Improving Lives: Green Paper

Debate between Lord Farmer and Lord Freud

Monday 31st October 2016 Lords Chamber

[Lord Freud]

Yes, some of the technologies that one sees are remarkable. The noble Lord, Lord Low, who is not in his place at the moment, demonstrates that for the blind every time he stands up—I cannot imagine how he can do it—as did one of the members of my private office, who was also blind. There are amazing technologies to help support in that case; I know that it is also true elsewhere. We want to adopt and take on new technologies. One of the interesting and heartening things with Access to Work, where we have been a little concerned about the take-up, is that we have just introduced a digital offer there and we are encouraged by the response to it. There will be other areas where we can get a lot of benefit from going with new technologies.

[Lord Farmer (Con)]

My Lords, as we have heard, this Green Paper is to be recommended. It will obviously need some broad support to get it through. Can my noble friend tell us what he is doing to garner broad support for these changes?

[Lord Freud]

We have deliberately designed this Green Paper to ask for responses from a lot of key areas. Noble Lords may remember that when we started off on this process, it was by looking down a direct White Paper route. We have pulled back and gone for the Green Paper route, with a lot of areas for consulting. We plan to hear from and work with disabled people and people with long-term health conditions. We want to hear from employers, health and care professionals, the voluntary and community sectors and the devolved Administrations. We really want to build a consensus on what we can do and get the widest support that we possibly can for any changes.

Universal Credit (Waiting Days) (Amendment) Regulations 2015

Debate between Lord Farmer and Lord Freud

Monday 13th July 2015 Lords Chamber

[Lord Farmer (Con)]

My Lords, while the noble Lord, Lord German, and the noble Baroness, Lady Sherlock, raise important points for consideration, I have to disagree with them both and speak against these Motions. In fact, I would go further and say that in the light of the £12 billion taken out of welfare in last week’s Budget, I am surprised that they are asking the Government to find yet more savings in other places. This is the implication of these Motions.

The waiting days measure, which is consistent with the wider landscape of welfare in this country, is projected to save around £150 million per annum, although there may be some debate on that. Indeed it is a save-to-spend measure, and so removing the housing element and delaying implementation will sharply decrease the amount of funding available for a number of programmes to get people off benefits and into work. I think noble Lords would all agree that we need to make the best possible use of taxpayers’ money and focus spend here. So I am concerned that, in particular, the proposed Motions will curtail the amount of help the Government can continue to give the long-term unemployed, such as quarterly work search interviews for all claimants and voluntary programmes available to lone parents with children aged three to four years old to help them become work ready.

I have been reading the Government’s response to the Social Security Advisory Committee and note that the SSAC’s recommendation to take housing benefit out of the waiting days regime would cut savings by around a half to two-thirds, costing £70 million to £100 million, as well as increasing the complexity of the universal credit payment from the point of view both of IT and the user. The onus is therefore on those tabling these Motions to say where they would cut the £70 million to £100 million to enable these important initiatives that started last year to continue.

Looking first at the concept of waiting days before entitlement to employment-related support, noble Lords will be aware that waiting days have been a long-standing feature of the benefit system and already exist in other working-age benefits, such as jobseeker’s allowance and employment and support allowance. In addition, it must be recognised that many people who make a new claim for universal credit will have come from a previous job and will therefore have final earnings or other income to support themselves until their first benefit payment.

Again, taking this approach to universal credit is consistent with the wider benefit system, which is not designed to cover very short periods of unemployment or sickness. Waiting days are also more consistent with the world of work, where very short breaks between jobs are unpaid as no employer is receiving the benefit of any work. This Government’s determination to ensure as far as possible that welfare mimics the world of work is the right approach.

It is my understanding that the safety net for vulnerable people is not being dismantled and that a number of groups are exempt from this change, including people who are terminally ill, victims of domestic abuse, care leavers, 16 to 17 year-olds without parental support, and prison leavers. Also, those who are in work and receiving universal credit who lose their job will not be subject to waiting days as they are already in the system.

