Welfare Reform and Work Bill
Lord Freud Excerpts(8 years, 2 months ago)
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Lord Freud
That this House do not insist on its Amendment 1 to which the Commons have disagreed for their Reason 1A, but do propose Amendments 1B, 1C and 1D in lieu—
“Child poverty
Child poverty: reporting obligation
(1) The Secretary of State must lay before each House of Parliament an annual report on child poverty.
(2) The report must include information on the percentage of children living in households where—
(a) equivalised net income for the financial year is less than 60% of median equivalised net household income for the most recent financial year;
(b) equivalised net income for the financial year is less than 70% of median equivalised net household income for the most recent financial year, and which experience material deprivation;
(c) equivalised net income for the financial year is less than 60% of median equivalised net household income for the financial year beginning 1 April 2010, adjusted in a prescribed manner to take account of changes in the value of money since that year; and
(d) equivalised net income has been less than 60% of median equivalised net household income in at least 3 of the survey years.
(3) For the purposes of subsection (2)(d), the survey years are the calendar year that ends in the financial year addressed in subsection (2)(a) and (b), and the 3 preceding calendar years.”
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, the other House has now considered Lords Amendment 1, which was proposed by the right reverend Prelate the Bishop of Durham, the noble Baroness, Lady Sherlock, and the noble Earl, Lord Listowel. The intention behind that amendment was to insert a new clause into the Bill, which would have increased the measures on which the Secretary of State was required to report annually to include income-based measures. As I have said previously, that amendment has technical faults and would require redrafting to make it work as noble Lords intend but, moving quickly beyond the technical defects in that amendment, I have repeatedly tried to shine a light on the fundamental flaws of the income-based measure.
The “poverty plus a pound” approach that results from measures of this kind led to billions of pounds being invested under the previous Government, with little or no transformational impetus in the life chances of young people. It is widely recognised that the low-income measures can give a misleading picture. For example, in a recession, when average income falls, poverty can appear to be falling too even if living standards have not improved for those at the bottom.
I stress again that low-income measures drive the wrong action, as I have sought to explain throughout the passage of the Bill through this House. Such measures simply focus on treating the symptoms of child poverty, whereas the Government are intent on tackling the root causes such as worklessness and educational failure. It is in these areas where we believe that the right action can make the biggest difference to the lives of disadvantaged children, both now and in the future.
Moving on, it is clear that substantial concerns remain that publication of the statistics on children in low-income families through the Department for Work and Pensions annual HBAI—households below average income—may not continue. This is despite the very clear commitments that the Government have given in both Houses and the protections already in place to safeguard HBAI as a national statistics product.
As I have said previously, I believe that the only difference on this issue between us is the word “statutory”. Given the doubts and concerns that remain about the continued publication of this low-income data, I am able to say that we have listened, we have heard and we are willing to provide further guarantees. Three of the four income measures—including relative low income, combined low income and material deprivation, and absolute low income—are already routinely published in the HBAI publication.
Through the government amendment we are putting forward today, we propose to place a statutory duty on the Secretary of State to publish this information annually. This provision will give the data the additional statutory protection that noble Lords sought. The amendment also places a statutory duty on the Secretary of State to publish new data on children living in persistent low-income households annually. The information will be based on a new data source, and the first figures will be published before the end of the 2016-17 financial year.
However, let me be clear that although we have given full statutory guarantees that this data will be published annually, we will not commit ourselves to laying a report before Parliament on it. This amendment is about providing a further guarantee that information on low income is made available for all to see, every year. Reporting to Parliament on income measures would incentivise government to take the wrong action and would simply continue to incentivise actions, such as direct income transfers, that will not tackle underlying factors.
We need to move on from this unhelpful approach. Resources are finite and it is crucial that the Government prioritise the actions that will make the biggest difference to children. The evidence is clear that this means tackling worklessness and low educational attainment, as set out clearly in our life-chances measures and approach. Any move to report on these low-income measures would divide government’s efforts and undermine this new life-chances strategy. I firmly believe it would not help to bring about the transformative change that we all wish to see.
It is worth talking briefly on one technical point in our amendment. Subsection (3) provides for the absolute low-income measure to be rebased in the data publication. This is vital because over time an absolute low-income measure using a 2010-11 baseline, such as that proposed in Lords Amendment 1, would be likely to become increasingly meaningless due to growth in the economy. As a national statistics product, the data publication already has significant statutory protections, guaranteeing that any rebaselining would be carried out by statisticians following best practice and free of any political influence. I reassure colleagues on this point.
I hope that these proposals will be welcomed in this Chamber. I urge noble Lords not to insist on their amendment and beg to move the Motion on the government amendments in lieu.
Baroness Sherlock (Lab)
My Lords, I welcome this change of heart from the Government, and I thank the Minister for bringing forward his amendment. It is good to know that we can guarantee that in future robust data will continue to be published about the incomes of poor children so that we can see what is happening to child poverty in Britain. I congratulate the right reverend Prelate the Bishop of Durham on his leadership on this issue and, like all other noble Lords, I thank the Child Poverty Action Group and the End Child Poverty coalition for their work. I thank noble Lords who have supported us on this issue through their words and their votes as the Bill has moved through this House.
I regret that we could not persuade the Minister to carry on reporting on child poverty, but I reassure anyone listening outside this House that we will continue to use these data as they are published to hold the Government to account for the consequences of their policies, particularly should those policies contrive to increase the number of poor children in Britain. I fear that I share the view of the right reverend Prelate the Bishop of Durham that it is most likely that that will take place.
I was not going to get into the area of poverty measurement but I have been tempted. I say to the right reverend Prelate the Bishop of Portsmouth that while I have given up sugar for Lent I am not going to give up politics as well, so I hope that he will bear with me for just one moment. Since the Minister took the opportunity of saying why the Government do not want to be in the business of counting the incomes of poor children, I should say that no one has ever felt that it was just about money—but it is not not about money. I am still proud that the last Labour Government lifted 1 million children out of poverty. The Minister may not think that income transfers make that much difference but they really do to the families involved. Labour tried very hard not to focus on tipping people over some imaginary poverty line. Instead it invested child tax credits for all families; it put in place the New Deal to help parents into work; it created tax credits so they could afford to take their jobs; it gave them childcare so that women could afford to go out to work; and it created Sure Start to ensure that the children developed. Therefore I fully support his agenda to look at poverty across the piece. The right reverend Prelate the Bishop of Durham did a nice job of explaining the different kinds of poverty and wealth. However, in the end, if you cannot afford to feed your kids, money matters. I apologise to the right reverend Prelate but now I am back on track.
The particularly important thing about these data coming out is that there is very strong evidence of the scarring effects of living for a period of time on low income in childhood and what that does to children’s life chances. Therefore I hope that as the Government publish the data, because the data will then be available to them they will also influence policy-making. However, given all of that, the House of Lords has done itself proud; I am grateful to have been part of a process during the passage of the Bill where the House of Lords has been able to scrutinise the evidence and the Minister has been willing to listen. I thank all noble Lords and I thank him. I am grateful for this concession, which is important, and we are pleased to support the Motion.
Lord Freud
My Lords, I thank noble Lords for their contributions and thank the right reverend Prelate the Bishop of Durham, who led in this area. I will make just one or two short points. In response to the noble Lord, Lord Kirkwood, I remind him that the forecasts of what happens to this measure of relative income are notoriously difficult to get right. I have been in this House on several occasions when there have been dire warnings that child poverty is about to go up over the next two years, but when you get to the figures two years later, it has not happened. I therefore hate having to defend myself against things that do not happen—it is bad enough having to defend myself against things that happen.
We have had a very useful debate on this area in this House. The point is that the debate succeeded in unpicking the concerns that noble Lords had, which is why we were able to find common ground. We are not in agreement in this area in our approach but we have found common ground here, and I hope both sides will be able to live with this amendment. However, I want to give some reassurance. One of the reasons we have brought forward this amendment is because we wanted to reassure the House and other people around the country that we take this whole issue seriously—that we have an agenda and we want to do something about this. We did not want to leave this issue with the impression that we were not taking it seriously. I can agree with the noble Baroness, Lady Sherlock, that I am convinced, as she is, that the publication of the HBAI will not go by without comment by someone on each occasion.
I will pick up on the point made by the right reverend Prelate the Bishop of Portsmouth, although I need to give him a two-handed answer. As I said when we went through this, we have separate arrangements—a specific set of payments—for bereavement. However, on domestic violence, which we dealt with specifically when we discussed it earlier, the right reverend Prelate has made reasoned arguments; I repeat my acknowledgement that this will remain an area of interest, at least for them, and anticipate the natural corollary of that. With those few words, I urge noble Lords to agree to the Motion.
Lord Freud
Moved by
That this House do not insist on its Amendment 8, to which the Commons have disagreed for their Reason 8A.
Lord Freud
My Lords, I will also cover Motion C and we will be able to take the issue in the round rather than have separate debates.
Since we last met, the other place has of course considered the amendments passed in this place to remove the changes to the ESA work-related activity component and the universal credit limited capability for work element. In both cases, there was a clear vote to reinstate the clauses. In addition, the Speaker in the other place ruled that these changes attract financial privilege.
However, a lot of specific, useful points were made by noble Lords during our debate and I would like to provide an assurance that I have listened to their concerns. I aim to address some of the unintended consequences of these measures and to announce how we propose to address some of the specific issues that noble Lords raised. I touched on some of them in a letter that I sent to the noble Lords who spoke during the debate but I will go through them in greater detail now.
The noble Lord, Lord Low, among others, spoke eloquently about the effect that these changes might have on people’s ability to engage in work-related activity, citing the extra costs that can arise from activities such as attending interviews and training courses, and accessing the internet to look for and apply for jobs. We are responding to that concern. We announced in the summer Budget a sum of £60 million per year rising to £100 million per year for practical employment support, but I can announce today that we plan to provide additional funding of £15 million in the first year, 2017-18, directed at the local jobcentre flexible support fund. This money will increase the fund by 22% and it will be set aside specifically for those with limited capability for work. The flexible support fund is used by district managers and work coaches to provide the local support that our claimants may need to return to work, and it has proved to be very effective.
We will also provide guidance to ensure that jobcentres target this additional money at claimants with limited capability for work. The fund will be used to help those affected by the changes to the ESA WRAC and the UC limited capability for work element to attend training courses on gaining practical skills, access mental health support, attend community projects or take part in motivational courses.
The noble Baroness, Lady Meacher, raised the possible impact of these changes on people with progressive conditions. Indeed, several noble Lords expressed real concern on this issue. I have had a very close look at this. I assure noble Lords that we are committed to ensuring that all claimants receiving ESA or UC due to a health condition are subject to appropriate conditionality, based on the way that their condition limits their ability to function. For some people with progressive conditions, this will be the WRAG; for others, it will be the support group.
While the department already offers reassessments to claimants who feel that their condition has deteriorated, I am aware that we can and should do more to make claimants aware of this. To this end, I am committing to improving the awareness of this option to claimants with progressive diseases, as well as the guidance for claimants and disability charities on reassessments. We will also provide training for jobcentre staff to ensure that they are aware that they may need to talk to claimants with deteriorating conditions about requesting a reassessment. This is not an easy area. It is an operational area, and I have told noble Lords who are interested in it that we will work with them and other stakeholders to make sure that we get the guidance and processes absolutely right.
Lord Freud
I start by thanking noble Lords for their contributions. Clearly, many of them feel very strongly on this issue and they have expressed that.
I was struck by the noble Lord, Lord Kirkwood, saying that this was merely an amendment to ask for extra time. However, the point that I tried to make was that the time being asked for was very substantial—as the noble Baroness, Lady Meacher, accepted, we are talking about the way this is constructed—pushing this measure out to 2021. The noble Lord, Lord Low, rather gave it away when he said that the concessions—the practical concessions I am trying to deliver to the House, and to the people who need them to help with their particular circumstances—were not enough, and that he would therefore bring forward this amendment to drive at the whole structure of the Government’s proposal. The noble Lord said that this amendment is a compromise, but in practice it is not, because it would mean that these measures could not go forward. Research has to happen, which we could not therefore do to any reasonable timescale.
There may be compromises—I have found three—but this is not a compromise. Although I am sure that this is not the noble Lord’s intention, his amendments effectively wreck this policy, for those reasons. I argue that that is not something this House is here to do, given the very clear message that was sent. This House sent this measure back to the other place, and it has come back with financial privilege. If the noble Lord’s amendment is carried, we will be sending this measure back with just as many costs—I gave an illustration of those—as were involved the first time. I know that a lot of noble Lords will feel pretty uncomfortable with that process. I accept that many noble Lords do not like this measure, but we are beyond that position now: we are into the question of the appropriate position of this House, in the context of a very substantial vote for the measure’s coming back.
Let me deal with some of the points that noble Lords have made. I point out to the noble Baroness, Lady Manzoor, that there is evidence that financial incentives do work in this area, and I have quoted those in the past.
Baroness Meacher
My understanding is that the evidence is all about able-bodied people, not disabled people, and that is a crucial difference. Disabled people are a different issue.
Lord Freud
Disability benefits was dealt with in a paper by Barr et al, published by the Journal of Epidemiology & Community Health in 2010, and there are some others.
People in the WRAG are not incapable of working: they have limited capability to work. That is the distinction—the tier down—from those in the support group. The noble Baronesses, Lady Campbell, and Lady Grey-Thompson, made the point about the barriers that exist. I accept that people face barriers to work in this category. One of the things we are focusing on in the White Paper, and which we will spend a lot of time on in future, is dealing with these barriers, because this Government are committed to halving the gap.
Meanwhile, the flexible support fund is designed to go to the work coaches. However, to pick up on the questions of the noble Baroness, Lady Thomas, this depends on whether it is in relation to ESA or UC. Within UC the work coach maintains the relationship right the way through regardless of the health status or employment status of the person. That is where we will focus our attention and, clearly, because there is a relationship with a work coach, the money will be available directly to support such people.
As to the point made by the noble Baroness, Lady Manzoor, on progressive conditions and reassessment, I thought that this was a legislative issue and I was considering how to sort it out. However, it is not a legislative issue but a communications and operational issue. That is why the approach I have taken is to work with some Members of this House and stakeholders to get the system working. It is important. Sometimes people who have Parkinson’s are fine at the beginning and go about their lives, but then it gets worse. So being labelled with a particular illness does not mean that you should be at the top rate but, if you take a downward move, it is vital that you are straight in. We need to look at the processes for that and I have committed to doing so.
As to mental health conditions, which many people have talked about, the most frightening single statistic about our system of welfare support is that 42%, I think the figure is—I am speaking without a note—of people go into ESA with mental health reasons as the primary indicator. Once they have been on ESA for a year, that figure has moved up to 68%. We have turned the system round. Work is part of the solution. Leaving people sitting at home is the worst possible thing we can do for them. The whole of our welfare system has been wrongly directed at that kind of projection and we are moving the system round to stop that—
Lord Freud
It is true. We will debate it elsewhere.
The noble Baroness, Lady Thomas, asked who will do all this. We are developing a system we call universal support under which we join with local authorities to support people with particular barriers. We have never had this kind of system before. We have had systems where individual problems are addressed but no one has tried to sort out people’s problems in their entirety. We have now found a way of doing this. Through district partnerships with local authorities we are trying to make sure that people’s problems are addressed. We have a relatively narrow position at the moment—we are considering budget and digital issues—but it is a potent position and it is likely that we will pursue it.
The noble Baroness, Lady Campbell, referred to the Select Committee’s recommendations on barriers. We have already announced that we will replace both the work choice and the work programmes with the work and health programme.
The noble Lord, Lord McKenzie, showed his usual mathematical skills, but he got the wrong denominator. That is because £15 million is quite a lot of money in a flow measure in the first year, and I can assure him that he need not multiply it by everyone in the group because we are looking only at the flow. There is no impact on the work capability assessment of doing permitted work; it is a functional assessment.
Perhaps I may recap the commitments we have given and which noble Lords have generously pointed to. We have put an extra £15 million into the jobcentre flexible support fund, a rise of 22% that will go straight to the right people. We have removed the 52-week limit on permitted work in ESA. We have set in train a way of protecting people with progressive conditions to make sure that they have a rapid route into the support group when they need it. We have also made a number of commitments and changes to the Bill as it has gone through, and I thank noble Lords for their help in focusing on where those changes were needed. We have taken on the DPRRC recommendations. We have amendments to bring in exemptions to the benefit cap for people in receipt of carer’s allowance and guardian’s allowance. We have exemptions to the measures limiting support to two children in child tax credit and universal credit for kinship carers and sibling group adoptions. We have agreed a year-long exception for all supported accommodation from the rent reduction measures and we have placed a statutory duty on the Secretary of State to publish income measures annually. We have really gone through the Bill with the help of Peers around the House to get it right.
I shall return to the amendments at hand. I hope that the Government have made a strong case not to accept them because they do not work as intended. We have already had the original amendments returned with a ruling of financial privilege. I hope that the House takes the relationship between this House and the other place seriously and gets its judgment right.
Lord Freud
That this House do not insist on its Amendment 9, to which the Commons have disagreed for their Reason 9A.
Lord Freud
That this House do not insist on its Amendment 34 and do agree with the Commons in their Amendment 34A in lieu.
“(a) in a case where the maximum amount applying under regulations under section 26 or Part 1 of Schedule 2 is determined on a basis that treats an amount, or a description of an amount, payable by way of service charge as part of the rent payable, includes a reference to an amount, or an amount of that description, payable by way of service charge,
(b) in a case where section 21 applies after regulations under section 26 have, or Part 1 of Schedule 2 has, applied a maximum amount determined on a basis that treats an amount, or a description of an amount, payable by way of service charge as part of the rent payable, includes a reference to an amount, or an amount of that description, payable by way of service charge,
(c) in a case not falling within paragraph (a) or (b) where, under the terms of the lease or agreement, an amount, or a description of an amount, payable by way of service charge is part of the rent payable, includes a reference to an amount, or an amount of that description, payable by way of service charge, and
(d) in any other case,”
“(4A) Regulations made by the Secretary of State may specify cases in which a reference in the social housing rent provisions to an amount of rent payable to a registered provider includes, or does not include, a reference to—
(a) an amount payable by way of service charge, or
(b) an amount payable by way of service charge that is of a description specified in the regulations.
(4B) Regulations under subsection (4A) may, in particular, make provision by reference to—
(a) guidance with respect to the principles upon which levels of rent should be determined issued by the Housing Corporation under section 36 of the Housing Act 1996;
(b) a standard set under section 193(1) of the Housing and Regeneration Act 2008 that includes provision under section 193(2)(c) (rules about levels of rent);
(c) a standard set under section 194(2A) of the Housing and Regeneration Act 2008 (the power of the regulator to set standards relating to levels of rent) that was published by the regulator before 8 July 2015;
(d) guidance relating to levels of rent issued by the regulator before 8 July 2015 (including guidance issued before 1 April 2012);
(e) guidance relating to levels of rent for social housing issued by the Secretary of State before 8 July 2015.
(4C) Regulations under this section must be made by statutory instrument.
(4D) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”
Lord Freud
My Lords, at Third Reading earlier this month, I informed the House that we had received representations from providers and the regulator for social housing about an unintended consequence of one of the government amendments we brought forward on Report. That amendment sought to enable continuation of existing policy on affordable rents and service charges which we had intended to be helpful. I said at the time that we would seek to address this issue by tabling an amendment in lieu when the Bill returned to the other place, and this Motion is the result of doing that.
In speaking to the Motion, I find myself reminded of Alexander Pope’s popular quotation, “To err is human”, but that would give noble Lords the chance to be divine in their forgiveness, which is clearly unacceptable. Perhaps it is more appropriate to quote William Hickson, the proprietor of the Westminster Review, who is credited with popularising the proverb:
“’Tis a lesson you should heed:
Try, try, try again.
If at first you don’t succeed,
Try, try, try again”.
I hope that I have now removed the opportunity for noble Lords to make jokes at my expense, but I doubt it.
I will outline briefly why the change is needed. The providers have told us that the drafting of the original amendment would inadvertently bring service charges within rent reduction measures for some standard social rent housing. This is because, although providers are entitled, under existing guidance, to charge service charges on top of formula rent, this has been implemented by providers in different ways. For example, some landlords of formula social rented housing reserve service charges as part of rent for purposes of enforcement in relation to non-payment of service charge. As a result, the service charge, even if it is separately itemised—and it is not always—forms part of gross rent and is captured by the provision. In such cases, service charge is part of rent and the entirety of the sum would be captured. This would result in a larger reduction in revenue for the providers than expected. We understand that these practices, while not general, are sufficiently widespread to be a problem for the sector. This was not our intention and we thank providers and the regulator for drawing it to our attention.
Given that this is a complex area, the amendment sets out a new regulation-making power instead, rather than setting the position out in the Bill itself. This will allow flexibility for further adjustments if they are ever needed. Regulations made under these powers would do two things. First, they would identify the cases where the social rent reduction limits being imposed by the Bill would limit both the amount of rent and the amount of service charge payable by tenants. This would apply to most affordable rented housing, where the rent is set using a percentage of market rent principle. Secondly, they would identify the cases where only rent is to be limited by the 1% per annum reduction policy. These are cases where rent is determined by a formula social rent approach. This is all standard social rented housing and that minority of affordable rented housing where rents are set by reference to the formula social rent model.
I regret the need for this late amendment. I am grateful to the housing sector for bringing this issue to light. I hope, with the explanation I have given and on the basis that the new provision will help providers, your Lordships will feel able to support the Motion. I beg to move.
Lord McKenzie of Luton
My Lords, as the Minister has anticipated, we have a sense of déjà vu on this drafting. We have lost count of the number of amendments and changes the Government have made to their own legislation. Again, the Commons are disagreeing with an amendment that the Government themselves laid in your Lordships’ House and replacing it with an alternative. So confident are they now that they will get it right on this occasion that they have decided to address the point at hand in regulations.
