Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 21st November 2011 Grand Committee

Particularly for large households where family and friends carers already have their own children still living at home or have taken in several children, my concern is that the cap will act as a disincentive for people to provide care and is likely to have the unintended consequence of more children being taken into care. Finally, given all that we know about the outcomes for children in care, in education and in the impact on the rest of their lives, I hope that this very small amendment, which could have a profound impact on the lives of some of the most disadvantaged children in our society—and, frankly, would not cost much money—is one to which the Government could see their way to acceding.

[Lord Kirkwood of Kirkhope]

My Lords, I think that Clauses 93 and 94, and I speak only for myself, are incapable of satisfactory amendment. They constitute a direct and dangerous attack on entitlement and the concept of entitlement. They subvert the scrutiny of Parliament and they will cost more than they save. Apart from that, they are absolutely fine. I understand colleagues’ attempts to try to mitigate some of the damage. The speeches have been powerful; I have supported some of them and agree with all of them. If the Minister decided to take on all the suggestions that he has had today on exemption, it would be so complex that it would add some £270 million to add some agile computing to get the exemptions properly carried out—and I would like to think that simplicity is an overriding principle in developing new policy.

The thing that really causes me sleepless nights is looking at the clauses themselves. I have just three points. I spent some time—not quite in my bath, as I do not take social security Bills to my bath with me—looking at three aspects in particular. The Minister might help me with this. Clause 93(1) starts with the wording:

“Regulations may provide for a benefit cap to be applied”.

I think that that is a first. I do not think that there is any other social security legislation that aggregates entitlement and then depresses the total amount by regulation. If I am wrong, I would really like to hear about whether any other legislation does that—and I have been looking at this area of policy since 1986.

We need to be careful that the step we are taking is not taken lightly, because subsection (2) contains some language that is also worrying if you follow the thread all the way through the rest of the clause. It says inter alia that,

“where a single person’s or couple’s total entitlement to welfare benefits in respect of the reference period exceeds the relevant amount, their entitlement to welfare benefits ... is reduced by an amount up to or equalling the excess”

We find out about the relevant amount from subsection (5), which tells us that it is going to be contained in regulations. It also tells us at subsection (6) that the relevant amount will be,

“determined by reference to estimated average earnings”,

and we have had some important discussions about exactly what that does and does not mean. Then we have subsection (8), which is wonderful. It says:

“The Secretary of State may estimate such earnings in such manner as the Secretary of State thinks fit”.

That is quite novel as well. Is there another social security regulation where the Secretary of State can exercise that level of discretion on top of the attack on entitlement contained in subsection (1)?

[Baroness Hollis of Heigham]

It is putative.

[Lord Kirkwood of Kirkhope]

It may be putative, for all I know, but the conjunction of subsections (1) and (8) worries me greatly. There may well be other precedents, but perhaps people who know better than I do will leave me alone so that I can finish my speech quickly.

I move on to my third point. Clause 93(4) talks about regulations, and that subsection is also worrying. Paragraph (b) states that regulations may,

“make provision as to the welfare benefit or benefits from which a reduction is to be made”.

There is absolutely no qualification there. It refers not just to workless benefits but to welfare benefit or benefits. The Minister slightly gave the game away earlier by saying that we have all the power we need in Clause 93, and he is absolutely right about that. There is nothing that he cannot do by regulation. My point is: what is the House of Lords for if not to say that Clause 93 is a step too far?

I will vote not only against Clauses 93 and 94 but against the regulations that flow from those clauses, because that is the only way that we can protect entitlement. From where I am sitting, the concept of entitlement is sacrosanct in the benefits system. I am up for a discussion about reducing the social security budget total by £270 million. We can do that—we can have the debates; we know the process; we can choose the benefit and we can look at the effects. We do a lot of work in creating these entitlements and I should like to think that we do so carefully, line by line, particularly in the House of Lords. We all know that that certainly does not happen any more in the House of Commons, so this is the last place where on occasion we can protect people’s entitlement.

We should remember that we are talking about the lowest two deciles of the household income group in this country. They are the most vulnerable people in our communities throughout the length and breadth of the land. We need to be safe in the knowledge that we are doing what is right, benefit by benefit, but I think that Clauses 93 and 94 take away that security of knowledge. If we pass these clauses, everything can be capped by regulation. By convention, we do not vote against regulations in the House of Lords, and there are very good reasons and precedents for that. However, this is a game that any Government can play. My noble friend is a sensible and good man, as we established earlier in the Committee. We might make sensible decisions about some of these things but they will be enshrined in law. Another Government will use this power and it will subvert the role of Parliament. That is my objection. I understand and agree with a plea for exemptions left, right and centre, but I feel in my heart that if we pass this legislation we will be crossing a bridge that will lead to consequences which are not easily foreseen.

Speaking for myself, I will not vote for these clauses. I think that on Report the House should not just concentrate on some of the important, powerful speeches made in attempts to win exemptions but give some consideration to the parliamentary ramifications of Clauses 93 and 94. If that does not happen, we will be surrendering a power that we will never win back.

[Baroness Sherlock]

My Lords, I hesitate to follow that speech from the noble Lord, Lord Kirkwood of Kirkhope, because I want to address a particular category. In fact, part of the reason I want to do that is for the reason he has just outlined, which is that it is important that if the Government are to ask this House to pass the Bill they should understand the implications of doing so. One of my difficulties with the way that this clause is framed is that it makes it very hard for noble Lords to understand the consequences of the decisions that they are being invited to take.

I wish to speak specifically to Amendment 99B in my name and that of the noble Earl, Lord Listowel, although I also support other amendments in the group. My amendment would specifically exempt from the cap households where a child is a subject of a child protection plan, a children-in-need assessment or a common assessment framework team, or is waiting to be subject to any of those.

I tabled my amendment because I am concerned about the possible effect of forced moves on vulnerable children, and I want to give the Minister the opportunity of reassuring the Committee and, through us, the House that he does not expect any such impacts. We have already discussed whether or not forced moves will happen. Briefly, we have heard the Minister’s suggestion of three ways that someone could avoid being forced to move: negotiating a reduced rent, which the Minister acknowledged may not be possible; moving into work, although we have already established that the clear majority of people likely to be affected by the benefit cap are not required to work; or using savings or other income.

We all know that most of the people we are talking about will have little or no savings. Even if they do, there are already mechanisms in means-tested benefits—as there will be in universal credit—to decide how treatment of savings income should be taken into account. There is therefore no need to double-address that point. We must accept that there will be forced moves, and we may debate elsewhere how many there will be. I want to address what will happen to the most vulnerable children when forced moves happen.

We have all had many briefings, and noble Lords will be aware that charities working with vulnerable children are concerned that the cap could force families to move, perhaps repeatedly, as rents rise faster than the cap. Research clearly shows that housing problems are a frequent theme in serious case reviews. I cite just one example of a report from a London Safeguarding Children Board paper, which found that 47 per cent of people in a sample of serious case reviews completed in the capital between 2006 and 2009 had rent arrears, had been evicted or were on the verge of eviction.

It is interesting to drill down further into that. It became clear that the highly mobile population in London and associated issues came to the surface. That kind of mobility interferes with the ability of professionals who work in child protection to focus on the most vulnerable children. This report showed that 21 per cent of families were known to two London Safeguarding Children Board areas, and 13 per cent to four or more areas. Noble Lords may also remember from the Laming review of the case of Victoria Climbié the concern that was expressed about what happens when a child potentially falls between two boroughs. Anyone who has ever had cause to look at a serious case review will know, as I heard another member of the Committee explain eloquently, that where everyone gathers around the table for the first time and shares all the information they have from their different perspectives, they always say, “If only we had done this sooner. If only we had all known then what we all know now, this may not have happened”.

That is hard enough within a single authority. It is clear that when people move across boroughs, children fall between the cracks. I am therefore very concerned that this House should not be invited to do anything that might make that more likely to happen, because we understand that the consequences are very serious. I am not attempting to get into shroud-waving. I simply want to give the Minister the opportunity to explain to the Committee whether or not he believes that this will happen, given the evidence that I have set out. If not, why not? If it does happen, what are the Government going to do about it?

