Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 23rd January 2012 Lords Chamber

[Baroness Butler-Sloss]

My Lords, I totally understand why the Government require it to be said that not everyone should get child benefit. There are two groups of those who are not employed and to whom the cap will apply about whom I am particularly concerned. I should declare an interest as the president of the Grandparents’ Association.

A considerable number of grandparents, particularly grandmothers, have been in perfectly good employment over a number of years and then for one reason or another find themselves obliged to take on the care of children, who are sometimes extremely young, in addition to their own teenage children. As well as grandparents, there are also other kinship carers, as they call themselves, who take on the care of other people’s children, usually their nephews and nieces and sometimes their great nephews and great nieces. They give up their jobs. They have to, because they cannot care for these young children, who have in a sense been dumped on them without any prior warning on some occasions. They will give up their jobs for the care of their grandchildren or other kinship children, then find themselves in real difficulties with this cap.

We are not just talking about one or two children—this is my second point. There are families with a considerable number of children, not all of whom are their own. There are single mothers who have gone through a number of different partners by whom they have had a child. They end up sometimes with five different successive partners, and with more than five children. How on earth will that group of families cope if they are unable to have additional child benefit? I can understand their coping perhaps with one or two children but not three, four, five or six. Such families make up a smaller percentage; the figures were given in our previous debate. However, they do exist and they will be in real difficulty. Unless there is some sort of hardship allowance for families who cannot cope on this £26,000 cap without child benefit, I fear that I will go the way I would prefer not to go—against the Government.

[Lord Kirkwood of Kirkhope]

My Lords, this is a very important subject and this is the most important amendment as it seeks to deal with some of the problems that will flow from Clause 94.

I want to make it clear that I am implacably opposed to a household benefit cap in principle. People’s eyes glaze over when I try to explain my main reasons. I tried it in Grand Committee and by the end people looked at me as though I was possessed. However, there is a point that has not been made and it is very important. I am talking to my own side as much as to anyone else. I have spent my entire life fighting for benefit entitlement to be enshrined in law. That is to say, if you meet the eligibility criteria you get the amount due. That has been hard fought for and it is a very important part of our social security set-up.

Clause 94 changes that. It is a ministerial override. The Chancellor of the Exchequer or the Secretary of State for Work and Pensions will decide, arbitrarily in my view, although the Minister says that it is to do with mean or median average income. These are not figures that are easily pinned down in our systems of legal entitlement in social security Acts. A Minister of the Crown now says that he can, by regulation, override who gets child benefit if it is counted in a cap and if they are over the arbitrary limit. That is a change. We are giving powers to Ministers that I do not think it is safe to grant them.

If the Government think that housing benefit is too high in some circumstances, let us reform housing benefit. I would be up for that. We have heard powerful speeches. My noble friend Lord Greaves just made a very powerful speech about the amount of money that is being diverted to landlords. It is £2 billion a year in housing benefit. Anyone sensible would want to take a look at that, but this is looking at it over too short a period and doing it in a technical way that strikes at some of the protections that we have in Parliament. When we set entitlements in the uprating Statement every year, we can be confident that if people meet those entitlements they will get that money. We cannot say that any more because a cap may be applied. Look at the regulations and look at Clause 94; it is very general. This is a very targeted debate, which it should be as it is about child benefit. I say to noble Lords that, in future, child benefit amounts can be attacked in a way that we will not be able to control. Local authorities will have to reduce child benefit entitlements to enforce this cap. That is not something that this House should accept casually.

What I should really like to do with Clause 94 is vote against the whole thing. However, my noble friend Lord German and one or two others took me into a dark room, sat me down and said, “That wouldn’t be sensible because the great British public know the square root of next to nothing at all about the detail of the technicalities”. He has persuaded me that I should mitigate Clause 94, and I am prepared to do that. This amendment is the best form of mitigation because it protects a universal benefit that people earning just shy of £80,000 a year will qualify for until we look at that. The Government say that they are on the case. Those people will get that benefit, while people subject to the housing cap in future may not. I do not see the equity in that situation and it would not be safe for us to run with the clause if unamended. I am grateful to my noble friend Lord German for showing me the error of my ways in getting the mitigation.

I want to say two other things as well. This does not attack universal credit. If I believed that the amendment did that, I would certainly vote against it. Why do I not believe that? The amendment is to Part 5 of the Bill, whereas universal credit is in Part 1. If this is an essential part of universal credit, why is it not in Part 1—in the first 43 clauses? It is not. It is there only because of something called the Treasury claw-back, which we discussed at great length in Grand Committee. I was absolutely persuaded that I would die in a ditch to save universal credit. I pay credit—universal and otherwise—to the Minister for achieving it. As someone said earlier, it is an achievement. It will transform and improve dramatically the way that the welfare and benefits system is rolled out. We will certainly be in a much better place when the economy recovers.

However, the Treasury claw-back is £18 billion over the CSR period. The amendment, give or take the new version of the impact assessment, which I have not yet studied, will save £113 million. My point is simply this: the deal was done by the department in 2010, when it was absolutely reasonable to expect that the green shoots of the economy would start to be seen in 2014. Is there anyone in this House who now believes that that will happen? The circumstances of 2010 are now changed, so we are not lashed to the mast. If you want to give some protection to the people at the lower end of household income distribution, this is the amendment to mitigate that affect.

There is a lot of misunderstanding in this debate about the difference between a poverty indicator before housing costs and a poverty indicator after housing costs. After housing costs, the families that will be hit by this household benefit cap will be as poor as church mice. When you measure the amount of income available to a household and divide it by the number of people in it—these are big households—they will get tiny sums of money. I saw an article in the Guardian today that referred to 62p per family member after the household benefit cap in one case that had been worked out. What are we doing here if we are approaching that kind of thing?

The Government will not be able to control this. The child benefit that will be withdrawn will be withdrawn by local authorities. Once the regulations are passed, we will lose control of what will happen to these households. I contrast that. Colleagues may know that the DCLG is running a very interesting programme on troubled families. The Prime Minister tells us that there are 120,000 troubled families—I am sure there are—just in England. We are spending just shy of £450 million on getting alongside them, getting them back into work and getting their kids into school. That is a much better way of dealing with some of this stuff. Why, on the one hand, are we helping troubled families? People who are hit by the housing benefit cap will very quickly become troubled. Maybe they will get help from this left-handed scheme. Meanwhile, they have to face the reductions that are being made by the right hand of the Government.

I am very worried about this. Child benefit is a universal benefit and a mitigation that is essential to protect the interests of children. It does not affect universal credit. If it did that, I would not vote for it. However, if it is pressed, I will vote for this amendment with enthusiasm.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 23rd January 2012 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, I rise to speak in support of Amendment 61B, to which my name is attached, and to Amendment 61C in my name. The amendments have a particular resonance for me. One of my clearest memories when I worked at the Child Poverty Action Group was sitting below the Bar during the passage of the then social security Bill under the Fowler review, of which we heard earlier, and literally jumping for joy when the Minister announced that the then Conservative Government would withdraw their proposal to pay family credit through the wage packet. I was given a severe warning by the attendant.

During my subsequent academic career I conducted Joseph Rowntree Foundation-funded research with Jackie Goode and Claire Callender that demonstrated the importance to the well-being of both children and women of paying benefits for children to the mother who was in all those families the parent with main responsibility for the day-to-day care of the children. This research helped to persuade the previous Labour Government of the error of their ways when they proposed to pay working tax credit through the wage packet. Now here we are again having to persuade the Government why it is so important to pay money for children direct to the parent who has the main responsibility for the day-to-day care of the children and for day-to-day budgeting. This time the stakes are higher, as the noble Baroness, Lady Meacher, has made clear because universal credit wraps up so much in it, including housing costs. The noble Baroness, Lady Meacher, has already made the case very powerfully for why what is colloquially known as “wallet-purse” is such a crucial issue, particularly for children and women.

I want to pick up a couple of the arguments made by the Minister in Committee, some of which I have to admit I was not convinced by. First, I make reference back to a point made by the noble Lord, Lord Lester, earlier when he talked about the report of the Joint Committee on Human Rights, which came out after our proceedings in Grand Committee. It commented on the reduction in the financial autonomy of women, resulting from the payment of universal credit to only one member in the household. In order to address that, the Committee suggested that the Bill could be amended to allow payments intended for children to be labelled as such and to be paid to the main carer.

One of the points made by the Minister was to try to reassure the Committee that making universal credit as a single payment will not now be a problem because the Government are committed to ensuring that people can access support to manage their payments and help them to budget effectively, including access to budgeting products, such as jam-jar accounts, as mentioned by the noble Baroness. I put that argument to an expert who understands jam-jar accounts much better than me, and who shares the Minister’s enthusiasm for them. Her response was that it was a bit of a smokescreen as there is no coherent link between budgeting accounts and the decision as to whom the benefit is paid. Moreover, what is at issue is not budgeting capabilities but financial autonomy. It is about ensuring that the parent with the every day care of children has control over the money allocated for them.

That brings me to another argument used by the Minister that the Government want to enable couples to decide where their payments should go. It is not for the Government to dictate how a family arrangements its finances. The only decision that the couple can make is between payment into one or other single account or a joint account. As the noble Baroness has already explained, joint accounts are not necessarily the answer. Research by Fran Bennett of Oxford University and others shows that the existence of a joint bank account does not guarantee access by both partners to the money held in it.

While I agree that it is not for the Government to dictate how a family arranges its finances, is it not the case that their belief in the power of nudge might point them to supporting this amendment? Presumably, the Government want the money allocated to meet the needs of children to be spent on children. As the noble Baroness pointed out, that is much more likely to happen if the money is clearly labelled for children.

If the Government refuse to countenance that approach, then I suggest that Amendment 61C might be the answer. It provides for a couple to choose for the payment to be split between accounts without earmarking any of the money for specific purposes. This would meet the Minister’s concern that universal credit should be seen as a single payment. In this case, it would be a single undifferentiated payment, but split between the two bank accounts when the couple so wished. It would allow for the variety that exists in the ways that couples organise their finances. I acknowledge that it is not a perfect solution for, as the Minister observed earlier in our proceedings, effective choice exists only when the balance of power is equal, and the gender balance of power is still often very unequal, but it would be more consistent with the Government’s position on choice and would be better than the only choice offered in the Bill, which potentially puts all the money into the hands of one partner.

As the noble Baroness emphasised, neither of these amendments would cost money, but they would help millions of women and children and address the very real problem of hidden poverty which can result when resources are not shared fairly within families.

[Lord Kirkwood of Kirkhope]

My Lords, I shall add a few comments to the speeches of the noble Baronesses, Lady Meacher and Lady Lister. I learnt the importance of this subject a long time ago when I was involved in consistorial legal work in a provincial legal office in south-east Scotland. I was surprised by the importance of financial autonomy to people within quite troubled and tense family contexts, as the noble Baroness, Lady Lister, mentioned. I was then persuaded yet again, academically, by the exemplary work that she has done ever since with Fran Bennett and others to make this case consistently over the years. It is as apt in this benefit reform as it was in the Fowler reforms or at any time since. I guess I could be persuaded that this is a debate that needs to be conducted at regulation level and I am certainly up for continuing an interest through the primary legislation until the regulations are tabled. I will be happy to contribute to those discussions.

There is a real question that I want to be clear in my head about. We had some interesting discussions in Grand Committee and I am certainly sympathetic to the Minister’s search for innovative financial products. I think it is absolutely correct. However, if you separate out the politics from all this, I would like to understand whether it is factually possible for the agile computer system that we are developing with such care in Warrington to deliver the device suggested in Amendment 61C. That is a separate question from whether the Minister is prepared to deliver it. I want to know that we are not blocking off—this is the point that the noble Baroness, Lady Meacher, made—the opportunity to come back to this. If we cannot persuade the coalition in the short term, either tonight or in regulations, that this is the right thing to do, which I believe it is, it would comfort me if the Minister were able to say that the Government do not believe that this is right because there are other ways of dealing with it. I would go to my bed this evening and rest slightly easier if he were able to say that it is still possible and we would not need to buy a new computer system if we wanted to do this in future.

