Welfare Reform Bill

Lord Freud Excerpts

Thursday 3rd November 2011 Grand Committee

[Baroness Hayter of Kentish Town]

My Lords, this amendment seeks to tackle the introduction, under UC, of a poor work incentive for second earners who, as the noble Baroness, Lady Howe, has said, are mostly women. As my noble friend Lady Lister said, 300,000 second earners will see increased marginal deduction rates as opposed to only one-third of those who will see reduced MDRs. The policy to make work pay does not appear to extend, therefore, to a third of these affected second earners. According to the impact assessment:

“It is possible that in some families, second earners may choose to reduce or rebalance their hours or to leave work. In these cases, the improved ability of the main earner to support his or her family will increase options available for families to strike their preferred work/life balance”.

As my noble friend Lady Lister has said, it is not clear how this will improve options for families who prefer to have a more equal working relationship, where both partners combine work and child rearing. It also seems to be in conflict with other bits of coalition policy, such as the BIS modern workplace consultation, which sets out options for families to share parental leave more evenly between men and women. Perhaps, in responding, the Minister can let us know what discussions he has had with BIS about whether the incentives within universal credit support the BIS policy.

The reduced incentives for second earners to work come on the heels of the April cuts in childcare and therefore, as has been said, further reduce the incentive for anyone with a child to take a job, not to mention other little things such as cuts to the baby element of the child tax credit, the health in pregnancy grant, the Sure Start maternity grant and the freeze in child benefit.

As my noble friend Lady Lister said, the pay of second earners is crucial in keeping families out of poverty. If I may be forgiven for repeating her figures, which I hope I have right, child poverty is at 19 per cent where there is one full-time earner but it drops to 5 per cent with two earners and down to 2 per cent with two full-time earners. Therefore, second earnings are absolutely key to the Government’s objective of reducing joblessness, child poverty, dependence on universal credit and increasing the tax take. I look forward to the Minister’s answer to whether it was the gross cost after taking account of tax take which led to the projected cost of this.

Childcare has already been mentioned and is clearly particularly important in two sorts of families. One is obviously lone-parent families, and the other is where there is a second earner, with both parents tending to be out of the house at certain times. The disincentive to work increases where there are child costs to be met. As has already been said, childcare will cover only 70 per cent of costs, and that leaves 30 per cent to be found from earnings, which is already a high enough take from the second earner’s pay. Therefore, without an earning disregard of their own, the second earner has a very high deduction rate where there are child costs to be met, effectively making the taking of a job financially unviable. Yet, as I have said, second earnings are crucial in keeping households out of poverty. They will be even more important if, as we read today in the Financial Times, there is any truth in the rumour that when times get tough it is the poor whom this Government will seek to make pay. According to these press reports, the Chancellor is looking at cutting further billions from benefits by scrapping inflation-linked uprates, even—this beggars belief—freezing some payments. We read in the same article:

“The Liberal Democrats will oppose anything that suggests the coalition is unfairly passing the burden of deficit reduction on to struggling families”.

We look forward to hearing whether the Minister can say whether the Financial Times is accurate. Perhaps he can also ask those sitting alongside him—maybe they could pass him a note—whether they would like to place on record their opposition to any attempt to pass on any cutbacks to struggling families. They must know that the rich can pay far easier than the poor. Are they going to use their bargaining power, such as it is, in the coalition to protect the very weakest in society?

These amendments are about reducing poverty and increasing the take-up of work, and it would be useful to know on which side the Lib Dem/Tory coalition sits on this. Later today, we shall reach Amendment 75A to Clause 51 standing in the names of the noble Lords, Lord German, Lord Stoneham and Lord Kirkwood, and the noble Baroness, Lady Thomas, which effectively asks for an earnings disregard from the second earner where the first earner is now too ill to work. We very much welcome that amendment, but it would useful to know whether the same principle could be more widely adopted, as this amendment seeks to do.

The Minister may well be forgiven for wanting to reduce the number of working women on this side of the Committee but perhaps he would make it clear that that is not the intention with universal credit by ensuring that second earners really will be better off in work.

[Lord Freud]

My Lords, I have enjoyed what we are calling the bevy of ladies on the other side. Their intellectual prowess has left me stunned on my heels. Let me go into this amendment, which proposes that we create a disregard for the second earner in a joint claim. This proposal was raised in Amendment 52DB, which we have already debated, so I am going to be reasonably brief.

First, this is not a matter of principle. We acknowledge that it would be desirable to incentivise both members of a couple to work. However, we have limited funding and we have chosen to focus that on creating a strong incentive for at least one member of each couple to work, in order to limit the number of workless households. This is clearly a difficult choice. We have discussed these choices, in response to the noble Baroness, Lady Lister, with other departments on a regular basis, and we are very aware of links to other programmes.

Clearly, this is something that, if we had some money, we could revisit at a future point, but let me give noble Lords the figures. If couples who were both in work were entitled to an additional disregard of £700 a year, for example, the cost would be £240 million.

[Baroness Hollis of Heigham]

Could the Minister be very detailed in his costings? When he says an additional £750—

[Lord Freud]

I said £700.

[Baroness Hollis of Heigham]

Is that as an addition to the second earner?

[Lord Freud]

There was a question around that, so I will endeavour to supply all the information I possibly can. A sum of £700 a year in addition would cost £240 million; if the disregard were £1,000 a year, the cost would be £350 million. We simply do not have the money in our present envelope. There is no real difference between gross and net in those figures because they are below the personal tax threshold, so there is no tax effect to set off. We are doing all sums on a non-dynamic basis anyway, so there is not a dynamic effect. From the point of view of the architects of the universal credit, we would have liked to incorporate more dynamic effects, but there are certain other interests in the Government that take a very straightforward view of money.

Let me deal with the other issue—that making the lack of a disregard for second earners makes the universal credit bad for women. That is the underlying argument here and clearly one that would concern us very greatly. But it is clearly not the case. Universal credit has many features that will improve the position of women, most obviously in support for mini-jobs and childcare. We have a duty, as the noble Baroness, Lady Lister, asked, to look at the impacts of policy changes on a range of particular groups, including the impact on men and women, and we are satisfied that our policy here is the right approach and that we can justify the impact. That is why I was able to sign the ECHR statement for this Bill.

Our impact assessments and equality impact assessments show that women in general are more likely to gain than to lose from universal credit, that this is also true for lone parents and couples with children and that lone parents benefit the most in both absolute and relative terms from the likely increase in take-up.

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[Baroness Hayter of Kentish Town]

Before the Minister stands up, as I think he might like to get everything together, there were two questions posed that he did not respond to. One was whether he had had discussions with BIS. I had also given him the opportunity to refute the story in the Financial Times. I hope he might use this moment to do that.