However, the substantive point is serious and it is important that the legislation is right. It is understood that the issue is to properly identify those cases where the 1% per annum reduction will apply to only the rent and to where it will apply to rents and the amount of the service charge. The former will apply to rents determined by a formula social rent approach; the latter to what is known as affordable rents, which are determined on a percentage of market value. It is understood that the sector is content with this differentiation—the Minister has confirmed that—and so are we. We look forward to the regulations in due course. There will, doubtless, be various iterations of them.
Lord Freud
I thank the noble Lord, Lord McKenzie, for being merciful in his remarks. As I said at the start of this brief debate, this Motion has been tabled as a result of representations made by the providers—I confirm that again—and the regulator. We welcome their input, as the noble Lord does. I urge noble Lords to support this Motion.
Welfare Reform and Work Bill
Lord Freud Excerpts(8 years, 3 months ago)
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Lord Freud
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I will first speak to Amendments 1 and 2, which seek to pave the way for the introduction of an exemption from the benefit cap for all households where a member receives carer’s allowance or guardian’s allowance. We will bring forward regulations to give effect to these exemptions later this year. The exemption will mean that households where someone receives carer’s allowance or guardian’s allowance will be exempt from the cap. For carer’s allowance, this means that the claimant’s household will be exempt from the effect of the cap regardless of whether the cared-for person is part of that household or not.
Providing an exemption from the cap where a member of the household receives carer’s allowance fits within the wider government strategy to do more to support and invest in carers. Both carers and carers’ organisations have welcomed this change, with Carers UK, one of many organisations that work tirelessly to support the needs of carers, describing it as “fantastic news”.
Following the eloquent arguments on guardian’s allowance put forward by the noble Baroness, Lady Hollis, on 25 January, I said during the debate on Report on 27 January that this was an issue I wanted to explore further. Having considered the issue carefully, I can now confirm that we intend to exempt all households in receipt of guardian’s allowance from the benefit cap.
Guardian’s allowance is paid to someone who is bringing up a child whose parents have died, or in cases where one parent has died and the other parent cannot look after the child, for example where the other parent is untraceable, unknown or serving a long prison term. As noble Lords will appreciate, this is a very difficult time both for the guardian and for their family, who are not only dealing with their own grief over the loss of a family member or friend, but also helping a bereaved and possibly distressed child come to terms with their loss while settling them into a new family home.
By tabling this amendment we are leading the way for the introduction of an exemption, and we will bring forward regulations to give effect to that later this year. An exemption from the cap emphasises that the Government both recognise the difficult circumstances these families face and strongly value the role of guardians in enabling vulnerable and bereaved children to continue living with their relatives or close family friends.
Amendment 3, as I explained on Report on 25 January, was tabled in response to a recommendation by the Delegated Powers and Regulatory Reform Committee that regulations made under the powers introduced by Clauses 8 and 9 should be submitted to the Social Security Advisory Committee for consideration. We have decided to accept the committee’s recommendation in part.
During the debate on 25 January, the noble Baroness, Lady Sherlock, asked for a clarification of what regulations might be available to be sent to SSAC, as well as an explanation of why the Government do not think that the level of the cap should be referred to SSAC. I will explain that now. But before I do, I should like to put on record the fact that the Government greatly value the role that SSAC undertakes in providing impartial advice on social security and related matters. This is why consultation with SSAC may extend to cover regulations relating to the key features of the benefit cap policy. For example, we would discuss with SSAC any proposed changes to the grace period or exemption criteria, the introduction of new disregards, or changes to which level of the cap applies to the different household types.
Regulations relating solely to changes in the level of the cap are not included in this amendment. Changes in the level of the cap require a broad assessment of the most significant long-term developments and trends that might affect our economy and are important to households up and down the country. Factors such as inflation, benefit rates, the strength of the labour market, and any other matters that may be crucial and relevant at that time, need to be considered. This is why we have maintained throughout that it is important to allow the Secretary of State the ability to consider the context of the cap in a broad and balanced way. Maintaining this approach means that the Government can respond quickly in the light of any significant economic events that occur unexpectedly but will have long-term consequences for the national economy, and can take steps to adjust the cap level accordingly.
Equally importantly, let us not forget that any changes to the level of the cap are subject to the affirmative procedure, as agreed on Report on 25 January, when government amendments to that effect were accepted. So noble Lords will have the opportunity to ask the Government to explain any changes in the level of the cap before voting to accept those changes. I believe this approach substantially addresses the committee’s recommendation, but also enables the Secretary of State to respond to economic circumstances by considering a broad range of factors when considering the cap level.
Amendment 4 is a consequence of Amendment 3. Its purpose is to make clear that the new clause inserted by Amendment 3, which brings regulations under the benefit cap provisions within the remit of SSAC, extends to England and Wales, and Scotland.
As we draw to the end of debate on the benefit cap clauses, may I take this opportunity not just to thank noble Lords for their contributions on this subject, but to focus on the fact that they have helped to ensure that the work incentive principles of the cap are fairly balanced with that of protecting the most vulnerable. We will bring forward new exemptions for those in receipt of carer’s allowance and guardian’s allowance, and, as I have said, we have increased the level of parliamentary scrutiny by extending the affirmative provisions for any change to the cap level in the future.
Subject to the will of Parliament, the department will now press on with implementing these changes, and will continue to work closely with local authority partners. In spring, after Royal Assent, we will notify households that may be capped at the lower level and advise them of the support available to move into employment, as well as budgeting and housing support that they can access. This will give households several months to take up any support they might need and prepare for the new cap coming in from the autumn. I beg to move.
Lord Freud
I thank noble Lords very much for the lack of vituperation all round, which is deeply appreciated, and for their thoughtful speeches, although I think that this debate has been thoughtful all the way through the different stages. I have appreciated very much what noble Lords have said.
Let me try to answer some of the specific questions. The noble Baroness, Lady Pitkeathley, had forensic queries about the underlying entitlement. As she understands, that is quite complicated. We will go through these issues carefully and bring forward the regulations that allow us to frame the required exemptions, but I make it absolutely clear that our intention is that the exemptions should cover all the carer’s allowance underlying entitlement group, caring for at least 35 hours a week, and equivalent groups in universal credit. I hope that I have satisfied her on that. I confirm also that we will amend housing benefit and universal credit regulations in line, so I think that I have answered affirmatively—indeed, I always answer the noble Baroness affirmatively, as the House has now noticed.
Let me pick up the specific questions put by the noble Baroness, Lady Sherlock, on the two-child policy, when she skilfully asked me to make huge commitments. On the regulations and sight of them, I hope she will take this in the spirit in which I am presenting it. This will be a rather transparent process. The regulations are not straightforward. They are very sensitive in some areas and we will be working with stakeholders to get them right. I am not talking about an overly formalised consultation process, but I am talking about a transparent process—much more open than you will see with some of the other regulations. I hope that that satisfies her. I will allow her the indulgence of accusing me of not honouring the spirit of what I have said if she thinks I have not.
On the sibling group question—the sequential question—clearly, our intention is that sibling groups are kept together. As we draft the exemption we need to work with stakeholders and colleagues to get this exactly right because it is quite complicated. We will take the point made by the noble Baroness absolutely on board.
I think I ought to write to the noble Lord, Lord Kirkwood on the SSAC’s powers, which are rather wide. As the noble Lord knows better than anyone else, there is the power to have independent reviews, but I shall put in writing the exact status of what it can and cannot look at, so that others are able to see it. I can tell the noble Baroness, Lady Howarth, that our approach has been that it is not fair to treat parents adopting a child more advantageously than other parents, but we recognise the value of having sibling groups together. That is where we have concentrated our exemption.
I hear the point about domestic violence from the noble Baroness, Lady Manzoor. We have a series of measures to support victims who flee violent households, and I will write to her, laying out what those are. I am in absolutely no doubt that, as we get closer to defining the regulations, this is an issue to which various Members of this House will want to come back. I have probably said all that I can at this time on that. I beg to move.
Lord Freud
Lord Freud
“Benefit cap: Social Security Advisory Committee
(1) In section 170 of the Social Security Administration Act 1992 (Social Security Advisory Committee), in subsection (5)—
(a) in the definition of “the relevant enactments”, after paragraph (al) insert—“(ala) sections 96 to 97 of that Act;”;(b) in the definition of “the relevant Northern Ireland enactments”, after paragraph (al) insert—“(ala) any provisions in Northern Ireland which correspond to sections 96 to 97 of that Act;”.(2) In Schedule 7 to the Social Security Administration Act 1992 (regulations not requiring prior submission), in Part 1 (Social Security Advisory Committee), after paragraph 3 insert—
“Benefit cap3A Regulations under section 96A of the Welfare Reform Act 2012.””
Lord Freud
Lord Freud
(a) the amount that would be found under sub-paragraph (4)(a) if sub-paragraph (4)(a)(iii) were disregarded, and(b) the amount that would be found under sub-paragraph (4)(b) if the period in question were the whole of the relevant year in which the tenancy begins,”
Lord Freud
My Lords, the amendment to paragraph 3(5) of Schedule 2 is to address ambiguity in the drafting and clarify that, in a case where the tenancy begins after the beginning of the first relevant year but not at the beginning of the second or third relevant year, the rent should be calculated in the following relevant year. The amendment also removes a redundant cross-reference to paragraph 3(2), which is a drafting error we had regrettably not spotted previously.
I would like to inform the House that a number of social housing providers have alerted us to an unintended consequence of the government amendment brought forward on Report, which sought to enable continuation of existing policy that affordable rents are inclusive of service charge when determined on the percentage of market rent principle, but exclusive of service charge when determined on the social rent model. We have looked at this and agree there is an issue in the drafting that we need to address. The Government will therefore be seeking to do so during Commons consideration of Lords amendments. I thank the providers who raised that issue with us, and apologise to the House that this has come up at such a late stage, and that we are dealing with it in this way.
The Bill returns to the other place without the proposed changes to the ESA WRAG, and the limited capability for work element in universal credit. It also now places a requirement on the Government to publish and report on income measures of child poverty. In sending these amendments back, the Cross-Benchers, in particular, have sent a clear message and I will say only this: there will now be a process between the two Houses, as is conventional. We have discussed many other matters during the passage of the Bill. Many of them are important and we will continue to reflect on them and seek to obtain the best outcomes we can. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for his explanation of Amendment 5. It makes the drafting of this area somewhat less impenetrable. I was going to say that it would be churlish, given the occasion, to point out that this is the third or fourth attempt to get this drafting right but clearly there will need to be a fourth or fifth, from what the Minister has said, and we welcome the point to which he has alerted us.
I take this opportunity to welcome the Minister’s action in deferring the impact of the rent reduction policy for a period and holding back on the local housing allowance. We will have to see where that leads. Of course, this point was pursued rigorously by the noble Lords, Lord Best and Lord Kerslake. My understanding is that this has not necessarily allayed the concerns of providers sufficiently and there is the risk of holding back on some key projects in relation to supported accommodation, which would be a great pity. So I think there is a task for the Government there.
With regard to the amendments that go back with the Bill to the other place, all we can do is urge the Minister to send it on its way with his wholehearted support.
Lord Freud
I hear what the noble Lord, Lord Low, has asked for—a meeting on this matter. Of course I would be pleased to meet him, and other colleagues, to discuss this as it wends its way back to the Commons, and perhaps back to us, depending on what happens.
May I take this opportunity to place on formal record my thanks to noble Lords throughout the House? They have discharged their duties to look at the Bill really conscientiously, and have worked hard on some difficult and sensitive issues. They have brought out some unintended consequences, and they have described them and expressed their case in calm, clear language, which means that we can take the points and aim to address them. Indeed, both today and on Report we have tackled some of them.
The Bill has been insulted by one or two noble Lords. I have to reflect back that it has raised some profound issues around what the benefit and welfare system does and how it works. Pinpointing where it affects the most vulnerable and how we can ameliorate that and sort it out has been really valuable.
I thank the Bill team, a handful of whom are in the Box now. They have been formidable in supporting me all the way through the progress of the Bill. I know that they have also been assiduous in briefing noble Lords, because we set up the system, which I have used with previous Bills, whereby there is a briefing ahead of Committee stage, so that when we debate these issues we do not waste time but are able to deal with the issues. The Bill team have done a really good job, and I believe noble Lords think so, too. I am sure I express the view of the whole House in thanking them for all their support.
Baroness Sherlock
May I, on behalf of the Opposition, thank the Minister for giving us access to his officials? I thank the Bill team and some very impressive policy people who have been briefing Peers from all over the House. We appreciate his generosity in giving us access to them, and their expertise and willingness to explain to us patiently—sometimes, if necessary, more than once —precisely how the Bill works. We are grateful for that. They have also been helpful in working with the wonderful Muna Abbas, from our Whips team, who has done a brilliant job in supporting us from this side.
We have not been persuaded by the Minister that this is anything other than a bad Bill—but now, as a result of what this House has done, it is less bad than it was. I pay tribute to Peers throughout the House, who have shown the House of Lords doing what it does best—being a revising Chamber which, even when it does not like legislation, focuses its attention on improving it and sending it back to the other place much better than it was. Long may we do so.
Housing Benefit (Abolition of the Family Premium and Date of Claim Amendment) Regulations 2015
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Lord McKenzie of Luton (Lab)
My Lords, we should be grateful to the noble Lord, Lord Kirkwood, for giving us the opportunity to range over this issue this evening and to the noble Lord, Lord Low, for his very extensive analysis of some of the risks around homelessness that these changes will create. Given the hour and the business to follow, I shall raise one or two brief questions.
On the family premium, the Explanatory Note with the regulations says:
“Removing the Family Premium helps to simplify the overly-complex HB system … and should therefore reduce administration costs”.
Can the Minister seriously tell me how much of a reduction in administration costs is anticipated just from removing this one component of what is and can be quite a complex calculation? It seems to me that it should be built into the system, so whether it is there or removed would make very little difference to the cost.
As for backdating, we have heard the arguments against the Government’s position that effectively we want to get equality with universal credit and if universal credit only needs one month’s backdating why does the housing benefit system need longer? I should have thought that it was recognised—and the noble Lord, Lord Low, has made it clear—that the housing benefit system is more complex. Indeed, is that not one of the boasts of the Government about universal credit, which we have supported—that it is an easier system whether you are in or out of work? You simply move up the scale; you do not have to come off one system of benefits and go on to another, or seek to return to them in due course.
We are in danger of overlooking a fundamental point here—that this is about backdating if there can be shown to be good cause. It is not something that is awarded willy-nilly. There are particular concerns around people with mental health conditions and the extent to which they are supported to make the right sort of decisions and judgments about their claim for benefits. That seems to sweep aside that issue.
There is one technical issue that the Minister may be able to help with. If somebody is awarded JSA after making a claim, they would be entitled to a three-month backdating of that benefit. The award of that benefit could automatically transport somebody on to maximum housing benefit—somebody who was not previously eligible for housing benefit. So we get somebody on JSA with a three-month backdating, which opens up the opportunity for housing benefit for somebody not previously entitled. There is something in the text that suggests that that backdating would apply to housing benefit as well, but I cannot quite see technically how that comes about. I would be grateful if the Minister could clarify that on the record tonight, because clearly there would be an anomaly with accessing one benefit opening up the opportunity for another benefit and giving rise to different backdating results, as a result particularly of these regulations.
Baroness Sherlock (Lab)
My Lords, I welcome the Minister’s enthusiasm to respond to the challenges put to him, but I regret that I am going to add to them, if he can bear with us for a little bit longer. I, too, thank the noble Lord, Lord Kirkwood, for giving us the opportunity to debate these regulations and for having gone into some detail about the process questions. I very much share his concerns. We have concerns of substance on these Benches, but the process should be of concern to all Members of the House, irrespective of the view that they may take on these regulations. I hope that the Minister gives some satisfactory answers on that.
As we have heard, these regulations do two things: they remove the family premium from claims to housing benefit from April 2016 and the backdating of housing benefit, to which I shall come in a moment. Existing claimants will also be affected if their circumstances change, such as if they move or if a child reaches the age of 18. When it is lost, it will be lost almost exclusively to working families, because households where someone is claiming an out-of-work benefit will automatically receive the maximum possible housing benefit payment. The Social Security Advisory Committee report cited an example from the Peabody Trust of a single parent in part-time work, caring for her disabled adult son. Should she need to make a new claim for housing benefit following the removal of the family premium, she would lose around £572 a year, compared to what she would get currently—a lot of money for someone in those circumstances.
My noble friend Lord McKenzie asked a very good question about the admin costs. It is hard to believe that simplification is the reason; one could always simplify benefits by abolishing them. We really have to have better arguments than that.
The DWP claims that withdrawing the family premium in HB will “promote better work incentives”, but, as the SSAC points out, some HB claimants will permanently lose the premium if they temporarily increase their hours and therefore could be deterred from doing so. Equally, some will be deterred from moving address to secure or look for work if it means a drop in HB, or could be discouraged from taking short-term work over Christmas, for example, if it means a drop in housing benefit. Will the Minister comment on that?
The SSAC was also very critical of the Government’s refusal to adopt linking rules. It gives the very serious example of domestic violence victims who need to be rehoused and points out that if somebody moves outside a local authority area, they lose the entitlement. The SSAC points out that some local authorities and social landlords have a deliberate policy of moving domestic violence victims to a different local authority area to minimise the risk that they would run into their assailant and to protect them. It states:
“Those organisations now face a fairly stark choice in terms of whether to keep the existing policy in the knowledge that the victim is likely to be financially worse off, or to rehome them within the existing local authority area where they may be at greater risk”.
The Government’s only response to this is to say:
“Since 2010 our policy has been to move away from building new linking into our reforms to Housing Benefit”.
That is not a reason. That is basically saying “The reason for our policy is that it is our policy”. I hope the Minister can give us the reason behind the policy rather than telling us that it is the policy. The Government go on to say that they do not think linking rules are the most appropriate way of supporting vulnerable cases, but they do not explain why. The only alternative they can offer is our old friend the discretionary housing payment, which has already been offered as an answer to almost every problem created by welfare change since 2010, from the fallout of the welfare Bill to the benefit cap.
The SSAC also points out that universal credit will allow linking and continuity of claim where there is a temporary increase in income or relocation to another local authority area, but they will not be available under these HB proposals which it says will have a negative impact on work incentives and will raise issues around income stability and security.
I now come to the backdating change which other noble Lords have commented on. A number of NGOs and charities have said that limiting backdating to one month will have a significant impact on vulnerable renters, a point made very clearly by the noble Lord, Lord Low, and my noble friend Lord McKenzie. As we have heard, the SSAC recommended that the Government should not proceed with the reduction from six months to one month. It is interesting that the committee expressed disappointment at the lack of proper consultation with local authorities, landlords and voluntary and charitable bodies which will be impacted by these changes. I hope the Minister can explain why that consultation was not done.
The SSAC’s view is that the position faced by HB legacy claimants, especially the more vulnerable, is substantially different and more challenging than the position following migration to universal credit. It pointed out that in the absence of a robust impact assessment the case for simple alignment was not there.
The response from the Government to the SSAC report was so slight as to be almost rude. Their only argument is to say that the policy intention is to align the housing benefit treatment with that in universal credit. Where is the rush? As the noble Lord, Lord Kirkwood, pointed out, it is not as though the entire population is about to land on universal credit. I know that back in November 2010 the DWP believed that everybody would be on it by 2017, but we now know that it is going to be at least 2020, possibly 2021, and maybe some way beyond that. We are years away from everyone needing housing support getting it entirely through universal credit. There could yet be millions of people who could come on to housing benefit, get it, move into work, come off it, come back on to it and still not be on universal credit, so there is a significant issue. I hope the Government will tell us their real reasons. It cannot just be that they want to be in exactly the same position on universal credit and on legacy benefits; otherwise they presumably would not have allowed the situation to develop where two people in identical circumstances, one on tax credits and the other on universal credit, could find themselves with a difference of £3,000 a year in entitlement. Will the Government tell us what the real reasons are?
To summarise I would like the Minister to answer some questions. I will be interested in his response to the process points made by the noble Lord, Lord Kirkwood. He referred to the Minister’s letter of 11 January to the noble Lord, Lord Trefgarne, saying that he had instigated a review of the way the DWP produces explanatory memoranda. Will he tell the House when that review is likely to report? Will its findings be published? If they are not going to be published, how will the House get reassurance that his department will be able to do this job better in the future than it has in the past? Will he tell us why the Government did not consult properly before issuing this instrument? Will he explain the reasons for opposing a linking rule in the family premium? In particular, will he tell us why he has rejected the SSAC recommendation of three months if the Government are not willing to go all the way to six months? I look forward to the Minister’s answers.
Lord Freud
My Lords, I ask noble Lords to forgive me for not keeping up with the exact floating role of the noble Lord, Lord McKenzie, as he moves forward and back on the Benches. I thank all noble Lords for their contributions which, as one would expect, covered a number of issues.
I start with the family premium, which will align housing benefit with universal credit, which does not have this process. As noble Lords will be well aware, it applies to new cases only. It will therefore not affect people in receipt of family premium on 30 April this year. They will continue to receive the family premium until they are no longer responsible for any children or young people under 20 or make a new claim for housing benefit. To avoid people dying at the stake for the sake of these premiums, I remind noble Lords of their very complicated history which started in 1988. With the reform of tax credits, they were removed from income support but not from housing benefit. I know there is a lot of historical nostalgia for bits of the benefit system, but this one reminds me more of an appendix than of anything else: it had a purpose at one time, but it is pretty odd to remember what it was and it can cause you problems, as I am discovering.
On the linking rules, where claimants are in receipt of housing benefit and subsequently move house into a different local authority, they are required to make a new claim for housing benefit. That has always been the case and the policy does not seek to change it. If the claimants were in receipt of the family premium before their move and they move after 30 April, they will no longer receive the family premium in their new housing benefit claim from their new local authority. That responds to the question from the noble Baroness, Lady Sherlock. I know that the noble Baroness likes to stretch out the period for which this will last, but universal credit will be coming in for new cases reasonably soon. It is simply not feasible to introduce linking rules for these cases because that really would introduce a level of complexity and cost.
