Benefit Changes: Vulnerable People
Lord Greaves Excerpts(5 years, 5 months ago)
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Lord Kirkwood of Kirkhope (LD)
My Lords, it is always a pleasure to follow my noble friend, whose speeches always repay later reading because of her expertise and experience in these fields. I particularly agreed with one of her earlier remarks when she talked about the difficulty the department has—and I think this is true—in that it seems to be turning a deaf ear to some of the complaints. Now, I do not think that demonstrates anything other than a misperception of how the department works, and I understand the Minister’s perplexity and why she feels the need to defend the professionals in the department, and she is right to do so, because they are excellent people. But it is true that the perception left outside the department is that, because there is so much difficulty in trying to resolve some of these problems, the department keeps founding on the fact it has an 80% approval rating, which it has. People who have work experience, computer knowledge and a bank account in positive balance always get a very good service, from my experience. I have studied this and watched cases being enrolled on to universal credit. It is partly why the employment rate is so high, and I think that will continue.
On the other hand, a benefit change of this kind, where you get six benefits in one payment, is a big change from an array of small payments that had previously been studded through the month. If anything goes wrong with that—whether it is bad process, partly the slightly strange ideology behind it or the lack of generosity of some of the benefit payments—and it does not come through the door on time or it is wrong, the household’s finances are severely affected immediately. The Government would be well advised to confess a bit more readily that, when it is in full rollout to 7.7 million households, payments of this kind will always go astray and there will always be people who will need help.
In satisfaction of trying to deal with that, I think that we should consider some sort of triage system, because there is a lot of data in the department and a lot of clever people who can cross-tabulate it. I cannot help but remember that dynamic benefits—the basis for universal credit—was set up in 2008. A huge amount has evolved about how people can creatively use data to identify cohorts within populations. The department should now be able to identify the vulnerable cases much more specifically, so that work coaches and advisers can be given a case that has a red flag on it that says, “This case needs special treatment because, if something goes wrong with it, children will suffer”—or whatever, because there will be consequences or it is a riskier than normal case. That can be passed on to the housing authorities and anybody acting on behalf of the applicant so that we can be much better prepared to stop people being thrown out of their rented accommodation because their UC payment is late and then sent to Yorkshire from London with three young children—
Lord Kirkwood of Kirkhope
There is nothing wrong with Yorkshire; I was just referring to a programme I saw on Channel 4 last night. I see hard luck stories and bad stories for the department all the time. The department has to understand that, with a rollout cohort of 7.7 million families, it will always have difficulties and bad stories. It will get better as UC rolls outs.
My noble friend also mentioned the importance of getting more flexibility into the hands of the caseworkers. They are not using enough flexibility yet. I noticed that the Secretary of State was in Scotland this morning. There are some really excellent new flexibilities for people coming out of prisons. That is really positive and it was a good news story in the Scotsman today. That is good, but we should have more of it. No doubt the Minister will say that there are all sorts of things going on that we do not know about—and I believe that to be true—but it is perplexing that we are not better at identifying vulnerabilities. That is the point I am making, because if the professionals dealing with the cases had a bit more information of that kind available when they make judgments on the case it would make a significant difference.
I did not mean to say any of that. I meant to start by thanking my noble friend Lady Janke for introducing the debate in an excellent way. Her analysis was really good. It set the scene. The timing of the debate is very important because we are looking at, we hope, a comprehensive spending review and a Budget that might happen sometime in the autumn or maybe even later—if we still have a Government. Departments such as the DWP should be thinking clearly and carefully about what their asks are for the Chancellor of the Exchequer, whosoever that may be. That work would then inform what happens in the next three years. That three-year period has to be used constructively to repair some of the damage that we have seen since 2010, some of which is still with us and some of which still has to be visited on us. The noble Lord, Lord Livermore, was quite correct in identifying that previous Governments have dealt with low income quite deliberately and politically by pouring money into the tax credits system, which saved an enormous amount of extra heartache from the financial crisis of 2008-09. If that had not been there things would have been much worse. The noble Lord was right to say that.
The right reverend Prelate was also right to advert to the two-child limit. I am old-fashioned about adjusting levels of expenditure. In social security, levels of expenditure are enormously high, not in proportion to national wealth but in nominal terms. Social security should be increased or decreased annually by adjusting the rates of the benefits. If money needs to be taken out of child support, there are ways of doing that without adopting ridiculous policies which will almost certainly be overturned by future Governments. There is no security or stability in this policy area. It will continue to fester, it will not prosper, and then it will change, and there will be another level of complication for the people that have to suffer the benefit changes that are the subject of this debate. We need a longer-term strategy. We need to find ways of raising resources during the CSR as well as spending them. I would lean a little more heavily on wealth rather than income to generate extra resources. There are other clever ways of doing that. I understand that extra money has to be found to correct some of these problems.
I want to make a point in passing about housing policy. In both Governments—this is over a longer period of time than just since 2010—housing costs have crept up. For low-income families, they are a significant cause of poverty. I attended an IFS presentation last week. In an article about it for the Times of 24 June, Paul Johnson wrote,
“low-earning households have housing costs a good 50 per cent higher than they were 20 years ago, while housing costs for the highest-earning households have not risen at all, on average”.