[Lord Freud]

My Lords, let me try to pick up some of those points. Picking up the point of the noble Baroness, Lady Hollis, I hope that she is hearing that I am sympathetic to this point. I hope that noble Lords have heard that this is about money. We do not have this money. We have a very sharp choice to make, about whether to reduce workless households or to look after second earners with a disregard. We have taken this decision, and we have also taken a decision, when we do find some more money, to do something about childcare, which is another issue that I know greatly concerns noble Lords.

There are two clear issues when we look to improve this system, as we see dynamic effects coming through which are provable. We had a debate the other day on why we need to test things. Two of the obvious things to test will be second earner disregards and taper. Those are the first two things that everyone in this Room, I think, would like to know about as we get the system under way. Therefore, to the extent to which I am being asked “Will we look at it?”, yes, we will be looking at this. I am not going to make any assurances, because we should find the answers, but that is exactly the kind of question we want to have answered.

I shall take up the points of the noble Baroness, Lady Sherlock, on MDRs. You can freight all kinds of things on to MDRs if you want to, with different costs, and I am sure that you can create a position where the overall costs come up to high MDRs. The simple point that I would like to make is that with the universal credit itself, the MDRs come down.

On whether we will force people to take a job which leaves the household poorer, we made the point when we discussed this that we take these things into account when we set up the obligations of claimants.

[Baroness Sherlock]

My Lords, I am grateful to the Minister. I hear very clearly his sympathy for this issue. If it is simply a question of money and therefore timing, one of the things he could do, to put everyone’s minds at ease, is to say, “Until we can afford it, we will not force a household to be worse off by forcing them into work or sanctioning them”. He could then review the situation when he found the money down the back of the sofa next time.

[Lord Freud]

I will not give that kind of assurance to noble Lords. This is clearly—

[Baroness Hollis of Heigham]

You could, you know.

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[Lord Freud]

Stop teasing me. The noble Lord, Lord Beecham, made the point about VAT; there is clearly a missing element there, and I acknowledge that there is a difference between the gross and the net.

I thought I had answered the point made by the noble Baroness, Lady Hayter, on talking to other departments. Yes, we are talking to BIS. As to the FT story: as you would expect me to say—it is something between, “Pick the normal stuff”, “I do not comment on press articles” and, “It is a matter for the uprating Statement”. Pick any one of those you want. I am not answering the question. [Laughter.]

[Baroness Hollis of Heigham]

I congratulate the Minister on his nimble footwork; it was very impressive. However, what happens to Bhavna in this situation, where her childcare completely mops up £19 out of her £20 addition to the family earnings?

[Lord Freud]

In this example, there is a 65 per cent taper. Thereby, extra earnings produce an increased income of about £20. The effect of childcare costs would depend on the amount of the childcare costs. Under our current proposals, the parent is clearly expected to meet 70 per cent of allowable costs, and the state will cover the rest.

[Baroness Hollis of Heigham]

I understand that. I thought that that was exactly the point I made. The question was regarding the result of that calculation. She earns £60 and adds £20 net after universal credit, and £19 of that will, on any reasonable estimate, go on her share of childcare costs. That is before you take travel costs into account. Why work?

[Lord Freud]

We are going round in circles. We all know the point that is being made. We all know the reality of the iron triangle. We are wrestling with it. This is what we can afford to do right now. Some people may be caught in such a position and we make the point that some people will have higher MDRs—a lot will not. As we improve the position when we have funding, and have proof of the dynamic benefits that may free up main funding, we will be able to apply them. However, this is the best we can do right now. I would love to do more, but I cannot find any more money.

[Baroness Lister of Burtersett]

My Lords, I thank noble Lords who have supported the amendment with some helpful additions to the argument. I do not know whether any other noble Lords spotted it, but the Minister asked the “noble Lord” to withdraw the amendment. I do not know if he was making a Freudian slip and trying to reduce the bevy of Baronesses opposite him.

I should like to make a couple of more critical points before I come to a more positive one. I can understand the Minister’s frustrations that there are other parts of government that will not allow the department to do its calculations on a dynamic basis, but I was a bit disappointed that the department’s thinking was not dynamic in relation to this matter and it was not prepared to acknowledge that there could actually be positive dynamic effects through a second-earner disregard—whether they be anti-poverty or paid work effects, and all the things that the department is in favour of. I do not know whether these are just the noble Lord’s own arguments or those that are simply in the brief that comes from the various documents we have been given, but it seemed to me that there was still the unitary-household approach and an inability to understand that while couples are couples, they are also individuals within couples. I ask the noble Lord to go away and think about that a bit more and about the importance of individual autonomy within the context of coupledom. I would have been even happier if he had been able to go one step further and commit himself on the second-earner disregard in the longer term.

We have, however, made progress today. What the Minister has said takes us beyond some of the other things which have been said. I now take it as the official departmental view that it will, in the fullness of time, consider improving incentives for second earners, either through a second disregard or through the taper, as and when resources permit. I therefore beg leave to withdraw the amendment.

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[Lord Freud]

My Lords, Amendment 52D would take a power to disregard the full amount of any pension contributions from the assessment of both single and joint claimants’ income. In the universal credit White Paper, we set out our intention to disregard 50 per cent of contributions to an occupational private pension from the income assessment. This balances our commitment to encourage pension saving with fairness to the taxpayer and it is the current treatment in the benefits system. It is true that in tax credits 100 per cent of pension contributions are ignored, but tax credits are based on gross income. This is not therefore directly comparable with the 50 per cent disregard in the benefits system.

In addition to the disregard, universal credit claimants will also have tax relief on their pension contributions. This means that for each pound that goes into the pension pot of an employee who is a basic rate taxpayer and in receipt of universal credit, the take-home income is reduced by only 34 pence after minimum employer contributions, tax relief and increased universal credit payments are taken into account. It would cost approximately an additional £200 million a year to move from 50 per cent to a full disregard. While this would no doubt be welcomed by claimants on low incomes, not all taxpayers who do not claim benefits have the advantage of a private or occupational pension. We must therefore take a balanced approach to the disregard of pension contributions, and we believe that 50 per cent is the appropriate level.

Pension contributions are disregarded from the income assessment in tax credits. We have taken the view that this is one of several areas in which tax credits have been excessively generous to claimants when the position of the average taxpayer is taken into account.

On the operational point, we are already operating a 50 per cent disregard, including a payment towards personal pensions. The rules will operate in a similar way to the way that they do now, but clearly we will not be able to do all this through RTI, so there will need to be some direct reporting.

Picking up the point that the noble Baroness, Lady Drake, made about what we are doing for asset accumulation, I can point to a series of measures that the Government are taking in that area, not least the support being provided to lower-income houses to purchase a home. In universal credit, households are able to save up to £6,000 with no impact on the universal credit award. I should point out that an average household with a working-age adult has average savings of £300.