I regret that I cannot answer the precise question from the noble Lord, Lord McKenzie, on the administration costs saved. When you go through the sums of how you reach that family premium amount and then do the taper with it, and you have to do that differently through every local authority, I have to believe that it genuinely saves some money. However, I cannot put any amount on that.
On the point about work incentives made by the noble Baroness, Lady Sherlock, the loss of family premium would be one factor among many others, including the financial gain and development prospects that would come from entering work. It is important to mention the likely behavioural change that could result from this policy, as the potential reduction in benefit may make claimants more likely to find work or increase their hours. Indeed, you see evidence of that in some of our welfare reforms already.
I turn to the issue of backdating, which noble Lords touched on. This change introduces equality for working-age claimants by aligning housing benefit rules with those in universal credit. Under current rules, as noble Lords have pointed out, the working-age housing benefit claimants may have their claim treated as made from a date up to six months before they actually make the claim. The backdating period will apply from the date of claim and is not dependent on the time that it takes to process claims. Our rationale is that the one month provides a reasonable period to seek assistance or to get claimant affairs in order for those who can demonstrate good reason as to why they did not claim more promptly. While claimants still receive legacy benefits before migration to UC, there is sense in preparing them for the transition to UC by, so far as practicable, equalising how they are treated. The other factor that is useful when we look at this is that our administrative data show that more than two-thirds of backdating claims for housing benefit are awarded for one month or less.
The noble Lords, Lord Kirkwood and Lord Low, asked why we rejected the three-month recommendation —although, interestingly, the numbers between the one-month figure and the three-month figure are actually not very great. We are aiming to change behaviours. If people want to claim benefits, one month allows sufficient time for them to register a claim in the first instance. It does not matter if it is a more complicated process, because the processing and getting the detail does not change the date of entitlement, which is established on the initial claim.
To respond to the noble Lord, Lord McKenzie, who as usual has excruciating detail at his fingertips, I confirm—and I am impressed that he has looked at this—that where a claim for housing benefit is linked to a claim for one of the legacy income-related benefits that applies the three-month backdating rule, entitlement to housing benefit will be linked back for the full three months if it is made within one month of the award for legacy benefit. So he got that spot on.
On the point from the noble Lords, Lord Kirkwood and Lord Low, we do not anticipate pressures on the homelessness front. I am slightly influenced by the fact that every time we make such a change we are warned about that but so far it has not come through.
Lord Low of Dalston
Does the Minister not agree that I gave some concrete and tangible examples where people might be justified in needing to have their claim backdated for longer than a month, through no fault of their own—for example, where forms have gone missing or where they have been sanctioned in error? Would it really mean any skin off the Government’s nose to include an element of flexibility to take account of those cases? If someone has lost a form or they have been sanctioned in error, those are not instances of behaviour that can be changed by limiting the backdating rules to one month.
Lord Freud
I listened very carefully to the noble Lord on those points. My response to that is, if the claim was made on that date and it was lost but it was made then, the issue is whether the bureaucracy accepts the claim that it is lost. The date is established then, and would be established in both of those cases. A lot of the problems may be through legacy benefits, where, as I just explained, the situation has not changed.
DHPs are designed to give additional support to claimants who need it. It is technically possible for DHPs to meet a historic need, although in practice we suspect that it is rather unlikely that a local authority would make this award for that reason, as the regulations state that a claimant should need further financial assistance with housing costs to receive a DHP. As the time period that they are applying for would have passed, it would be difficult to argue that there was a need for financial assistance with housing costs. Therefore it is unlikely but not impossible.
Under-occupancy Charge
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The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I shall repeat in the form of a Statement the Answer given to an Urgent Question in another place.
“We know there are people who need extra support. That is why we are providing local authorities with discretionary housing payment funding. Local authorities are best placed to assess people’s needs in their area and identify where extra support is needed.
We have increased the amount of discretionary housing payment available, and, on top of the £560 million since 2011, we are providing an extra £870 million over the next five years. The people involved in these cases are receiving discretionary housing payments. That is precisely why we have discretionary housing payments, and shows that these are working.
We welcome the fact that the High Court and the Court of Appeal have both ruled that the public sector equality duty has been met in respect to women. Furthermore, we have won a Court of Appeal ruling where the court ruled in our favour on the policy of the spare room subsidy. In that judgment, the court found that discretionary housing payments were an appropriate means of support for those who are vulnerable. So this is a complex area and, in terms of these two latest cases, it is a very narrow ruling.
On these cases, the High Court found in our favour and we fundamentally disagree with yesterday’s Court of Appeal ruling on the ECHR. This is not a case of people losing money, for in these cases they are in receipt of the discretionary housing payments. This is about whether it is possible to define such exemptions or whether direct housing payments through local authorities give the right flexibility to help a wide range of those in need. The Court of Appeal itself has already granted us permission to appeal, and we will be appealing to the Supreme Court”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Answer from the other place. The Court of Appeal ruled against the Government on two bedroom tax cases: one from a victim of rape who had had a panic room installed by the police, and the other from the Rutherford family, who care for their severely disabled grandson. In both cases, the court ruled that the bedroom tax was illegal and discriminatory. However, any relief for the families was short-lived because, astonishingly, Ministers have decided to appeal to the Supreme Court. References to the fact that families may receive the temporary discretionary housing payments from a pot being stretched in ever more directions are nothing but a fig leaf.
I would like to ask the Minister a couple of questions. First, can he confirm that 280 victims of domestic abuse have had a panic room installed under the sanctuary scheme and are affected by the bedroom tax? On the same point, is it true that exempting domestic abuse victims would cost the Government only £200,000 a year? Can he tell the House whether, in the wake of this judgment, the Government will consider withdrawing their appeal and instead taking the right decision of exempting severely disabled children and their families and victims of domestic abuse from the bedroom tax, in which the people of Britain have now completely lost confidence?
Lord Freud
I do not have the figures to which the noble Baroness referred, so I will have to check the figures we have and write to her on that.
Effectively, with this appeal we are joining these two cases to a number of others for the Supreme Court to look at the whole thing in one context. It is, essentially, about whether the discretionary housing payment system is appropriate for handling these particular hard cases, which the High Court has, in practice, accepted as the right way to ameliorate those cases, up to now.
Lord Taylor of Goss Moor (LD)
My Lords, my former colleague, Andrew George, brought forward proposals in the previous Parliament to exempt those who had particular needs for an extra room from the bedroom tax—such as those with disabilities needing a carer—and, indeed, to exempt those who had not been offered suitable alternative accommodation. I have heard what the Minister has said about this case. I do not believe that, outside the Government, anyone believes that the kind of cases that went to appeal are a matter for discretion.
The Minister may say that a wise local authority will exercise its discretion appropriately, but the general public will ask: how can it possibly be a matter for discretion when there is any chance that they might not get that support when they so evidently need the space within their accommodation? Nor do I believe that the public understand why people are penalised when a local authority is unable to offer them suitable alternative accommodation. I say simply to the Minister that I do not believe the Government are doing themselves any service at all in pressing this to the Supreme Court. I have no particular wish to encourage support for the Government but I assume that the Minister would wish to encourage such support, so I really beg him to think again. It is in the interests of all involved. Most of all, I believe that, on this, the Government are not with the people.
Lord Freud
The issue here is that there quite a lot of particular circumstances where one would feel that people should not have the spare room subsidy removed. It is extraordinarily hard to define all those cases. That is why the Government took the decision in 2010-11, when this was introduced, to have this mechanism of a discretionary fund so that the hard cases can be looked after. By and large, that system has been pretty effective in making sure that in those hard cases the people are looked after.
Baroness Young of Old Scone (Lab)
Does the Minister recognise that, since he has said that there are a wide range of circumstances in which the bedroom tax is inappropriate, that may be an indicator of the wider discriminatory nature of this tax? Can he confirm that the most recent evidence is that three-quarters of those hit by the bedroom tax are cutting back on food and only 5% of those hit by the tax have been offered alternative accommodation to allow them to move?
Lord Freud
We discuss this issue regularly in this Chamber and earlier this week, or maybe last week, we went into how many people have come off the bedroom tax. There has been a 16% reduction in the number on the roll—98,000 at the last figure. Many have done so because they have gone into work. Indications are that people are adjusting to this policy.
Lord Phillips of Worth Matravers (CB)
My Lords, is it not the case that each of these cases was given permission to go to the Court of Appeal specifically to enable them to go on to join the other cases in the Supreme Court? In those circumstances, is it not a little harsh to criticise the Government for accepting that invitation?
Lord Freud
Yes, that is precisely the point. As far as we can tell, one reason that the Court of Appeal took this decision was to send the cases to join another set of cases that the Supreme Court will look at in March. The Supreme Court will, therefore, be able to take a view and reach a judgment across the piece on these issues and will do so relatively rapidly. So this is really by way of an interim legal position before we have something more definitive.
Baroness Stedman-Scott (Con)
Can the Minister tell us how many cases the Government have won in relation to this policy?
Lord Freud
So far, we have had 10 cases in the High Court and we have won them all. We have just lost these last two in the Court of Appeal but we have won the five joined appeals in the Court of Appeal and those are the ones that are now going to the Supreme Court. So, until this last judgment, the legal system has accepted that the way that we ameliorate these hard cases using the discretionary housing payment is an appropriate way of providing the protections that I think all of us in this Chamber want to make sure are there.
Baroness Hussein-Ece (LD)
Does the Minister accept that there is a shortage of appropriate housing for some of these social tenants to move into? This has been said repeatedly in this House when we have debated housing, including quite recently—there is a shortage. In those instances, surely it cannot be discretionary. The Minister just said in response to my noble friend that “by and large” these sorts of cases are cropping up. These are very small numbers. Surely the case of someone like Paul Rutherford and his severely disabled grandson, which has gone to appeal, is a deserving one. The Government should show some compassion, rather than spending more of taxpayers’ money fighting against the right for this family to live in peace and look after their disabled grandson.
Lord Freud
When we looked at the surveys on this originally, the figure was that roughly 20% of people might want to downsize in order not to have the subsidy removed. Many have downsized and local councils are stepping up the provision of appropriate housing—one-bedroom or two-bedroom flats—to match demand. So there are signs in the research we have conducted that people are adjusting to this policy.
Lord MacKenzie of Culkein (Lab)
I want to reinforce the point just made that “by and large” is not good enough in these sorts of cases. I cannot see for the life of me how any Government with a shred of decency think that having a panic room to protect vulnerable women in particular can be classed as a spare room. How on earth can the Government seek to appeal that?
Lord Freud
The people in these cases were receiving discretionary housing payments. These are small examples. Our guidance says that local authorities should prioritise these areas and we will reinforce that guidance. As I say, the Supreme Court will be judging this way of ameliorating complex areas. These are two examples. There are quite a lot of hard cases, and it is important that we get to all of them. If you start to define them all in legislation, you end up with a lot of legislation. The issue that the Supreme Court judges will be looking at is whether we are looking after the hard cases in the right way.
Welfare Reform and Work Bill
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Baroness Hollis of Heigham (Lab)
My Lords, I do not want to add to the extremely powerful speeches we have had but I would like to ask the Minister a straightforward question. On Monday, when we discussed the benefit cap, we raised the issue of the guardian’s allowance. As noble Lords who were present at the time will know, the guardian’s allowance goes to those at the very sharp end of kinship care, looking after children who are not just neglected but orphaned and traumatised as a result. That benefit cap obviously interlocks very much with the issues of kinship care. In the light of that, has the Minister been able to think further on the arguments that were put during that debate and reconsider the guardian’s allowance issue? It is a subgroup within kinship care but a few may be affected by a benefit cap, which would have disastrous effects on their capacity to care for some of the most distressed and grieving children society is likely to see.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
I thank the noble Baronesses, noble Lords and right reverend Prelates for their amendments, and all those who contributed to the debate. The amendments all relate to exemptions in certain circumstances from the policy which limits the child element in child tax credit and universal credit to a maximum of two children or qualifying young persons from 6 April 2017. I think we have gone through those exemptions so I will not go through them in the normal way but take them as read.
We have been clear since the summer Budget, when this policy was announced, that we will exempt a third or subsequent child or qualifying young person who is one of a multiple birth where there were previously fewer than two children in the household, and we will exempt a third or subsequent child born as a result of rape. These exemptions will be developed and brought forward in secondary legislation, as subsections of Clauses 11 and 12 permit. We believe that secondary legislation is the right approach for specifying exemptions, to allow for flexibility and engagement with stakeholders. It will be important to get the detail right and we have time to do that before bringing forward regulations for April 2017.
I recognise the deeply felt concern in this House, the other place and more widely about how this exemption will work—something the noble Baroness, Lady Manzoor, pinpointed just now. We all recognise that this is a difficult and sensitive issue and I would like to provide the House with further information. Clearly, we need to establish a way of making this assessment that is sympathetic and responsive to the claimant and timely in determining entitlement to benefit. Our intention is not to focus on or pre-empt criminal justice outcomes but to ensure that mothers receive the help they need at the time they need it, using clear criteria that are straightforward to apply and not overly intrusive, but which secure the system against fraud and error.
While we continue to look at the detail, our thinking is that a third party evidence model offers the most promising approach to striking the balance we need to achieve. This approach would not be new for the benefit system. For example, we use a third party evidence model in universal credit for the temporary relaxation of the requirement to be available for work in cases of domestic violence. The evidence required is the reporting of the abuse to a third party acting in an official capacity, such as a GP or social worker. This model was developed with input from stakeholders.
Of course, a significant amount of work is needed to take forward and develop the detail of the model. I also want development of the model to include working with stakeholders to help ensure that the process is as compassionate and supportive as possible for claimants in these circumstances, while providing the right assurance to government that the additional support is going to those for whom it is intended. We will be getting in touch with organisations with an interest in this policy shortly to seek their input, and I encourage any other stakeholders who would like to be a part of this to let me know. While there is a significant amount of work to do and detailed questions to be answered, I hope this helps reassure the House and stakeholders that we are thinking very carefully about how we respond to this difficult and sensitive issue.
We have been clear since the summer Budget that we will bring forward further exemptions for exceptional circumstances, and we will be doing that today. I am grateful to those who have suggested amendments and contributed to the debate. As a number of noble Lords pointed out, I have been talking to Peers on this matter. We have carefully considered those affected by this policy and the options available, while taking into account the fact that one of our objectives for universal credit is that it will be part of a simpler and workable welfare system that benefits everyone. I know that noble Lords will remember my muttering about adding carbuncles every now and then.
Regardless, I am pleased to announce today that in recognition of the important role which family and close friends can play in caring long term for children who are unable to live with their parents and could otherwise be at risk of entering the care system, we are in favour of an exemption for children in such circumstances. The noble and learned Baroness, Lady Butler-Sloss, and the noble Baronesses, Lady Sherlock, Lady Drake and Lady Armstrong, have made persuasive speeches on this issue not just today but in Committee—so it is worth putting the effort into those speeches. We recognise that in these cases such carers, often referred to as kinship carers, are not in the same position to make choices about the number of children in their family as other parents are. I am grateful that the noble Baroness, Lady Drake, is now taking my distinction there in a positive rather than a non-positive way.
As I have already mentioned, the Bill provides the necessary powers to make regulations to provide exemptions to this policy, and we intend to use regulations to provide for this exemption. In developing the regulations, we will need to ensure that we get the definition right to make sure that the exemption applies to the children to whom it is intended to apply. We will work with stakeholders in developing the regulations to deliver a solution which meets the needs of vulnerable children, while protecting the Government from the potential risk of fraud and error.
Baroness Butler-Sloss
If the Minister will forgive me for interrupting, I am having slight difficulty in understanding. I am delighted to hear about kinship carers but adopters are generally not family. One of the great points about adoption is that they come from outside, so the Minister’s suggestions to the House about kinship carers would not cover the majority of adopters.
Lord Freud
That is a timely intervention because I am now going to move on to the very eloquent arguments for exempting adopted children. We think that where a single child is being adopted, it would not be fair to treat the parents adopting more advantageously than other parents. However, where children need to be placed for adoption and have siblings in the same position—this was the example that the right reverend Prelate the Bishop of Durham used about one of his, I suspect, many friends—we recognise that it is often in the best interests of the children for them to be placed in their sibling group. Therefore, I am also able to announce that we are in favour of an exemption where there were previously fewer than two children in the household and the adoption of a sibling group causes the number of children to exceed two. Again, we intend to use regulations to provide for this exemption.
This is a good point at which to respond to the question of the noble Baroness, Lady Hollis, who on Monday night discussed guardian’s allowance—very eloquently, as usual. I am in a position to say that I will continue to explore that particular issue with her and whether it is possible to bring forward something at Third Reading.
In relation to disabled children, the Government are committed to making sure that disability benefits work for these families, so we will continue to support families with disabled children through the disability elements of child tax credit and the equivalent in universal credit. I must point out to the right reverend Prelate the Bishop of Portsmouth that the figure is not reduced in universal credit: the absolute figure reads across from the tax credit system into the universal credit system. That will be payable for all disabled children, even when they are a third or subsequent child, so support for families with disabled children will still be reflected in universal credit and tax credits following the introduction of Clauses 11 and 12. There is of course other support for disabled children within the DLA system to recognise the extra costs which, as noble Lords have pointed out, parents with disabled children need to carry. In addition, we are exempting disability benefits such as personal independence payment and disability living allowance from the uprating freeze.
The Lord Bishop of Durham
Could I ask for some clarity on what the Minister has just said? It sounded to me as though there was concern about the length of time that might be involved and so on and so forth, but his tone of voice sounded as though there might be willingness to at least explore the possibility. I am just teasing out whether he meant that he really was not willing to consider this, or whether there may be a possibility of exploring it further, particularly around domestic violence.
Lord Freud
We have a regulatory process where these exemptions will be gone through in detail. I can make a commitment today where I can do so, but I assure noble Lords, including the right reverend Prelate, that the machinery of government is not in a place which allows me to say anything more about anything else at this stage. However, the process of setting out regulations will take place some months from now, and we will be exploring in great detail how they work. If the right reverend Prelate is asking me whether there are going to be more opportunities to put pressure on the Government, I would imagine that there will be.
Baroness Hollis of Heigham
In which case, given that helpful and tactful response by the Minister, will he help us even further by agreeing to publish draft proposed regulations before the formal procedure of “take it or leave it” in both Houses, thus allowing various participants to discuss those proposed draft regulations with the Minister before they are formally submitted?
Lord Freud
In practice, I think that what I have said produces that outcome. I have said that we will consult very widely with stakeholders to get this right, because these are very sensitive issues. The rape exemption is very difficult. Getting kinship caring and adoption right is not straightforward. In practice, there will be consultation, but I do not want to overformalise that process. I have committed to a much more open process than you might see in some other regulations that we issue.
The next complicated case is the formation of new households through re-partnering of single parents, which we have looked at very closely and which produces a number of difficulties. First, it would be perceived as unfair by those families with three or more children who stay together and receive a maximum amount of child element or child tax credit in respect of two children, whereas other families who have formed more recently could receive more. Secondly, there is a risk that families may try to manipulate the benefit system by breaking up and re-forming, or even claiming to have broken up and subsequently re-formed in order to increase the amount. Thirdly, there would be a practical issue in assigning children in newly formed families to a particular parent. We have not done that before. Your Lordships will hear me muttering the word “carbunclising”. That is not to mention the intrusive nature of that process.
Finally, I looked at the numbers involved. The reality is that, whether we like it or not, the bulk of children stay with the mother. The number of fathers with children joining mothers with children is not many. Once the measure is fully rolled out, we expect that only 7% of single men will have children, so it is not that substantial a problem. The noble Baroness, Lady Manzoor, talked about half a million. That is just not the reality. I reiterate what I said in Committee about the way it is introduced in 2017 for child tax credit and universal credit. Any household which has claimed within the past six months will also be protected. For those reasons, I urge the noble Baronesses and the right reverend Prelate not to press their amendments.
The Earl of Listowel
Before the Minister sits down, given the fact that, as a nation, increasingly our children are growing up without a father in the family—according to the OECD, in the 2030s, we will overtake the United States in the proportion of children growing up without a father in the family—will he think again about his last statement? It may be a small proportion of fathers who bring children into these mixed families, but surely we want to encourage those larger families, especially, to have a father. The benefits that that father brings to those two children, or whatever, from the mother’s family is important. Will the Minister keep that in mind?
Lord Freud
We have looked at this very sympathetically, but in practice we found it too difficult. We have heard from this Chamber about the kinship and adoption issues, and those are the ones that we want to get absolutely right.
The Lord Bishop of Portsmouth
My Lords, I am grateful to the dozen or so Members of your Lordships’ House who have contributed in the course of these exchanges as we have considered these amendments. I am sure that we have all been touched and moved by the strength of feeling and clarity of argument that have been brought. I am particularly grateful for the Minister’s response a few minutes ago. In my opening remarks, I spoke of the candour and courtesy he showed when a number of us met him last week, and we have been grateful for that again.
We heard very clearly the indication from the Minister of the importance of consideration of the regulations that will be brought forward relating to these measures, and I am grateful for his sensitivity about that. I assure him that we on these Benches and, no doubt, others, too, will certainly engage in the way that he suggested. We are also grateful for some clarification about the reporting model he has in mind to be used where a third child is born as a result of rape. Again, I know that many people will wish to engage in further consideration about that.
I think it is fair to say that we are delighted by the position he has outlined about kinship carers and adoptive parents and are very grateful indeed for that on behalf of the children themselves and of wider society.
On areas where the Minister was not able to satisfy us as much as we might have hoped, I draw his particular attention to circumstances in which children and a parent flee domestic violence. I said at the beginning that violence is never justified in circumstances such as that. I hope that the Minister will understand how difficult it is for me and others to accept what sounds at the moment like a policy which gives a financial incentive to risk staying in a situation where children might be in danger of abuse or in physical danger. It is a very serious matter and I hope that there may be some flexibility in the conversation to which he has pointed.
