Welfare

Lord Kirkwood of Kirkhope Excerpts

Monday 21st March 2016 Lords Chamber

[Lord Freud]

I accept that one of the issues around the disability element is that we have a fairly one-size-fits-all approach. One thing that the new Secretary of State will be very interested to hear is how best to manage the process in the light of that complexity—I know that he is very aware of it. I have tried to deal with the Motability issue. It is different people who are getting that and it is based on a better test; PIP is a better test than DLA. We are putting a lot of resource into assessments and their quality is now showing some good improvement.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am pleased that the Minister paid tribute to the outgoing Secretary of State for Work and Pensions. He is a man I have known over many years and he had a sense of mission, which I think we should acknowledge. I hope that the new Secretary of State will have an equal sense of mission, particularly in relation to universal credit, which was, I think, what drove the past Secretary of State to distraction and out of his office. To me, universal credit is the most important thing that the Government still have to deliver. Will the Minister assure the House that the conversation that the new Secretary of State has announced in relation to disability will not delay the forthcoming White Paper process too long? I am in favour of consultation, and I am also in favour of the Government paying attention to consultative responses, but can he assure the House that the White Paper is still on track?

[Lord Freud]

I have known Stephen Crabb for a time. He was a Whip for the department and then he was in Wales, where he dealt with welfare issues. I have high hopes for him in pursing the reform agenda. He is up for it and he will be pretty effective at it. I look forward to providing him with all the support that I possibly can in this agenda. Clearly, in getting this reform going, the conversation has to be balanced with the speed. He is conscious of that and will look to get something going at the fastest possible speed, commensurate with making sure that we get it right and get the views of quite a complicated set of constituencies.

Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 7th March 2016 Lords Chamber

[Lord Low of Dalston (CB)]

My Lords, perhaps I might be permitted to say a word about the Commons rejection of my amendment. Despite the Minister’s best efforts to soften the impact of the £30 cut in the incomes of disabled people in the employment and support allowance WRAG, which I readily acknowledge, this is a black day for disabled people. The Commons has spoken decisively and we must bow to their wishes, but we do so under protest. Do not let anyone kid you that this is democracy in action. There is more to democracy than just being elected. Questions of representativeness, accessibility, openness and responsiveness all come into it as well. From these standpoints, this House, though unelected, is much more democratic. Organisations representing the needs of poor and dispossessed people find it much easier to get their point across and have it taken on board in the House of Lords than in the House of Commons, which is more politicised and subservient to the Whips—and the Whips were certainly working overtime last Wednesday night in the House of Commons, going round handing out bribes and blandishments like there was no tomorrow.

Last week, the noble Lord, Lord Young of Cookham, took me to task for quoting selectively from the Commons debate on our amendments, but I did so because the debate ran largely one way. Last Wednesday, the Minister had a bit more support, but some telling points were still made against the Government. Commenting on the Commons reason for refusing our amendments— that is,

“Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient”—

Neil Gray, MP for Airdrie and Shotts, said:

“So the Commons did not offer ‘any further Reason’, which I found shocking. The Government could not come up with anything else to say—no empirical evidence, no logical argument, nothing socially responsible or of any consequence. It relied on a pseudo-constitutional technicality to explain the decision to remove £30 a week from the pockets of sick and disabled people on ESA WRAG … What message does that send from this Government to ESA recipients? It says, ‘We don’t need to justify why we are cutting your ESA, we just are. We just can and we just will. We trust that this reason may be deemed sufficient’”.

Helen Goodman, MP for Bishop Auckland, said:

“The Minister said that she was going to spend another £100 million on supporting these people. If her scheme was going to work, she would not need to cut this £30 from such people’s weekly income, because she would get the savings as they all moved into work. This is doomed to fail and the Minister knows it. If she was convinced that it was going to work, she would do the impact assessment, because she would be confident of the upshot. She is not doing so, and she is ignoring the very real impact that this will have on the health of the most vulnerable of our fellow citizens”.

From the Conservative Benches, Stephen McPartland, MP for Stevenage, said:

“I genuinely think we would not have been in this position if the White Paper had been brought forward already and we were not having to take on faith something we are not really sure is going to happen, who the Ministers will be, who will be in charge of the money, and how we are going to move forward for these disabled people”.

With those words in mind, it is essential that the White Paper focuses on better back-to-work support for disabled people and better support for employers. Jo Cox, MP for Batley and Spen, said:

“If implemented, these cuts will surely also hinder the Government’s ambition to halve the disability employment gap. Instead, they will push many disabled people further into poverty and have a significant and harmful impact on the health and wellbeing of many people, including many in my constituency”.

Accordingly, I agree with the noble Baroness, Lady Grey-Thompson, that the Government must monitor how these cuts affect disabled people, both in and out of work, and gather evidence as to the impact on disabled people’s physical and mental health and their finances as well as their ability to move towards work, as called for in your Lordships’ amendment.