The convention is that “two Baronesses” makes “noble Lords”. If I made a mistake during debate on the previous amendment, I was possibly slurring my “s”. In this case, I can ask the noble Baroness to withdraw her amendment.

[Baroness Hollis of Heigham]

I was slightly taken aback by the Minister saying that he thought 100 per cent disregards in tax credits were regarded as overgenerous, when at the same time no mention is made of what we are paying in higher-rate tax relief. Currently, out of the £26 billion we spend on tax relief, some £8 billion to £10 billion is going to higher-rate tax relief. If we follow the Minister’s line, apparently we need only to incentivise the rich to save; the poor are being overincentivised and we are being overgenerous.

[Lord Freud]

My Lords, I think I am caught being slightly puzzled. I was strongly under the impression that pensions were removed from the higher rates of tax relief. I hope I am not wrong on that.

[Baroness Hollis of Heigham]

The noble Lord is wrong.

[Lord Freud]

On that basis, I am probably the wrong person to interrogate on this matter.

[Baroness Hollis of Heigham]

There is a limit on how much of your pot can attract higher-rate tax rates, which is the £50,000 figure. There have been some changes, but £50,000 of pension contributions is still tax free.

[Lord Freud]

I think we are now into the realms of minutiae. This has been subject to a substantial change. It was unlimited. Noble Lords can see that my personal interest in this is not as great as it might be. One can make comparisons and political points all over the place; let us stay with the business in hand.

[Lord McKenzie of Luton]

Can the Minister help us on one point? I am interested in the practicalities and operation. He said that we could not do all this through the RTI system. I am trying to understand how much of it can be done, given that the RTI system is going to produce either a gross income figure or a net of tax and national insurance figure.

[Lord Freud]

My Lords, we had a session earlier today trying to go through what the universal credit shows. Without being overprecise, a lot more information is available but effectively you need the net and the gross figures. Clearly, the personal pensions are not captured on that payslip, but the pension contributions through auto-enrolment, for example, would be captured.

[Lord McKenzie of Luton]

I accept that you might have the net and the gross figures, but do you not now need another figure, which is half the occupational pension payment? That is not readily thrown up in the pay-as-you-earn system or any other system.

[Lord Freud]

Yes, we have commissioned that as part of the requirements.

[Baroness Drake]

I appreciate that the Minister has to give the Government’s reasoning behind this decision, but I am absolutely aghast at the argument that it will cost £200 million to restore 50 to 100 per cent of the pension contributions being deducted. There was a pension settlement, which said that the state pension age had to go up but the earnings-related element would be removed from the state system and go flat rate, and that individuals, supported by their employer, would have to take on greater responsibility for personal saving. They would be auto-enrolled, and that was part of them taking responsibility for a sustainable pension system over the long term. As part of that, the incentive to save had to be right; that was a huge debate. In the third leg, between the state pension age going up, flat-rating the state system and moving private savings up and earnings-related out of the state system, the incentive to save had to be right.

At the time, there was a huge debate and a huge argument that it would not work unless you got the incentives to save right. At the lower end, how the benefit system interfaced with the pensions savings system was a very important part of the payback. It was also a very important part of the explanation to people—including shadow Conservative Ministers at the time, who were very vocal on this issue—that this was what the payback would look like, with incentivisations to saving that came through the tax credit system. This is what I mean about incremental decisions. Now somebody says, “Well, we can just remove a chunk of the payback for a particular group of people and save £200 million by reducing the figure from 100 to 50 per cent”. I really struggle with that because it is saying, “Never mind what the strategic analysis was or where we are trying to go; this convenient incremental policy will save us £200 million”—and somehow it is a fairer deal for the taxpayer. Maybe in 30 years’ time it will not be a fairer deal for the taxpayer if more people present themselves for benefits. I struggle with that line of reasoning for doing this for that group of people. Okay, it is £200 million. I am not avoiding the need to make tough decisions, but again one stands back and looks at the contribution that the taxpayer makes to the incentive to save across the piece.

My noble friend Lady Hollis is right. You can get £50,000 per annum incentivised right up to 50 per cent tax relief. I know that the noble Lord is going to shout at me that this will allow more people to keep their income and that it is a different analysis, but I do not accept that, particularly in the context of a sustainable pension strategy. We have all sorts of tax advantage savings arrangements that the well-off can take advantage of. You can fund a tax advantage stakeholder account for your child. You can fund a tax advantage ISA for your child or your non-waged spouse. I have taken advantage of some of these for my children. However, I struggle against the decisions on the incentive to save for low-to-moderate-income groups, which was inextricably linked to the in-work benefit system, when somebody says, “It saves £200 million. Just undermine the incentive to save and the payback for this arrangement”. It just does not stack up intellectually. It does not stack up when there is a consensus which says that everyone should buy into a pension solution that holds over the very long term. We have just taken £10 billion from a group of women who should not be bearing that level of savings, and we are now going to take £200 million out of low-to-moderate-income earners. My argument is losing subtlety because the quality of what I am pushing back on is unsustainable. It is £200 million for an irrational reason. Extremely reluctantly, I beg leave to withdraw the amendment, although I am sure I shall be coming back to this.

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[Lord Freud]

My Lords, I am well aware of the work of my noble friend Lady Thomas on this, although perhaps not quite as well aware of it as the noble Lord, Lord McKenzie. Clearly, the amendment is intended to improve the position of disabled people on benefits who participate in service user groups. Changes in the regulations to do just that were made towards the end of the last Parliament, and universal credit will carry these forward. Nothing in universal credit will worsen the position of participants in service user groups.

Looking purely at the earnings element—the fee element, not the expenses element—the structure of universal credit will improve the general position for participants. The earnings taper will ensure that any fees which are beyond the claimant’s earnings disregard will still make the claimant better off overall. The removal of the 16-hour permitted work rule and the personalised conditionality regime will see to it that the claimant will not fall out of the benefit if they undertake a modest amount of voluntary or paid activity. That is as far as the earnings element is concerned.

The amendments to the social security regulations made in 2009 exempted individuals covered by the definition of service user from the notional income rules and ensured that any expenses they received would be disregarded in the benefit calculation. I think that all parties welcomed these improvements when they were introduced. Therefore, my noble friend’s amendment seeks simply to build on those 2009 changes.

This is a matter for regulations, and there will always be scope to make further changes where these are needed. However, we need to ensure that any definition is clear and can easily be applied by administrators. The current definition was drafted on that basis. Like the noble Lord, Lord McKenzie, I am not convinced that it will be feasible to broaden the current definition in the way proposed by the amendment, but I am very pleased to meet my noble friend on this, as she requested, and I think that we shall be able to get this right.