I offer the Minister some suggestions. He has already mentioned that help will be available for hard cases. Perhaps he could tell us how hard cases will be defined and whether the children that I have described will count. Secondly, the Minister mentioned transitional relief. Can he tell us more about that? Will households containing children at risk definitely be covered by transitional relief, and can he explain how that will happen? What assurance can he give the Committee that boroughs with an influx of safeguarded children will receive adequate resources to cope? In particular, can the Minister tell the Committee that he has confidence that the kind of boroughs that will receive an influx of children have the resources and systems to support them? If so, can he provide us with the basis of that confidence? If the Government are going to undertake a move that will specifically increase the chances of families of very vulnerable children moving, I simply invite the Minister to explain to the Committee how he can defend that.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Thursday 10th November 2011 Grand Committee

My preference would be that Clause 69 does not stand part of the Bill. So long as it does, I believe that amendments such as these and the amendment in the name of my noble friends are vital to ensure that the needs of some of the most vulnerable members of our society continue to be met. I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, it is a pleasure to follow my colleague, who, like me, at the time, was fulminating against the introduction of the Social Fund as a wicked Tory trick. I remember the debates very well. I was standing shoulder to shoulder with her at the time. In view of the experience since 1986, the Social Fund migrated into a place that met the need much better than I expected. There is a little vignette here which I hope I can convince the Minister to go away and think a little more about because the Social Fund replaced single payments. Single payments were a rock-solid, embedded system in the social security system and it was fully appealable, all the way through to the Social Security Appeal Tribunal and, indeed, to commissioners in 1986. One of the reasons why the noble Baroness and I were so aghast at the proposal was that the initial 1986 White Paper suggested that there should be no appeal of any kind on the grounds that these were discretionary payments, so how could you have rules for them?

That was all fine until the Council of Tribunals—these are big legal cheeses—produced a report and, for the purposes of the further elucidation of the Committee, I have obtained a copy of it. It is a special report of the Council of Tribunals when, in 1986, it waded into the argument. I shall quote two sentences about the importance of independent review of any social security decisions. The council was responding to the White Paper and said that,

“the people most affected by this proposal are among the most vulnerable in society. Very good reasons are needed before abolition of the right to an independent appeal in such circumstances, an appeal which has existed for over 50 years”—

in 1986. It continued:

“It would probably be the most substantial abolition of a right to appeal to an independent tribunal since the Council of Tribunals was set up by Parliament in 1958, following the Franks report. It is for these reasons that we are so critical of the proposal. In our last Annual Report we described it as highly retrograde”.

That was an interesting intervention at the time. What did the Government of the day do? They took it back and thought about it carefully and a man called Mr Tony Newton, who was the Minister of State, had second thoughts and went away and produced amendments, which the Commons accepted. They were then sent back to the Lords and the Lords capped the sensible amendments that had been introduced by the then Mr Tony Newton by introducing the Social Fund Commissioner. The Office of the Social Fund Commissioner was set up at that stage and has been extremely successful, much more successful than some of us thought at the time. It filled a need, and that need is greater now than it was then. My point about the vignette is that it is possible for Ministers of State to listen to what has been said to them about the need for independent scrutiny and review, to go away and reflect and to come back with some better ideas.

I cannot resist this Tony Newton quote. After a good deal of prodding in the ribs by many of us, he said that there should be,

“some clearly established machinery that was separate from and outside the normal management chain of . . . the social security system . . . to provide the kind of confidence that hon. Members”—

he was in the Commons at the time—

“felt was necessary to show that an element of independence was being applied”—[Official Report, Commons, 19/5/86; col. 43.]

He did the business and it was sorted. It was the House of Lords that put the final touches to it in a way that made the system work. That is a lesson that we should bear in mind this afternoon. The noble Baroness has set the scene very well, and I concur with everything she said, which is why I have put my name to these amendments.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 8th November 2011 Grand Committee

[Baroness Meacher]

Perhaps I may suggest that the Budget is a completely different kettle of fish, because you absolutely have to implement financial changes on the day of the announcement—otherwise all sorts of people will play games and use the delay to do all sorts of things. However, social security is completely different. You are talking about vulnerable people dependent on benefits, and that is why the convention in the social security field is totally different from the convention regarding the Budget.

[Lord Kirkwood of Kirkhope]

Can I just make a point? As to the Minister’s explanation of when things start from, this announcement was made in 2010. If logic is to stay on his side, implementation should have started in 2010.

[Lord Freud]

Well, my Lords, what was written in the document that my noble friend Lady Thomas referred to was posited on the notice given in it, which allowed people to prepare for this change. The notice was given in—

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Thursday 3rd November 2011 Grand Committee

[Lord German]

My Lords, I shall speak to the amendments in my name, Amendments 59, 61, 63, 64, 65, 66, 67, 68, 69, 70, 77, 96, 99, 101 and 106, and to whether Clause 47 should stand part of the Bill. It will not take a wizard to note that these recommendations are based on the report to this House of the Delegated Powers and Regulatory Reform Committee. Before I give a general perspective on why I have tabled these amendments and my response to individual amendments, I shall simply look at the rationale that runs through the Delegated Powers and Regulatory Reform Committee’s reasoning for these recommendations.

The first thing it says—and I think we all agree with this—is that this is a detailed and complex piece of legislation and that it needs to make provision for as wide a range of personal circumstances as is practicable, but it has a perceived need for adaptability. That is fundamental. It comments that this is a significant revision of social security means-tested benefits since at least 1986. It also comments on the way in which there has to be an opportunity for subsequent amendment and for views on the way in which this is being implemented. Clearly, as we all know, this is a skeleton Bill, and the regulations put the flesh on the bones. That is why it is very important that we get the arrangements right, particularly bearing in mind those key principles that I have just outlined.

The Government have accepted some of the amendments, so I will not dwell on them. They have accepted Amendment 59. Amendment 63 proposes the removal of claimants subject to no work-related requirements. This was an issue that came up earlier this afternoon. This amendment removes the requirement from the affirmative procedure only for the first set of regulations and later puts it back into affirmative every time it occurs. I notice that the Government have not yet responded to this amendment, and I hope that they will deal later with the question of whether it should be affirmative throughout. It falls into the category where we may wish subsequent amendments to be dealt with by the affirmative process because they have such a substantial impact on the clients who fall under these no work-related requirements.

Similarly, there is the issue of hardship, and I have done the same thing there. I have taken that from being affirmative for the first occasion only, and in a later amendment I suggest that it should be wholly affirmative. Amendment 65 proposes that the basic conditions be subject to the affirmative procedure throughout. These basic conditions set out by Section 4 and the regulations beyond it specify certain circumstances in which a person has been treated as having accepted the claimant commitment. The basic conditions are laid out in Section 4(1). These are the bare bones of universal credit and should be subject to the affirmative procedure because they are part of the fundamental structure of the Bill. These basic conditions may well change. There will be a requirement for some flexibility, knowing how the system will pan out over time. As the people who are going to be affected by this will be the more vulnerable, it seems to me that we should have an affirmative resolution for those regulations throughout.

On Amendment 66, the Delegated Powers Committee—whose report I read very carefully—said that if the Government could convince it that the negative procedure would satisfy it, that would be sufficient. In their response, the Government said that they would seek to reassure the committee that the negative procedure would be sufficient. I wait to be convinced, as I suppose do many other noble Lords. I am grateful that the Government have changed from a negative to a first-time affirmative procedure, but the amendment questions whether that is significant. I believe that the powers are significant, and the Delegated Powers Committee worried about the restrictions put on claimants and about whether they would be suitable for differing personal circumstances. The Bill and the documents that we already have seem to allude to using these measures in a positive way—something that I support—suggesting that restrictions on types of work will allow claimants to look for work in sectors in which they are interested or for hours that are appropriate for them. Quite clearly, it is an area with significant and changeable circumstances. If it is the view that the negative procedure should be used for routine matters, then, when these policies proceed, there should be an affirmative process.

Amendment 68 relates to the claimants who are subject to no work-related requirements. The Government said that they would make that subject to the affirmative procedure for the first regulations. Once again, the Regulatory Reform Committee asked whether the Government would confirm that there would be only minor adjustments after that first set, and I think that we might be content with that.

With Amendment 69, it is exactly the same process. The Government have put in the affirmative procedure for the first time. If they can assure us that the regulations set out in the first instance are unlikely to change a great deal thereafter, I think that that will be satisfactory as well.