A little later on, Jo Cox said that,

“it is time to listen to Macmillan, Scope, Sense and Parkinson’s UK, to the many experts who have lined up”,

to oppose the cuts to ESA. Stephen Timms said:

“The judgment that the House has to make … is whether”,

to listen to Ministers or to the organisations representing disabled people. Your Lordships have listened to disabled people, but the House of Commons, which ultimately determines how things play out, has preferred to listen to the Government, who have not been able to give any convincing reason for their decision to cut £30 a week from the incomes of 500,000 disabled people. As I said, it is a black day for those 500,000 disabled people—and for disabled people in general because this action is emblematic of the way in which this Conservative Government have chosen to treat disabled people. As Helen Goodman said:

“The fact is that Ministers are looking for large savings at the expense of the poorest and most vulnerable. That was not made clear in the general election campaign; then, the Prime Minister said that disabled people would be protected”.—[Official Report, Commons, 2/3/16; cols. 1052-58.]

By this action, the Government have betrayed the trust of disabled people and they should not be surprised if they forfeit it for the rest of their time in office.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, before the Front Benches wind up this final session on this important Bill, I am prompted to follow the noble Lord, Lord Low. I am sure that I speak for the whole House when I commend him and his colleagues on the Cross Benches who experience some of the problems facing disabled people for their work and for the contribution that they have made to the Bill—and I agree with the Minister that some of the contributions have been important. Their experience and the report of the commission chaired by the noble Lord, Lord Low, helped me to understand exactly what was at stake in some of these measures.

Concentrating on Clauses 13 and 14 and sending this back to the Commons for further consideration was the right decision. It was the right part of the Bill to concentrate on. There are a number of things that we will need to watch carefully. I support those who have said that we must now engage in careful and urgent monitoring across the piece of how the ESA support group is catered for in future. Something that particularly worries me is the perverse incentive that will now be introduced into the scheme for people to hide from the truth in terms of the statements that they make when applying for their work capability assessment, because the cliff-edge for getting into the group will be that much steeper. These things must be carefully monitored going forward.

I think that the Minister has done everything that he could and that this is a better Bill, but it is still a severe Bill that will cause hardship for the rest of this Parliament. I look forward to the discussions with colleagues on the White Paper. That will be an important moment when we can remedy some of the defects that are still in the Bill and the savings that will be occasioned by it. Mental illness and fluctuating conditions are other areas that we will need to study carefully.

Finally, over the weekend I read an interesting report from the think tank Reform, Working Welfare: A Radically New Approach to Sickness and Disability Benefits. Reform has come up with interesting ideas that are new to me and it would be reassuring if the Minister could ask his officials to look at it; some of those ideas are worth pursuing. This Bill will now go for Royal Assent and I think that the best thing the Minister can do in concluding these proceedings would be to commit himself and the department to urgent and fine-print monitoring of how it works in practice.

State Pension Age

Lord Kirkwood of Kirkhope Excerpts

Wednesday 2nd March 2016 Lords Chamber

[Baroness Altmann]

My Lords, as the terms of reference make clear, the independent review will consider changes in life expectancy as well all other relevant factors.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, will Mr John Cridland, as the independent reviewer, be provided by the Government with official terms of reference? We have seen a press release, but will there be formal terms of reference shaping the work that he does? Will it be possible for him to consider some of the schemes previously used by Scandinavian countries that simply index the increase in the basic state pension age to increasing longevity as it goes forward, both up and down?

[Baroness Altmann]

My Lords, this will be an independent review. All these issues are a matter for the reviewer. I urge as many noble Lords as possible to make representations to the review. It will consult widely across society and across interest groups to ensure that all these relevant factors are considered.

Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 29th February 2016 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, I warmly welcome Amendments 1B to 1D, and I offer my thanks to various people, at the risk of sounding a bit like an Oscar winner, which I am not. First, I thank the right reverend Prelate the Bishop of Durham, who spearheaded the original amendment and made such a powerful speech on Report and again today. I thank the Minister for listening, hearing and bringing forward what I agree is a pretty fair compromise at this stage. As he said, it gives legal status to the commitment to continue publishing the very important HBAI statistics. Also, there was a letter to the Times last week from nearly 180 academics, including those at the forefront of child poverty measurement, including Professor Sir Michael Marmot—I declare an interest as one of the signatories in my academic capacity. Despite what the Minister said, I think that they will see this as recognition of what was said in that letter: income and material deprivation should be at the heart of child poverty measurement, because such indicators are vital to our ability to track the impact of economic and policy change. I thank Dr Kitty Stewart of the LSE, who organised that letter, and all those who signed it, along with the voluntary organisations that have worked tirelessly to achieve something like this outcome.

Last, but by no means least, I thank Rebecca, a mother of two who, off her own bat but with the help of CPAG, launched a petition to keep the measures and collected 50,000 signatures in less than a month. Writing in the latest edition of CPAG’s journal Poverty, she said that she had been very moved as she read through many of the words written by people explaining why they were supporting the petition. She concluded that we should make sure that all children who are living in poverty are counted in the measures so that we can really see if things are getting better for them. She wrote:

“Children in poverty already feel poor and disadvantaged, why should they also be unnoticed?”.

Amen to that.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I have been studying these figures for as long as anyone. I start by acknowledging that I do not think the change would have happened without the direct personal intervention of the noble Lord, Lord Freud. I am very grateful to him, as the whole House should be, because he has the weight to be able to do these things and has the knowledge and understanding of what it means to people.