That is not easily fixed; it cannot be done overnight. However, it is absolutely insane that we spend £23 billion every year on housing benefit, and it goes to landlords— sometimes housing associations and councils, but mainly private landlords. We cannot go on like this. I do not have an answer—I am not a housing expert—but it is an area that deserves urgent, cross-departmental treatment. We need a housing policy that is worthy of the name. If we could do that, it would take a lot of pressure and some of the costs off these low-income families.
I commend the Government—because not many people do and I do not often get the chance to—on the employment rate that has been achieved, which I think is excellent. I would not have thought it would be high or have stayed that high; with a bit of luck it will continue to stay at that level. But two things flow from that. It is really good news that we have a high employment rate—the noble Lord, Lord Livermore, referred to this as well—but we need to increase hours within employment now, to deal with in-work poverty. We need to start concentrating on that, and it is quite complicated for Government to do, but we need to increase hours available for work. Secondly, we need to have more emphasis on in-work progression. That is really important.
I come back to where I started. As I recall, the National Audit Office report of June 2018 made the comment that the DWP could not really identify the vulnerable cohort particularly of its universal credit caseload. Hopefully, that is something that the Government will do. I hope that when the Secretary of State returns from Scotland, she will also explain how the Scottish child payment of £10 per week, starting in 2021, can be replicated here in the United Kingdom.
Lord Greaves
My Lords, my noble friend Lord Kirkwood said what a privilege it was to follow such an expert as my noble friend Lady Thomas. I have the privilege of following them both. They are both experts in this area; I am not. I shall make a few general comments from the perspective from which I see this—casework in my role as a humble local councillor, in which I see people who get into real difficulties and need help sorting it out.
The role of jobcentres—Jobcentre Pluses, as they are now called—has changed in the many years since they were set up as labour exchanges. I have two anecdotes. The first is about a mother with two young boys. Her partner had moved out quite some time previously but was now homeless. To get his benefit, he had to put down an address. He gave the address that he used to live at with this lady and her children and, as a result, she had her benefit stopped because they said that he had moved back in. It took months to get such a little thing, which was nothing at all to do with her, sorted out. Clearly he was not living there, but that is what happened. She had a part-time job but was not getting tax credit. It got to the stage where she kept her children off school because she was not entitled to free school meals as she was not on benefits. She could not afford their dinner money or to heat the house properly, so they were being kept in bed all day. It was sorted in the end but it should not have taken so much time and trouble.
The second example is of a fairly elderly gentleman who suffered from mental difficulties and could not get out of his flat. He was not able to admit strangers into his flat and therefore failed to turn up for an interview, so that when people did a flat visit he failed to let them in and lost his benefits for a considerable time. Those are just two examples of how Jobcentre Plus people are now not there to help people. In my view, they are there to control them and, too often, to penalise and sanction them.
When the labour exchanges were first set up in 1909 by the great Liberal Government, they were a tremendous step forward because they meant that jobs could be advertised for free by employers in a central exchange where people could go to find out what there was. Before then, a lot of people simply had to tramp the streets from one mill to another, or to a factory or whatever, knocking on the doors and saying, “Have you got a job, please?” The exchanges were not perfect and faced a lot of political opposition from the Tories and the Labour Party at various times, but overall they were a great success. They were turned into employment exchanges, which was largely a change of name, and then into jobcentres, where the administration of the benefits system and the system of advertising jobs were put together.
I wish any noble Lord who wants to go into a so-called Jobcentre Plus with a client now the best of luck. You would first have to argue your way in—to argue that you are allowed in with somebody to help them. If you overcome that argument, you would then find that the centre is actually a means of administering the benefits system. These centres do two particular things to people. First, they will try to put them on training courses, some of which are on how to apply for jobs. In my experience of talking to friends about them, many of the courses provide training in doing things that those people will never be able to do well. If they manage to understand things such as managing a simple spreadsheet, they will never get a job that requires that kind of training. However, there may be others that are more useful.
Secondly, people have to spend a lot of time applying for jobs online and proving that they have done this. Instead of tramping the streets, as people had to do before 1909, they now sit at computer screens applying for jobs—we all know that people who advertise jobs now get large numbers of applications—which, in most cases, they will never get. There is a huge amount of wasted time and effort in the system. As I said, I do not believe that the fundamental job of a so-called Jobcentre Plus is helping and supporting people any more; it is about controlling and, too often, penalising people.
I agree very much with everything that the right reverend Prelate the Bishop of Chichester said about the two-child limit. I have a copy here of the report that he referred to, All Kids Count: The Impact of the Two-Child Limit after Two Years. I recommend that everybody reads that report and wondered whether I should say a few things about it but he said it all. The only thing I want to add is how ludicrous it is that we invite some of the most vulnerable families in the world—refugees from Syria, for example—to come and live in this country, and then impose something like the two-child limit on them.
Again, looking back in history, the present system goes back to the introduction of the family allowance by the Labour Government in 1946, based on proposals that originally came in the report from that great liberal of the last century, William Beveridge. But when that allowance was originally introduced, it was the other way round. The first child did not get the benefit, as it was assumed that it was the subsequent children who really needed it and that they would be in poverty if a family had more than one child. In my own family, I remember the great glee there was in 1956 when the eldest child in the family—that is, me—became eligible for family allowance. For my mother, that was a great step forward. The point about family allowance was that it went to the mother and was paid in cash every week. That made it an unbelievable addition to the resources that she had. In some families, it meant the children could be brought up—I would not say in relative affluence, but certainly out of poverty in the circumstances of the day.