Amendments 70 and 99 would remove the words “Scottish Ministers”. That would not only create equality between the rest of the country and Scotland but ensure that, because Scotland would be doing these regulations by affirmative procedure, the rest of the country would be doing them that way as well. I did not understand why it was not.

Clause 47 provides that regulations under Sections 6 and 7 of the Jobseekers Act 1995 should require only the negative procedure. As of now, they have the affirmative procedure, and the regulations concern claimant conditionality and the requirements for claimants to be available for and actively seeking work on which their jobseeker’s allowance is dependent. The predecessor committee that looked at the matter in 1995 for the Jobseekers Bill considered the provisions concerning availability for work and actively seeking work to be of fundamental importance to the Bill and recommended that regulations about them should require the affirmative procedure whenever made. The DWP memorandum on this topic says:

“Regulations such as this are generally advantageous to JSA claimants. The Department has increasingly found that having to use the affirmative procedure makes implementing the changes more onerous than it needs to be”.

Can the Minister say what “more onerous” means? Does it mean that you have to have open consultation, which seems to me important? The Government rejected the recommendation from the Delegated Powers Committee, saying that moving to the negative procedure was absolutely necessary. I think we would like to know a bit more about what was absolutely necessary.

With the introduction of universal credit, there are bound to be uncertainties that really should not be left to the negative procedure in this matter. Some changes are envisaged in the regulations using the negative procedure, meaning that the Secretary of State can restrict the conditions on a claimant so that they are searching for a job that they want or may not want or one that is near them or is paying well. The precedent set by the previous legislation in this area—in fact, all legislative matters in this area in the past—has required the affirmative procedure to be used for issues of this kind. I wonder whether the Minister can convince us that we need to move in a different direction.

The Government have accepted Amendments 77 and 96, while they have put down an amendment to the part of the Bill covered by Amendment 101, and they have also agreed to Amendment 106.

With a Bill of this magnitude, which has such importance for a great number of people, over the years to come we should be absolutely clear that we are going to have a fully transparent process to allow the debate to occur, not just this year or next year but for the length of time that this Bill survives before changes are made and whenever these matters become important to the public. We need to have that public debate, and I think that Parliament deserves the affirmative resolution in the areas that I have outlined.

[Lord Kirkwood of Kirkhope]

My Lords, I find to my surprise that I have an amendment in the middle of this group, Amendment 71, which I am sure I conceived of in a reflective moment in my bath a long time ago. The amendment proposes a new clause entitled “Universal credit: requirement for simplicity”. It says:

“Nothing in the regulations giving effect to this Part shall introduce avoidable complexity to the claiming, calculation or payment of universal credit.”

I do not think that anyone in the Room is in favour of avoidable complexity. However, the point that I wanted to make, as we come to the end of the universal credit part of the Bill, was that, with a bit of determination, for the first time you can achieve simplicity. Even if unavoidable complexity were engrained in the legacy systems and the rest of it, perhaps it would be positive to have a statutory duty. There might be another Government in due course—you never know what might happen—and you could foresee circumstances in which there might be some back-sliding in terms of some of the gains that we have made with universal credit. If it is possible to do it—and I think that there have been signal successes in this direction, and they are demonstrated in the legislation that we have in front of us—maybe it would help to put in perpetuity for future Ministers a duty to avoid unnecessary complexity. It is something that could always be argued if future Governments came up with other unnecessarily complex systems. Perhaps I am talking to myself here, but the point is at least worth considering.

This is, rather obviously, a probing amendment, but I would like to hear the Minister’s thoughts: is it a completely daft idea, or might there be some merit in trying to get Ministers—the noble Lord’s heirs and successors—always to think carefully about unavoidable complexity in future iterations and reforms, particularly of the universal credit? It would be so easy to lose a lot of the advantages if we started making it—as we always have done, for the past 30 years—piecemeal and patchwork, with special pleading for special cases. We end up with incoherence, which is avoidable.

[Lord McKenzie of Luton]

How does the noble Lord envisage definitions of avoidable complexity being built in to the legislation—by regulation, perhaps, or a bit of guidance here and there, or perhaps even something in primary legislation?

[Lord Kirkwood of Kirkhope]

I have no idea—it was a thought in my bath. I confessed that at the beginning. However, it is worth reflecting on. Of course the noble Lord is absolutely right—as soon you start thinking about it, you start putting in layers of complexity. I think a challenge to Ministers is not a bad idea, even if it was just on the wall or behind the desk—I would settle for that. I beg to move.

[Lord Freud]

My Lords, in some areas I broadly agree with the Delegated Powers and Regulatory Reform Committee’s suggestions, and the Government have brought forward amendments to make these changes. Where key principles are established the first time the powers are used, these amendments will make the regulations subject to the affirmative procedure in the first instance. As to Amendment 66, Clause 6(1)(a) allows for regulations to set out circumstances in which a claimant will not be entitled to universal credit even though they meet the conditions of entitlement. I am grateful for the opportunity to reassure the Committee that the negative procedure will afford Parliament adequate control over the use of this power.

As I set out during our debate on Clause 6, there will be a number of specific groups who will not be able to access universal credit. These may include certain prisoners and children leaving full-time care who remain the responsibility of the local authority where payment of universal credit would lead to duplication of provision. This will broadly reflect similar rules in current benefits.

Similarly, I would like to reassure noble Lords that it is appropriate for the regulations on hardship and claimants falling into the no work-related requirements group to be subject to the affirmative procedure only in the first instance. In both cases, our intention is that the initial set of regulations will clearly establish the key principles of the new system. We have already provided noble Lords with a draft of the regulations to be made under Clause 19(2)(d). We have also published a briefing note on the conditionality threshold. We have debated these matters at some length earlier in Committee. Once the system that we have set out is in place, it is unlikely that the regulations will change significantly, and I hope that is the assurance that my noble friend Lord German was looking for.

There are three areas where I am unable to accept the committee’s recommendations or the noble Lord’s amendments. First, the committee and the noble Lord have suggested that Clause 47 should be removed from the Bill. Clause 47 relates to the parliamentary procedure for regulations relating to the requirements on jobseeker’s allowance claimants to be actively seeking, and available for, work. These powers are currently subject to the affirmative procedure. The clause makes them subject to the negative procedure.

These powers were groundbreaking when first introduced in 1995, as the noble Lord pointed out. However, the House now has had more than 15 years experience of how these powers are used. There is a wide understanding of what the phrases “actively seeking” and “available for work” mean; in fact, it fundamentally underpins our active labour market approach. We believe that this experience means that it is now far more appropriate that this power is subject to the negative procedure. Their use is now well established and we have no intention of departing from that precedent.

Secondly, Clauses 33 and 89 allow for supplementary, incidental, transitional and consequential amendments to other legislation to be made through regulations. To pick up on the point that my noble friend made about the Scottish Government, who have powers under Clause 33 to make consequential amendments in their area of remit, they specifically requested that these regulations be made by affirmative procedure in the Scottish Parliament. This was the result of one of our helpful non-statutory discussions, which I am sure an FOI request will show in all its glory. Amendments 70 and 99 would make any regulations that amend primary legislation subject to the affirmative procedure.

It is likely that a large number of minor amendments to other legislation will be necessary as a result of the importance and scale of the changes that the Bill introduces. It is not unusual for some of these changes to be made through secondary legislation, and such consequential powers are usually subject to the negative procedure. Moving away from this precedent would take up a very significant amount of parliamentary time and could pose a risk to the timetables for both universal credit and personal independence payment. We therefore feel that the negative procedure remains appropriate.

Amendments 55E to 55G and 69ZA seek to make regulations that contain definitions of “disabled”, “severely disabled” or “work” subject to the affirmative resolution procedure. It inserts a new subsection into Clause 43 and consequential amendments to the terms where they arise in Clause 41. I can reassure the noble Lord that these amendments are not necessary. Clause 43(3) already provides that a wide range of regulations will be subject to the affirmative procedure the first time that the power is exercised. This includes the regulations to be made under Clause 12 providing for additional amounts that will include the definitions of the terms mentioned in the amendment. Noble Lords may recall that the illustrative draft regulations on elements provided to your Lordships already contain a draft definition of “disabled” and “severely disabled”.