This gives me a lot more confidence that policymakers within the Conservative Government are not running away from the extent of this problem. I never really believed that that was the case, but this change means that they are not giving the impression that they do not want to see any of these figures published. Individually, these figures—they are relative, and there are well-recognised problems about relative measures—establish trends over time. That is important. Sixty per cent of national median income is perfectly well understood. It is a bellwether figure which we must all bear at the front of our minds as these policies unfold in future.

I remind colleagues that in the last figures the HBAI produced, in 2013-14, something like 17% of British children were in poverty. That is a ballpark figure of 2.3 million in all. That is a serious situation. If that is not difficult enough looking back, looking forward, the best estimate that I can find—the most accurate, up-to-date figure—is the projection that that figure might rise from 2.3 million to 3.8 million by 2020. That is the biggest increase in my generation and an issue of some concern. Obviously there are very difficult financial circumstances, and austerity has to be factored into the policy mix, but it struck fear in my heart when, speaking from Hong Kong, the Chancellor of the Exchequer said that he is looking for further savings in public expenditure. Looking forward to 2020, I think the pupil premium will help a lot in England, and the educational attainment and childcare provisions will help, but I do not think that the Government’s life chances strategy, as currently set out and planned, will deal with the projected increase in child poverty. That is serious and it is what we should be spending time on.

Having said that, reassurance will be provided by the Government accepting these figures and adding persistent poverty, which is a particularly important indicator, although it should be rebased, and I understand the technical need for that. This is a good and welcome step but, more than anything else, I want to acknowledge that it would not have happened without the intervention of the noble Lord, Lord Freud.

[The Earl of Listowel (CB)]

I thank the Minister for bringing forward these amendments. I was delighted to see them tabled. I agree with him that employment and education are the most important ways out of poverty. I am also delighted to keep reading the employment figures and seeing that we have the highest records of employment on record, I believe.

I thank the Child Poverty Action Group, which has briefed me on this and introduced me to the First Love Foundation, a bank providing food to hungry families in east London, and, through it, to Lorna, a mother of three boys—two, I think, with disabilities—who was working 16 hours a week. Two-thirds of children in poverty live in working families. It was so helpful for me to meet her and hear about her experience and that of her family, and the difficulties she faced living on such a low income.

I am also very grateful to my Cross-Bench colleagues, who listened very carefully to the debate on Report. I am most grateful for their attention to this matter. I thank the Minister again.

--- Later in debate ---

[Lord Kirkwood of Kirkhope]

My Lords, I would like to add a couple of broad points to this important debate on this significant subject. As far as I am concerned, the noble Lord, Lord Low, has done the House a great service in tabling his amendment. I take the point made by the noble Lord, Lord Young of Cookham, as a former Chief Whip; the amendment may well be defective, and I certainly do not want to go back into the territory covered by the report of the noble Lord, Lord Strathclyde. However, the noble Lord, Lord Low, is saying that the House of Commons has asserted its rights in the process of ping-pong but this is merely a Motion to ask for some extra time.

As one or two other colleagues have said in the debate, I would want that extra time, if for no other reason than—a point made by the noble Baroness, Lady Thomas—to look at the White Paper. The White Paper that is coming will be significant and I am looking forward to it; it is an opportunity to have a look at this whole important policy area again. Taking this decision this evening would be a retrograde step and might make it more difficult for us to take the proper opportunity that the White Paper represents. If this change were not to be introduced until May 2017, that would be a sensible pause. I take the Minister’s point about the difficulty and technicality of meeting the test set out in the amendment, but it would be perfectly possible to have a sensible stab at estimating the impact on this particularly vulnerable group of our fellow citizens—the DWP has hundreds of researchers who do this work all the time.

I want to draw a broader point from that: we would not need to be here if we had had a proper impact assessment in the first place. To make an even broader point, it is now deemed to be old-fashioned and not sensible to have White Papers, Green Papers and a pre-legislative process for our legislation because it all has to be done for the greater glorification of Chancellors at Budget time so that they can make ex cathedra statements and get plaudits in the Sun newspaper the next day, only for us to find a fortnight later that all is not as it seemed. There is a plea here and a lesson to be learned: we should be more deliberative about the consultation process in these specialist areas of policy in order to get this kind of thing done right in the first place.

I make a point in passing about universal credit that a number of colleagues have made: this strips out some of the many advantages that universal credit will have in future, and that is regrettable. I also make the point that the £640 million saving has to be measured against the £100 million. I accept that again the influence of the noble Lord, Lord Freud, on this has been entirely beneficial. No other Minister could have had the success he has had in refining in important but second and third-order ways when considered against the fact that we are spending a sixth of the savings we are making in support for people who are in the work-related activity group. That is not enough. If it had been 50:50 and the Government came forward to the House with the savings bill—and it is correct to bear in mind that we are facing austerity as you cannot ignore that either, but to put one-sixth of the saving into the support services that are necessary for people in the WRAG group is not a proper balance or the right judgment—the House would have been a bit more willing to listen if the balance had been a bit more even.