[Baroness Hayter of Kentish Town]

My Lords, I am looking forward to the Minister’s reply, otherwise we will worry about the sleeping patterns of the noble Lord. These amendments, as has been clearly set out, seek to mitigate the risk of paying the entirety of universal credit to one person and, in particular, to provide protection for women who are more likely to be the main carer in a couple and less likely to have the power in the relationship to determine how money is managed.

The Government’s proposals suggest that universal credit payments would not, other than exceptionally, be split between a couple. Instead, they would be paid, as we have heard, entirely into one bank account. The DWP briefing note states that,

“the Government wishes to place responsibility for household budgeting with the household. It is not Government’s role to dictate how a household spends their money”.

However, these amendments are not about how households spend their money but how they receive it. They are about allowing households to decide to whom the money should be paid. This principle is long established in social security policy. Households receiving child benefit can nominate a main carer and those receiving working tax credit can receive child tax credit in the bank account of the main carer and working tax credit in the bank account of the other partner.

Concerns about the shift in policy from this have been voiced by a wide range of organisations, all of which have presented strong arguments in favour of ensuring that the part of universal credit intended for children is paid to the person who has the main care of them. As has already been spelt out, we know that benefits labelled as intended for children are more likely to be used for that purpose. This amendment would enable the Government to identify the parts of the credit intended to help with the costs of children.

Research for HMRC shows that child tax credit is commonly identified as money for children and more often spent accordingly. Again, as has been said, we know that money within the household is frequently unequally distributed, particularly in low-income families. An Oxfam study of black and minority ethnic women in low-income couples revealed cases where,

“women had so little access to money that their husbands were effectively in control of key aspects of their lives”.

Benefits for children are sometimes the sole source of independent income for vulnerable women.

As the Women’s Budget Group points out,

“putting benefits together is key to the design of UC; paying it into one account is not”.

There can already be exceptions. Sometimes, for example, there will be rent for certain categories of recipients. Support for mortgage interest may be paid to lenders and, as the Women’s Budget Group states,

“a sanctioned claimant could lose their UC, and the remainder … paid to their partner”.

The DWP briefing acknowledges:

“There may, however, be exceptional cases that require alternative arrangements: to ensure safeguards. The Government intends to retain powers to split payments between members of a couple in joint claim cases”.

I think that the noble Lord, Lord Kirkwood, will be able to sleep easy in his bed because it seems clear to me that the technology will exist to enable the Minister, if he so desires, to accept either or both of these amendments; that is, either paying the child elements of universal credit to the main carer or, in line with the Government’s assertion that they wish to enable choice, allowing families to choose to split their payments.

Resistance to these amendments would suggest that administrative simplicity is seen as more important than either ensuring that women have an independent income or encouraging money which is intended for children to reach them. I hope that the Minister will feel able to accept the argument for these changes.

--- Later in debate ---

[Lord Freud]

My Lords, it is a shame that the noble Lord is not here to move the amendment. I thank the noble Baroness, Lady Meacher, for moving it so ably. The noble Lord, Lord Ramsbotham, was pretty surprised and somewhat impressed as he heard the developments that we are making in this area. He has been a long-term campaigner in this area. I think he was worried about the bits that we had not yet caught. I was not able to have a meeting with him on this matter, but he met with my officials, as did his colleagues from Unlock, and we were able to provide a lot of reassurance about positive intent to keep going in this area. There are some differences, which is the reason why we cannot support the entirety of this new clause. That is not because we are in any way against helping in the rehabilitation of prisoners and other detainees but because we are moving along with our own programme. We think that that will prove more beneficial in the long run than introducing this structure, which we think would be expensive and resource, intensive in prison assessments.

[Lord Kirkwood of Kirkhope]

Perhaps I could concur with the point made by the noble Lord, Lord McKenzie. I support these amendments. As I said in Grand Committee, the key thing—I am a non-executive director of the Wise Group and we run one of these projects very successfully—is that the people who do the work are ex-cons themselves. My suggestion is that more Jobcentre Plus staff should be recruited from ex-convicts in future so that these programmes can be run positively. That is a facetious way of putting it, but this is a serious point.

[Lord Freud]

My Lords, it is a real point because we know that virtually all addiction treatment centres are manned by people who have gone through the experience of addiction. That is one of the reasons why they are able to help people. There is probably a very similar argument for convicts. Given the way in which we have incentivised the work programme, I would expect that that fairly basic knowledge will be picked up. I am in no position to instruct any work programme to do anything, but I hope that the way in which this has been structured financially will drive that logic.

--- Later in debate ---

[Baroness Lister of Burtersett]

My Lords, in moving Amendment 62ZA, I shall speak also to Amendment 62B. These amendments focus on the issue of sanctions, in particular where a claimant with a dependent child faces sanctions because they are unable to access work or work-related activity or to sustain work due to a lack of suitable childcare which meets the needs of any child for which the claimant is a responsible carer. Amendment 62ZA seeks to ensure that the appeal tribunal takes into account the extent to which a claimant with a dependent child had access to appropriate childcare when the decision was made to impose a sanction under Sections 26 or 27. Amendment 62B also focuses on this issue and would guarantee that a claimant would not face sanctions and the loss of benefit where they are unable to access work or work-related activities or to sustain work due to a lack of appropriate childcare.

These amendments are supported by more than 40 very widely spread organisations. The recent child impact assessment statement from the Children's Commissioner for England stated that sanctions should never be imposed on the main carers of children under Clauses 26 and 27 of the Bill, unless accessible, affordable childcare was available that would allow them to take up offers of work or training or attend interviews. These amendments would meet the commissioner’s concerns. Providing such safeguards would be consistent with the approach taken in the 2009 welfare reform legislation where at Report, my noble friend Lord McKenzie of Luton confirmed in response to a similar amendment tabled by the noble Lord, Lord Kirkwood of Kirkhope, that the then UK Government would introduce regulations to provide that claimants with a dependent child would not face sanctions in these circumstances.

Most lone parents want to have the opportunity to combine paid work with the vital job of being a parent once their children are old enough, but the Welfare Reform Bill fails adequately to recognise the significant barriers to paid work which lone parents often experience, in particular the availability of appropriate childcare. In Committee, the Minister outlined the kind of safeguards which would be put in place to protect lone parents from sanctions where they are unable to access childcare. I will not reiterate them now. Unfortunately, I have a whole lot of examples which I cannot now read out because of the time constraints. However, in those examples it is clear that lone parents are being put under pressure to work hours which are not consistent with their childcare responsibilities. I believe that the organisations have written to the Minister and I am very happy to provide those examples outside these proceedings.

I know that the Minister will say that it is not appropriate to put in the Bill the safeguards being sought to ensure that no one is sanctioned because of lack of available childcare. I am sure that the House would be very grateful if he could therefore give a commitment on the record to bring forward regulations in the same way that my noble friend Lord McKenzie of Luton did to provide safeguards for lone parents who are doing a very important job raising their children. I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I concur with the noble Baroness, Lady Lister.

[Lord McKenzie of Luton]

My Lords, for the sake of brevity, I can say that I also concur with my noble friend and with the noble Lord, Lord Kirkwood. My noble friend is simply seeking to have the issue on the record.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 17th January 2012 Lords Chamber

[Baroness Meacher]

My Lords, I will speak briefly to Amendment 50ZA and will refer to Amendment 50ZC. I very much applaud the aims of the noble Baroness, Lady Lister, in seeking to have publication of information about the allocations of money to local authorities for the purposes envisaged. She presented her case very powerfully as always.

I want to thank the Bill team for a most helpful conversation. I understand that the £36 million allocated for crisis loans could be spent by local authorities on grants or payments in kind as well as loans. I find that very encouraging. I for one am very suspicious of loans for people attempting to live on the breadline—they can build up even greater problems for the future—other than when provided for budgeting purposes, which I know is very much what the Minister has in mind. If, for example, households receive half their monthly income half way through the month as a loan only to be repaid at the end of the month, that would go some way to ameliorate what would otherwise, for me anyway, be a highly risky set of proposals.

Amendment 50ZA, tabled by the noble Baroness, Lady Lister, would provide information on whether the funds had been spent by local authorities on the purposes for which the Government are allocating them—we all understand that is what they are being allocated for. I have some concerns that, even if the Minister concedes this amendment, it remains true that there is no statutory requirement for local authorities to provide some form of assistance to households in crisis. Many Social Fund crisis loans are sought because mothers, often single mothers, have no cash for the electricity meter—apparently, this is really the dominant issue confronting people who seek these loans—with several days to go before getting any more benefit and, of course, the children are cold and the mother cannot even make a hot meal for them without some form of electricity. I understand that the idea of the settlement letter is to spell out the purposes for which the £36 million should be used. I applaud that. I also understand that the DWP plans to follow up a representative sample of local authorities after one year to find out how they have spent the money.

My concern is that over time the settlement letter might be redrafted—heaven forbid that Ministers even change from time to time—and, if local authorities report after one year that unfortunately the £36 million had to be spent on other matters, it seems to me that there is no way of ensuring that these households in crisis actually have funds allocated to those needs. That is actually my concern. We need to know that there will continue to be a system for dealing with these household crises, particularly for families with children. We do not want these children disadvantaged.

I understand the logic of making the £178 million for community care grants and crisis payments available to local authorities, which are no doubt closely involved with many of these families—certainly, if they are not involved, they should be. The aim, as I understand it, is that these funds need to be brought together with other forms of assistance for these families in order to generate greater value for money. At the moment, the Social Fund is a national system that operates at arm’s length from other services. I recognise that this has some disadvantages. The concern is that every local authority is likely to respond differently to this challenge. How can we be sure that households in crisis will have somewhere to go for help, as I have already said? The Government are already committed to the settlement letter and review after 12 months, again as I have already alluded to. I welcome those commitments very strongly. They are a start, but they are a weak provision in this very important area of policy.

I hope that the Minister will take seriously the need for a more robust system to underwrite what I understand to be the Government's intentions. The amendment tabled by the noble Baroness, Lady Lister, is one option, but whether or not the Minister accepts Amendment 50ZA, perhaps he will consider incorporating in regulations the requirement that the funds envisaged for resolving household crises are indeed allocated to that purpose. I understand that how local authorities want to do that is a matter for them, but I think that ensuring that the funds are focused on that issue merits a sentence in the regulations. That would certainly make a much stronger support for the provision and give an assurance to the House that we have not lost it.

I would be very grateful for the Minister's serious consideration of the amendment. I should mention that I will not move Amendment 50ZC at this stage.

[Lord Kirkwood of Kirkhope]

My Lords, I make a brief intervention to support the amendments, as I did in Committee. Clause 69 is very important for a relatively small but very vulnerable group of people. The discretionary Social Fund has been part of the furniture, if you like, of social security for a long time, and during the period that it has been deployed, people have been able to take advantage of it to save the public purse considerable sums. One of the main purposes behind the discretionary Social Fund is to prevent people being institutionalised in various ways, and it has done that very successfully. There is cross-party agreement that reform of the Social Fund is long overdue, but to abolish or decentralise it like this raises many questions, which remain unanswered. I hope that the Minister will take the opportunity to try to assuage the concerns that some of us continue to have.

First, the process that will now unfold is less than clear to me. Reading the penultimate subsection of Clause 69, I think that an affirmative resolution will be required to give effect to the power that the Government are seeking in the clause, but I should like reassurance about our ability to have ongoing discussion about how the Social Fund Commissioner’s assets and the apparatus that we have in place at the moment will be dismantled in a way that makes sense, and that the allocation formula for the disbursement of these moneys is carefully considered and consulted on, because the discretionary Social Fund spend obviously has a very spatial dimension to it because some communities need it much more than others. We need to be careful about how we make that decision in the first instance. That is another reason why Parliament, by virtue of affirmative resolution or statutory instrument, must be continuously approached for advice and reassurance. The sample of local authorities being lined up for the welcome review process needs to be carefully considered because of the point I have just made: the decentralisation process will affect some dramatically differently from others.

I still have serious misgivings about this. If we are going to do this, we need to be really careful that we are getting it correct in the first instance and that the client group who have relied on discretionary payments from the Social Fund in crisis situations are not left wanting, completely abandoned and without access to liquid cash in circumstances where they find it difficult to survive.