In the current regulations, the definition of service user is limited to consultation for specified purposes. In all cases, the consultation with service users is required by law. The intention here was to avoid extending the easements to the activities of commercial enterprises. We also need to ensure that benefit claimants are not able to deprive themselves of regular earnings and so remain on benefit while operating as consultants to research bodies. These protections remain valid from the Government’s point of view, so any new regulations need to protect the Government in some of these areas.

On the general question of expenses, we will apply the same disregards in universal credit as in the existing benefits. We would not want claimants in work to see their universal credit fall as a result of their receiving payments as reimbursement for expenses that they have incurred solely in carrying out their job. To do so would reduce the incentive to take a job, which would undermine the core purpose of universal credit. Briefing note number 9 was intended to clarify that work-related expenses could continue to be disregarded in the same circumstances as apply now.

We also intend, as now, to exempt reimbursement of expenses made to volunteers who give their time to charities and voluntary organisations from the calculation of claimants’ unearned income.

I hope that this account will reassure noble Lords about our intentions for the treatment of expenses in universal credit generally. I think that there can now be a process of refining and enabling service user groups to make their valuable contribution in the fullest possible way, and that is what I shall be aiming to do with my noble friend when we meet. However, these are not matters for primary legislation; they are matters to get right in regulations. That is what we will be aiming to do and I hope that, on that basis, my noble friend will be content to withdraw the amendment.

[Baroness Hollis of Heigham]

My Lords, perhaps I may ask the Minister a question. I chair a housing association, as I have declared previously, and we pay a very modest sum per year to our tenant board members. One of them was on disability benefits and preferred not to take the very modest emolument because of the interaction with his disability benefits and the problem that he would have of resuming them as and when the emoluments ended. However, because he could have drawn that emolument, it was assumed under benefit rules that he had done so and he could not make that move. I ask the Minister to look at this point. This was, after all, a sort of charitable housing association and he was stuck.

[Lord Freud]

My Lords, I will look at it, but I am not sure I need to study it very hard. As I understand it, the fear of that individual is that if they earn too much money they get taken off their benefit structure entirely. Because they are earning too much, they are outside the disability benefit structure and they must therefore get on another one and they then have a terrible problem. That does not apply under the universal credit. The worst that could happen is that the universal credit goes down in the period, reflecting the emolument, but they are better off overall. That acute fear of being left stranded goes. In that particular case, and many others like it, the desperate cliff-edge position which currently exists is not there under universal credit.

[Baroness Thomas of Winchester]

I thank the noble Lord, Lord McKenzie, for his support, as does my noble friend Lady Wilkins. I would like to take up my noble friend’s offer of a meeting before the Bill reaches the next stage, because we were told specifically by the officials of the noble Lord, Lord McKenzie, when he was Minister, that they could not extend this to bona fide NHS research—nothing to do with commercial interests—unless there was a peg in legislation on which to hang the regulations. I therefore do not accept my noble friend’s statement that everything can be done by regulations, because we found that this particular matter could not be done. We are not talking about people who can get a job; we are talking about severely disabled people, who are a million miles from the job market, but they have specific conditions which are needed for vital research. I hope this can be sorted out before the Bill goes any further. We need this peg, and it is not too late to put it in this Bill. I will take up the offer of a meeting, which I have done on many occasions when I have withdrawn this sort of amendment—and, of course, it finally bore fruit.

[Lord Freud]

We do not need a legislative peg in primary legislation to make changes here. That was a reference to NHS legislation. How we define and work through the different types of income is something which we are going to do in regulation. I can assure my noble friend that, although this is something which is slightly complicated to do, it does not have the desperate urgency that requires it to be done in the next couple of weeks.

[Baroness Thomas of Winchester]

I am caught between two pieces of advice: one is that we do need legislation and one is that we do not. I am somewhat conflicted, and I would like to get this sorted out before Third Reading. We have been told that for the rules that I read out from the statutory instrument, there was a peg on which to hang it, and that is why they were there. We were told that because there is nothing for NHS research we could not extend it. I shall withdraw the amendment now, but hope that we can resolve this before Third Reading, if not Report.

[Lord McKenzie of Luton]

Could the noble Lord arrange to send us copies of the earlier advice, because there is some confusion and I am not clear in my mind?

[Lord Freud]

My Lords, I will have an early meeting with my noble friend on this, and we will take it from there. Subject to that meeting, I will provide that particular advice, otherwise we may go round the houses on this very technical matter. I hope it is one we can resolve pretty fast, with a letter.

[Baroness Thomas of Winchester]

I beg leave to withdraw the amendment.

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[Lord Freud]

My Lords, the intention is that the housing credit will broadly follow the current rules that apply in housing benefit. For someone to be entitled to the housing credit element of pension credit they will need to live in Great Britain, have reached the pension credit qualifying age and be liable for housing costs that relate to the accommodation they live in. The extent to which a person is liable for the housing costs, what constitutes the accommodation, how we treat temporary absences from home and how we calculate the amount of the housing credit will also be included in regulations.

A person may be entitled to the housing credit whether or not they receive the guarantee credit or saving credit element of pension credit. This schedule also enables us to specify that rates of support may differ by area. So, for example, different housing allowance rates can apply in different parts of the country.

In introducing the new housing credit we will, however, look for opportunities to streamline the benefit and align rules wherever possible. This includes extending pension credit provisions to the housing credit wherever possible. One such area includes assessed income periods. These are specified periods during which a customer is not required to report any changes in their requirement provision—namely, their occupational pensions and capital.

The schedule provides us with the flexibility to determine in what circumstances retirement provision will not be fixed in relation to the housing credit regulations, which will be subject to the appropriate level of scrutiny. The schedule also contains the consequential amendments to other legislation needed as a result of the abolition of housing benefit and the introduction of the housing credit.

This probing amendment would remove flexibility and would work to the detriment of those who, through no fault of their own, require assistance with their housing costs while at the same time making the system vulnerable to manipulation.

The noble Lord asked a large number of detailed questions on this matter. I can deal with some of them but I will answer most by way of a letter. On direct payments to landlords, it is not our intention that pensioners would be part of that regime, which is for working-age people. We are not planning to change the SMI arrangements for pensioners. Uprating will be done by CPI, as it will be with working age. We need capital limits in the system overall, clearly, and we need to determine what the right rates should be. They should be at a level where we do not see a substantial change in practice. As the noble Lord pointed out, this is now done by a tariff income process and, as we move towards an overall position in the housing credit, we need to get the equivalence.

I think that deals with the bulk of the questions. There are one or two more, which I will answer by letter, but, given the assurances about how we intend to use these powers, I urge the noble Lord to withdraw the amendment.

[Baroness Lister of Burtersett]

My Lords, will the Minister make sure that that letter includes the answer to a question which was asked a few sessions ago but to which the Committee never received an answer? It was not specifically about pensioners but was a more general question about whether mortgage interest will be paid as part of the universal credit or to the lender.