Under Amendment 69ZA, the noble Lord seeks to significantly widen the scope of regulations subject to debate in both Houses, covering consequential amendments and changes to working age benefits and pension credit. It would be completely impractical for this House to debate the numerous consequential amendments being made to both primary and secondary legislation, and a poor use of parliamentary time. I have already explained why it is more appropriate that Clause 33 should remain subject to negative procedures, but none of the other provisions identified by this amendment was covered by the report of the Delegated Powers and Regulatory Reform Committee. We are therefore satisfied that the negative procedure is appropriate.

With regard to universal credit, I should also point out that all the regulations on entitlement, awards and claimant responsibilities will be in a single set of regulations. They will necessarily be affirmative in the first instance because if any regulations within a set are affirmative they all are. So, even if the Bill does not require the affirmative procedure for specific points, it will apply in practice.

Amendment 71 would introduce a different form of scrutiny for universal credit regulations requiring the Secretary of State to avoid creating any unnecessary complexity into the system. I strongly support the spirit of the amendment in the name of the noble Lord, Lord Kirkwood. A key aim of universal credit is to simplify the benefit system. Simplification is a publicly stated, fundamental principle that has guided the design of the new system. Any requirement for simplicity would have to be finely balanced against other considerations, such as affordability or easing the transition to work. I acknowledge that this is a probing amendment, but perhaps a duty to consider the simplicity of any changes, as suggested by the noble Lord, would be a better approach than that in the amendment. However, any Government would clearly have to be concerned about the detailed interpretation of simplicity, which, as the noble Lord, Lord McKenzie, took delight in pointing out, is a subjective term.

Nevertheless, I will look at this idea very closely. I can assure the noble Lord that we will put in place a number of non-legislative safeguards to protect universal credit from unnecessary complexity. These include governance processes to ensure simplification and consistency in policy design, and working with claimants to ensure that universal credit is simple to understand and administer.

Given these explanations, I urge noble Lords to withdraw or not move their amendments.

--- Later in debate ---

Moved by

[Lord Kirkwood of Kirkhope]

56: After Clause 41, insert the following new Clause—
“Benefit regulator
Nothing in this Part shall be introduced until a claimant regulatory authority is established to oversee the professional standards being observed by those government departments and other agencies delivering universal credit and other benefits.”

[Lord Kirkwood of Kirkhope]

My Lords, I hope that in the remaining few minutes before the Committee considers wrapping up for the day we can deal with my two amendments in this group, which are quintessentially simple ideas. Amendment 56 suggests having a benefit regulator, and Amendment 113 proposes an office for social protection. I freely confess that these ideas can be criticised for increasing quangocracy, but before the noble Lord, Lord McKenzie, attacks me for creating new quangos, it is certainly not my intention to do that. These are very simple quangos.

I have tabled Amendment 56 because we are coming to the end of an important piece of Committee work that will transform the way that people think about benefit delivery in the future. I see in other aspects of my work that there has been a general increase in public discontent with the services that they are getting across the public waterfront. Complaints against doctors and public servants are increasing. That may be for the beneficial reason that people are more active in demanding a proper service. If you look at the changes that we are making—and the Government argue rightly that this is a culture change if it is to be successful—perhaps we should be looking at the provision of public services delivered by professionals within the Civil Service, in government departments and in the plethora of government agencies. It applies not merely to the DWP or the Child Support Agency, but to prime providers in the Work Programme. There is a very complicated set of hierarchies, which I am sure are doing their best, but they all need to be invested with a culture that underpins the ethic of good service to the public. A regulator may not be the right word and an office or new organisation may not be necessary, but I feel strongly that we should be looking to the Government and the department to set clearly some new paradigms about how they will deliver universal credit as we go forward.

If I thought that previously, I was reinforced in that view by looking at the recent White Paper, Open Public Services, which contains some of the principles of good complaint handling in terms of the need for public services to be accountable to users and taxpayers, and to be responsive to the people whom they serve. That White Paper sets out the principles clearly for all to see and sets the high standard that we should all aim for. I also carefully considered the work of Ann Abraham—the Parliamentary and Health Service Ombudsman—of whom I am a fan. Last month, she produced a very interesting report, Responsible and Accountable? It repays careful study for some departmental Ministers in the DWP because Work and Pensions and the subsequent agencies are at the high end of most of the complaints.

--- Later in debate ---

[Lord Freud]

My Lords, how we research changing universal credit is something that I am taking an active interest in getting on top of now, as I discussed on a previous day. Clearly there is a lot of research. The department puts out an enormous amount of research every year. Huge tomes come out monthly, and I know noble Lords enjoy reading them all. There is no lack of adequacy of independent research on DWP matters.

[Lord Kirkwood of Kirkhope]

My Lords, my main priority is to get back to my bath as soon as possible. If I do not get my 7 pm train I will not do that, so I thank the Minister for his reply, and I am happy to withdraw the amendment.

Amendment 56 withdrawn.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 1st November 2011 Grand Committee

[Lord McKenzie of Luton]

My Lords, this is a probing amendment in respect of hardship payments generally and issues around recoverability in particular. The draft regulations that have been provided to us indicate that hardship payments will be made where a universal credit payment has been sanctioned but where the award has been reduced below a certain level and the claimant can demonstrate that they are or will be in hardship as a consequence of the sanction. It is understood that the regulations will broadly replicate existing JSA regulations. Claimants will be required to continue to meet work-related requirements.

Under existing JSA arrangements, a person can qualify for hardship payments at the beginning of a period of a claim if a decision about eligibility is awaited. Will similar arrangements operate for universal credit? What happens where there is a couple claim but the couple splits up? Does the unrecovered amount attach to the claimant who was sanctioned? Further, when will recovery actually start?

I should have said that there is a key difference between the arrangements proposed for universal credit and the existing JSA regime in the plan to recover hardship payments from some claimants. The notes suggest that this will include everyone who is not in the “vulnerable” category. Is this still the intention? The Minister will be aware of the deep concern that this prospect has raised. It is planned that recovery will be based on existing legislation relating to the recovery of overpayments and payments on account. Will the Minister explain what these are? Using the model for recovery for those who have been overpaid for those who have been in receipt of just 60 per cent of the amount of the sanction reduction does not seem innately to fit well. Over what period or at what rate will the hardship payments be recovered? What if the recoveries themselves push claimants into hardship?

I shall repeat a question I put a moment ago. What happens where there is a couple-claim and the couple split up? Does the unrecovered amount attach to the claimant who was sanctioned? When will recoveries actually start—while the claimant is still in receipt of the hardship payment or after benefit is restored?

The Minister will recognise that to qualify for hardship payments, claimants have to be just that: in hardship, a few steps away from destitution. The Minister may well say that that would be of their own making, but we should not overlook the chaotic lives some people live, compounded for some by mental health and other fluctuating conditions. Too many claimants exist at the very margins of financial solvency, and recovering hardship payments could tip them over the edge.

I want to pick up on a point made by my noble friend Lady Sherlock a moment ago about the announcement of the increase in the amounts which can be recovered for fines to £25. What will be the relative claim in respect of these payments? Will the hardship payment recovery take precedence over these other amounts, and how will that be sorted out? Will the recovery of hardship payments reflect other deductions which are already being taken from benefits? I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I am trying hard to say nothing from this end of the table because it is important to make progress. However, I too am very worried about the press reports that have coming since the summer. I said at the beginning of our first session in Committee that some of the language that was being used in relation to these issues and to benefit deductions was extremely worrying. It is getting more acute and more refined. I do not think the Minister can hide behind the defence that he tried to use, although it is absolutely accurate. Changes of this kind would come under the powers given to the courts because these things will be decided in court. But the latest BBC newswire I have seen on this issue described the Prime Minister, David Cameron, talking about benefit reductions for fines up to a maximum of £25 under universal credit. That came from a BBC report. If the Prime Minister has it in his heart and head that universal credit is going to be subject to what I calculate to be a 37 per cent reduction in the standard allowance, I do not think it is fair for this Committee, or indeed the House, to go through all these legislative proceedings, pass this Bill and give it Royal Assent, without some consideration of exactly what that means.