[Lord Boswell of Aynho]

My Lords, I wish to raise briefly the question of whether to centralise payments to people in extreme difficulty or whether to leave that to the discretion of local authorities or, as was originally suggested prior to the First World War, friendly societies, or others. That idea has subsisted for at least 100 years and I think it will continue. I am generally supportive of the localism agenda and I can see material benefits in devolving this opportunity to local authorities. However, the amendments raise two issues that need a little reflection.

The wider question, which has been touched on by a number of noble Lords, is whether this money, which was intended for people in severe difficulties, will continue, albeit with local administration, to be applied to such people in general. I think that on the whole the Government are facing in the right direction here, but I look forward to the Minister’s assurances on it.

The specific twist that I want to add was prompted by something that the noble Baroness, Lady Lister, said about whether there should be a local connection. Clearly there is the subtext that there could be some discrimination in favour of the local boy or girl against someone from outside, someone who was felt to be in some sense the architect of their own distress or someone in some way morally unworthy. I do not want to go on about that now, but we can see the argument developing.

I should like the Minister to consider—and it may be helpful to him to do so—the fact that since the passage of the Housing Act some 16 years ago, we have had all the equality duties, including the public sector equality duty. Certainly local authorities, in exercising the discretion being offered them, will have to operate within the framework of that duty. I wonder whether that is indeed helpful in obtaining the assurances that I think we want with regard to making sure not only that the money goes where it is intended to go but that it goes to the people who need it most within that category of difficulty, rather than being siphoned off to people who are more acceptable or who come more within the interest of the local authority concerned.

--- Later in debate ---

[Lord De Mauley]

My Lords, when we discussed the Social Fund last week, I hope I was able to offer reassurance in two key areas. First, I informed noble Lords that we would extend the 2014-15 review of a cross-section of local authorities to include information about the way they have used their funding for the new local provision. Perhaps I may return to that in a moment.

I was also able to assure your Lordships that the settlement letter that noble Lords referred to today that will accompany the funding will set out what the funding is to be used for and will describe the outcome that must be achieved—although, for reasons I explained, not the method that should be used to achieve the outcome. After further consideration of the issue, and following questions from noble Lords, I am able to explain what the settlement letter will contain. The letter will set out what the funding is to be used for, the underlying principles, and describe the outcome that must be achieved. It will say that the funding is to concentrate resources on those facing greatest difficulty in managing their income, and to enable a more flexible response to unavoidable need. The letter will make explicit that the funding is to provide a replacement provision for community care grants and general living expenses crisis loans.

The letter will go on to explain that community care grants were awarded for a range of expenses, including household equipment, and were intended to support vulnerable people to return to or remain in the community or to ease exceptional pressure on families. They were also intended to assist with certain travel expenses. It will also explain that crisis loans were made to meet immediate short-term needs in an emergency or as a consequence of a disaster when a person had insufficient resources to prevent a serious risk to the health and safety of themselves or their family. As I said in our discussion of Amendment 50 last week, I assure your Lordships that we are equally committed to ensuring that this funding goes to help the most vulnerable.

Amendment 50ZA would require the Secretary of State to publish information on the amount of money given annually to each local authority. I can assure your Lordships that we already plan to publish this information on the DWP website. On community care grant budgets, noble Lords might like to be aware that work has been done since Committee to make the funding distribution fairer by changing the funding allocation methodology.

It is each local authority’s responsibility to decide what type of support it provides with these funds. We have already been made aware of a variety of innovative ways in which local authorities plan to use this money, such as furniture re-use schemes, working with credit unions, investing in existing projects or joining up with other organisations in the area. For example, the fieldwork undertaken by the department shows that rural local authorities had very different ideas from those of urban authorities, and would embrace the freedom to design and establish local provision that suits the particular challenges they face.

Some benefit recipients cannot even afford the delivery of free goods from support schemes. During the fieldwork, the department was made aware of the fact that a local authority in Yorkshire is considering using some of the new funding to pay the delivery fees charged by an existing provider for the delivery of free goods to benefit recipients and other low income groups. This demonstrates the benefit of tailoring support to the local area. This initiative is particularly useful in a rural area, as it would have been far more expensive for people to arrange their own deliveries than in an urban area. This service would help people on the lowest incomes to receive free household goods that they might otherwise be simply unable to access.

Another example of innovative thinking came from a local authority in the Greater Manchester area, which said that it would use the funding to expand the local credit union, as this already provides household goods to people on low incomes. Expanding the scheme would increase access to affordable credit for those on low incomes and reduce the reliance on high-cost and illegal lenders. Yet another different approach to the new provision is that of a local authority in the south-west, which has been looking at how commissioning services would boost the local economy, providing new skills and routes back into employment and out of poverty.

As I hope is evident from these examples, giving local authorities the responsibility for deciding what the new local provision will look like allows for innovative new schemes that are tailored to the local area.

[Lord Kirkwood of Kirkhope]

These examples are very helpful, as is the further fleshing-out of the content of the letter to local authorities, but what is the arbitration process, supposing local authorities deliberately and in bad faith pay no attention to the contents of the letter that the Minister is proposing to send?

--- Later in debate ---

[Lord Touhig]

My Lords, I do not intend to detain the House long, because Amendments 50B, 50C and 50D were debated at some length in Committee. I attempted to withdraw Amendment 50A yesterday, but the gremlins crept in and the only thing that has been withdrawn is my name—the amendment still appears on the Marshalled List.

With Amendment 50B, the noble Lord, Lord Addington, has once again made a very powerful case in support of the need for properly trained assessors. In particular, all assessors should have an understanding of and training in autism if they are to recognise and understand the complex cases they will have to deal with. It has been said a number of times—I make no apology for repeating it here, because it is important—that when you have seen one person with autism, you have seen one person with autism. This is why the training is so important. A knowledge of autism and possessing the right skills to assess the needs of an autistic person are essential in making any decision about the appropriate level of financial support that that person might need. I believe that the Minister accepts this point of view.

Following the Committee stage, a number of other noble Lords and I had a very useful meeting with the Minister and his colleague Maria Miller MP, and we are grateful for that opportunity to exchange views in a less formal situation. One point from that discussion, which was touched on today by the noble Baroness, Lady Browning, did concern me—the point about the qualifications of the person carrying out the initial assessment. One of the Minister’s officials told us at that meeting that the initial assessments would be carried out by an occupational therapist. Will this be the case? That seems a very narrow skill base from which to draw the expertise for any kind of wider assessment, and it leaves me, for one, with the impression that the assessment is aimed primarily at getting people into work and not at trying to understand and support them if they are not able to work. Such a situation would fly in the face of the well-argued case that assessors should have specific training in all mental, intellectual and cognitive disorders, as advocated by the amendment. I hope the Minister can allay my fears.

I turn to Amendments 50C and 50D, in my name and that of my noble friends Lady Healy of Primrose Hill and Lord Wigley. The amendments concern face-to-face assessment and would, if accepted, exempt certain categories of people from the process of continuous reassessment where sufficient medical and other expert evidence existed to demonstrate that their condition would not improve. I return again to my concerns about people with autism. Autism can be summed up in this way: autism is for life. Any reassessment must accept this fact before progress can be made. The Minister made it clear, at Second Reading and in Committee, that the Government did not believe that a face-to-face assessment would be the right course to follow in all cases.

At our meeting, both the Minister and his colleague, Maria Miller MP, gave a strong impression that the Government would support a tiered approach to assessment in such cases, as advocated by the National Autistic Society and others. In practice, this tiered approach would allow for written assessment from professionals to be considered and a decision to be made, on that basis, about whether a face-to-face assessment was appropriate or necessary. I will not test the patience of the House any longer. I look forward to the Minister’s response and hope he will have something positive to say about a tiered assessment.

[Lord Kirkwood of Kirkhope]

This is an important debate because existing relevant medical evidence is absolutely essential to getting this test—and the whole process—delivered as accurately and as sweetly as it possibly can be. This is true in two separate directions. First, getting access to and active consideration of existing relevant medical evidence will make the examination—if an examination is needed—much more satisfactory for all concerned. As has already been said, it will reduce appeals—and it will minimise costs for that reason if for no other.

It has a second important function which I hope the Minister will be able to spend some time on. If the Minister could help us understand better how desktop assessments can obviate face-to-face assessments, he could diminish the fear factor that clearly exists, rightly or wrongly, about what will face people who might be invited to these face-to-face tests in future, and that would be enormously helpful. I am aware, having followed this for some time, that the DLA provisions which we put in the primary legislation in 1992 were, in some respects, too prescriptive. I understand perfectly that assurances can be made and put into regulations and put into medical contracts as well.

I am in the market for voting for this amendment if we do not get the kind of response that I hope for. However, there are ways of delivering the assurances that are being sought by our correspondents and the disability community. It would be helpful if the Minister could say a word about the contract. I understand that the contract is out to tender and it is too early to say who is interested, but people are drawing conclusions from the Atos Healthcare experience. I do not think that that experience would necessarily be repeated in the future if the terms of the contract are drawn sufficiently clearly. In that contract, if not in regulations or primary legislation, we should be saying clearly that on cause shown, if there is heavyweight medical evidence that can be addressed at a desktop level, those are circumstances where it should almost be a default that people will not be subjected—if that is the right verb—to these assessments.

I share a concern about the quality and experience of the assessors. I have a capacity issue as well as a quality issue about that. It does not matter if you get the best contract in the world and the most enthusiastic prime contractors who come in and promise, hand on heart, to do the best they can. The professionals with the right qualifications and experience to do this work may not be out there. If that is the case then we need to be very careful. There is not enough emphasis in the United Kingdom on this kind of medicine, and we should be promoting with our medical colleagues a far higher degree of interest in and development of the specialist skills that medical professionals need to do these jobs in order to make this process a success.

I have here a case history that caught my imagination. A 25 year-old young man is undergoing his first major reassessment of his problems as an adult. His assessments will involve MR scans, examination by neurologists, neurogeneticists, neurophysiotherapists and a specialised occupational therapist. He has scattered neuromotor difficulties. Although I trained as a pharmacist a long time ago, I could not even find on the internet what neuromotor difficulties actually amount to, but it is clearly a serious condition that is being addressed by experts at a tertiary, if not international, level by a centre of excellence in a region in the United Kingdom. The young man has written to say that he is now fearful that he will have to address the circumstances of these tests. It would be completely daft and stone mad that we cannot say something now that is clear. There may be technicalities with the legislation, and perhaps I could be persuaded that such provisions should not be in primary legislation, but we absolutely need some clear, copper-bottomed assurances from the Minister that a person in those circumstances would not face such difficulties.

I hope that the Minister will understand that this is an important amendment and that he will take as much time as he can to tell us as much as he knows about how these processes will work and where in the legislative process—whether by regulation or primary legislation—we can be assured that we will get some protection for the kind of young person to whom I alluded.

[The Countess of Mar]

My Lords, I have difficulty with Amendment 50ZR. I fully endorse the fact that medical evidence is needed, but some people with ME have not seen a doctor in years, simply because there is no treatment for them. If the department is expected to depend a lot on medical evidence for corroboration of the illness, I do not know how people with ME are going to cope. That really disturbs me and the issue needs to be examined.

I fully support the amendment of the noble Lord, Lord Addington, on training. People with ME have cognitive difficulties as well as all their other problems, and these are not very well understood. I give him my heartfelt support, and I hope that the noble Lord will take on board the fact that some people cannot get current medical evidence to corroborate their illness.

--- Later in debate ---

The changes from DLA to PIP could cause a major upheaval in the lives of millions of people, many of them extremely vulnerable. We do not argue against change, but for a precautionary approach in introducing that change. This should include an independent report before the start of change, focused particularly on the assessment process, trials before general rollout and, above all, meaningful engagement with disabled people, because they deserve no less.

[Lord Kirkwood of Kirkhope]

The noble Lord is an experienced hand and has made a very interesting speech, but it would help the House enormously if he could be tempted to give an assessment—if he was the Minister facing Amendment 50—of how long he thinks it would take to discharge the responsibilities contained in the amendment.

[Lord McKenzie of Luton]

It is clear that the Government are going to have to do some of this anyway, but in terms of an overall time period it is clearly a matter of some months rather than weeks, but not a matter of years. It depends on the determination and effort that the Government bring to bear. They have the levers and the resources to cause this to happen quite quickly, I would suggest, but there has to be full engagement with disabled people for it to be meaningful. This does not mean endless delay in the introduction but it does mean a real level of reassurance before we embark upon this very significant change.