I am told that only 60% of universal credit now goes to the main carer, who is usually the woman, but not necessarily nowadays, as we know families have changed. But it is not the same benefit it used to be. We had battles over the years on family allowance and child benefit. I go back to battles in the 1960s and 1970s, and I remember working then with the Church of England and Child Poverty Action Group. Some things seemed to go round and round, and never change. We all ought to unite and campaign, across the parties, whoever we are, to abolish this two-child limit. It really is ridiculous, because it undermines the fundamental principle of the benefit, which is that the resources should go to the children. You cannot say that they should go only to the children of families of two and not to families of four, because families of four will clearly be in more difficult financial circumstances. It is a top priority for this to happen.
Housing: Underoccupancy Charge
Lord Greaves Excerpts(10 years, 11 months ago)
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Lord Freud
The reductions in housing benefit will of course be repaid as we correct the anomaly for this period, so people will be made whole.
Lord Greaves (LD)
My Lords, when the repayments have to be made by local authorities, will they be reimbursed by central government, since it is clearly not the fault of local authorities that this cock-up has occurred?
Lord Freud
Yes, my Lords, the payment will of course go through as housing payment in the normal way.
Property: Under-occupancy Charge
Lord Greaves Excerpts(11 years, 5 months ago)
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Lord Greaves
To ask Her Majesty’s Government what is their latest assessment of the impact of the under-occupancy charge on properties with spare bedrooms.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, both an impact assessment and an equality impact assessment have already been published. It remains too early to say how people are reacting to this change. The DWP is conducting a formal two-year evaluation of this policy, running from April this year to March 2015. In the short term, an outreach exercise is being undertaken with approximately 78 local authorities to monitor implementation and to ensure that the support provided to local authorities and claimants has been sufficient.
Lord Greaves
My Lords, two years is too long for many people, and the evidence is already coming in. Is it not true that, in many cases, the discretionary housing payments available for people with special needs, especially disabled people who need an extra bedroom, are being provided by local authorities on a short-term, temporary basis, and therefore that these people will still be trapped with rents that they cannot afford in the longer term? Is it not also the case that many councils and housing associations are already reporting that, in order to relocate and rehouse people who wish to move to smaller accommodation, the demand, compared with the supply, is such that it will take several years, and these people, too, will be trapped with higher rents than they can afford?
Lord Freud
My Lords, the purpose of DHPs specifically for the disabled in heavily adapted houses and homes is to make sure that they can stay there indefinitely. Clearly, it would not make sense for people to move when there would be a high cost of adapting a new premise. As I have said, it is too early to know what is happening in different local authorities. The information I have up to now from our intensive interrelationship with local authorities on this matter is that there is a great deal of variation in outcomes.
Growth and Infrastructure Bill
Lord Greaves Excerpts(11 years, 10 months ago)
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Lord Beecham
My Lords, the noble Lord, Lord Deben, made what Ministers are apt to call some interesting points, which usually presages a disinclination to approve them. However, he did make some interesting points, not least the thought that perhaps the Treasury should revisit the issue of how significant housing projects and more generally the construction industry, to take up the remarks of the noble Lord, Lord Burnett, might be supported. However, the argument of the noble Lord, Lord Deben, was too limited in some ways.
The assumption throughout the noble Lord’s speech was that we are talking exclusively about housing, but Section 106 agreements are not, of course, confined only to housing matters. Secondly, he assumed that affordable housing schemes are for owner occupation. Of course that is true of a greater proportion, but they are not necessarily confined to owner occupation. There is also a need—which is one of the reasons for these agreements in any event, as the noble Lord, Lord Alton, implied—for a mix of tenure which would potentially ensure that there is a social mix within the development. In addition, the noble Lord, Lord Deben, implied that we are talking only about first-time buyers. I do not know what the evidence is for that assertion. When new estates are built, wherever that is, there are certainly a number of first-time buyers, but equally there are people who are, as it were, trading up and who are not necessarily first-time buyers. The position is not quite as stark as he suggested.
It follows that we need to be very clear about what the policy objectives are. First, as everyone in this Committee and in the House generally would confirm, we need to build more houses. Secondly, they should be accessible, through one form of tenure or another, to a wide range of people, not least in order to meet the desirable aim of having the kind of social mix that would help avoid a divided society. There are different ways of doing this. Clearly, Section 106 agreements can facilitate matters, and we will debate that issue in greater detail later. However, I recall in the 1970s, when there was a collapse in the property market, that my local authority stepped in to buy up unsold new private housing developments. That may have happened in other places as well but I cannot say whether it did. They were taken into the municipal stock. Subsequently, of course, under right-to-buy, they virtually all left local authority ownership. However, this might be a way of freeing up the industry; if not properties that are currently built and standing empty, then at least local authorities or social housing organisations taking a share of a development, thereby providing initial purchases and helping to ensure that kind of social mix.
Lord Greaves
The noble Lord reminds me of what Pendle Council did when I was chairman of the housing committee, back in those days when we were all young. As the noble Lord may recall, it was possible because it was a central government initiative that provided the funding, by some means or other, whereby the councils could do that.
Lord Beecham
Precisely. I do not know whether the noble Lord, Lord Deben, would agree but that might be one of the lines of inquiry that the Treasury could pursue and the Government could adopt. The position is not quite as stark as the noble Lord was suggesting and I certainly support the amendment of the noble Lord, Lord Best.