The other thing is that the personal independence payment provisions we have introduced will not survive the test of time. The assistance we give people who are in the support group is nearly absent, and we need to do far more to provide help for people in that group to find work in the longer term. Therefore the Government would be well advised to think again. The noble Lord, Lord Low, has brought forward an important amendment; if he presses it to a Division I shall certainly support him, and I hope that other Members of the House will do the same.

[Lord McKenzie of Luton (Lab)]

My Lords, as others have said, we should be grateful to the noble Lord, Lord Freud, for his focus on a number of initiatives that seek to ameliorate the problems created by withdrawal of the WRAG component for new claims after March 2017, whether those were intended or unintended. However, I will be clear up front: we do not consider that the Government’s package of proposals adequately deals with the consequences of that withdrawal.

I will start by addressing the specific points raised by the Minister. First is the commitment to increase the funding in 2017-18 for the flexible support fund with guidance to jobcentres to ensure that the additional funding is targeted specifically at those with limited capability for work. The sum of £15 million has been mentioned. Obviously, this is to be welcomed so far as it goes and it could be used to help with extra costs of expenditure on attending interviews, training courses, accessing the internet, and so on. The focus on those in the WRAG is important because at present, as the 57 pages—would you believe it?—of guidance to district managers makes clear, the fund can be used to support all Jobcentre Plus customers, including 16 and 17 year-olds. Does the Minister have any indication of the current annual application of the fund to those in the WRAG, and how many claimants in the WRAG is the new money expected to help? With half a million people in the WRAG, £15 million amounts to 50p a week on average.

As for those with progressive deteriorating conditions, increasing awareness of the right to seek reassessment is fine but is this not just what the system should deliver anyway? Perhaps the Minister can say a little more about how it works at present, what data there are on the numbers currently seeking reassessment from the WRAG, and what information there is on the timescales within which these assessment are delivered. If it is envisaged that this awareness-raising would lead to greater numbers of individuals being reassessed, what additional resource is being made available to cope with it all?

On permitted work, the proposition is that someone on ESA will in the future be able to undertake work for more than 52 weeks, which, as we have heard, is the current limit, as long as it is for fewer than 16 hours a week and earnings do not exceed £107.50. It is understood that such earnings would not be taken into account for benefit purposes, including housing benefit. Perhaps the Minister can confirm that. Can he also say what the position will be in relation to council tax support schemes?

Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Tuesday 9th February 2016 Lords Chamber

[The Lord Bishop of Portsmouth]

My Lords, without wanting to detain the House, I add on behalf of this Bench our thanks to the Minister and offer our support and gratitude for the amendments he has brought forward today. The concerns that have been expressed around the House on many occasions for those who are most vulnerable in society have been passionate and heartfelt. It is good and reassuring when they are heard, and we offer our thanks as well.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I add my note of congratulation to the noble Baronesses, Lady Pitkeathley, Lady Hollis and Lady Drake, on the splendid work that they have done not just on this Bill but long before and since. They deserve the credit for these hard-fought and well-won amendments, as does the Minister. This has not been an easy Bill at all. Indeed, I do not want to spoil the tone but I join the noble Lord, Lord McKenzie, in saying that this is the worst Bill that I have ever come across in 35 years of working in social security. This group of amendments is extremely welcome, but taking £12 billion out of the social security system for the rest of this Parliament is going to continue to be a hard-fought business at all levels, particularly in this House.

I congratulate the Social Security Advisory Committee, whose work is exemplary; it supports a lot of the work that many of us in this House do. I also congratulate the Delegated Powers and Regulatory Reform Committee, which was absolutely correct in its 13th report when it strove to draw to the Government’s attention the fact that the SSAC needed to have a role in these clauses. I agree with that, and now we have a compromise. I do not understand why the Government decided not to allow the whole of the DPRRC’s recommendation; it would not amount to much, and keeping the level out of the hands of the SSAC just encourages Treasury Ministers to say daft things after Budget purdah without any consultation or anticipation by anyone—there have been examples of that in the recent past.

It also detracts from the established annual procedure for updating the social security levels that Parliament has always had in the uprating statement. I note, for example, that there is no sign of the uprating statement coming to your Lordships’ House this year; it is being done by the other place. I look forward to the powers that be allowing at least a Moses Room debate because it is the one occasion when you can look at the national insurance accounts, the Government Actuary’s recommendations and the totality of social security and tax credit expenditure. If this House cannot find time to discuss that annually, that is a matter of very great regret.

My final point is about the SSAC and the policy around the benefit cap. It is one of the most regressive policies that I have ever come across in any social security system, but I understand that I am in a minority of maybe one in the country on that question now. Maybe the Minister will confirm this because I think that the answer to this question is yes: once, as I hope it will be, austerity is dealt with and as a nation we get into a more favourable set of economic circumstances, I believe that the SSAC could use its discretion to undertake a report into the whole policy. I do not think it is excluded by anything in these amendments from looking at the impact and eventual outcome, after the introduction of universal credit. I understand that that may be a few years down the line, but am I right that nothing in the amendments precludes the committee, on cause shown, if it really believes that it needs to make recommendations to the Minister?