Jobseeker’s Allowance (Jobseeking and Work for Your Benefit) (Amendment and Revocation) Regulations 2012

Lord Kirkwood of Kirkhope Excerpts

Monday 16th January 2012 Grand Committee

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his explanation of this order, which has our support. Enabling prison leavers to be referred to the work programme immediately upon release, rather than at the earliest after seven days, is to be welcomed. As the Explanatory Memorandum recites, those in employment are much less likely to reoffend, and the importance of this first week is acknowledged even though, as the Minister said, the focus will be on reintegration and securing a base rather than work preparation and job search. From the Explanatory Memorandum, it also appears that the JSA claim process will be conducted in prison so that entitlement can begin on release. Again, the Minister covered that. It is proposed to make use of the provisions of what I think is now Clause 96(2)(1) of the Welfare Reform Bill. What will the position be in the interim before the Clause 96 provisions can be brought into effect? What payment will be due to individuals between release and the otherwise first payment date?

The Minister might be relieved to know that I do not propose to reiterate the detailed inquiry about the work programme which was taken up in the other place. However, when is it expected that the Government will be releasing comprehensive data on its operation, about referral levels, categories, outcomes, cost et cetera? It would be helpful if the Minister would say a little more about the process of these additional referral opportunities. Will this become the main approach for those leaving prison? I note from the Explanatory Memorandum and the Minister’s confirmation that 16 and 17 year-olds will not be referred by this process. Will he say a little more about why? How many prison leavers have been referred to the work programme at day eight to date—from what the Minister said, it may be that the answer is nil—and certainly within 13 weeks of their claim? We understand that there is going to be a new category in the work programme. I am not sure whether it is just for those day one referrals rather than perhaps day eight referrals, week 13 referrals or any others.

In particular, will the Minister confirm that this will not be an automatic process that will squeeze out other programmes? I am sure that, if he were in his place, the noble Lord, Lord Ramsbotham, would talk about some of the programmes of which he is aware. I certainly remember sessions where we had presentations—I think that the Forestry Commission was engaged in employing people even before release from prison. These were imaginative programmes that really made a difference to people, and I would not wish to see these opportunities trump them and squeeze them out.

Subject to any points arising from those questions, we support the order and wish the Government well with this initiative.

[Lord Kirkwood of Kirkhope]

I add to the welcome that the noble Lord, Lord McKenzie, has rightly given to these regulations.

I am particularly interested in this aspect of the work programme because I am a non-executive director of the Wise Group in Glasgow, which has for some years been running a programme called “Roots Out of Prison” that has been extraordinarily successful. The Minister rightly pointed to the fact that other aspects of the public service and the voluntary sector need to help if these projects and this work are to be successful. The Scottish Prison Service was exemplary in the way that it encouraged Wise Group employees, who were reformed former convicts who had been trained by the Wise Group, who went into Barlinnie prison in the first iteration of the project. Inside the prison, those Wise Group employees, working on a voluntary basis, engaged in capturing the interest of some people who were about to be released. I was not aware that the jobseeker’s allowance regulations made that first seven-day period a bit of a difficulty—I do not know how they got round that—but all that I can say is that it was a splendid project that worked to everybody’s benefit.

As the Minister or someone else said, the first seven days are crucial. The people who are waiting to meet disaffected offenders, particularly young offenders who may have completed their first sentence, when they come out of the door at 7 on a Thursday morning, are usually the drug dealers. The drug dealers know that that is when the prisoners are let out, and they say, “Come with me to the pub and I’ll help you”. Then of course the prison leaver is back into a cycle of recidivism. Somebody should be there to welcome the prison leaver and take them somewhere, or talk to them before they come out about their housing benefit and getting accommodation. Local authorities could help some of these ex-convicts to find places where they can immediately go to live. Then the whole system would be more positively pointed at people who are in a very vulnerable set of circumstances.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Wednesday 11th January 2012 Lords Chamber

[Baroness Meacher]

My Lords, I support Amendment 43, tabled by the noble Lord, Lord Freud, and I also wish to congratulate him on levering a little money out of his Government, or the Treasury, to enable that amendment to be tabled. However, I also want to speak to my Amendment 42A, rather late in the day, which seeks to introduce just a little more humanity into this part of the Bill. It simply extends a little the remit of Amendment 43.

At present, a claimant who has a terminal illness and who is expected to live no more than six months would be placed in a support group, which means that they would have no conditions attached to their benefit entitlement. If they have a few good days when they might be able to work, there is no commitment for them to have to do that although anyone in this position who has a job will no doubt wish to work as far as they possibly can. I am talking about those people who do not have a job and who therefore find themselves in the position of having to look for one, when they have a terminal illness that will deteriorate over time until they finally die.

This amendment applies to a group of people who are suffering from a life-threatening disease, the symptoms of which cannot be controlled by any recognised therapeutic procedure, and where there is reasonable cause for these symptoms not to be able to be controlled by any such procedure. At present, the default position is that these claimants will be allocated to the work-related activity group and will be expected to undertake interviews and activities on this rather wild and ridiculous assumption that they should be finding a brand new job, with a brand new employer, for whatever little bits of time they are able to function. At the same time, of course, they have to prepare themselves mentally for the ever worsening symptoms that will lead to their death.

My question to the Minister is whether he regards such expectations of persons on a downward path towards death as humane and reasonable. I hope very much that he will answer that question rather carefully in his response, in the sense that having accepted the government amendment and put that forward, he will find that this amendment is a very minor shift which brings people in a rather similar position into line. Again, I must emphasise that this amendment would not in any way discourage terminally ill people who can work from doing so. Rather, it is an attempt to remove callous pressures from being applied to people who already have probably far too much to cope with.

The Minister knows that I understand very well the need to reduce the numbers of people on ESA and, most particularly, to reduce the months and years that some people remain on it. We are really of one mind on that. Of course, proper conditions need to be applied so that if people are really sufficiently well to work, they make every effort to do so. However, we are talking about people whose lives are severely curtailed. They will not be around to spend years on ESA, let alone to claim pensions. Are we not in danger of throwing the baby out with the bathwater here?

I shall leave your Lordships with just one case to illustrate the point. A CAB client had had major surgery for breast cancer, twice. At the time of her assessment for benefit she was suffering severe pain and undergoing tests that revealed some abnormal bone activity. She told the HCP about her condition and the fact that she was due to have a further scan. This lady was found to have metastatic non-curative cancer of her bones, primarily in her pelvis, hips, back and spine, as well as down her legs and in the rib area. She was told that she had three or four years to live, although I have to say that sounds a little unlikely to me, and my guess is that it will be a pretty miserable three or four years.

On appeal, this claimant had her “fit for work” status—which is mind-boggling in itself—removed, but she was placed in the work-related activity group. She became very tearful and had to see a psychologist. She was unable to return to her previous job due to pain from the operations removing the lymph glands under her arms. She got extremely tired, of course—if you have metastatic cancer you are not going to be in a good way to do anything. The CAB adviser was of the view that this client would not be able to work again due to the increasing pain levels that she was going to suffer.

Anyone who has known anyone with metastatic bone cancer will know that this is not a happy thing to have; it is seriously deleterious. That is the point that I want to make: here you have people whose pain, tiredness and general debility cannot be adequately controlled, and there should be some fairly automatic procedure to deal with them. Perhaps the Minister could consider the position of a potential employer. Who would take on an employee with metastatic bone cancer? I have to say that I would not. How reliable would such an employee be, and for how long—for how many days or weeks at a time? Who knows? The prospects, though, are pretty poor.

This client will have to go through the humiliating and endlessly negative experience of writing applications and going for interviews, knowing in her own mind that employers, if they are half sensible, simply will not take her on. It is that aspect that we need to get hold of. Also, she could be accused of wasting employers’ time: why should they be reading these applications and interviewing her when, poor soul, she really is not in a fit state to work?

Noble Lords have mentioned in previous debates that terminally ill claimants will be saving taxpayers substantial amounts of money because of course they will not be living for decades with dementia, as people like myself might be doing. All we are looking for is dignity in those last months and, if they are lucky—although perhaps this might not be lucky after all—years before they die. As the Prime Minister said in his first party conference speech as Prime Minister,

“people who are sick, who are vulnerable, the elderly—I want you to know that we will … look after you. That's the sign of a civilised society and it's what I believe”.

We are really not talking about a lot of money here. I hope that the Minister will consider this matter.

[Lord Kirkwood of Kirkhope]

My Lords, I would like to make a brief contribution to this debate. Anyone who was part of the collective consideration in Grand Committee would have to acknowledge the very constructive role that the Minister played in this part of the Bill. The Bill is very difficult territory. I think that it was an amendment in the name of noble Lord, Lord McKenzie of Luton, that opened the door to some of the changes that the Government are now proposing, but it was palpable to everyone who was watching the Minister that the defence that the department was taking at the time was not adequate to meet the demands that were being made of it in the cross-examination that he was getting. For myself, I think that it was commendable that he was alive enough to what was being said by adult people around him at the time on an important issue. It is not a huge issue; there may be 4,000 or so claimants who might now benefit from this measure, but those who do will get substantial benefit. It is appropriate, particularly from my side of the coalition on this side of the House, to recognise that this is a significant amendment that was won only because the Minister was willing enough to listen and make a constructive response. That is why we have the amendment in front of us today, and I hope that the House will support it unanimously.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Wednesday 11th January 2012 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I shall speak also to the other amendment in our name in this group. Perhaps more than any other component of these changes, the inclusion of the assessment period in the tally of days which count to limit contributory allowance serves to underline that this is fundamentally about budget cuts. The assessment phase of an ESA claim normally ends 13 weeks after the beginning of an entitlement. It is the period during which DWP gathers relevant information about a claim to determine whether a person has limited capability to work or limited capability for work-related activity. While the assessment is under way, there is no entitlement to an additional component. Indeed, it is the additional component which is supposed to reflect the additional needs of those who are not job ready. If the assessment determines that a claimant should be treated as having limited capability for work or work-related activity, the relevant additional component will be backdated to the end of the 13-week period, albeit that the assessment period may have been longer. During the 13-week period, the individual is entitled to only the contributory ESA rate equivalent to the income support JSA basic personal allowance rate. This is the same rate as the contributory JSA rate. By including in the 365-day period the 13-week assessment phase with no additional component, the Government are denying the receipt of 13 weeks of the additional component at the end of the period. This is demonstrably unfair.

We will doubtless be reminded of the cost implications which are, I think, £20 million a year after 2012-13 and £115 million for that year, the accumulated effect of those hitting at the start of the system. The effect of what the Government are proposing is that the additional component receivable by those entitled to contributory ESA in the WRAG will be available for only nine months, not 12 months. This is an example of where somebody has looked at every conceivable means of clawing back moneys from sick and disabled people. The benefit to government is said to be £100 million in a year, but looked at another way, this is an additional £100 million in a year taken from the pockets of the disadvantaged.

Amendment 41A addresses the position of those with fluctuating conditions who might move between the WRAG and the support group. Fluctuating conditions have been a strong feature of our debates on this Bill and on previous welfare reform measures. Concerns have been expressed about how work capability assessment operates for those with such conditions, whether there is sufficient training for DWP staff and providers and whether there is appropriate expertise which can be brought to bear to make sure that the system works as it should for people with fluctuating conditions. This brings with it the prospect of individuals potentially moving between the WRAG and the support group when reassessment arises.

Movements into the support group have been protected by the government amendment, and for so long as somebody is in the WRAG or the support group movements into the latter would not be denied contributory ESA, but periods in the WRAG are accumulated for the purposes of the time restriction. The problem this brings is as follows: consider somebody with cancer or another fluctuating condition who has spent, say, 11 months in the WRAG, has moved to the support group for a period and whose condition subsequently improves so they move back into the WRAG on a reassessment. If the clock does not then start again, they are given one month to prepare themselves for the loss of contributory benefit and to seek to re-enter the workplace. This problem would be made worse if there was an extensive period in the support group because of the greater disconnect with prior work-related activity. It is submitted that the amendment is a narrow and entirely reasonable proposition. The Minister may have figures about how many people it might affect, but it is suggested that it is unlikely to be many.