Now I have two complaints. First, as I said in the first day in Committee, a particular language is being used. The Prime Minister talked about the current maximum deduction of £5 as “much too soft”. Indeed, the Secretary of State is not absolved from some of these phrases which really target people on benefits. Of course, we are talking about people in the courts and who have committed crimes. We may even be talking about people who took part in riots—I am not sure about that. That has to be borne in mind and taken into consideration, but to remove up to 25 per cent of £67.50—the level that I understand is being set for the introduction of universal credit in 2013—is a massive reduction for anyone to contemplate. It will simply push people to the margins.

Secondly, what kind of benefits are we talking about? Are claimants to include state retirement pensioners who may find themselves in the courts? Are they contributory benefit claimants who may well have been paying in for all their lives to get that access? Under this new regime, are they likely to be subjected to a £25 benefit deduction? It is not sensible for the Committee or House to contemplate going into universal credit against the background of this being possible without serious consideration of what it is, in detail, that is in the mind of the Prime Minister or Secretary of State. I completely absolve the Minister of any of this stuff, but he must understand that it causes serious concern to people. I guess that this could be introduced by a change in regulations, late at night on a wet Thursday. Unless I get some pretty compelling, better evidence about the provenance of this idea, I will be there, wet on a Thursday, waiting for him. It is unimaginable that we should just pass these things willy-nilly because these benefit claimants riot and need 37 per cent of their entitlement reduced. It is unconscionable and we need a better explanation than the one we have at the moment.

[Baroness Meacher]

I rise very briefly to add my support to this. Many years ago, I wrote a book about the withdrawal of benefits after four weeks from people who had been in difficulty. The book clearly showed that 90 per cent of them or more went straight into more crime. This is just another obvious, simple situation where that is all that the Government will do. I know that the Minister will not wish that to happen. I plead for him to take this away and think about it.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Wednesday 26th October 2011 Grand Committee

[Lord Kirkwood of Kirkhope]

My Lords, like others, I was absent from the last sitting of the Committee, unavoidably. I was having my gardening wound attended to in a magnetic resonance machine; I think I am still radioactive but I hope it is not affecting other people.

I am in favour of these amendments. Conditionality is an important part of this and I am not sure that we have got it right, although the principle of conditionality was hammered out almost to infinity over the last two welfare reform Bills and it is now a more or less agreed policy. That is not to say that we have not got to get some of these important questions right. The expertise of the noble Lord, Lord McKenzie, is acknowledged in this field. It was demonstrated beyond any doubt in the last two welfare reform Bills and the Committee is the better for having his experience. Having buttered him up, I should say that this debate is at risk of being incoherent. I would much rather have had a conditionality debate over a solid period without a whole list of disaggregated amendments.

I am about to lose my well established credit with the Committee because I am going to repeat myself. I was looking at this last night when I came in. The Marshalled List was substantially different and I was looking forward to an all embracing principled debate, because we all know that if you have to resort to conditionality this policy is not working. I know this because I am a director of the Wise Group, and colleagues know that. If you have to inflict penalties in big numbers in circumstances that are not clearly defined, there is something wrong that needs to be fixed further up the food chain.

I want to continue with my whinge for another moment if Members will indulge me. I am very worried that there are four or five big issues here, one of them being disability, that we are not going to give proper time to if we disaggregate the amendments to the extent they were overnight. It is not for me to tell people how they do their business and I am speaking for no one but myself but I notice how far we are down the sitting stage. I have been here before—as the noble Lord, Lord Steel, said famously in the Chamber the other day, I didn’t come up the Clyde on a bike—so I see that we will end up doing three days on the trot, something disabled colleagues might find quite difficult to deal with, never mind the rest of us, to cover everything between Clause 15, which is where we are, and Clause 136.

I cannot do anything about any of this and I am willing to take part in debates. I do not want anyone to say that I am saying anything like conditionality is not important, because it is. As a matter of process, however, I appeal to all colleagues to try to make sure that we get to the important things. To be brutally honest and tell you the unvarnished truth, I want to put pressure on the coalition Government on four or five issues here. I may run out of time because we are doing things in a way that is disaggregated to the extent that it is. So I am appealing to my colleagues on all sides of the Committee—even from Rutherglen—to think carefully about that. We are having very good debates and we are getting very good responses from the Government and I make no complaint about that but we have to be realistic about making sure that we get to the really important political things in this Bill, otherwise the Committee will not do as effective a job for the House as it would otherwise.

[Lord McAvoy]

I thank the noble Lord, Lord Kirkwood, for drawing attention to that sort of matter because, with the exception of the first two Committee meetings, at every sitting half the time has been taken up by the Labour Opposition and the rest by others. There is no question of anything deliberate on this side; that was a clear inference. This side has taken up half the time and half the time has come from others. I do not complain because on at least seven occasions the Minister, who is extremely able and competent—I can also butter up—has had to say “I will write to you” because of the complicated nature of the questions from my noble friends on this side of the House. It is a point that the noble Lord, Lord Kirkwood, should make but I do not think he should make it to this side.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I was responding to the Minister’s reply and saying that I am sure we are all glad to hear that there is no intention to rush into these things. Perhaps I may say to the noble Lord, Lord Kirkwood—when he is in his place—

[Lord Kirkwood of Kirkhope]

He is behind you.

[Lord McKenzie of Luton]

It is always good to know that the noble Lord is behind me and I thank him for his kind words. I want just to say, on the nature of our debates, that we could have had a big debate around conditionality as a whole, but in Committee surely what we should be doing is going line by line through this legislation, challenging and probing it in order to try to understand its full intent. But even in itself, in-work conditionality is a new and big topic, as a number of noble Lords have said.

The key issue which has emerged is: what is the default position in respect of lone parents with children aged 13 or older? Certainly our understanding from the briefing is that the default position would be the 35 hours national minimum wage. If the noble Lord is now in a different position on that, or perhaps we have misunderstood it, it would be good if that is put clearly on the record. That would deal with the points made by my noble friends Lady Hollis and Lady Sherlock. However, in their different ways, my noble friends Lady Drake, Lady Lister and Lady Donaghy have pointed to the newness of and some of the risks and challenges posed by issues around capacity, how the discretion is going to be exercised and what it does to the employment relationship. We are in uncharted waters and these are issues of real concern.

In respect of using gross earnings, I did not object to this and I understand why that might be the basis on which it would be done. I said simply that where there are other features of someone’s employment terms, particularly employer pension contributions—someone might have lower pay but a good employer pension contribution—to try to force them away from those would not make any sense. I am sure that is not necessarily in the Minister’s mind, but those sorts of issues are associated with the capacity that is needed to make these evaluations. They would mark a departure for Jobcentre Plus and providers.

We remain concerned about providers. I understand that we may be close to negotiating the next round of contracts and that it can be addressed in those, but I think we would hang on to the point that, as it is currently structured, there is the potential for real conflict where providers are remunerated on getting people into work—at least 16 hours a week, I think—and keeping them in work. What in-work conditionality will do, if the noble Lord says it has to be done outside the work programme, is take people off that scheme, possibly before they have enabled the provider to earn their full remuneration for keeping them there long enough. It is those sorts of conflicts with which we have some difficulties.

I think that we have given this a good airing. I hope that we have put down a marker about our concerns, and certainly our concerns about taking up a framework for legislation. We know that this type of legislation inevitably has a framework basis to it, but with something so unformed and in many respects as vague as this, it is quite difficult for us to say that we will support it. That is why I return to my point that we may look for some sort of sunset provision here in order to see how it all works out in practice. Having said that, I beg leave to withdraw the amendment.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 18th October 2011 Grand Committee

[Lord German]

If the noble Lord wants me to answer the question, I can answer it, and will answer it in this way; I believe that the three underpinning policies behind this section of this measure are correct, but in order to achieve those we have to answer some of the fundamental questions, which the noble Baroness, Lady Hollis of Heigham, raised earlier on today. I have also tried to seek answers to those questions, because I have not found them. That is what we are here to do, and that is what the Committee stage of a Bill is about, it seems to me, but I am new to this particular Parliament. In the one I have come from, that is what we would do: explore these issues.

[Lord Kirkwood of Kirkhope]

My Lords, I am provoked into joining this discussion, which I was going to leave until the next group of amendments.