I pay tribute to everyone who has been involved in this Bill; it has been one of the hardest fought and most difficult, and people have worked hard on it. We have got results today, and I welcome that as much as anyone. Still, I think that the Bill will cause damage in future, although I know that as long as the noble Lord, Lord Freud, is in his position he will be monitoring that carefully. If he believes in the fullness of his consideration that some of this stuff needs to be amended in future, we rely on him to come to the House and tell us so. I would be one of the first to support him if he did.

[Lord Mackay of Clashfern (Con)]

My Lords, I join those who have congratulated the Minister on recognising the special needs of this particularly deserving group. I also congratulate those who have brought these matters to his attention. I feel that this demonstrates very clearly that, when a good argument is put forward, it will be listened to.

Housing Benefit (Abolition of the Family Premium and Date of Claim Amendment) Regulations 2015

Lord Kirkwood of Kirkhope Excerpts

Wednesday 3rd February 2016 Lords Chamber

Moved by

[Lord Kirkwood of Kirkhope]

That this House regrets that the Explanatory Memorandum to the Housing Benefit (Abolition of the Family Premium and Date of Claim Amendment) Regulations 2015 does not contain sufficient information to gain a clear understanding of the policy objective and the intended implementation; and that some of those in receipt of housing benefit will be adversely affected by the regulations.

Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to move the Motion standing in my name on the Order Paper, which refers to the 17th report of the Secondary Legislation Scrutiny Committee. This is a slightly unusual Regret Motion. I gave the Minister’s private office notice of the fact that I wanted to spend a moment looking at some of the process issues around the regulations and in a wider context before moving on to some comments about the difficulties that may arise for those claiming housing benefit who may be adversely affected by the regulations.

I shall also refer to the 21st report of the Secondary Legislation Scrutiny Committee because, taken together, they cover an important worry that the committee, chaired so ably by the noble Lord, Lord Trefgarne, was beginning to have about the information and data supplied by the Department for Work and Pensions over recent weeks and months. Two other sets of regulations, the Universal Credit (Waiting Days) (Amendment) Regulations of a few weeks back and the housing costs amendment regulations, were also subject to some lapses, as is the committee saw it. The committee’s report stated in stark terms that it believed that there was insufficient information to determine the policy intent or intended implementation in the Explanatory Memoranda that the department supplied for the purposes of scrutiny by the committee.

The report used some stark language: there was a section on inaccuracy, a section on incomplete information, one on obscurity and one on lack of context. Taken together, they caused me some concern that this was a matter that should be drawn to the House’s attention. Speaking for myself, I rely almost completely on the excellent work that the committee, chaired by the noble Lord, Lord Trefgarne, does. It has a duty to bring matters to the House’s attention when it feels that that is necessary. If it is not getting the basic data that it needs to do that, it is a matter for concern. Incidentally, the Social Security Advisory Committee report that also looked at the regulations in front of the House also complained about limited material, lack of consultation and no analysis of the backdating period that was currently being claimed for the regulations as they were submitted to the committee.

Having said all that, I must acknowledge that the noble Lord, Lord Freud, responded to that in a robust way. He went to the committee and the exchange that he had with it is clearly set out. He agreed to set up a review to ensure that the process is clarified at a strategic level to deal with some of the complaints raised. I warmly welcome that. His letter of 11 January, I think it was, sets out clearly that some work is being done. He has given a reassurance that he will make sure that that happens. I am perfectly prepared to take his word for that, but I am sure that I am not the only Member of this House who will be looking carefully at the review when it is published.

I say this not by way of threat by any stretch of the imagination, but process is an important part of scrutiny. If the process is inadequate, it could be tested in the Lobbies. I am not saying that that by itself would be a reason for voting down statutory instruments, because the policy content is important, too, but these are important procedural matters. I am pleased that the Minister responded as clearly as he appears to have done, but I want the House to know that I support the statutory instruments committee and the SSAC in pursuing the department if they feel that they are not getting the information they need.

Having got that off my chest, I turn very briefly to the content of the final clause of the Motion, which deals with the backdating issue. Again, I drew heavily on the conclusions of the Social Security Advisory Committee. It came up with a compromise of a three-month period for backdating, not one; it is currently six months, as colleagues will know. I have looked at the argument both ways and the government response. I just do not believe that the department has dealt adequately with the important set of detailed questions raised by the Social Security Advisory Committee, which eventually took the issue under reference after it had a workshop about it. These are skilled people who know the complexity of the legacy benefits in a way that is not normally given to the rest of us.

I absolutely agree that the digital service of universal credit will deal with some of this in future. The one-month backdating is perfectly adequate for universal credit in the way that it is cast, as far as I am concerned, although we will need to wait and see what happens. So this is a transitional issue; I understand that. Of course, the announcement was made in the Budget. As the Minister knows, I complained religiously about him letting Treasury Ministers make announcements about social security. It is not a good thing because it is done under purdah. Nobody really gets a chance to look at the consequences. I am sure that the savings are drawn like blood out of the department and it is not an easy thing to do. I understand, too, that there is a responsibility to the nation’s taxpayers. But the Budget announcement just came out of the sky and I do not think any of us had a chance to understand any of the implications until after the deed was done. Once a Budget Statement is made, there is no going back.