Amendment 41A, which has been tabled by the noble Lord, Lord Patel, precludes the starting of the time-period limitation for contributory ESA until the relevant provisions of the Bill enter into force. It has our support as it stands. As we discussed earlier, the clock has already started. When this legislation enters into force—the earliest date being April this year—some 100,000 people will lose their contributory ESA overnight, and for some that will be as much as £94 a week. Some may have been receiving it for the bare 365 days yet have paid their national insurance contributions for decades. We await further comments from the noble Lord, Lord Patel, but on any reasonable analysis, this is retrospective legislation and should be opposed. If there is to be time limiting of contributory ESA, in the normal course of events one would expect it to operate for claims after the introduction of the legislation. The Government are applying it to existing claims. Worse, they are counting days for which the allowance has already been received. Letters of notification have served only to cause confusion and dismay. Just imagine the consternation that would be caused by having a letter drop on the doormat telling you that in six months’ time it is likely that you will lose as much as £94 a week of your income—overnight.

In their understandable need to address the deficit, which we acknowledge, I believe the Government have lost all perspective and all sense of fairness. They have been thrashing around in all directions to grab back money on the flimsiest of propositions. Frankly, they should be ashamed of themselves.

[Lord Kirkwood of Kirkhope]

My Lords, I want to make a brief contribution to this debate because we have had a busy day and I think we all want to go away and reflect on what some of the earlier important amendments and votes mean for the rest of the Bill.

As I was preparing for tonight’s consideration of the Bill, I thought that Amendment 40A had some real potential to try to keep some channels open to the department. We have had some very powerful speeches and some significant decisions taken by the House. For myself, I want to go away and read all of those carefully. If we were looking for a way of trying to meet some of the obvious concerns that have been expressed in this debate, both internally and externally, this amendment suggests that there might be a possibility of getting something that can stand the test of time and that does not destroy the tight financial framework within which the Minister is seeking to operate. I know that he cannot on a whim say, “Yes, this is something that is possible for me to go away and look at”, but I think this is potentially realistic.

There are a number of reasons for supporting it, not just because it is realistic and meets some of the concerns but because it wins some extra time for everyone. The extra three months would be of significant advantage to the claimants concerned. My noble friend Lady Thomas made an important point earlier when she said that Harrington has a great deal of potential. I do not think that has been properly reflected in any of this evening’s discussions. The Government have set out their stall very robustly about the five-year set of annual reviews. I am well pleased, and I think everyone else is, about the progress that Professor Malcolm Harrington is making. Perhaps he should be invited to consider some of these things, including what might be done around the assessment phase. All I am saying is that I think there is some potential here for getting a compromise that might be winnable in terms of the financial constraints and might keep the channels open through the rest of the proceedings of this Bill—we might be able to come back to it at Third Reading.

In the balance of what else has happened today, this might seem nugatory or irrelevant, but I do not take that view. I think there is a mechanism here that is sensible and that may be doable. It will not be easy and there cannot be any guarantees, but I would really counsel my noble friend the Minister—who I know is actively concerned about all of this and is trying to find a way through that meets his financial framework as well as the concerns that have been expressed so powerfully by colleagues—to give this very careful consideration. The hour is not great but the House might be well advised to think carefully about this after the Minister has responded. I feel quite strongly that Amendment 40A may be worth considering voting on if we cannot get a response from the Minister that meets some of the concerns that have been expressed this evening.

--- Later in debate ---

[Baroness Hollis of Heigham]

If my noble friend will allow me, would the Minister be content if we were to introduce such a power by regulation at Third Reading, which would commit him to nothing or everything, according to how he wished to play it in future?

[Lord Kirkwood of Kirkhope]

Before whoever it is who is speaking sits down, I should say that I think that the Minister is making life difficult for himself. If he cannot take the advice that he is getting from all sides—and I, too, concur with what has been said—I, too, will look to get an expression of opinion from the House, which I really do not want to do. The suggestion that has been made about regulation-making powers is an easy out. I do not care what the Box thinks, actually; the Minister has the knowledge and the wisdom to take that decision right now, which would be a beneficial outcome for everyone.

[Lord McKenzie of Luton]

That has been helpful, as has been the intervention of my noble friend Lady Hollis, and I think that I can see a way forward. We do not need the Government’s permission to introduce an amendment in due course to take a regulation-making power, so if there is not that opportunity at the moment we will find out between now and subsequent Report days or even Third Reading. I think that that is what we will do; it will be a route through this. On that basis, and with that preliminary notice to the Minister, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Blair of Boughton]

My Lords, I am a Cross-Bencher who does not necessarily spend all day in this House but I have been here all day for this amendment because I have seen the effects of the Social Fund and on victims of domestic violence, in particular. The idea that we would allow the Social Fund to become a discretionary matter for local authorities is an abdication of our duties to the poor and the desperate. I very much support the amendment tabled by the noble Baroness, Lady Lister.

[Lord Kirkwood of Kirkhope]

My Lords, I should like to make a contribution to the debate as someone who was happy to co-sponsor the amendment of my longstanding and noble friend Lady Lister.

This has happened partly because the department thought that the Social Fund was beginning to become too difficult to handle. I know that the current explanation is that it is all part of the localism agenda, but I do not believe that. The criticisms that have been well set out by my noble friend Lady Lister are all valid. They are concerns that I share. More than anything else, I am beginning to hear from my spies, who are everywhere, that local authorities are coming to arrangements—if I were them I would do the same—for benefits in kind with white goods providers and food banks, though not quite soup kitchens yet. The point that I am making is that there is no substitute in certain circumstances, when families are in crisis and people are at risk of prejudice to their health, to the availability of access to liquid cash. There is no substitute to get them out of the kind of classic crises, whether domestic violence or other things. They need hot money and they need it right now to get them into a place where they can become safer. No amount of ingenuity, local creativity, co-operation or anything else is a substitute for that. We are not safe in this House to devolve this money—I shall come on to how it will be devolved in a moment—without recognising the value to family households in crises of having access to cash.

There is a very important point for Parliament about the oversight of this money. As colleagues know, we have a sophisticated system. There is a Social Fund commissioner and a variety of excellent public servants have served in that office with distinction. They have overseen the independent review service and have provided extremely useful current advice, information and data that have helped to stay on top of some of the policy issues. All of that is being thrown to the winds. I deeply regret that and said so at some length in Committee. The work that the Social Fund commissioners did in the past will be missed. I can see no way that Parliament will be able to stay as closely in touch with developments in this important policy area under the regime proposed in the clause.

I have no confidence at all that we can be secure in the knowledge of what will happen in Scotland and Wales. The Government may be able to control to some extent the conditions and provisions under which local authorities in England and perhaps Wales—although I am not sure about Wales—will comply with these regulations. However, certainly in Scotland the money will be given to the Scottish Government, or will pass through the Scottish Government, and noble Lords may have noticed that arguments have started to mature north of the border that perhaps will knock relations between the Westminster and Scottish Governments temporarily out of kilter. My serious point is that there will be different legalities relating to the controls and dispositions that will be made by local authorities in England and north of the border. I have no way of knowing how the Government will handle that.

No additional cost is involved in the amendment. That is an important consideration, given our earlier debates. We had some good discussions on this in Committee and I, like the noble Baroness, thought we had got some constructive and seriously positive responses from the Minister. I simply want to know how Clause 69 in all its glory and with its 10 subsections will be translated into practice and implemented.

I assume that there will be further opportunities at the regulation-laying stage—assuming that we do not agree any of the amendments that I think are necessary to improve the Bill in this important area—when the powers and the money are transferred. The money is important because another unique aspect of the Social Fund is that it has loans that are repaid, and the repaid loans refurbish the resources available for further use by other clients at a later stage. I am not sure exactly what amount of money will be transferred. I am certainly not clear—and I do not think that anybody else is—about how it will be disposed of, in relation to who gets what and the disbursement formula that will be used to allocate money. I assume that it will be done on a basis of need, but I have no way of knowing what that is. If I have missed it, I would be very pleased to be pointed towards the work that the Government are doing.

This is a really important part of the Bill and the amendment is the very least that we should ask for. This House should say that whatever sum of money is available at the moment, it would not be safe for us to let it be devolved to local authorities. I am sure that they will do their best and I have nothing against them, but we must impose a condition that any moneys that are disposed of and devolved for that purpose must be devoted to that purpose and to no other.

[Baroness Howe of Idlicote]

My Lords, I remember there being considerable concern in this area upstairs in Committee. Having listened to what the noble Baronesses, Lady Lister and Lady Turner, said, in particular about the plan in the amendment tabled by the noble Baroness, Lady Lister, I think that there is a way of dealing with the situation. Some of the problems of exactly how it will be spread out and all the rest of it might need a little more administrative attention, but I think this is a satisfactory answer about what to do with this sum of money. I would back it like that. Let us end the argument.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Wednesday 14th December 2011 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, I speak as someone who supported Amendment 14, and I am very happy to agree to the composite that the noble Lord, Lord Best, has now accepted and put to the House. I think that it is one of the most significant amendments in the whole of the Report stage. I am now speaking to my own side of the House because I support this amendment very strongly. If the noble Lord, Lord Best, feels the need to press this to a Division, I shall support him, and I shall do so for a couple of reasons.

First, it is important to reassure people on my own side that this proposal would not interfere with universal credit, the introduction thereof or anything thereby, but it would mitigate some of what I call the Treasury claw-back—that is, the money that was required of the department to set up the universal credit system. I do not think that that is an easy thing for the department to do but, for me, it goes too far. It is claiming back too much money too quickly from too vulnerable a client cohort, and that is something that colleagues on this side of the House need to bear in mind.

At the risk of embarrassing the noble Lord, Lord Best, I point out that he has been active in housing for longer than any of us care to remember and is an acknowledged expert. The noble Baroness, Lady Hollis, and the right reverend Prelate are experts in their own fields. I have had some experience myself as a former chairman of the Social Security Select Committee in another place, and I am telling the House that today we are looking at a qualitatively different sort of cut.

Secondly—seen from the perspective of the summer of 2010, when this deal was done with the Treasury—it was not unreasonable to start looking for the green shoots of a recovering economy by 2013 to 2014. I am no economist but I think that there is no prospect whatever of that happening, as the Office for Budget Responsibility has recently confirmed. I think that we are facing dire prospects. If we are facing a 13 to 15 per cent cut in our national wealth then people like me will be able to accommodate that, but people at the bottom of the financial pile will not. Were the assessment of summer 2010 made today it could not, in all conscience, extend to the level of reducing household incomes in the social rented sector by £676 annually. That is not fair. This does not affect the implementation of universal credit; it is an attempt to claw back money for the Treasury.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 12th December 2011 Lords Chamber

[Lord Kirkwood of Kirkhope]

My Lords, I, too, was a Member of the Grand Committee considering this issue, and I apologise to the noble Baroness for being late for her opening remarks, whichever amendment she moved.

I shall pick up a point, if I may, made by my noble friend Lord Hamilton. The Government said that it was not a cost issue; there is no doubt about that. Indeed, the Minister was good enough to confess that. I have been thinking about this since we had our full discussion upstairs and I remain totally unconvinced that it is necessary to effect such a culture change. The notion that the kind of people we are seeking to serve with universal credit will fall into executive jobs that will pay them monthly into bank accounts is so remote from reality as to be unhelpful, but I put that to one side.

I say honestly to anybody who is listening that this is not a trivial matter. It seemed like an operational issue but it is not that at all. It is about the management of weekly budgets day by day in families that can blow apart because of debt. Anybody who thinks that we are short of debt, especially in the household income strata of below £10,000 a year, is completely wrong and should look at the evidence referred to by the noble Baroness, Lady Meacher, about the payday loans and the extent to which people rely on week-to-week, month-to-month emergency packages, paying Peter and paying Paul on different days and trying to survive in the middle. It is a great skill, which some people are forced to exercise. It causes enormous pressure, which is normally borne by the women in the household. We have to be careful how we typify some of the caricatures within families, but in my experience it is the womenfolk who have to make the difference between Tuesday and Friday, which is not always easy. Often they go short of food in trying. That is the reality.