[Lord Freud]

We are looking very closely at the support for mortgage interest. I can let the Committee know that we are planning to consult on how we do that. Rather than include that point in the letter, I will make sure that noble Lords are informed when that consultation paper comes out.

[Lord McKenzie of Luton]

I am most grateful to the noble Lord for a number of detailed replies, with some follow-up, but can he just be a little more specific around the capital rules? From his answer, it was very unclear what is intended. We have two systems for housing benefit: we have the cut-off at £16,000, whereas for the pension credit we do not. I am not sure whether those two systems will sit side by side in the new arrangements, or whether there will be some common approach to capital, and whether that will adopt the pension credit approach or the current housing benefit approach.

[Lord Freud]

My Lords, it will go somewhere in between. It will be a capital limit as opposed to a tariff income approach, but it will be a higher capital limit than that for working-age claimants.

[Lord McKenzie of Luton]

As I understand it, that will operate for pension credit as well as the housing component.

[Lord Freud]

Yes, that is correct.

[Lord McKenzie of Luton]

I am grateful for that—well, I am grateful for the answer, not necessarily the information. It is the lowest common denominator again. I beg leave to withdraw the amendment.

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[Lord McKenzie of Luton]

Indeed. Perhaps I may finish off with a question. I think that earlier in our deliberations we touched on what would happen if someone sought to challenge the WCA determination, as well as concerns about the fact that their benefit would be withheld during that process. I do not know whether the Minister has anything further to say on that. I think that there was an exchange in the Commons on which I had a note on a piece of paper, which I have lost, but it seemed to give some credence to press reports that people were being actively discouraged from going to appeal. If that were the case, it would be an absolute disgrace.

I think that there is great merit in the amendment. Like the noble Lord, Lord Wigley, and perhaps some other noble Lords, I would not accept it quite as it says. However, when someone says that a person should be in the WRAG group but they should be capable of coming out of it in three months or six months, there ought to be a test of what they would be capable of at that point and whether that would amount to work under this sort of description. I should be interested in the noble Lord’s comments on that.

[Lord Freud]

My Lords, I should start by making a point about the overall attitude of the Government to people who are disabled or who have difficult medical conditions. We are committed to unequivocal support for those people, and that is what the support group is about. There is extra funding for the group and we are absolutely determined to provide that support. In the midst of the concerns about particular things, and as we try to make sure that the gateway works and that we can find the people who really need our support, that fact can be lost. However, I want noble Lords in this Committee Room to be under no illusion that we want to support the people who need our support. I have already expressed my concern about the fear factor, which I find very disturbing. I also acknowledge that the press in this country sometimes writes articles that none of us in this room find appropriate. I certainly do not find them appropriate and my colleagues in the department find them deeply disturbing. We do not control the press, regrettably, and things are written that we do not like to see. However, I am pleased to put on the record where we stand.

We debate the WCA a lot. We have debated it in this Committee and elsewhere, but, if noble Lords will forgive me, on this occasion I want to try to keep the debate in the context of the Bill.

The work capability assessment uses a number of specific, measurable criteria, covering all types of disability and health conditions, to provide an assessment of whether an individual has limited capability for work. The assessment was designed to take account of chronic and fluctuating conditions. It is not intended to be a snapshot but looks at what someone can do reliably, repeatedly and safely. It takes account of the effects of pain and fatigue. The healthcare professionals conducting the assessment are fully trained in understanding fluctuating conditions. Claimants get a full opportunity to explain how their condition varies over time.

The criteria were developed in conjunction with disability experts, medical professionals and a significant number of disability representative groups. They focus on physical and mental function. Examples of criteria include whether someone can stand or sit for periods of time, their ability to lift and reach, how they learn new tasks and whether they have problems engaging socially. The criteria fully take account of the fluctuating nature of many conditions. The training and guidance for the assessment is clear that where an individual is unable to complete an activity repeatedly or reliably, they will score points against the relevant criteria.

[Baroness Wilkins]

Does the Minister accept that he has not yet received the report of Professor Harrington’s working party on fluctuating conditions? There may well be recommendations that he has to make in that regard.

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[Lord Freud]

Yes, Professor Harrington is currently looking at two areas: mental health conditions and fluctuating conditions. We have received one but not the other. We will clearly take those into account and look at them closely when they come in. To that extent, the debate today is slightly premature. It may not be later in the process of the Bill.

To pick up on the point of the noble Baroness, Lady Wilkins, on the medical evidence used, all available evidence, including that from GPs or specialists, is fully considered by the department’s decision-makers. The final decision is with the department. It gets a recommendation from Atos and takes that into account with all this other information. Following recommendations by Professor Harrington, decision-makers are now phoning claimants to ensure that they understand the process and can submit any additional medical evidence that they feel is relevant. However, GPs and specialists are not experts in disability assessment. Often, as advocates for their patients, they are not best placed to make a decision that affects benefit entitlement. We would not want to undermine the role of GPs as advocates for their patients.

As a result, the criteria provide a reliable, nuanced and measurable way of assessing limited capability for work. This ensures that a full understanding is gained of an individual’s disability or health condition, the effects of that disability or health condition, how these effects may vary over time and whether it would be reasonable for that person to work or not.

The amendment suggests that an additional test with additional criteria is added to the assessment of limited capability for work. However, the criteria suggested are not readily measurable or nuanced. It would, for instance, be impossible to measure the potential excessiveness of any workplace adjustments because they will vary depending on the size and capacity of the employer concerned.

An additional test would also not provide an objective or more accurate assessment of an individual’s limitations—and in some instances could hinder it. For instance, it would be difficult to provide strong evidence of whether someone currently out of work could work for 26 weeks without significant time off without knowing the type of job they would be in and their health circumstances at the time. Such judgements are difficult to make and, as a result, the criteria would risk being inconsistently applied.

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[Lord Wigley]

May I press the Minister a little further on the position of people who might be capable of work if they have assistance? To the extent that the assistance is not available, would that be a definitive reason why they should not lose their benefits?

[Lord Freud]

It is clear that a lot of changes are going on and I am not surprised that people do not understand them all. One of the things that we have done means that claimants in the support group can volunteer to go straight on to the work programme, where there is substantial help for them to get back into work. That is one way in which we are helping people who may find themselves in the worst possible position to get into work. We have made a very straightforward mechanism.

I pick up the point of the noble Lord, Lord McKenzie. We are instigating a process whereby people, if they are in the WRAG with a prognosis, are asked by work providers whether they would like to come in at any point—I think at six months. They are then encouraged to volunteer for the process early. They do not move from the WRAG to JSA until there is another WCA. We are talking about a process here; it is a dial for these people, as the noble Lord said, but it has to be understood in the context of how the work programme operates as well as how the WCA operates.