Lord Greaves
The noble Lord makes some good points. I will put a slightly different scenario to him and ask what he thinks. In an area where development is difficult to get under way because it is not a growing or economically buoyant area—I am obviously talking about my own area—clearance took place under the old housing market renewal scheme, so there are small brownfield sites. The council will provide those brownfield sites for free to the main local social housing landlord, the RSL which deals with the former council stock. The intention was to build mixed developments of affordable housing on there, some of which would be for sale and some for rent. However, when you take into account free land, the cost of developing the site and the rents which can be charged in a low-rent area over the next 30 years, as against the costs of developing and management during that period or the price that would have to be charged for affordable housing for sale, the figures just do not add up. Those sites remain undeveloped because they are not affordable to the RSL under the existing rules and regulations. Does the noble Lord have a solution?
Lord Beecham
If I did, it would not necessarily be one that has as yet been reached by my colleagues at the other end of the building. I cannot be writing Labour’s housing policy, much as I would like to.
We need to go back and consider the point which I thought that the noble Lord, Lord Deben, was implying: the Treasury and the Government have to look at the extent to which public investment is required to meet the housing crisis that we are facing, if only because that will have wider impacts upon the economy as a whole. It is as good and necessary a time for that kind of investment to take place, given low rates of interest in borrowing and the need on the construction and housing sides. I think an element of public subsidy would be desirable, but I emphasise that I am not authorised to make any such pronouncements.
Lord Greaves
Of course, they were originally going to stack up because the relatively small gap funding required there was going to come through the housing market renewal scheme. Unfortunately, the coalition’s abolition of that scheme now makes it impossible.
Lord Beecham
There is, of course, also £300 million in the Government’s programme for affordable housing. I have today tabled a Question for Written Answer, which might be anticipated by the Minister, as to where that is going.
Baroness Hanham
My Lords, I think that the answer is simply because affordable housing is such a significant element of this particular argument. I may have to write to the noble Lord about this pinch point and come back to him.
As regards the £300 million, I said that we will not make a blanket commitment to fill the gap regarding the aspiration of affordable housing, which is what we have been talking about—the idea of granting affordable housing requirements in the event of a Section 106 agreement being renegotiated. I have not ruled that out entirely but I have, more or less, said that I do not think that we could have such a provision. However, the matter is still being looked at.
Lord Greaves
On the question of the two types of Section 106 agreements, if renegotiation of non-housing Section 106 agreements can be done in regulations, why does it need to be in primary legislation in relation to housing?
Lord Greaves
My Lords, the noble Lord, Lord McKenzie, briefly spoke to my Amendment 55BA, which states that,
“a modification under this subsection may have an effect that the obligation is more onerous in one aspect in return for being less onerous in another or others without becoming more onerous overall”.
It is part and parcel of the feeling throughout the amendments in this group that there ought to be more flexibility in the system, and that if there are Section 106 agreements in relation to a development, they should be looked at as a whole, on the lines drawn by my noble friend Lord Tope, rather than simply in relation to obligations for affordable housing.
Earlier, my noble friend the Minister said that the question of non-housing Section 106 agreements would be dealt with by regulation, and that housing was in the Bill because it was quicker to get it into effect; regulations covering non-housing Section 106 agreements would take longer. That does not answer the question of why the Government have not done both together. Common sense suggests that they could either both be in the Bill or both be covered by regulation, whichever is most convenient. I do not understand the lack of logic in doing them separately.
Perhaps the Minister will tell me—I am not clear on this—whether the regulations for non-housing Section 106 agreements will be seen in the same light as those in the Bill. In other words, will developers be given a right to appeal against a local authority that refuses, or does not want, to relieve them of the obligation? Will the same sort of regime apply under the non-housing regulations, or will they simply state that there is an opportunity to ask the authority to look again at development plans, which of course exists at the moment? It would be interesting to know what the Government are intending.
Common sense suggests that in some circumstances it might be better to look at non-housing obligations. For example, if there is a requirement to produce a park or a play area on the edge of a development or as part of the development, for some reason that may become impractical, or it could be thought in the light of viability studies that it is not absolutely essential, but that it is a less undesirable penalty to incur than having no or less affordable housing. There might be a situation in which a Section 106 agreement required a contribution to a local bus service. The way that local bus services are going at the moment, with some county councils cutting subsidies, by the time the estate is built, the bus service might not exist. It might be that that would be an appropriate let-off for the developer. Flexibility is a good idea.
It seemed to me that some noble Lords speaking in this debate were referring to a different world from that in which some of us are trying to make the best of things. In the case of new housing developments—greenfield housing developments in my part of the world—when planning applications come in, the local authority in general does not ask for affordable housing as part of the development, because an affordable housing requirement would very quickly make that development unviable. That is a fact of life. Local authorities in my part of the world—we will debate an amendment on this later—are finding it very difficult to set up a CIL regime, because imposing CIL on developments would make them unviable. Therefore, none of this applies if development is required or is thought to be reasonable.
Coming back to the point I raised earlier in an exchange with the noble Lord, Lord Beecham, what is a local authority supposed to do when it owns a brownfield site where housing or industry has been recently cleared and the site flattened and made reasonable, when development on that site for housing for sale or rent is simply not viable in present conditions, even if the local authority has put the land into the equation for free? It is simply not viable to develop given the current equation between local development costs and local house prices. The intention was that there would be a degree of gap funding to cover this; it was assured through the housing market renewal scheme, which has now been stopped. There is no gap funding.