With grateful thanks to the Minister and to those who have contributed in this conversation and this debate, and welcoming the advances that have been made and the indications of some further changes in the future, I beg leave to withdraw the amendment.
Lord Freud
My Lords, these amendments seek to remove Clauses 13 and 14 in order to prevent the proposed changes to the ESA work-related activity component and the universal credit limited capability for work element. Clause 13 amends existing legislation to remove this additional payment for new claims to ESA and aligns the amount of benefit paid to claimants with limited capability for work with that paid to jobseeker’s allowance claimants. I think I need to clarify that although some Peers have mentioned a loss of £60, the work-related activity component is just under £30 a week. Clause 14 is designed to introduce a similar outcome for UC claimants. The measure will save £640 million over the long term but in 2017-18, it will save £55 million while we will invest £60 million into additional practical support.
This change does not affect the support group component, the UC equivalent or the premiums which form part of income-related ESA. Existing claimants in the support group will be entitled to the work-related activity component if they are reassessed into the WRAG. We aim to protect existing ESA claimants who temporarily leave the benefit to try out work and then return to ESA, an issue which the noble Baroness, Lady Meacher, was concerned about.
ESA was set up by a previous Government to support people with health conditions and disabilities into work but it has unfortunately failed the very people who it was designed to help. Despite spending £2.7 billion this year on the WRAG, currently only 1% of people in this group actually move off the benefit every month. As a Government, we want to ensure that we spend money responsibly in a way that improves individuals’ life chances and helps them to achieve their ambitions, rather than paying for a lifetime wasted on benefits.
Currently, those in the WRAG are given additional cash payments but very little employment support. As the Prime Minister recently stated, this fixation on welfare treats the symptoms and not the causes of poverty. Over time, it traps people in dependency. That is why we are proposing to recycle some of the money currently spent on cash payments, which are not achieving the desired effect of helping people to move closer to the labour market, into practical support that will make a genuine difference to people in these groups.
The additional practical support is part of a real-terms increase that was announced at the Autumn Statement. How the £60 million to £100 million of support originally set out in the Budget will be spent is going to be influenced not only by Whitehall but by a task force of representatives from disability charities, disabled people’s user-led organisations, employers, think tanks, provider representatives and local authorities. I thank the noble Lord, Lord Low, and the noble Baronesses, Lady Grey-Thompson and Lady Meacher, for their work during Committee in this area.
The new work and health programme will provide specialist support for the very long-term unemployed. We are committed to supporting everyone who is able to work to do so. The forthcoming White Paper is aimed at ensuring that we offer the best possible support to those with health conditions or disabilities, a point raised by the noble Baroness, Lady Campbell, and the right reverend Prelate the Bishop of St Albans.
There have been ongoing discussions with the noble Baroness, Lady Hollins, about learning difficulties. Mencap’s website points out that despite the fact that research shows that 65% of people with a learning difficulty want to work, and the fact that with the right support they make highly-valued employees, only one in 10 people with a learning disability known to social services is currently in paid work. The Autumn Statement announced a real-terms increase in funding of almost 15% for those with health conditions and disabilities.
In Committee, some noble Lords raised concerns that we are expecting claimants who have been found “not fit for work” to be able to work. Although this was discussed then, it is important to stress once again that claimants in the work-related activity group have been found to have “limited capability for work”, which is very different to being unfit for any work. That is an important distinction, as this misconception helps drive people further away from the labour market and perpetuates the benefit trap.
As for returning to work and improved mental health, this Government are committed to ensuring that people with mental health conditions receive effective support to return to and remain in work. The noble Baroness, Lady Meacher, was concerned about this issue. We are investing £43 million over the next three years in trialling ways to provide specialist support for people with common mental health conditions. I have trawled the international evidence, and I know that we are going to build up a very substantial body of knowledge in this key area.
The noble Baroness, Lady Meacher, also raised the issue of deteriorating conditions. People with Parkinson’s who are currently getting the work-related activity component will not lose it, and will continue to receive ESA at the same rate, but any claimant who reports a deterioration in their condition can request a WCA to assess whether they may be eligible for the support group. As all Peers in the Chamber will acknowledge, some of these conditions can take a very long time indeed to develop, and there are times when people in the early period of those conditions are able to work, and indeed really want to.
Another area discussed at length in Committee was the evidence to support the Government’s view that the work-related activity component, in some cases, acts as a financial incentive to remain on benefit. I went through that evidence in some detail then but will summarise the points now. The findings of the OECD report, which we have touched on today, covered the whole population. Although the report does not specifically focus on the disabled population, it does not indicate the incentives would not apply there. We have the paper by Barr et al in 2010, which found that,
“eight out of 11 studies reported that benefit levels had a significant negative association with employment”.
It also noted that, “The most robust study”—by Hesselius and Persson—
“demonstrated a small but significant negative association”.
I have already mentioned the Norwegian study of the impact of financial incentives.
It is important to also recognise that the changes to ESA and universal credit work together and cannot be taken forward in isolation. Universal credit will replace income-related employment and support allowance once fully rolled out. We want to ensure that we build on what is working in universal credit to help those with health conditions and disabilities move into work. We have invested a lot in universal credit to make sure that we keep people connected to the labour market from the outset of their claim. Unlike under ESA, UC claimants with a health condition or disability are offered labour market support, where it is appropriate to do so, at the very start of their claim. This helps them to remain closer to the labour market, even if they are not immediately able to return to work.
The noble Baroness, Lady Lister, said that about 116,000 people in the whole country benefit from the disability element of tax credits. The smallness of that number illustrates how the current system is not working. That is why universal credit gets rid of the hours rules that stop people entering the labour market. It makes every hour—every fluctuating hour—pay and gives people the work coach support they need to find and then retain work. I have to say that some of figures from the noble Baroness, Lady Grey-Thompson, do not accurately reflect the situation. The point is that universal credit will make smaller, regular hours pay. Rather than dealing with a lot of very complicated sums, I will write to her and set out our response.
The findings from Universal Credit at Work show that universal credit is making a real difference in getting people closer to the labour market. It is easier to understand. People are earning more, they say they have better incentives to work and, indeed, they are working more. Universal credit is a step towards modernising the welfare system into one that improves individuals’ life chances, but we intend to go a lot further than that. We will publish a White Paper in the new year that will set out reforms to improve support for people with health conditions and disabilities, including exploring the role of employers, to further reduce the disability employment gap—which we are committed to doing —and promote integration across health and employment.
As for the impact of another budget, I should point out to the noble Lord, Lord Low, what we spend on disability benefit: it went up by £2 billion in real terms over the last Parliament. We spend £50 billion every year on benefits to support people with disabilities or health conditions, which is rather more than we spend on defence and police combined—6% of government spending.
Clauses 13 and 14, together with the additional practical support announced in the Budget, provide the right support and incentives to help people with limited capability for work move closer to the labour market and, when ready, into work. I therefore urge the noble Lord to withdraw his amendment.
Lord Low of Dalston
My Lords, I thank the Minister for his very full and careful reply. I knew that it was too much to hope that his generous spending spree would continue into this group of amendments, so we will deal with the case that has been made on its merits. I also thank all those noble Lords who have spoken. The amendment has attracted support from right across the House: I made it 10 speeches in all and 9:1 in favour of the amendment.
Baroness Hollis of Heigham
My Lords, all of us in the House supported universal credit and we all recognised the absolutely key role played by the noble Lord, Lord Freud, in seeking to deliver it. Why have those of us who worked on tax credits—my noble friend in the Treasury and myself as the Minister taking the tax credits Bills through this House—none the less gone on to support universal credit? It was because tax credits did make work pay, they transformed lives, and we were and indeed are proud of them.
But, first, without real-time information, we could not keep pace with the changes of circumstance. Half of all lone parents experienced more than a dozen changes of circumstance every year, and the computers never caught up. We had to have end-of-year adjustments and we had the sadness of trying to recover overpayments from people who could ill afford to make them. Secondly, as has been said, we absolutely needed to simplify the benefits system so that people would know what they were entitled to. Finally, tax credits were rightly built on a work model, and work was defined as 16 hours a week. However, we know that for many lone parents a job for fewer than 16 hours a week, a mini job, is the pathway into work. Instead of the cliff-edge of 16 hours, we supported the principle that the noble Lord enunciated in universal credit of a ladder up from mini jobs right on into full-time work. Over some 17 long Committee days, we supported the noble Lord on universal credit.
The architecture of universal credit remains, but to repeat the image of the noble Baroness, Lady Manzoor, the key driver of making work pay is being shrivelled by the cuts, slice after slice. My heart goes out to the Minister because he must hate it. But, of course, he cannot possibly comment. Instead of universal credit being more supportive than tax credits, which is where we came from in helping people into work, as my noble friend Lady Sherlock has said, increasingly the opposite is now true.
Yes, last autumn we protected existing families on tax credits—not new claimants—from cuts to their existing income, given the commitments made on all sides during the general election. The Chancellor accepted that as people move from tax credits to UC as part of the migration timeline, they should not be worse off simply by virtue of that administrative change. It was the right thing to do and I believe that everyone in the House, including of course the noble Baroness, Lady Meacher, who was so key to this, was delighted by the move.
However, as my noble friend has said, such transitional protection may not cover situations where there has been a recognised, formal change of circumstance which, as it stands, could bring existing tax credits families immediately into UC over and beyond the migration timeframe, and at that point they will experience cuts in UC. I want the Minister to help us by clarifying the situation. What will take a person who is on tax credits now, who is not part of the planned timeline, into UC and thus experiencing immediate cuts? The reason it is uncertain is that at the moment, certain changes with tax credits must rightly be formally reported to HMRC. As my noble friend set out, that must be done when a lone parent becomes part of a couple or the couple breaks up, when there is another child or a child leaves school, and when hours of work or income change, or childcare costs change—for example, during the summer holidays. And, of course, tax credits rates are now and should continue to be properly adjusted to reflect those natural changes in circumstance. However, will such changes of circumstance, which would bring about a change in tax credits, now instead be a trigger on to UC, at which point families will find themselves caught by the UC cuts, or will they remain outside it? Or does this apply only when the tax credit claims have completely ended, so that no tax credits are in payment? For example, if a lone parent has repartnered and her partner’s income floats them off tax credits altogether and then, say, a year on, sadly, he moves out and she needs to make a fresh new claim, will that fresh claim be under tax credit rules or the more oppressive universal credit rules?
If the oppressive universal credit rules apply, will there none the less be a linking rule—as in the past with a well-established principle for disability benefits—so that within six months, or certainly a year, a new claim is regarded as a resumption of the old claim? In other words, the lone parent remains de facto on tax credits with the protection that that carries when, by the natural time migration, she moves over to UC. I apologise to your Lordships for being quite nerdish about this, but it is essential that the Minister clarify the position for us, which I am sure he will.
Finally, we supported UC over tax credits above all to incentivise people into work. My noble friend has spelt out the additional resource that the Minister was able to achieve to incentivise people into work, especially those more marginal to the labour market, by allowing them to keep more of what they earnt. We all thought that that was the right thing to do. Several years back, the Minister was absolutely right, while criticising tax credits because of the multiplicity of interlocking benefits, when he said that there was a high rate of benefit withdrawal—that is, the taper—which meant that some working people kept only pennies in the pound for every hour that they worked. Therefore, they did not.
However, although the universal credit regulations do not change the taper, in many cases they essentially halve the work allowance which can be earnt before the taper kicks in for many, and they withdraw it in its entirety for some. Therefore, cuts will affect people who come on to universal credit after April 2016. The cut in the standard work allowance for a lone parent working mother, from more than £8,000 to £4,764, means that she will lose half. Effectively, she will lose £2,628 a year by being on universal credit, which she would not if the work allowance had not been halved. Couple families with one partner with limited capacity to work because of disability will lose around £3,000. Single people will lose it altogether. Hence, this amendment.
I am concerned, as are my noble friend and others on our Benches, about the impact of these proposed cuts within universal credit, as we all are about work incentives. We need evidence. The Minister respects evidence. If it is not there it needs to be collected. If it is, I am sure the Minister would want us to address any problems that may arise. My fear is that universal credit, instead of encouraging people into work, will begin to disincentivise them. But I do not know, which is why, as my noble friend has argued, we need that report to determine how, where and with what severity those cuts will fall, and on whom. In particular, how will they affect the key significance of universal credit: to improve work incentives and, as we all wish, to make work pay?
Without improving work incentives, universal credit has lost its moral argument and becomes instead, I fear, a mere administrative tidying up of the current benefit system, with the added risk that we are already beginning to see of repeated cuts. There would be much upheaval for no gain for many claimants, and real, if potential, losses for many more. I hope that I am wrong but we need to know. Such a report would tell us and, if my noble friend chooses to put this to a vote, I hope this House will support her.
Lord Freud
Before I start, I acknowledge my appreciation for what Peers are saying. This is not an attack on universal credit. They are some of its greatest fans and it is in that context that they speak. I absolutely get that and I appreciate it. It has reminded me that I owe regular updates about progress of universal credit and has jogged me to get going on that as soon as this Bill is over.
The amendment in the name of the noble Baroness, Lady Manzoor, seeks to repeal the work allowance regulations. I am going to sound like the noble Baroness, Lady Sherlock. This measure has been debated and voted on twice in the other place, and both times these regulations have been retained. Therefore, this House should think carefully about using a Bill such as this to introduce opposition to a financial measure that has seen that kind of support in another place.
On the amendment, let me remind noble Lords of the context of those changes. The previous welfare system was not working. Spending went up from £6 billion in 1998 to £28 billion in 2010, when we reached the stage where nine in 10 families with children were eligible for tax credits. Some families could earn £60,000 a year and still receive benefits. Yet, at the same time, the number of people in in-work poverty increased by about 20%. It also did not do enough to support people to get into work, stay in work, and progress in work. People were left with unfulfilled potential and did not have an incentive to progress. Even if we forget the money, it undermined opportunity and aspiration due to the distortions and complexities of the system.
The Government have stated their intention to move from a low-wage, high-tax, high-welfare society to a high-wage, low-tax, low-welfare economy and have set out a package of measures. Let me remind noble Lords that the national living wage is set to reach over £9 an hour by 2020 and the personal tax allowance is set to rise to £11,000 in 2016-17, taking 570,000 more people out of income tax. I remember some debates about increasing support for childcare, and we have moved it up to a rate of 85% of eligible costs. We have doubled the early years’ provision, which is free for the working parents of three to four year-olds. When one looks at the whole of childcare, we now spend £5 billion in total across all the schemes, including UC, tax credits and the early years’ provisions, which is more than any previous Administration. Since 2010, there has been an increase of £1 billion.
To respond to the noble Baroness, Lady Manzoor, the measure is different from the tax credit cuts. Universal credit provides an incentive to making work pay and helps to move people off a life on benefits. They get personalised support through a dedicated work coach which helps them through the barriers. It is a different structure. It is not the same thing as the reduction in tax credits. Clearly, we have two elements; namely, the work allowance and the taper rate. We have already got evidence that it works and gets people into work much more effectively than jobseeker’s allowance. Apart from the savings we will achieve on taxpayers’ money, it will generate—partly by focusing the money more efficiently on the people who need it most—gross economic benefits of £7 billion every year once it is fully in.
Welfare Reform and Work Bill
Lord Freud Excerpts(8 years, 3 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, in the spirit of comradeship and friendship with the Liberal Democrats, we are very happy to support that request.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
I think there were two parts involved in that question, so let me go through them. In answer to the first part, I will meet the noble Baroness and the CPAG. In answer to the second, I am happy to meet her and the CPAG.
Lord Freud
My Lords, Amendment 46E would apply the affirmative procedure to the support for mortgage interest loan regulations as recommended by the Delegated Powers and Regulatory Reform Committee. The committee opined that these are novel provisions which are likely to have a significant impact on a large number of people. This is true, but the part which is novel is the change in this support from a benefit to a loan. In all other aspects the level of support offered and the way the system will be administered will simply replicate the existing system. The committee made its recommendation before your Lordships debated these measures in detail. I have been quite clear about how the new loan system will be implemented and that the regulations we will bring forward will replicate the existing SMI system. Using the affirmative procedure for these regulations would therefore not be a good use of parliamentary time.
I will come to the government amendments, which may actually be the real palliative here because we will have SSAC reports in this area. If they come up with something there is space within the negative procedure to bring issues before the House. The committee did not have that information about what we were planning with SSAC. I should also point out that the current SMI regulations are subject to the negative procedure.
Amendment 46F would prevent the Government from changing the benefit into a loan for those on state pension credit. It would allow regulations to be made to create a system of grants for pensioners’ mortgage interest. This would mean that pensioners would receive help with their mortgage interest as a grant rather than a loan and that that would be the case indefinitely. In this context that would be unsustainable and clearly unfair on the taxpayer. It is not right that taxpayers, many of whom of course cannot afford to buy their own home, are subsidising the acquisition of what in many cases is a very substantial asset. Pensioners will have access to the same level of support for mortgage interest payments as the current system provides and the Government will not recover the loan until the property is sold. With pension credit claimants, it is most likely that this will be on their death and therefore will impact not on them but on the beneficiaries of their will. My noble friend made the point that they may not be that pleased, but the balance is between them and the taxpayer.
I shall pick up on some of the specific points. Pension credit claimants will have access to passported benefits such as funeral payments. We would normally provide advice through a telephone conversation and the advice will focus on the circumstances of the individual concerned with regard to their options, asking whether they have alternatives available such as downsizing or help from relatives or their heirs. I think that the noble Baroness should take my last word on the issue of who would do this as I wrote in my letter. To the extent that that contradicts what I said earlier, it should be the latter. Our view is that whatever theoretical potential conflict there might be, we will make sure as we set out the arrangements that there is no conflict in the way it is done. I think that that is what I expressed in my letter, although perhaps not using that language.
Let me reassure noble Lords that the Government will seek to recover the debt only up to the level of available equity when the property is sold. Any outstanding debt will be written off. The amendment would also provide powers to introduce regulations to introduce a waiting period for pensioners before they can receive help. There is currently no waiting period for help with mortgage interest for pensioner claimants and it is not the Government’s intention to introduce one. With those explanations, I urge noble Lords not to press the amendments.
Amendments 47 to 49 and 83 provide that loans for mortgage interest regulations made under the Welfare Reform and Work Bill are submitted to SSAC, the independent statutory body that provides impartial advice on social security and related matters for consideration. With the introduction of the new loans-based scheme, help with mortgage interest will no longer be a part of benefit entitlement. However, we recognise the important role that SSAC plays in the scrutiny of regulations and have accepted the recommendation of the DPRRC to provide that regulations relating to loans for mortgage interest fall within the remit of SSAC. I have just realised that I slightly misspoke when I implied that the committee might not have both those bits of information. Perhaps I may also withdraw that point.
The amendments also ensure that certain decision-making rules in the Social Security Act 1998 apply to decisions about SMI loans in the same way as they apply to decisions about benefits. In particular, this will ensure that an appeal may be brought against a decision relating to a mortgage interest loan in the same way as an appeal may be brought against a decision relating to a benefit. This means that applicants will have the same appeal rights as under the existing provision for support with mortgage interest, ensuring fairness for applicants of the new loan provision. They will allow the department to supply information about SMI loans within the broader welfare system to persons who are concerned with the provision of welfare services. For example, it will allow the Secretary of State to share information with those providing free school meals and health benefits such as free prescriptions, so that recipients of SMI loans can access these “passported” benefits. I think that that picks up on the point made by the noble Baroness about concerns with the passporting issues.
The final amendment is a minor and technical change to the Long Title. The purpose of SMI loans is to prevent repossessions. All types of mortgages and loans are eligible for support under the new loan system. This change ensures that the Long Title accurately reflects the contents of the Bill by including a reference to “other liabilities”.
Baroness Sherlock
My Lords, I thank the Minister for that response. I hope that he will take away again the point about the DPRRC. I certainly welcome the move to refer the regulations to SSAC but, welcome though SSAC is and much as I respect its expertise, it is not Parliament. Parliament should have the opportunity to debate this. He mentioned that the DPRRC recognises that regulations for loans for the grant scheme were negative. I am working from memory but I think that the committee pointed out that, had the draft regulations been available, it would have recommended negative in the ordinary run of things because the original regulations had been negative. In fact, the draft regulations were not available, which is why it recommended the affirmative procedure. Will he go away and think about that?
The fact that the Minister said that the service normally will be by telephone gives me a glimmer of hope that the department might be willing to consider a face-to-face service for vulnerable consumers. I hope he will consider that. I will not take on the point made by the noble Lord, Lord Young, although I disagree with him. Given the lateness of the hour and the fact that we went around this issue fairly effectively in Committee, I will set that to one side. I thank the Minister for his other comments. I hope that when he looks at the record he will check the presumptions that I have made as to the operation of the scheme. Should any of those prove to be wrong and not to have been corrected by him, I hope that he will write to me. On that basis, I beg leave to withdraw the amendment.
Lord Freud
“( ) In section 170 of the Social Security Administration Act 1992 (Social Security Advisory Committee), in subsection (5)—
(a) in the definition of “the relevant enactments”, after paragraph (an) insert—“(ao) sections 16, 17 and 19 of the Welfare Reform and Work Act 2016;”;(b) in the definition of “the relevant Northern Ireland enactments”, after paragraph (an) insert—“(ao) any provisions in Northern Ireland which correspond to sections 16, 17 and 19 of the Welfare Reform and Work Act 2016;”.”
Lord McKenzie of Luton
My Lords, we support each of the amendments set down in this group and have added our names to some of them. On Amendments 50, 51 and 52, we join other noble Lords in congratulating the noble Lord, Lord Best, on his negotiating skills—doubtless assisted in that endeavour by the noble Lord, Lord Kerslake—and the Minister for listening and helping with at least a partial solution.
