Pensions Act 2014 (Consequential Amendments) Order 2016

Lord Freud Excerpts

Thursday 8th September 2016 Lords Chamber

Moved by

[Lord Freud]

That the draft Order laid before the House on 4 July be approved.

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

My Lords, you will recall a previous set of consequential amendments connected to the introduction of the new state pension, together with a set of affirmative regulations that were discussed in February this year. This order makes a small number of further such consequential amendments. They do two things.

First, they ensure that existing administrative arrangements which are designed to facilitate the annual uprating exercise will continue to operate as they do now. Secondly, they give appeal rights to decisions about national insurance credits that count for new state pension purposes.

Article 2 amends provisions of the Social Security Administration Act 1992 which deal with alterations in the payable amount of certain income-related benefits: income support, income-based jobseeker’s allowance, income-related employment and support allowance, universal credit and pension credit. These provisions allow the income-related benefit award to be adjusted without the need for a further decision if the adjustment is due to uprating—whether it is the benefit itself that is being uprated, another benefit is being taken into account, or both. They also enable the decision-maker to take account of the new rates from the uprating date in determining new awards that begin before the uprating order has come into force. These are long-standing administrative easements which help to ensure the effective operation of the annual uprating exercise.

As your Lordships know, where a person is a member of a couple, their entitlement to benefits can be affected by their status as a couple. Therefore, where a working-age income-related benefit is in payment for a couple but the non-claiming partner is a pensioner, the benefit income could include state pensions. The amendments made by Article 2 simply ensure that business as usual will continue where a person’s benefit income includes new state pension. The forthcoming uprating exercise which will determine the rates to be applied from next April is, of course, the first to apply to the new state pension.

National insurance credits which count for new state pension purposes are provided for under Part 8 of the State Pension Regulations 2015. These are new regulations, made under a new power inserted in the legislation by the Pensions Act 2014. The policy is that decisions made in relation to these credits should, as is the case with decisions made in respect of existing credits awarded under the old credits regulations, have the right of appeal. As the law stands, they do not. The amendment being made by Article 3 gives that appeal right. This amendment should have been in place from 6 April 2016 but, unfortunately, it was overlooked. Having identified the omission, we have acted as quickly as we could to put it right. This is why the order will come into force on the day after it is made.

My officials have been working closely with HMRC, which administers credits on DWP’s behalf, to devise a workaround. Once the order has come into force, HMRC will be revisiting the decisions made before it came into force. Where fresh decisions are made, they will carry an appeal right. There will be no substantial difference in outcome between an original decision, had it been appealable and successfully appealed, and a fresh decision that is successfully appealed. A successful appellant will have credits awarded to them. I should stress that to date there have been no appeals. That there have been no appeals is understandable. First, this issue relates only to decisions made in the period between 6 April 2016 and the date the order takes effect, which is around five months. Secondly, it only affects credits which a person has to apply for.

The practical impact of the gap in the law is restricted to decisions about credits which a person has been able to apply for since 6 April 2016. These include new credits to cover past periods in which a person was accompanying their Armed Forces spouse or civil partner on service overseas. Ordinarily, credits awarded for the tax year 2016-17 would be taken into account only in the assessment of new state pension awards made on or after 6 April 2017. However, the new credits for Armed Forces spouses and civil partners could affect awards made this year. A further mitigation is that before a disputed decision can be appealed, it goes through a process of mandatory reconsideration. So the decision-maker has to look at it again and if, on reflection, they consider that the decision should be changed then it can be revised, without the claimant having to go through an appeal process.

We also know that in relation to the new credit for an Armed Forces spouse or civil partner made under Part 8 of the State Pension Regulations 2015, out of 1,647 applications which have been decided up to 5 September 2016, 324 were refused—and of those refusals, 201 were because the tax year in question is already a qualifying year for other reasons.

Finally, based on data from last year—2015-16—about credits decisions made under the 1975 regulations, we know that only a tiny number of disputed credits decisions actually proceeded to appeal.

So with the change in the law imminent, and if they are needed, we anticipate that the contingency arrangements we have put in place will be required for only a very small number of cases. I can also confirm that, in my view, this statutory instrument is compatible with the European Convention on Human Rights. I hope this gives noble Lords reassurance that while it is accepted that justice may be delayed, it will not be denied. I beg to move.

[Baroness Drake (Lab)]

My Lords, it is unfortunate that there has been an oversight in providing a right of appeal in respect of certain decisions on NI credits for the new state pension, but clearly it is recognised that this SI seeks to correct that.

However, I am a little confused because, as I understand it, the decisions potentially impacted by the oversight in relation to the appeal relate to credits for, in certain circumstances, people caring for children under 12, carers and spouses and civil partners of members of Her Majesty’s Armed Forces. It would be helpful if the Minister could clarify exactly which classes of credits were impacted by this appeal oversight, because it is difficult for the layperson to work it out. In particular, will he say whether that category or class of credits includes applications for credits from those caring for at least 20 hours a week, including grandparents?

The concern has to be over the extent to which the omission of a right of appeal may have affected individuals’ access to such credits and whether this SI addresses that sufficiently. Again, it was quite complex trying to follow what exactly was the answer to that question. Is it possible for the Minister to confirm or indicate the number of claimants who have been denied a right of appeal to date as a result of this omission—that is, the population denied that right rather than those who sought, in the absence of that right, to appeal?

The oversight concerning an appeal embraces all decisions on the relevant credits made between 6 April 2016 and the date when these regulations restore a right of appeal. The Explanatory Memorandum refers to minimising,

“the period when there is no right of appeal”,

for these certain classes of credits, but I am not sure how that impacts the individuals who may have sought to exercise a right of appeal during the period. Does this mean, for example, that all those who made applications for such credits which failed will automatically be written to and told that they now have a right of appeal? I am not quite sure how they will be addressed under this SI. It would be helpful to have that clarified.

As the Explanatory Memorandum observes, some credits are posted automatically while other credits must be applied for: for example, the credit for caring for at least 20 hours a week. The omission of an appeal sits alongside what appears to be government reluctance to report on the success of measures to improve the take-up of claimable benefits. The noble Baroness, Lady Altmann, as Pensions Minister, commented that it was regrettable that the number of carers claiming for NI credits was still so low—so I will take this opportunity to ask the Minister whether it is possible to be advised on how many carers claim such credits and the number the DWP estimates could be eligible for such credits, so that we have some idea of what the noble Baroness, Lady Altmann, was referring to when she referred to the regrettably low number of claimants.

My final point is on the uprating of the new state pension and the consequential adjustment to income-related benefits. Sections 150, 150A and 151A of the Social Security Administration Act refer to uprating by no less than earnings or prices. There is no reference to the triple lock in the new state pension. I cannot miss this opportunity, given that there has been much speculation and comment about the longevity of the triple lock, not least from the Government’s previous Pensions Minister. Can the Minister confirm the exact extent of the Government’s commitment to retaining the triple lock?

Given the introduction of universal credit, over time the adjusting of income-related benefits to take account of the uprating of the new state pension will largely be in respect of awards of universal credit and pension credit. The experience of the poorest pensioners will continue to be influenced by the extent to which the uprating of the pension guarantee credit is comparable to, or less generous than, that applied to the new state pension. Can the Minister confirm the Government’s policy for the uprating of pension credit, not least over the course of this Parliament?

--- Later in debate ---

[Lord McKenzie of Luton (Lab)]

My Lords, I shall follow the usual incisive contribution of my noble friend Lady Drake and the contribution of the noble Lord, Lord Kirkwood of Kirkhope, in thanking the Minister for his introduction of this order. It is quite like old times. I also take the opportunity to thank the officials who spent a bit of time yesterday with us trying to unlock for us some of the intricacies of these provisions which, although small in terms of drafting, are quite complicated.

We note the Minister has confirmed at least in one respect the judgment of his predecessor, concerning compatibility with the European Convention on Human Rights. I state from the outset that we do not seek to challenge these provisions, although we add our concerns to that expressed by the Secondary Legislation Scrutiny Committee, that overlooking an appeals mechanism within three months of a new pension scheme starting does not inspire confidence. My noble friend Lady Drake has rightly chided the Government in stronger terms, and the noble Lord, Lord Kirkwood, made the point that two omissions are two too many.

As we have heard, the order seeks to address two distinct issues. First, it extends the automatic adjustment of certain benefits where a recipient or their family are in receipt of another benefit which is uprated. In particular, it ensures that the definition of benefit income includes the state pension under the Pensions Act 2014—that is, the new state pension—and that definitions of alteration include those transitional provisions of the new state pension which have to be uprated by no less than the increase in prices. That includes protected payments, certain increments inherited from a deceased spouse or civil partner, and certain other deferred amounts inherited under the state pension. Secondly, as the noble Lord explained, there are appeal rights to secure certain national insurance credits.

On the first issue, the automatic adjustment would apply only to income-related benefits including income support, JSA, ESA, pension credit and universal credit. The Explanatory Note to the order sets out the limited circumstances where the state pension will form part of the benefit income of a person claiming a working-age benefit. Its application is asserted to be—perhaps the Minister will confirm this—for pension credit awards and potentially for so-called “mixed” couples, where there is currently a choice of pension credit or the working-age benefit. We are told that this choice is to be phased out. Perhaps the Minister will also confirm the timing and mechanism for this to happen.

To the extent that income support, JSA and ESA are to be replaced by universal credit, the Government anticipate that these arrangements in due course will apply to universal credit and pension credit only. This raises a number of questions. First, there is the timetable for universal credit. It is understood that the most recent plans—pre the resignation of IDS—were for universal credit to be rolled out for all new claimants between 2016 and June 2018, with gateway areas becoming full service areas. This was to be followed by migration of current claims of legacy benefits to be completed in 2021. Is this still the plan?

