Freud]

I am grateful to have the opportunity to pay tribute to Iain Duncan Smith. He was a remarkable champion for reform in the welfare state. I say with feeling that there is a reason why no one has transformed the system in the last 70 or 80 years and that is that it is very difficult to do. He had the political guts to get on and do it, and I am very proud to have supported him in getting the programme as far as it is. I think that he will go down in history for that achievement.

As my noble friend said, the OBR forecast shows that we gave more money to the disabled in the last Parliament, and the same is projected for this Parliament. In particular, a real-terms increase in the area of PIP/DLA is now baked in. My noble friend is of course right that the next step in the process is the need to find the right way to help disabled people back into the workplace and to achieve our objective of halving the disability gap.

[Lord Davies of Stamford (Lab)]

My Lords, the noble Lord gave an assurance that the DWP will not replace the £4.4 billion of savings from the PIP programme, which it is now going to abandon, with cuts elsewhere in the DWP budget. However, he has not answered the obvious and important question of how those savings are going to be compensated. Surely there are only three possibilities. They will have to be compensated by spending cuts in other departments, by tax increases or by an increase in the fiscal budget being run by the Government. Which is it, or will it be a combination of all three? Surely it is the height of fiscal irresponsibility simply to announce that £4.4 billion of projected savings will no longer be arriving without any idea at all of how they will be replaced.

[Lord Freud]

My Lords, the Chancellor and the Secretary of State are saying that at the Autumn Statement we will look at the whole picture and at how the finances of the country should be organised. At that stage, there will be lots of moving parts and we will be able to see how this fits in.

Welfare Reform and Work Bill

Debate between Lord Davies of Stamford and Lord Freud

Monday 21st December 2015 Lords Chamber

[Lord Freud]

My Lords, that was a thoroughly enjoyable debate for this time of the evening. The amendment moved by the noble Lord, Lord Kirkwood, is directed at Motability, which provides vehicles at discounted rates to people whose disability or long-term health condition has a significant effect on their mobility. It is run on a day-to-day basis by Motability Operations, a limited company, and is overseen by the Motability charity.

On the specific questions about Clause 20 that were raised by the noble Lord, Lord Kirkwood, I can say that the Government divert benefit payments directly to Motability but the administrative costs of the diversion have been borne by the Government, who do not have the power to recoup them. Clause 20 gives the Secretary of State the power to make regulations to do so. Such a power would currently apply only to Motability but it is drafted broadly to enable the provision to apply to any organisation running a future scheme.

I can confirm to the noble Lord, Lord McKenzie, that the cost is small—less than £1 million, I think—and Motability has confirmed that it will not change its pricing or the level of service it provides. Therefore, it will have no impact on its members.

The noble Lord, Lord Rooker, asked about information on directors’ remuneration and relevant interests. That is available in the annual and interim accounts of Motability Operations, in compliance with international financial reporting standards. These can be found on its website, which is where I found them on the occasion referred to by the noble Lord, Lord Rooker. Indeed, it publishes information on its board meetings in the same place.

The department meets regularly with Motability to discuss the scheme’s performance. I know that this does not overly impress the noble Lord, Lord Rooker, but as a charity, Motability is accountable to the Charity Commission. It is therefore unnecessary to require Motability to submit the annual report that is the formal subject of the amendment, because the information is there.

I will run through some of the rather surprising number of other issues. On overhead costs, Ernst & Young found that Motability was driving down its overhead costs, while satisfaction was rising. On the monopoly question, we have regular meetings and consider the value for money that Motability provides. The banks own Motability shares but they have waived all dividends and received no profit.

[Lord Davies of Stamford]

The Minister has moved on rather rapidly. He brushed past the quite important issue of a monopoly without going into it. What seems to arise from this situation is that we have here a government department—the Department for Work and Pensions—which has given a contract on a monopoly basis to a charity, which appears then to have given its business on a monopoly basis to a public company. One could imagine that that structure could easily be used elsewhere. It is a very attractive idea: a nice little number and a cosy arrangement for those receiving the salaries and getting the other benefits from the circulation of public money in that way. That is the basis of the concern about monopoly. Maybe the Minister would like to enlighten the House if I am wrong. It would be interesting to know whether the Government have done anything to encourage competition or to see whether any alternative providers might be interested in getting into this market.