The deferral of the rent reduction programme is clearly welcome. The clarification on the comfort in respect of LHA caps is clearly important as well. The more that the Minister can say on that, the better. My noble friend Lady Warwick has outlined some of the problems because of the known existence of that aspiration. The Minister could, I hope, therefore go further. It is always the way that Ministers come forward with concessions, and then everybody piles in and wants just that little bit more, but this is a very important issue.
That raises the question of where that leaves the amendments, as the Minister’s proposition in his correspondence effectively covers co-operatives, almshouses and community land trusts, as well as housing associations. Are the Government going to accept the amendments, substitute something for them or simply rely on what is on the record of this debate?
The noble Lord, Lord Kerslake, spoke to Amendments 53, 61 and 63, each of which we can support. He stressed the importance of an independent evaluation of what has gone on, in good time for rent policy for the subsequent period to be settled. In respect of Amendments 61 and 63, the noble Lord explained the importance of flexibility in respect of new-build, particularly for schemes of marginal feasibility. We had a very helpful meeting with members of the Bill team and the noble Baroness, Lady Williams, on this. Hopefully, embedded in this long list of government amendments is one that addresses that issue specifically. It may not necessarily have the breadth or flexibility the noble Lord is seeking, but I think it at least seeks to address the principle.
Amendment 59A, in the name of the noble Baroness, Lady Manzoor, proposes a report on local housing allowance rates. We debated this in Committee, but the Minister probably still owes us a reply. The purpose of that discussion was to recognise that, with the moratorium following the 1% limitation, LHA rates are increasingly going to move away from the reality of what renting in the private sector actually entails.
The noble Lord, Lord Ramsbotham, was clearly pleased with the outcome for almshouses. All in all, we should be grateful to the Minister for responding as he has—or hopefully will—at the Dispatch Box in confirming this. This is a real issue of substance which was worrying many people.
The noble Lord, Lord Best, is probably happy with the definition of supported housing that we have here, which is the broadest possible. I know there have been issues with specified support—what is in and what is out—but I take it from the correspondence and what has gone before that the moratorium is in respect of the widest definition of supported accommodation.
Lord Freud
I will start by picking up a point made by the noble Lord, Lord Ramsbotham, on unintended consequences. The House of Lords has done its job in alerting us to some unintended consequences in time for us to sort them out. I know that I rely on this House for that again and again, and in this case I express my gratitude to a number of noble Lords—with the noble Lord, Lord Best, leading the field—for enabling us to deal with these issues.
Let me now do the business on these amendments. Amendments 50 and 51 would exempt housing co- operatives, community land trusts and supported accommodation, while Amendment 52 would extend that exemption to almshouses. I will just make a few comments before I turn to the rent reductions in social housing. We face a challenge on the overall housing benefit bill and believe that social housing providers need to play their part in helping to bring that bill down. However, we also recognise the vital role that many housing providers play in supporting people who need the most help.
The Government have always made it clear that our policy will protect the most vulnerable members of society. To achieve that, the Bill has built into it the flexibility to except some social housing and provide exemptions for providers facing financial difficulty as a result of the reduction. We have also made several amendments to the Bill, including some today, which we believe will be helpful.
Baroness Warwick of Undercliffe
Might I press the Minister for a moment on the LHA cap issue? I am not quite clear about what he means. He said that he could not be specific, and I understand that, but I am very conscious of the uncertainties that boards now face as regards the decisions they have to take in the next few weeks. Do we take it from what he said that the slate is clean as far as they are concerned, there is no assumption that the LHA cap will be applied and that the outcome of the review will look at this afresh?
Lord Freud
There will be a review, which will look at how we fund. We have given ourselves a year to come up with that, so clearly they can look to that in the medium term. However, I have already said that we accept that it is urgent to make sure that their immediate concerns are taken off the table, and we are working to make sure, as we look forward to a more fundamental review, that those protections in that short-term period are in place.
Lord Kerslake
The proposal with regard to the exemption and flexibility for the regulator in those difficult circumstances is entirely welcome. Although it does not go as far as I sought, it is a very helpful move indeed, so I thank the Minister.
Lord Freud
“(b) regulations under section 26 of that Act, or(c) Part 1 of Schedule 2 to that Act.””
Lord Freud
Lord Freud
“(i) was payable at the beginning of 8 July 2015 by the person who was the tenant of that social housing, in a case where 8 July 2015 is the relevant day,(ii) was payable at the beginning of the relevant day by the person who was the tenant of that social housing, in a case where the relevant day falls after 8 July 2015 and the person who was the tenant at the beginning of 8 July 2015 continued as tenant until at least that later time,(iii) is likely to have been payable at the beginning of the relevant day by the person who was the tenant at the beginning of 8 July 2015 if the person’s tenancy had continued until at least that later time, in a case where the relevant day falls after 8 July 2015 and the person who was the tenant at the beginning of 8 July 2015 ceased to be the tenant before that later time, or(iv) is likely to have been payable at the beginning of the relevant day by a tenant of that social housing, in a case where there was no tenant at that time and sub-paragraph (iii) does not apply,”
Lord Freud
“(6A) The Secretary of State may by regulations define “formula rent” and may, in particular, provide that it is a rent set in accordance with a method specified in the regulations.
(6B) Regulations under sub-paragraph (6A) may, in particular, make provision by reference to—
(a) the standard published in January 2015 by the regulator under section 194(2A) of the Housing and Regeneration Act 2008 (the powers of the regulator to set standards relating to levels of rent),(b) Rent Standard Guidance published in January 2015 by the regulator, or(c) Guidance on Rents for Social Housing published in May 2014 by the Secretary of State.”
Lord Freud
“(3A) Regulations made by virtue of subsection (3) may, in particular, provide for section 21 or Part 1 of Schedule 2 to have effect with modifications.
(3B) The modifications that may be made by virtue of subsection (3A) include (but are not limited to) modifications that—
(a) provide for the maximum amount of rent to be increased from year to year by no more than a percentage specified in the regulations;(b) provide for the maximum amount of rent to be determined by disregarding the effect of a temporary reduction or waiver of rent;(c) provide for the maximum amount of rent to be determined by reference to a different period;(d) provide for section 21(1) or paragraph 1(4)(c) or (5)(c) or 3(4) of Schedule 2 to have effect as if it referred to a different percentage;(e) provide for paragraph 1, 2 or 3 of Schedule 2 to have effect as if the social rent rate were uplifted by a percentage specified in the regulations;(f) provide for paragraph 3(2) or (3) of Schedule 2 to have effect as if paragraph 3(2)(a)(ii) or (3A)(a)(ii) referred to a different percentage;(g) provide for the maximum amount of rent to be determined by reference to what would have been the amount if an exception in regulations under section 22 or paragraph 5(5) of Schedule 2(including an exception making such provision as is described in section 22(7) or paragraph 5(7)) had not applied.(3C) Regulations made by virtue of subsection (3B)(d) may not provide for a higher percentage to have effect.
(3D) Regulations made by virtue of subsection (3B)(e) may, in particular, make provision in relation to cases where an exception in regulations under paragraph 5(5) of Schedule 2 making provision about social housing which satisfies conditions prescribed by the regulations as to design, facilities, use or the provision of support to tenants applies.
(3E) Regulations under subsection (1) may not provide for a maximum amount of rent payable by a tenant of social housing in respect of a relevant year, or a part of a relevant year, which is less than the amount that would be payable by the tenant in respect of that period if the rent was payable at the social rent rate in that period, in a case where an exception in regulations under paragraph 5(5) of Schedule 2 applies.”
Lord Freud
Lord McKenzie of Luton
My Lords, we strongly support the amendment moved by the noble Baroness, Lady Meacher. Indeed, it replicates part of an amendment moved in Committee by the noble Earl, Lord Cathcart. We know from the Government’s point of view that there is an article of faith here. Their starting point is that they overwhelmingly want and expect universal credit to be paid as a single monthly payment in arrears to the claimant. We know that there are opportunities for alternative payment arrangements and my noble friend Lady Sherlock set down our understanding in responding to the amendment in Committee.
The issue of eight weeks has been raised, but it is not eight weeks before you get to a solution. As I understand it, the guidance states that, when arrears reach one month’s rent, the DWP will review the situation—I am not sure how long it takes it to do that—following notification by the claimant or landlord. When they hit two months or eight weeks, either the landlord or the claimant can request an APA. Again, I think the point was raised about how long it takes the DWP to respond to those questions. Even then, there is no automatic right to one because the Government are still clinging to the concept that managing benefits should mirror choices in managing money which they say that those in work have to make.
The issue is one not only of having a nominal system in place under which alternative payments can be made, but of how those are put into practice and what realistic timescales are involved. Even if it were on the dot of eight weeks, that is a time for a landlord to wait. Some landlords might be left in a marginal economic situation.
A question was posed about what information we have about claimants of universal credit and other benefits being effectively denied access to properties available for rent. It might be quite hard to get hard statistics on that, but it would be interesting to know what the department has. The landlords fear, even if they may ultimately get paid, that they will have to wait eight weeks or even longer before they get their money.
My noble friend asked about what is happening with universal credit and how many people are in the system at the moment. At December 2015, there were 287,000 universal credit claims—I think that this is internal management information and therefore not fully verified—and some 37% of those payments included a housing element. Again only preliminary analysis showed that 19% of those had a managed payment to the landlord. I suppose that that gives a glimpse of something that is working to an extent, but clearly is not working in a sufficiently robust way to address the very real concerns that have been raised.
We debated this endlessly during the passage of the Welfare Reform Bill. My noble friend will remember it, and jam-jar accounts have featured already this evening. The arguments were strongly made against not only monthly payments but the opportunity for direct payments, particularly in relation to housing. My noble friend Lady Hollis made an extremely important point that the fundamental is a roof over your head—pretty much everything else flows from that. How can you get a job if you do not have secure accommodation? How do the kids get to school if you do not have secure accommodation? It is a fundamental issue. Just a relatively small change to the system, giving people the choice of having direct payments, means the prospect of removing what is clearly a growing problem, as explained, and fixing it in an effective way, so we support the amendment.
Lord Freud
This amendment requires the Secretary of State to make regulations that would allow universal credit claimants to opt to have the housing cost element of their award paid direct to the landlord, irrespective of the reason. One key principle of UC is that the single, monthly payment mirrors the payment of monthly wages that most claimants would receive if they were in full-time employment. Whether they are receiving UC or are working, tenants need to make similar decisions on managing their money, including paying their own rent.
The Government understand that a move to a single, monthly household payment is a significant change for many claimants and that some will require help and support. Regulations came into force in February last year to allow DWP to inform social landlords whenever one of their tenants makes a claim for or is awarded universal credit with housing costs or when an existing universal credit claimant moves to one of their properties. This enables the social landlord to decide whether the claimant requires advice, support or assistance in budgeting so that they can manage their rental payments.
There will, of course, be instances where the claimant needs additional support and, to this end, the Secretary of State already has powers to pay all or some of a claimant’s UC entitlement to a third party through alternative payment arrangements—or APAs, in the trade. There are three APAs: paying rent directly to the landlord; making more frequent than monthly payments; or splitting the payment within the household. APAs can be considered by the Secretary of State at any point during the universal credit claim, whether at the outset or later on, if a claimant cannot manage the monthly payment arrangement.
Recent improvements allow the landlord to email their APA requests, which are dealt with in a matter of days as a priority—so some of the early teething problems as we started rolling out the system have been addressed to speed up that process. Wherever possible, these arrangements are time-limited and delivered with appropriate budgeting support to help claimants make the transition to monthly budgeting.
The arrangement also covers claimants who are in rent arrears, and managed payments to the landlord will be considered where claimants have arrears of at least one month due to repeated underpayment or where the claimant owes arrears of at least two months and is at risk of eviction. These protections, combined with the measures enabling landlords to recover arrears from a tenant’s UC award, already mitigate any impact on landlords’ income or on homelessness.
We are in fact making a series of initiatives in this area and one of the most interesting is the trusted partner trials, where we are working with local authorities so that they decide the people who should be put on an APA, at least initially, and then look to see the budgeting support that a person needs to run their own funding.
Picking up the point made by my noble friend Lord Cathcart on experience, in terms of arrears we did an elaborate direct payment project and we found that, in the early stages, the numbers who paid in full were running at 95.5%, compared with 99% of those where the state paid. However, by the 18th payment—these were weekly payments in the comparator in this project—the direct payments figure had risen to 99%. Interestingly, this happened when the removal of the spare room subsidy came in, and those tenants who had become used to managing their own rent handled the removal of the spare room subsidy better than the ones who had been on the state-managed payments system. That is not surprising because the managed payments system is not necessarily an easy option where there are reductions for non-dependants, the spare room subsidy and so on, because the claimant will still need to pay the shortfall to the landlord.
The other factor, which I am surprised that noble Lords have not clocked, is that a large number of the families on universal credit are in work. It is not like the old legacy system where you have one lot out of work and one lot in work; this is a blended group and people are moving from the out-of-work group into the in-work group. Therefore, the idea that you can be halfway down the taper—in the jargon—and have a managed payment would be incredibly hard for any organisation, including the DWP and the tenant, to manage. Two million households is equivalent to a quarter of the case load.
Baroness Hollis of Heigham
The noble Lord makes our point for us. If a substantial number of people are in work and managing fine—as, indeed, is the case; it is one of the reasons for supporting UC—they will not seek alternative payment arrangements. Who will seek them? It is those who have the self-knowledge to know that they are vulnerable when it comes to paying their rent, given the pressure of debt payday loans and all the other debts they may accrue. If they are being hounded, as we know they are, what will go first is the money that should be earmarked for their rent. I urge the Minister not to superimpose on people who find it hard to manage assumptions about how those of us with rather more comfortable incomes and reliable monthly salaries handle our accounts. It can be a very different and very difficult world.
Lord Freud
The core reason why I dislike this measure—and I do dislike it, so it is not a question of persuading the Secretary of State—is that we can actually see this situation right now. Interestingly, my understanding from conversations I had with welfare rights people in the 1980s was that they were against managed payments because they disempower tenants. It is funny that the political debate has come full circle. If you say that tenants can choose but you have an imbalance of power between the landlord and the tenant, which is the reality, you will find very quickly that every tenant will choose to have a managed payment because they will be told by their landlords—who would love to have someone with an AAA credit rating paying them—“You must have a managed payment”. That is what has happened. Some 93% of people in social housing choose to have a managed payment. They are disempowered, which makes it hard for them to get back into work—I think the noble Baroness is shaking her head, as a landlord. You say lots of good things—
Baroness Hollis of Heigham
I have spent years in either local authority housing management or housing association management. I have represented, possibly unlike the noble Lord, a council estate—one of the largest in the city of Norwich—and day by day, week by week, year by year, we went knocking on doors. We know what we are talking about.
Lord Freud
Perhaps I should not have personalised it.
The reason this idea of choice does not work is that it is too attractive for a landlord to have an AAA income stream. That is why the solution of the noble Baroness, Lady Meacher, cannot work. It is a retrograde step away from claimants being job-ready. We know that we need to give an enormous amount of help to people with budgeting, and we are doing so. We are looking to social landlords to help us with that, and many are doing a great job. But I am afraid that I must ask, with some passion, that the noble Baroness withdraws this amendment.
Baroness Meacher
It is extremely late but I would like to thank the noble Earl, Lord Cathcart, the noble Baroness, Lady Hollis, and the noble Lords, Lord Layard and Lord McKenzie, for their very helpful and powerful contributions. The Minister and I will have to disagree passionately about this issue: I do not think we are going to agree. The Minister is right that landlords have a lot of power. They will walk away. Why should they let out their properties and not have their rent paid? They will not do it. That is my big worry—I say that seriously to the Minister: they will not do it. One can talk about budgeting help and all sorts of things but this is very difficult. As benefits reduce, people are going to find it incredibly difficult to manage at all. They simply will not be able to leave any money in the pot until the end of the month to pay their rent because of the pressures they will be under. I profoundly and passionately disagree with the Minister, as much as I respect and like him. But what am I supposed to do but withdraw my amendment?
Lord Freud
Welfare Reform and Work Bill
Lord Freud Excerpts(8 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, Amendment 25 seeks to remove child benefit and child tax credit from the list of those benefits included within the benefit cap, so that they are disregarded when calculating the total amount of benefits that a household can receive before the cap is applied. This amendment undermines the fundamental principle that we established when we introduced the cap: that there has to be a clear limit to the amount of benefits that an out-of-work family can receive. This principle has gained very broad support across the country.
The benefit cap is just one part of our suite of welfare reforms, which are restoring work incentives and fairness to the benefits system. The previous system was not fair on working taxpayers, nor on claimants who were trapped in a life where it was more worthwhile claiming benefits than working. Our welfare reforms are about moving from dependence to independence and the benefit cap is helping people to take that important step into work. Indeed, the evidence shows that the cap is working, with capped households 41% more likely to go into work than similar uncapped households. In fact, more than 18,000 households have entered work since the cap was introduced.
However, we have always accepted that there should be some exemptions from the benefit cap which support the cap aims of incentivising work and bringing greater fairness to the welfare system, while supporting the most vulnerable. To incentivise work, the cap does not apply to those households which qualify for the in-work exemption in universal credit. Nor does it apply to those households in receipt of working tax credit. For lone parents, this is just 16 hours of work per week; for couples with children it is 24 hours of work per week. In recognition of the extra costs that disability can bring, households which include a member who is in receipt of attendance allowance, disability living allowance, the personal independence payment and the Armed Forces personal independence payment are exempt. Those who have limited capability for work and receive the support component of employment and support allowance, or the universal credit limited capability for work- related activity element, are exempt. Furthermore, war widows and widowers are also exempt. Noble Lords should also not forget that if the claimant, their partner or a child for whom they are caring is in receipt of an exempt benefit, the cap will not apply.
As well as promoting fairness for those families who are in work, the welfare reforms are about transforming life chances. Since the cap was introduced in April 2013, nearly 9,400 capped lone parents have moved into work and claimed working tax credits, joining the 1.26 million lone parents in employment in the UK. By going out to work, parents show their children the importance of a strong work ethic and reinforce the message that work is the best route out of poverty, while improving their longer-term life chances.
As to the ECHR criticism about the rights of the child, the interests of children are best served by doing everything possible to get their parents into work and providing the right support to remove the barriers to work, such as employment support, training, budgeting advice and free childcare. DHPs are available to assist in hard cases, and the Government will make £870 million available in that area over the next five years.
The noble Baroness, Lady Lister, raised the family test, and the noble Baroness, Lady Sherlock, was kind enough to remind her that I managed to get a letter to her saying that the family test had been applied when considering the benefit cap changes. The way that the test works on the whole is that the department thinks carefully how the new policy can support family relationships. We have been very clear, as I have been this evening, that it is important that children grow up in households that are in work. The cap is a key way of delivering this particular policy and this particular change.
Like other welfare benefits, child-related benefits are provided and funded by the state, and it is therefore right that they are taken into account along with other state benefits when applying the cap. It is only fair that households receiving benefits should make the same choices that families in work do. The cap levels are equivalent to annual pre-tax incomes of £29,000 and £25,000. These are still considerable incomes, with around four in 10 households earning these sums in London and the rest of the country respectively.
It is a simple matter of fairness for those families with children who are in work to set the cap at these levels and to include child-related benefits within its scope. To be clear, households who go out to work and qualify for the in-work exemption in universal credit or for working tax credits will be entirely exempt from the cap and will receive all of these benefits over the cap level. For those households who need additional support in adjusting to the cap, DHPs are available: £800 million has already been made available and a further £70 million was added to that figure in the Autumn Statement.
There is of course a nine-month grace period in which the cap may not be applied to those have recently left sustained employment. This gives households, including those people who are receiving child benefit and child tax credit and who may have had to leave employment, time to adapt to their new circumstances or find work before the cap is applied to them.
For the reasons I have explained, I do not agree that we should remove child benefit and child tax credit from the cap, as would be the result if this amendment, as drafted, was passed. I ask the noble Baroness to withdraw her amendment.
Baroness Lister of Burtersett
My Lords, I am grateful to my noble friend Lady Sherlock and to the Minister. I never received the letter last Thursday, although I recall there was another letter when we raised the question of the family test in relation to the policy we will be discussing on Wednesday about families with two or more children. That said exactly the same thing—I think it was almost the same sentence.
When I was preparing this over the weekend, I realised I had never received a letter about our fourth day in Committee, so I emailed the Minister’s office to ask whether there had been such a letter, and I have not had a reply yet. Perhaps the letter about our fourth day could be re-sent, because I have certainly not received it. Anyway, it sounded horribly familiar—that is, it did not tell us very much at all, as my noble friend said.
I did not really expect we would agree on this. The Minister has certainly not satisfied me that it is fair when we are not comparing like with like. That is really the nub of the argument. On the rights of the child, he simply repeated the very argument that the noble and learned Baroness, Lady Hale, had pretty much destroyed in the Supreme Court judgment. He brought up the old DHPs again—many moons ago I said this was the loaves and fishes argument. DHPs have to be extended to cover everything and they do not provide anyone with any kind of right because they are discretionary. Clearly we are not going to make progress on this but it is important that we at least keep maintaining why we believe that this is not fair. I beg leave to withdraw the amendment.
Baroness Sherlock
My Lords, the amendment would exclude guardian’s allowance from the cap. I shall briefly set out the regulations on exactly who gets guardian’s allowance, because I think it is worth doing. You can get it only if you are caring for somebody else’s child, you are entitled to child benefit for the child and both of the child’s parents are dead, or one of the child’s parents is dead and at that time the whereabouts of the other parent is unknown and you have made all reasonable efforts to find them, or one of the child’s parents is dead and the other is in prison with a minimum sentence of two years remaining to serve, following the death of the other parent. People do not get this allowance lightly. It is not paid to foster parents or prospective adopters. My noble friend Lady Hollis, with a precision and a lyricism that I could not begin to match, set out the effects of taking this away from a group of people who are reaching out to some of the most vulnerable children in our country. I hope that that has persuaded the Minister how important this is. But given those effects, and given how few these people are in number, and given how vulnerable the children are, I would like the Minister to explain why they do not fit into the category that he described under the last amendment, when he said that the Government wanted to incentivise work but also to protect the most vulnerable. Why do they not count as the most vulnerable?