I was pleased to read about a range of other targeted exemptions, which seem to be a better use of scarce public funds than treating all people as equally in need. I am, however, concerned about those who are long-term unemployed and have no savings or incoming final payment, and this is where it is vital that claimants receive timely and effective personal budgeting support as well as, if necessary, cash support in the form of a universal credit advance. Again, I would say that this Government are right to take a more finely grained approach and help those who particularly need support in the very short term, instead of assuming that everyone is in the same position.

I turn to the other elements of universal credit not tied to employment support, especially the housing benefit element that is the concern of the Motion of the noble Lord, Lord German. My understanding is that as universal credit is simplifying the welfare system, not least to make work pay, it would run counter to that goal to treat the housing element separately. I think that this was said earlier, but paying universal credit as a single monthly sum to households aims to help to prepare claimants for the world of work or to keep them in that mindset when they drop out of the labour market.

Quite rightly there is an expectation placed on households to manage their own budgets. Obviously housing costs do not cease when someone finds themselves having to move on to universal credit, but neither do they cease when someone is between jobs. However, I was relieved to find out that protections are in place for tenants who fall into arrears and alternative payment arrangements are available. In other words, it is not a sink-or-swim situation but we are encouraging the norm that very many of those who are in work try to live by, which is saving something for a rainy day.

In summary I support the Government’s position on waiting days, on the grounds that when there is such a tight financial settlement it is imperative that the welfare system is simple but concentrated on those who need it most. However, I echo the Social Security Advisory Committee’s plea, which we have just heard, that this change be subjected to the test-and-learn approach that was a hallmark of welfare reform under the coalition Government. It is essential that we can irrefutably say that the exemptions and other fine print of the waiting days measure are delivered as promised.

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

Before considering the individual arguments, I think it would be useful to understand to whom exactly waiting days actually apply. It is not the most vulnerable: care leavers, the terminally ill, victims of domestic violence, youngsters without parental support and prison leavers have all been exempted. It is not those coming from other benefits such as jobseeker’s allowance or employment and support allowance. We have to remember that because universal credit is a benefit for low-income people in work as well as a safety net, many people in low-income and unstable employment will remain on universal credit as they move in and out of work. Hence, the very people for whom much of the concern has been expressed today will not be affected.

Noble Lords, and indeed the Social Security Advisory Committee’s consultation, highlighted a series of examples of cases that might be affected. These included the effect on a single mother reducing her hours to care for her sick child; the effect on those who have not been able to build up a cushion for a rainy day because they have been in low-paid work, on zero-hour contracts or in in-work poverty; the reluctance of claimants to take short-term employment as they fear they may have to serve waiting days again when the job finishes; the concern of landlords that their tenants might not be able to pay their rent because they lose a week’s housing and the disproportionate effect that that will have in London; and the fear that low-income people may borrow from payday lenders and loan sharks to keep afloat, a point made by the noble Lord—I find it hard not to call him my noble friend—Lord German.

I understand why these examples cause concern. They would cause me concern, too, if I was not confident that in such cases waiting days would not affect the most vulnerable. The single mother, the low paid, and zero-hours contract workers will most likely already be on universal credit while in work if their income is low. If on universal credit, they will not serve waiting days. Even if a person on a zero-hours or a short-term contract comes off universal credit, they will be exempted if they reclaim within six months. People moving from other legacy benefits are also exempted.

Universal Credit

Debate between Lord Farmer and Lord Freud

Monday 24th November 2014 Lords Chamber

[Lord Freud]

We conducted a painstaking process of testing how people respond to paying their housing rent directly. We found that there was a three-month adjustment process until people got familiar with it. We are now ensuring that we have the right systems to help people make that adjustment into the monthly payment situation.

[Lord Farmer (Con)]

My Lords, the principles of universal credit are sound, but timings and cost to the public purse are vital considerations. Can the Minister tell us when all claimants will be on universal credit and how much it will cost to reach this point?

[Lord Freud]

In the last strategic outline business case the costs of the programme to 2023-24 were £1.8 billion. That is down from the £2.4 billion figure that we had in 2011. Under that case, we anticipate that the bulk of the exercise to transfer people on to universal credit will be completed by 2019.