How does the Minister respond to the article in Tuesday’s Times, which refers to the involvement of GCHQ in alerting No. 10 to security flaws in the programme, with significant numbers of claimants facing significant issues? Can the Minister assure us that, now IDS is out of the way, the reported chaos under every stone has been dealt with? Quite apart from this order, however, we should find time to debate this fully.

So far as pension uprating is concerned, Sections 150, 150A and 151A make reference variously to uprating by not less than earnings or prices. My noble friend Lady Drake pressed this issue. There is of course no specific reference to the triple lock in these statutory provisions, although it can be catered for within the drafting formulation. I press the Minister, as has my noble friend, to confirm the Government’s position on this matter, particularly in light of his predecessor’s recent comments. Will the triple lock continue to be applied, as now, at least until the end of this Parliament?

We have been told that Article 3 amends an omission of a consequential amendment arising from the 2014 Pensions Act, and this omission being included in the right of appeal for decisions concerning awards for credits made under Part 8 of the State Pension Regulations 2015. We are told that any credit decisions under these provisions in respect of the tax year 2016-17 will need to be reconsidered once the law has changed. My noble friend, again, pressed on that matter. As my noble friend said, these could relate to decisions on credits for spouses and civil partners of members of HM Forces, people caring for a child under 12, foster carers and people approaching pensionable age. These are important provisions.

The Explanatory Note suggests that this omission will have very little effect because it concerns only one class of credits—post-April 2016 class 3 credits to cover gaps in the records of those accompanying HM Forces, as spouses or civil partners, in a posting outside the UK. This seems to be on the basis that generally decisions on tax credits for 2016-17 will be relevant only in determining the new state pension for those reaching state pension age for 2017-18, by which time the problem will have been fixed. The exception appears to be spouses and civil partners of HM Forces personnel, where credit from 1975-76 can be relevant to pension awards for 2016-17. Can the Minister confirm that that is correct and that is why it is of limited effect?

Can the Minister say generally whether the appeals rights apply only to those credits which have to be claimed and not those applied automatically? I think he did that in his presentation, but I ask: if that is the case, what is the remedy, should the latter be subject to error? Is this a matter of administrative adjustment?

The Explanatory Note seems to be suggesting that, notwithstanding that there is no current right of appeal in certain circumstances, HMRC can in the interim undertake a reconsideration, which would be the first stage of an appeal should the right to one exist. Again, I think that that is what the Minister said, but perhaps he would confirm that.

The issue of National Insurance credits takes us back to an earlier debate about generally improving take-up of these credits, which are not awarded automatically—again a point pressed by my noble friend Lady Drake. In resisting a reporting process to Parliament on a take-up strategy, the noble Lord said that,

“we intend to review these systems to identify what efficiencies can be put in place to make the system of national insurance credits as simple as possible”.—[Official Report, 18/12/13; col. 353.]

Would the noble Lord please now offer us an update?

[Lord Freud]

My Lords, I thank noble Lords for their contributions, which made it rather a more interesting debate than I had anticipated. I will go straight into the questions that were raised rather than reprising the content.

There have been two omissions. One was something that has actually potentially affected people; we are getting that first one back in time. We take this seriously. It is not the first time that I have had to grovel somewhat about redoing regulations; I suspect that some noble Lords on the other Benches have had similar experiences.

[A noble Lord]

Never.

[Lord Freud]

Never! So, clearly we need to take this seriously. In this case, however, the impacts have not been great. On how the feedback works, we have an established complaints and resolution procedure—and it is particularly valuable doing it this way because, as the noble Lord said, the numbers are small—whereby people can either write or phone in. We will catch these and assess what is happening.

I say to the noble Baroness, Lady Drake, that I described in my speech a process that, so far, no one has tried to appeal. If they do, there is a workaround, so in practice there will be no gap at all for people. The minimum guarantee for the pension credit standard will continue to be uprated, at least by earnings every year. I am in a position, I think, to confirm to noble Lords that the triple lock is in place through this Parliament, as has been said several times in the past.

On the question raised by the noble Baroness, Lady Drake, about credit decisions, the oversight affects all decisions on credits—which includes grandparents—made under the powers in the Pensions Act 2014 from 6 April 2016 to when the law is changed. The specific decisions affected relate to credits for spouses and civil partners of members of Her Majesty’s Forces, child benefit recipients, people caring for a child under 12, foster carers and people approaching pensionable age—and, as I mentioned, it includes grandparents. I am afraid that we do not have data on the numbers. There are around 400,000 eligible for carer’s credit and, in August, there were 10,900 recipients. There are 200,000 service spouses eligible and, since April, we have had 1,850 applicants.

The noble Lord, Lord McKenzie, enjoys reading newspaper articles on universal credit. I can confirm that there was a most imaginative use of the present tense in the Times—all references to spies are pretty historical by now. We have been working with GCHQ all the way through to make sure that universal credit is secure. It has monitored and is content with the system; that is something that has been of immense value to us as we have developed the system.

We made an announcement in July on the timetable. We now envisage universal credit being completed by March 2022 instead of March 2021, but nine months of that difference is contingency.

The noble Lord, Lord McKenzie, asked about credit applications. Decisions on credit applications made in respect of 2016-17 will be relevant in determining the new state pension entitlement only of people reaching state pension age from 2017-18, as this will be the first cohort for which 2016-17 will be a relevant tax year. What he was asking was therefore correct.

On his question about a review, we carried out a review and found that the main issue was lack of information. This is being addressed in the new state pension awareness campaign. I think I have covered most of the questions, but I will go over them carefully afterwards and I will write to noble Lords.

[Lord McKenzie of Luton]

Before the noble Lord sits down, I imagine he has a note from the Box ready, so perhaps I could ask him to comment on the right of appeal in respect of credits where they are awarded automatically. From what he said, I think the right of appeal applies to credits that have to be claimed. If there is an error in the application of automatic credits, what is the remedy and how is it applied?

[Lord Freud]

I will confirm this in writing, but my impression is that there is a right of appeal in these circumstances. It may be that there was no gap in the legislation. I will confirm that, but that is my starting position for 10.

[Baroness Drake]

Before the noble Lord sits down, I just want to take advantage, if I may, to ask about the issue of pension credit. It has been confirmed that it will follow the earnings link, which we know is in the legislation. But in recent times we have seen increases in pension credit greater than what is required by legislation in order to ensure that the poorest pensioners do not receive a smaller increase than those receiving state pension. Given the kind of statements made in the Budget in 2015, is the disposition of the Government still to say that there will be a focus on the poorest pensioners through pension credit and that they will not feel constrained to stay only within what the legislation says but may go above it in order to protect those poorest pensioners? I am interested so I am pushing the Minister on this point.

[Lord Freud]

I always love to answer the noble Baroness in a positive way, but I am not in a position to speculate on the precise levels in any particular year. We do not have long to wait until we see some of the figures. I am feeling incredibly confident about my last answer, almost to the extent that a letter is not required on this particular point. With that response, I beg to move.

Motion agreed.

House adjourned at 5.33 pm.

Universal Credit

Lord Freud Excerpts

Tuesday 19th July 2016 Lords Chamber

[Baroness Lister of Burtersett]

To ask Her Majesty’s Government what assessment they have made of the combined impact, to date, of the payment of universal credit monthly in arrears and the seven-day waiting period before it can be claimed.

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

I recognise the concern about impact, especially about arrears, as we discussed last week, but many claimants come to UC with final earnings to support them until their first payment and often find work quickly. Waiting days apply to those most likely to find work and various claimant support initiatives are available, including advances, dedicated work coaches and budgeting support. DWP is keeping a close eye on this area and hopes to publish data later this year.

[Baroness Lister of Burtersett (Lab)]

My Lords, in the survey of council home providers to which my noble friend Lord McKenzie referred last week, 100% of respondents cited the six-week wait for the first UC payment as a key factor in rent arrears. It is also a factor in food bank referrals. Will the Minister now, as a first step, remove the seven-day waiting period, as called for by the National Federation of ALMOS and ARCH, bearing in mind that his department’s data show that lower-paid workers are more likely to be paid weekly and not have savings to fall back on?

[Lord Freud]

I am looking at this area. The figures have to be looked at very carefully to see what they are really showing us. We are looking at a group going to UC who are changing their circumstances. The difference between what happens to them as they go on to housing benefit compared with the legacy benefits is not as great as I initially thought. But I am taking this seriously and I will look at it personally with the department to ensure that we get the right answer.

[Lord Hylton (CB)]

Will the Government publicise the available arrangements for discretionary payments and emergency payments so that those who are eligible for them do know?

[Lord Freud]

We do publicise them. In UC, we probably do not publicise the advances available enough, and I am looking at making that information more available on screen and automatic, rather than through a conversation—so that is a good point.

[Baroness Sherlock (Lab)]

You certainly do not publish them very well. In 2010-11, more than 1 million people applied for crisis loans. In the year to September 2015, that was down to 140,000 people applying for the equivalent advances.

Did the Minister see the research out today by the IFS which showed what the House has been telling him for a long time: two-thirds of the poor are now in households where somebody is in work? If those people are paid weekly, they are already poor. If they lose their job and apply for universal credit, they have to wait six weeks before they get a penny. As my noble friend said, they get nothing for the first week. Can the Minister not see that that is setting them up to fail?

[Lord Freud]

As I said, I am looking at this area. It is not as simple as some of the figures might make you think. I, too, read the IFS research with great interest. Inequality among children has fallen very steeply since the mid-1990s, most of it post the recession. Whenever the IFS says anything nice, I really appreciate it. It said that the important reason was a remarkable fall in the share of children in workless households. Indeed, we have half a million fewer since 2010.