In Committee on 21 December I asked the Minister what behavioural incentives the Government were seeking by including guardian’s allowance in the cap. He said:
“Recipients of maternity allowance and guardian’s allowance will be affected by the benefit cap only if they are in receipt of a significant amount of other welfare payments”.—[Official Report, 21/12/15; col. 2378.]
That is not a justification. Either it is right to include guardian’s allowance in the cap or it is not; it cannot be right because you get other benefits as well. So if the Government believe that it is right, can the Minister please tell the House what behavioural response the Government are looking for from people who receive guardian’s allowance as a result of the cap? If he cannot provide one, will he accept that the fact that they will be affected by the cap only if other benefits are also received is not a good argument for guardian’s allowance itself to be counted towards the cap? That argument could be made for any benefit. I look forward to the Minister’s explanation.
Lord Freud
Amendment 26 seeks to remove guardian’s allowance from the list of those that are included within the benefit cap, so that it is disregarded when calculating the total amount of benefits a household can receive before the cap is applied. Guardian’s allowance is paid to those who are responsible for a child or young person and either both parents or in some circumstance one parent have died. The Government recognise the crucial and valuable role that recipients play in helping children to recover from the loss of their parents, but I do not agree that it should be excluded from the benefit cap. That is about the principle that there is a clear limit to the amount of benefits that an out-of-work family can receive.
In the interests of time, I shall not repeat my previous arguments, but will provide the best information that we have, which is that the noble Baroness, Lady Hollis, is right to say that this affects very few people. On our sums, the inclusion of the guardian’s allowance within the cap affects fewer than 50 claimants—those are the figures that I have. Rather than a blanket exclusion of this benefit, it is better that targeted support is offered to those who need it. That is where the discretionary housing payments of £870 million come into play. On that basis, I ask the noble Baroness to withdraw her amendment.
Baroness Hollis of Heigham
First, I thank my noble friend who spelled out the devastating situation in which these children find themselves, and how those who care for them—on kinship care, usually—are therefore entitled to receive guardian’s allowance.
The Minister made two points. First, he said that the principle was that there is a clear limit to benefits that out-of-work families can receive, even when that out-of-work family has taken on the joyless but essential and necessary task of caring for another family’s children. Why does the Minister not consider that therefore they are entitled morally—I am not saying practically, but morally—to benefits for two families, because that is what they are doing? We are not talking about families of their own children; we can argue for that, as my noble friend did, and she was absolutely right to do so.
I am talking about a situation at the extreme end of kinship care, when somebody has taken on responsibility for another family’s children. To say that, on principle, that out-of-work family should not get additional money for doing that—that is not a principle. A principle usually has some sort of moral quality to it. That, I am afraid, is a Treasury statement. I cannot believe that the Minister believes that it is the right policy to uphold in this situation. We should be hugging those kinship carers who are entitled to guardian’s allowance and giving them every support we can. Instead, what we do is to make them poorer.
The Minister’s second point was that he reckoned there were 50 families. I would love to see how he got to that figure. I could not work it out—obviously, because I could not work out how many people were grandparents, how many were in-work families and how many were below the limit, and therefore exempt, because they did not already have children of their own.
If we are really talking about 50 families, why on earth are the Government not conceding? How much does the Minister think this will cost? Let us assume that the average number of children taken on by a guardian is one and a half—in some cases one child, in others two children, and in a few cases three or more. I estimate that that would work out at about £1,000 to £1,200 a year. For 50 families that would be about £50,000 to £60,000 a year. The Minister cannot find £60,000 a year—or £65,000, if we push it—to address this problem? I am going to sit down and ask him whether, in the light of the information he has so far given, he is willing to reconsider his position.
Baroness Hollis of Heigham
What does that mean—“at this stage”? Is the Minister willing to come back at Third Reading with a little amendment just taking out this group of people, who are among the poorest of the poor, who are taking on the hardest of hard tasks—caring for bereaved and traumatised children—at a time when they themselves are probably also bereft?
Lord Freud
Regrettably, as I said, I am not in a position to make any kind of commitment.
Baroness Hollis of Heigham
I guess it is my fault. I should have brought this up in Committee and perhaps given the Minister more time to think about it. Perhaps he will look back on today’s proceedings. He absolutely rightly responded to my noble friend Lady Pitkeathley on a situation that we all recognised it was important that he should respect and meet—and not just because of the court case. I suggest to him that this is another such case—and I think he may wish to do otherwise. Obviously I shall withdraw the amendment now, but I would hope, none the less, that on reflection he will feel able, for 60,000 quid a year, to take guardian’s allowance, at the extreme end of kinship care, out of the benefit cap. He will not even notice it—but they will. I beg leave to withdraw the amendment.
Baroness Sherlock
My Lords, this amendment, in the name of my noble friend Lady Hollis, would exempt from the cap women who are at least 29 weeks pregnant or responsible for a child under nine months of age. I thank my noble friend for making it clear to the House just what a perilous situation these women will find themselves in if things proceed as planned.
Some very strong arguments were made to me by Gingerbread as to why this particular group ought to be excluded. It suggests, first, that the group will find it most difficult to move into work to escape the cap and therefore will simply be pushed deeper into poverty. Of course, that is the last thing that it wants for a woman who is pregnant or has a very young child. Secondly, it points out that the Government want families on benefits to make the same choices as those who are in work. Parents in work have pregnancy and maternity rights, including an expectation that they will have some time away from work both when they are in the later stages of pregnancy and in the first months of their child’s life, so this exemption would mirror the rights of working families.
As my noble friend Lady Hollis pointed out, pregnant women and those with very young children are not listed as a priority group for discretionary housing payments, despite the complex challenges that they face as they move into work, and therefore they cannot have that to fall back on as other vulnerable groups might. I would be very interested to hear the Minister’s response to these challenges.
In Committee, I tabled an amendment that would have excluded maternity allowance from the cap. I did so to probe the Government’s reasoning and particularly to try to find out what behavioural responses the Government were expecting of pregnant women. However, as I explained earlier, I could not get an answer from the Minister. The only thing that I got on maternity allowance was the same as for the guardian’s allowance: the response was that people would not be affected unless the household was also getting other benefits. As I have said, that is not an answer.
This amendment from my noble friend seeks to protect a very narrow group of people at a very vulnerable time. The Government’s usual response is that if someone wants to escape the cap, they should either get a job or move house. Can the Minister explain to the House what he thinks the chances are of a woman who is 29 weeks pregnant getting a job? How strong does he think her chances will be out there in the job market if she has not worked previously? Secondly, if that is not a practical thing for her to try to do, maybe he thinks she should move house. I do not know whether he has ever had to help a very heavily pregnant woman move house, but would he really suggest to her that moving house when she is very heavily pregnant or has a brand new baby is either desirable or practical, unless of course she is forced into it in the circumstances described by my noble friend because she ends up being evicted for rent arrears?
I just want to get the Minister to address the practicalities of this situation. This is a very narrow group of people. What do the Government expect them to do if they find themselves hit by the cap? Will he please tell the House?
Lord Freud
My Lords, as I have already set out, those with a sustained work history benefit from a nine-month grace period before the cap is applied to them. Therefore, those households that have been in employment for at least 50 out of 52 weeks will be exempt from the cap. This gives time for households, including those with a new child, to adapt to their new circumstances before the cap is applied to them.
Households in receipt of working tax credits or which meet the UC earnings threshold will be entirely exempt from the cap. Although some single mothers will not be immediately able to move into work, for those households consisting of couples, the partner need work only 24 hours a week for the household to qualify for the exemption. Around 45% of households that include a maternity allowance claimant who will be affected by the new cap levels are households consisting of a couple, meaning that a partner can help to exempt a household from the cap through work. Households that include a claimant in receipt of maternity allowance may also be entitled to working tax credits and so be exempt from the cap.
Although I am grateful to the noble Baroness for speaking on this issue and for the research that she has put into it, I am not sure that the amendment would do what is intended. It would not create a disregard or exemption from the cap for the specified group; it would, however, appear to make the group subject to a different prescribed list of benefits to be defined by the Government in regulations. That would of course go against the approach that the Bill adopts of providing certainty about the capped benefits by including them in the Bill. I therefore ask the noble Baroness to withdraw the amendment.
Baroness Hollis of Heigham
I thank my noble friend Lady Sherlock. The Minister’s answer is that if a woman has a partner, he can increase his hours and she will be okay; if she does not, the amendment is technically deficient and so she cannot be helped. Is that a fair summary of what the Minister has argued? I think it rather is. But what about the situation of a deserted mum? She has one or two children already, she is now pregnant and the man has swanned off. What then? She has no partner who can increase his hours, she already has the care of children and she is up to or at the point of the benefit cap. She is now 29 weeks pregnant and trying to manage a budget, given she is in the private sector, that means she is probably unable to follow the nutritional guidelines and all the rest of it that is heavily recommended for her at this stage. I ask the Minister the same question that my noble friend asked: what is she supposed to do—apart from find another man?
Lord Freud
One of the things we have tested rather thoroughly through the courts is the role of discretionary housing payments for the kind of hard cases that the noble Baroness is so adept at finding. This is precisely where one would anticipate that provision, which is quite substantial, being used. The courts have found, again and again, that it is appropriate to use those payments for such cases because they are so hard to define in statute. Because of that difficulty, the flexibility of the DHP is the way to address the issue.
Baroness Hollis of Heigham
In that case, why do such women not fall within the Government’s guidelines as having high priority for DHPs? As my noble friend says, they do not. Although I have not been able to verify it myself, I understand that, as a result of that, in most local authorities they do not get such money because the money is not there. They certainly, I suspect, would not get it for nine months after and up to two months before, or something like 11 months’ continuous payment, because local authorities cannot run it. They use DHPs to deal with temporary, immediate emergencies. Therefore, if the Minister means what he says, he should be giving guidance to local authorities that this should be a priority consideration and he should back that with the necessary money, which is not there at the moment, to do so. However, I see that he is standing up, perhaps to respond to that.
Lord Freud
I just want to make the point that DHPs can be used for the long term. They are not just a temporary thing and the guidance says that very precisely.
Baroness Hollis of Heigham
I do not know how many local authorities the Minister has spoken to about their use of DHPs, but that is not my experience. Obviously, I have not been able to test the opinion of the entire local authority movement, but certainly this is what I am assured. I have crawled over some of the priority considerations of certain local authorities and can assure the Minister that what he is saying does not hold good: there is simply not enough money.
As far as I can see, the only advice the Minister is offering is that these women should throw themselves on the mercy of non-existent DHPs from local authorities whose money is already spent, cross their fingers and hope. I do not think that is a policy. I do not even think it is appropriate for the Minister to possibly suggest that that is what they should rely on. However, at this point, and given the time of night, I beg leave to withdraw the amendment.
Lord Freud
Amendment 27 seeks to exempt people in temporary accommodation from the benefit cap. I do not agree that it is appropriate to have a blanket exemption from the cap for people living in temporary accommodation. Rather, the best approach is to provide targeted support early so that people may better address their barriers to work. As I said in Committee, an exemption might, in fact, prolong a stay in temporary accommodation if it is likely that the cap will apply when a household moves to more permanent accommodation. That is an incentive both on the local authority and on the family.
I have already explained how £870 million in discretionary housing payments will be available for those households that need additional support in adjusting to the cap. Provision already exists to support the most vulnerable people who might be affected by the cap. Housing benefit paid to households in specified accommodation is disregarded from the benefit cap, and we included refuges within the definition of “specified accommodation”. While this does not mean that such households are exempt, by not including housing benefit in the calculation we expect that the vast majority of these cases will not be affected in practice by the benefit cap.
From April 2017, the weekly management fee in respect of temporary accommodation, currently £40 in London and £60 elsewhere, will be abolished and replaced with a grant that devolves this funding to local authorities. Unlike the existing management fee, this new grant will not count towards the benefit cap and that will help local authorities tackle homelessness more effectively. I therefore ask the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
I thank the Minister for his reply. None of it was a surprise, and I will, of course, withdraw the amendment in due course. I would just like to ask the Minister a few questions. He said that if there were a blanket exemption, this would prolong the stay of people in temporary accommodation. What evidence is there for that? Is it not generally the case that temporary accommodation is not of the best quality, and some of it pretty grotty? Why would families not want to move out of temporary accommodation as soon as they could to put down their roots in a more permanent arrangement? In relation to the grant, that seems helpful in principle, but on what basis is that grant going to be made available? Is it going to be ring-fenced for these situations, or just generally devolved to local authorities and caught up in the morass of funding and cuts that they are having to face?
Lord Freud
One of the most worrying aspects about temporary accommodation is that many cases have not been temporary. There have been cases where people have been kept in temporary accommodation for months, stretching to years. One of the reasons for that was that the only way it could be extinguished was by going into social housing. People were quite keen on that route through. That was changed in the 2012 Act so that it can be extinguished by going into private housing. Nevertheless, we want to incentivise councils to move people into settled housing as quickly as they can. Indeed, I think that the limit is 13 weeks. There are just too many examples; I do not have the exact number, but there are too many cases where it has gone on too long.
On the fee, funding previously paid to local authorities will become an upfront payment no longer tied to households remaining in temporary accommodation. The fund will be administered by the DCLG and the devolved Administrations. We will be able to give further details of that process in due course. That is all I have at the moment.
Lord McKenzie of Luton
I am grateful to the Minister for that. I will read the record, but I am not sure that I would agree with the proposition about local authorities not wanting to move people into more permanent accommodation as quickly as they can, and away from temporary accommodation, which is expensive for them. Having said that, and given the hour, I beg leave to withdraw the amendment.
Lord Freud
“(b) in subsection (4), omit “other”.”
Lord Freud
The Delegated Powers and Regulatory Reform Committee recommended in its report of 23 November a number of amendments to the benefit cap clauses in the Bill. Amendments 29 and 30 are technical and consequential amendments as a result of the committee’s recommendations. Amendment 28 is a tidying amendment and not as a result of the committee’s recommendations.
Before I do that, I would like to explain that, although the committee recommended that Clause 7 should be amended so that new Section 96, which it inserts into the Welfare Reform Act 2012, should reference single persons, couples and lone parents, and provide for the meaning of those terms to be specified in regulations, the Government do not consider this to be necessary. Redrafting the provision in the way suggested would overly complicate the legislation. The Government have been very clear in debates and briefings that the higher tier of the cap levels will apply to lone parents and couples, and that the lower-tier levels will apply to single people without children. I am happy to formally put on record again here today that this is the policy.
Turning to the amendments that are being taken forward, the committee recommended that the affirmative procedure should apply to any regulations amending the level of the benefit cap, using the power introduced in new Section 96A of the 2012 Welfare Reform Act to be inserted by Clause 8. As currently drafted, the affirmative procedure is applied only if the level of the cap is lowered. The amendments to Clause 8 mean that any change to the levels of the cap will be subject to parliamentary debate in line with the committee’s recommendation. This is a considerable level of extra parliamentary scrutiny for these future decisions. I am sure that these amendments to Clause 8 will reassure noble Lords’ concerns that for any future review of the cap this House and the other place will have the opportunity to have the decision explained and debated, and to agree it.
The committee also highlighted that currently regulations pertaining to the benefit cap are not required to be referred to SSAC. It has recommended that an amendment be made to provide that regulations pertaining to the cap must be referred to SSAC. After careful consideration, the Government accept this recommendation in principle and will table an amendment at Third Reading to reflect this. However, the Government do not accept that regulations relating solely to the level of the cap should be referred to SSAC, as that is a matter for Parliament.
A consequential amendment to Clause 7 has been identified. It has arisen as a result of the removal of Section 97(3) of the Welfare Reform Act 2012. Section 97(3) provided that the first set of regulations made under Section 96 were affirmative. As the first set of regulations has been made, the removal of the word “other” from Section 97(4) is purely consequential on that. I beg to move.
Baroness Sherlock
My Lords, I thank the Minister for that explanation. We welcome the move to affirmative regulations and are happy to accept his assurance that the other amendments are technical and consequential. I look forward to his returning at Third Reading with details of the amendments relating to SSAC. I would like to ask him to come to Third Reading armed with some specific information. If the Government are not minded to make reference to SSAC in relation to the level of the cap, and given that all the benefits affected by the cap are now in the Bill, will the Minister come back and detail for us precisely what those regulations might refer to that are still available to be sent to SSAC? Will he come back at that point and give a better explanation, of appropriate length—I am not blaming him for not doing it now—as to why the Government do not think that the level of the cap should be referred to SSAC, given that that is probably the single biggest determinant of the impact on those affected by it?
Lord Freud
“(4A) A statutory instrument containing regulations under section 96A”
Welfare Reform and Work Bill
Lord Freud Excerpts(8 years, 3 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, this is an interesting group of amendments. If I heard correctly from each of the speakers, the thrust of it is that government should be entitled to a whole range of information that will best inform it across the piece as to how to tackle a range of issues. Specifically, the group of amendments seeks to add to the reporting requirements to Parliament: the progress of children at five in areas of cognitive, personal, social, emotional and physical development—likewise for children living in disadvantaged households; the health and well-being of children living in workless and long-term workless households; and maternal nutrition in workless and long-term workless households.
The noble Lord, Lord Ramsbotham, referred to a range of matters. In particular he spoke about the collection of disadvantage that you get: homelessness, mental health, fuel poverty and low income—it is that collection of issues which makes more difficult the life chances of individuals. A number of speakers emphasised the importance of education—the noble Baroness, Lady Manzoor, picked up again the point she made in Committee about key stage 1 for education, and the noble Baroness, Lady Hollins, spoke about the importance of health and well-being boards. I understand that the Office for National Statistics produces data on national well-being and on the well-being of children; I think it reported in 2014 and again just last year. It is interesting that a whole range of data goes into those measures. It is said with regard to children that there are something like seven domains and 30-odd measures of children’s well-being, which is a whole collection of stuff to have to handle and deal with.
At the end of the day, government ought to welcome the information that this collection of amendments seeks to be reported on, which is a range of information across the piece. The key issue that flows from it is what you do with it, or what strategies or interventions will flow from that collection of data which will make a difference to the life chances of young people—which is the thrust of this.
The noble Lord, Lord Ramsbotham, made the point that we do not have a collective figure for the consequences of all the changes in the tax and benefit system in recent times. I know that the IFS did a calculation of what had happened under the coalition Government with regard to tax and benefit changes and concluded that if you look at those changes—the percentage of the income of various groups of people—the lowest two percentiles bore the greatest burden. If you look at it in terms of absolute amounts, the top 10% bore the most, but if you look at it as a percentage of income, the poorest have had the worst outcome from all these changes the Government have introduced—and that is before we get into ones that are reflected in the Bill we have debated to date.
When we talk about health and well-being, we need to be clearer about our distinctions. We have the national statistics data and the background to that, which is a very broad measure. The issue around health and well-being boards’ and local authorities’ responsibility is a slightly different focus, but important nevertheless. So far as we are concerned, we can see the benefits of this range of amendments, which try to encourage the bringing-forward of data to underline just what the consequences of these policies are. I think the noble Earl, Lord Listowel, talked a moment ago about how it is all too easy for us in this Chamber to see this in perhaps rather abstract terms and not the reality. People out there have to face the reality of what these policies mean, and the collection of data of which noble Lords speak will help bring that home to government as well as to campaigners generally, so that those who bear the largest burden feel that that is understood, reflected and challenged—which is our job here.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, these amendments on Clause 4 have been grouped together quite widely. I will start by making a general point about adding to the reporting duties that the Government have already set out. The best way of securing progress by government is to have a focused set of measures. I echo the implication of what the noble Lord, Lord McKenzie, said. The more you have, the more likely you are to have a diluted effort and distraction from the key issues, which in this case the evidence tells us are worklessness and educational attainment. Of course many factors contribute to these headline measures. For example, we know that children’s health is an important factor in their educational attainment. Tackling health at work will help ensure that more adults are able to work. Therefore delivering on worklessness and educational attainment calls for a wide set of actions. However, it is important that we focus government on its core objectives that will tackle the root causes of child poverty.
First, with regard to additional statutory reporting duties, I turn to Amendment 3. With this amendment the noble Lord, Lord Ramsbotham, seeks to introduce an additional reporting duty on the Secretary of State. The report must contain data on maternal nutrition in workless and long-term workless households in England. I have already set out that our evidence review published in 2014 makes it clear that worklessness and educational attainment are the factors that have the biggest impact on child poverty and children’s life chances. We are committed to supporting families at the earliest stage and to helping parents move into work and earn more through universal credit or investment in childcare, the national living wage and increases to the personal allowance in the tax system. This is the best way to secure children’s life chances and ensure that parents are able to care for themselves, too.
I cannot overstate the importance of ensuring that we focus on measures that tackle the root causes of child poverty and not be distracted by others that do not do so. Of course, the issue raised by the noble Lord, Lord Ramsbotham, is important. The Government take action. They provide advice for parents on maternal and infant nutrition via NHS Choices and Start4Life. Government also operates the Healthy Start vouchers scheme, which provides low-income people with vouchers that can be spent on milk, plain fresh and frozen fruit and vegetables, and infant formula. It already publishes the results from the National Diet and Nutrition Survey, which includes results by age and gender. There are a variety of reasons why adults have poor diets, and it is important that we look at the whole picture, which gives us valuable information and helps shape interventions. I therefore cannot support this amendment.
Through Amendment 4, the noble Lord, Lord Ramsbotham, seeks to expand the duty placed on the Secretary of State to include a duty to report on the progress of children and disadvantaged children living in England at age five in their cognitive, personal, social, emotional and physical development. It is vital that all pupils thrive and develop in their early years. Monitoring children’s personal development is already a core function of every education setting. This monitoring then enables teachers to tailor their support based on how each individual is progressing. I assure your Lordships that we do not take this issue lightly. As the Prime Minister said during his speech about children’s life chances—quoted by noble Lords—we want,
“stable families and good parenting, because we know the importance of those early years in setting children up for a good life”.