What do the Government expect us to do in those circumstances when development of a perfectly good vacant site—for example, on the edge of a small town with wonderful views across Pendle Hill—is nevertheless not economically viable, so development cannot and will not take place? Somebody somewhere has to provide some gap funding to allow that development to take place if an area such as that is going to contribute to the Government’s aims of more housing. That is a slight variation on this amendment but it is a point that needs to be made and I will keep making it time and again because it is a question that nobody seems to be facing up to at the moment.
Baroness Hanham
My Lords, I shall start by trying to answer the points made by the noble Lord, Lord Greaves, because from what he says he will come back to them again. As I understand it, these sites are unviable but are not included within a Section 106 agreement; they are outside that.
Lord Greaves
The sites are not viable on a commercial basis. It is not proposed to be affordable housing, it is proposed to be commercial housing sold at the market price in the local housing market. It is not possible to build houses in those locations that will sell for a price that will pay for the development. An organisation can build for virtually no profit but it is still not viable.
Baroness Hanham
For the moment I am going to say to the noble Lord that it is not quite relevant to this amendment but I would like to consider it further and perhaps come back to him at a later stage.
Clause 6 introduces a fast-track application and appeal process to ensure that quick decisions can be made on stalled sites. These amendments would undermine this simplicity and add complexity, for very little benefit. Amendments 55AC and 55AE seek to bring into the application process consideration of the development plan and strategic policies contained in it. The development plan will already have been taken into account when the decision to grant planning permission was first made and the development plan will presumably be the same at this stage as it was then. I am aware that local planning policies may include policies for the delivery of affordable housing to meet local needs. It is usual practice to apply these policies in the context of individual site viability. The effect of this clause is to help deliver those policies by bringing forward viable development. It does not require a revisiting of the local plan.
Amendment 55AE seeks also to require an assessment of whether an alternative form of development would be economically viable. This would tie the process into lengthy consideration of alternative schemes. The effect of this amendment would be to establish a complex and lengthy process and clearly act as a deterrent to developers. Similarly, Amendment 55AC seeks to prevent a determination to reduce affordable housing requirements if modifications to other planning obligations would be more appropriate. There is nothing to stop the local authority agreeing to vary any obligation on a voluntary basis, as has been said a number of times this evening. The authority could negotiate with the developer to alter the Section 106 agreement outside the process of this legislation if that would be beneficial to both parties. The purpose of Clause 6 is to provide a quick, targeted review process based on viability related to affordable housing only. The imminent regulation change, which provides for a full review of Section 106 agreements in pre-April 2010 obligations, will enable these older agreements to be reviewed across the piece.
I do not think it helpful to bring community infrastructure levy payments into this consideration. The community infrastructure levy has been introduced to provide a non-negotiable levy that is up front and predictable, and set at the local level in accordance with local viability. Local authorities do not have a general discretion to waive or reduce community infrastructure levy payments. The regulations make provision for exceptional circumstances relief but this is subject to strict criteria.
Amendment 55AD seeks to require that the authority must assess the affordable housing requirement to be the sole reason for the site being economically unviable before it modifies the requirement. This amendment is not necessary. The current drafting requires that if the affordable housing requirement means that the site is unviable, the council must vary the obligation. The applicant will have to present evidence to the authority to demonstrate this. The local authority will have regard to this evidence and have the opportunity to prepare its own evidence to justify any decision.
Affordable housing often comprises the largest single contribution on residential schemes, which is why we have focused there. Research from 2007 and 2008 found that about 50% of all planning obligations are for affordable housing. The local authority and the developer are free to renegotiate any aspect of a Section 106 agreement on a voluntary basis at any time. If an obligation which is not affordable housing is causing the site to be unviable, both parties are free to negotiate around that item.
Amendment 55CA would allow land transferred at nil cost to be excluded from the assessment of viability. I understand the importance that land transfers of this type play in creating mixed communities. This is particularly important in high-value areas. I can understand the temptation to think that we should exclude land transfers from the assessment of economic viability. However, the value of this land can be a significant cost to house builders. It is right that the value of this obligation is considered as part of the overall economic viability of the scheme. If the value of that land transfer is causing the site to be unviable, it should be adjusted; this does not necessarily mean removed completely but adjusted to suit economic conditions. Only where it is no longer viable to transfer the land at nil cost will an adjustment be made. Our policy for mixed communities will be upheld and delivered in a realistic and viable way by these clauses. With these assurances, I hope that the noble Lord will withdraw his amendment.
Taxation: Families
Lord Greaves Excerpts(11 years, 11 months ago)
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Lord Greaves
My Lords, I feel out of place on this speakers list. I looked at it and thought that almost everyone on it apart from me is an expert and they will be bandying figures and statistics around that will send my brain numb by the time I stand up to speak. That is true: they have sent my brain numb. The debate is full of experts, not least the noble Baroness, Lady Hollis, who introduced the debate, and my noble friend Lord German. I have to say that I thought the noble Baroness was kinder to the Government than I would have been had I been making her speech.
I congratulate my noble friend Lord German on introducing a number of things into his speech that would not have been there if it had not been for the presence of the Liberal Democrats in the Government. If things are bad, they are nothing like as bad as they would have been had we just had the Conservatives.