First, underoccupation is one of the most serious concerns in this Bill, and I think that those concerns are shared across the Committee. I do not think that it helps to start picking away at the positions of individual members of the Committee at this time. What I think we are trying to do is to make it clear to the Government that the current proposals are unacceptable. They are unacceptable to me for two reasons. One is process—and we touched on the discussion about transition. On 1 April 2013, between 5 per cent and 10 per cent of the case load, which is arguably 67,000 working-age families, will be tipped into debt. It is a brick wall that they cannot avoid. It is very unusual for a social policy change of this magnitude not to have built in a transitional provision.

With a little bit of application and consideration, we might be able to address the issue of overoccupation, which it would be sensible to do in the long term. Speaking for myself, I think that Amendment 44 is close to doing that, although Amendment 40 is not far away. I got a very interesting note from Moat housing the other day, which suggested that:

“Two bedroom properties or below should never be regarded as ‘under-occupied’”.

It is as simple as that. That is another way of expressing it. I do not know what it would cost, but the Committee is right to explore some of these circumstances, which have ramifications for social landlords as well as everyone else. What worries me more than anything else is that on 1 April—that may be an appropriate date—in 2013, that change will be made, and people have very little protection or room for manoeuvre.

The other very interesting suggestion that Moat housing made to me, which I had never heard before, was that a “soft start” could be adopted when people were demonstrating that they were taking steps to address the underoccupation that they were allegedly facing at the time. They could continue to get the full support until they had made the appropriate arrangements. It would probably take 18 months or two years to work out in the wash; that may be too tight a period—it might take longer than that to do safely. As a Committee, we are looking for a safe transition process and a way of limiting the brick wall of debt that 670,000 of our social tenants in the United Kingdom will face on 1 April 2013. That is a matter of concern across the Committee, which I think we should represent to the Government in a way that will occasion constructive change on Report.

[Baroness Sherlock]

My Lords, there is very little left to say, particularly after the astonishingly impressive opening speech of my noble friend Lady Hollis. If I were a Minister facing that speech across the Table I would have run the white flag up and gone to the pub, but the Minister is clearly made of sterner stuff than me, which is probably just as well.

I have two questions, the first specific and the second general. First, what discussions has the Minister had with colleagues in other departments about the position of children in relation to the implementation of these provisions? Like many other noble Lords, I have had a number of cases raised with me on the position of disabled children, to which we may return, and children with health problems, as discussed by my noble friend Lady Lister. Also, Barnardo’s, for example, raised with me the position of families in which a child or children are in temporary care. For example, they may live temporarily under a residence order with their grandparent, and while the family is trying to get the children back it may look as though they are underoccupying when they are not. There is a whole series of exceptions. I am interested in the specifics, but more generally has the Minister talked to colleagues in other departments about the impact on child welfare, safeguarding and well-being or child poverty when this policy is implemented?

The second question is one the answer to which I would be very interested to hear. We have talked a lot about modelling and transition, but the noble Baroness, Lady Hollis, talked about what seemed to me to be an astonishingly simple amendment. She said that somebody should not be required to do something that they are incapable of doing. What is the Minister’s philosophical reply to that?

--- Later in debate ---

[Lord Rix]

My Lords, I assure the noble Lord, Lord Foulkes, that I have spoken at the Royal Albert Hall, the Royal Festival Hall and in a field at Cardiff Castle, and I trust that your Lordships can hear me in Committee Room 4A.

It is perhaps appropriate that with Amendment 35 I am in pole position in this vast group of amendments, for I am putting forward the case for people who reached the back of the grid only some 20 years ago and who had never been allowed near the track before then. I am of course talking about people with a learning disability. As your Lordships are aware, this Bill aims to introduce regulations laying out not only how housing benefit costs can be integrated into the universal credit but how mortgage costs would in future be covered in this context.

The purpose of this amendment, tabled in my name, is to ensure that disabled people have opportunities to buy a property via the home ownership scheme for people with a long-term disability, otherwise known as HOLD. Until October 2010, disabled people were able to access the higher rate of support for mortgage interest, or SMI, which meant that some mortgage providers were willing to lend to people with a long-term disability under the HOLD scheme by providing very specialist mortgages. The Royal Mencap Society, of which I have the honour of being president, believes that, contrary to all expectations, more than 1,000 people with a learning disability have been enabled to buy their own homes by this route. There are many more who hope and are able to follow in their pioneering footsteps. However, the abolition of the higher rate for SMI has meant that these mortgages are no longer available. This route into housing for people with a learning disability has, in effect, been closed down.

The purpose of the amendment is, effectively, to reinstate this route of home ownership for disabled people. It would also ensure that the Government’s support for care in the community continues to be a reality. Turning again to the analogy of motor racing, I am concerned that if we do not take appropriate action on this point now, people with a learning disability could be forced to take a prolonged pit stop, during which others will continue to lap them in the race to secure a decent and comfortable home.

In this group I support Amendments 36, 38, 39, 79, 80, 81, 82, 83 and 84. I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I shall speak briefly to Amendment 36. This group is not as complicated as it looks because there are two sets of mirrored amendments. I look forward to the speech of the noble Lord, Lord Best, whose knowledge is well understood in this House. The meat of the group is to do with the exceptions, which relate, as the noble Baroness, Lady Hollis, accurately said, to our earlier debate.

Amendment 36 does a slightly different thing. Before I speak to it briefly, I shall refer to what I said in the previous session of the Grand Committee. We are all under pressure to disaggregate groups of amendments because the people who are promoting the amendments think that they get better consideration in the Government’s reply if they are considered individually. It is better to have a debate around a wider set of amendments but it will not work for the purposes of the people who tabled them unless the Minister is able to say something about individual amendments. If he cannot, the flexibility in the Government’s position cannot be properly understood and appropriate arrangements cannot be made for Report. The Minister has a very difficult job because there are many amendments on the Order Paper, but they are all important in their own way. If he can address them individually to the best of his ability, that would be a favour.

Amendment 36 tries to lift and lay the existing protections in the current provision of housing benefit in the private and public sectors under the Social Security Contributions and Benefits Act 1992. Clause 11 is very regulation-oriented. Its last three subsections refer to regulations that determine a whole series of things and are the basis for the amount of housing costs. What Clause 11 does not do is provide for entitlement to be related to rents in individual localities. These are key concepts in the existing system that we want to make sure are enshrined in the new provision under universal credit.

Housing Benefit (Amendment) Regulations 2011

Lord Kirkwood of Kirkhope Excerpts

Wednesday 12th October 2011 Grand Committee

Moved By

[Lord Kirkwood of Kirkhope]

That the Grand Committee report to the House that it has considered the Housing Benefit (Amendment) Regulations 2011.

[Lord Kirkwood of Kirkhope]

My Lords, it is my pleasure to move the Motion standing in my name. I am grateful for the Chairman’s guidance about what we are doing today, which is exactly what I was intending.

The policy that the statutory instrument enshrines was first promulgated in the October 2010 comprehensive spending review, since when quite a lot has happened. Actually, it is my impression that the pressure group community and those in the wider world who follow these things actually think that some of these regulations are already in place. Because there was a nine-month transitional period, which was welcome, people perhaps do not recognise that the scheme enshrined in these regulations will not be implemented until January next year. Therefore, I think that it is apposite for colleagues to pause and reflect, and to tax the ministerial Front Bench with some questions that arise naturally from the proposed changes.

The first thing to say is that the economic circumstances have changed. I am certainly seized of the importance of deficit reduction, and it was obviously right of the incoming Government in 2010 to act quickly to make the savings that they have. You can have arguments about the degree, pace and scale of some of the changes, but I certainly think that, given the economic environment in which we now find ourselves and given the housing market changes that we have seen, particularly in the private rented sector, it is right to pause and look at the regulations carefully.

As colleagues will know, because it is clear from the regulations, housing benefit for single people under 25 who are in the private rented sector is currently restricted to paying for a single room in shared accommodation, rather than a self-contained, one-bedroom property. I remember well that quite a controversy surrounded the introduction of the original shared-accommodation rules in 1996, and it has been my sense that, ever since, the department has been hankering after the opportunity to make a change of this kind. However, there are cogent reasons for stopping and reflecting on why we need to think carefully about this.

First, it is now clear that the shared-accommodation rate tends to be significantly lower than the one-bedroom rate. In checking some of the facts in preparation for this debate, I was taken aback by the scale of some of the proposed changes. Indeed, in some areas recipients will see their benefit entitlement more than halved if their circumstances are caught by the proposals in these regulations. For some people, this will mean a significant change in January 2012.