[Baroness Hollis of Heigham]

My Lords, may I ask the Minister a couple of questions? The first is about Atos. I was slightly taken aback by his statement that he did not want GPs’ and consultants’ evidence going to Atos because they were the patients’ advocates and this was the proper role of the decision-maker. Behind this and other remarks that the noble Lord has made when talking about DLA, for example, is the belief that somehow there is an objective assessment that is to be much preferred to a “subjective” assessment—for example, the sort of diaries that disabled people are encouraged to keep when trying to determine what level of award they would get on DLA. Does the Minister accept the point that two people can have identical physical conditions but very different capacities for work by virtue of their education, mental health, family support networks and, frankly, the savings and income that they have behind them? That dowry of resource would allow someone in an identical physical situation to someone else to go into work when the other person could not.

The Minister seems to believe that there is something objective about this and that it must therefore be left with Atos because there is a sort of box-ticking going on here that is reliable. He believes that the GP, who has extended knowledge of the patient or applicant concerned, is somehow on the patient’s side and is a subjective advocate whose view should not be taken into account. I find that approach wrong. Why, given that Atos is medically qualified, should it not receive advice from other medically qualified practitioners who know the patient’s ability in certain situations of stress?

My second question has nothing to do with that and is about Croydon. From the sound of it, the Government’s Croydon centre is breaking the law of the DDA. Could the Minister follow that up?

[Lord Freud]

My Lords, I will follow up the Croydon situation. I was not aware of it, even though I was brought up in south Croydon.

Let me try to make this absolutely clear. The whole point of the assessment is to judge whether someone is functionally able to do the job, which is exactly what the noble Baroness was asking for. The point is that it can be done coherently and consistently by people who are experts in that function, whereas GPs and specialists are trained in diagnosis and treatments which are entirely different; it is not their job to see people and make those judgments day in, day out on a consistent basis. But that is what we are looking for. Atos Healthcare professionals are trained in disability assessment, which is assessing the functional effects of a person’s condition or disability. That is exactly what the noble Baroness is asking for.

[Baroness Howe of Idlicote]

My Lords, this has certainly been a very wide-ranging and passionate debate on these issues, with good reason. I am certain that my noble friend Lady Mar will read it with considerable interest and will no doubt have plenty of issues to raise at a later stage of the Bill, when I hope she will be available. We obviously have to wait for Professor Harrington’s final report, which will be extremely helpful. The various questions that were raised makes one realise how complicated the way through these things will be. Above all, we will need to reassure people with these fluctuating conditions that they will be treated fairly. On my noble friend’s behalf, I thank all noble Lords who have taken part in the debate and beg leave to withdraw the amendment.

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[Lord McKenzie of Luton]

My Lords, we should thank the noble Lord, Lord Wigley, for reminding us of the scope there is in the Bill and the profound consequences that it may have, not only for the universal credit but for all the other parts that are before us today and will be before us in subsequent Committees. I thought the noble Lord, Lord German, was on the point of distinguishing between relevant Ministers and irrelevant Ministers, but he did not quite go there.

We saw today—I am afraid I did not see it all—some of the detailed work that has gone on in preparation for, certainly, a big part of what is in the Bill. However, the point has been made by both previous speakers that it is not only about DWP and England; there is lots of work for others to do, particularly local authorities, who are about to reel under the impact of the Localism Bill and all that Mr Pickles has sought to visit on them.

Questions were raised about new burdens and how they work. It is important that that is factored in and that there is fairness and equity in how these matters are rolled out.

I acknowledge receipt of the Low review. Unlike the noble Lord, Lord Wigley, I have not had a chance to read it yet or to quote from it, but it looks to be a particularly valuable document. I hope I have a chance to read it before we get to DLA later in the Bill.

[Lord Freud]

My Lords, I am also looking forward to reading the Low review but I have been listening with great intensity to everything said in this Committee today. Social security is a reserved matter, although it will clearly have a limited, tangential impact on areas of policy where the Welsh Assembly and Scottish Parliament have competence, the obvious examples being childcare and housing. It does not, however, include DLA, which was one of the issues raised by the noble Lord, Lord Wigley.

I can reassure noble Lords that we have held, and will continue to hold, regular discussions with Ministers in the devolved Administrations and their officials. We are committed to the smooth and successful implementation of universal credit. To achieve that we are working closely with devolved Administrations and relevant local authorities to help them identify and address the impact that the introduction of universal credit will have on any services that they deliver. We are doing so in line with devolution guidance. My department is continuing to work through the detailed design aspects of universal credit which will be covered in regulations. Throughout this process they will continue to have discussions with the devolved Administrations, as appropriate, on these provisions and on others in the Bill. I can assure the noble Lord, Lord Wigley, that whatever I am saying here is relevant to the whole of the Bill.

I am concerned that this amendment would introduce a new and unnecessary level of bureaucracy. My noble friend Lord German hinted at some of the problems that it would result in. In practice, that would hamper progress and potentially delay the introduction of universal credit, let alone other aspects of the Bill.

[Lord Wigley]

Can the Minister clarify how that bureaucracy comes about?

[Lord Freud]

The issue is that if there is an additional, formal process, requiring a formal level of discussion at a formal time before you can clear particular things, that is another element of delay to negotiate when we already have a huge number. We are on a very precise plan of implementation here. Those noble Lords who were able to see the presentation of how we are introducing and implementing universal credit will be aware of the importance of a smooth process. I am concerned to avoid delays due to artificial elements of bureaucracy. Our ongoing discussions with devolved Administrations are the best way to address any impact on devolved services and achieve the successful implementation of these reforms. With that reassurance, I beg the noble Lord to withdraw his amendment.

[Lord Wigley]

I am grateful to the Minister for his response. I am intrigued by the way in which this bureaucracy is going to be such an imposition. If there are meaningful, ongoing discussions with the Administrations in Cardiff and Edinburgh involving a two-way flow of discussion, after which there is either a meeting of minds or not, that is not an extra level of bureaucracy. If that is not happening and it would be an extra imposition, I would be very concerned because the reassurances we are getting would be insufficient.

[Lord Freud]

My Lords, let me make myself utterly clear. If we had a statutory duty to discuss and if a devolved Minister were, for any particular reason, unavailable—my noble friend Lord German made my point here—our progress could be slowed. That unavailability could, potentially, be deliberate. We do not want another problem to negotiate when we already have a formal set of agreements on how we relate to devolved Administrations. We are sticking to those and we are talking regularly and informally on how best to get this through.

[Lord Wigley]

I note what the Minister says. He suggests that there could be some deliberate refusal to engage in such discussions. Does he seriously have examples of that happening that he could cite to the Committee, or is it something that he is imagining?