There are two key issues at the heart of the life chances reforms—action on work and action on education. Lives can be transformed by focusing on these two most significant drivers of poverty. The Bill will start to realise the vision set out by the Prime Minister when he said that,
“we can rescue a generation from poverty and extend life chances right across our country”.
We all know that the end of key stage 4 is a vital juncture in a young person’s education. It represents the culmination of primary and secondary schooling and provides a consistent point at which to measure attainment across all young people. Pupils who fail to achieve at the end of key stage 4 are at high risk of not being in employment, education or training, so the Secretary of State is committed, through the life chances measures in the Bill—
Baroness Manzoor
My Lords, I get what the Minister is trying to say but unless there is a comparator at key stage 1, by key stage 4 it will be too late—the children will be 16 years old. If the Government really are to assess the development of children from the ages of five to 16, there is a need for that assessment to start at key stage 1. If there is an issue, they can be given support much sooner so that they have much better outcomes at 16. That will not happen if we do not have information from key stage 1.
Lord Freud
As the noble Baroness knows, we have a lot of information about how pupils progress. The point is that it is necessary to have something that absorbs all that rather than having detailed measures at each point. The earlier processes have to be right to attain the achievements at the key target date. I have spoken in this House before about “targetitis”. If you give hospitals 220 different targets, for instance, which is what happened a decade ago, nobody knows what on earth they are looking at, whereas if you focus on the two things that really matter and not on the culmination of a lot of measures, you drive coherent behaviour through the targets that are set, and that is exactly what this strategy does.
I have already made the House aware that the measures that we have include key stages 1 and 2. Annual reporting at different stages of primary schooling already provides significant detail of the progress and attainment of disadvantaged pupils. Monitoring personal development in the way that the noble Lord suggests—
Lord Ramsbotham
My Lords, these reports include the Department for Education and the Department of Health, as well as the Department for Work and Pensions. Who is making these reports and to whom are they going?
Lord Freud
The whole point is that these reports are published. It is a forcing mechanism to make sure that the relevant Secretaries of State and the relevant departments of government work together to tackle the fundamentals that produce these outcomes.
Returning to the educational issue, if we made this change to the Bill, it would increase the burden on primary schools and send a signal to schools that Parliament does not trust them to carry out their core functions. That is why I cannot support this amendment.
Amendments 5 and 6 look to expand the reporting duty placed on the Secretary of State so that his annual report containing data on children living in workless households and long-term workless households in England must include data on the health and well-being of these children.
It goes without saying that the Government want the best for our children. We want all children to have the opportunity to have fulfilling lives and to realise their potential, and clearly their health and well-being is an integral part of that. However, we can achieve this aim, which is one that we all share, only by tackling the root causes of child poverty, and I will not parrot what I have already said on this point. Our evidence review shows clearly that worklessness and educational attainment are the two factors that have the biggest impact.
We recognise that, as the evidence review pointed out, child ill-health is also a driver of poverty. We are absolutely committed to reducing health inequalities in terms of access and outcomes, and we are working across government to ensure that ill health does not hold our children back from fulfilling their potential. The Government have already put in place a well-developed reporting framework—the public health outcomes framework—that supports health improvement and protection at all stages of life, especially in the early years. The framework includes a large number of indicators on children and young people’s health and, along with the NHS outcomes framework, sets a clear direction for children’s health that allows anyone to hold us to account.
We are committed to improving access to better services and to promoting early intervention to address children and young people’s mental health issues before they worsen. We are investing £1.4 billion in that over the next five years, and we have invested more than £120 million to introduce waiting time standards for mental health services—the first time that we have done that.
If we concentrate our actions and resources on the root causes of child poverty, such as worklessness and education, that will be the springboard from which everything else will follow. While the Government recognise the importance of tackling child ill-health, these amendments would ultimately distract the Government’s focus and finite resources from what is most important for our children’s future life chances. For these reasons, I cannot support the amendments of the noble Lord and the noble Baroness.
Amendment 7, tabled by the noble Lord, Lord Ramsbotham, would require separate reports for measures of worklessness and educational attainment. We are already committed to reporting on these measures and believe that it is sensible to deal with them together as they are jointly fundamental to improving life chances.
Amendments 9, 10, 12, 13 and 14 are consequential on Amendment 7 and therefore, in the Government’s view, unnecessary.
Once again, I thank noble Lords for their contributions but, on the basis of what I have said, I urge the noble Lord to withdraw his amendment.
The Earl of Listowel
Before the noble Lord sits down, will he reassure the House about the future of health visitors? Clearly, they have a very important role in the welcome things that he has just said. The Government have done a great job in recruiting and developing the workforce, but now that responsibility for health visitors has been moved to local authorities, which must fund them, there has to be a concern that in the current atmosphere for local authorities we may go backwards and health visitors will not be commissioned to do the work that is so necessary in relation to what we have just been discussing. Perhaps the noble Lord would consider writing to noble Lords who are interested in this area about the mechanisms that exist to ensure that that does not happen.
Lord Ramsbotham
My Lords, I am very grateful to all those who have contributed to this short debate. I am particularly grateful to the noble Lord, Lord McKenzie, for summing up what people said.
I listened very carefully to what the Minister said, and I am grateful to him for repeating what he has said before about the Government’s concentration on worklessness and educational achievement as being the main causes. However, I do not think that they are unique causes. The health and well-being, not just of the children but also of the families, and particularly the mother, is something that is a huge cause of the subject that we are looking at, and it ought to be added to worklessness and educational attainment.
It is all very well saying that we are going to do a great deal and going to improve the child mental health treatment processes in the National Health Service, but that comes at an enormous cost. The National Health Service cannot afford to do all this at present; otherwise, it would already have done it. I am very concerned that health and well-being in particular are being excluded from the terms of the Bill. They ought to be before everyone who is considering the issues of which the Bill is made up, particularly tackling the problems of worklessness and educational attainment, both of which have mental health as one reason—not the only reason—that they are there.
I am in something of a quandary. In many ways, I would like to test the opinion of the House on each of these three amendments, because I think that they are each important. However, if I may, I would like to withdraw Amendment 3 and not move 4 and test the opinion of the House on Amendments 5 and 6, which deal with health and well-being, which are, I think, the guts of all this issue.
Lord Freud
My Lords, let me go straight to that question while it is fresh in my mind. It is, of course, possible to be poor while both parents are in work, particularly under the present legacy system. That is why we are bringing in universal credit—to make that much harder. We are not arguing about the level of poverty; it is about what is likely to happen to the life chances of that child compared to both parents being at that level of income and out of work and in work. That is the argument I have been trying to make all afternoon, with, I think, some resistance.
Under Amendments 8 and 11, noble Lords seek to expand the reporting duty placed on the Secretary of State so that his annual report to Parliament must include data on children living in low-income families where one or both parents are in work. Their amendments would add the terms “low income” and “in work” to the list of terms to be defined in the annual report.
I have already gone on enough about the centrality of worklessness and educational attainment. Alongside these statutory measures, the Prime Minister has announced that we are committed to publishing a life chances strategy in the spring, which will set out a comprehensive plan to fight disadvantage and extend opportunity, including a wider set of non-statutory measures on the root causes of child poverty such as family breakdown, problem debt, and drug and alcohol addiction.
I have said before that work is the best route out of poverty but I want to restate our arguments about the centrality of tackling worklessness. The risk of a child being poor is dramatically reduced if at least one parent works. According to the latest statistics, the risk of being in relative poverty for a child in a working family is 13%, compared to 37% for a child in a workless family. So a child in a workless family is almost three times as likely to be in poverty as a child living in a family where at least one adult works. Perhaps those are the figures for which the noble Baroness, Lady Sherlock, was asking.
Last year, we published an analysis on the transitions into and out of poverty. What we found was staggering, although some might say that it was obvious. Of the children who are in poor workless families, 74% will leave poverty altogether if their parents move into full employment. The analysis also made clear that the more work parents do, the more likely they are to leave poverty, with 75% of children from poor families in part-time employment leaving poverty if their parents enter full-time employment. I remind noble Lords that we have a package of reforms to encourage people to work. These policies include the national living wage and changes to the personal tax allowance, which will allow people to keep more of what they earn. Furthermore, over 30 million individuals will see a tax cut as a result of the changes we will make in this Parliament. Some 570,000 individuals will be lifted out of income tax altogether by 2016-17 and, as a result of the introduction of universal credit, more people will enter work due to improved financial incentives. We have a vibrant and growing economy, and last year real pay grew by 2.1%.
On the question from the noble Baroness, Lady Hollis, on support for women, we are supporting families through the national living wage, which is expected to have a stronger positive impact on the female workforce, boosting the wages of three in 10 female employees by 2020. Our childcare reforms will provide support to women who want to find employment, helping them to increase their income.
We have discussed before that two-thirds of children in relative poverty are from working families, but let me go over my argument. I am not convinced that it will convince the noble Baroness, Lady Lister, but I must try. It is correct that the latest figures published in the HBAI show that 64% of children in relative poverty are from a family where at least one adult is in work. This proportion has grown over the last couple of decades due to the improved progress in tackling poverty in workless families. In 1996-97—the earliest period for which data are available—around 60% of children in relative poverty were from workless families, which is around 2 million children, and around 40% of them were in working families, which is around 1.5 million children. During the 2000s, there was progress in reducing the number in poverty in workless families by focusing spending on tax credits, but this had the unintended consequence of weakening work incentives that resulted in hardly any change in the number of children in in-work poverty, which stood at 1.3 million in 2009-10.
Baroness Hollis of Heigham
My Lords, if the Minister will allow me to say this, he is misrepresenting the statistics. It may be a statement about children in poverty, but in particular the number of lone parents in that period who were in work went up from barely 50% to some 65%. Therefore, tax credits made work pay for them.
Lord Freud
It may have made work pay for some people, but it had the effect that, while it was possible, through income transfers, to drive down the out-of-work poverty of children, which is what they were designed to do, it had virtually no impact on in-work poverty. That brought that policy to a reductio ad absurdum: you could not do it without undermining your work incentives because you were raising the level of the benefit structure and it was beginning to knock up the income scale. That was the problem; that is what the data show.
In-work poverty, combined with falling levels of children in poverty from workless families, led to a greater proportion of children in poverty being from those workless families. This meant that, from 1996-97 until the end of the last decade, the proportion of children in poverty from working families actually went up from four in 10 to six in 10. That is the reality of the situation today. I can see that there is some ideological difference to be found over that analysis.
The evidence review, raised by the noble Baroness, Lady Lister, highlighted the importance of low earnings, but emphasised the impact of working a lower number of hours, rather than the impact of low-paid work. On the question of how we will know about the levels of poverty—in work and out of work—I reassure her, as I already have, that we will have that data in the HBAI. It will continue to be available. Indeed, those in-work poverty figures in the HBAI can always be broken down by whether the family is in full-time or part-time employment.
I described why having two separate systems worked so poorly. We are introducing universal credit exactly to address those disincentives. I can tell noble Lords that I have spent the most enormous amount of personal time trying to get this structure so that we do not have these odd disincentives, which are really undermining for society. Universal credit is the best way to give people the incentive to enter work: it reduces poverty by making work pay and making sure that people do not lose out as they start to earn more, which is the terrible discontinuity in the legacy system. It provides an effective route out of poverty, while supporting the most vulnerable households. We already see the evidence under universal credit that people are working more and are better off in work.
As with Amendment 2, which we discussed earlier, these amendments would reintroduce an income-based relative poverty measure, which, as I have tried my best to explain—perhaps not as successfully as I might—do not tackle the root causes of child poverty. The Government are concerned with focusing our efforts and attention on those areas that will make a real difference to children’s lives, and concentrating on those root causes.
Resources are finite. It is crucial that we prioritise our actions to make the biggest difference for children. Statutory income measures cause the Government to focus their action and resources on direct and incremental increases to family income, but that does not necessarily drive any real change and is detrimental to the things that we think are vital—noble Lords know what I think they are.
Let us focus on the things that matter and drive the actions that will give our children the future they deserve. Let us not be distracted by measures that detract from that aim. As I said, we will continue to publish the HBAI figures so that we will know exactly what is happening. I therefore urge the noble Baroness to withdraw the amendment.
Baroness Lister of Burtersett
My Lords, I am grateful to all noble Lords who spoke in support of the amendment. I am grateful to the Minister, who at least went into more detail. As he expected, I was not convinced by his arguments, because I still have not really heard a convincing explanation of why there should be no accountability for what is happening. He said that we must focus on the things that matter, but surely what is happening to, for instance, the lady referred to by the noble Earl, Lord Listowel, matters? My noble friend Lady Sherlock talked about those who work such long hours that they do not see their children. We know from research at Bath University that children care about that. It talked about children and lone mothers in particular: they are glad when their mother gets paid work, but it affects them. They hardly see their mother. That time squeeze on such families is important. These things matter as well.
I do not necessarily think that this is ideological, as the Minister said. At the beginning he said that it is not the level of poverty that matters, but what is likely to happen to the life chances of children—as if these were totally separate things. The whole point, as the Social Mobility and Child Poverty Commission and the driver analysis said, is that life chances are affected by income poverty. Therefore, we need to know what is happening to the life chances of children, regardless of the employment status of their parents. I will not go into the detail of the trends; it is pretty much what the Minister said in Committee. I do not think that that is the point; the point is that there should be government accountability about what is happening to those who, as the Minister likes to say, are “doing the right thing”—although I am not so sure it is always doing the right thing—and who are in paid work.
I am disappointed. What the Minister said at the end suggests, if we are focusing on what matters and we do not focus on the poverty of those whose parents are in paid work, that that therefore does not matter. That says volumes. I do not suppose that low-paid parents are sitting at home watching this debate—they are probably out there working—but if they read about it or hear about it, they would say, “Don’t we matter? Don’t the hours I am putting in for little pay matter? Don’t the Government want to report on what is happening to people like me? Doesn’t it matter?”. I think that it matters enormously. However, I will not push our luck and test the opinion of the House, so, regretfully, I beg leave to withdraw the amendment.
Lord Freud
These amendments seek to rename the reformed commission as the Life Chances Commission, rather than the Social Mobility Commission, and to amend the duties placed on the commission to promote and improve life chances instead of social mobility. The two concepts—social mobility and life chances—are different although there are, of course, areas of overlap between the two. The Prime Minister’s speech earlier this month demonstrated the importance this Government place on improving children’s life chances. The statutory measures of worklessness and educational attainment and the Government’s life-chances strategy will drive action that will make the biggest difference to children’s life chances. Together, they will provide transparency and enable anyone to hold the Government to account.
The Government also place great importance on improving social mobility and providing equality of opportunity for all citizens. Our proposals for the reformed commission will enable it to have a single-minded focus on social mobility and play a crucial role in its scrutiny and advancement. That is about ensuring that everyone has the opportunity to realise their potential in life, regardless of their background. Perhaps those in Oxford do not need quite as much looking after as others. The commission will also have a new duty to promote social mobility in England, enabling it to engage with a wide range of partners, including government, business and the third sector. This will be crucial to tackling the institutional biases and cultures that prevent individuals fulfilling their potential. Through our new statutory life-chances measures and strategies and the reformed Social Mobility Commission, the Government will drive action and enable scrutiny on these two vital issues. I therefore urge the noble Baroness to withdraw the amendment.
Baroness Lister of Burtersett
My Lords, I am very grateful to the noble Lords who have spoken. I feel slightly embarrassed; I am supposed to be the sociologist but it was the right reverend Prelate who quoted Max Weber. I had better go back and read my old sociology textbooks. I still do not feel that the Minister has given a true explanation. He seems to be making a distinction: the way he and the Prime Minister see it, life chances are about children’s life chances, while social mobility is about everyone—children and adults. However, children become adults and I see life chances as being about the whole life course, from cradle to grave. If that is the case, and the distinction lies in the commission’s focus being more on what is happening to adults, that worries me even more. Let us remember that this started life as a child poverty commission. In the Welfare Reform Act 2012, it became the Social Mobility and Child Poverty Commission and some of us were a bit worried about that at the time. Were we not right to be worried? Now it is not just child poverty that has been dropped, but children, too. Apparently it is not now supposed to be interested in children at all. I am not so much puzzled now as quite worried about what this means for the commission, because the Social Mobility and Child Poverty Commission has produced very valuable reports about what is happening to children in this country. The Government no longer have a statutory obligation to report on children in poverty, other than in relation to worklessness and educational attainment. We do not know what will happen to the Child Poverty Unit. It is as though children—and children in poverty—are just disappearing.
I am less puzzled than really upset about what has happened here. The complete shift of focus away from children in this commission is disgraceful. I am not going to push it now, for obvious reasons, but I hope there may be some other way that we can come back to this, though I do not know at what point this can happen or what scope there will be for the commission to try and expand its remit. I find what the Minister is saying quite extraordinary. As he himself has said, we want to focus on what matters: he is saying that children do not matter. I leave it there and beg leave to withdraw the amendment.
Lord Freud
It might be worth my intervening on the noble Baroness, I think, in the interests of not hearing too much more vituperation—there is only a certain amount that I can take.
Lord Freud
Amendment 24 seeks to remove carer’s allowance from the list of benefits that are included within the benefit cap. As written, the effect is that recipients of carer’s allowance with a benefit income above cap levels would still be included in the cap but their carer’s allowance payment would be disregarded from the cap. That is the way that this amendment works.
I emphasise to the noble Baroness, and to your Lordships, that this Government value the contribution which carers make to society, and shall outline the further steps that we are taking to support carers. As I indicated earlier in the process, the Government have been carefully considering the position of carers and the people who they care for in relation to the benefit cap. I am grateful for the patience which noble Lords have shown while we completed this consideration. I know that your Lordships have been keen to hear where we would come out but it is necessary to look at these things in detail and take the right time to do so. We keep all these policies under review and have been looking at support for carers with particular attention—that is, across the piece and not just here. In relation to the benefit cap, the position of carers cannot be considered in isolation from wider policy aims. Our strategy is to support and invest in carers. We have therefore looked at the evidence and considered the best way to continue to support carers in the context of wider government strategy.
We do not consider that the disregard which this amendment would create is the right approach. We want to go further; we will be exempting all recipients of carer’s allowance from the benefit cap, whether they are single or part of a couple. This approach fits within the wider government strategy to support and invest in carers. Many carers wish to enter paid employment and many have done so while sustaining the role. We recognise that in some cases, it is beneficial for both the cared-for person and the social care system if people are cared for at home. It continues to be the case that some paid employment, alongside caring, will be right for many carers. But our strategy to support carers through the Care Act and through wider investment strategies provides new, targeted opportunities for help and encouragement, where appropriate, to remain close to paid employment.
As I say, we will be exempting recipients of carer’s allowance from the benefit cap. This is of course complex and we will need to get it right. But with my assurance that to support this exemption we will bring forward an amendment at Third Reading, and then appropriate regulations in due course, I therefore ask the noble Baroness, if she has finished moving her amendment, to withdraw it.
Baroness Pitkeathley
I am always happy to spare the Minister more vituperation, as he pleaded for. I am of course delighted with what he said, with the recognition that the Government have given to the contribution which carers make and to their inability to mitigate the effect of the cap in other ways. Certainly, some carers combine paid work with caring but, as I have said, for many their caring responsibilities are too heavy for them to do that without enormous stress. I am very glad that the Minister has taken account of that, and that the Government have taken account of the very strong wording of the High Court judgment. The wording was extremely well put but extremely firm. It would have been very difficult to understand if the Government had not heeded the very strong words of that High Court judgment. At the time, it seemed that there was neither logic nor justice in the Government’s position. I beg leave to withdraw the amendment.
Housing Benefit: Social Housing Units
Lord Freud Excerpts(8 years, 3 months ago)
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Baroness McDonagh
To ask Her Majesty’s Government what assessment they have made of the additional expenditure on housing benefit paid to private sector landlords as a result of the reduction of social housing units.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
The latest data show that the number of social and affordable rented housing units in England has increased by 46,000 since 2010 and now stands at more than 4 million. Over the last two years, overall real spending on housing benefit fell for the first time in a decade. In 2014-15, housing benefit expenditure in the private rented sector was £9.1 billion, the lowest figure since 2010-11. This year, it is forecast to fall to £8.9 billion.
Baroness McDonagh (Lab)
Unfortunately, I have to say to the Minister that my understanding of the figures is very different. Is it not correct that, in the last year of the Labour Government, 33,000 social housing units were built, renting out at 40% to 50% of market value? Last year, 9,500 units were built—a drop from 33,000 to 9,000. Is it not the case that most families are being pushed into expensive “affordable” housing or private renting? Will the Minister confirm that, as of last year, the housing benefit bill had increased by £2 billion over the last five years? Does the Minister not agree with me that the Government’s affordable housing strategy should be renamed unaffordable—unaffordable for the British taxpayer and unaffordable for families?
Lord Freud
I am afraid there were a lot of inaccurate figures there. Under the last Labour Government, the number of social and affordable rented houses fell by 420,000. Since 2010, it has gone up by 46,000. We have just seen the expenditure come down, because we have got people into work: people in work do not require support from housing benefit, and their numbers have come down. The numbers in the social rented sector are down 2% in the last year and the numbers in the private rented sector are down 5%. The figures that the noble Baroness was promoting are really quite wrong.
Baroness Gardner of Parkes (Con)
Is the Minister aware that there are abuses in the system through which private landlords let properties to people who need them very badly? In the past, there was a ridiculous situation whereby, if you were prepared to let your property for £X, the council would tell you that you could get £2X for it, so immediately any sensible landlord charged £2X. Is he also aware that other people required their tenants who were getting housing benefit to pay extra to them as private landlords and to say nothing about it? Something has to be done to ensure that that does not continue.