[Lord Kirkwood of Kirkhope (LD)]

Will the Minister confirm that, if my history is right, he is the single surviving Minister since 2010 holding down the same office in government, promoting the interests of universal credit? Is this because the subject area is so complicated, or maybe because he is unpaid? Do any of the 11 pilots currently being mounted by the department address the issue raised by the noble Lord, Lord Hylton, which is important? Packages of support and advance payments are available, but this does not seem to be communicated to the people who need them most. I hope that the Minister will stay in his position for some time yet.

[Lord Freud]

I thank the noble Lord. His sums on this are right, although, along with him, I am not sure whether that is a compliment or the opposite. With the figures that we are looking at, we are disentangling legacy systems—which are pretty odd in themselves—from the new system. One fact about the very big ALMO figures is that ALMOs want rent a week in advance, so it is not surprising that a lot of people are in arrears when you compare them with housing associations, which take the rent four weeks in arrears. That is the kind of thing that I have to disentangle.

[Lord Flight (Con)]

My Lords, the issue has been raised before, but housing associations, as well as councils, are suffering major rent arrears. When the Government have sorted out the meaning of all the data, I would just ask that they do not rule out returning to providing direct payment of housing subsidies to landlords, because clearly it is a problem for housing associations if they are short of income. I add my congratulations to the Minister for remaining in seat.

[Lord Freud]

Let me be absolutely clear why we are doing this. It is of course very convenient for housing associations to be paid directly by the state, but it is incredibly inconvenient for claimants to then move from being out of work to being in work. Our whole drive is to break that barrier and get rid of all those artificial barriers to people going into work. It is something that we need to work on and get right, so that the transformation is made easily. The basic, underlying philosophy is more important than the convenience of housing associations.

[Lord Foulkes of Cumnock (Lab)]

When did the Minister last meet one of these claimants in person?

[Lord Freud]

Oh, last week.

[Lord Forsyth of Drumlean (Con)]

My Lords, given that the Prime Minister made a statement, on entering the doors of No. 10, that she would be on the side of people struggling to make ends meet, would it not be wise for the Minister to address this problem urgently with a view to finding a solution?

[Lord Freud]

To be clear, the Prime Minister, who I have worked for directly, treats this area as very important, which I am really pleased about. We are paying real attention, at speed, to sorting out these matters. As I said, one can brandish the figures around, but they do not necessarily tell you what you think they do.

Poverty

Lord Freud Excerpts

Thursday 14th July 2016 Lords Chamber

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

My Lords, I am responding to this debate in the most unusual circumstances imaginable. I started off with a Whip beside me; she disappeared after a few minutes and then popped up on my telephone screen as my new boss, the Leader of the House—the boss of all of us. So that is unusual. Later, I saw on the screen—I am sorry, I have not been quite as attentive as I normally am—that apparently my other boss, the Secretary of State, Stephen Crabb, has resigned. When the noble Baroness, Lady Sharp, talks about the delights that she is looking forward to—going out in the evening, perhaps watching a bit of TV—I really, really get it. I pay tribute to her, as others have done. She has done this House great service and is appreciated all around the House. We all thank her for what she has done over many years. I am sure the House will understand that when the noble Lord, Lord Hunt, asks me how I am going to translate the words of the Prime Minister into action, I am slightly hamstrung in making firm commitments.

I congratulate the noble Lord, Lord Bird, on securing this debate and bringing to the House’s attention this vital issue—that to dismantle poverty we must tackle its root causes. This sentiment is wholeheartedly endorsed by this Government, as we heard yesterday from the new Prime Minister. We have made a clear commitment to tackling the root causes of poverty and extending opportunity so that everyone, whatever their background, has the chance to realise their full potential.

We demonstrated this when we rejected the narrow, income-based approach that the Child Poverty Act 2010 incentivised. Focusing on moving families above a notional poverty line is not sufficient if we want to address the root causes of disadvantage. Instead, through the Welfare Reform and Work Act, we have introduced two new statutory measures to drive continued action on worklessness and educational attainment. As the noble Lord, Lord Ouseley, pointed out, these are the two factors that can make the biggest difference to the life chances of disadvantaged children and families. We agree with the noble Lord, Lord Bird: we want to tackle some of the deep-rooted and complex social problems that mean people are held back, and the underlying factors that can trap people in poverty.

I will set out the current ways in which we are tackling the causes of poverty in the UK, following the recent publication of the HBAI report, which covers the year to March 2015. I know that noble Lords follow this very closely, as do I. The report showed that average incomes have grown at their fastest rate since 2001-02 and are at a record high, with the average household now receiving £473 a week—an extra £800 a year compared with 2013-14. The average annual income of the poorest fifth of households is also at a record high—around £900 higher in real terms than in 2007-08. Inequality is unchanged, with the Gini coefficient remaining at 34%. Inequality, therefore, remains statistically significantly lower than in 2009-10.

The noble Lord, Lord Crisp, said that poorer people are able to identify what they need to do to get out of poverty. In responding to that, it is really important that we empower people. Empowerment is underlying what we are trying to do with our welfare reforms. We are trying to give claimants responsibility for their own lives. That leads me, as the noble Lord, Lord Kirkwood, would expect, to what we are trying to do with universal credit; that is, to make it very clear that extra work means extra money, which you keep in your pocket. There are strong signs in the evidence that we are collecting that it is starting to transform lives, with people on universal credit moving into work significantly faster and staying longer in those jobs. For every 100 people who would find work under the old JSA system, 113 universal credit claimants would move into a job. There are none of the cliff edges of the old system. As earnings increase, universal credit payments reduce at a steady rate, so that working and earning more are clearly incentivised. Basically, people know where they stand; that is the definition of empowerment.

There is also more coherent support. A Jobcentre Plus work coach remains in touch with the claimant, offering personalised support to increase their hours, earn more and progress in work. These are very early days with regard to this aspect but I expect that it is going to be key as we raise low incomes.

The noble Baroness, Lady Warwick, expressed concern about childcare. As she will be aware, we are now providing 85% of childcare costs in universal credit. There is some complexity in the various areas of provision. We have a cross-ministerial team working on that so that people understand all the different ways in which they can access support with childcare.

The noble Baroness, Lady Finlay, raised the point about treating the widowed parent’s allowance as income in universal credit. The widowed parent’s allowance provides support for normal living expenses, and it would not be appropriate to disregard it as a source of unearned income.

I think the point that was echoed the most was about silos—that is what the noble Lord, Lord Mawson, called them—and all the different ways that services come on a siloed basis. The noble Lord, Lord Bird, spoke about breaking down budgets so that they can be used on a joint basis. The right reverend Prelate the Bishop of Derby talked about models of partnership and how we might provide guidelines on that. The noble Lord, Lord Whitty, also spoke about it. This is the most important single area that we need to get right. As noble Lords will be aware, I have been trying to develop a system to do so, with the development of universal support. It will work as a partnership between ourselves, local authorities and third-sector groups—other bits of government and other bits of public provision—to try to get coherent support for people.

We have built that system and tried it on a couple of barriers: digital exclusion—the noble Baroness, Lady Lane-Fox, will be pleased that we are trying to help people to handle such issues, because the challenge with UC is to be able to handle them—and financial barriers. We have done a lot of experimentation, and we have just completed the report on 11 of the trials. One thing that found is that people need to tackle a number of barriers. Following those trials, we are reviewing the whole way in which we are looking at universal support and at how best to address these and a broader range of barriers. My view—it is a personal view—is that this is really quite a promising development to supplement universal credit, but there is a long way to go.

On life chances, we know that work is the best route out of poverty. The Child Poverty Transitions report that came out in June 2015 found that 74% of poor children in workless families that moved into full employment exited poverty, and the highest poverty exit rate was for children living in families that went from part-time to full-time employment. One of the really good statistics is the dramatic fall in the number of children living in workless households, which is down by 449,000 since 2010. My noble friend Lady Stedman-Scott spoke about how we measure this, and she referred to the work of our noble friend Lady Stroud in setting up the Social Metrics Commission. That is a very interesting approach, which we have never had before. We have had the IFS, which tries to assess the fiscal impact of government measures, but no one has tried to measure the social impact of government measures. It is extraordinarily ambitious to try to do so, but if anyone can do it, my noble friend Lady Stroud can. We will watch that, and if it is promising, we will clearly find it of great value.

The noble Lord, Lord Empey, said that it was important that people should leave school being able to read and write. There have been improvements. The move to using phonics more rigorously means that an additional 125,000 pupils are on track to read effectively. Last year, four out of five children achieved the national expected standard, or higher, in reading and writing and maths at key stage 2.

I should not pass up this opportunity to point out today’s IFS analysis—I do not know how many noble Lords have seen it—on what has happened to income inequality for families with children. It describes the fall in the numbers of children in workless households as “remarkable”. I cite that because it is very rare to get a quote from the IFS saying this is going the right way. The IFS gives the example that, for the poorest fifth of children, household worklessness has fallen from 60% to 37% over the past 20 years. Most interestingly, it highlights how earnings make up a much higher proportion of the household income of poorer children than they did 20 years ago, and how that income has grown over the period.

A number of noble Lords raised the critical issue of education. It clearly is critical, and the Government regard it as such. Since the pupil premium was introduced in 2011, the disadvantage attainment gap has narrowed by 7.1% at key stage 2 and by 6.6% at key stage 4. Our commitment to protect the pupil premium at current rates means we will provide billions of pounds of additional funds for schools to continue to boost the attainment of their disadvantaged pupils. Our ambition, as reflected in the education White Paper in March, is to ensure that every child and young person can access world-class provision, achieving the best for his or her ability, regardless of location, prior attainment or background.