[Lord Freud]

My Lords, I could not reveal any confidences about the discussions that I have had with Ministers in devolved Administrations. Therefore, regrettably, I cannot answer that question.

[Lord Wigley]

I understand where the Minister is coming from. However, the point is that there may well be a difference of opinion between what is perceived as good public policy in Cardiff and Edinburgh and what is perceived as good public policy in his department under his Government. After all, they are different Governments of different political complexion, which will have different priorities. That is true of the current Government in Cardiff and the coalition Government who were there before them. The whole point is that we need some understanding on this.

[Lord Wigley]

That would indeed be interesting. No doubt we will hear if that is the case. However, on this amendment I was also pressing for assurances—it may well be that the Minister was giving them in the words that he used—with regard to the application of the concordat. I assume from his words that the concordat—I quoted from paragraph 17—is fully applicable and will be in the context of these negotiations; and, likewise, that the assurances of “no surprises” that have been given to local government will also be applied. If there are any direct relationships between his department and local government in Wales, which there could be in the context of housing benefit because there is a direct relationship, will those assurances apply equally? I am sure that the Minister is about to nod that that is his understanding, but I should be grateful if that could be put in writing.

[Lord Freud]

I repeat my point: we are absolutely moving in line with devolution guidance. We have no intention of doing anything other than that.

[Lord Wigley]

I have probably got as far as I will get by rattling around this set of bones but this is clearly a matter of some concern. We will not know for certain until the Bill becomes an Act and how this works is turned into reality. However, I very much hope that if, in that reality, it transpires that significant additional costs are landing on local government in England or the devolved Administrations in Wales and Scotland, the Government will pick up the bill in the spirit of the concordat and the other devices that they have if it is their actions that are causing those additional costs. On that basis, I beg leave to withdraw the amendment.

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[Lord Kirkwood of Kirkhope]

I have no idea—it was a thought in my bath. I confessed that at the beginning. However, it is worth reflecting on. Of course the noble Lord is absolutely right—as soon you start thinking about it, you start putting in layers of complexity. I think a challenge to Ministers is not a bad idea, even if it was just on the wall or behind the desk—I would settle for that. I beg to move.

[Lord Freud]

My Lords, in some areas I broadly agree with the Delegated Powers and Regulatory Reform Committee’s suggestions, and the Government have brought forward amendments to make these changes. Where key principles are established the first time the powers are used, these amendments will make the regulations subject to the affirmative procedure in the first instance. As to Amendment 66, Clause 6(1)(a) allows for regulations to set out circumstances in which a claimant will not be entitled to universal credit even though they meet the conditions of entitlement. I am grateful for the opportunity to reassure the Committee that the negative procedure will afford Parliament adequate control over the use of this power.

As I set out during our debate on Clause 6, there will be a number of specific groups who will not be able to access universal credit. These may include certain prisoners and children leaving full-time care who remain the responsibility of the local authority where payment of universal credit would lead to duplication of provision. This will broadly reflect similar rules in current benefits.

Similarly, I would like to reassure noble Lords that it is appropriate for the regulations on hardship and claimants falling into the no work-related requirements group to be subject to the affirmative procedure only in the first instance. In both cases, our intention is that the initial set of regulations will clearly establish the key principles of the new system. We have already provided noble Lords with a draft of the regulations to be made under Clause 19(2)(d). We have also published a briefing note on the conditionality threshold. We have debated these matters at some length earlier in Committee. Once the system that we have set out is in place, it is unlikely that the regulations will change significantly, and I hope that is the assurance that my noble friend Lord German was looking for.

There are three areas where I am unable to accept the committee’s recommendations or the noble Lord’s amendments. First, the committee and the noble Lord have suggested that Clause 47 should be removed from the Bill. Clause 47 relates to the parliamentary procedure for regulations relating to the requirements on jobseeker’s allowance claimants to be actively seeking, and available for, work. These powers are currently subject to the affirmative procedure. The clause makes them subject to the negative procedure.

These powers were groundbreaking when first introduced in 1995, as the noble Lord pointed out. However, the House now has had more than 15 years experience of how these powers are used. There is a wide understanding of what the phrases “actively seeking” and “available for work” mean; in fact, it fundamentally underpins our active labour market approach. We believe that this experience means that it is now far more appropriate that this power is subject to the negative procedure. Their use is now well established and we have no intention of departing from that precedent.

Secondly, Clauses 33 and 89 allow for supplementary, incidental, transitional and consequential amendments to other legislation to be made through regulations. To pick up on the point that my noble friend made about the Scottish Government, who have powers under Clause 33 to make consequential amendments in their area of remit, they specifically requested that these regulations be made by affirmative procedure in the Scottish Parliament. This was the result of one of our helpful non-statutory discussions, which I am sure an FOI request will show in all its glory. Amendments 70 and 99 would make any regulations that amend primary legislation subject to the affirmative procedure.

It is likely that a large number of minor amendments to other legislation will be necessary as a result of the importance and scale of the changes that the Bill introduces. It is not unusual for some of these changes to be made through secondary legislation, and such consequential powers are usually subject to the negative procedure. Moving away from this precedent would take up a very significant amount of parliamentary time and could pose a risk to the timetables for both universal credit and personal independence payment. We therefore feel that the negative procedure remains appropriate.

Amendments 55E to 55G and 69ZA seek to make regulations that contain definitions of “disabled”, “severely disabled” or “work” subject to the affirmative resolution procedure. It inserts a new subsection into Clause 43 and consequential amendments to the terms where they arise in Clause 41. I can reassure the noble Lord that these amendments are not necessary. Clause 43(3) already provides that a wide range of regulations will be subject to the affirmative procedure the first time that the power is exercised. This includes the regulations to be made under Clause 12 providing for additional amounts that will include the definitions of the terms mentioned in the amendment. Noble Lords may recall that the illustrative draft regulations on elements provided to your Lordships already contain a draft definition of “disabled” and “severely disabled”.

Under Amendment 69ZA, the noble Lord seeks to significantly widen the scope of regulations subject to debate in both Houses, covering consequential amendments and changes to working age benefits and pension credit. It would be completely impractical for this House to debate the numerous consequential amendments being made to both primary and secondary legislation, and a poor use of parliamentary time. I have already explained why it is more appropriate that Clause 33 should remain subject to negative procedures, but none of the other provisions identified by this amendment was covered by the report of the Delegated Powers and Regulatory Reform Committee. We are therefore satisfied that the negative procedure is appropriate.

With regard to universal credit, I should also point out that all the regulations on entitlement, awards and claimant responsibilities will be in a single set of regulations. They will necessarily be affirmative in the first instance because if any regulations within a set are affirmative they all are. So, even if the Bill does not require the affirmative procedure for specific points, it will apply in practice.