Secondly, a worrying, but perhaps not surprising, degree of concern has been expressed on a number of fronts, which I think the Committee will want to reflect upon carefully. The University of York did an important survey that repays careful study called Unfair Shares. It came to the conclusion that this was potentially the most damaging housing benefit cut in terms of potentially promoting additional homelessness. The University of York is an experienced hand in these matters and its opinion should be taken seriously.

In addition, the Social Security Advisory Committee advised the Government that they should not proceed with these regulations and made suggestions to the Government about what they would need to do if they proceeded with them. The Government, I am pleased to say, came up with two additional exemptions and they are very welcome. I will come back to exemptions in a moment but I do not want to lose the point that the Social Security Advisory Committee, after mature reflection, thought that these regulations should not be proceeded with. That should give us pause for thought.

The Merits Committee, which does valuable work looking at the regulations as they come before us in this House, came to the conclusion that there were significant uncertainties about the wider consequences of these regulations. It went on to mention that it was uncertain about where any second-order costs would fall—for example, the cost of providing emergency re-housing for individuals who cannot find a room within the housing benefit budget that they are set. The Merits Committee was encouraging Members to look carefully at these regulations, and that is what we are doing this afternoon.

The pressure group Crisis did a serious piece of work in a survey. It judged that these regulations were going to cause major problems and increases in homelessness and rough sleeping. Crisis knows a great deal about that client group and their needs and its conclusions need to be respected too. We are in a situation where there is continuing and increasing concern because of the changes in the private rental market and the economy that we are now facing. These regulations therefore need some careful thought.

I turn to the exemptions. The two new exemptions are welcome but, because they deal with homelessness and people who have spent more than three months in supported accommodation and therefore are on the road out of rough sleeping and matters of that kind. By definition rough sleepers who do not have the three-month qualification will not be exempt and that is a concern. The ex-offenders’ extension of an exemption is welcome but, again, ex-offenders who are not considered to be a risk do not qualify for the exemption and that is a concern. People who have disabilities but do not qualify for the higher rates of DLA will not get the exemption that already exists under the shared accommodation rate exemptions, and that is a concern. Two obvious other groups that occurred to me are pregnant women, who I think should be the subject of an exemption under these regulations, and non-resident parents, whom I want to come back to briefly in a moment.

My third point is the lack of available accommodation. That is getting worse, for the reasons that I explained—the private rental sector is getting tighter and tighter. Households of multiple occupation are being much more rigorously policed by the local authorities and that is a good thing, but it means that there are fewer of them. In rural areas like the one in which I live, there is almost a complete dearth of any appropriate accommodation that would service the needs of people who would be looking for shared accommodation in rural areas, and I am sure that that is true of other parts of the United Kingdom as well. I want to tax the Minister of State with a question about what evidence he has that, when these changes are introduced, appropriate levels of accommodation will be available to people who will need to take account of it. Of course, by virtue of the fact that we are forcing more people into this marketplace, there is even more pressure on available suitable accommodation for shared occupation in future.

Of course, the Government are right to say that they have put extra money into the discretionary housing payment scheme, which is welcome. Some £190 million over the period of the comprehensive spending review is a significant sum of money, but the evidence is that it will not match the needs that will be generated, particularly by these changes.

I turn briefly to some of the problems—I hope that other colleagues will be encouraged to enter the debate and expand on them a little. My evidence is that there is an advantage to some people in sharing accommodation. In a “friendly” share, you get people’s support. If you are comfortable with your fellow inhabitants in the share, a lot can be gained and a lot of positive support can flow from that. On the other hand, in circumstances where your entry into shared accommodation is unplanned and you are working in a strange environment with people whom you do not know, that almost by definition increases stress and makes life a lot more uncomfortable. It generates questions of safety, particularly for young female claimants. It can also affect people’s ability to get to work. If they come from self-contained accommodation and go into shared accommodation where they are uncomfortable, it disrupts their state of mind to the extent that it may even affect their work patterns if they happen to be in work at the time. A general question of health and well-being therefore surrounds whether people are able to find friendly people to share with or whether they are forced into accommodation with strangers whom they do not really know and trust.

I would have been much more comfortable if we had taken the time to pilot the regulations. I do not have any recollection of whether we did so in 1996 but, given the circumstances that we find now, again in rural areas in particular, I would have been more comfortable if a little extra time had been taken to look at how the regulations might work out in practice. There are all sorts of divergences in policy provision in different social security areas. In Scotland, the policy that the Government are working towards is to give everyone an entitlement to settled accommodation by 2012. I do not know how these regulations will fit into that plan. I am not arguing that it is a good, bad or indifferent plan, but it is different and I hope that there has been proper consultation so that these regulations do not run counter to what the Government north of the border are thinking of doing.

A small but important legal point is that you can engage in a tenancy north of the border if you are 16 or 17; you cannot do that in England until you are 18. So there is the prospect in Scotland of a 16 year-old entering a shared tenancy with a much older adult, the potential risk in which is obvious for everyone to see. I would happy to see an extension of the regulations much lower down the age range to try to protect against inelegancies such as that. That is another example of how we have to treat the devolved nations of this United Kingdom with some care.

On shared accommodation for non-resident parents, I do not know how valid or strong the following legal point is, but I am advised that the right to maintain personal relations and direct contact with both parents could contravene Article 9.3 of the UN Convention on the Rights of the Child. I do not know whether that is so, but it is certainly an argument. I should like some reassurance that a lawyer in the department has looked at that. We will discuss non-resident parents, child maintenance and child support in another Room later in the week, and for weeks and weeks—we are looking forward to that—but I make that request for information today.

--- Later in debate ---

I hope that this debate has helped to inform your Lordships of our thinking behind this measure, and I thank all noble Lords for their contributions and views. I commend the regulations to the House.

[Lord Kirkwood of Kirkhope]

My Lords, I am extremely grateful to the Minister for his usual, comprehensive diligence in responding to the debate. We have had a very good debate, which I do not want to prolong. I take it from what the Minister said that he has registered that there is continuing concern, not just among the bodies that we have cited but in this House and in this Committee, about the potential effects of implementing this policy. I also take it, from his invitation to feed back any information on untoward results, that any evidence that might controvert the evidence on which the department has founded the regulations will be happily received. Speaking for myself, I will be watching this area, as will other colleagues, extremely carefully over the next 12 months.

As well as being very grateful to everyone who has taken part in the debate, I want to say two other things before I sit down. First, the Minister has invested discretionary housing payments with a role that I did not think that they had. He said—I wrote it down—that there is “no limit” on discretionary housing payments, but he has to be very careful about this. I do not want to read too much into what he said but, for example, a very powerful case was mentioned this afternoon. I take it from what he said that, as there is no limit on discretionary housing payments, it would be possible for a local authority, if it thought it appropriate, to apply discretionary housing payments not just for transitional provision or for temporary problem solving but—if it has the budget, which is an important point that was made—to apply its discretion systematically over time. That is not what I thought that discretionary housing payments were for. We will all go away and reflect carefully on that.

My final point is that we need to monitor all of this, including the use of discretionary housing payments. We also need to ensure that we keep in kilter with the devolved Administrations, as I am not sure that these local authority duties are exactly the same in other jurisdictions in the United Kingdom.

Having said all that, this has been a valuable debate, for which I am really grateful. I know the Minister of State well enough to know that he has obviously engaged with the issues seriously, and we are grateful for that. If we get any other evidence or feedback from other sources, including the pressure groups and other bodies that are competent to operate in these areas, we will take advantage of his kind offer by ensuring that the department is made fully aware of the circumstances as those unfold after January next year. I am grateful to the Minister for making that clear.

On that basis, I am happy that the Committee has indeed considered the statutory instrument in what has been a very valuable debate, and I am grateful to the Minister for his reply.