Let me pick up a few of the points made about housing, which was another issue raised by several noble Lords—the noble Baroness, Lady Warwick, the noble Lord, Lord Whitty, and the right reverend Prelate the Bishop of St Albans—including the importance of having the right housing to tackle poverty. Everybody needs the security and stability of a decent affordable home, and it is a government priority to increase the provision of affordable homes. We have doubled the housing budget to more than £20 billion over the next five years. That includes £8 billion for affordable housing, which will deliver 400,000 affordable housing starts.

The point raised by the noble Lord, Lord Hunt, about bringing together health and work was well made. This goes beyond universal support, at one level, but we could look at it in that context. We still enjoy the benefit of Dame Carol’s expertise; she is undertaking a review of addiction. We have set up a joint health and work unit, staffed by colleagues from both the Department of Health and the DWP, with the aim of pulling together our approach on health and work.

Work, education and health issues are right in the centre of the Government’s sights when it comes to tackling the fundamentals of poverty. I hope that the noble Lord, Lord Bird, feels reassured that at least the questions he is asking are the same as the ones the Government are trying to answer.

Universal Credit: Rent Arrears

Lord Freud Excerpts

Wednesday 13th July 2016 Lords Chamber

[Lord McKenzie of Luton]

To ask Her Majesty’s Government how they will address the causes of the increase in the number of council tenants in receipt of Universal Credit who are in rent arrears.

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

I appreciate the concern with this. The reality is that there are a lot of factors at play and universal credit is not the sole issue. Many people are coming into universal credit with pre-existing arrears. Safeguards are in place for claimants, including advances, budgeting support and alternative payment arrangement. Research shows that over time claimants successfully reduce their arrears. I have commissioned work from the department to help understand the true level and causes of these arrears.

[Lord McKenzie of Luton (Lab)]

I thank the Minister for his reply. He will be aware of the survey conducted by the National Federation of ALMOs and ARCH which details the shocking build-up of rent arrears by council tenants. Of those covered by the survey, 79% in receipt of universal credit were in arrears and only half of those previously had been in arrears. Despite what the noble Lord says, it seems that the rollout of universal credit is causing a build-up of debt among social tenants, creating financial hardship and reportedly driving some into the arms of loan sharks. That is not surprising, given the long processing times and the recently introduced imposition of a further seven-day waiting period before the benefit can kick in—an imposition opposed by the Social Security Advisory Committee. As the rollout of universal credit is to widen, does the Minister agree that these arrangements have to be reviewed urgently, from the point of view of both landlords and tenants, and the seven-day waiting period scrapped?

[Lord Freud]

The best evidence I have got at the moment is a gateway review, which shows that a rather high figure—48%—of the singles on UC have got arrears, but, interestingly, half of them were pre-existing arrears. That compares with 31%—so it is higher—but the interesting thing is how quickly it comes down. In the second wave—that is, three months later—it comes right down to very close to the JSA figure. There is a lot of complexity here; it is not straightforward at all. I am looking at it with some urgency.

[Earl Cathcart (Con)]

My Lords, during the passage of the recent welfare Act the Government were warned by several noble Lords from around the Chamber that, if they did not allow tenants to choose to have the rental part of their universal credit paid direct to their landlords, then rent arrears would increase. As the noble Lord, Lord McKenzie, has just said, arrears are increasing dramatically, but at the time the Government said no. Why can universal credit be paid directly to mortgage lenders for mortgage interest but tenants cannot choose to have the payment made directly to their landlords?

[Lord Freud]

What we are aiming to do with universal credit—and there is evidence of success in this—is to get people to take control of their own lives. It is much more difficult for people to switch to going into work if their rental situation is locked up in a dependency situation. We are aiming to free people from that so that they can move into work. There are good signs that we are being successful in getting people into work.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, the Minister’s announcement that he is undertaking a review is very welcome, but will he include the evidence that the noble Lord, Lord McKenzie, has just put forward about the increasing incidence of rent arrears? We need to make sure that this is merely a short-term spike and not a long-term trend. In the course of his researches, will he look into why the safety net measures built into the design of universal credit, to which he referred, appear to be failing in this instance? This is important. By a country mile, this is the biggest change programme that Her Majesty’s Government are bringing forward. It is mission-critical for the United Kingdom, particularly after Brexit, and it is important that we get it right.

[Lord Freud]

I absolutely accept that we need to get it right. I am spending quite a lot of time with the ALMOs. I have had a couple of meetings with Eamon McGoldrick and John Bibby to discuss their findings. It is complicated. The essential fact is that landlords like their money paid in advance and all benefits systems pay in arrears, so we do not know how much of this is what the ALMOs call book arrears and how much is real arrears. We need to get to the bottom of that and we need to get to the bottom of what are the processing and payment systems issues. We need to understand what the existing arrears are. They are much higher than we expected—50%—and that is a frightening fact. We may be looking at a group going into UC which is unusual because it is moving up and down, and we need to understand and quantify those factors.

[Baroness Meacher (CB)]

My Lords, I am grateful to the Minister for commissioning some work on the level of debt, but in view of the impact of rent arrears and other debts on mental and physical health, will the Minister commission a review of the cumulative impact of the benefit cuts since 2010 on the mental and physical health of claimants? If the Minister is moving on to other pastures, perhaps he could leave a note for his successor to commission such a review.

[Lord Freud]

I congratulate the noble Baroness on her timing with that question. I will not answer it. I am not in a position, however, to commission major research on mental health today.

[Baroness Sherlock (Lab)]

My Lords, exactly a year ago today this House voted for a Motion in my name, urging the Government to delay the enactment of the Universal Credit (Waiting Days) (Amendment) Regulations until UC was rolled out. The Government ignored that, enacted the regulations and, as a result, 79% of people are now in arrears, because when you make a claim for UC, you wait six weeks to get any money and now the first week is missed completely, without any payment at all. On that day, the Minister refused to make a statement but he said that,

“I will come back to the House at the appropriate time”.—[Official Report, 13/7/15; col. 438.]

A year down the road, does he feel that that time has now arrived, and what is he going to do about it?

[Lord Freud]

I have said to the House that I am looking at this, and I hope that later this year we will have some data. I urge the House not to expect too much certainty on this. This is quite a complicated situation—there is a lot happening under this—and I am hopeful that I will be able to explain some of this to noble Lords to their satisfaction.

Poverty

Lord Freud Excerpts

Wednesday 29th June 2016 Lords Chamber

[Lord Bird]

To ask Her Majesty’s Government what long-term plans they have, and what action they intend to take in this Parliament, to prevent the underlying causes of poverty in the United Kingdom.

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

The Government have set out a new life chances approach which will include a set of indicators to measure progress in tackling the root causes of poverty, such as worklessness, educational attainment and family stability.

[Lord Bird (CB)]

My Lords, I think I may go down in history as the person who asked only one question of this House—how do we begin the process of dismantling poverty? When we have a situation where 34% of all the money received by the Chancellor of the Exchequer is spent on and around poverty; when we spend 12% of our budget on education and yet we fail 30% of our children in school, who then become 70% of the prison population, who then become 50% of the people who use A&E as a drop-in place, when will the Government and the House get behind the idea that we need a different form of intervention in poverty in order to begin to dismantle it? We are pussyfooting around. We are not dismantling poverty in the way that it should be done. Let us be honest and accept that keeping people in poverty is incredibly expensive.

[Lord Freud]

We are trying to move away from the income transfer approaches that we have seen for some time, to try to handle the fundamental causes of poverty. I agree with the noble Lord that that is where the effort has got to go. It is difficult, but that is the only real way to tackle this problem.

[Lord Morris of Handsworth (Lab)]

My Lords, does the Minister agree that one measure of national poverty is the number of people using food banks? Can he therefore provide a report to this House saying whether that number has gone up or down since the general election?

[Lord Freud]

We do not collect those figures. There have been figures: I believe that the Trussell Trust put out some not so long ago, which showed those figures, from its perspective, flattening out. There has also been quite a lot of research on food banks, and the APPG did a very good piece of work, which showed that what drives people to this emergency support provided by the community—which one welcomes—is a very complex matter.

[Baroness Manzoor (LD)]

My Lords, no one chooses to be poor, but of course there are many people in the UK who experience poverty. We are moving into a global era when there is greater emphasis on technology, automation and robotics, and we need to upskill our workforce. What is the Government’s strategy to ensure that those who are trapped in poverty are given the skills needed to be able to contribute in that area? As we move forward, the gap between those who have and those who have not will get greater.

[Lord Freud]

There is a huge amount of work being done on the educational side, which is where this has to start—but clearly there is an element of remediation and later support beyond the school years. That is where, for instance, the apprenticeship programme, which is growing quite steeply, is really important.

[Lord Shinkwin (Con)]

My Lords, as someone who welcomes the Prime Minister’s commitment to social justice and improving life chances, and believes that he will leave a significant legacy to his successor, may I ask my noble friend what plans the Government have to help the most needy and vulnerable benefit recipients in future?

[Lord Freud]

One of the most valuable things I got from this House was during the passage of the Welfare Reform Act 2012, when we debated what to do for the most vulnerable in the context of UC. That led to the creation of universal support, whereby we join up with local authorities to try to provide services that join together. We have done that now for two of the barriers people face, in budgeting and in digital competence, and we are now exploring how to expand that approach, which shares information, data and support in relation to other barriers. We have some trials going on at the moment, one in Croydon and one in the London Bridge area, on how to do that most effectively.

[Lord Sutherland of Houndwood (CB)]

My Lords, one of the Government’s more successful innovations in dealing with the long-term implications of poverty has been the introduction of the pupil premium. I have to tell the Minister, from conversations I have had with headmasters in some of the most benefited schools in this area, that they are concerned that changes in the rules about how entitlement to benefit is calculated in future will affect very directly the input into schools through this rather good innovation. Any reassurances that can be given, now or in writing, would be appreciated.

[Lord Freud]

That is one of the topics that I and the Schools Minister are talking about. We now have, as a potential option for future use, far more specific measures of real levels of poverty in universal credit which we can use to record poverty, rather than the much cruder measures that we used in the legacy system.