The reason why I thought that I should take part comes from my work as a local councillor, where I represent one of the poorest areas in east Lancashire. Last week, I was watching the television at home. The BBC in the north-west was doing a week-long series on food banks in the region. I thought, “Has it really come to this?”. This country is something like the sixth richest in the world. It is richer than it has ever been apart from a slight sag in the past five years—it really is slight in historical terms. Has it really come to food banks now being part of the mainstream culture of this country? I find it extraordinary.
I had made a list in preparation of all the problems that we are experiencing at the moment, but the noble Baroness, Lady Hollis, dealt with them all in far more detail and far more expertly, so I will not read them out. But I have one or two points to make. The changes can all be individually justified, particularly against the need that the Government see to cut spending, but put together the position is horrific for many people. When that is combined with benefits in kind provided by local services through local authorities and other bodies, it is made even worse.
I think that it was the noble Baroness who said that if you cut people’s benefits, there are serious effects on local economies. The fact is that benefits, as a side-effect, are an efficient way in which the Government can put money into the economy. Most of the money that people get in benefits is spent. As that money is spent, it has a direct positive impact on local economies. On the one hand we have the Government, with Mary Portas and all the rest of them, saying “Town centres are in trouble—let’s have initiatives to help them”. On the other hand, they are taking money away from the very people—certainly in small and medium-sized towns—who use the town centres most, because many of them do not have their own transport to go to the out-of-town or edge-of-town supermarkets and so on. The poorest people spend their money and so, simply from an economic point of view, it is a good idea to give more money to them.
I concur with everything that has been said about some of the quite appalling attacks on poor people that have been made, such as the comparison between strivers and skivers, which the noble Baroness, Lady Hollis, called ugly, cynical and indecent. I congratulate her on finding words for that which are appropriate to use in the House of Lords. I tried to think of words but thought that I had better not mention them, because any that I would use would be out of order.
I recommend to anybody who thinks that the answer is that people who do not have jobs should just get them that they go down to their local Jobcentre Plus, have a look at what jobs are on offer and how many of them there are. They will very quickly come to the view that that is not the immediate answer.
It is fairly clear that somewhere between 10% and 20% of the poorest people in this country are quite deliberately being made poorer by the policies of this Government. If they are not in work, their benefits are being cut; if they are in work, they are too poor to benefit from the cuts in income tax, because they do not pay it, and their benefits are also being cut.
I rely a lot on the work of Professor Danny Dorling, an incredibly energetic geographer who seems to produce a book every three weeks. He is not one of those typical geographers who simply stroll around the countryside looking at the scenery. It is fairly clear, from work that he and others have done, that the levels of economic inequality in this country declined year on year from some time shortly after the end of the Great War into the late 1970s—inequality being the spread between the richest groups of people and the poorest groups. In the 1980s it got worse; it got steadily worse during the years of Conservative government from 1979 to 1997 and it continued to get worse, year on year, through the Labour years until 2010. That is clearly still happening, partly because people at the top are getting much richer, but also because people at the bottom have not been keeping up with everybody else and are now quite clearly falling behind. We are told that the answer lies in social mobility, which I am in favour of. However, you can have social mobility in a more equal society and economy and in a less equal economy. On its own it does not alter the basic facts.
As a Liberal, I go back to William Beveridge and try to put things in the context of what he said back in the 1940s. As we all know, he put forward his five giant evils: want, disease, squalor, ignorance and idleness from lack of work, which perhaps we would now call worklessness. His remedies are interesting to read today. Everybody now says that what they want to do—wherever they stand on this argument—is based on what Beveridge thought.
Beveridge proposed that people in work pay a standard weekly payment into the social insurance fund and suggested unemployment payments for people for as long as they have not got a job. He also proposed benefits for pensioners, maternity grants, widows’ pensions, pensions for people injured at work, and so on. What was crucial was his proposal of what he called child allowances, which became family allowances and which have now mutated into child benefit. They were at a very much higher level than child benefit has now become. As part and parcel of that, he advocated the creation of a National Health Service, so that when you were poorly you got treated for free at the point of need.
The crucial part of all Beveridge’s proposals was that payments in all these cases should be at a standard, flat rate, depending on contributions, with no means tests, which he was opposed to. So many of the problems that we now have in what people call the welfare benefit system—the tax allowances and all the rest—have come about because people have tried to be too clever by means-testing this, that and the other, with all the unfortunate side-effects that means tests have. The cleverer people get, the more they try to finesse the system; the more detail they put into it, the more problems they create.
I will give two examples. Instead of subsidising property, which is what used to happen until about 20 or 30 years ago, we now have the mantra that in the area of housing the people in the houses should be subsidised. The effect of this is the present crazy housing benefit system, which takes up so much of the welfare benefit budget and yet is no more than old-fashioned out-relief for landlords. We also have the working tax credit, which is no more than a subsidy to employers who pay low wages. This is the fact of the matter and the situation that we have got into. I do not know how we will get out of it. I am quite sure, however, that we will not get out of it by making the poorest 10% or 20% of people in this country even poorer today.
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Baroness Tyler of Enfield
My Lords, I support the amendment, to which my name is also attached. We have heard a lot today about fairness. It is important that people in work feel that there is fairness in terms of how much money can be received by those out of work and on benefits, and that there is a clear incentive for all those capable of work to do so in order to r themselves and their families. I place on record that I welcome the measures being taken by the Government, such as the work programme, to give intensive help and support to people needing a lot of help to get back into the jobs market.