I cannot figure out how the saving is £10 million. There are no data in there that persuade me that that is anything other than an estimate. I understand that it is a marginal amount of money in the totality of the Budget. I also understand that when this kind of material was being sifted through in the Treasury and the department there were a whole lot of other things going on. I can see a context where Ministers were saying, “Well, why are you bothering me with small amounts of money like this?”. Having said that, the people that it may affect are potentially the most vulnerable. We all know that these legacy benefits will still be around for a long time, in spite of everyone’s best endeavours to try to get universal credit implemented as soon as we can. Backdating, as I know from my former constituency days, is a well-known legacy safety net but one of last resort. People who really need it really need it. There are obviously delays, oversights and mistakes in the legacy systems, and we hope that universal credit will deal with some of that, too. But the histories of people who disproportionately claim backdating for lengthy periods of time are, in my experience, those claimants who have a disposition to mental illness and other vulnerabilities. That has to be weighed in the balance.

I would argue, too, that continuous good cause needs to be proved for any backdating claim to be seen under the legacy system. That is a way of dealing with claims that are not considered appropriate or within the rules. So there is a protection there. I also make the point that, as Crisis recently explained to me, its most recent work suggests that if people fall into homelessness —if they cannot get the backdating, are evicted and become homeless—that can cost between £3,000 and £18,000 further downstream to the public purse. That is just passing the problem on to our colleagues in local government. That is not necessarily helpful.

As I understand it, if there is only a one-month backdating period eligible, because there is no eligibility for housing benefit beyond that, there is no capability within the current rules as I understand them of applying discretionary housing payments. You need to be entitled to housing benefit to apply for DHPs. The Government have been quite creative about using discretionary housing payments to fill some of the gaps but I am not sure that they can be used properly in this context that we have in front of us this evening. I am be anxious to be put right on that if I am not correct.

I have just a final point of experience. Through my experience in the Wise Group in Glasgow, I saw one or two really difficult cases of sanctions being applied and, because of that, housing benefit being stopped over a long period of time—wrongly. That causes distress to housing benefit claimants whose situation will be made worse by these regulations.

So I am not sure about the saving. The wider cost-benefit analysis would need to weigh in the balance any discretionary housing payments or alternative payments found by local authorities to try to deal with the consequences of eviction as a result of these changes. I still believe that the SSAC compromise of three months would be a good one. Apart from anything else, the other legacy benefits such as income support and income-related JSA already have three-month backdating limits. So it is maybe not surprising that the SSAC in its conclusion came to the view that,

“the summary rationale given for the proposals—namely early alignment with UC—is too simplistic and potentially misleading”.

That is quite strong language for the Social Security Advisory Committee, but it is right to be concerned. I share its concerns and I hope that the debate this evening will point up some of the problems that may arise. I hope the Minister will watch these things carefully—I know that he always does—and that he will give us an assurance that if the changes have unintended consequences, he will do his best to bring these matters back to the House and try to get them sorted so that no vulnerable clients and HB applicants in future are caused further distress and misfortune by the content of these regulations. I beg to move.

--- Later in debate ---

Some noble Lords will remember that we made a big effort to improve things in 2011. That at least got us a couple of years where we seemed to be getting it right, but it seems that another go at this is needed. These regulations will help to align housing benefit with universal credit and are part of a much wider system and set of reforms designed to bring about behavioural change in claimants while drawing a balance between their needs and those of taxpayers, who fund the welfare bill. We are saving money: we saved £6 billion over the last Parliament in housing benefit reforms, and the annual housing benefit bill would have been considerably higher than it is now if we not made some of these changes.

[Lord Kirkwood of Kirkhope]

My Lords, I am grateful to all colleagues who took part and, as always, I am grateful to the Minister. We will all collectively study his remarks in the Official Report tomorrow. I am very grateful for the opportunity the business managers have given us to have this debate, and I am pleased to seek permission of the House to withdraw the Motion.

Motion withdrawn.

Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Wednesday 27th January 2016 Lords Chamber

As I have said, reasonable objections to voting down a statutory instrument, which may have been the reason for Labour’s reticence to support our amendment previously, do not apply today given that this is simply an amendment to the Bill. I am therefore at a loss to understand why there would be objections to our amendment—unless the Labour Party simply supports the Government’s cut to universal credit. I ask everyone in the House to support this amendment in the Lobbies tonight and challenge the Government’s clear error of judgment over universal credit. The Chancellor got it right when he overturned the previous decision, and we can do the same again today. Not doing so must surely be seen as a derogation of our duty to all those who will be affected by these cuts. I beg to move.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I will add just a word to my noble friend’s excellent speech. I want to do three things: look at the context, share some new analytical evidence that I have just had access to and, finally, talk about the relationship between Amendments 45 and 46A.

For me, this is a significant moment for universal credit. I am determined to do everything in my power to bring universal credit to a successful, sustainable position if it is the last thing I do before I go to the great Parliament in the sky. This is an important moment. What we are arguing about is part of the strategic balance in the architecture of the system. I believe that the Chancellor, who is fully focused on the public finances, as perhaps Chancellors have to be, is completely blind to family budgets. That is evident in the way that he has been seeking some of the necessary public savings. I know that the Minister is completely innocent in terms of any of these changes. My spies are everywhere, and they actually give him quite high marks. One only had to read the newspapers over the late autumn, sensitively and between the lines, to know that we could have been facing rates of change to the reduction in the benefit of not just 65% but 75%. I believe that to be true and believe that the Minister was responsible for stopping that happening. I am deeply grateful for that. If that had happened, I would have given up any further attempt to make this policy work at all.