[Baroness Sherlock (Lab)]

My Lords, if the Minister wants to measure poverty he could perhaps look at the official figures that came out this week. They show that while average household incomes are finally back to their pre-crash levels, child poverty has actually gone up by 200,000. It is the first rise for a decade, the largest single rise in one year since 1996, and even more of those poor kids are in working families. Ministers were warned by people around this House that this would be a consequence of government policy but the Minister kept telling us that we were crying wolf. I have rarely been sorrier to be wrong. But now that the warning signs are clear, what will the Government do about it? We have not yet had the effect of the cut in universal credit help or benefits for large families. Will he please urge his new Secretary of State, if he genuinely wants a one-nation country, to go back and reverse that catastrophic decision to cut help for working families on universal credit?

[Lord Freud]

Regrettably, the cry of wolf is wrong in this case. As the noble Baroness knows perfectly well, these statistics are fairly odd on a year-by-year basis. We have had quite a substantial rise in the median income, so the relative figure has gone down—although, I am told, it is genuinely not statistically significant. At the same time, there has been a decline in the number of children living in absolute poverty, with 100,000 fewer. These figures can be pretty odd, and this is another good example of it.

Poverty Programmes: Audit

Lord Freud Excerpts

Wednesday 4th May 2016 Lords Chamber

[Lord Bird]

To ask Her Majesty’s Government whether they will conduct audits of the poverty programmes they support, and publish the results; and if not, why not.

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

We have a range of programmes across government to transform lives, from the troubled families programme and the pupil premium to our flagship reform, universal credit, and we audit the majority of these. Work is the best route out of poverty and this Government are committed to transforming lives by providing people with the support they need at all stages to get into work.

[Lord Bird (CB)]

Is it not a verity of poverty that one of the big problems with poverty itself is that a lot of the support goes to enabling people to live in poverty and very little is spent on dismantling poverty? So I ask the Minister whether it is possible to create a new way of measuring poverty statistics that asks the question: does this get people out of poverty? There is too much emphasis on keeping people in poverty.

[Lord Freud]

My Lords, that question goes along exactly the lines that we are going along in trying to transform the welfare system. We aim to create programmes that promote independence among people and the centrepiece of that is universal credit. Within universal credit we have developed what we call a test and learn approach, which monitors the behavioural responses very closely.

[Baroness Lister of Burtersett (Lab)]

My Lords, the Minister referred to work as the best route out of poverty. Can he explain how salami-slicing financial support for low-income workers, including in the flagship universal credit scheme, is contributing to reducing poverty through paid work, noting that the welcome increase in the minimum wage will not and cannot compensate for such cuts?

[Lord Freud]

The design of universal credit, which the noble Baroness is looking at, is very different from existing legacy benefits. It incorporates real incentives to work more and we are already seeing people who are on universal credit looking to work more, looking to do more hours and looking to earn more in a way that they were not on legacy benefits. At the same time as we have those reductions to which she referred, we are moving the basic national living wage up and increasing childcare very substantially in order to go to a low-welfare, low-tax environment.

[Baroness Manzoor (LD)]

My Lords, the Minister will appreciate the poverty issues that are likely to affect BHS employees if the enormous shortfall in the pension fund is not met. What assurance will the Government give on ensuring that this gap is closed for around 11,000 BHS employees and around 20,000 pensioners?

[Lord Freud]

We have a strong safety net for pensioners in failed companies, as the noble Baroness will be aware. It is important that we have a strong pension regulator behind that. I also observe that this story has shown the importance of having effective pension trustees when there is a change of ownership.

[Baroness Watkins of Tavistock (CB)]

My Lords, what effect does the Minister think the extra health visitors who have been trained under the Prime Minister’s initiative, and the proportion who will actually be employed, will have on poverty in the future?

[Lord Freud]

The key thing in tackling poverty is life chances—in the end, transforming people’s lives—not income transfers. To the extent that the extra support helps children in their early years and in their education, it will be of great value.

[Baroness Stedman-Scott (Con)]

My Lords, now that universal credit is in every jobcentre in the country, how is it helping the poverty agenda?

[Lord Freud]

I am really pleased to confirm that universal credit is now a national programme right across the country. We have real evidence that it achieves its aims: 13% are more likely to be in work at the nine-month point than if they were on JSA. It is already a good benefit by international comparisons. Many more of those in work are looking to do more hours, and many more are looking to increase their earnings than would be the case if they were on JSA.

[Baroness Sherlock (Lab)]

My Lords, I wonder whether the Minister has read the report just out by the Resolution Foundation, which is chaired by the noble Lord, Lord Willetts. Universal credit was meant to tackle working poverty by making work pay. However, the report found that more than 1 million working families will lose all in-work support, and that that will not be made up by tax cuts, living wage rates or childcare. The report said that the cuts,

“risk leaving UC as little more than a vehicle for rationalising benefit administration and cutting costs to the exchequer. Any ambition for supporting and rewarding work and progression looks very hard to achieve”.

It is now rolled out around the country. It has cost billions, and wasted billions. Was it worth it?

[Lord Freud]

I am absolutely confident that the core architecture of universal credit is doing what it is designed to do, which is to encourage people to move towards greater independence. I simply do not agree with many of the conclusions of the Resolution Foundation.

[Lord Roberts of Llandudno (LD)]

My Lords, does the refusal to let asylum seekers work until they have been here for 12 months—and for them to be in poverty during those 12 months—enhance the Ministers?

[Lord Freud]

My Lords, there is a different process for asylum seekers. However, once they have the right to remain, they are entitled to our welfare support.

[Lord Watts (Lab)]

My Lords, will the Minister guarantee that the anti-poverty measures which the Government have put in place will be measured independently, that those independent reports will be published, and that if the Government’s measures are found to be failing, they will change policy?

[Lord Freud]

The noble Lord will be aware that we publish an enormous number of reports, many of which are independent. Indeed, many of them have been developed at the request of this House.

[Lord Lawson of Blaby (Con)]

My Lords, does my noble friend not agree that the fact that we have the lowest level of unemployment of any country in Europe is testament to the success of the Government’s policies?

[Lord Freud]

I think that we have a very flexible labour market. We are developing programmes and a culture that encourages work in a way that we did not have in the early years of this century.

Welfare

Lord Freud Excerpts

Monday 21st March 2016 Lords Chamber

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

My Lords, with the leave of the House, I shall now repeat the Statement made in the Commons by Stephen Crabb, the Secretary of State for Work and Pensions. The Statement is as follows.

“It is a privilege to stand here at the Dispatch Box as the new Secretary of State for Work and Pensions. First, I pay tribute to the work of my predecessor, the right honourable Member for Chingford and Woodford Green. My right honourable friend came into this job six years ago with a real sense of mission and purpose to transform people’s lives for the better, and he achieved some remarkable things. I intend to build on this success.

As a one-nation Conservative, my vision is to support everyone to achieve their full potential and live independent lives. That means people having the stability and security of a decent job, and children growing up in a home with the benefit of that stability. There are now over 2 million more people in work than in 2010, and almost half a million more children now grow up seeing a mum or dad go out to work each day. We are ensuring that these opportunities extend to all those in our society, including disabled people.

Today, there are more than 3 million disabled people in work. In the last 12 months alone, 152,000 more disabled people have moved into work, 292,000 more over the past two years. That represents real lives transformed as we support people with disabilities and health conditions to move into work and to benefit from all the advantages that that brings. But we are also supporting the most vulnerable, and are determined that those with the greatest need are supported the most.

Our reforms have seen support for disabled people increase. In the last Parliament, spending rose by £3 billion. We are now, rightly, spending around £50 billion on benefits alone to support people with disabilities and health conditions. Devoting this level of resources is the mark of a decent society.

Personal independence payments were introduced to be a more modern and dynamic benefit to help to cover the extra costs faced by disabled people, something that its predecessor benefit, the DLA, did not do. PIP is designed to focus support on those with the greatest need, and we have seen that working. For example, 22% of claimants are receiving the highest level of support, compared to 16% under the predecessor benefit, DLA.

Before Christmas, the Government held a consultation on how part of the PIP assessment works in relation to aids and appliances. As the Prime Minister indicated on Friday, I can tell the House that we will not be going ahead with the changes to PIP that had been put forward. I am absolutely clear that a compassionate and fair welfare system should not just be about the numbers. Behind every statistic there is a human being, and perhaps sometimes in government we forget that.

I can also confirm that after discussing this issue over the weekend with the Prime Minister and the Chancellor, we have no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament two weeks ago, which we will focus on implementing.

I want to turn directly to the welfare cap. First of all, it is right that we monitor welfare spending carefully. The principle of introducing a welfare cap is the right one, given the huge increases in welfare spending we saw under previous Labour Governments—up nearly 60%. The reality is that if we do not control the public finances, it is always the poorest in society who pay the biggest price, so we need that discipline. The welfare cap strengthens accountability and transparency to Parliament—something that simply was not in place under Labour. We make no apology for this. As we are required to do, we will review the level of the cap in the Autumn Statement when the OBR formally reassesses it, but I repeat that we have no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament two weeks ago, which we will focus on implementing.

Against this backdrop, I want to build on the progress we have made in supporting disabled people. We made a manifesto commitment to halve the gap between the proportion of disabled people in work compared with the rest of the labour market. As I have outlined, we have made good progress in supporting disabled people into work, but to go further will require us to work in a way that we have not done before, to think beyond the artificial boundaries of organisations, sectors and government departments to an approach that is truly collaborative. That is why today I want to start a new conversation with disabled people, their representatives, healthcare professionals and employers. I want the welfare system to work better with the health and social care systems. Together we can do so much better for disabled people.