How do I know that? In 2009 the payment system went from weekly to fortnightly, which caused enormous difficulty. It is not that long ago, so we do not really know what the impact of that change has been. If in 2011 we are considering going from weekly to monthly, we are talking about an entirely different regime of family budgets and people keeping their households together. It is symptomatic of how we treat the 15 per cent of the caseload that will be affected and will struggle with this. I encourage the Minister, who is absolutely correct to be ambitious for this new reform. He has lots of ideas and is a master of the technology to the extent that Ministers have not been before in terms of what he is trying to do. I absolutely support the jam jar accounts, sophisticated bank accounts and applications that go on my iPad so that if I ever need income support I will be fine. But I do not believe that the 15 per cent of the family households at the bottom end of the income distribution will be anywhere near using these things comfortably.

For me, this is a litmus test issue; it is not a trivial, operational matter. It is not safe to have anything in the legislation other than payment being fortnightly. Anything else is a bonus. By paying universal credit fortnightly there is a chance of being safe and dealing with the 15 per cent of the household distribution that we are talking about. If we do not get the system to work for the lower end of the household income distribution, we will fail the people who need it most, so it is not a sensible policy to be considering. Lots of imaginative things have been talked about and I am in favour of them all, but they are a fudge. We are making it potentially much more difficult for people who cannot manage day-to-day budgets from week to week.

The other thing that I have great fears about is that, no matter how many jam jars there are in your bank account, it is all arrestable. My Scots law might be slightly out of date but a long time ago—to my shame—I used to work for the South of Scotland Electricity Board, arresting people’s wages. In those days, you had to go to the sheriff to get the account properly closed down and the supply cut off. Those days are thankfully now gone, but you can still pend and arrest bank accounts. If I am owed money and I know somebody is getting a monthly payment of all their benefit under one wrapper called universal credit, I will be waiting at the counter of the bank and I will slap an injunction on them and they will have no money at all.

There must be some safety mechanism to protect these essential monthly payments. You might get away with surviving fortnight to fortnight if one fortnightly payment is made, but just think of the pressure and difficulty for families who have annual incomes that rely on universal credit if somebody arrests their Co-operative account or whatever it is that the Minister is thinking of. These are not straightforward issues and this is not a small matter. Unless the Minister can persuade me that this will adequately serve the 15 per cent of the caseload at the bottom end of the income distribution, this House would be sensible to require fortnightly payment to be put in the primary legislation.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 28th November 2011 Grand Committee

[Lord Freud]

I would be utterly delighted to invite noble Lords, but not too many. Perhaps the noble Lord, Lord Ramsbotham, will give permission for the Official Opposition team to join him. If he does, I would be delighted to see you all.

[Lord Kirkwood of Kirkhope]

If there are invitations floating around, could I add my name to the list? Two things worry me that we have not touched on. I support the amendment. I do not think that any of us really understands the full consequences of localism as it is finally rolled out. In terms of the public purse as generally described, if we do not have sensible means inquiries within the DWP provisions, we may just be handing on costs, charges and families in distress to our local government colleagues. That does not take us very far.

Another obvious point is that the legal aid changes that are coming are very worrying. If we look at some of the wider context in any such meeting, that would be extremely valuable, too.

[Lord Brooke of Sutton Mandeville]

My Lords, I reassure my noble friend the Minister that I am not asking to come to this meeting, but, as somebody who has sat through long hours in Grand Committee, I would diffidently make the suggestion that both matters might be treated at the same meeting.

--- Later in debate ---

Moved by

[Lord Kirkwood of Kirkhope]

113AA: After Clause 129, insert the following new Clause—
“Social Security Advisory Committee
In section 173(5)(a) of the Social Security Administration Act 1992 for “coming into force of the enactment under which those regulations are made” substitute “enactment under which those regulations are made receiving Royal Assent”.”

[Lord Kirkwood of Kirkhope]

My Lords, this amendment is tabled in my name and that of my noble friend Lady Thomas of Winchester. I think I can dispatch this with as much speed as possible. It is an important probing amendment to try to persuade the Government to clarify the position of the Social Security Advisory Committee beyond doubt in the context of this Bill.

As we all know, the Social Security Advisory Committee sheds light on some of the more obscure regulations and regulatory powers that flow from primary legislation and has an important additional duty to give advice and assistance to the Secretary of State. I know that the noble Lord, Lord Freud, who I think is the responsible Minister, is very careful in his duty to the Social Security Advisory Committee, which is welcome. It is welcome as far as the committee is concerned as well.

After Royal Assent, there is a process that has been going on for some time. Members of the Social Security Advisory Committee—they are technical experts, in the main—can self-refer pieces of secondary legislation where they feel there is an important point to make, to explore or to advise Parliament of. They sift every statutory instrument, and they use their discretion to self-refer. It all works rather well. As far as I can recall, until the Social Security Administration Act 1992 primary social security statutes were much more expansive and descriptive and most had their own time limit at which the Social Security Advisory Committee could take charge of regulations and self-refer. It was usually after a period of something like six months, but sometimes different statutes made different arrangements.

After 1992, there was an understanding that six months was the most appropriate period because Parliament could in theory be considered to have introduced all the salient facts, discussed them and come to conclusions that would not change much in six months. I think things have changed since then, because we are now dealing with skeletal primary statutes. This Bill is no exception. There must be up to 200 regulations in here. In the past we have seen some regulations being scrutinised by the Social Security Advisory Committee only after six months of the implementation of the provisions in the individual clauses.

This is a probing amendment. I hope that the Government will go away and think carefully about this. In this Bill in particular, because it is a significant change of direction, regulations will start pouring out of the department, so we will have many hours of happy discussions downstairs in secondary instrument debates almost as soon as this Bill gets Royal Assent. I want to be clear about exactly where the SSAC fits into the future of that. The implementation of the Bill and the rollout of provisions will, in any case, take a long while, so circumstances could change quite dramatically not just financially but socially, culturally and in others ways as well. I for one would feel safer if we had an assurance—even if it was in the Bill—that there was no doubt in anyone’s mind that, six months after Royal Assent and when the ink was dry after Her Majesty’s pen had scraped the official signature— if that is what happens these days—across the goatskin, the Social Security Advisory Committee would immediately thereafter have access to the regulation-making power that flowed from the universal credit and all the other provisions in this particular legislation.

Obvious questions flow from that. Does the SSAC have the discretion, authority or interest in picking what regulations to concentrate on? Speaking for myself, I trust its judgment in doing that. If, for every 10 secondary instruments that it looked at, it said that Parliament should look at two, I would be absolutely content to leave it to make that decision and use its discretion in that way. That is based on years of working with the committee and being confident that its members know what they are doing and have regard to the public interest, as well as having the depth and knowledge of experience that they have arrived at over many years. I can give colleagues comfort that they could do that properly.

I am not even going to ask for more resources. I would like to, but in these straitened times it would be hard to say that as we could double the workload we need to double the staff. I am not saying that. I am asking for clarity about when its remit commences. I think that we will all need help in trying to understand. I know that the Minister has done his best to provide the Committee with draft regulations as soon as they become available, but there are still huge gaps. We are taking a lot on trust. As legislators, we could feel more confident that we were on top of what was being done in Parliament if the Social Security Advisory Committee had unfettered access to discretionary self-referral of statutory instruments after six months after Royal Assent. I beg to move.

[Baroness Thomas of Winchester]

My Lords, my name is also on this amendment. My noble friend has explained the six-month rule. I would say that the DWP has recently interpreted it creatively. The rule was originally brought in partly to allow for the quick implementation of regulations and partly to stop the wasteful duplication of the same evidence being produced for the statutory consultation undertaken by the SSAC as for the parliamentary debate on the Bill. It dates back to 1973 and the predecessor committee, the National Insurance Advisory Committee, but that reasonable rule has been stretched beyond reason when a year, say, after Royal Assent, whole sections of Acts can be activated, at which point the DWP starts the clock to begin the six-month exclusion period.

--- Later in debate ---

[Lord Freud]

It never failed in the past. They also underplay their ability to gather the views of stakeholders that have been coming and do come to them directly. I suggest that a major expansion of the powers of the SSAC, which this would represent in practice, is not appropriate. Any regulations for universal credit that rely on existing legislation relating to claims, awards, payments and joint claimants will still be subject to SSAC examination. I ask the noble Lord to withdraw his amendment.

[Lord Kirkwood of Kirkhope]

I do not know whether I am more frightened now than I was previously. I accept that there is a capacity issue, but I am looking for the comfort that I have heard in the past that significant matters will reach our desks as legislators faster. None of us can keep up with the flow of things. If you are just a guerrilla opposition Member, which I used to be, the default position was to table negative prayers against everything.

The Minister has to be careful that we do not get back to that safety default position where you could just give the Minister of the day a bit of a kicking at the Dispatch Box and go home. Sometimes you might hit lucky on something that the Government did not want you to know about, but that is not where we want to be. I absolutely accept that the Minister in particular has been transparent to a fault. You can see straight through him on things that are coming down the track. It is impossible to read it all, but I worry that he will struggle if these regulations come in in wodges and packages immediately after Royal Assent. I do not want people like me to be put into the position where I think, “Well, safety first. Let us just pray against it anyway”. That would not be sensible.

I would like the SSAC to say, “Of this batch, if you want to concentrate on anything, this is what you should concentrate on”. That would be massively reassuring to me. I would go home at the weekend thinking that I was earning whatever it is that we get to come here. Obviously, I will withdraw this amendment, but I hope that the Minister will reflect on that point. This is a probing amendment. I understand capacity issues and the importance of him using his expertise within the Government to get to a better place. I will read the record and try not to worry more than I did before I tabled the amendment. I beg leave to withdraw the amendment.

Amendment 113AA withdrawn.

--- Later in debate ---

Moved by

[Lord Kirkwood of Kirkhope]

113B: Clause 131, page 101, line 10, at end insert—
“( ) After section 1 of the Child Support Act 1991 there is inserted—
“Effective maintenance arrangements
(1) The main objective of the Secretary of State in applying the provisions of this Act shall be to maximise the number of those children who live apart from one or both parents for whom effective maintenance arrangements are in place.
(2) The Secretary of State shall prepare and lay before Parliament a report on a bi-annual basis giving details of the progress achieved under subsection (1) above in maximising the number of children who live apart from one or both parents for whom effective maintenance arrangements are in place.””

[Lord Kirkwood of Kirkhope]

My Lords, given the hour and the fact that we are turning to a completely fresh, but very important, subject, perhaps I can be allowed to introduce skeletally the first clutch of four amendments. Amendment 113B, which stands in my name and the names of other noble Lords, inserts a new section into the Child Support Act 1991 to maximise the maintenance payment of money to children separated from their parents.

I would like to get to the second group of amendments as fast as we can. In trying to contrive a debate that made sense, it was necessary to tease out some of the important themes relating to child support, and the only way I could sensibly do that was with these four amendments: Amendment 113B, which deals with a duty to maximise benefit; Amendment 113C, which deals with the level of services; Amendment 113D, which looks at equality of treatment in gateway access; and Amendment 113F, which deals with legacy cases and how they relate to the new gateway. If we can deal with those expeditiously by way of introduction, we can then get on to some of the more apposite provisions in terms of charging. I hope that we will be able to do that in good order.

I do not know why I am so personally wrapped up in child support legislation. I think it is partly because I was around in 1991 when the first Act was introduced, and I have seen it through all its stages: the 1995 Act, the 2000 Act, 2007, 2008 and here we are in 2001—

[Noble Lords]

2011!

[Lord Kirkwood of Kirkhope]

It feels like 2001. I beg the Committee’s pardon. It should have been 2011, and it may even be 2012 by the time we get there.

These two or three clauses have deep significance, and they have to be read. I took the trouble to reread them at the weekend. They differ quite substantially in tone from the rubric and narrative that the Government are advocating for this change. They insert quite dramatic hurdles, particularly for parents with care. They introduce a new level of fiscally driven tension between getting the savings that CMEC and the department are looking for and the maximisation of the flow of benefits to parents with care and their children.

This is the new, new CSA—CSA 2.5 or CSA 3—that we are heading for in 2012. I will go to the great Parliament in the sky a very unhappy bunny if this one goes wrong as well. It is not a question of allocating blame; I am as responsible as anybody. I thought that the provisions that were introduced early on were fit for purpose. However, there is a huge gap between policy creation and the implementation of this very difficult area of public policy. It is a deeply troubled area and we need to be very careful that what we are doing is apposite and right for the people it is designed to serve.