There is another aspect to fairness, though: fairness to children, irrespective of the circumstances of their birth. I shall run through the reasons why I feel that child benefit should be exempt from the calculation of the benefit cap. First, as we have heard, it is a non-means-tested benefit paid to all households with children. We have already heard this question posed today, but is it fair that children born into small families with earnings in excess of £80,000 a year receive child benefit while those born into larger families with a benefit income of £26,000 a year do not? I do not think that that passes any fairness test.
Secondly, child benefit is paid to assist with the costs of raising children. In my view, it is not about sending signals or penalising adults who do not work—and I add that all adults who can work should do so. Thirdly, this measure would have a disproportionate impact on children. We have heard the figures from the noble Lord, Lord Wigley, and the right reverend Prelate, and I do not intend to go through them again. Fourthly, it is a question of a compromise solution between children in large families receiving the full current level of state support and receiving nothing at all, which I perceive to be unfair. Fifthly, reducing the impact of this policy on large families would reduce the couples penalty that is currently built into the benefit cap.
The reason why I am concerned about the current situation is the issues raised compellingly in the debate earlier by my noble friend Lady Walmsley. This is about families having to move abruptly to cheaper areas and the disruption that that will cause to children’s schooling, often halfway through a school year. It is about families feeling, rightly or wrongly, that they will have to split up because if they created two households instead of one, parents would then be entitled to £26,000 a year in benefits. That cannot be right. Experts in the field have said that there is a substantial couples penalty built into the cap that is completely at odds with my own view, and that of the Government, of the need to support strong and stable families.
I am concerned about the impact on children who might find themselves homeless, perhaps in unsuitable and expensive temporary accommodation. With children and young people’s services already very overstretched, there is a real danger of children at risk simply disappearing from view below the radar, which raises child protection and safeguarding concerns.
I will summarise by saying, as was said earlier today, that children should not be the innocent victims of this policy. The vulnerability of children is very important to people on these Benches, and I look forward to hearing what safeguards the Minister has to offer in this area. I heard him say in the previous debate that he saw the transitional issues as a second-order issue. I do not consider the welfare of children to be a second-order issue at all.
Lord Greaves
My Lords, I have not spoken in the Welfare Reform Bill debates so far and I will be brief now. On the specific issue of child benefit, the Government seem to have got it seriously wrong. What is being proposed undermines the whole principle on which child benefit—and before that, as many of us will remember, the family allowance—has been based. If the Government are going to do that, I fear that that is the beginning of a slippery slope, and they will have to explain to us very carefully why they think the basic principles no longer apply.
In illustration, I go back to the example given by the noble Lord, Lord Best, about typical, ordinary—perhaps very ordinary—accommodation in the East End. There has been lots of fancy new development in the East End in the past decade or two, but most of it is still not regarded as being the most desirable part of London. People living in other parts of London in particular usually find themselves paying a great deal more than £350 a week for an ordinary two or perhaps three-bedroom flat. According to the paper today, for a four-bedroom house in the least salubrious part of Kingston—I did not know that such places existed, but it appears that they do—£400 a week is not unusual. That is four times what you would pay for an ordinary, perfectly decent house in my part of the world, but there you go.
If as a family whose benefits are being capped you receive £500 a week, and you are paying out £400 a week for rent, that leaves you £100 for everything else. I challenge any Members of your Lordships’ House to tell us how well they would do at bringing up a family of two, three or four—or perhaps more—children, plus one or two adults in the house, on £100 a week. It can be done, and many people in many parts of the world survive on far less than that, but this country is now almost the most prosperous that it has even been, if you take away the last five years. We are still incredibly well-off. If Members of your Lordships’ House think back—most of us are getting on a bit—to our childhoods and the circumstances that we were brought up in, they will see that this country is now incredibly rich and well-off. To require families to bring children up on £100 a week for everything apart from their rent is unacceptable.
When the media are encouraged, I have to say by some politicians in this country, to rant and rave about how these people are getting £26,000 a week and that everyone ought to be able to live on that—I apologise, £26,000 a year; some people are on £26,000 a week, but they are rather different—the debate really ought to start at what you have left after your rent. The state of the private housing market, and indeed rents in the public sector, is not the fault of people who have to live in these houses. There is a scandalous situation in which commercial landlords are ripping off people—indeed, they are ripping off the state, if people are getting housing benefit—by charging ludicrously high rents that are not justified by the cost of maintaining those properties but that are what the market will bear. If the Government and the rest of us want to do something about the state of the private housing market, we should look at housing policy and perhaps at the way in which the private housing market works. But that is a different issue all together. It is not the fault of the people. To try to do this—to try to force rents down or to try to regulate the markets and move people around the country by capping the benefits of the people living in those houses so that they can no longer live there—is penalising the tenants when the people who ought to be penalised are the landlords.
I have digressed a little from child benefit. I apologise for that. Child benefit, as my noble friend and others have said, has always been a non-means-tested benefit that goes as of right to families with children. It has always been paid on a per capita, per child, basis. That is a fundamental principle. The first child gets more nowadays, then each child after that gets the same, in order to assist the work of bringing up that child. To abolish child benefit, which is what is actually being done in this Bill, for people who are at the benefit cap and who are getting other benefits that take them up and beyond that cap, as is highly likely, is a fundamental attack on the whole principle of child benefit.