This is a hugely complex but hugely important area of policy to get right. Disabled people themselves can provide the best insight into how support works best for them. So I am determined that all views are listened to in the right way in the weeks and months ahead. I will be personally involved in these discussions. The events of recent days demonstrate that we need to take time to reflect on how best we support and help to transform people’s lives. That is the welfare system I believe in. I commend this statement to the House”.

That concludes the Statement.

--- Later in debate ---

[Baroness Manzoor (LD)]

My Lords, I wish the new Secretary of State for Work and Pensions every success in his new role—I mean that sincerely—and I am sorry that the Government find themselves in a difficult place. In fairness, however, they have had significant notice that there was much wrong with the way the welfare reforms have been tackled and are to be implemented.

As the Minister knows, we on these Benches have seen the welfare reforms through the prism of work, so we opposed cuts to tax credits, cuts to universal credit, the removal of support for people with disabilities, and measures that increased child poverty. We on these Benches want to ensure that government policy enables a fairer and more compassionate society, where the weak and the vulnerable are protected and people are supported to work, and supported in work when their incomes are low.

The Government have led us to believe that the weak and the vulnerable are being supported, but the events of the weekend say that this is not only about ensuring adequate support for disabled people but has been—as Iain Duncan Smith’s letter says—about unnecessary cuts to hit a politically motivated target. If that is the case, I am sad to say that the Government may have lost their moral compass. Do the Government accept IDS’s criticism, and do they not therefore owe disabled people an apology for being used as pawns in a cynical political game? I am pleased to note that the reassessment for PIPs will now be kicked into the long grass, but that is not good enough. The entire PIP cuts plan should be stopped. Will the Minister confirm exactly what the intentions for changes to PIP are? Are they to be fully stopped, as the Minister indicated, or just paused for the next six months or so?

Finally, given that the Government consulted on these proposals and until last Friday were saying that they were about giving the right support to disabled people, what is the Government’s actual view on the use of aids and adaptations by disabled people? If they have changed their mind for political reasons, does that mean that the foundation for the Government’s original claims was false, and—as IDS says—just an excuse to cut money? I am concerned about how the Government have treated the consultation process. Should there not be a review into whether they have made misleading claims in order to justify the cut, while ignoring the outcome of the consultation process?

We all have a duty of care to protect the most vulnerable in our society, to preserve their dignity and to help them live full and independent lives. All Governments should take that responsibility very seriously. To that end, I am pleased to note that the Statement says that the Government have no plans to make any further cuts in welfare, but can the Minister confirm that this applies throughout this Parliament? I am also pleased that they are re-setting the conversation, which is vital. I hope that this new conversation about welfare, health and social care will benefit the majority.

[Lord Freud]

There were a number of questions there. One of the main questions is about what is happening to PIP in terms of costs—various claims have been made. I reassure noble Lords that in this Parliament we are seeing an increase in the DLA PIP budget in real terms. I accept what the noble Baroness, Lady Sherlock, said; namely, the contrast between the PIP process we were undergoing last week and the tax cuts was wrong. This is almost history, but the reality was that we were looking at the issue in its own terms, following a report by an independent review that said there was a problem in the PIP process. Fundamentally, putting the two together has caused a great deal of upset. Indeed, Iain Duncan Smith raised that very point himself.

I shall not spend the whole time going through the PIP issue. I assure noble Lords that we have now stopped the PIP adjustment, full stop. It is not being delayed; rather, it is not happening. The question—a suspicious question from the noble Baroness, Lady Sherlock—is: where is the money coming from? I see. The answer is that we are not seeking to replace that money within the welfare budget. That is the point of the very explicit statement, which was made twice, that, looking ahead, we are not looking for welfare savings.

The noble Baroness asked about the White Paper process. That would be a reform process; there may be changes in the way we do things and how we support people, but that is following a consultation on what will work best and is not to do with the savings process that I described. There is no intention to use it in that way.

I shall pick up some of the other issues raised by the noble Baroness, Lady Sherlock, including, for instance, whether we will reconsider other things. There are 24,000 more people on Motability than at the start of 2013. They may be different people, but the process is being directed at the people who need it. The independent living fund was a transfer. The noble Baroness uses one set of statistics on who is disabled and the RSRS. The numbers come down very considerably when one looks at them on ESA. The final issue she raised was the ESA and WRAG. I remind noble Lords, and her, that that was voted on repeatedly in another place.

On the points made by the noble Baroness, Lady Manzoor, I reiterate that there is a full stop here; we are not moving things around on PIP changes. I defend the consultation process that we undertook. We made some changes as a direct result of the consultation, although we did not use four of the options. We went to one and then adapted option 5. I think I have now dealt with the Front Bench questions.

--- Later in debate ---

[Lord Freud]

I take that point from the noble Lord, who is very well informed in this area, on advisement. I accept his point that George Osborne is a pussy cat compared with some previous Chancellors sitting not very far from me.

[Lord Low of Dalston (CB)]

My Lords, as the Minister has confirmed, events at the weekend have made it clear beyond any doubt that the Government’s welfare reform programme has run out of road. Its contradictions stand revealed for all to see. Since exactly the same criticisms apply to the cuts to the employment and support allowance enshrined in the Welfare Reform and Work Bill as apply to the cuts to the personal independent payment, I repeat the question asked by the noble Baroness, Lady Sherlock: will the Government now reconsider implementation of the cuts to the employment and support allowance? They may have been voted through, but it is still open to the Government to reconsider the matter, as they have with the personal independence payment.

[Lord Freud]

The welfare reform programme is massive and we are pushing ahead with it. At its heart is universal credit, which is now moving at a pace. As I speak, more than 400,000 people have made an application for universal credit. We have a lot more to do, and we have a lot to do to implement the Bill that we have just passed. I have to disappoint the noble Lord by saying that there are no plans to reconsider the changes to ESA WRAG that we put through in that Bill.

[Baroness Thomas of Winchester (LD)]

My Lords, it is excellent news that the cuts announced in the Budget have been abandoned, but there is an existing cut that urgently needs to be reversed. It has had less attention but is badly affecting working-age claimants of PIP. I refer of course to the 20/50 metre issue in the “moving around” section of the PIP assessment, which is resulting in 400 to 500 Motability cars a week having to be handed back. Will the Minister ask the new Secretary of State to look at this again, not least because reversing the cut would save money by helping many disabled people to get into work and pay taxes?

[Lord Freud]

At one level, the new Secretary of State will clearly look at his whole portfolio with a critical eye. At another level, there may be changes in who gets the higher-rate mobility component to allow them to qualify for the Motability scheme. More people are on the higher rate under PIP than was the case under DLA. Indeed, more people with mental health issues are going on to PIP than would have received DLA. So, while there is a change in who gets the top-level mobility component and is therefore entitled to the Motability scheme, the absolute number qualifying for the Motability scheme is now moving up. As I said, there are now 24,000 more people on the Motability scheme than there were in 2013.

[Lord McKenzie of Luton (Lab)]

My Lords, the Minister will recall that we recently debated issues around rent restriction policy and local housing allowance changes for supported accommodation. There is a commitment in the Statement that there are no further plans to make welfare savings beyond the substantial savings legislated for recently. Are the proposed changes to supported accommodation now off the table, and does the commitment also run to pensions and pensioner benefits?

[Lord Freud]

Supported accommodation is a vital issue and I am grateful for the noble Lord’s question as it gives me a chance to offer the industry as much reassurance as possible. We have delayed two of the changes—the rent reductions and the LHA cap on supported accommodation—for a year because that will give us time to really understand the sector. In the short term, I expect to get a report on how the sector works so that we can look at how to support it most efficiently with funding and finance. The noble Lord will probably not remember how it is financed, as I do not think that anyone knew at that time. It has been quite a complicated issue. As for his question about the commitment and pensions, the pension element is growing rather rapidly, so, far from cuts, that becomes an irrelevant consideration.

[Lord Lansley (Con)]

My Lords, those of us who know Stephen Crabb well are very hopeful about the approach that he will bring to this very important and challenging task. From these Benches we should pay tribute to Iain Duncan Smith for what he achieved as Secretary of State and indeed even before he became Secretary of State in his ambition to help the poorest and most vulnerable in society. Coming back to the questions that arise today, will my noble friend confirm that the OBR forecast published alongside the Budget now appears to indicate that the anticipated disability benefit budget, having risen by about £4 billion since 2010, will rise over the next four years by about another £2 billion? That highlights that, if we are to achieve meaningful reform in the future, it is not about, as my noble friend said, changing the amount of money paid to people with specific needs but about helping people back into work. The focus of welfare reform should be not diminished but refocused on the work and health programme and halving the disability employment gap.

[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.

[Baroness Masham of Ilton (CB)]

My Lords, I agree with the part of the Statement that says that disability is very complex. There are very many different disabilities and many of them involve extra expense, such as extra food to keep fit. I also agree with the noble Baroness, Lady Thomas, about Motability. If you live in a rural area and do not have a car, you cannot get to work and are therefore stuck. Another very important issue is the people who do the assessments, about which there has been a lot of criticism. Can the Minister arrange better training for the people doing the assessments?

[Lord Freud]

I accept that one of the issues around the disability element is that we have a fairly one-size-fits-all approach. One thing that the new Secretary of State will be very interested to hear is how best to manage the process in the light of that complexity—I know that he is very aware of it. I have tried to deal with the Motability issue. It is different people who are getting that and it is based on a better test; PIP is a better test than DLA. We are putting a lot of resource into assessments and their quality is now showing some good improvement.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am pleased that the Minister paid tribute to the outgoing Secretary of State for Work and Pensions. He is a man I have known over many years and he had a sense of mission, which I think we should acknowledge. I hope that the new Secretary of State will have an equal sense of mission, particularly in relation to universal credit, which was, I think, what drove the past Secretary of State to distraction and out of his office. To me, universal credit is the most important thing that the Government still have to deliver. Will the Minister assure the House that the conversation that the new Secretary of State has announced in relation to disability will not delay the forthcoming White Paper process too long? I am in favour of consultation, and I am also in favour of the Government paying attention to consultative responses, but can he assure the House that the White Paper is still on track?