It is important to mention the staff who laboured under the introduction of these provisions. I think that the Minister in the Commons, Maria Miller, mentioned them rather glancingly in the Public Bill Committee. She said that the actions of the staff resulted in the measure not falling flat on its face, particularly around 2003 when everything was going wrong. If it had not been for the dedication of the professionals who ran the CSA centres and worked through the stuck cases that went into manual administration, the whole thing would have collapsed. I want to make clear that although I think that in the past the policy has been totally inadequate, I do not mean in any sense to criticise the professionals who were asked to administer it. By and large, they played a great game and without them we would have been in a much worse situation.

The background political context to this is slightly worrying as well. It would be helpful to be told why there has been no response to the Select Committee report that was published in July. As colleagues know, Governments have to respond to Select Committee recommendations within a two-month period, although there is a bit of a purdah period over the summer. For a set of important recommendations that are absolutely apposite to this group of amendments to be published and to have no government response is indicative of something: either something very good or something very difficult is happening.

My noble friend has now been invited to enter the trench of child support and maintenance. I cannot think of anybody more appropriate to man a trench than my noble friend Lord De Mauley. I welcome him to the task. I hope he is not considered to be expendable infantry—perhaps the noble Lord, Lord Freud, has neatly side-stepped the graveyard pass. Can we be told what is happening with the Select Committee report? Furthermore, the draft regulations were supposed to be made available to the Committee by the end of 2012. Perhaps we will get them soon, very soon or very, very soon, but there are only days left before these regulations are due. I am picking up in the corridors here at Westminster a general political unease—this unease crosses parties and is felt not just by one side or the other—about the family implications of some of these changes, particularly around charging which we will come to in a minute. Some of us are old enough to remember when a £44 charge was introduced in 1995, which did not last very long. I wonder what has changed. I think that that £44 charge lasted about 18 months before it was realised that it cost more to collect than it brought in and the whole thing collapsed, but here we are again with charging. I ask myself what is different.

My next question impacts on all four of the amendments we are discussing. Is the 2012 CSA 3 or CMEC 3—or whatever the new, new system is being called—on track? The annual report of the CMEC/CSA that was produced earlier this year noted that the major projects authority was asking some very searching questions, and raising doubts, about challenges that were being faced with yet another new computer system. I do not know whether the system is in Warrington or whether it is an agile system. I hope that it is both, but I hope that it works. If we could get an assurance about the readiness of the 2012 relaunch, it would be valuable in our consideration of all three groups of amendments around this policy.

I also want to ask about costs. I looked at the Work and Pensions Select Committee report on the rest of the comprehensive spending review period and am puzzled about what exactly the costs are. At paragraph 75, the report states:

“Noel Shanahan indicated that CMEC’s aim was to achieve at least a 30% reduction in costs, in common with other parts of Government”

over the CSR period. We all know that the previous annual report, for 2009-10, indicated that the CMEC was spending £572 million. At paragraph 76, Noel Shanahan is quoted as saying that the transition to the new system in 2012 would cost,

“in the region of between £150 million to £200 million in terms of additional costs”.

Could some clarity be introduced as to over what period that refers to? How is that money being spent and how does it measure up to the 30 per cent reduction that Mr Shanahan was talking about? I am not clear as to the spend profile and the business case for charging—we will come on to that later. A reduction of 30 per cent on a budget of £572 million will put immense cost pressures on the agency through 2012 and beyond. It is very important, in order to make sense of this group of amendments, to know what the Government are planning to spend and what the business case is.

We have all had the benefit of the excellent work that has been done by Gingerbread and other groups that have been briefing us. Amendment 113B would make sure that the principal objective available to CMEC in its previous non-departmental-public-body status, to maximise the number of those children who live apart from one or both parents for whom effective maintenance arrangements are in place, was enshrined in law. CMEC is being abolished as a non-departmental public body and being taken into an executive agency, and therefore does not have that objective. All we have now is assurances from Ministers. The Minister, Maria Miller, gave rather a weak assurance to the Public Bill Committee, saying that we could rely on ministerial assurances. I am sure that we can, but that is not my experience with all Ministers all the time. I should like to hear what the Government have to say about the prospect of trying to put back that basic overriding objective into the work of the commission. As a consequence, a two-yearly report on progress on meeting that objective would be valuable.

I wonder whether we could use Amendment 113C to ask the Minister to explain to us a little bit about how the new support services will be rolled out and, again, how much money is involved in their provision. A £30 million fund is available through the Department for Education, which oversees a range of grant-funded relationship and family support services.

--- Later in debate ---

[Lord De Mauley]

I shall come back to that if I may.

With the right support in place to help parents collaborate better, more children will be able to benefit from effective family-based maintenance arrangements. Outcomes for children across a range of measures are almost always best when parents work together. We want to make it easier for parents to access support by ensuring that it is available in a more co-ordinated way.

We want the people who know families best to shape these plans. That is why we asked a steering group of academics and voluntary sector experts to help us develop proposals for better coordinating support at a local and national level and as to how most appropriately to measure success. I am pleased to be able to say that we will look to act on this advice and to commit increased funding as detailed proposals emerge. This could include, for example, a web portal or a helpline that would provide an entry point to the wide range of services which are already available but parents may not be aware of. The helpline might, for example, offer a “triage” conversation to help parents identify their priority issues and obstacles and then advise on how and where to get support on them. The web portal would provide a framework to help co-ordinate the wide variety of online services already available, ranging from interactive advice and support from experts to forums where parents can talk to others in the same situation to share learning and information. The steering group will also consider how best to co-ordinate face-to-face local services to offer help and support. We will also look to test which interventions are most effective in helping parents overcome any obstacles to collaboration. This will be critical in helping us to decide where best to direct funding.

Amendment 113D would appear to create a period within which the prospect of an application being made to the statutory service against the non-resident parent would act as a stimulus to the NRP to engage in conversation with the commission. The conversation would encourage the NRP to consider taking action towards a family-based arrangement. This is a welcome intention, but one drawback is that it would impose a delay on processing the application where there was no prospect of a family-based arrangement, which in turn would delay the flow of maintenance. The Government’s view is that it is preferable to get parents talking at an earlier stage in the separation process to maximise the chances of them acting collaboratively and to provide them with access to services that will help them overcome any barriers to doing this.

The commission also has the objective of promoting financial responsibility. It should not be only the threat of an application to the statutory service that forces non-resident parents to be mindful of their obligations. The commission will continue to work to produce the cultural change outlined in the Green Paper so that the statutory service is the last resort rather than the default option. This will not happen overnight but this rebalancing of approach away from state intervention to parental collaboration must be the right approach.

Amendment 113F would exempt existing CSA clients from the need to take reasonable steps before applying to the new statutory scheme. It is just as important that these parents consider the possibility of reaching a family-based arrangement as parents entering the child maintenance system for the first time, particularly as they will be treated as if they are making a fresh application. Research tells us that 51 per cent of CSA parents with care feel that they would be likely or very likely to make a family-based arrangement were they to receive the right help and support. In addition, many CSA clients were compelled to apply to the CSA as a condition of applying for benefit.

Therefore, it is surely right to give CSA client parents who feel that they can make an arrangement and who may have been required to use the CSA the scope to consider whether a family-based arrangement could work for them. I challenge the view that the only way to have an effective arrangement is to have the state manage it. That approach has been shown not to work. Our proposals will provide more support for family-based arrangements and more options for reaching effective arrangements.

My noble friend Lord Kirkwood asked about the costs of transition, which will be effected over a three-year period. Estimates of cost will accompany consultation on the regulations covering case closure and charging, which will set out the spending profiles. The policy has not been finalised, so costs have not yet been firmed up.

In the context of Amendment 113D, my noble friend Lady Tyler referred to there being no charge on the NRP, to which I will turn when we deal with the next group. The noble Lord, Lord McKenzie, asked how the gateway is different from options. The conversation is basically the same. The difference is that we would expect applicants to have the options conversation before applying to the statutory service. At present, they go straight to the CSA. Earlier, I mentioned that we want to make the statutory service more effective. He also asked whether there is capacity to cope with case closure and how support will be structured. Yes, there are no concerns about capacity and support will be structured along similar lines as CM options.

The noble Lord, Lord McKenzie, also asked whether the same fee structure would be applied generally and, if not, what it will be. There will be one application charge only. He asked whether there would be an appeals process, if I understood him correctly. I think there is no need for an appeals service because the gateway is simply a phone call. He asked whether, if access is denied, an individual can apply again. Yes, they can. He asked how soon they can get on the statutory scheme. The answer is immediately. He asked whether both parents need to interact with the gateway. No, it requires just one telephone call, which generally is from the parent with care but both parents are free to seek advice.

With that rather lengthy response, I hope that I can persuade the noble Lord not to press his amendment.

[Lord Kirkwood of Kirkhope]

I am sure that the Minister wants the Committee to make progress. I have to confess that I am disappointed that we have not been able to get a quantification of the costs for the maintenance and support system to which the Minister referred. If I have understood what he said— I will read his words carefully tomorrow, as I am sure we all will, and I am grateful for his reply—it looks to me as if we are going to get to Report stage and the later stages not knowing what investment and what timescale we will be dealing with in terms of the proposed support systems in this new iteration of the Child Support Agency. We still do not know whether the families and relationships funding scheme from the Department for Education will be replaced in 2013. That involves a substantial sum of money, £30 million. If we do not get at least £30 million and then some, it could be construed as an effective cut.

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[Lord Newton of Braintree]

My Lords, I know other noble Lords have attached their name to this amendment but I crave the indulgence of the Committee for a few minutes. As my noble and learned friend Lord Mackay said, we were in cahoots on this 20 years ago. We are in cahoots on it today and I support him totally in what he has said and what he is proposing.

At one stage I thought it was a pity that this group of amendments had not been placed with the next group. I did not agree with everything that was said on the previous group, but I do not have the courage to say who I disagreed with and so I will keep my head down on that. I should like the Minister to explain to me sometime—not tonight—the overarching coalition philosophy that links the Public Bodies Bill proposition that Ministers should take all decisions and the NHS Bill philosophy which says that Ministers should take no decisions. He can think about that and come back to me at his leisure—which might be in about three years’ time.

I, too, am grateful to Gingerbread for some helpful briefing. I wish to cover some historical points, one of which indicates that I have some sympathy with one of the noble Baronesses facing me—namely, the noble Baroness, Lady Sherlock. My noble and learned friend has used characteristically more emollient language than I, but the original CSA proposals were made difficult by two things: one was that the Treasury wanted too much money out of it too soon; the second—and there have been echoes of this in the discussions today—was that the political classes, and I include myself in that, did not understand what they were dealing with.

There are four people in this Room who are former MPs—one of whom is in a Trappist position because she is the Deputy Chairman—my noble friend the former Member for the Cities of London and Westminster; my noble friend the former Member for—I forget what it was called but it was the Borders.

[Lord Kirkwood of Kirkhope]

Roxburgh and Berwickshire.

[Lord Newton of Braintree]

Right.

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Secondly, will he explain—I am happy if he writes to me before Report—what parents with care will have to do, show or prove to obtain an exemption? Finally, will he explain why an exemption will be from the initial charge only and not from the charge for using the collection service? Having said all that, I hope very much that this is not necessary and that the considerable wisdom expressed around this Committee prevails.

[Lord Kirkwood of Kirkhope]

My Lords, just for completeness I shall speak to Amendment 113E. I will be grateful if the Minister will respond to the prospect of, if everything else fails, having a waiver system for low-income families facing some of these fees. I want to know whether the Government have thought about this carefully and looked at the operational and other implementation arrangements that might be necessary. I look forward to the Minister’s response.

[Baroness Tyler of Enfield]

My Lords, I would like briefly to add a few comments to those that have been made so powerfully around this Committee. We have heard some moving quotes today, but the one I want to give is not from someone who has been part of this process as an end user but from Sir David Henshaw who, back in 2006, came up with the report that is often cited as being the genesis of the idea of charging. We have heard his name referred to on a number of occasions as his policy has been explained. Sir David Henshaw himself recognised the limits to charging when he said:

“I do not want to create a disincentive to use the service for those parents who have no other option for agreeing maintenance”.