We are talking about work allowances and how they fit into the system. We have to get this sorted out once and for all, because although people have been told this before, I believe that in the 2016 fiscal year we will see a massive scaling up of universal credit, not just across all the job centres but in terms of the categories and numbers of claimants that will be admitted. I am anxious that that should happen. However, I make the point that there are a lot of problems waiting on the other side of that, which we know about and have been working on. We have to get the architecture right before the scale-up starts, and work allowances are an essential ingredient.

My noble friend’s amendment actually works with the grain of government policy much better than the Chancellor’s proposal does. The universal credit, making work pay and work incentive momentum will be significantly reduced if these work allowances are reduced in the way that is being suggested.

We are able now to start to look at some of the impacts on universal credit recipients as the rollout moves on. I will very briefly sketch through some analysis I have seen from Policy in Practice, a group of people whose judgment I trust. It has done some forecasting of the effects of the impact of universal credit on recipients. The analysis makes three points. First, with no mitigation plan in place for people currently on universal credit, all households in work and on universal credit in April 2016 can expect to be worse off as a result of reduced work allowances. It estimates that 96,000 households in work will be worse off by April 2016. I see the wrinkling of a ministerial nose already. I know that this is the Minister’s territory and I am sure that he will want to look at some of these figures, but that is what I am told and I am reading it as accurately as I can.

The second worrying point raised by the Policy in Practice analysis, and with an indirect relationship to the work allowances changes, is the finding that taking into account the national living wage and higher personal allowance—that is, the government package—35% of universal credit recipients will be worse off in 2020 without transitional protection. If that is anything like true, we should be worried.

Even more interestingly, and perhaps more worryingly, the third conclusion of the analysis is that households that are worse off under universal credit would need to work additional hours in order to not be worse off from these changes. Policy in Practice’s current best estimate puts the combined figure at an additional 10 million hours each week across the United Kingdom that would need to be found and worked before people could protect their income in the long run. Worse than that, it then goes on to say that, at the same time, cuts to work allowances will limit the dynamic effect of universal credit by up to 2.5 million hours each week, and that is on top of the OBR estimate that the national living wage will reduce the weekly hours available by a further 1.8 million hours each week.

If you combine these factors, we are looking at the possibility of making it more difficult for households to make up their shortfall by working additional hours. I am sure that that will all be tested in due course when the figures are made available. However, that is the scale of the challenge that we may be facing as a result of some of these work allowance changes. I am certainly concerned that this is a significant change that we need to think about very carefully.

Family Test

Lord Kirkwood of Kirkhope Excerpts

Tuesday 26th January 2016 Lords Chamber

[Baroness Altmann]

The life-chances strategy aims to tackle the root causes of child poverty and to help transform children’s lives. Those root causes include family breakdown, addiction, debt and worklessness. The Prime Minister has announced the doubling of funding for relationship support over the next five years, as well as the tearing down of sink estates, investment in mental health care and support for women during pregnancy.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I remind the Minister that when the Prime Minister announced this important policy in August 2014, he made a point of saying that he wanted the test to apply to every single domestic policy. That is what he said. Would the Minister be prepared to commission an independent evaluation of that policy, in early course, so that we can test whether the Prime Minister’s ambitious policy intent is being delivered in practice?

[Baroness Altmann]

My Lords, I assure the House that the family test is indeed incorporated into every new domestic policy consideration by this Government.

Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 25th January 2016 Lords Chamber

[Baroness Meacher (CB)]

My Lords, I really was not expecting to speak today on this. We had asked that Amendment 43, on IAPT, be shifted and taken separately on Wednesday. The IAPT programme has now been going for 10 years: we had the first pilot in the mental health trust in east London 10 years ago. The point of that pilot, and of the whole programme, was to help the large numbers of people with mental health problems back into work. I remember talking to jobcentre staff and having great difficulty persuading them to refer people to the programme. Ten years on, we have so much evidence that if people with depression or anxiety receive good therapy quickly, they achieve remarkable results—far better results than any other that I am aware of in the psychological therapies. I stand here completely unprepared, save only to say to the Minister: please make use of what is an excellent programme on the whole—nothing is perfect everywhere, of course not—to help the 50% or so of unemployed people who desperately need precisely such help so that they can quickly get back to work. I make that big appeal to the Minister.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I add my support to the opening remarks of the noble Baroness, Lady Campbell. She said that she was somewhat disappointed by the Minister’s response to these amendments in Committee. She is right. He founded his response on a defence that these statistics are already available if you know where to find them and that they will continue to be published. That is only half the story. There is a case to be made for looking at more qualitatively based, specific disability-related data that are not available. It would not cost a great deal of money. The DWP has a capable resource department. Over a period of years, a lot of small but very important disability employment issues could be explored and the trends chased down and studied.