[Lord Freud]

I have known Stephen Crabb for a time. He was a Whip for the department and then he was in Wales, where he dealt with welfare issues. I have high hopes for him in pursing the reform agenda. He is up for it and he will be pretty effective at it. I look forward to providing him with all the support that I possibly can in this agenda. Clearly, in getting this reform going, the conversation has to be balanced with the speed. He is conscious of that and will look to get something going at the fastest possible speed, commensurate with making sure that we get it right and get the views of quite a complicated set of constituencies.

[Baroness Hollis of Heigham (Lab)]

My Lords, as my noble friend said, I think the whole House recognises the honourable way in which the Minister has behaved over recent days. I would like to associate myself with her remarks to that effect. However, I want him to return to the answer that he gave to one of her questions: she asked whether he would accept that the original decision to cut PIP was wrong. Listening to the Minister, I think he appeared to suggest that what was wrong—he used the word “wrong”—was its conjunction in the Budget with reduced wealth taxes for the better off. Do I understand from that that according to the Minister, had it not been conjoined with those Budget changes benefiting the better off, he would have supported, welcomed and gone ahead with the PIP changes?

[Lord Freud]

The noble Baroness deals me a compliment with one hand and a blow with the other in the way that I enjoy so much, as a masochist. I am not sure it is worth chewing over what I thought last week. We could do it, but I am not sure that it would be a valuable use of Hansard inches.

[Baroness Hollis of Heigham]

To clarify, it was what the Minister said—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, this is not a debate; it is a Statement. The noble Baroness has asked her question and my noble friend is responding to it. He will respond to it in one go and then we will move on to the next question.

[Lord Freud]

We were told by Paul Gray, who did a study of this, that there was something going wrong with the way that the aids and appliances element was adding up. There were eight different categories and the points were tiered up. He thought that that was not going right and that a large number of people were getting PIP purely on this one category—that the figures were adding up in an odd way. That is what the consultation was about: it was driven by the need to make sure that it worked. When it got wrapped up into a debate on savings, that was not the driving force and it became something that was not acceptable to Conservatives in the Commons. It was decided, therefore, that we would not go ahead with it. That is the honest and full answer.

[Baroness Lister of Burtersett (Lab)]

My Lords, I welcome the Minister’s Statement. When he said that there would be no further social security cuts looking ahead, does that mean that there will be no further cuts for the lifetime of this Parliament, as was asked by the noble Baroness, Lady Manzoor? Having paid tribute to his former boss, could the Minister say whether he agrees with him that the reduction in the welfare cap following the election was arbitrary and that therefore he—Mr Iain Duncan Smith—no longer could support it?

[Lord Freud]

The Statement said—and I think I need to stay very close to the Statement—that there will not be any further welfare savings. That is the Statement and I will leave it at that. What happened with the review of the level of the cap was that it came down post-election. However, that was not arbitrary: it reflected the level of welfare payments in those categories and was fixed at that level with a projection that ran the same way. If that sounds complicated, it is because it is quite complicated.

Employment: Job Creation

Lord Freud Excerpts

Thursday 17th March 2016 Lords Chamber

[Baroness Jenkin of Kennington]

To ask Her Majesty’s Government how many net additional jobs have been created in the United Kingdom since 2010, and what assessment they have made, if any, of how that figure compares to those of the 19 nations of the Eurozone.

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

Since 2010, employment in the UK has risen by more than 2.3 million people. Comparable international figures for this period are not available, but over the last year the UK has seen the second largest rise in employment in the whole of the EU, after Spain.

[Baroness Jenkin of Kennington (Con)]

I thank my noble friend. Youth worklessness is still too high in this country. Will my noble friend tell us what the Government are doing to tackle it?

[Lord Freud]

We have had youth obligation programmes and we seem to have turned the corner here. The figure that I have consistently given to this House over the past nearly six years has concentrated on the workless number—those unemployed or inactive in the 16 to 24 age group. In recent months that figure has been at an all-time low. It is 14.3% of the population and has come down to just a shade over 1 million. It is very interesting that even through the boom years the figure was going up. There was a structural issue. We seem now to be getting at the roots of that structural problem and are beginning to see the figure come down, as I said, to an all-time low in recent months.

[Lord Grocott (Lab)]

Does the Minister recall, as I do, the dire consequences that were predicted by so many businesspeople, economists and politicians were we not to join the eurozone? In view of those predictions having been so spectacularly wrong, has the Minister heard any apologies from those people?

[Lord Freud]

It is not often that I warmly endorse the previous Prime Minister or Chancellor in the shape of Gordon Brown, but he seems to have done one signal service to the country in keeping us out of what has clearly been a major mistake by the European Union.

[Baroness Sherlock (Lab)]

My Lords, I welcome the rise in employment but I want to ask about the disability employment gap. I was pretty shocked on reading the Red Book to discover that the single biggest revenue raiser was the new decision by the Government to save £4.4 billion over five years by taking personal independence payments away from hundreds of thousands of people who need aids to get dressed or manage incontinence. That is on top of previous PIP cuts, lost Motability cars and ESA cuts. How will that help disabled people into work?

[Lord Freud]

There is a huge misapprehension about the cost of PIP, which has been going up rather than down. These are not cuts: on the present trajectory the figure is moving up to £12 billion, and when we discussed it during the passage of the Welfare Reform and Work Bill there was an expectation that in the key 2019-20 year it would be £9 billion. We are reducing a rapid growth and adjusting how to get PIP because clearly we are getting much higher figures than originally expected through the use of those aids and appliance measurements.

[Lord Garel-Jones (Con)]

Does my noble friend accept that, contrary to what the noble Lord opposite said, it was not Prime Minister Gordon Brown who kept us out of the single currency but Prime Minister John Major? Gordon Brown simply stuck wisely to that Conservative decision.

[Lord Freud]

I am very happy to accept the correction.

[Baroness Burt of Solihull (LD)]

As the Minister said, we do not have precise international comparisons on job creation, but we are doing okay on the number of jobs. However, is not productivity also very important? On average, we have lagged behind the French by 20% over the last 20 years. Does the Minister agree that the answer is to invest more in people and lifelong learning? If he agrees, can he tell me what the Government will do about it?

[Lord Freud]

An economist would reply that the way to get more productivity out of people is to put more capital in and raise the quality of people’s input. It is clearly a long-standing issue that we have lower productivity than other major countries; the comparisons are often with the US and Germany. However, there is something about the structure of our service-based economy that means the comparisons are not necessarily what they seem to be. Nevertheless, it is quite clear that one of the major challenges of this economy is to get our productivity up.

[Lord Kilclooney (CB)]

My Lords, of the 2.3 million jobs that the Minister states were created, how many were given to United Kingdom citizens?

[Lord Freud]

The bulk of people in the country are British citizens—as are 90% of those in the workplace. The majority of those extra jobs have gone to British citizens but a substantial proportion have gone to outsiders.

[Lord Blunkett (Lab)]

My Lords, will the Minister reflect on the paradox that if more people are being assessed more rigorously as being eligible and fit for work, even with disabilities—he and I agree on that—there is a certain irony in using the increase in the volume cost of the personal independence payment as a reason for taking away that PIP from those who have been judged to be so disabled that they are entitled to additional support, some of which will eventually enable them to take work? Is it not therefore a completely cost-ineffective means of dealing with the challenge of increased PIP to reduce the number of people who are eligible for it?

[Lord Freud]

We carried out a survey of a representative sample of about 400 people, with, I think, 95% accuracy. We found that the vast bulk of people in the categories that we are talking about did not have extra costs apart from the aids and appliances they were using. Some of those aids and appliances were, for instance, a bed. We found that extra costs were not applied to these particular measures.

Welfare Reform and Work Bill

Lord Freud Excerpts

Monday 7th March 2016 Lords Chamber

Moved by

[Lord Freud]

That this House do not insist on its Amendments 8B and 8C, to which the Commons have disagreed for their Reason 8D.

8: Clause 13, leave out Clause 13.

--- Later in debate ---

8D: Because they would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

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

My Lords, in these opening remarks I shall cover Motion B as well. Last week the Commons considered the amendments passed by this House to place a duty on the Secretary of State to estimate further the impacts of the changes to the ESA work-related activity component and the universal credit limited capability for work element. The Commons also considered the aspect of those amendments that sought to make the commencement regulations bringing both changes into effect subject to the affirmative procedure.

The Commons voted solidly to reject those amendments, and the Motion now asks this House to accept that decision. In addition, the Commons Speaker has also ruled that these changes attract financial privilege. As noble Lords have not tabled amendments to the contrary, I will make the presumption that the House is now prepared to accept the changes, albeit with great reluctance, and will not defy convention.

I put it to noble Lords that as a House we have performed our duty. We have rigorously scrutinised the legislation to remove unintended consequences and sent back a number of concerns for the Commons to reconsider. Indeed, on the ESA work-related activity component and the universal credit limited capability for work element, we have twice asked the Commons to reflect on the measures and twice it has voted down proposed amendments with substantial majorities. I think that our duties are discharged, and there comes a point when we must accept the decision of the Commons on this financially privileged matter.

I am proud of the important work this House has done to improve and refine the Bill. I remind noble Lords of the important changes they have secured. We have put in place additional statutory protections around the publication of low-income data; we have secured exemptions from the benefit cap for recipients of carer’s allowance and guardian’s allowance; and, in the case of the limit on support through child tax credits and universal credit, we have secured exemptions for certain children being looked after by family-and-friends carers and adopted sibling groups. On the social rents measure, supported accommodation will now be excepted from the changes for one year, and across the Bill we have accepted—in full or in part—recommendations from the Delegated Powers and Regulatory Reform Committee.