We know, because DWP estimates tell us, that about half of all eligible families have no child maintenance arrangements at all. The danger is that even more children in poorer families will go without child maintenance as a result of the proposal to charge the parent with care. This is my final point, which I want to link to the one I made on the previous group of amendments. Not only will the children be worse off—we have heard some graphic and moving accounts of the real hardship that some children could be in—but more will grow up without a role model of a father who contributes, however modestly, to the cost of raising his own children.

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Moved by

[Lord Kirkwood of Kirkhope]

113G: Clause 132, page 101, line 38, at end insert—
“(c) the non-resident parent has not agreed to collection arrangements by the Commission under subsection (2A)(a), but has subsequently failed to make full payment of any maintenance due to the parent with care by the date it was due to be paid.(2B) Where subsection (2A)(c) applies, the Commission shall forthwith (and within no more than seven days from the date of notification of non-payment by the parent with care) make arrangements under subsection (2)(a) for the collection of the child support maintenance payable.”

[Lord Kirkwood of Kirkhope]

My Lords, I still have the will and resolve to continue. Amendment 113G seeks to get fast access to the collection service when the non-resident parent fails to pay. I have a series of questions, which I hope the Minister will help us with, about what happens in these circumstances—they are clearly set out in the amendment—if the non-resident parent fails to pay. The suggestion is that the statutory system would kick in within a seven-day period. I think the Government accept that there could be a gap if that situation was not addressed with dispatch. Seven days might be too high a target to set by way of getting a quick response. Certainly there is concern that a gap, which could be as much as a month, would have a serious impact on the family’s circumstances. Indeed, the Work and Pensions Select Committee noted that,

“unpaid maintenance or late payments can have a devastating impact on parents with care and the wellbeing of their children”.

This amendment tries to identify the fact that there is a gap and tries to get the Government to think about ways of resolving it in order to protect children’s welfare.

I have three basic questions. How quickly does the Minister think that the commission will intervene in these circumstances? What verification of non-payment will they require, which is an important question? Finally, how will disputes be resolved where the non-resident parent argues that payment was made? They are not of the same order as the amendments with which we dealt earlier but it would give some assurance to colleagues if the Minister can say what the Government plan to do in these circumstances. I beg to move.

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[Lord De Mauley]

My Lords, turning first to my noble friend’s Amendment 113G, the Government are determined to ensure that non-resident parents meet their child maintenance responsibilities. That is why we have already committed to bring cases into the collection service as soon as we have evidence that payment has not been made through maintenance direct. Where a parent with care informs us that payment has not been received and the non-resident parent is unable to provide evidence to the contrary, such as a bank statement showing credits to the parent with care’s account, we will swiftly move the case in to the collection service and act quickly to ensure payment is reinstated.

This could include the use of enforcement tools where necessary, such as deduction from earnings orders, where maintenance is deducted directly from an employed non-resident parent’s earnings, and deduction orders, which enable deductions to be made directly from a non-resident parent’s bank account. Where the parent with care alleges that further payments have been missed during the maintenance direct period and there is no evidence to the contrary, we will ensure that these arrears are also paid when we bring the case into the collection service. It is unacceptable for non-resident parents to neglect their child maintenance responsibilities and build up arrears, which the Government are determined to tackle. To that end we will take a more robust approach to collection and enforcement in the new scheme and will use all avenues available to us to ensure outstanding arrears are paid and new arrears are not allowed to accrue.

We will not give up on cases. Following the introduction of the new scheme, the commission will continue to pursue non-resident parents for any arrears of maintenance that they may owe, which will include arrears from the schemes currently in operation. Where arrears have been accrued prior to the introduction of charging, no charges will be payable by either party in relation to these amounts.

On victims of domestic violence, as raised under Amendment 113H, let me put it on the record that we are committed to ensuring that victims are protected. They will be fast tracked into the statutory scheme; they will not be expected to make a family-based arrangement; and will not be required pay an application charge. Clause 132 provides non-resident parents with the ability to choose to pay their child support maintenance by maintenance direct within the statutory scheme. When designing this provision we considered carefully how to protect victims of domestic violence. Therefore, we will provide a service to enable direct payments between the parties without the need for any direct contact to be made or any personal information to be disclosed. This will be known as the payment support service. We will also provide appropriate support to help clients to use this service effectively where necessary.

We believe that the provision of this service and the support we will provide to clients in using it will ensure that victims of domestic violence are able to use maintenance direct safely, without any risk of harm to the parent with care or the child. As I have explained, as soon as we have evidence that payment has not been received we will bring the case into the collection service and take appropriate action to re-establish payment. With that explanation, I hope that my noble friend will agree not to press his amendment.

[Lord Kirkwood of Kirkhope]

Perhaps my noble friend will expand on one detail. The amendment seeks an expeditious response within a seven-day period whereas the Government seem to be working to a four-week response time. Is there any way in which I can persuade the Minister to think about at least setting some targets? A month is a long time in a challenged household. It is a gap that we have identified and it will exist. These things will happen. I might be being too ambitious with seven days but my noble friend is being very complacent if he is sticking to 28 days.

[Baroness Hollis of Heigham]

I shall be brief. I have a question that we should have asked on the previous group of amendments. What moneys do the Government expect to collect as a result of the £100 fee?

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[Lord De Mauley]

Given what I said in the debate on charging, I would prefer to write to the noble Baroness about that in due course.

[Lord Kirkwood of Kirkhope]

I am grateful to my noble friend for the offer of a letter and I am happy to withdraw the amendment on that basis.

Amendment 113G withdrawn.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Wednesday 23rd November 2011 Grand Committee

[Baroness Lister of Burtersett]

In moving Amendment 103ZZZA I shall speak also in support of Amendment 103ZA tabled in the name of the noble Baroness, Lady Hollins, to which I have added my name. In fact, Amendment 103ZZZA has been designed with the help of the Child Poverty Action Group to complement and support Amendment 103ZA, and it is just an accident of drafting that it is being taken first. I shall therefore start by speaking to Amendment 103ZA, which also has the support of Carers 2000 and a large number of charities and churches. The purpose of the two amendments is to apply to universal credit the rules on recoverability of overpayments that reflect those currently applied to most benefits in regard to official errors that a claimant could not have known about and to provide for the offset of underlying entitlement from overpayments, a concept that I shall explain in a moment.

The current rules on the recoverability of overpayments that apply to most benefits provide for recovery where overpayments have arisen because of,

“misrepresentation or failure to disclose a material fact by a claimant or by any other person”.

This is a fair and just test which has been in place for many years and has been tried and tested in case law. Its purpose is to allow the recovery of an overpayment which arises as the result of a claimant’s actions or failures, whether innocent or fraudulent, but protects the claimant in a case where the overpayment arises because of official error by the benefit authorities. In other words, it sanctions recovery in the case of negligence by the claimant but offers protection in the case of negligence by the state. I believe that this is a fair and just balance which reflects the responsibilities of claimants to correctly notify their circumstances when claiming benefit and the benefit authorities to calculate correctly and pay awards based on the information available to them.

Clause 102 proposes to allow recovery in all cases regardless of culpability. I believe that this alters the balance of responsibilities and justice unfairly in favour of the state. It would mean, for example, that a claimant could be presented with a large bill for repayment amounting to thousands of pounds many years after an overpayment occurred, even though the overpayment was due entirely to the negligence of the benefit authorities. In return for providing accurate and up-to-date information, I believe that a claimant is entitled to the accurate calculation of payment of entitlement by the benefit authorities and that the state should bear any losses caused by its own negligence.

In the other place the Minister of State accepted that there are some real issues around whether vulnerable individuals can or cannot be aware of the error that takes place when overpayments are made without them realising it, and they only discover afterwards that they have incurred a substantial debt. We have to be careful and sensitive in that situation. He went on to say:

“The real question about the clause, however, is whether it is sensible to establish safeguards in primary legislation that apply absolutes to a situation and which effectively say, ‘You can never do anything’”.—[Official Report, Commons, Welfare Reform Bill Public Bill Committee, 19/5/11; col. 1018.]

That recognition of the sensitivity of this is welcome, but my answer to the Minister’s question in this instance is “yes”. The Government’s view however, is, of course, “no”. Although the Government appear to have recognised the justice of the case, they have done so only by indicating that they will provide for non-recovery in cases of official error in a code of practice on recovery. Can the Minister say whether that code of practice will be published, whether it will be made public, and exactly what it will cover?

I do not believe that a code of practice is sufficient, and I would argue that it is essential that provision is statutory so that an aggrieved claimant has the right of appeal against recoverability to an independent tribunal. The claimant should have a clear right rather than be vulnerable to discretionary decision-making. The Government have expressed their confidence that the introduction of universal credit will significantly reduce the scope for official error. If that is the case, the administrative burden of retaining protections for claimants unjustly prejudiced by official-error overpayments should be greatly reduced.

The system of automatic recoverability, perhaps supplemented by a non-statutory code of practice as proposed in Clause 102, mirrors the system which applied to tax credits. This system has blighted the administration of tax credits, caused widespread injustice and hardship and has been widely condemned in the media and in reports by the Parliamentary Ombudsman and the Select Committees in the other place. It has also resulted in thousands of complaints to MPs, the Revenue adjudicator and the ombudsman.

Amendment 103ZZZA provides for the offset of underlying entitlement when calculating overpayments. Underlying entitlement means the entitlement that would have been paid to the claimant had the claim been made correctly at the time. For example, an overpayment might arise if a claimant had separated from their partner and the claim continued to be paid as a couple claimed for several weeks after the date of separation. The claimant had not declared the change of circumstances immediately and had told their personal adviser that they were not aware that they needed to because they had hoped that the separation was temporary. I think that sometimes, in those circumstances, you do not really want to face up to what is happening. If the claim is cancelled from the date of the separation then the claimant must make a new claim. However, had they immediately declared the change then their claim would have been reassessed as a single claim, so it would have given rise to entitlement as a single claimant which could be offset against the overpayment as underlying entitlement. I am sorry that that is slightly complicated.

This mirrors the provision in the housing and council tax benefit regulations which ensures that only the true amount of excess entitlement is recovered. This provision is particularly needed in relation to universal credit because there is a requirement for the benefit to be claimed by either a single claimant or by both members of a couple, which, as is the case with tax credits, results in many notional overpayments when there is a change of status from single to joint claims and vice versa. The Revenue has belatedly recognised the need for the offset of underlying entitlement in such cases and introduced non-statutory provision for this from January 2010. This Bill gives the opportunity of providing for offsetting on a statutory basis, ensuring that it is applied fairly, openly and consistently.

It may be that it is intended to do this in regulations. I must apologise because I have seen the draft regulations only today. I have had a quick look at them and it seems that they are perhaps intended to do that. I am glad that the Minister is nodding but it would be even better if he put it formally on the record so that we know that that is the case. I am very happy that for once the Minister is nodding rather than shaking his head when I am speaking. There is another question that I hope the Minister will be nodding at as well. Can he assure the Committee that there will be a right of appeal to an independent tribunal in the case of a dispute as to whether an overpayment was caused by official error and should or should not be recovered; or—I do not see any nodding going on there—if there is no such right of appeal, how will a claimant be able to challenge a decision to recover an overpayment?

In conclusion, this might appear to be a rather techy amendment. However, the strong lobbying by a wide number of churches and charities signals its significance. The reason they are so concerned is in part because they believe it to be simply unfair that a claimant might have to pay for a mistake made by the state. They are also concerned because they know from their own work what this would mean in terms of hardship and possibly increased debt to moneylenders and loan sharks as claimants’ benefit was reduced below the statutory minimum. Heaven help them if they are also subject to capping. I hope the Minister will look favourably on a small but important amendment, which serves to protect the underlying rights of claimants. I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I support the case that the noble Baroness has made. I am particularly interested in the answer to the question about an independent appeal right in these circumstances. That would be very useful indeed and I hope that the Minister can confirm that that will be true.

I have four amendments in this group. They can be dealt with with reasonable dispatch but they deal with a very important issue that surrounds the whole question of amounts recoverable by deductions from earnings. During the Bill’s Commons stages the Government amended Clause 102 to add a new Section 71ZD(3)(e), which addresses the,

“level of earnings below which earnings must not be reduced”.

That is very welcome, as far as it goes, but I wonder whether the Minister could say a bit about whether any thought has been given to how that will be delivered and how that protection will be rolled out. That is important.