I give the example of the change as we move to universal credit, using work coaches rather than disability advisers. I understand that and I am very supportive of that new environment, but the work coaches are not dedicated specialists. They will have access to people, but I would love to watch how that works—if it does—as universal credit is rolled out. If it does not, we will need to change the setup, as I am sure the Minister will agree. I would like to see that kind of thing in gremio of the other suggestions for the reporting requirement from the noble Baroness, Lady Campbell. I support her in observing the need for what does not currently exist. With a bit of good will, working with the disability communities, we could have better sight of some of these problems.

My second point is that a contract of employment takes two people: you need an employer as well. We must not forget the employers. They try to do the best they can. As was said, physical disability is in some ways easier to address because the solutions are more obvious. Potential employees who suffer from any kind of intermittent condition—it is mainly, but not just, mental illness—are in a different category altogether. I remember feeling sympathy for the Minister when he got into trouble for saying that people with disabilities were not worth the money, or something—I am sure he never said it and that he did not mean it even if he did. However, he is right, in that the one risk that a potential employer fears—if I can put it that way—with regard to a very good candidate with intermittent conditions is that they cannot control their ability to turn up at key moments. Therefore, we need flexible working and to compensate for or take account of that, to reassure employers. You could do it by mitigating NI contributions, for example. We are not yet engaging in sufficient outreach with employers who might otherwise be willing to address this gap.

Welfare Reform and Work Bill

Lord Kirkwood of Kirkhope Excerpts

Monday 25th January 2016 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I support the case that has been powerfully made by the noble Baroness, Lady Lister. We have been discussing for what seems like years what should be done to help low-income families in work, and she has made a very good case. I cannot understand why the Government do not see the force of monitoring carefully the circumstances and environment in which these children will live, admittedly in England, in low-income households.

The Minister referred—and I know the work well—to the Waddell and Burton concepts of the sustainability and well-being that derive from work. That study was done in the early 2000s, and it was a changing experience for me as well—it was new to me. He also referred to the work that he then went on to do with the Labour Government in his important report. It all suggests that low-income working families are struggling to get to the kind of rewards that Waddell and Burton were talking about in their biopsychosocial model, which was so instructive in changing the terms of the debate.

I agree with the noble Baroness, Lady Lister, that the evidence is that we are in a very precarious employment environment. It is particularly true, and becoming more so, of self-employment. Single-parent families in low-paid work suffer increased and increasing stress, and all the other well-known elements that lead to deprivation in terms of the indicators of disability. Large households and some ethnic groups have historically had challenges relating to making work not just something that pays a wage but leads to a fulfilling life. This whole area will become more, rather than less, important in future, as the precarious employment environment increases.

There are big regional differences to which, as policymakers, we are at the moment blind. There are geographical areas and differences within England—as the amendment refers only to England—that would be instructive for policymakers looking at children in low-income working families and to which we do not have access at the moment. We could so easily have it if this amendment were adopted by the Government.

Finally, the universal credit change that is coming in this direction is quite new. Not only does it require families on universal credit under the claimant commitment to get themselves ready and able for work but, once within work, they are under pressure under the new system to go for longer hours and higher-level wage contracts of employment. That is all backed by sanctions. That is something that, once universal credit eventually rolls out across 7.7 million households, we will have to watch very carefully in relation to the trends. I am not saying that there is anything wrong with trying to get people into higher-level jobs, because that is important for low-income families, but that element of universal credit is quite new, to me certainly, in relation to how the social security and social protection systems that we have in the United Kingdom work.

I would be much more comfortable if the Government were to agree to these amendments. We would be better informed and, as legislators in the future, we would be in a much better position to protect the interests of children in low-income families who struggle with poverty in this country. It is time that we tried to do something about that.

[The Earl of Listowel]

My Lords, I support these two amendments. In the family to which I referred earlier, Ms Lorna Sculley has three children; the oldest and youngest sons have a disability, and she is a working mother. She works 16 hours a week as a dinner lady at the First Love Foundation—the food bank—and she discussed the prospect of getting more work. She calculated that if she worked seven more hours a week, she might get only another six pounds. It just was not worth her while to progress along a work route. I welcome very much what the Government have said about introducing the new, much higher, minimum wage, but the actual effect on families’ incomes might not be as positive as we would all hope, so I hope the Minister will consider accepting this proposal.

I would like to raise another point about a further complication for Ms Sculley. She depends on housing benefit and lives in Tower Hamlets. Her benefit has not been sufficient to pay her rent, so she has to subsidise it from her other income. She says that she cannot move from where she is because of her eldest son’s disability: he is at a school that is good at meeting his needs. That is what I understood from what she said, so that is perhaps relevant to others in our discussion.

My final point in relation to Ms Sculley is that she was offered a parenting class because of her two sons’ disabilities, but it took place on a Thursday, which is when she has to work at the school. She is therefore, in a way, disadvantaged by being in work because she cannot take up the opportunity of attending the parenting class. There is a lot to be said for these two amendments, and I look forward to the Minister’s response. Before I finish, however, I would like to thank him for the time that he took last week—an hour—to speak on the needs of children as they relate to this Bill. I certainly appreciate that very much.