Speaking personally, I thank noble Lords for the precision and clarity with which they have made their arguments. It has made immeasurably easier my task of relaying the concerns back to my colleagues in the department and across government and getting an agreed response. The quality of scrutiny in this place amplifies the power of the arguments within government.

On this occasion, I will not expand on the measures at issue; we have had an extended opportunity to do so during the Bill’s passage. However, I remind the House of the improvements it has helped to secure: improved guidance for those with progressive conditions, £15 million for the flexible support fund, and removing the 52-week permitted work limit in ESA to reduce barriers to part-time work.

I am proud of the work this House does to scrutinise legislation and highlight unintended consequences—as it has in this case to improve these measures to help more sick and disabled people back into employment. It is, I believe, the right moment for the Lords to accept that it has done its job in communicating to the Commons areas of concern for it to reconsider. I am confident that noble Lords have done an excellent job in scrutinising the Bill, and I am grateful to colleagues throughout the House for a series of powerful and thoughtful speeches.

In the light of the convincing votes in the Commons and the application of financial privilege, I beg to move the Motion.

[Baroness Grey-Thompson (CB)]

My Lords, I am deeply disappointed that we have got to where we are today with the Welfare Reform and Work Bill, but I thank the Minister for continuing to meet Members of your Lordships’ House. I and others spent a great deal of time last week working through every possibility of tabling another amendment to send this dreadful and punitive part of the Bill back to the other place. Unfortunately, because of parliamentary procedure, that was not possible. Placing financial privilege on these amendments means that the other place ultimately has its way, and it is entitled to do that—just as we were entitled and absolutely right to ask the Commons to think again.

As a Chamber appointed because of our expertise in areas such as this, we know and understand the impact this Bill will have, even if no formal impact assessment was carried out. I apologise to the people affected by this Bill that, at this point, we could not do any more. This may be the end of the legislative process, but it is the start of the negative impact the Bill will have on thousands of people’s lives. It may be seen as a victory in terms of voting numbers in another place, but we cannot forget that there are many disabled people who will lose out. That may be realised only when the letters come flooding in.

--- Later in debate ---

[Lord Freud]

I thank noble Lords for their contributions. I reiterate that we are committed to working with interested Peers to improve the existing guidance around the progressive conditions and the reassessment. I share the aim of getting greater awareness among people suffering from these conditions—that is awareness in the jobcentre and the disability charities, and with claimants. I have asked officials to set up a meeting with that group of Peers on that work as soon as diaries can be juggled together—soon.

I pay tribute, along with other Peers, to the group of Cross-Bench Peers who have argued so passionately against the changes that we are introducing in ESA WRAG and the universal credit limited capability for work provisions. I refer, of course, to the noble Lord, Lord Low, and the noble Baronesses, Lady Campbell, Lady Grey-Thompson and Lady Meacher. I assure them that we have heard what they said and that those concerns will be right at the forefront of our minds—certainly of my mind—as we work with ministerial colleagues to finalise the White Paper.

--- Later in debate ---

[Baroness Meacher]

The Minister says that some of this information cannot be given away. Obviously, you cannot give away any personal information. However, if, for example, the suicide rate in that group is 10% or 20% higher in the year after the introduction of this cut than in the year before, it should be perfectly possible to make that information public, and surely it would be highly significant. If the department could issue that sort of figure, I would be very grateful.

[Lord Freud]

We have recently produced a large analysis on this, which I will send to the noble Baroness. That analysis makes it absolutely clear that you cannot make these causal links between the likelihood of dying—however you die—and the fact that someone is claiming benefit. As I say, I will send that analysis to the noble Baroness but I wanted to make that absolutely clear now rather than set hares running.

As regards the point made by the noble Lord, Lord McKenzie, the Secretary of State has been absolutely clear that the impact assessments that we have used provide the most robust analysis that is available. The White Paper will touch on many issues related to health, disability and work, and will cover a lot of new ground which we have not had the chance to debate in the context of these provisions. I commit to taking on board views directly from the group, as a number of noble Lords have requested. We will seek those views, and value them, as we aim to get better outcomes for disabled people and those with health conditions. Therefore, I hope that noble Lords agree that in the context that we are talking about there is no need to test the opinion of the House on this matter. I beg to move.

Motion A agreed.

Moved by

[Lord Freud]

That this House do not insist on its Amendments 9B and 9C, to which the Commons have disagreed for their Reason 9D.

9: Clause 14, leave out Clause 14.

Housing: Underoccupancy Charge

Lord Freud Excerpts

Wednesday 2nd March 2016 Lords Chamber

[Baroness Sherlock]

To ask Her Majesty’s Government what steps they are taking to protect disabled people and victims of domestic violence from the effects of the under-occupancy charge.

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

We have already taken steps to protect disabled people and victims of domestic violence by providing local authorities with £560 million in discretionary housing payment funding since 2011. A further £870 million of discretionary housing payment will be provided over the next five years, which will allow local authorities to make long-term or indefinite awards so that people in difficult situations such as these are protected.

[Baroness Sherlock (Lab)]

I thank the Minister for that Answer. The Government are spending a quarter of a million pounds appealing two bedroom-tax cases in the Supreme Court this week: one from a rape victim who had had a panic room installed by the police and the other from a family caring for their severely disabled grandson. I intuit that the Minister will not want to comment on the cases specifically, but he mentioned discretionary housing payments, which are always the Government’s defence when the bedroom tax comes up. But the Government’s own evaluation found that a third of people hit by the bedroom tax did not even know that the payments existed. Can the Minister tell the House what he is doing to improve the situation for disabled people and rape victims and how people will know about the discretionary housing payments?

[Lord Freud]

To start with, roughly 40% of people knew about the discretionary housing payments—that figure has now increased to 66%, I think. So there is information out there. I thank the noble Baroness for making the point that the Supreme Court is looking at this area right at this moment—today; I am necessarily more circumscribed than normal in some of what I can say on this area in the next few minutes.

[Baroness Thomas of Winchester (LD)]

My Lords, have the Government thought of changing the law so that the partners or spouses of disabled people who are also their carers would be eligible to have the spare room—which is often needed for very bulky items such as hoists, wheelchairs and so on, as well as a bed—so that the carer, who is the husband, wife or family member, may have what one might call respite sleeping?

[Lord Freud]

The noble Baroness has put her finger on a Supreme Court issue, which I will just have to duck today.

[Lord Wigley (PC)]

My Lords, if it turns out that the funds available to local authorities, which the Minister mentioned, are in fact inadequate to meet the defined needs of disabled people and others who should come within their orbit, will the Government make more funds available?

[Lord Freud]

We keep this under review and, as I said, we have increased the amount quite substantially for the next five-year period. Currently, local authorities have been somewhat underspending and we get a small return of the money that they do not spend. The bulk of local authorities, at the halfway point of the current financial year, have been spending under 50% of their allocation.

[Baroness Lister of Burtersett (Lab)]

My Lords, two-fifths of local authorities whose policies are online make it clear that payment is short term, while nearly a third specify a fixed period for discretionary housing payments. The Minister’s own evaluation report warned that,

“this funding is by its nature short term and offers tenants little certainty over their future”,

which is particularly relevant to disabled people and domestic violence victims. How much longer will the Minister pray in aid discretionary housing payments to justify an unjustifiable policy?

--- Later in debate ---

[Lord Freud]

On the noble Baroness’s first point, we have made it absolutely clear in our guidance that these can be longer-term payments. One thing that we have done by having a five-year settlement is to give local authorities the confidence to make longer-term payments. The guidance in the manual says that,

“it may be more appropriate to make a long term award in cases where a claimant’s circumstances are unlikely to change, and making a short term award will cause them undue distress”.

We have recognised the exact point that the Baroness makes.

[Baroness Hussein-Ece (LD)]

My Lords, is it the case that current regulations allow for an additional bedroom for a disabled adult who requires overnight care but not for a disabled child in a similar situation? If that is the case, is that fair?

[Lord Freud]

I will have to repeat the answer that I gave to the noble Baroness, Lady Thomas.

[The Lord Bishop of St Albans]

Can I take the Minister back to the first question of the noble Baroness, Lady Sherlock, about panic rooms? His answer was that there is information out there but when someone has had a panic room installed through a sanctuary scheme, there is a clearly defined problem. It seems that we need to find some way to make sure that that advice automatically gets to them. Has the Minister considered any way in which we can encourage local authorities to have a duty to give that information about the discretionary housing payments?

[Lord Freud]

The information on this is disseminated. When people are written to, informing them that they are subject to the removal of the spare room subsidy, the information is made available to them on that occasion. Awareness of that is growing.

[Lord Brooke of Alverthorpe (Lab)]

Given the well-known problems in housing with rentals and finding accommodation, have the Government given any thought to extending their policy on the underoccupancy charge to the private sector?

[Lord Freud]

The way that this was introduced was to replicate what happens in the private sector, where the LHA does exactly that: it provides the family with what they require. The removal of the spare room subsidy brings the same system into the social sector as was introduced into the private sector by the very party that the noble Lord sits in.

[Baroness Hollis of Heigham (Lab)]

My Lords, two-thirds of those affected by the bedroom tax have a disability. Will the Minister tell us what proportion of those people affected—the two-thirds—are actually receiving discretionary housing awards? The money does not stretch to them.

[Lord Freud]

I have gone through these figures before. When you look at the numbers of disabled people who are subject to the spare room policy, 63% of the original number were disabled on a DDA basis but, by the time you take it on to the higher rate DLA basis, the figure was down to 17%.