Motion agreed.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 10th October 2011 Grand Committee

I hope first and foremost that the Minister will reconsider the decision to pay universal credit monthly—or, at the very least, will allow the claimants to choose between fortnightly and monthly payments in line with the Government’s own philosophy of choice. As a fallback, a third amendment would allow a claimant proactively to choose fortnightly payments while retaining monthly payments as the default, and the fourth would require a review of the impact of monthly payments should they go ahead. I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I am privileged enough to share the billing on the amendment with the noble Baroness, Lady Lister of Burtersett. She has made a very powerful and comprehensive case, and there is not an awful lot left to say, except one or two things. This is a significant change. In my previous incarnation, as a member of the Select Committee in the other place, I was always surprised at the extent to which weekly budgeting is a feature of life that is qualitatively different. If you do not live under those circumstances, it is hard to appreciate how difficult it is. A change to monthly payments would be extremely significant. I feel that it is part of my duty to protect the Minister of State from his normal missionary zeal in many of these cultural attempts to change the way people behave. They are perfectly logical, but potentially really quite dangerous if we take them too far and too fast.

The first thing I hope that the Minister will do for the Committee is put some flesh on the Government’s proposed mitigation factors which talk about exceptions and budget support. The noble Baroness, Lady Lister, correctly asked for those to be made clearer. She is right that if this is to be done properly and the system is to be equal to the task, it might cost more than the department currently thinks. That has the potential to wreck some of the elegance of the simplicity around universal credit, which would be a bad thing. However, before the Committee can make a judgment on the Government’s position, we need to listen carefully to what is planned.

Secondly, this is a significant change because there is no appeal on frequency of payment. As colleagues know, throughout the benefits system there is a highly developed set of circumstances for people who feel that they are being short-changed or not being properly served. There are means of recourse through systems that are well known, well used and well supported by the legal advice community, pressure groups and the like. There is no right of appeal here, so if we get it wrong, people will have nowhere else to go.

There is an issue too about monthly payments. Monthly is not the same as 12 times a year. People pay their bills monthly because that is how often the bills come in. So it is not just a simple question of weekly payments or not, it is actually that people being paid on a weekly basis know when the utility bills will come in and know where savings have to be made in order to meet them. It is not an easy thing to move from weekly payments to 12 times a year.

I absolutely agree with the noble Baroness, Lady Lister, about the payday loans issue, and I think that it will become seriously significant. I would draw attention to what I am sure colleagues already know intellectually, which is that discretionary payments made under the Social Fund are flying up under the changes we are making now. The Government say that we need not worry too much about it because there are local circumstances—400 of them in England, not to mention Scotland and Wales—and they will fill the gap. I remain to be convinced of that. We need to be careful that we are not creating a loan shark’s charter at the expense of lower income households in our communities.

We need an impact assessment, and many noble Lords were right to draw attention to that. I look forward to seeing the document that was magicked to some effect out of the Minister’s top hat earlier today, and long may that continue. If we have one of those every time the Committee sits, we will make some serious progress. In the end, however, this is a question of choice. For me, Amendment 27 does it perfectly. It states,

“so that it is payable twice per month where requested by the claimant”.

I understand the driver to replicate the monthly situation. Obviously everyone in this Committee has a natural rhythm of payments constructed around monthly bills, direct debit payments and all the rest of it. The ability for the claimant to request that this is the way that they work and to do otherwise would cause them serious distress would still leave them with a default position where they would largely get what they want, and the people who are nearer the labour market would be perfectly happy to accept the discipline that they need to make this work successfully.

--- Later in debate ---

[Lord Freud]

My Lords, I was coming to this issue. The universal credit is a rather differently structured benefit system. We have talked in the past about much greater flexibility with earlier draw-downs and an automatic repayment system. We are looking at these kinds of structures. When I talk about budgeting support, I am not just talking about education, advisers and that kind of support, I am also talking about a degree of flexibility in the system that simply does not and cannot exist now. I do not think there would be any stigmatisation at all in how people use this system. We have not worked out all the detail of this, and noble Lords have given me personally quite a bit of food for thought. How we develop these regulations and get them right so that we do not run into the kind of problems which noble Lords have so powerfully raised today is something that we will look at very closely. On the stigmatisation point, my intention would be that it would be invisible, and within the universal credit system, it can be invisible.

Let me revert to the question put by my noble friend Lord Kirkwood about the impact assessment. I have to tell him that payment frequency is not one of the issues in the impact assessment. It was referred to in the equality impact assessment where we said we were carefully considering the claimant welfare implications of the options, so that is where it is.

[Lord Kirkwood of Kirkhope]

May I clarify the point for the avoidance of doubt? Is there a technical issue about frequency of payments? I understand and am listening carefully to what he is saying about assessment periods versus payment periods. Are his new computers going to be agile enough to pay fortnightly rather than monthly?

[Lord Freud]

I think the noble Lord, with his normal subtlety in his amendment, has made a distinction between bi-monthly and fortnightly. This is one of those issues, to be honest, where if you start delving into it, you will end up with daily rates because of the arbitrariness of both weeks and months. It is not a straightforward thing to do. Clearly, at one level all the utility systems are driven on a monthly basis, while other areas are driven on a weekly basis. With this system, we are one of the drivers of the way people behave and of social change. We should not forget that; how we do this will shape the norm, so it is not just a question of saying, “This is what everyone does. We must adapt to it”. There is an element of saying, “If we do it like this, we will shape the way people arrange their lives”.

Welfare Reform Bill

Lord Kirkwood of Kirkhope Excerpts

Thursday 6th October 2011 Grand Committee

Tabled by

[Lord Kirkwood of Kirkhope]

3: Clause 1, page 1, line 7, after “payable” insert “after consultation with other United Kingdom legislatures”

[Lord Kirkwood of Kirkhope]

My Lords, having regard to the constructive and comprehensive debate we had in the first session of the Grand Committee, and because there is a very important amendment next in the name of the noble Baroness, Lady Hollis, which I wish to support, I beg leave of the Committee to withdraw this amendment.

[Lord Foulkes of Cumnock]

My Lords, I added my name to this amendment and intimated to the Clerks and to the previous Chairman that I wished to move this amendment. It is unfortunate that my noble and assiduous friend Lord Kirkwood—he is a friend—did not seek to move it. He has drafted it very well and I shall speak to it briefly because I know we have a very important amendment in the name of the noble Baroness, Lady Hollis, and, indeed, many other important amendments coming up. But this amendment allows us to discuss at an early stage the implications of devolution in relation to the Bill. It also gives me an opportunity to raise an issue about devolution that applies to other Bills as well. Indeed, a lot of what I am saying about this Bill applies to them.

Unfortunately, because of devolution, we have had less consideration of Scottish, Welsh and Northern Irish business here in the United Kingdom Parliament. That has had some unfortunate consequences in Scotland that are causing political difficulties for some of us. It has now gone too far because the United Kingdom is still responsible for about half the identifiable public expenditure in Scotland, including welfare benefits, and for about half the legislation affecting Scotland, including this Welfare Bill. Yet we seldom discuss the implications for the devolved authorities because they have different arrangements for dealing with certain things, and I want briefly to mention one or two of them.

--- Later in debate ---

CTB has increased by 10 per cent this year due to the recession. Crucially, benefits have always been demand-led. To talk in technical language, they are under AME rather than DEL. If you wish to change the conditions, you do it by generalised changes to eligibility. No longer. The cake will be cut, allocated and carved up with each person’s CTB depending on how many other people in the locality are claiming CTB as well. Think about extending the same principle to JSA, so that whenever the factory closes and the claimant count goes up, individual JSA benefit would fall—and then say, as DCLG does, with breathtaking hypocrisy, that this level will support you because people on JSA will now be encouraged to seek work. That is what this does to CTB. Hence, I believe that CTB is not safe in the hands of DCLG. It will utterly destabilise universal credit. I am asking that it be brought within universal credit and therefore within DWP so that there will be a nationwide, predictable benefit taper that does what it says on the tin—rewards work and reduces risks—rather than undermining both, as this document does. Otherwise, why bother with this Bill? I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I share the credit for Amendment 13 with my noble friend Lady Meacher. We always expect forensic analysis from the noble Baroness, Lady Hollis, and she has excelled herself this afternoon. I will take a slightly different approach because I do not think that there is anything much to add to the critique. I cannot understand where this came from. We are talking about single working-age benefits. To my certain knowledge, for 10 years, it has always been expected that any change of this kind would embrace council tax benefit. For me—I am in favour of universal credit—this is not a constructive step to take because, as the noble Baroness has just said, it diminishes the effectiveness of universal credit. It goes in the opposite direction—not to mention the fact that it will inevitably cost local authorities more, and not to mention the confusion and conflicts on tapers and capital limits.