This ought to be resisted. Your Lordships ought to resist it, and we really ought to ask the Government very seriously to think again on this particular issue.
Lord Newton of Braintree
My Lords, I had not intended to speak again, having had my say earlier, and will not repeat what I said, although I cleave to the view that this is not a sensible way to deal with these problems; they should be dealt with in secondary legislation. In that, I embrace the comments made by the noble and learned Baroness, Lady Butler-Sloss, about people taking in other people's children and the need to be sensitive to issues that could arise there. Indeed, I remember noticing while I was in not another place but another location during the first week of discussion on the Bill that a lady in Huntingdon, I think, was reported to have taken in five children of friends of hers, both of whom had died in a short space of time. Others may have noticed the story. Such a case, and others raised in an amendment by the noble Baroness, Lady Drake, need consideration in detail, but we cannot do that on the Floor of the House in discussing amendments to primary legislation.
I need no encouragement in willingness to hold Ministers’ feet to the fire about addressing some of those detailed problems, but I question whether it can be done in this way. My noble friend Lord Kirkwood is a real friend. I cannot remember the last time that I disagreed with him. He is clearly out to be more reverend than the Bishops’ Bench in his defence of no benefit cap at all. He makes his case. He suggests that it is not incompatible with his support for universal credit. Fundamentally, his position is hostile to the intention of universal credit, which is to diminish the number of people who cannot afford to work.
I must say to the right reverend Prelate that the basic point about the amendment is that it raises the level of the benefit cap. There may be an argument for that, but that is what it does. There is a knock-on effect of that. It must increase the number of people who cannot afford to work. That is a matter of logic. It must do. The more children you have, the less likely it is that you will be able to afford to work, because you will not necessarily be able to command earnings which will replace the benefit. That is the core of the problem that we are seeking to address.
The right reverend Prelates may want to do that; they may think that it is right; but it needs to be straightforwardly stated, in the context in which many people have said—I do not make a judgment on this—that the worst thing that can happen to children is to be trapped in a household which cannot afford to work, in which they have never known anyone in the household in work. Keith Joseph used to have a phrase for that: the cycle of deprivation. We are not free of it. We need to take account of it. People can draw their own conclusions about the right level, but we need to know what we are doing.
As I said, I hesitate to challenge the right reverend Prelates, but they are making life easier for some in financial terms but worse in what I would regard as a sensible way to approach social policy. They may have put figures on that; they may not; but that is my view.
Lord Greaves
Does my noble friend accept that the logic of what he is saying is that child benefit should be abolished for everybody who does not have a job?
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Lord Freud
My Lords, we are going to spend a lot of time on getting this right. It is not something we want frozen in primary legislation. In fact, it would be very uncomfortable to freeze these items in primary legislation. Regulation is the right place to do these things. We have a consultation paper out on how we may move forward with temporary accommodation. There are some very obvious solutions within that—I touched on them earlier this evening—comprising separating out service charges and housing costs rather than bundling them up; that is where the temporary accommodation becomes so expensive. We need to get a solution to this so that we do not have a ludicrous go-round of people moving into expensive temporary accommodation which they can no longer pay for because of the cap. We are absolutely aware of this and have measures in train to get a solution in the round to that issue. However, it is not a simple set of issues.
Lord Greaves
On the same point, the Localism Act 2011, which we recently passed, means that in many cases local authorities will carry out their duty to find accommodation for homeless families by putting them into privately rented accommodation, where they will have to pay the rent. How will that tie in with a benefit cap that might apply to the accommodation, to which the local authority directs them in order to fulfil its homelessness duty? Will the local authority be under some obligation to top up the rent, or something like that?
Lord Freud
My Lords, one can very easily see circumstances in which a local authority considers that to be a very sensible use of the discretionary housing payments. That is one reason why we have ramped up that amount. I am not saying that it will be every time, but that might be a solution. We are looking to redesign the process of finding temporary accommodation, which is the immediate problem that local authorities are faced with, so that we do not get caught in some Catch-22, which would obviously not be smart at all. That is where we are with that; we are very conscious of those issues and very comfortable that we have the legislative powers to develop effective solutions.
I pick up the important point from my noble friend Lady Thomas on the DLA and how the cap interacts with it. The DLA is there for those in receipt of DLA. That is how we have worded the illustrative regulations. A person whose DLA award is pending and who is serving what is now, and will remain, a three-month qualifying period, would not be covered by the exemption. That is the point in the question raised by my noble friend. It shows why this issue and other similar issues need to be dealt with in secondary legislation, so that we do not have the inflexibility that we would have if it was in primary legislation.
We are conscious of the concerns around the introduction of the cap. I can assure noble Lords that we are listening. We have said all along that we will introduce measures to ease the transition for families and provide assistance in hard cases. We are still considering our plans, and it is essential that we get them right. The clause has been drafted so that we have all the powers that we need to ensure through regulations that we provide the appropriate protections. I hope that that gives the noble Lord, Lord Best, a measure of reassurance.
Before I ask the noble Lord to withdraw the amendment, I would like to make it clear that the Government do not consider Amendments 60A and 61 to be directly consequential on Amendment 60. Further Divisions would be required should noble Lords wish to push those other two amendments in the group to a vote. I apologise for spelling that out, but we had a small frisson the other week. I ask the noble Lord to withdraw the amendment.