Lord Freud
We inherited a system under the local housing allowance which was based at 50% of the average rate. Clearly, that was too high and encouraged some landlords to move up to that central rate, even though their houses were not worth that amount. We have now put a series of controls on how the LHA works.
Baroness Warwick of Undercliffe (Lab)
My Lords, can the Minister comment on the changes in housing benefit in respect of supported housing for the most vulnerable people? Can he confirm that the Government’s plan to limit housing benefit in the social housing sector to the local housing allowance will only apply to tenants of working age in general needs housing and not to the homes of the most vulnerable?
Lord Freud
We are having a very substantial study done on the supported housing sector. That will come out later this year and we are looking at what our policies should be to support that sector.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, as private sector rents are normally higher than social rents, this could lead to an increase in housing benefit paid to private sector landlords, if the volume of private sector rental properties available is outstripped by demand from those renting there instead of in the social sector or from those who cannot afford to buy a property. Does the Minister agree?
Lord Freud
No, you have to look at the round trip. A single person in a three-bedroom place, say, may move out to the private rented sector. That might be more expensive, but then you can take a family, who are very expensive in the private rented sector, and put them in the cheaper, social rented sector. That round-trip effect in somewhere like Enfield is worth £2,500 a year to the state; the typical figure for a place such as Lincoln would be more than £600 to the state.
Lord Skelmersdale (Con)
My Lords, is there not a direct relationship between the amount of capital that local authorities are allowed to spend and the number of council houses built by those authorities?
Lord Freud
My Lords, we are looking to double the housing budget to more than £20 billion over the next five years. We are committed to 400,000 new affordable housing starts worth £8 billion—£1.6 billion of that is going to the rented sector. This is from a Government that are really trying to get housing back after the last Labour Government in 2010 left housing starts at the lowest level ever since the 1920s.
Baroness Sherlock (Lab)
My Lords, let us put a couple of facts on the table. The Government said they are going to spend £20 billion on housebuilding this Parliament, of which only £1.6 billion will go on affordable housing. Under the welfare reform Bill that the Minister is dealing with at the moment, the OBR has said that 14,000 fewer social housing units will be built as a direct result of the plan to force housing associations to cut rents. How does that help bring the housing benefit bill down?
Lord Freud
I just repeat what I said: we are spending £20 billion to have 400,000 new starts. That is more than this country has seen. Where there might be a policy that may have a pressure, we will look at that but, overall, we are determined to get the houses built in this country.
Welfare Reform and Work Bill
Lord Freud Excerpts(8 years, 3 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, we support Amendment 1 for the reasons advanced with conviction by the noble Baroness, Lady Campbell, strongly supported by the noble Lord, Lord Low, and pretty much every other Peer who has spoken in this debate so far. We heard from the noble Baroness, Lady Doocey, about the importance of proper reporting to the ability to deliver proper parliamentary scrutiny. The right reverend Prelate the Bishop of St Albans raised the very important issue of the need to have data on different groups, otherwise there is a risk that targets will be achieved by dealing just with those closest to the labour market. The noble Lord, Lord Wigley, reminded us about the impact of specific, detailed reports which come before Parliament. The noble Baroness, Lady Thomas, said that we can get full employment only if we make progress on the disability employment gap. The noble Baroness, Lady Hollins, and other noble Lords, talked about the failure of the Work Programme at the moment—a running theme on these issues. I am delighted that the noble Lord, Lord Lansley, and the noble Baroness, Lady Meacher, touched on Amendments 42 and 43. That enables me, in the absence of my colleagues, to address those and I will do so in a minute. The noble Baroness, Lady Afshar, made an important point about tackling the stigma around mental health which, sadly, still pertains in some communities.
We, too, welcome the Government’s commitment to halving the disability employment gap by 2020. We are grateful to the Minister for organising a meeting last week, together with his colleague, Justin Tomlinson MP, although the message delivered was that the amendment would be resisted by the Government. I hope there has been a change of heart in the interim. This is notwithstanding the generally encouraging noises and the promise of a White Paper. We know that the disability employment gap has stayed stubbornly persistent—the noble Lord, Lord Low, referred to it as intractable—for too long and cross-government effort will be needed to deliver on the commitment.
The reasons why we need regular reporting have also been summarised, too, by Leonard Cheshire in its briefing paper and these include, in particular, the incentive for action in that it will provide a departmental and cross-government focus on the gap. As the Minister himself has frequently opined, it is that which gets measured and reported on which gets government attention. That briefing highlighted the somewhat conflicting messages we have received from the Government. The Employment Minister in another place stated that the Government did not see the need to report on disability employment, as the measure was essential to achieving the wider commitment to full employment. However, the more enlightened Minister for Disabled People did promise that the annual report on progress to full employment would include an update on the Government’s progress towards halving the disability employment gap.
We need some clarification on this, particularly considering the comments made by the noble Lord, Lord Freud, in Committee, to which the noble Baroness, Lady Campbell, referred. The thrust of those comments was that the management information which this amendment seeks has not been built into the current plans and would not represent value for money, given the timeline to just 2020. Do the Government have no ambition after that? It would also disrupt the universal credit timeline, wherever that currently stands. If the Minister rejects the amendment, but promises regular reporting, will he make it clear what that will entail and what the sources of the data will be? The amendment is seeking not just aggregated data reporting but a proper analysis of progress over a range of conditions. If we do not have clarity on this and the noble Baroness, Lady Campbell, is minded to test the opinion of the House, we will support her.
Amendment 42, in the name of the noble Baroness, Lady Howe, seeks, as we have heard, to add people with mental health problems to the list of groups which are exempt from the conditionality element of back-to-work support schemes. We have received a very helpful briefing from Mind which covers this and other issues. It is suggested that conditionality, with its threat of sanctions, has a negative impact on people with mental health problems, that it undermines the relationship between claimant and adviser, removes choice and control, and has no evidence to support it working for people with mental health problems. It seems to us that this is fundamentally about having the right sort of support for people with mental health problems. Mind and others point out that the mainstream back-to-work support is currently often generic, as we have heard today, untailored and does not address the barriers to work which disabled people face. The lack of specialist support is undermining the opportunities for individuals to access work. This is a constant complaint from those who engage with these issues, so perhaps the Minister will tell us how he is to address this in the context of halving the disability employment gap.
Amendment 43, in the name of my noble friend Lord Layard, refers us back to psychological therapies, as we have heard. I am grateful for the interventions of the noble Lord, Lord Lansley, and the noble Baroness, Lady Meacher, so that we can at least debate this a little today. On the matter of drafting, we need to reflect on the reference to “primary medical condition” given that entitlement to the WRAG is determined by a range of descriptors which can be for physical or mental health factors. Drafting aside, my noble friend's objective is to encourage and assist those with a mental health or behavioural disorder to access assessment and, if appropriate, treatment. This is an objective which we wholeheartedly support.
My noble friend Lord Layard has previously made a powerful case in identifying that nearly a million people are on ESA due to depression or anxiety disorders but that only about half are getting treatment. We have heard that improving access to psychological therapies can make a real difference, as the noble Baroness, Lady Meacher, confirmed. The pilots that took place were 10 years ago. My noble friend has previously explained that around half of those treated under the programme last year recovered during treatment. Such results could obviously assist the path for people back to work and we know of the evidence that work—good work—is good for people’s health. His amendment does not mandate anyone for treatment—we have been down that path before—neither is it instructing the NHS to treat in a specific way a group of individuals. But it requires that those with a mental health problem be encouraged and assisted to be referred for assessment and treatment. There is no conditionality attached and no suggestion that such individuals should somehow jump the queue.
If assessment and treatment is key to making individuals well and helping them move closer to the labour market, is that not exactly what the system should be about? This of course begs the question of what the process should be. I hope that the Minister will accept the thrust of this amendment and follow up with my noble friend and others who have been engaged in the past. We used to have mental health champions in Jobcentre Plus; perhaps the Minister could tell us what has happened to this role.
I finish where I started: fundamentally, we are very happy to support Amendment 1, which is very important, and to help the noble Baroness test the opinion of the House if that is her decision.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, Amendment 1 would build on Clause 1, which sets out the Government’s commitment to report to Parliament annually on the progress made towards full employment. Producing an annual report which illustrates progress towards full employment across the UK demonstrates this Government’s clear intention and continuing commitment to building a strong economy, growing business and ensuring labour market opportunities for all.
The purpose of this amendment is to require a further annual report to Parliament on the progress that has been made towards narrowing the disability employment gap. The amendment would also require the report to include how the Government have defined the disability employment gap, how they will assess whether progress has been sufficient and what remedial action will be taken if progress is insufficient. The amendment also requires that the report should include data on progress in increasing the employment rates of specific groups of disabled people, including people with autism, a learning disability, mental health problems and visual impairments.
I hereby formally commit the Government to report on our progress towards halving the disability employment gap in the annual report on full employment—no ifs, no buts. Halving the disability employment gap is a crucial part of achieving our full employment aspirations and a key priority for this Government in its own right. I hope also that, following my meeting with Peers on this very subject last week, they are assured of my commitment and that of my honourable friend, the Minister for Disabled People, who was also at that meeting.
Baroness Meacher
My Lords, before the Minister sits down, perhaps he would help us by explaining what the technical problems are in a simple referral to NHS by IAPT of people who have a diagnosis of a mental health problem.
Lord Freud
Yes. The Secretary of State for the DWP has no power to make referrals into the health system. That is just the way that these things are kept separate, and there is enormous sensitivity in the medical area about data and information flowing around the systems. In practical terms, that makes it impossible to join them up; it must be done in a much more subtle and clever way.
Baroness Campbell of Surbiton
My Lords, I thank the Minister for his reply to my amendment, which I shall come to in a moment. First, I thank the right reverend Prelate the Bishop of St Albans, the noble Baroness, Lady Doocey, and of course my noble friend Lord Low for putting their names to my amendment and believing in some of the arguments that I put forward in Committee. I would also like to thank everyone else, but they are too numerous to mention. I am thrilled to get that amount of support for the amendment.
I am fully aware of the Minister’s and the Government’s good intentions towards helping disabled people gain fulfilling employment. They were and, I believe, still are very serious about wanting to halve the disability employment gap. I welcome that, but I remember thinking the day I heard it, “My God, that’s going to take some work!” and, “Goodness me, we are really going to have to understand what lies behind the lack of mobility and movement within the unemployment field as it concerns disabled people”. I am aware that it will be tough—it will be really tough.
I hear what the Minister says about committing to making sure that disability is properly scrutinised in the annual reporting system. He will probably even get them to give a dedicated chapter to disability, but I also know that this will not do what it needs to for disabled people in really beginning to address that 30% gap.
I have been involved in writing and being part of generic reporting many times in my life. I have often been asked to do the work on disability for general reporting on health and social care. One very clear example struck me when the Minister was speaking—from when the Disability Rights Commission and the reports written by it was amalgamated into the Equality and Human Rights Commission, a lovely generic body where we would all work together on addressing the barriers that everyone faces with getting into work, housing, and so on. I am currently sitting on the post-legislative scrutiny committee on disability to see how well it is doing under the Equality Act and the commission. I have to say that we are receiving overwhelming evidence that the generic approach is simply not working. Disabled people are complex creatures; we are all so different, and all our support is different. Understanding why we are not entering the employment market will take something else—something more than a chapter in a generic report. However committed the Minister is that it should reflect the situation, I am afraid that it will not. That is why I was very keen—and I am keen—that something more should be put forward to address this intractable problem, as unemployment among disabled people is probably one of the biggest.
I am very tempted to test the House, but I am not sure that it would work—and, if it did, I am sure it would be overturned. So I am looking to the Minister to go back to the Government and to departments other than the Department for Work and Pensions, which, frankly, will write the report. Who will collaborate with the department across government? Which departments will really throw their weight behind this? I am sceptical, because they have not done very well so far on other issues. I would like the Minister to go back to the Government and say, “Okay, this will be part of the generic report, but I want it to be a substantive part, and I want more than a generic report with a chapter on disability that tells us all the things that we already know”. For that reason, I beg leave to withdraw the amendment.
Lord Freud
My Lords, Amendment 2 seeks to insert a new clause that would expand the annual report to include data on children living in households with low relative income, combined low income and material deprivation, absolute low income, and persistent poverty. It would effectively reintroduce the same income-based poverty measures as set out in Sections 3 to 6 of the Child Poverty Act 2010—measures that fail to tackle the root causes of child poverty. I know that the amendment is well intentioned, but as it is drafted, it is technically faulty and cannot achieve what the right reverend Prelate, the noble Baroness and the noble Earl want it to achieve. For example, the amendment refers to how equivalised net household income is to be adjusted by regulations, but there is no regulation-making power in relation to the life-chances clauses in the Bill.
However, this is not the foundation of my disagreement with the amendment. I firmly believe that the existing statutory framework, set around the four income-related targets, simply does not drive the right actions to transform children’s lives. That is what we are all aiming for, so I think it is important for me to spend some time explaining why income measures are not the way to achieve what we all want to see. There will always be natural variations in income levels in society. However, having less money than someone else does not necessarily mean that an individual is in poverty. Income measures do not take this into account effectively.
Income measures focus on the economics of poverty and ignore the human dimensions: the social causes and the reasons people can get stuck in poverty. But even as economic indicators they are flawed. They are an indirect and imperfect indicator of poverty. They do not account for the full needs of the family or other financial deductions that reflect a family’s true financial situation, such as the amount of debt a family has, or even their non-income based resources, such as the benefits from education, such as the pupil premium. Households that have large savings or capital can still count as being in income poverty. This means that income measures can provide only a partial reflection of a family’s economic well-being.
There are other weaknesses, too. For example, the measures are based on current parental income and do not incentivise action to prevent poor children becoming poor adults. They do not reflect government action on raising attainment and improving life chances for disadvantaged children. These are some of the general weaknesses of income measures. I would now like to speak briefly in turn about why specific measures of relative low income—including persistent poverty, absolute low income and material deprivation—are unhelpful in tackling poverty.
If we first consider measures of relative poverty, the problem is that a household can be moved into or out of relative low income without any change in its circumstances. For example, in a recession, as median income falls, so does the relative poverty line. This means that many households that were previously in poverty will now be above the new, lower poverty line, even though their income and life chances have not changed. This incentive of “poverty plus a pound” does not drive transformative change in the lives of family members who still face multiple barriers to lift themselves out of disadvantage.
Conversely, policies such as raising the personal tax allowance and introducing the higher national living wage that give poor families a higher income could lead to increased average household incomes. This in turn raises the poverty line and brings more children into low income, punishing Governments for doing the right thing. As an example, while the economy grew from 2003 to 2009, income measures incentivised the previous Government to tackle the symptoms of poverty through expensive income transfers, such as spending £300 billion on working-age welfare and tax credits. This strategy did not tackle the root causes of child poverty or make a long-term difference to children’s prospects as the number of children in relative poverty remained broadly unchanged. Given that the proposed persistent poverty measure is based on families being stuck below the relative low-income line, it, too, will suffer from these same weaknesses.
I turn now to the disadvantages of absolute low-income measures. By definition, absolute poverty measures the proportion of children below a fixed income line, which is only adjusted each year to account for changes in prices. The current measure of absolute poverty uses the relative poverty line for 2010-11. However, the decision to use this as the absolute low-income line is essentially arbitrary, in the sense that there is no logic to why this is better than any other reference threshold that could be chosen as the absolute standard of what households should be able to count on in order to meet their needs.
Notwithstanding the clear criticism that this measure is subject to some of the same flaws as the relative poverty measure, it also leads to illogical changes in the level of children in absolute poverty. When the absolute poverty line was rebased to the 2010-11 relative poverty line, the number of children in absolute poverty under this measure went from 1.4 million children under the old baseline to 2.3 million children under the new one. These children saw no material difference in their lives or changes in their circumstances, yet just because the line was being drawn somewhere else they were all brought into poverty.
Finally, measures of material deprivation simply do not capture real material living standards robustly. The material deprivation measure asks subjective questions around whether families think that they can afford a certain set of items. We have looked into the accuracy of what it is trying to measure. Analysis from the IFS shows that almost 50% of children who live in a household that is deemed to be materially deprived have incomes well above the most commonly used relative low-income line. This brings up questions around whether material deprivation measures accurately reflect the true living standards of families. I hope that I have been able to show why the existing income measures are a poor test of whether children’s lives are really improving and a distraction from the aim of tackling the key drivers of child poverty.
Baroness Hollis of Heigham
Before the Minister goes on to his next point, I am puzzled. He is going through the individual indicators as though those are the exclusive and sole measurement of child poverty. That is precisely why the previous Government introduced a suite of measures. Each one captured some aspect and together they captured the broad range of issues that determine how we assess child poverty. So deconstructing and challenging each individual measure is not the point: it is the suite of measures that is being dumped, and it is that suite which caught what it means to be in poverty.
Lord Freud
The noble Baroness is making a presumption that the suite of four is self-reinforcing and that the weaknesses of one are balanced by the strengths of the others, but I hope that I have been able to describe that there is no necessary reason why they should be self-reinforcing. In fact, they may be taking us all in the wrong direction. That is the presumption that I challenge.
On the right reverend Prelate’s points, the consultation demonstrated support for a wider range of measures of child poverty beyond income. More than 90% of respondents showed support for measures that drive the Government’s action in tackling child poverty. Our new approach—this is a point that the noble Baroness made—has been informed by our evidence review, which underlies the crucial importance that worklessness and educational attainment play in improving children’s life chances.
Poverty is highly complex and affected by a large number of interrelated factors. The evidence review showed that low income is one of several factors affecting educational outcomes, but worklessness is the most important driver of low income. The evidence also showed that the best way to increase incomes and exit poverty is to enter work. We want to drive the action that will make that difference. That is why the two measures cover worklessness and educational attainment.
On the point about working families with low incomes, work remains the best route out of poverty. Around 75% of poor children in families where parents move into full employment leave poverty altogether. We will return to this on a later amendment, so I will not go into it in any more detail.
The income measures that the amendment would introduce are essentially symbolic. It is important that we recognise this for both sides of the debate. The Opposition have laid out their argument of how these measures are a symbol of where the Government should focus their action. However, to us they are a symbol of the old world—of how easy it is for Governments to be incentivised to push people’s incomes £1 above the poverty line without any real transformation to their lives. This is of huge importance to us as we want to move away from these types of drivers and instead focus on the right type of actions.
In response to the concerns from the right reverend Prelate and the noble Baroness, Lady Sherlock, about the information, the Government have made a strong commitment to continue to publish the HBAI figures. I should add that HBAI is a national statistic. That means that it complies with the Code of Practice for Official Statistics, which states that it must be produced independently of political influence. That may be a stronger position to protect the statistics than a statutory base. It is hard for them to be removed.
Baroness Lister of Burtersett
The Minister says that the figures are independent. What if those producing them are under great financial pressure, and they look around and think, “What measures can we stop? What data can we stop collecting and statistics stop analysing?”. They could say, “The Government show that they’re not interested in these statistics, so perhaps we should stop analysing them”. Whatever the Minister says, without a statutory obligation we cannot be absolutely sure that those statistics will continue to be produced and analysed. That is one reason why we had a bit of a debate on this in Committee. The Minister said that he thought that the only real difference between us was the word “statutory”. That is why we believe that statutory accountability is so important.
Lord Freud
We have made this commitment to continue to publish the HBAI figures. They are national statistics and part of what is almost a huge industry of measurement around the world, as countries do it in the same way. It is always conceivable that that outcome could happen, but in the real world it is almost unthinkable.
Baroness Lister of Burtersett
If countries around the world are doing it in the same way, does that not suggest that it is the right way?
Lord Freud
We had this debate in Committee. We all measure this in the same way; we are the only country in the world that has put it in an Act. We are now moving to how other countries treat these statistics. The behaviour of other countries supports in practice what we are doing in leaving these as national statistics, with the commitment I have just made to make sure that they continue to be published.
I have spent time on these points because this Government believe that the measures we opt for really matter. Let none of us be in any doubt that there is an important choice to make with this amendment and with Amendments 8 and 11, which follow. Resources are finite and it is crucial that we prioritise the actions that will make the biggest difference for our children. Do we choose income measures which would disincentivise a range of actions which will actually help improve the life chances of children, and incentivise others which will not tackle the underlying factors at play? Or do we put our wholehearted effort into the areas which can help transform children’s prospects—worklessness and educational attainment? Indeed, I was pleased to note that the right reverend Prelate the Bishop of Durham prioritised his daughter’s graduation, showing what he thinks of educational attainment compared with anything else, for which I commend him. This amendment would end up taking resources away from these areas. I firmly believe that it would end up being detrimental to the transformational actions we want to see.
I think noble Lords will agree that these are the key drivers which the Government must focus on. The evidence behind this is set out in our published 2014 evidence review and I have spoken at length on it on previous occasions and now. The statutory life chances measures of educational attainment and worklessness are the right measures that will incentivise government to bring about real change in children’s lives.
I urge the right reverend Prelate to withdraw the amendment.
The Lord Bishop of Durham
I thank the Minister for his very full response, for which I am grateful. If the amendment is technically faulty, my understanding is that it could be redrafted, so that is not a reason for not pressing it. I am grateful to the noble Earl, Lord Listowel, for his support and was moved by his story about Ms Sculley. I am also grateful to the noble Baronesses, Lady Lister, Lady Hollis and Lady Sherlock, for their expressions of support and the points that they made. I hope that the comment of the noble Lord, Lord Northbourne, on family was addressed by the noble Earl, Lord Listowel.
I will not go through all the points that the Minister made, because I think that we fundamentally disagree about the importance of reporting on income statistics. This amendment would not in any way detract from the drivers that the Minister wants around worklessness and educational attainment; those would absolutely still be there. This is simply about a reporting mechanism which we believe is important as part of the monitoring. I say “we” because I have consulted with bodies such as the Child Poverty Action Group, the Children’s Society and many others which work with children and families in poverty day in and day out and are still convinced that this is important information to have alongside tackling the other drivers. Therefore, although I know that the Minister will not be pleased with me, I wish to test the opinion of the House.