Amendment 71 would introduce a different form of scrutiny for universal credit regulations requiring the Secretary of State to avoid creating any unnecessary complexity into the system. I strongly support the spirit of the amendment in the name of the noble Lord, Lord Kirkwood. A key aim of universal credit is to simplify the benefit system. Simplification is a publicly stated, fundamental principle that has guided the design of the new system. Any requirement for simplicity would have to be finely balanced against other considerations, such as affordability or easing the transition to work. I acknowledge that this is a probing amendment, but perhaps a duty to consider the simplicity of any changes, as suggested by the noble Lord, would be a better approach than that in the amendment. However, any Government would clearly have to be concerned about the detailed interpretation of simplicity, which, as the noble Lord, Lord McKenzie, took delight in pointing out, is a subjective term.

Nevertheless, I will look at this idea very closely. I can assure the noble Lord that we will put in place a number of non-legislative safeguards to protect universal credit from unnecessary complexity. These include governance processes to ensure simplification and consistency in policy design, and working with claimants to ensure that universal credit is simple to understand and administer.

Given these explanations, I urge noble Lords to withdraw or not move their amendments.

[Lord McKenzie of Luton]

My Lords, I am happy to do so. However, I should like to comment on the issue of avoidable complexity. The Minister said that he had to balance that against issues of affordability and ease in transition. I accept that, but you also have to strike a balance around issues of fairness. One of the problems of simplicity and standard systems is that they do not necessarily take account of some of the individual circumstances that have to be addressed. You see it perhaps more acutely in the tax system, but it applies equally to the benefits system. Although I clearly support getting things as simple and straightforward as they can be, fairness should also be one of the balancing factors. I beg leave to withdraw the amendment.

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[Lord Freud]

My Lords, I share the noble Lord’s concern that the benefits system must be fair, efficient and affordable, which is indeed why this Bill is before the Committee today—to ensure that benefits are well targeted and fair and the system is simple to understand and simple to administer.

The first of these amendments would introduce a claimant regulatory body for universal credit. We are committed to involving claimants throughout the development of universal credit. This involvement will ensure that issues are known, understood and mitigated as universal credit is being built. As part of this, we are already conducting a programme of research among a broad range of future claimants and are testing the design of the claimant commitment with claimants, front-line staff and stakeholders. This process will continue over the coming months to ensure that claimants have real and sustained input into the creation of the new benefit.

The other amendment in this group would create a wider office for social protection, looking at the benefits system as a whole. There are already a number of other bodies with oversight of the benefits system and any changes made, not least the Social Security Advisory Committee. As well as scrutinising regulations, the committee comments on a range of operational matters, especially in relation to claimants’ interests. While I am grateful for the contributions of the noble Baroness, Lady Lister, and my noble friend Lord Kirkwood, I am not convinced that another body is needed. The coalition Government are committed to reducing the number and cost of quangos, and increasing accountability by transferring the responsibility for key decisions on public policy back to Ministers. Ministers are held to account in Parliament, including by powerful committees such as the Public Accounts Committee and the Work and Pensions Select Committee, not to say the Chamber of the House itself.

I do not intend to reverse this direction of travel, and I would urge the noble Lord to withdraw his amendments.

[Baroness Lister of Burtersett]

My Lords, before the Minister sits down I would like to make clear that I was not arguing for a separate body. I was arguing that Social Security Advisory Committee could perhaps be asked specifically to consider, on a regular basis, the issues contained in the noble Lord’s amendment—possibly in its annual report—namely the adequacy of the different elements of the system, the sustainability and the way the different elements of the system fit together. It would be very helpful to have that kind of annual overview. Perhaps the Minister can take that away and consider it.

[Lord Freud]

My Lords, I know it is not our House, but I point out that the Work and Pensions Select Committee has that remit—a very direct remit to look at the system overall. If you are looking at how individual claimants are treated, we have a process of tribunal and independent review. There are a whole number of different processes.

[Baroness Morgan of Drefelin]

Can the noble Lord tell us who would be responsible for promoting and funding research into these questions? If there is not a body which is taking an interest in evaluating the impact of changes in social security, who will be funding, gathering and evaluating independent evidence looking at the impact of these changes or changes like this?

[Lord Freud]

My Lords, how we research changing universal credit is something that I am taking an active interest in getting on top of now, as I discussed on a previous day. Clearly there is a lot of research. The department puts out an enormous amount of research every year. Huge tomes come out monthly, and I know noble Lords enjoy reading them all. There is no lack of adequacy of independent research on DWP matters.

[Lord Kirkwood of Kirkhope]

My Lords, my main priority is to get back to my bath as soon as possible. If I do not get my 7 pm train I will not do that, so I thank the Minister for his reply, and I am happy to withdraw the amendment.

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Moved by

[Lord Freud]

56A: Before Clause 42, insert the following new Clause—
“Pilot schemes
(1) Any power to make—
(a) regulations under this Part,(b) regulations under the Social Security Administration Act 1992 relating to universal credit, or(c) regulations under the Social Security Act 1998 relating to universal credit,may be exercised so as to make provision for piloting purposes. (2) In subsection (1), “piloting purposes”, in relation to any provision, means the purposes of testing—
(a) the extent to which the provision is likely to make universal credit simpler to understand or to administer,(b) the extent to which the provision is likely to promote—(i) people remaining in work, or(ii) people obtaining or being able to obtain work (or more work or better-paid work), or(c) the extent to which, and how, the provision is likely to affect the conduct of claimants or other people in any other way.(3) Regulations made by virtue of this section are in the remainder of this section referred to as a “pilot scheme”.
(4) A pilot scheme may be limited in its application to—
(a) one or more areas;(b) one or more classes of person;(c) persons selected—(i) by reference to prescribed criteria, or(ii) on a sampling basis.(5) A pilot scheme may not have effect for a period exceeding three years, but—
(a) the Secretary of State may by order made by statutory instrument provide that the pilot scheme is to continue to have effect after the time when it would otherwise expire for a period not exceeding twelve months (and may make more than one such order);(b) a pilot scheme may be replaced by a further pilot scheme making the same or similar provision. (6) A pilot scheme may include consequential or transitional provision in relation to its expiry.”

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Moved by

[Lord Freud]

57: Clause 43, page 20, line 9, at end insert—
“( ) section 4(7) (acceptance of claimant commitment);”

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Moved by

[Lord Freud]

60: Clause 43, page 20, line 14, leave out from “10(3)” to end of line 15 and insert “and (4) (children and young persons element)”

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Moved by

[Lord Freud]

62: Clause 43, page 20, line 17, at end insert—
“( ) section 18(3) and (5) (work availability requirement);”

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Moved by

[Lord Freud]

69A: Clause 43, page 20, line 25, leave out from beginning to “(pilot” and insert “by virtue of section (pilot schemes)”