[Lord Freud]

I was able to say that the department considered value for money and had drawn up this clause to allow for other providers. That is as far as I can go at this stage. Motability is a long-established and very well-loved organisation; that is the current position.

On the second charity, the Motability-run fund is used to support the objectives of Motability and is not government-run. The remuneration of Motability Operations directors, and indeed those of the charity, is a matter to be decided by Motability.

Pensions: Draw-down Charges

Debate between Lord Davies of Stamford and Lord Freud

Tuesday 9th June 2015 Lords Chamber

[Lord Freud]

That is one of the things that we will look at very closely. Clearly, we need to get evidence of how this particular part of the market develops. We already have transparency in the accumulation phase. If that is necessary in the decumulation phase, we will not hesitate to introduce it.

[Lord Davies of Stamford (Lab)]

My Lords, you do not need to wait to watch the market to believe that transparency is absolutely essential in any honest financial business. Why cannot the Government decide that there should be complete transparency of charges from the beginning? Should they not have decided that at the outset, when they introduced this new reform?

[Lord Freud]

My Lords, we have a marketplace and it is fair to give it a chance to develop. At the moment, according to the FT and Which?, the annual charges applied to decumulation pots are somewhere between 0.25% and, for high-end performers, 1%. For the set-up, the charge is somewhere between £70 and £300. As we start to gather this evidence and assess it, we will know whether we need to intervene.

Youth Employment

Debate between Lord Davies of Stamford and Lord Freud

Wednesday 30th July 2014 Lords Chamber

[Lord Freud]

Youth unemployment is different in its nature from general unemployment in that there is a scarring effect for the young if they do not get into the workforce early. We therefore need to make extra effort to get youngsters into the workforce, which many of our measures are designed to do. There has been a real recasting of support for youngsters, whether through training, education or apprenticeships, and we are providing this support for them through the Work Programme, the jobcentres and work experience. We have myriad programmes, and they are actually having an effect. We are now seeing very steep falls. It is not yet good enough but it is moving aggressively in the right direction.

[Lord Davies of Stamford (Lab)]

My Lords, of course it is a priority—

--- Later in debate ---

[Lord Freud]

Obviously we have looked at the living wage. If the figure suggested for the living wage were to be adopted, we would have to consider the impact on unemployment and the particular impact on youngsters, who would be hit worst. The NIESR estimated that adopting the living wage as opposed to the minimum wage would knock 300,000 youngsters out of work.

[Lord Davies of Stamford]

My Lords, it is obviously very important to do everything that we possibly can to help young people into work for the first time or back into work from unemployment.

--- Later in debate ---

[Lord Davies of Stamford]

The coalition has already had time; I am sorry.

But what the Minister describes as a scarring effect can affect people at any age if they spend too long outside the workforce and cannot get back into a job. I have asked the Minister questions about this before and he has avoided them. Can he now tell us whether the Government keep evidence of age discrimination being practised against jobseekers? Can he also tell us what the Government do if they come across a prima facie case of age discrimination? Have they ever prosecuted or might they prosecute if a clear case arose?

[Lord Freud]

I have written to the noble Lord on this matter. We have not prosecuted in such a case but if we found something egregious we would consider doing so.

Employment: Universal Jobmatch

Debate between Lord Davies of Stamford and Lord Freud

Tuesday 11th March 2014 Lords Chamber

[Lord Freud]

We have a thorough communication exercise to jobseekers to make sure that they look after their information online, just as anyone else needs to be careful with their information online, and we are currently looking to enhance our service through Universal Jobmatch to make sure that we do not have this kind of problem.

[Lord Davies of Stamford (Lab)]

My Lords, there is quite a lot of anecdotal evidence, certainly in Lincolnshire and I suspect elsewhere, that it is disproportionately difficult for older people in their 50s and early 60s to get jobs through the jobcentre system. In the event that there is evidence of age discrimination against applicants, it is very unreasonable to expect the applicant, who may be a man or woman without means or with very slender means, to pursue his or her own legal redress. Is it the Government’s policy in such circumstances to pursue the case and if possible to prosecute? Have there been any prosecutions for age discrimination instigated by or supported by the department?

[Lord Freud]

The Government do not support age discrimination of any kind, particularly in looking for jobs and we are vigilant to make sure that people do not experience such discrimination.