Welfare Reform and Work Bill

Lord Hodgson of Astley Abbotts Excerpts

Monday 14th December 2015 Lords Chamber

[Baroness Manzoor (LD)]

I accept everything the noble Baroness, Lady Lister, and the noble Earl, Lord Listowel, have said. The last time this Committee sat, noble Lords touched on the question of how we can learn lessons if we do not put reviews in place. If we do not review sanctions, how will the Government assess whether they have been effective or whether they can be adjusted to get people back into work? That is surely what it is about and why sanctions have been put there in the first place. We must have an independent review and I hope the Minister will look seriously at this issue.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I do not object to reviews in principle. I have done some for the Government and I am now doing the official review of Part 2 of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act, which covers the impact on non-party political campaigning. They have a useful role and, in light of the work I have done for the Government, it would be strange if I objected in principle to what the noble Baroness and the other noble Lords proposing these amendments are saying. I leave aside the question of whether there is a real purpose here: the noble Baroness rather disregarded the Oakley review and other things as being of little value. If reviews are to have worthwhile purposes, they need to meet certain tests. Other noble Lords will have their own tests, but I will share three with the Committee this afternoon.

First is the question of timing. The full impact of legislation takes time to emerge. In these circumstances, we are obviously seeking to change people’s behaviour. Their first reaction may not be their last and further reactions—good or bad—may emerge over the months and years after the legislation comes into effect. The amendment suggests 31 March 2016 as the date by which the review must be set up into whether sanctions are an,

“effective and proportionate means of meeting the Government’s objectives”.

I doubt whether it is possible to adhere to that timescale and reach meaningful outcomes, given the complexity of the subjects we are discussing and the likely evolution of events and behaviours. I am therefore concerned about the timing.

The second question is about the remit, which is too narrow. Each statute contains a number of pieces, as in a jigsaw. If one piece of the jigsaw is moved, all the other pieces have to move as well. The amendment looks at just one piece and does not pay enough attention to the wider implications, strategic aims and objectives of the Bill as a whole. Its benefits and value suffer as a result of its proposers making it so narrow.

The third question is the terms of the review. To be worth while, a review has to be reasonably even-handed as it sets out. I notice that the word “sanctions” is used four times in the amendment. By no stretch of the imagination can “sanctions” be said to be a neutral word: it is a pejorative term. The review sets out with these terms in order to arrive at, and find, a particular outcome.

[Baroness Hollis of Heigham (Lab)]

My Lords, does the noble Lord not agree that the word “sanctions” is employed in my noble friend’s amendment because that is the word the Government choose to use?

[Lord Hodgson of Astley Abbotts]

In these circumstances, a word such as “provisions” would be a better and more even-handed way of looking at the measure.

From my point of view, the timing proposed in the amendment is too soon, the remit is too narrow and the terms of reference are designed to achieve only one result. Therefore, I hope that my noble friend will reject it.

[Lord Beecham (Lab)]

My Lords, I also have a slight reservation about my noble friend’s amendment, but it is not the kind of semantic quibble which the noble Lord has just advanced, if I might term it that way. I would like to see the review of the out-of-work benefits regime and sanctions, which she rightly calls for, extended to certain other aspects of the welfare system as it is now operating.

In debates in your Lordships’ House, I have referred before to the area in Newcastle I represent as a councillor. It is a ward in the west end of the city with high levels of deprivation and a life expectancy 12 years lower than that of the area where I live, some 12 minutes’ drive away. The ward has six primary schools, two of which are Roman Catholic schools. All the schools, together with the Excelsior Academy, founded by a Conservative philanthropist, provide breakfast clubs for their pupils. The ward is served by the largest food bank in the country and poverty is a very real local issue.

On 26 November, I was contacted by a constituent, a single parent with two very young children, whose child tax credit payments had been stopped for eight weeks. The family was left with £33 a week child benefit and £117 a fortnight income support. The children’s milk tokens had also been stopped, and formula milk needed by one child who suffers from asthma could no longer be afforded. The parent of these children could not top up the gas meter, when required, to the usual extent.

Concentrix, the firm dealing with my constituent under contract to HMRC, had initially stated that it would take six weeks to check the eligibility for child tax credits. I forwarded the details and my reply to the constituent to the local Member of Parliament, and advised my constituent that I had done so and would also endeavour to take up the matter with the Minister. However, three days later, on 1 December, I was again contacted by my constituent, who told me that a further telephone conversation had taken place with Concentrix. The initial response—now nine weeks after payments ceased—was that inquiries were ongoing. A request was then made to speak to a supervisor. Initially, that led only to an assertion by the supervisor that the mandatory reconsideration was being carried out by another department which did not accept calls from claimants. However, after it was said in the course of this telephone conversation that the local Member of Parliament had been informed about the case, the problem was miraculously resolved and payments immediately resumed, even though for weeks Concentrix had claimed that this could not be done by the department to which the calls had been made.

This sorry saga raises serious questions about the administration of the child tax credit system in general, and by Concentrix in particular. Of course, it is right that claims should be validated, but your Lordships might think that even six weeks seems like a long time for payments to be suspended, let alone the nine weeks which had elapsed in this case and the even longer period which, but for the mention of the Member of Parliament, would otherwise have ensued.

There are also issues about the approach taken by Concentrix in dealing with the matter, not just the length of time taken. This US-owned company, another beneficiary of the passion for outsourcing these services, was featured in an article in the Independent in February. Staff claimed they were under pressure to start 40 or 50 inquiries a day into possibly fraudulent claims without any initial cause. In effect, they were asked to fish for fraud. As of August, the Mumsnet website carried 91 cases of applicants complaining about how they felt intimidated by the company’s approach and its demands, for example, for original documentation such as bank statements, rent payments or catalogue, fuel and other bills, which were often prefaced by unsubstantiated and false assertions that claimants were not lone parents but were living with someone.

All of this is symptomatic of a deeply troubling approach to an important component of our welfare system, or, as I prefer to characterise it, our system of social security, which in so many ways the provisions of this Bill threaten to undermine.

A week last Friday, I watched a recording of JB Priestley’s powerful and moving play “An Inspector Calls”, set more than a century ago, which deals with the tragic history of a young woman driven to suicide by poverty and the withholding of what was then known as poor relief. I am not, of course, suggesting that we are in a similar position today or that this Bill, however imperfect, will take us back there. But I believe it is time for an inspector to call not only on Concentrix but on HMRC, the department and the Government as a whole to review not just how the system is administered, but the implications for those in need of the policies embodied in this Bill.